Bb Seguridade Part Sa Adr

Good morning.

Welcome to our virtual meeting to present the results of the second quarter of 2025. This conference call is being recorded and has simultaneous translation into English. To listen to the audio in English, please press the interpretation button at the lower right-hand side of your screen. This conference call is going to be divided into two parts. We are going to present the highlights. The slides in presentation or in English can be downloaded by all from the More Ingressive Relations website at www.dbcgrid.in. All right. Back to you. Back to you. In the second part, we are going to have a Q&A session where nationalists and investors will ask their questions. I will be back after the presentations to give you instructions if you want to ask a question. I would like to give the floor to Pandrin, who is going to share with us the main highlights for the theater. Our music floor is yours.

Thank you, Philip. Good morning, the audience.

I would like to start by thanking everyone who are with us in our virtual meeting to talk about good performance on the basic freedom in the second part of 2025. This is an important moment to highlight the results which gives more commitment to value creation and innovation, the continuous search for efficiency in all forms of our business. Our net income, excluding my inference 17 standards, had extraordinary events in a period reached 3.2 billion BNU, an increase of approximately 3% compared to the second quarter of 2024. with a annualized return on equity within the month, approximately 90%, and advancing more than 15 percentage points compared to the same period of the previous year. Significant growth is also observed in accumulated receipt on the first half of the year. With a net income of $4.2 billion, with 14% in an R.E.A., it overcomes the 95% and increase of 12 percentage points. The purchase result was driven by an 11.3% growth in operating income and a significant increase of 69% in our financial income, created by efficient asset management in all of the companies of the group. The retained earned premiums in Shure's main revenue metric grew almost 10% totally . The last ratio remained at the lowest historical levels and ended at a quarter within an improvement . Our accumulation business Brenton reserves expanded 9.3% in 12 months and reached the expressive mark of $549 billion. In savings bonds, we reached $1.8 billion in collections, a strong growth of 24.1% compared to the second quarter last year. In Bratislava, the brokerage revenues totaled 1.4 billion BRN, with 6 in accounting. The results presented reflect the management capacity and the merit of a tireless team for innovating and creating solutions that generate value for all stakeholders. The new products were used this year by already delivering consistent numbers, which paved the way for the company to grow in a robust and sustainable way. We launched two initiatives in the end of March that have been really a fortune, and I'm going to capitalize results for the company. The first one is the credit relief insurance for private pay relief. which quoted more than 94 million in premiums and the second is BB credit life for consortium originated with premiums of 82 million BME at the end of June we launched credit life meant for the big red lines for micro small businesses a segment that we did not serve in just one month we had 69 million in premiums in livestock insurance revenue we had 69 million dll in premiums in the year guaranteeing new features we launched for here firing the growth of 48 compared to the same period in 2020 Our project to celebrate the 30th anniversary of Odopop has been a success. In two months, we had more than 135 million collected, with the saying of being 44,000 books. As part of our strategy of channel diversification, we reached the volume of 856 million premiums written through commercial partners, equivalent to 11% of the total insurance. In structured business, we have life-long insurance and solar panel insurance operations. We grew 40% compared to the first half of 2020. 24.4% for primary resellers. The growth is 55%. We also sold 0.3 million good income bonds to New York. customers, followed with a collection of 11 million there. We also advanced in digital channels, where we made 330,000 sales in the space. There are 48.6% of new customers. In terms of premium funds and personal protection insurance, We tried products in our strategy to expand the base and universalize protection solutions, and we see in our pursuit research of efficiency and excellence in SIPC's content, a remain satisfaction indicator that has 3.7 points and remains consolidated in a quality zone. We reduced the number of complaints by 27% compared to the same period of last year and a transfer by 10%, forcing the loyalty of our membership groups. This advances a direct reflection of our management capacity and coordinated action of our companies. We have reduced the general mean expenses in all funds. 7.8 percentage points in Brazil. 1.8 percentage points in Brazil. These efficiency gains are not just numbers. They represent our ability to do more with less, to deliver value with responsibility, to turn customers at the center of our decisions. Now, moving to, I would like to give the floor to Rafael, who is going to show you the main financial highlights for the group.

Good morning, everyone.

