Institutional Presentation. BB Seguridade Participações S.A. Investor Relations

Transcription

1 2017 Institutional Presentation

2 Overview

3 Track Record IPO IRB Brasil RE Establishment of ADR Level I 1981 Establishment of BB s insurance operations 1987 BB Corretora s establishment 1993 Creation of Brasilprev 1995 Brasilcap s inception in partnership with SulAmérica, Icatu and Aliança da Bahia 1996 Establishment of Brasilveículos in partnership with SulAmérica 1999 Partnership with Principal Financial Group in Private Pension Plans Ownership restructuring of BB s insurance, Pension Plans and Premium Bonds division 2010 Establishment of the Joint Venture with MAPFRE 2012 Establishment of BB Seguridade Equity investment in Brasildental Partnership with Odontoprev 3

4 Ownership Estrutura StructureAcionária - Parcerias Free Float 33.75% 66.25% BB Seguridade 100% 100% BB Seguros BB Corretora BB MAFPRE SH1 MAPFRE BB SH2 Brasilprev Brasilcap IRB Brasil - Re Brasildental BB Seguridade Economic Stake (%) Life, Mortgage Life and Rural 74.9% P&C 50.0% Pension Plans 74.9% Premium Bonds 66.7% Reinsurance 15.2% Dental Insurance 74.9% BB Seguridade Voting Stake (%) 49.9% 49.0% 49.9% 49.9% 15.2% 49.9% Board of Directors Representation (%) 50.0% 50.0% 50.0% 66.7% 20.0% 50.0% Board of Executive Officers Representation (%) 50.0% 50.0% 50.0% 50.0% %¹ 1. One of the members is elected by consensus. Brazilian Government; Bradesco Seguros S.A.; Itaú Seguros S.A.; FIP Caixa Barcelona; Other. 4

5 ESTRUTURA ORGANIZACIONAL BB SEGURIDADE Internal Structure General Meeting Fiscal Council Board of Directors Audit Committee Internal Audit Related-party Committee Executive Board CEO José Maurício Pereira Coelho Chief Financial Officer Werner Romera Suffert Chief Risk Officer Antonio Rugero Guibo Chief Marketing Officer Sérgio Augusto Kurovski 5

6 Shareholders Structure TOTAL CAPITAL BREAKDOWN DEC/2017 FREE-FLOAT BREAKDOWN¹ DEC/2017 Individuals 5.3% Free-float 33.8% Institutional 15.2% Banco do Brasil 66.3% Foreign Investors 79.5% ¹ Does not include treasury stocks. 6

7 ADR Program In 2014, BB Seguridade established a sponsored Level I American Depositary Receipt (ADR) program. Depositary Bank: Deutsche Bank Trust Company Americas Custodian Bank: Banco do Brasil S.A. Ticker: BBSEY Structure: Level I ADR Exchange: Over-the-counter (OTC) market Ratio (ADR:ORD): 1 ADR : 1 ORD DR ISIN: US05541J1034 CUSIP: 05541J103 7

8 Corporate Governance Board of Directors Six members: Board of Executive Officers Four members: Stocks Two members appointed by Banco do Brasil from its Board of Executive Officers One appointed by the Ministry of Planning, Budget and Management and the other one appointed by the Ministry of Treasury The CEO of BB Seguridade One member appointed by the minority shareholders Elected among the active employees of Banco do Brasil Remuneration policy: fixed monthly wage plus variable portion between six and twelve monthly wages. The variable portion is paid as 50% in cash and 50% in stocks with vesting period of 4 years. Related-party Committee Three members: One is the independent member appointed by the minority shareholders The independent member has veto power Only common shares 100% tag along 80% payout (semi annual dividends) 8

9 Access to Banco do Brasil s network Brokerage Income Equity Income BB Seguridade Banking Fee Cost Reimbursement Equity Income 66,25% Any proposal for changes in the agreements must be examined by the Related-party Committee where the independent member has a veto power 9

