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 2Q24 net income at R$2,143 million, a 13.3% increase, driven by strong performances in insurance, pension, and brokerage segments.

• Adjusted managerial profit (excluding IFRS 17 and extraordinary events) grew 3.1% to R$3.7 billion.

• Insurance premiums written increased 5% to R$8 billion, with credit life insurance up 21% and pension reserves surpassing R$410 billion, up 12% year-over-year.

• Pension plan net inflows more than doubled to R$5.3 billion, and brokerage revenues rose 12% to R$2.7 billion.

• Customer base grew 6% and NPS improved by 1.6 points since December 2023.

Financial highlights

• Loss ratio improved to 27%, down 1.9 percentage points year-over-year.

• Premium bonds reserves grew 5% to R$11.2 billion.

• Investments in IT, cybersecurity, and digital solutions totaled R$258 million in 1H24.

• Net investment income in 2Q24 was R$323.5 million, down 14% YoY, mainly due to higher liability costs and negative mark-to-market in pension assets.

• Market capitalization at quarter-end was R$65.9 billion.

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%).

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

• Non-interest operating result grew 8.8% in 1H24, within guidance.

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