PORTO SEGURO PRESENTATION

Transcription

1 PORTO SEGURO PRESENTATION September, 2017

2 Agenda Insurance Industry Overview Market Development Competitive Landscape Key Growth and Profitability Drivers Porto Seguro at a Glance Business Portfolio Strategy and Key Differentials Long-Term Results Stock Performance and Dividends Recent Results 2Q17 Insurance Non-Insurance Businesses Financial Results

3 INSURANCE INDUSTRY OVERVIEW

4 Worldwide Insurance Penetration (premiums as % of GDP ) Insurance Industry Overview The Brazilian insurance market still offers significant opportunities, despite of the fact that in the last 13 years premiums have been growing roughly 10% (CAGR) Canada: 7.5% Russia: 1.4% UK: 10.1% France: 9.2% Germany: 6.1% USA: 7.3% Mexico: 2.3% Italy: 8.2% Spain: 5.6% Japan: 11.1% China: 4.1% India: 3.5% Japan: 9.5% < than 2% Brazil: 4.0% 2% < 5% Chile: 4.8% South Africa: 14.3% Australia: 6.5% 5% < 8% Argentina: 2.6% 8% unanalysed Brazilian Insurance Market Penetration* CAGR > 9% Source: Swiss RE 2.7% 2.7% 2.7% 2.8% 2.9% 2.9% 3.1% 3.1% 3.2% 3.6% 4.0% 3.9% 3.9% 3.9% *Overall written premiums as % of GDP, excluding Capitalization and Health Medical Operator segments 4

5 Penetration - % A market of R$ 403 Bi, driven mainly by pension, auto, life and health products insurance penetration of these main lines does not exceed 30% Insurance Industry Overview Brazilian Premiums by Segment (2016) Other 36% 19% P&C Auto 46% Non-Life 17% R$ 70 BI Life 83% R$ 333 BI Health 49% Life 6% 10% Pension (PGBL + VGBL) 34% Main Insurance Products - Penetration vs. Premiums 45 ( Estimate) Main Insurance Products CAGR ( ) 30 30% 25% 15 10% 12% 10% 6% Premiums (R$ Billion) Auto Homeowner Life Pension Health Dental Source: ANS, SES-SUSEP, CNSEG and Porto Seguro estimate Market Premiums Growth CAGR ( ) Pension 17% Dental 16% Homeowner 13% Life 12% Auto 10% Health 11% 5

6 Insurance Industry Overview The market is highly concentrated in all segments Concentration of Brazilian Market Share (Top 5 Players and Porto Seguro) Non-Life Auto Homeowner Market Share (%) 50.0% 72.1% 28.7% 72.6% 28.4% 48.0% 17.6% 51.9% 17.0% 10.5% 24.8% 5.6% Top 5 Porto Seguro Top 5 Porto Seguro Top 5 Porto Seguro P&C (Ex Homeowner) Life (Ex VGBL) Health* 25.1% 2.9% 43.3% 5.8% 41.7% 60.0% 2.2% 2.5% 90.5% 96.8% 6.4% 3.1% Top 5 Porto Seguro Top 5 Porto Seguro Top 5 Porto Seguro *Not including HMO Source: SUSEP/ANS/Sincor 6

7 Insurance Industry Overview The Brazilian insurance market is dominated by brokers in the Auto, P&C and Health segments and by banks in Life and Pension Products no clear universal distribution model to be adopted and the internet channel is still irrelevant Life and Non-Life Segmnents Channel Distribution by Country (Premiums % ) USA Auto Insurance Customer Shopping¹ USA UK Germany Mexico S.Africa S.Korea Brazil Internet Brokers Gather Quote Purchase 51% 44% 28% 49% 66% 72% Agents Brokers Banks Direct Affinities Source: CEA Insurers of Europe III On Line/UK-ABI Key Facts / Swiss RE / Accenture ¹Account for 72% of all shoppers Source: 2012 McKinsey Auto Insurance Customer Insights Research 7

8 Insurance Industry Overview There is no strong correlation between Brazilian GDP and the insurance products growth competition plays a key role and affects pricing Brazilian Insurance Products and GDP Growth (%) - Real 20.7 Auto (%) P&C (%) GDP Growth Auto Growth GDP Growth P&C Growth Life (%) Health (%) Source: CNSEG/SUSEP/IBGE GDP Growth Life Growth* GDP Growth Health Growth 8

9 Insurance Industry Overview The Brazilian penetration has been showing low fluctuation even considering the macro economic conditions (inelastic demand) it s a resilient industry dominated by higher income customers Brazilian Car Sales Expansion Cost of Auto Insurance in Brazil CAGR: 10% CAGR: 2% Source: SUSEP, ANFAVEA and ANEF Auto Insurance Development % 31.5% 31.6% 31.3% 31.0% 30.1% CAGR: 9% CAGR: 3% Insurance price over income percapita¹ ¹Porto Seguro average auto insurance price over annual GDP per capita Source: IBGE, Porto Seguro Penetration by Insured Fleet Age* 31.0% 31.5% 31.6% 31.3% 21.7% 18.8% 17.2% 18.6% 27.5% 24.5% 23.4% 23.3% 45.4% 49.0% 50.6% 51.8% * 2016* Auto Insurance Premiums (R$ Billion) Auto Insurance Penetration Source: Susep; Fenseg, Denatran; Anfavea; Fenabrave *Porto Seguro Estimates for auto insured fleet (2015/16) Insured Fleet (Million) years 6-10 years > 10 years 9