10 Backed by Banco do Brasil with Expertise of Private Partnerships Backed by Banco do Brasil Expertise from Private Partners Solidity, tradition, security and reliability Safe harbor, especially for long term products Flight to quality and less susceptible to market conditions Brand awareness Fast decision making BB Seguridade operates in an arm s length format Monitors the developments of any potential conflicts between BB and BB Seguridade Improves corporate governance Minimum voting stake of 50.1% Partnership Relationship Term of the agreements (years) Start End Banco do Brasil Agreement with BB Corretora for distribution of products in Banco do Brasil's branches 20 January-13 January-33 Mapfre Joint Venture 20 June-11 June-31 Principal Joint Venture 23 April-10 October-32 Icatu Partnership No defined term June-05 - Aliança da Bahia Partnership No defined term June-05 - Odontoprev Joint Venture 20 September-15 September-35 10

11 Competitive Advantage BB Seguridade strategy focuses on bancassurance with its own broker, taking advantage of the access to Banco do Brasil distribution network. Own Brokerage Distribution Channel Low complexity business model No underwriting risk Bank Channel 66.0 Million clients 4,770 Branches 59,709 ATMs 13,774 Banking correspondents 1 º 35,827 Points of service in shared network Low capital needs Non-banking Channel 146 Partnerships (Affinity) Access to the largest distribution network in Latin America 19,723 External Brokers 11

12 Strong Financial Performance ROAE¹ 2017(%) INSURANCE COMPANIES ASSOCIATED WITH BANKS TRADITIONAL INSURANCE COMPANIES Brokerage participation 171.2% 45.5% 31.5% 18.5% 16.8% 11.6% 11.3% 10.0% 9.2% Source: Companies and Susep 1. Odontoprev and SulAmerica data as of 9M17 12

13 Macroeconomic Environment

14 Global Macroeconomic Data E 2019E 2020E World Economy - GDP Growth¹ World 2.4% 3.0% 3.1% 3.0% 2.9% USA 1.5% 2.3% 2.5% 2.2% 2.0% Euro Zone 1.8% 2.4% 2.1% 1.7% 1.5% China 6.7% 6.8% 6.4% 6.3% 6.2% Brazilian Economy² GDP Growth - Brazil³ -3.6% 1.0% 2.8% 3.0% 2.7% SELIC (ends of period) 14.0% 10.0% 6.8% 8.0% 8.0% SELIC (year average ) n.a. n.a. 6.8% 7.9% 8.0% Inflation (IPCA) 6.3% 2.9% 3.8% 4.3% 4.0% Inflation (IGP-M) 7.2% -0.5% 4.5% 4.3% 4.0% Dollar (quotation in R$) Source: World Bank - forecasts as of January, Source: Focus - forecasts as of February 16, GDP Growth Brasil 2017E 14

15 Bancassurance POPULATION WITH CHECKING ACCOUNT¹ (%) FINANCIAL INCLUSION¹ (%) United Kingdom United States Italy China Brazil Venezuela Colombia Source: World Bank 1. Data as of 2014 BRANCHES IN BRAZIL Source: Febraban 1. CPFs with active relationship in Brazilian Financial System /Economically active population BANCASSURANCE IN INSURANCE DISTRIBUTION 4,770 4,749 4, % 69.0% 69.6% 71.5% 71.1% 3,415 2, Banco do Brasil Bradesco Itaú Caixa Santander Others Source: Companies Market-share (%) 1. Data as of September/17. Source: SUSEP 15

16 Taiwan Hong Kong South Africa South Korea Finland Netherlands United Kingdom Denmark Japan France Italy United States Germany Portugal Spain Chile China Brazil India Colombia Argentina Mexico Global Insurance Industry Insurance market presents low penetration level in Brazil Insurance premiums 1 / GDP (%, 2016) Life Insurance Premium / GDP Non-Life Insurance Premium / GDP #41 In Total Insurance # In Life Insurance Source: SUSEP and Swiss Re Sigma 03/ Excluding businesses abroad 16

