IRB-Brasil Resseguros (IRBR3) Q3 2024 earnings summary

Executive summary

• Net income reached R$116 million in 3Q24 and R$260 million YTD, more than doubling 2023's total, with significant YoY growth under both IFRS 4 and IFRS 17.

• Underwriting profit surged to R$118 million in 3Q24 and R$274 million YTD, up over 400% YoY.

• Loss ratio improved to 68% in 3Q24 (down 6p.p. YoY) and 64% YTD (down 11p.p. YoY), reflecting better risk management.

• Written premiums grew 10% YoY in 3Q24 to R$2,166 million, with 83% from Brazil and international up 27%.

• Turnaround process is consolidated, with focus on profitability, portfolio quality, and shareholder returns.

Financial highlights

• Combined ratio improved to 102% in 3Q24 and 9M24, a 7-8p.p. YoY improvement; non-life segment below 100%.

• Claims/loss ratio dropped to 68% in 3Q24 and 64% YTD, mainly due to rural and property lines.

• Commission ratio fell to 19% in 3Q24 (from 24% YoY); YTD commission ratio at 26%.

• Financial and equity results totaled R$196 million in 3Q24, including gains from property sales.

• Administrative expenses stable at ~R$80-85 million per quarter; ratio at 9%.

Outlook and guidance

• Combined ratios expected below 100% by 2025, with operational growth and improved margins as renewals at higher prices take effect.

• Retained premium growth targeted at 10%-20% for 2025, focusing on domestic market and selective international exposure.

• Dividend payments likely postponed to 2026 due to accumulated losses.

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