1H16. Institutional Presentation. BB Seguridade Participações S.A. Investor Relations

Transcription

1 1H16 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 Estrutura Acionária - Parcerias Ownership Structure Free Float (Post IPO) 33.75% 66.25% BB Seguridade 100% 100% BB Seguros BB Cor BB Seguridade Economic Stake (%) BB Seguridade Voting Stake (%) Board of Directors Representation (%) Board of Executives Officers Representation (%) BB MAPFRE SH1 Life, Rural 74.9% 49.9% 50.0% MAPFRE BB SH2 P&C 50.0% 49.0% 50.0% Brasilprev Pension Plans 74.9% 49.9% 50.0% Brasilcap Premium Bonds 66.7% 49.9% 66.7% 50.0% 50.0% 50.0% 100.0% IRB Brasil Re Reinsurance 20.4% 20.4% 20.0% Brasildental Dental Insurance 74.9% 49.9% 50.0% BB Corretora Brokerage 100.0% 100.0% %¹ 100.0% 1. One of the members is elected by consensus. 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 Marcelo Augusto Dutra Labuto Chief Financial Officer Werner Romera Suffert Chief Risk Officer Antonio Rugero Guibo Chief Marketing Officer Ângela Beatriz de Assis 5

6 Shareholders Structure TOTAL CAPITAL BREAKDOWN JUN/2016 FREE-FLOAT BREAKDOWN¹ JUN/2016 Individuals 5.1% Free-float 33.8% Institutional 14.9% Banco do Brasil 66.3% Foreign Investors 80.0% 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 64.2 Million clients 5,428 Branches 64,785 ATMs 14,110 Banking correspondents 1 º 35,680 Points of service in shared network Low capital needs Non-banking Channel 141 Partnerships (Affinity) Access to the largest distribution network in Latin America 20,318 External Brokers 11

12 Strong Financial Performance ROAE¹ 1H16 (%) INSURANCE COMPANIES ASSOCIATED WITH BANKS TRADITIONAL INSURANCE COMPANIES Brokerage participation 185.6% 52.5% 34.9% 22.7% 14.2% 10.7% 10.1% 9.8% 9.3% Source: Companies and Susep 1. Annualized ROAE calculated by dividing the adjusted net income by the average shareholder s equity multiplied by two. 12

13 Macroeconomic Environment

14 Global Macroeconomic Data E 2017E 2018E World Economy - GDP Growth¹ World 2.6% 2.4% 2.4% 2.8% 3.0% USA 2.4% 2.4% 1.9% 2.2% 2.1% Euro Zone 0.9% 1.6% 1.6% 1.6% 1.5% China 7.4% 6.9% 6.7% 6.5% 6.3% Brazilian Economy² GDP Growth - Brazil 0.1% -3.8% -3.2% 1.1% 2.0% SELIC (ends of period) 10.9% 13.3% 13.8% 11.0% 10.5% SELIC (year average ) n.a n.a 14.2% 11.8% 10.5% Inflation (IPCA) 6.4% 10.7% 7.3% 5.1% 4.5% Inflation (IGP-M) 3.7% 10.5% 8.1% 5.5% 5.0% Dollar (quotation in R$) Source: World Bank - forecast s as of June, Source: Focus - forecasts as of Aug 12,

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 BRAZIL¹ 5, Source: Febraban 1. CPFs with active relationship in Brazilian Financial System /Economically active population BANCASSURANCE IN INSURANCE DISTRIBUTION 69.3% 69.2% 69.0% 69.7% 4,602 4,483 3, , Banco do Brasil Bradesco Itaú Source: Companies Caixa Santander Others 1. Data as of Jun/16. Market-share (%) Source: SUSEP 15

16 Taiwan Hong Kong South Africa Finland South Korea Japan Netherlands United Kingdom Denmark France Italy United States Portugal Germany Spain Chile Venezuela Brazil China India Argentina Mexico Global Insurance Industry Insurance market presents low penetration level in Brazil Insurance premiums 1 / GDP (%, 2015) 3.2 Life Insurance Premium / GDP Non-Life Insurance Premium / GDP #39 In Total Insurance # In Life Insurance Source: SUSEP and Swiss Re Sigma 06/ Excluding businesses abroad 16

17 Netherlands US Australia Switzerland UK Canada Japan South Africa 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 (%) % 166% 127% 121% 120% 121% 119% 113% 116% 112% # 10 In assets 97% 85% 67% 60% 69% 57% 54% 56% 41% 40% 22% 21% 14% 13% 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$ 8.1 billion in premiums written, R$ 21.8 billion in pension contributions and R$ 2.6 billion in premium bonds in 1H16 Net Income Growth with High Profitability Annualized ROAE¹ of 52.5% in 1H16 Largest Insurance Broker in Latin America Access to Banco do Brasil s unique distribution network 2 nd Largest P&C Insurance Company in Brazil 2.7 million insured vehicles and R$ 4.5 billion in premiums written in 1H16 Leading Presence in both, contributions and net inflows in Pension Plans P/VGBL reserves amounted to R$ billion in June 2016 Insurance Operations, Pension Plans and Premium Bonds managed through private partnerships with global leaders 167 employees at the holding and broker level, and 7,653 employees at the affiliates level. 1. ROAE, considering the total distribution of dividends. 21