17 Netherlands Australia Switzerland US UK Canada South Africa Japan Ireland Hong Kong Brazil¹ Germany France Global Pension Plans Industry Pension market is growing in Brazil due to the life expectation increase Pension Assets/GDP² (%) % 168% # 9 In assets 126% 123% 120% 119% 121% 121% 112% 108% 103% 97% 57% 74% 67% 59% 56% 42% 40% 42% 21% 23% 13% 12% 6% 6% Source: Towers Watson 1. Brazil pension assets were recalculated based on Abrapp and FENAPREVI data to include opened and closed entities 2. Assets/GDP ratio for the world is calculated in USD and assets were estimated as of Dec 31,

18 Insurance Industry in Brazil INSURANCE INDUSTRY EVOLUTION (R$ BN) INSURANCE PREMIUMS WRITTEN EVOLUTION (R$ BN) Source: SUSEP. 18

19 Pension Plans Industry in Brazil AuM (R$ BN) CONTRIBUTIONS (R$ BN) Source: Fenaprevi Source: SUSEP 19

20 Performance

21 BB Seguridade at a Glance One of the Largest Insurance, Pension and Premium Bonds Companies in Latin America R$ 15.9 billion in premiums written, R$ 41.1 billion in pension contributions and R$ 4.9 billion in premium bonds in 2017 High Profitability Annualized ROAE of 45.5% in 2017 Largest Insurance Broker in Latin America Access to Banco do Brasil s unique distribution network Leading Presence in both, contributions and net inflows in Pension Plans P/VGBL reserves amounted to R$ billion in December 2017 Insurance Operations, Pension Plans and Premium Bonds managed through private partnerships with global leaders 174 employees at the holding and broker level, and 6,592 employees 1 at the affiliates level. 1. Including outsourced workers 21

22 Market Share 2017 Segments Insurance premiums written Market Size (R$ MM) Life¹ 22,257 Credit life 9,576 Rural 4,208 Auto 34,692 Pension plans BBSE (%) # % # % # % # % Main Competitors # % # % # 1 # % 16.0% # 2 # 3 4.7% 3.6% # 1 # % 11.8% Contributions 121,090 P/VGBL Reserves 763,607 Premium bonds Collection 20,777 Reserves 29,158 Source: Susep 1. Excluding premiums from Dotal 22 # % # % # # % # % # % # % # % # % # % # % # %

23 BB Seguridade Performance PREMIUMS, CONTRIBUTIONS AND COLLECTIONS 1 BREAKDOWN OF PREMIUMS, CONTRIBUTIONS AND COLLECTIONS¹ 24.5% 27.0% 27.5% 28.8% 25.0% 9% 43,349 53,996 60,176 68,876 61,883 Brasilprev 68.9% Brasilcap 8.2% SH1 10.7% SH2 12.2% Brasilprev 66.4% Brasilcap 7.9% SH1 12.4% SH2 13.3% Revenues (R$ MM) Market share² 1. Premiums written, pension plans contributions and premium bonds collections 2. Source: Susep PROFITABILITY 1. Premiums written, pension plans contributions and premium bonds collections EARNINGS BREAKDOWN 38.4% 49.8% 54.8% 51.8% 45.5% 2016 Others 1.2% % 2,260 3,223 3,945 4,107 3,911 Adjusted net income (R$ MM) ROAE BB Corretora 38.3% Brasildental 0.1% IRB 4.1% BB Corretora 40.6% Brasildental IRB 0.1% 4.0% 23 Brasilcap 7.0% SH1 29.7% Brasilprev 18.0% SH2 3.0% Brasilcap 4.4% SH1 28.7% Brasilprev 20.9% SH2 0.2%