10 The competitive environment contributes to the auto loss ratio fluctuation, which remains historically cyclical - however, since 2014, the cycle has shortened and now lasts approximately 1 year National Auto Insurance Claims Behavior (Loss Ratio and Variation vs. Previous Year) Insurance Industry Overview 2.1% 1.4% 0.1% 0.2% 2.7% 0.0% 1.9% -1.0% 3.2% 3.3% -3.8% -5.4% -2.4% -4.1% -2.2% 71.1% 72.5% 72.6% 68.8% 63.4% 63.6% 66.3% 66.4% 64.0% 65.9% 64.9% 60.9% 64.1% 61.9% 65.2% Variation vs. Previous Year National Auto Insurance Loss Ratio Source: SUSEP 10

11 Insurance Industry Overview In the last 5 years, out of the 10 largest players, only Azul Seguros has increased its market share reporting decreases in the loss ratio Historically, the losses of Porto Seguro have stayed below the market average (-9 p.p. in 1H17) Top auto players outcome¹ (2016 x 2011) Loss Ratio Evolution - Porto x Market Market +1.7 p.p. 3.1 p.p. 1.4 p.p p.p p.p. 6.6 p.p. -2.5% -0.5 p.p p.p p.p p.p p.p. 4.4 p.p. 4.3 p.p. 2.4 p.p. 2.7 p.p. 2.8 p.p. 1.8 p.p. 1.9 p.p. 0.5 p.p p.p % 66.4% 62.9% 66.5% 64.7% 68.1% 68.0% 61.5% 60.8% 55.3% 57.6% 54.5% 58.5% 59.0% S17 Market (Ex Porto) Porto Consolidated Market vs. Porto (p.p.) Market Share Loss Ratio Market Loss Ratio ¹ 2016 Loss Ratio vs. last 5 years average Source: SUSEP 11

12 The São Paulo state is the only place that implemented the Chop Shop regulation reducing the number of cars stolen, significantly The amount of stolen cars in Brazil rose 12% from 2013 to 2016 while in São Paulo it decreased 12% Claims Distribution in Brazil (Auto Insurance) 30% 5% Car Parts: 70% Skilled Labor: 30% 65% Collision Theft Other Coverage¹ ¹Glasses, passengers personal injuries and additional services Source: Porto Seguro Estimative/SUSEP Auto Thefts in Brazil (Thousand Vehicles) 0 Insurance Industry Overview Auto Thefts (Rates per 100,000 vehicles) State of São Paulo USA England and Wales Source: NICB/The car people /SSP-SP Southeast South Northeast Mid West North Source: Anuário Brasileiro de Segurança Pública The chop shop car law is being enforced only in São Paulo State, decreasing the number of stolen cars +12% % Brazil (Ex São Paulo) São Paulo Source: Anuário Brasileiro de Segurança Pública 12

13 Insurance Industry Overview According to Brazilian Insurance Federation, the insurance market will grow from 8% to 11% in 2017 Rural, Life, Homeowner and Health are the most prominent products Insurance Market Revenues Estimates Nominal Growth 2017/2016 Revenues 2016 (R $ B illio n) Worst Scenario Best Scenario P&C % 4.1% Auto % 6.8% DPVAT % -31.1% Homeowner % 13.7% Rural % 16.2% Other % 10.7% Life % 12.0% Term Life Plans % 15.1% Saving Plans % 11.0% CAPITALIZATION % 8.0% HEALTH % 12.8% MARKET % 10.7% Source: CNSeg 13

14 Insurance Industry Overview The sensibility of interest rate (SELIC) variation is small. Assuming a decrease of 1.4 p.p. in interests, policies price must be readjusted by 1% in order to compensate lower financial results Financial x Operational Results Simulation Estimated Decrease in SELIC Average Porto Combined Ratio (Last 4 Years) Prices Readjustment SELIC Impact Price Impact Estimated Combined Ratio -10% 97.3% +1% MM 20.9 MM 96.7% -20% 97.3% +2% MM 41.9 MM 96.2% -30% 97.3% +3% MM 62.8 MM 95.6% 14

