IRB-Brasil Resseguros (IRBR3) Q3 2024 earnings summary

Executive summary

• Net profit reached R$116 million in 3Q24 and R$260 million for the nine months, both showing significant year-over-year growth under IFRS4; under IFRS17, net income was R$192 million in 3Q24 and R$623 million in 9M24.

• Underwriting profit surged to R$118 million in 3Q24 and R$274 million YTD, with a 990.5% increase in 3Q24 and 448.7% in 9M24.

• Written premiums grew 10% YoY in 3Q24 to R$2,166 million, with Brazil accounting for 80–83% of total and international up 27%.

• The turnaround process is considered consolidated and expected to conclude by end of 2024, with continued focus on profitability, portfolio quality, and efficiency.

• Notable non-recurring gain of R$33–37 million from the sale of land in Rio de Janeiro in Sep/24.

Financial highlights

• Loss ratio improved to 68% in 3Q24 (down 6p.p. YoY); YTD loss ratio at 64%, an 11p.p. improvement.

• Combined ratio decreased to 102% in 3Q24 and 9M24, with non-life segment below 100%.

• Investment portfolio AUM at R$8.5 billion as of Sep/24, with annual return of 7.8%.

• Financial and equity results of R$196 million in 3Q24, up 7.4% YoY.

• Retained premiums increased 26% YoY in 3Q24 to R$1,040 million.

Outlook and guidance

• Combined ratios are expected to fall below 100% by 2025, with operational growth and improved ratios anticipated.

• Dividend payments are likely only in 2026, as accumulated losses must be covered first.

• AM Best affirmed Financial Strength Rating at A- (Excellent) with stable outlook; S&P rating at brAA+ with negative outlook.

• Retained premiums expected to grow 10%-20% in 2025, with focus on core business lines and efficiency.

• Ongoing portfolio adjustments expected to further improve underwriting results as older contracts mature.