IRB-Brasil Resseguros (IRBR3) Q3 2024 earnings summary

Executive summary

• Net income reached R$623.4 million in the first nine months of 2024, reversing a prior loss, with Q3 net income at R$192 million under IFRS 17 and R$116 million under IFRS 4, both showing significant year-over-year growth.

• Underwriting profit surged to R$118 million in Q3 2024 and R$274 million year-to-date, with a 990.5% increase in Q3 and 448.7% in nine months compared to prior periods.

• Written premiums grew 10% year-over-year in the first nine months, reaching R$4–5 billion, with 80–83% from Brazil and the remainder international.

• The turnaround process is considered consolidated and expected to conclude by year-end 2024, with a focus on profitability, portfolio quality, and shareholder returns.

• Regulatory capital sufficiency and solvency requirements were met, with strong liquidity and capital positions.

Financial highlights

• Combined ratio improved to 102% in Q3 2024 and for the nine months, down 7–8 percentage points year-over-year.

• Loss ratio dropped to 68% in Q3 2024 (down 6 p.p. YoY) and 64% for the nine months (down 11 p.p. YoY), mainly due to rural and property lines.

• Commission ratio decreased to 19% in Q3 2024, with a 21–26% range for the nine months, driven by contract changes.

• Financial and equity results totaled R$196 million in Q3, including gains from property sales.

• Investment portfolio AUM at R$8.5 billion as of September 2024, with an annual return of 7.8%.

Outlook and guidance

• Combined ratios are expected to fall 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 the domestic market and selective international exposure.

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

• Management expects continued regulatory capital sufficiency and no material uncertainties regarding business continuity.

• Strategic focus remains on capital optimization, risk diversification, and operational efficiency.