15 PORTO SEGURO AT A GLANCE

16 Over the last 70 years Porto Seguro has been recognized by its entrepreneurship and excellent execution in all its business lines Porto Seguro At a Glance Main Facts and Companies Porto Cia Porto Consortium Kind of Financing for Car and Real State Portopar Portoseg Financing Operations and Credit Card start in 2007 Porto Health Insurance IPO Itaú Partnership Constitution of Itaú Auto e Residência Bioqualynet Commercializes Occupational Safety and Health Services Health for Pet Pet Health Plan Oxigênio Business Incubator Chubb and AIG auto portfolio acquisition Change in Corporate Control Life and Pension Surveillance and Monitoring Security and monitoring devices for home and commercial Launch of Azul Axa Seguros acquisition Individual Health portfolio sold to Amil Porto Seguro Serviços Porto Conecta Provides telecommunication services as a virtual operator (MVNO) Porto Faz Intensifying the dissemination of Porto Faz convenience services (handy made services) Popular Insurance Propducts 16

17 Porto Seguro At a Glance Porto Seguro is composed of insurance, financial and general services businesses Operational Structure Porto Seguro Controllers* 57.0% *Controlled by Jayme Garfinkel Itaú Unibanco 43.0% Free Float Shareholders Breakdown (September, 2017) 6% 3% PSIUPAR 70.8% Free Float 29.2% 31% 25% 35% Porto Seguro Cia de Seguros Itaú Seguro de Auto e Residência Azul Seguros Porto Seguro Dental Porto Seguro Heatlh Insurance Porto Capitalization Porto Seguro Life and Pension Porto Seguro Consórcio Portoseg (Consumer Finance and Credit Card) Portopar (Asset Management) Porto Call Center Porto Conecta (Virtual Mobile Operator) Porto Seguro Medical Services Carro Fácil (Long Term Car Rent) Porto Seguro Surveillance Porto Renova (Recycle and Dealer Car Parts) Porto Faz (Convenience Services) Health for Pet Brazil USA Europe Asia Other Portomed (HMO) Porto Seguro Uruguay Porto Oxigênio (Business Incubator) Insurance Financial Services General Services 17

18 Porto Seguro At a Glance To serve about 10 million clients and more than 18 million covered items, Porto Seguro has a solid and reliable operational structure Operational Structure 32 Thousand 70 anos de história Brokers Uma marca de confiança! Mais de 6 milhões de clientes e 24 mil corretores Entre as 15 marcas mais valiosas do Brasil em Líder em seguro de automóvel e residencial Branches 15 Thousand Employees 210 Automotive Centers 18 Thousand Service Providers 5 Thousand Itaú-Unibanco Branches Porto Seguro Brands Mission: Taking risks through top-notch quality services exceeding clients expectations and ensuring agility at competitive costs with social and environmental responsibility. 18

19 Porto Seguro At a Glance We based our strategy on four pillars Our Strategy Segmented Value Propositions Three brands to attend different needs and preferences Different value propositions service, price, specific affinity (Itaú) Strong Relationship with Brokers and Clients High service level Focus on long-term relationships, not product transactions Retention rate higher than market average Innovative Products and Services Innovative and synergic product portfolio (cross-leverage) Expanded services (for home, car and individuals) beyond basics Services as key for value recognition Sophisticated Risk Selection and Pricing Conservative, profit driven underwriting Leverage of huge database and sophisticated quantitative models Loss ratio historically below market average Majority of short tail business 19

20 Porto Seguro has different value propositions through its brands - not a one size fits all approach Porto Seguro At a Glance Segmented Brand Strategy Auto Insurance Brand/Product Focus Coverage Main Feature Fleet age Operating Process Underw ritting TRADITIONAL INSURANCE (COMPREHENSIVE COVERAGE) Porto Seguro Auto Differentiation (Auto Jovem; Auto M ulher; Auto Premium; etc) Comprehensive Value Added Products and Services Low -Middle Flexible Sophisticated Risk Selection and Pricing Itaú Auto Affinity Comprehensive Convenience Low -Middle Lean Sophisticated Risk Selection and Pricing Azul Auto Low Cost Comprehensive Lean Products and Services Low -Middle Lean Sophisticated Risk Selection and Pricing Azul Leve Low Cost Flexible AFFORDABLE INSURANCE (PARCIAL COVERAGE / USED PARTS) Reduced Price Through Flexible Coverages Mid-High Lean Sophisticated Risk Selection and Pricing Azul Seguro Popular Low Cost Comprehensive Use of generic and used parts High (only specific car models) Lean Sophisticated Risk Selection and Pricing Itaú Furto e Roubo Affinity + Low Cost Theft Designed For a Specific Need Mid-High Lean Sophisticated Risk Selection and Pricing Porto Rastreador Mais Seguro Low Cost Theft Provide the Customer's 1st Coverage Mid-High Lean Sophisticated Risk Selection and Pricing 20

21 Porto Seguro At a Glance Offering a wide range of insurance products Main Insurance Products (2016) Auto P&C (1) Health Homeowner Life Market Position 1º 2º 4º insurance only 1º 11º * Market Share 29.2% 9.9% 3.3% (Data from 2015) 27.8% 2,5% * Premiums (R$ Million) % on Total Premiums Premiums CAGR (5 years) Insured Items (thousand) 9,353 1,328 1, % 9% 9% 5% 5% 10% 14% 8% 12% 14% 5,454 2, ,117 6,905 (1) Including Homeowner insurance Source: Susep/Sincor/Porto Seguro 21