24 Net Investment Income AVERAGE SELIC RATE (%) FORWARD YIELD CURVE (%) Sep/2016 Dec/ Sep/2017 Dec/ DI1F18 DI1F19 DI1F20 DI1F21 DI1F22 Source: Focus - Bacen do Brasil NET INVESTMENT INCOME (R$ MM) Source: ValorPro ASSET ALLOCATION 21.6% 23% 26.7% 31.1% 30.7% 28.3% 1,225 1,263 1,108 Fund quotes 0.2% Other 5.0% Pre-fixed 25.0% DEC/16 Fund quotes 0.2% Other 3.8% Pre-fixed 24.6% DEC/ Inflation protected 51.2% Floating 18.6% Inflation protected 45.0% Floating 26.4% Net investment income % Net income 24

25 BB MAPFRE SH1 PREMIUMS WRITTEN (R$ MM) 5% 6, ,432 7,601 7,379 7, BREAKDOWN OF PREMIUMS WRITTEN AND RETAINED PREMIUMS (%) WRITTEN RETAINED ,703 6,904 7,007 6,626 6, Retained premiums Premiums ceded Life Credit Life Rural DPVAT Mortgage Life UNDERWRITING RESULT NET INVESTMENT INCOME (R$ MM) 75.0% 72.5% 69.0% 70.2% 73.9% 19% % 2,425 2,654 2,794 2, ,680 Underwriting result (R$ MM) Combined ratio 25

26 BB MAPFRE SH1 Performance Ratios¹ LOSS RATIO (%) COMMISSION RATIO (%) G&A RATIO (%) COMBINED RATIO (%) Adjusted ratios considering the reinsurance effects. Combined ratio Expanded combined ratio 26

27 BB MAPFRE SH1 NET INCOME BREAKDOWN (%) PROFITABILITY 29.6% 41.4% 46.5% 44.2% 42.1% % 1,297 1,632 1,663 1, Non-interest operating result.¹ Net investment income¹ Adjusted net income (R$ MM) ROAE 1. Net of taxes considering the Company s effective tax rate. SOLVENCY ASSET ALLOCATION 128.9% 126.0% 113.3% 139.9% 186.2% DEC/16 DEC/ Others¹ 15.2% Inflation protected 30.7% Pre-fixed 9.9% Floating 44.2% Inflation protected 25.0% Others¹ 10.0% Pre-fixed 8.2% Floating 56.8% Dec/13 Dec/14 Dec/15 Dec/16 Dec/17 Investments + Receivables (R$ BN) Technical reserve (R$ BN) Solvency ratio 1. Agrarian debt bonds, DPVAT, Investment funds 27

28 MAPFRE BB SH2 PREMIUMS WRITTEN (R$ MM) BREAKDOWN OF PREMIUMS WRITTEN AND RETAINED PREMIUMS (%) 1% 7, ,846 9,094 1,198 1,414 8,424 8,238 1,417 1,358 WRITTEN RETAINED ,909 7,648 7,680 7,008 6, Retained premiums Premiums ceded Vehicles Casualties DPVAT Other UNDERWRITTING RESULT NET INVESTMENT INCOME (R$ MM) 98.0% 98.6% 99.4% 102.7% 104.5% -6% 16% ,423 1,410 1,504 1,185 1, Underwriting result (R$ MM) Combined ratio 28

29 MAPFRE BB SH2 Performance Ratios¹ LOSS RATIO (%) COMMISSION RATIO (%) G&A RATIO (%) COMBINED RATIO (%) Adjusted ratios considering the reinsurance effects. Combined ratio Expanded combined ratio 29

30 MAPFRE BB SH2 NET INCOME BREAKDOWN (R$ MM) PROFITABILITY 7.5% 9.2% 12.8% 7.0% 0.4% 26-47% Net investment income¹ Non interest operating result¹ 1. Net of taxes considering the Company s effective tax rate. SOLVENCY Adjusted net income (R$ MM) ROAE ASSET ALLOCATION 130.8% 139.0% 143.1% % % Dec/13 Dec/14 Dec/15 Dec/16 Dec/17 Investments + Receivables (R$ BN) Technical reserve (R$ BN) Solvency ratio 8 30 Floating 36.1% Pre-fixed 16.0% Inflation protected 30.7% DEC/16 1. Agrarian debt bonds, DPVAT, Investment funds Floating 56.7% Inflation protected 19.6% DEC/17 Others¹ 16.7% Others¹ 17.2% Pre-fixed 7.0%

