Prem Watsa

Prem Watsa was born in 1950 near Hyderabad, India. His father was a teacher and later became the principal of an excellent boys’ school. My dad was an upright, no-nonsense kind of guy. He expected me to work hard and study. My father was a great influence on me. I will never forget one piece of advice he gave me. He said, ‘Work as hard as you can, as though everything depended on you. Pray as hard as you can, as though everything depended on God.’”

Though not wealthy, Prem, along with his brother and two sisters, had the advantages of loving, attentive parents. The Watsas were Christians. Prem says, “I was brought up on the Christian values of family, honesty and integrity, and doing the right thing.”

While in school, Prem’s strength was in math and chemistry. He applied to the Indian Institute of Technology (IIT), India’s top engineering school and majored in chemical engineering. Out of 50,000 applicants, only 1,000 were selected and Prem was one of them.

By the time he graduated, Prem decided he was more interested in pursuing a career in business than engineering. He applied to the best business school in the country, the Indian Institute of Management. The school received about 10,000 applications for only 100 openings. After failing to make the cut the first time, Prem resolved to study harder and apply again. He worked for a year in a few jobs, studied, and re-applied. This time he was accepted to the prestigious school.

Prem’s older brother had married and settled in London, Ontario, Canada. His father suggested that a better opportunity for Prem might be to attend graduate school in Canada. He left India with only $8 in his pocket. He found a job selling air conditioners and furnaces door to door, which funded his MBA at the University of Western Ontario Business School, later known as the Richard Ivey School of Business.
After earning his master’s degree, Prem began applying for jobs.

Finally, in 1974, he got a job at Confederation Life Insurance Company in Toronto as an investment analyst. His manager, John Watson, became his mentor and taught him all he knew about investing based on Benjamin Graham’s theories of value investing.

After nine years with Confederation Life, Prem and a few partners founded a successful asset management firm, Hamblin Watsa Investment Counsel Ltd. A year later, in 1985, he organized a group of investors to take control of a small Canadian trucking insurance company with $10 million in premiums. That became the base for Fairfax Financial Holdings Limited. With Prem Watsa as its Chairman and CEO, Fairfax evolved into a worldwide property and casualty insurance and reinsurance company operating in more than 100 countries, with $28 billion in premiums. Over the past 37 years, Fairfax has increased its shareholders’ equity from $10
million to in excess of $20 billion and book value per share has compounded at approximately 19 percent per year. Fairfax’s stock price has followed suit.

Prem says, “We focused on treating our employees and customers well, and we worked hard for our shareholders. We decided from the beginning that if we were successful, then we would invest in the communities that helped us. We made it a rule that one or two percent of our pre-tax profits would be reinvested back into the communities in which we do business.”

Prem defines success on three levels. “First,” he says, “I am a Christian, so faith is very important. Second is my family. I’ve been married for 50 years and it’s the best thing that has ever happened to me. I have three children and I am the proud grandfather of five grandchildren. Third is my business success. The most important principle we have in our company is honesty and integrity. We will never compromise those values. Nor will we ever succeed at the expense of our families. I like a quote from the Bible, which says, “What profiteth a man if he gains the whole world, but loses his soul?”

He is a member of the Sick Children’s Hospital Foundation and is Chairman of their Investment Committee, member of the Advisory Board for the Richard Ivey School of Business, Chairman of the Investment Committee of St. Paul’s Anglican Church in Toronto. He is on the Board of Horatio Alger Association U.S. and President of Horatio Alger Association of Canada. He is Chairman of Fairfax India. He is the Chancellor of Huron University College at the University of Western Ontario and formerly Chancellor of the University of Waterloo. He is a recipient of the Order of Canada and the Padma Shri Awards, one of the highest awards in India.