IRB-Brasil Resseguros (IRBR3) Q2 2024 earnings summary

Executive summary

• Net income for 2Q24 reached R$65 million, up from R$20 million in 2Q23; 1H24 net income was R$144 million, a fivefold increase YoY, with R$431 million under IFRS 17.

• Underwriting profit for 2Q24 was R$34 million, and R$156 million in 1H24, a significant YoY increase.

• Major claims from Rio Grande do Sul floods totaled R$257 million, but retrocession arrangements limited net impact.

• 82% of premiums in 2Q24 were from Brazil, reflecting a strategic focus on domestic market leadership.

• The company released its first sustainability report and was recognized as a Great Place to Work.

Financial highlights

• Written premiums in 2Q24 totaled R$1,434 million, up 3% YoY; Brazil up 18.4%, international down 35.9%.

• Retained premiums for 2Q24 were R$990 million, down 4.2% YoY; 1H24 retained premiums fell 7.4% YoY.

• Underwriting result for H1 2024 was R$156 million, with Q2 at R$34 million.

• Financial and equity result in Q2 2024 was R$166 million, up 73% YoY, aided by exchange rate gains.

• Total assets under management reached R$9.1 billion as of June 2024.

Outlook and guidance

• Portfolio adjustments are expected to further improve underwriting results as older contracts mature.

• Premium growth is expected as the market adapts to new pricing, but profitability remains the priority.

• Combined ratio target is 95%; normalized loss ratio expected around 60% for sustainable profitability.

• Dividend payments not expected before mid-2025 due to accumulated losses under IFRS 4.

• Lower capital requirements are anticipated due to an improved risk profile.