22 Market Share 1H16 Segments Insurance premiums written Market Size (R$ MM) Life 11,397 Credit life 3,675 Rural 1,659 Auto 15,680 Pension plans BBSE (%) # % # % # % # % Main Competitors # % # % # 2 # % 15.8% # 2 # 3 3.9% 3.1% # 1 # % 12.3% Contributions 53,398 P/VGBL Reserves 539,322 Premium bonds Collection 10,231 Reserves 29,721 # % # % # % # 1 # 2 # % 25.8% 24.0% # 2 # 1 # % 27.0% 14.1% # 1 # 2 # % 22.6% 10.2% Source: Susep 22

23 BB Seguridade Performance PREMIUMS, CONTRIBUTIONS AND COLLECTIONS 1 BREAKDOWN OF PREMIUMS, CONTRIBUTIONS AND COLLECTIONS¹ 21.4% 24.5% 27.0% 27.5% 28.5% 28.5% 1H15 1H16 22% 43,349 53,996 60, % Brasilcap 10.8% SH1 11.2% Brasilcap 8.0% SH1 11.1% 33,322 30,360 32,486 Brasilprev 63.3% SH2 14.6% Brasilprev 67.2% SH2 13.7% Revenues (R$ MM) Market share 1. Premiums written, pension plans contributions and premium bonds collections PROFITABILITY 32.4% 38.4% 49.8% 54.8% 55.3% 52.5% 1. Premiums written, pension plans contributions and premium bonds collections EARNINGS BREAKDOWN¹ 1H15 1H16 3,945 3,223 31% + 5% 1,754 2,260 1,944 2,044 BB Corretora 38.1% Brasilcap 6.9% Adjusted net income (R$ MM) ROAE 1. It does not consider Brasildental result neither the Holding s revenues and expenses. 23 IRB 3.7% Brasilprev 16.5% SH1 29.7% SH2 5.1% BB Corretora 38.2% Brasildental 0.1% IRB 4.0% Brasilcap 7.7% SH1 29.0% Brasilprev 16.8% SH2 4.3%

24 Net Investment Income AVERAGE SELIC RATE (%) FORWARD YIELD CURVE (%) Jun/15 Jun/16 Mar/16 Mar/ DI1F17 DI1F18 DI1F19 DI1F20 DI1F21 Source: Focus - Bacen do Brasil Source: ValorPro NET INVESTMENT INCOME (R$ MM) ASSET ALLOCATION 31.5% 21.6% 26.7% 31.1% 30.9% 31.4% 30% % Fund quotes 0.2% Other 3.5% Pre-fixed 28.6% JUN/15 Fund quotes 0.2% Other 4.9% Pre-fixed 25.2% JUN/ Inflation protected 47.0% Floating 20.6% Inflation protected 45.0% Floating 24.6% Net investment income % Net income 1. BB Corretora + Holdings 24

25 BB MAPFRE SH1 PREMIUMS WRITTEN (R$ MM) BREAKDOWN OF PREMIUMS WRITTEN AND RETAINED PREMIUMS (%) 18% 4, ,351 6, ,703 7,432 7, ,904 7, % 3,409 3, ,315 3, WRITTEN RETAINED Retained premiums Premiums ceded 1H15 1H16 1H15 1H16 Life Credit Life Rural DPVAT Mortgage Life UNDERWRITING RESULT NET INVESTMENT INCOME (R$ MM) 78.6% 75.0% 72.5% 69.0% 69.7% 70.9% 30% % 721 1,070 1,559 1, % % 359 Underwriting result (R$ MM) Combined ratio 25

26 BB MAPFRE SH1 Performance Ratios ¹ LOSS RATIO (%) COMMISSION RATIO (%) p.p p.p G&A RATIO (%) COMBINED RATIO (%) p.p Adjusted ratios considering the reinsurance effects. Combined ratio Expanded combined ratio 26

27 BB MAPFRE SH1 NET INCOME BREAKDOWN (%) PROFITABILITY 20.0% 29.6% 41.4% 46.5% 44.7% 42.8% % 1,297 1, % Non-interest operating result.¹ Net investment income¹ 1. Net of taxes considering the Company s effective tax rate. SOLVENCY Adjusted net income (R$ MM) ROAE ASSET ALLOCATION 159.1% 128.9% 126.0% % % 120.0% Others¹ 11.7% Inflation protected 46.2% Pre-fixed 11.5% JUN/15 Floating 30.7% Others¹ 18.1% Inflation protected 29.5% Pre-fixed 12.5% Floating 39.9% JUN/16 Dec/12 Dec/13 Dec/14 Dec/15 Jun/15 Jun/16 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 (%) 11% 6, , ,846 9,094 1,198 1, % 4,445 4, WRITTEN RETAINED ,806 6,909 7,648 7, ,850 3, UNDERWRITTING RESULT 98.4% 98.0% 98.6% 99.4% 98.5% 101.1% -18% 82 Retained premiums Premiums ceded H15 1H16 1H15 1H Vehicles Casualties DPVAT Other NET INVESTMENT INCOME (R$ MM) 27% % Underwriting result (R$ MM) Combined ratio (%) 28

