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, 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) and extraordinary provisions impacted actuarial provisioning and accounting policies.

Financial highlights

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

• 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%), with reserves at BRL 11 billion.

• Brokerage revenue rose 11% to BRL 4.1 billion.

• Net investment income declined 16% year-over-year in Q3 and 18% year-to-date, mainly due to higher liability costs and lower Selic rates.

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.