BB Seguridade Participações (BBSE3) Q3 2024 earnings summary

Executive summary

• Net income for the first nine months reached BRL 6.4 billion, up 9.7% year-over-year, with managerial net income at BRL 6 billion, a 5.7% increase and a record high.

• Q3 net income was BRL 2.3 billion, up 10.1% year-over-year, driven by improved underwriting results, lower loss ratios, and higher brokerage revenues, despite a decline in net investment income.

• Customer experience improved, with NPS up and complaints down 9% year-over-year; churn improved by 15.2%.

• Investments in digital transformation totaled BRL 368 million in nine months.

• Regulatory changes (Susep Rule 678, IFRS 17) impacted actuarial provisioning and accounting policies, leading to extraordinary provisions.

Financial highlights

• Insurance premiums written totaled BRL 13.2 billion (up 1% YoY), with retained premiums at BRL 11.4 billion (up 8% YoY).

• Pension reserves increased 11% year-over-year to BRL 42.2 billion, with net inflows of BRL 7.9 billion.

• Premium bonds collected BRL 4.9 billion (up 4% YoY), with reserves at BRL 11 billion.

• Brokerage revenue rose 11% to BRL 4.1 billion.

• Net investment income dropped 16.2% year-over-year in 3Q24 and 10% year-to-date.

Outlook and guidance

• Premiums written guidance revised from 8%-13% to 0%-3% growth for the year due to rural/agriculture segment performance.

• Non-interest operating result expected to end the year near 12% growth, outperforming guidance.

• Pension plan reserves indicator growing above expectations despite interest rate volatility.

• For 2025, expectations are for stable or slightly improved loss ratios and continued bottom-line growth, with less volatility in financial results.