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

30 MAPFRE BB SH2 NET INCOME BREAKDOWN (%) PROFITABILITY % 7.5% 9.2% 12.8% 12.5% 9.8% 22% % 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 127.5% 130.8% 139.0% 143.1% 132.4% 163.6% JUN/15 JUN/ Floating 28.0% Inflation protected 34.5% Floating 50.7% Inflation protected 19.7% Others¹ 13.8% Pre-fixed 23.3% Others¹ 14.2% Pre-fixed 15.8% Jun/15 Jun/16 Investments + Receivables (R$ BN) Technical reserve (R$ BN) Solvency ratio 1. Agrarian debt bonds, DPVAT, Investment funds 30

31 Brasilprev CONTRIBUTIONS (R$ BN) NET INFLOWS 27% % % 20% 11.2% % 9.3% 9.2% 8.8% % MANAGEMENT FEE VGBL PGBL Traditional Net inflows (R$ BN) Redemptions ratio Source: Quantum Axis RESERVES (R$ BN) 1.38% 1.32% 23% 838 1, % 1, % 1.23% 1.16% 1, % % % Management fee (R$ MM) Management fee Jun/15 Jun/16 VGBL PGBL Traditional¹ 1. Defined remuneration plan 31

32 Brasilprev RESULT WITH PENSION PLANS AND INSURANCE PROFITABILITY 60.7% 52.8% 52.2% 51.7% 52.7% 48.7% 47.1% 46.3% 42.6% 39.2% 38.6% 37.0% 28% % % % 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 4.1% Securities¹ 12.2% Stocks 1.1% JUN/15 Debentures and Stocks commercial 0.6% JUN/16 Pre-fixed papers 4.7% 2.6% Securities¹ 9.0% Floating 6.3% JUN/15 Pre-fixed 2.3% Floating 8.2% JUN/16 Government bonds 82.6% Government bonds 87.9% Inflation protected 89.0% Inflation protected 89.4% R$ BN R$ BN R$ 10.8 BN R$ 12.0 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 19% 3,871 1,920 6,270 6,687 6,517 1,867 2,629 2,586 4,403 4,058 3,931-20% 3,282 1,440 2,614 1, % 17.3% 18.2% 15.7% 16.3% 18.3% 22% % 82 1,951 1,843 1,337 Unique payment Montlhy payment NET INVESTMENT INCOME (R$ MM) Result with premium bonds (R$ MM) PROFITABILITY Premium bonds margin 35% % % 31% 57.1% 92.2% 87.0% 88.3% % 96.9% Adjusted net income (R$ MM) ROAE 33

34 Brasilcap TECHNICAL RESERVES (R$ MM) SOLVENCY RATIO (%) 24% - 7% ,459 9,489 11,752 12,354 12,061 11, Jun/15 Jun/ Jun/15 Jun/16 ASSET ALLOCATION¹ ASSET ALLOCATION TRADING PORTFOLIO JUN/15 JUN/16 JUN/15 JUN/16 Government bonds 75.0% Time deposits and others 14.5% Government bonds 73.1% Time deposits and others 14.7% Pre-fixed 61.0% Floating 35.8% Pre-fixed 57.6% Floating 38.9% Repo + Cash Debentures and Debentures and 5.2% Repo + Cash Inflation Stock Funds Inflation commercial commercial 7.4% Stock Funds Stocks protected 0.9% protected papers papers Stocks 0.7% 0.9% 2.3% 2.7% 4.7% 4.2% 0.6% 1. Do not includes BB Capitalização 34

35 BB Corretora BROKERAGE INCOME (R$ MM) BREAKDOWN OF BROKERAGE INCOME 23% 1,359 1,766 2,308 2,559 1, % 1,360 Brasilprev 18.9% Brasilcap 14.6% SH2 12.8% Other 0.2% 1H15 SH1 53.5% Brasilprev 20.3% SH2 11.5% Other 0.2% Brasilcap 9.5% 1H16 SH1 58.5% ADJUSTED NET INCOME (R$ MM) EXPENSES BREAKDOWN & NET MARGIN (%) 32% ,289 1, % Operating expenses Tax expenses Income taxes Net margin 35

36 Guidance 2016 Ratio 2016 Estimates Revised Estimates 1H16 BB Seguridade - Adjusted net income growth (%)

37 Portfolio of Products

38 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. 38

39 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. 39

40 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 40

41 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 41

42 BB Seguridade IR Investor Relations Contacts Rua Alexandre Dumas, 1671 Térreo Ala B São Paulo SP Brasil Telephone: ri@bbseg.com.br 42