Caixa Seguridade Participações (CXSE3) Q3 2024 earnings summary

Executive summary

• Achieved record managerial net income of BRL 1.0 billion in Q3 2024, up 10% year-over-year and 13% sequentially, with ROE reaching 62.9%; accounting net income was BRL 1.1 billion, up 11.7% year-over-year.

• Dividend payout of BRL 930 million approved for Q3 2024, representing 92.5% of adjusted net income, to be paid in January 2025; YTD dividends distributed total BRL 2.47 billion.

• Company included in the Ibovespa index, enhancing market relevance and liquidity.

• Significant reduction in insurance complaints and new sustainability initiatives, including joining the UN Global Compact and Pact for Racial Equity.

• Simplified shareholding structure by merging XS2 into Caixa Vida e Previdência and divesting non-strategic interest in Wiz Co.

Financial highlights

• Operating revenue in Q3 2024 reached BRL 1.33 billion, up 10.5% year-over-year; written premiums in insurance segment reached BRL 2.51 billion, up 7.8% year-over-year, with mortgage, home, and credit life insurance each growing over 13%.

• Private pension reserves rose to BRL 167.6 billion, up 11.9% year-over-year; management fees up 12.5%.

• Consortium credit letters sold totaled nearly BRL 5 billion, a 22% increase in new proposals year-over-year; credit letters inventory up 57.7% to BRL 28.1 billion.

• Assistance services revenue increased by over 25% year-over-year; home insurance and mortgage insurance both saw double-digit growth.

• Distribution business revenue grew 12.2% year-over-year, with insurance products contributing 71% of total.

Outlook and guidance

• Expect continued growth in insurance and accumulation products, though percentage growth may moderate as the base increases.

• Measures to expand pension product distribution outside the bank are expected to ease funding pressures and improve outlook for 2025.

• Continued focus on operational simplification, cost reduction, and sustainability, including the 2024/2025 plan and new ESG commitments.

• Financial results are expected to remain in line with Selic or 100% of CDI, supported by a conservative investment strategy.