IRB(Re) records net profit of R$79.1 million in 1Q24

Publicado em: 13/05/2024

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> The result, based on the IFRS 4 Business Vision, exceeds the net profit of R$8.6 million recorded in 1Q23.

> Underwriting results close 1Q24 at R$122.4 million, compared to R$3.7 million a year before.

> Loss ratio recorded in 1Q24 is 58.2%, registering a drop of 19.1 p.p. compared to 1Q23.

> Combined ratio of 99% is 11.9 p.p. better than that seen in 1Q23.

> Net profit calculated using the IFRS 17 methodology is R$236.8 million.

IRB(Re) recorded net profit of R$79.1 million in the first quarter of 2024 (1Q24). The value calculated in the first three months of the year is higher than that reported a year earlier, R$8.6 million. The numbers, released today (13/05), consider Business View and show the evolution of the reinsurer, which achieved positive results for the fifth consecutive quarter.

“Before commenting on our result, I would like to offer my solidarity to the entire population of Rio Grande do Sul, who continues to suffer from the impact of the floods. Paying claims is the main responsibility of the insurance market. We are in contact with our customers and we are committed to carrying out analyzes and payments as quickly as possible”, says Marcos Falcão, CEO of IRB(Re).

“Regarding 1Q24, I reinforce that we are working to produce sustainable results, in the long term, and, once again, our numbers show that we are making progress. At the beginning of the year, I would also like to highlight the advance payment of R$90 million, referring to the third issuance of debentures, and the receipt of court orders in the amount of R$277 million. Furthermore, we ended the quarter with 169% solvency. We will continue to control the items that are under our management: price, expenses and costs”, comments Falcão.

Positive underwriting result
The IRB(Re) underwriting result also advanced and closed 1Q24 positive at R$122.4 million, compared to R$3.7 million in 1Q23. The rural line recorded the highest nominal result, with R$74.1 million in 1Q24. Percentage-wise, the biggest growth was seen in the equity line: 209.9%, from R$16 million in 1Q23 to R$50.1 million in 1Q24. It is worth highlighting that the underwriting result in Brazil went from R$15.8 million in 1Q23 to a positive R$169.4 million in 1Q24. Abroad, in 1Q24, the underwriting result was negative R$47 million, compared to negative R$12.1 million in 1Q23.

In line with the strategy of concentrating business in Brazil and reducing participation abroad, the total written premium fell 9.1% compared to 1Q23, registering R$1.440 billion. The share of businesses signed in Brazil increased, reaching 74% of the portfolio. This percentage was 64% a year earlier. In relation to volume, there was a 5.3% increase in the premium issued in Brazil compared to 1Q23: R$ 1.060 billion. The premium issued abroad, which represented 26% of the portfolio, totaled R$379.9 million in 1Q24, a drop of 34.2% compared to 1Q23.

“We can observe the constant evolution of underwriting results, resulting from the cleaning of the portfolio carried out in 2023. Some sectors still present negative results, but the progression is positive compared to the same quarter of the previous year. In this 1Q24, focusing on executing our strategy, we renewed 90% of all the businesses we wanted to maintain. We continue with a diversified portfolio and new businesses. In relation to facultative, for example, there was a 68% growth in new business carried out in Brazil, when compared to the same period of the previous year”, explains Daniel Castillo, vice-president of Reinsurance at IRB(Re).

“Our underwriting strategy remains centralized in Brazil. We reached the goal of doing 70% of business in the country. We consolidated our share in the local market, leveraging our competitive advantages. In 2024, a step forward, we believe that businesses in Latin America could account for 20% of the portfolio and another 10% in other international exhibitions. In 1Q24, our percentage of premiums in Latin America was 6.2%, still very low, since the renewals of such businesses will only occur in the third quarter, as most Latin American customers renew their businesses in July 1st”, comments Castillo.

Total retained claims fell 43.3%
The total retained claim fell 43.3%, comparing 1Q24 with 1Q23, closing at R$528.8 billion. As a result, the loss ratio went from 77.3% to 58.2%, a drop of 19.1 p.p.. The company also improved the combined ratio – which includes claims, commissions and other expenses – by 11.9 p.p., going from 110.9% in 1Q23 to 99% in 1Q24.

“Considering geography, the loss ratio was 44.7% in Brazil and 93.3% abroad. Analyzing the curve, quarter by quarter, we see a small deterioration in Brazil and a 33 p.p. reduction in loss ratio abroad, considering 4Q23. We believe that the actions we carried out to adjust prices, reduce exposures with cancellation or reduction of participation in various contracts, in addition to the alignment of commercial conditions and technical modifications in renewed businesses, contribute to the gradual improvement of such ratio”, states Castillo.

Debt reduction
IRB(Re) reported that the company’s debt ratio closed 1Q24 at 13%. “Our debt ratio, which was measured here by the relationship between debentures and equity, reduced due to the payment of debentures in October 2023. In the second quarter, we will see a further drop, with the early redemption of the third issue debentures, which will also reduce our debt service”, explains Falcão.

IRB(Re)’s general and administrative expenses in 1Q24 totaled R$75 million, compared to R$88 million in 1Q23, when there was a payment of R$25 million related to the agreement with the US Department of Justice (DoJ).

The company’s financial and equity result in 1Q24 was R$141.6 million, practically in line with the result in 1Q23, impacted by the lower volume of financial assets and lower interest rates. “We ended the first quarter with R$8 billion in financial assets. The allocation of these resources, in general, can be divided between approximately 60% of assets in Brazil and 40% abroad”, says Paulo Valle, general director of IRB (Asset), the reinsurer’s investment branch.

Sufficiency in regulatory indicators
The IRB(Re) must observe two regulatory indicators, as per the regulations of Susep, which is the body responsible for supervising the insurance and reinsurance sector: Adjusted Net Equity Adequacy Ratio in relation to the Minimum Required Capital (CMR) and the Technical Provisions Coverage Ratio. In 2023, the company presented sufficiency in both ratios.

“The first indicator closed 1Q24 with a sufficiency of R$697.1 million, that is, 69% above the required capital, the best level since September 2021. I highlight that, with the best risk selection, we reduced the need for minimum capital required by R$572 million in 1Q24. The guarantee sufficiency indicator ended the first quarter with a sufficiency of R$370.1 million”, says Thais Peters, director of Internal Controls, Risks and Compliance at IRB(Re).

IRB(Re), in addition to reporting its numbers considering the IFRS 4 Business Vision, adopted by our sector regulator, Susep, and used by the company to make its decisions, published its 1Q24 results in IFRS 17, as required by the Commission of Securities (CVM). The international standard, aimed at the insurance and reinsurance market, treats operational flows brought to present value, considering the time value of money.

Considering the IFRS 17 methodology, the company’s result in 1Q24 was positive at R$226.8 million, compared to a loss of R$24.6 million in 1Q23. “Analyzing data in IFRS 17 requires looking at longer periods. This quarter, we can say that the result was impacted by the decline in loss ratio and reinsurance revenue, due to the lower volume of premiums written. Furthermore, we recorded an increase in the financial result from reinsurance due to the variation in discount rates and the lengthening of the payment curve for claims already provisioned”, says Falcão.

Willy Otto Jordan Neto
IRB(Re) announced, with regret, that Willy Otto Jordan Neto, statutory director on medical leave, passed away last Sunday afternoon (12). The executive was elected Vice President of Finance and Investor Relations in November 2021 and stepped down in March 2023. The company sympathizes with the family and thanks Willy Otto Jordan Neto for his contribution to the resumption of the reinsurer.

The complete Performance Analysis is available on the company’s Investor Relations website (

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