BB Seguridade (BBSE3) reports a profit of R$2 billion in 1Q24, an increase of 10.4% in the year

Published at 7:48 am

With an increase in earned premiums and an improvement in insurance claims, growth in brokerage revenues and an increase in volumes collected in pension plans and capitalization, BB Seguridade (BBSE3) announced a profit of R$2 billion in the first quarter of 2024.

The non-interest operating result was the company’s growth driver, increasing 10.9% in the period, above the published guidance.

The operational evolution more than offset the retraction in the financial result caused by the temporal mismatch of inflation indices that correct defined benefit pension plans, the negative mark-to-market on positions in fixed income securities and the fall in the Selic rate.

The effect of the fall in the Selic rate was partially offset by the expansion of approximately 10% in the average balance of floating positions of all companies in the group.

André Haui, president of BB Seguridade, highlights that “even in the face of a challenging scenario for the financial result, with the fall in the Selic rate, this result from BB Seguridade demonstrates the solidity of a company well founded on its strategic pillars and the ability to adapt and transform”.

In 1Q24, net profit from the insurance operation increased 11.7% compared to the first quarter of 2023, mainly driven by the increase in retained earned premiums (+9.6%) and improvement in claims ratio (-2.8 pp), both contributing to the 12% increase in non-interest operating income. Premiums written increased by 15.3% in the comparison, driven by all lines of insurance, but with special emphasis on credit life (+35.2%), rural lien (+54.1%) and rural producer life (+28% ).

In 1Q24, contributions to pension plans grew 13.5% compared to the same quarter last year and totaled R$16.8 billion, a number that represents the highest quarterly volume in the historical series. The redemption rate reached 8.6% – the lowest quarterly level since 4Q20 – and portability reduced by 0.5 pp. The record volume of inflows and the reduction in outflows of resources led to a net inflow of R$5.6 billion, almost triple what was recorded in 1Q23, with reserves for PGBL and VGBL plans expanding 15.2%.

Revenue from capitalization bonds grew 16.4%, with an increase in the average bond ticket. The operation’s net profit increased 12.8% compared to that recorded in the same period of the previous year, reaching R$70.7 million, driven by the 32.9% growth in financial results.

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