BB Seguridade Participações (BBSE3) Q2 2024 earnings summary

Executive summary

• Net income for 1H24 reached R$4.2 billion, up 11.8% year-over-year, with managerial net income at R$3.7 billion, a 3.1% increase, and 2Q24 net income at R$2,143 million, up 13.3% YoY.

• Insurance premiums written totaled R$8.0 billion (+5%), with credit life insurance up 21%, and pension reserves surpassed R$410 billion, up 12% YoY, with net inflows more than doubling to R$5.3 billion.

• Brokerage revenues rose 12% to R$2.7 billion, reflecting strong commercial performance and segment growth.

• Customer base grew by 6% and NPS improved by 1.6 points since December 2023, with complaints down 12.3% YoY.

• Regulatory changes (IFRS 17, SUSEP 678/2022) and extraordinary events, such as PCC provisions, impacted reported results.

Financial highlights

• Loss ratio improved to 27%, down up to 1.9 percentage points YoY, and combined ratio for Brasilseg was 66.3% in 1H24.

• Net investment income for 1H24 was R$714 million, with a normalized net income adjustment of R$324 million in 2Q24.

• Net commissions income for 1H24 was R$2,372 million (+11.7% YoY), and brokerage revenues rose 12%.

• Pension reserves increased 12% to R$410.3 billion.

• Investments in IT, cybersecurity, and digital solutions totaled R$258 million in the first half.

Outlook and guidance

• Premiums written are below guidance (5% vs. 8%-13% target) due to delayed Safra Plan and discontinued/co-insurance products, but guidance range is maintained.

• Pension reserves growth (13%) exceeded guidance (8%-12%).

• Management expects continued growth in reserves and management fees, with ongoing monitoring of regulatory impacts and market conditions.

• Expectation for a stronger second half, especially in crop insurance and investment income.

• No major changes anticipated in loss ratio for the second half; catastrophe impacts are contained.