22 Porto Seguro At a Glance Other non-insurance businesses increase the bottom-line, creating a stronger customer connection that intensifies loyalty and cross-selling opportunities Main Non-Insurance Products (2016) Financial Services General Services Brand New Services Mobile Operator Credit Card Consortium³ Surveillance and Monitoring Occupational Safety and Health Market Position 7º 12º 2 ¹ 1º Porto Faz (convenience services) Market Share 2.1% (Revenues) 1.4% (Number of Members) - - Revenues (R$ Million) % on Porto Seguro Non- Insurance Lines Revenues CAGR (3 years) Clients/Items (thousand) % 13% 5% 10% 15% 12% 9% 8%² 1, Carro Fácil (long term car rent + services) Health for Pet ¹ Porto Seguro estimative ² Acquisition of Bioqualynet company in 2013 ³ It s a kind of financing business where Porto Seguro charge a fee in order to manage the group of clients interest for buying cars or houses Source: Banco Central/Card Monitor/Porto Seguro 22

23 Porto Seguro At a Glance Porto Seguro works with a synergistic diversification in order to improve clients and brokers retention, leverage cross selling and enhance profitability - Approximately 80% of our clients have only 1 product Synergy between Products Synergistic Products (cross-selling opportunities) Cross-Selling Profitability Sales expansion of complementary products: Auto + Credit Card; Auto + Homeowner; Credit Card Theft Insurance Usage of the power brand to launch innovative products and tap into new market niches: Health for Pet, Carro Fácil, Porto Faz, Conecta etc. Business risk reduction: know-how of the insured clients base (Credit Card, Financing, Landlord Protection insurance) Scale gains through products synergy: costs reduction of the monitored insured fleet (Conecta); costs saving through the acquisition of car parts from Porto Renova Insurance Broker Retention Focus on long term relationship: High service level based on personal touch and differentiated loyalty programs that offer price discounts on the insurance policies Segmented Solutions (services, prices and specific groups): Auto Jovem, Auto Mulher, Itaú Roubo, Azul Leve, etc. Additional offers for Brokers: focus on advisory, new sales opportunities and additional income 23 10

24 First non-life insurance company in Brazil consistent revenue growth Porto Seguro At a Glance Porto Total Revenues (R$ Billion) CAGR = 21% CAGR = 14% Insurance Premiums Other Non-Insurance Business Revenues 2016 Non-Life Insurance Premiums 2016 Auto Insurance Premiums (R$ billion) and Market Share¹ (%) (R$ billion) and Market Share (%) Porto Seguro Consolidated % Porto Seguro Consolidated % Mapfre + Brasil Veículos % Mapfre + BB % Bradesco 5.8 9% Bradesco % Tokio Marine 3.8 6% Sul América % Sul América 3.4 5% HDI 2.8 9% Aliança 3.4 5% Tokio 2.4 7% Zurich 3.3 5% Liberty 2.1 6% HDI 3.1 5% Allianz 1.5 4% Caixa 3.0 5% Marítima 1.0 3% Liberty 2.4 4% Zurich 0.4 1% ¹Excluding Life, Health, Pension and Capitalizations Products 24 Source: Susep / Porto Seguro

25 Auto insurance continues to be relevant, however its participation has been reduced in the portfolio due to other business expansion Porto Seguro At a Glance Porto Seguro Portfolio Distribution (2016) Insurance Premiums (% of Total Revenues) (CAGR 2010 x 2016) 34.0% 3% 6% 9% Auto P&C 23.2% 4% Health 13.9% 13.8% 13.2% 6% 58% Credit Card and Financing Life 9.5% 8.7% 6.0% 6% Pension 8% Other Non-Insurance Other Insurance Volume of Clients by Product (thousand) Business Revenues (R$ billion) Products H17 CAGR Dental Members Insured Number of Credit Card Life - Members Insured % 695 2,086 18% 2,776 7,165 16% CAGR: 27.6% CAGR: 11.4% Clients of Consortium Surveillance and Monitoring Clients % % CAGR: 9.5% Homeowner Clients 1,275 2,226 9% Auto Other Insurance Financial and Service Businesses 25

26 Porto Seguro At a Glance We have reached consistent operating results in the last 5 years regardless of CDI rate decrease - The average combined ratio was 97.4% thanks to the underwriting discipline and focus on process improvement (administrative expenses fell -1,6 p.p.) Porto Seguro Insurance Results 17.3% 16.5% 17.2% 18.6% 15.5% % Recurring ROAE (all business w/o business combination) 13.2% 14.0% % CDI* 10.8% 8.4% 8.1% *Risk Free Rate (Similar to LIBOR) Loss Ratio Acquisition Costs G&A Other Revenues/Expenses Tax 26