31 Brasilprev CONTRIBUTIONS (R$ BN) NET INFLOWS 11.2% 9.4% 9.3% 8.8% 7.9% 16% % VGBL PGBL Traditional Net inflows (R$ BN) Redemptions ratio Source: Quantum Axis MANAGEMENT FEE RESERVES (R$ BN) 1.32% 1.28% 23% 1,031 1, % 1.15% 1.11% 2,382 1,957 1,555 29% Management fee (R$ MM) Management fee VGBL PGBL Traditional¹ 1. Defined remuneration plan 31

32 Brasilprev RESULT WITH PENSION PLANS AND INSURANCE 52.8% 52.2% 51.7% 49.2% 47.5% PROFITABILITY 46.3% 42.6% 39.2% 41.8% 43.1% 23% ,202 1,470 17% ,009 1,091 Result with pension plans and insurance (R$ MM) Cost-to-income ratio Adjusted net income (R$ MM) ROAE ASSET ALLOCATION ASSET ALLOCATION BY INDEX (EXCEPT P/VGBL) Debentures and commercial papers 2.2% Securities¹ 7.8% Stocks Debentures and DEC/16 Stocks 0.6% commercial 0.7% papers DEC/17 Pre-fixed 1.6% Securities¹ 4.6% 2.9% Floating 5.4% DEC/16 Pre-fixed 5.3% Floating 7.1% DEC/17 Government bonds 89.4% Government bonds 93.1% Inflation protected 91.7% Inflation protected 87.6% R$ BN R$ BN R$ 11.9 BN R$ 12.3 BN 1. Securities = time deposits, time deposit with special guarantee, real state receivables certificate, creditory rights, letras hipotecárias and letras financeiras 32

33 Brasilcap PREMIUM BONDS COLLECTION (R$ MM) RESULT WITH PREMIUM BONDS -6% 6,270 6,687 6,517 1,867 2,629 2,586 5,649 2,518 4,893 2, % 18.2% 15.7% 13.8% -42% % 4,403 4,058 3,931 3,132 2, Unique payment Monthly payment NET INVESTMENT INCOME (R$ MM) Result with premium bonds (R$ MM) PROFITABILITY Premium bonds margin 64% % 18% 92.2% 87.0% % % Adjusted net income (R$ MM) ROAE 33

34 Brasilcap TECHNICAL RESERVES (R$ MM) SOLVENCY RATIO (%) 1% 9,489 11,752 12,354 10,763 9, ASSET ALLOCATION ASSET ALLOCATION TRADING PORTFOLIO DEC/16 DEC/17 DEC/16 DEC/17 Government bonds 75.3% Time deposits and others 14.0% Government bonds 78.4% Time deposits and others 7.9% Pre-fixed 58.2% Floating 16.9% Inflation protected 23.9% Pre-fixed 56.9% Repo + Cash Debentures and Debentures and 4.9% Repo + Cash Stocks commercial Inflation Stocks commercial Stock Funds Stock Funds 10.5% 0.7% papers papers protected 0.7% 2.6% 1.0% 1.3% 5.2% 3.3% 34 Floating 38.4%

35 BB Corretora BROKERAGE INCOME (R$ MM) BREAKDOWN OF BROKERAGE INCOME 12% 1,766 2,308 2,559 2,764 2,775 Brasilprev 20.9% SH2 11.0% Brasilcap 10.1% Other 0.2% SH1 57.8% Brasilprev 17.3% SH2 10.2% Brasilcap 9.5% Other 0.3% SH1 62.7% ADJUSTED NET INCOME (R$ MM) EXPENSES BREAKDOWN & NET MARGIN¹ (%) 15% ,289 1,508 1,610 1, Operating expenses Tax expenses Income taxes Net margin 1. Operating, tax and income tax expenses are calculated as a percentage of brokerage income and does not consider the net investment income. 35