27 Porto Seguro At a Glance We are further expanding our national presence on auto insurance - other regions have been evolving rapidly and we still pursue opportunities to deploy our model outside the southeast region Auto Premiums by Brand Auto Premiums by Regions (2016) 1% 2% 5% 8% 9% 11% 13% 24% 74% 52% Porto Azul Itaú Porto Market (ex. Porto) Southeast South Northeast Mid West North Source: SUSEP % of Region Participation Region Auto Insurance Market Share (2016) 1st Var. p.p. vs nd Var. p.p. vs rd Var. p.p. vs th Var. p.p. vs th Var. p.p. vs % Brazil Porto Seguro Mapfre + BB Bradesco Sulamérica HDI 1.4% -2.4% 0.3% -0.2% 28.2% 12.4% 12.0% 10.0% 8.6% 0.2% 58% Southeast Porto Seguro Sulamérica Mapfre + BB Bradesco Tokio 1.4% -0.7% -0.7% -0.1% 36.1% 11.0% 10.8% 8.2% 8.2% 0.6% 39% São Paulo Porto Seguro Mapfre + BB Bradesco Sulamérica Tokio 1.8% 0.0% -0.4% -0.8% 41.9% 11.7% 8.4% 7.8% 7.5% 0.4% 20% South HDI Porto Seguro Mapfre + BB Bradesco Liberty 0.7% 1.2% -4.2% 0.0% 18.5% 14.7% 12.9% 12.7% 12.6% 0.4% 11% Northeast Bradesco Porto Seguro Mapfre + BB Sulamérica Liberty 1.7% 2.4% -7.1% 0.8% 21.4% 20.5% 15.9% 10.8% 7.8% 0.3% 8% Mid West Bradesco Porto Seguro Mapfre + BB HDI Tokio 2.8% -0.3% -2.2% 0.0% 22.8% 18.7% 16.8% 9.2% 7.9% 0.4% 2% North Porto Seguro Bradesco Mapfre + BB HDI Tokio 0.0% 1.6% -3.7% 0.9% 18.5% 16.3% 15.6% 12.1% 9.9% 0.4% 27

28 Porto Seguro At a Glance P&C business has been growing double digits as a consequence of the low market penetration - the loss ratio has been low and practically stable over the years P&C Premiums Growth (R$ Million) P&C Revenues Distribution 2016 (%) CAGR: 15% 12.4% Itaú Homeowner , , , % 33.1% 34.1% Porto Commercial Porto Homeowner Other P&C Loss Ratio (%) 34.4% 31.7% 29.7% 32.5% 33.1%

29 The health plan has been impacted by high frequencies and medical inflation. On the other hand, dental insurance growth is soaring (CAGR of 32%) Porto Seguro At a Glance Health Premiums Growth (R$ Million) Dental Premiums Growth (R$ Million) CAGR: 1% CAGR: 32% Health Premiums Insured Members (thousand) Dental Premiums Insured Members (thousand) 85.1% 84.1% 80.9% 78.9% Health Loss Ratio (%) 89.7% 86.0% 85.6% 86.8% 83.4% 83.8% 84.2% 84.9% 81.2% 80.4% 81.4% 79.6% 80.5% 80.1% 76.1% 75.5% 51% 51% Dental Loss Ratio (%) 60% 57% Market Porto Seguro Sulamérica Bradesco 29

30 Life insurance shows many opportunities through unexplored products with higher profitability Porto Seguro At a Glance Life Premiums Growth (R$ Million) Life Revenues Distribution 2016 (%) CAGR: 13% Group Life 16.7% Individual Life 7.7% 2.8% 39.5% Travel Insurance % Massified Personal Accidents Life Loss Ratio (%) 33.3% 31.1% 28.3% 26.9% 30.4% Massified Insurance: Insurance products distributed to end customers through partner companies in a wide range of segments such as retail, cooperatives, banks, financial institutions, among others. 30

31 The Non-Insurance operations result are led by Financial Businesses while the General Services are not mature yet Porto Seguro At a Glance 2000 Non- Insurance Revenues Growth (Financial Business and Services) CAGR: 17% CAGR: 15% CAGR: 17% CAGR: 12% CAGR: 12% CAGR: 183% Credit Operations Conecta Other Non-Insurance Expenses Development Consortium Medical Services Consolidated Revenues Non-Insurance Net Earnings and ROAE % 7% 6% 6% 7% 5% 6% 6% 15% 17% 20% 15% 13% 12% 59% 58% % 17% 52% 56% CAGR: 19% Total Expenses (R$ MM) Tax Commercial Expenses Allowance for delinquent accounts Costs of services rendered G&A + Other Operational Expenses 22% 17% % 14% ¹Considering the Business: Medical Services, Renova Ecopeças, Porto Seguro Serviços, Carro Fácil, Conecta and Health for Pet Startup Losses¹ Non Insurance Net Earnings ROAE 31

32 Porto Seguro At a Glance The Financial Businesses revenues have increased mainly due to the Credit Card and Consortium¹ operations growth Historically, the NPL from Credit Operations has been lower than market average Credit and Financing Revenues Growth (R$ Million) Revenues CAGR: 19.1% Consortium¹ Revenues Growth (R$ Million) Revenues CAGR: 9.8% 1,625 1,870 1, , Credit Card and Financing Credit Card Clients Credit Card Portfolio Consortium Clients (thousand) NPL over 90 days² 16% 19% 20% 19% 16% 21% 17% 15% 16% 16% 63% 64% 66% 65% 68% 7.9% 7.7% 6.6% 5.9% 7.4% 7.3% 7.3% 5.0% 4.9% 5.0% Credit Card - Revolving (R$ Million) Financing and Refinancing (R$ Million) Credit Card - Outstanding ¹A consortium is an association of two or more individuals, companies, organizations or governments (or any combination of these entities) with the objective of participating in a common activity or pooling their resources for achieving a common goal. Porto Seguro Consórcio is company owned by Porto Seguro mainly engaged to manage consortiums for the acquisition of assets and properties (house and vehicles). 2Q16 3Q16 4Q16 1Q17 2Q17 Porto Seguro Market ²The NPL over 90 days was adjusted to stay in line with the Central Bank methodology, which establishes that the balance of agreement operations related to late payments are not considered delinquency 32

33 Porto Seguro At a Glance In the last five years, we have posted an average recurring ROAE of 17.0% - total net earnings have increased steadily through insurance and non-insurance business Porto Seguro Net Earnings and Profitability* 17.3% 16.5% 17.2% % 15.5% 1, CAGR: 7.1% CAGR: 4.7% CAGR: 7.1% Total Net Earnings (R$ MM) Non-Insurance Business Net Earnings (R$ MM) Insurance Business Net Earnings (R$ MM) ROAE % *IFRS without Business Combination - Recurring Source: Porto Seguro 33

34 Porto Seguro At a Glance Since 2010, Porto Seguro s financial investments produced an average return of 101%, above the CDI¹ Return on Investment Portfolio (Total Assets, excluding Pension Funds) 133% % of CDI¹ 103% 96% 105% 100% 79% 93% % Nominal Yield 10.0% 11.6% 11.1% 10.4% 12.3% 14.7% 6.3% ¹CDI Risk Free Rate (Similar to LIBOR) 34

35 Porto Seguro At a Glance We have a surplus on our capital in our insurance and financial services companies Capital Requirements² 2Q17 (R$ million) % Revenues over Capital Requirement by Business² 2Q17 3,201 5, , % 29.0% 32.4% 44.4% Adjusted Equity (1) Insurance (2) Financial (2) Sufficiency (3) Insurance Regulatory Capital Financial Services Porto Seguro ¹ Equity adjusted by additions and exclusions according to agencies standardization (SUSEP, BACEN and ANS) ² Necessity of Capital required according to regulators (SUSEP, BACEN e ANS) ³ Refers to the difference between adjusted equity and necessity of capital requirement 35

36 Porto Seguro At a Glance Since 2011 (last 6 years), the payout ratio and dividend yield average were 46.8% and 4.8% respectively the decrease of dividends paid in the last two years was due to higher CAPEX Porto Payout and Dividend Yield 60.0% 50.0% 50.0% 50.0% 30.4% 32.3% 32.3% 31.6% 31.4% 40.0% 35.0% 35.7% PBV (12/30/2016) 1.3 P/E (12/30/2016) % 9.6% 3.2% 3.8% 1.9% 3.0% 4.2% 4.5% 8.8% 4.4% 3.7% 3.4% Payout Dividend Yield 36

37 Our CAPEX has been driven by geographic expansion, system replacements and new business development Porto Seguro At a Glance 64% Porto Seguro CAPEX (R$) 55% 53% 46% 46% 46% % of Investments on Net Earnings 29% 183MM 369MM 374MM 376MM 400MM 462 MM 417 MM 20% 18% 14% 9% 16% 19% 16% 6% 22% Furniture/Fixtures/Vehicles 21% 11% 19% 26% 12% 17% 31% 22% 21% 33% 30% 61% Hardware and Software System Development 48% 51% 44% 44% 38% 21% 11% Real Estate

38 The Company has exceeded the benchmark (Ibovespa) historically, reporting a significant increase of its liquidity Porto Seguro At a Glance Stocks Daily Negotiation (Average R$ Million) Performance PSSA3 vs. IBOVESPA (Last 12 months) 22.1% PSSA3 12.6% IBOVESPA Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Appreciation since the IPO in 2004 Historical Variation*: PSSA3 x Ibov % PSSA3 IBOVESPA 332% 162% *From November 2004 (IPO) to June,