36 Guidance 2018 Ratio 2018 Estimates Change of the adjusted net income -2.0% to +2.0% 36

37 Restructuring Estrutura the Joint Acionária Venture with MAPFRE - Parcerias Independent Broker & Affinity Bancassurance Independent Broker Bancassurance Bancassurance Independent Broker & Affinity 74.99% 25.01% 74.99% 25.01% Term Life Crop SH1 Credit Life Rural Lien Mortgage Life Credit Life for Farmers New BB MAPFRE INSURANCE GROUP Home BB Bancassurance Channel Other P&C Term Life Mortgage Life Credit Life Rural Term Life Affinity Channel 50.00% 50.00% SH2 Term Life Credit Life Crop Auto Home Auto Large Risks Home Large Risks Other P&C Other P&C Home Large Risks Captive Access to Distribute at BB Bancassurance Channel Other P&C Auto Auto Large Risks 37

38 Portfolio of Products

39 Our Products SH1 Insurances Life Definition: term life insurance without accumulation. Coverage: in case of death, permanent disability or severe disease during the term, the benefit will be paid to the insured or his beneficiary. Credit Life Mortgage Life Definition: insurance that guarantee the payment of loans. Coverage: in case of death the insured loan will be paid off and the client s relatives will not inherit the debt. Definition: insurance related to mortgage loans. Coverage: in case of death or permanent disability the remaining balance of the loan will be prepaid. This product also protects the home of the insured from physical damage. Rural Definition: encompasses a group of three main products: crop insurance, rural lien insurance and credit life insurance for farmers. Coverage: (i) Crop: any weather hazards and falling in the market prices of the crop; (ii) Lien: damage caused to the property, directly related to agricultural activities, which is provided as collateral of a rural loan; (iii) Credit life: in case of death of the insured person the insurance company will prepay the rural loan. 39

40 Our Products SH2 Insurances P&C Definition: is a type of insurance sold to individuals and companies that provides protection against risks to properties linked or not to loans. Coverage: the main coverage is for damages to the home of individuals, and the assets of companies such as machinery and other properties. Auto Definition: insurance sold to individuals or companies that provides protection to vehicles. Coverage: is an insurance policy designed to provide protection for vehicles against theft, physical damage and/or bodily injury resulting from traffic collisions, besides other assistances provided to the policy holder for their daily lives. DPVAT Definition: A mandatory insurance related to accidents caused by vehicles in Brazil. Coverage: Covers personal injury caused by vehicles to passengers, drivers or pedestrians. 40

41 Our Products - Brasilprev PGBL Pension Plan designed for people who declare income taxes in the complete form as contributions are deductible up to a limit of 12% of the client s taxable income VGBL Focus on inheritance planning It has the advantage of not joining the inventory Lower inheritance costs (does not have legal costs neither lawyer fees) Less time consuming (beneficiary receives the benefit in less than 30 days) Traditional Plan Defined remuneration Guarantees a minimum yield composed of either inflation +6% or TR + 6%. ** No longer sold 41

42 Our Products - Brasilcap Premium Bonds Premium bonds products are an alternative way to accumulate reserves, allowing the bond holder to be entitled to participate in lottery. The award occurs through periodic drawings, being most frequent the usage of a combination of numbers in a pre-determined series, based on the Brazilian Lottery. Chances of Contemplation Ourocap From 1 in 10,000 to 1 in 1,000,000 Official Lottery 1 in 50,063,860 42

43 BB Seguridade IR Investor Relations Contacts Rua Alexandre Dumas, 1671 Térreo Ala B São Paulo SP Brasil Telephone: ri@bbseg.com.br 43