39 PORTO SEGURO RECENT RESULTS 2Q17

40 Executive Summary Key Facts 2Q17 In the first semester of 2017 the insurance market attained R$ 48,2 billion in premiums, reporting an increase of 5% when compared to the same period of 2016, even considering the crisis economic scenario (Source: SUSEP excluding health) In the second quarter, Porto Seguro reported a better performance, both in the insurance operation and financial and service businesses. However, the financial result was lower, mainly impacted by the decreased interest rate In the auto segment, the industry still presents a competitive environment, but the price adjustments that we have set, have contributed to the improved loss ratio. Furthermore, the auto insurance market already shows signs of recovery, while the brand new vehicle sales (light vehicles) increased 4% in the semester (vs. 1H16 - Source: Anfavea) In the other insurance, the main products (Health, P&C and Life) presented a double digit growth Our efforts to improve operational efficiency has led the expenses to grow below the inflation rate, while the G&A ratio has remained stable, even when considering the more challenging scenario to improve sales In the 2Q17, we registered on-balance the first part of the interests on capital in the amount of R$ 243 million. The Company will complement the payment in the 4Q17. 39

41 Recent Results Total revenues increased 5% in the 2Q17 while written premiums and other business have grown 4% and 14%, respectively Net earnings reached R$ 238 MM (+36%) and ROAE attained 15%. However, excluding the tax benefit from interests on capital, the result would have been 1% lower Total Revenue (R$ Billion) Revenues by Business Lines* (R$ Million) +5% % % % % % % 3,448 3, % +19% Q16 2Q17 1H16 1H17 Insurance Premiums Other Non Insurance Revenues Insurance and Pension¹ Financial Businesses² 2Q16 2Q17 Services³ Net Earnings by Business Lines* (R$ Million) % -98% +128% +43% % -39% +72% % Profitability* (R$ Million) and ROAE* (%) Q16 2Q17 1H16 1H17 2Q16 2Q17 1H16 1H17 Insurance (1) Financial and Service Businesses (2) Holding (3) Financial Result Operational Result ROAE (%) Net Earnings 1 Including insurance operations results, pension and capitalization 2 Represents Financial and Service Businesses results such as Consortium, Credit Card and Financing, Mobile Operator, Surveillance and Monitoring, Medical Services, among others. 3 Results arising from the financial funds held by the Holding, which is a relevant part of the Company free resources excluding G&A and tax expenses * Profitability and ROAE excluding Business Combination, net of taxes 11,9 +36% 15,0 14,3 14,5 +9% 40

42 Recent Results The Combined Ratio improved 2.5. p.p. mainly explained by the lower loss ratio, especially in Auto, Health and P&C segments the ROAE of insurance operations reached 13.9 p.p. (+3.4 p.p.) Top Insurance Premiums Growth¹ 2Q17 vs. 2Q16 (%) Auto P&C Health + Dental Life Pension Total Premiums 4.1% 5.0% 7.1% 3.9% 17.8% 71.1% Premiums Distribution - 2Q17 (%) 2% 8% Auto 6% P&C 9% 9% 66% Health Life DPVAT Other -3,0 Combined Ratio (%) +0,8 +0,1-0,1-0,3 Insurance Profitability 12,1 11, , % 13, % ¹ Insurance Premiums and Pension Gross Funding/ ² Insurance Combined Ratio/ ³ G&A Ratio/ * O.E Ratio (Total other operational revenues and expenses / earned premium) 2T16 2T17 1H16 1H17 Net Income (R$ Million) ROAE (%) 41

43 Expenses (Loss Ratio % + Commission %) Recent Results Porto Seguro focused on the margins recovery the expense indicators (loss ratio and commission) remained the lowest in the industry. However, the growth was affected in the semester Auto Insurance Performance 1H Porto Seguro Sulamérica Mapfre + BB Market: 85.2% 85.0 Var. Loss Ratio: +0.7 p.p. Var. Commission: +1.6 p.p. Bradesco 80.0 Porto Consolidated* HDI Liberty Zurich Allianz Sompo Seguros Tokio Mapfre + BB Bradesco Auto/RE Sulamérica Tokio Marine Liberty 75.0 Allianz 70.0 Sompo Seguros 65.0 Market: +5.7% Premiums Growth Zurich HDI * Written premiums growth and expenses (loss ratio + commission / earned premium). Source : SUSEP 42

44 Recent Results The quarterly revenues improved 14% in the 2Q17, boosted mainly by the mobile operator (Conecta), credit card and financing products the credit card NPL decreased, enhancing the profitability, while the total ROAE attained 16.9% (+8.9 p.p.) Revenues Evolution 2Q17 vs. 2Q16 (%) Revenues Distribution (%) Credit Operation Consortium 12% 8% 16% Credit Operation Consortium Medical Services Surveillance and Monitoring Mobile Operator Other Businesses* Total Revenues 11% 14% 14% 27% 52% 7% 5% 9% 13% 50% Medical Services Surveillance and Monitoring Mobile Operator Other Businesses* *Represents the services provided to the Porto Seguro group Net Earnings¹(R$ Million) ROAE¹ (%) % % p.p p.p Q16 2Q17 1H16 1H17 Net Earnings % On Total Net Earnings ¹Without Business Combination 2Q16 2Q17 1H16 1H17 43

45 Recent Results The return on financial investments was affected by the lower average CDI* in the period (-24% vs. 2Q16) and a weaker performance of inflation linked bonds and equities the financial result decreased 37%, producing a return of 2.1% (ex. Pension Funds) Revenue from Investments Assets (R$ Million) Net Asset Value (R$ Billion) Q16 3Q16 4Q16 1Q17 2Q17 Insurance Others Pension Funds Quarterly Performance 2Q16 3Q16 4Q16 1Q17 2Q17 Pension Funds Other Assets Allocation¹ (ex-pension Funds) % 3.5% 2.9% 3.4% *CDI Risk Free Rate (Similar to LIBOR) % 2Q16 3Q16 4Q16 1Q17 2Q17 Nominal yield (ex-pension funds) % of CDI (pension funds included) % of CDI (ex-pension funds) 2.2% 2.9% 3.4% 3.2% 2.4% 8% 8% 7% 5% 5% 28% 34% 23% 12% 39% 44% 25% 29% 31% 12% 11% 53% 51% 19% 42% 2Q16 3Q16 4Q16 1Q17 2Q17 ¹ Futures exposures included. Equities Corporate Bonds Inflation-Linked Bonds (Tips) Fixed Income Floating Rate Notes 44

46 2Q17 Summary REVENUES (in R$ million) INSURANCE WRITTEN PREMIUMS, PENSION AND CAPITALIZATION REVENUES 2Q17 2Q16 Var.% 1H17 1H16 Var.% Porto Seguro Auto 1, ,138.7 (1.9) 2, ,265.1 (3.5) Azul Seguros Auto , , Itaú Auto e Residência - Auto , , Total Auto 2, , , , P&C - Porto Seguro and Azul Seguros P&C - Itaú Auto e Residência Total P&C Health Dental Portomed (health care plan) (36.6) (29.6) Total Health (Health + Dental + Portomed) Life DPVAT (Cars/Personal Injured Liability) (37.4) (33.6) Porto Seguro Uruguay Written Premiums VGBL Cargo Financial Risks (9.6) (9.8) Other Insurance (14.9) Total Written Premiums 3, , , , Other Operational Revenues - Insurance Total Earned Premiums 3, , , , Total Pension Revenues (PGBL + VGBL) Capitalization Total Revenues REVENUES FROM FINANCIAL AND SERVICE BUSINESSES 2Q17 2Q16 Var.% 1H17 1H16 Var.% Credit Card and Financing Consortium Medical Services Call Center Surveillance and Monitoring Services Mobile Operator Asset Management Other Revenues Financial Businesses and Services - Total Revenues , Other Operational Revenues - Financial Businesses and Services Real Estate Revenues Total Revenues 4, , , , FINANCIAL RESULTS 2Q17 2Q16 Var.% 1H17 1H16 Var.% Financial Results - Insurance (38.5) (27.3) Financial Results - Other (Financial Businesses / Services / Holding) (21.0) (3.7) Total Financial Results (36.5) (24.2) 45

47 2Q17 Summary INDEX (%) LOSS RATIO 2Q17 2Q16 Var. p.p 1H17 1H16 Var.% Porto Seguro Auto (1.3) Azul Seguros Auto Itaú Auto e Residência - Auto (3.1) (2.1) Total Auto (1.3) P&C - Porto Seguro and Azul Seguros (4.4) (2.5) P&C - Itaú Auto e Residência (4.4) (2.0) Total P&C (4.3) (2.3) - Health (5.2) (1.8) Dental (6.2) (10.1) Portomed (Healthcare Plan) (14.8) (15.9) Health (Health + Dental + Portomed) (6.8) (4.4) Life (0.9) Total Loss Ratio (3.0) (1.4) INSURANCE COMMISSION RATIO 2Q17 2Q16 Var. p.p 1H17 1H16 Var.% Acquisition costs - Insurance INSURANCE - OPERATING AND ADMINISTRATIVE EXPENSES 2Q17 2Q16 Var. p.p 1H17 1H16 Var.% G&A Insurance Other Operatinal Revenues/Expenses - Insurance (0.1) (0.3) Total Administrative and Operational Expenses (0.2) Tax - Insurance (0.3) (0.1) MARGIN AND PROFITABILITY 2Q17 2Q16 Var. p.p 1H17 1H16 Var.% Combined Ratio - Insurance - var.p.p (1.1) Amplified Combined Ratio - Insurance - var. p.p Shareholder's Equity w/o Business Combination - R$ million - var. % 6, , , , Shareholder's Equity with Business Combination - R$ million - var. % 7, , , , Net Earnings w/o Business Combination - R$ million - var. % Net Earnings with Business Combination - R$ million - var. % ROAE w/o Business Combination - p.p ROAE with Business Combination - p.p EPS w/o Business Combination - R$ - var. % EPS with Business Combination - R$ var. % # of thousand shares - var. % 323, , , ,293-46

48 Contact Investor Relations Department Alameda Barão de Piracicaba, th floor Campos Elíseos São Paulo, SP, Brazil Phone: (55 11) (55 11)