Thank you so much, Andre. Now, going to the details of our numbers, before going to more details about the result, I'd like to briefly explain to you something, something that is common here at BBC, that we break down and we separate non-recurring items. But this quarter, we had an update in... that stopped for the settlement of the court's decisions. So this affected a little bit of our numbers by 62 million. And we think that this is an one-off item. We separated from the numbers of the prior and near-to-date numbers. And this was a regulation change that we had, and especially the provision of the score. claims to settle the credit record. There was no regulation defining it. We still looked at these provisions monetarily, and we had our own internal methodology using NPC plus 1%, and as of the new law, that is that the monetary action is the PCA minus NPC. so after the end of last year we are grouping this um expenses according to the new law and now we updated the entire inventory and this created this impact of 62.3 so all of this is in our publications and i would like to place focus and then all the numbers that we are going to discuss are in recurring policies so now starting And the net income is 2.2 billion, 2.3 if we take out that time mismatch of the update of liabilities of the plans in Brazil PREV at 20% year-on-year growth. And now, in the case here, 5.2, at roughly 14%, so it would be 5.4 if we took out the impact. of this time mismatch, so the time mismatch took about 154 million in the first half. First half of last year was neutral, so it was a detractor during these weeks, but we always reinforce that this amount comes back to our numbers when it's going to come back to the bottom line in the second half of the year, and it went because in June, The IGPM had a strong deflation of 1.7%. With an impact in the assets and the liability, the deflation was half percent, which was made IGP. So in July and August, in July it gets a little bit better. In August it's going to be fully reversed. So probably in the third quarter you're going to see that the... Now, the consolidated net invested income, with a growth of 69% year-on-year in the second quarter, 255 in the first half, accounting for a significant number per month at the end year. Now, going to the next page, this is the break time. for our recovery manager and net income with all the competing results and net investment income, which have contributed almost equally. So we have $245 million in terms of operating results with a reduction in loss ratio. These are our main highlights in the year-to-date numbers. In terms of the investment income, We had a gain with a direct impact over the impact of the buy safe rate, plus a growth in volume, adding to 158 million. So this time mismatch, we've set taking up to 154, but then the mark-to-market adds another 173, and in the first week we had In fact, with a gain of the market to market of 23 million, whereas last year we had a loss in market to market of 15 million BRL in the first half of 2020. So the combined influence in the financial and the net investment income, despite the time mismatch, we had almost 300 million round year on year. Now going into the details for preparation. So in the on-page rate, we had premiums return in the second quarter dropped 1% year-on-year, and with a slight slowdown in a drop that we saw in the first half of the year, we were rather seeing the first quarter of the year, so this 1% reduction was very much impacted by credit life and remote insurance without going too much detail. But credit life is being impacted by credit life companies. So we had some growth in individuals, 5% for individuals, but really for corporations, it's been going down markedly. Now, in terms of value in the press and in the media, it's slightly more difficult with value, but with insurance, and this is the main focus, a drop of 3% in the quarter and year-on-year. And if you see the first month of May, so we saw a drop of 3.6%. in retained premiums and the factor explaining this was customers that left with higher tickets and we ended up not being able to offset with new sales. Even though we had a slightly separate gap in the second quarter, it's still in the pressing of other lines.

They're going rolling.

We had a medium-to-light node, one of them with good performance, and we had a quarter-in-quarter NEF, comparing the first half of the year. So we had an improvement in loss ratio. And last year, we had the disasters and the catastrophes in Rio Grande do Sul that affected our numbers, and we had other effects. And we've been through instead, in fact, the center south of Brazil, but this year, It didn't happen again, and in loss ratio, but it's a strong and good comparison basis, and the loss ratio is the main component explaining the data component ratio. Also, in terms of recreational efficiency, metal, DNA, blocked year-on-year, it also contributed to the better combined ratio. On the other hand, you can see a high in commissions, and because it remains in the mix, we will have a loss of more of insurance in a total, with either price of interest that we have higher commissions. by the investment income, the growth of 45% year-on-year, 42% in the first month, because of higher SIL, but a significant increase of SIL. And the growth has been growing, and then year-on-year, then 17% year-on-year, and with a better combined rate, and the main...

and can be adhered, and there is a recovery, and this is a one-off effect.

And then going to Princeton, and then we had a 22% and a drop in the indirect effect. of the regulation changes that we had with the introduction of Bioware over the PGB and then this ended up reducing the inflow of funds and which affected also the net inflows. So, with the increase of 50 basis points in the year-to-date, the quarter-on-quarter, it dropped with redemptions that we had until March of 11.6 that dropped to 11.1, and then we are still seeing, so we don't see much volatility along the second graph, and we are likely to see any movement in redemptions in a second. the reserves grow, and then management fees drop 1% year on year. This is a result of the dilution we are seeing. Management fees built on a change of risk when familiar with the buyers there of more conservative. That's in the total of assets, and so they drive down the management fee. and then this impacted the drop of revenue and year-on-year especially. So, Despite the reduction in revenue and management fee and marginal growth in year-to-date numbers, it has grown stronger, 20% year-on-year, 16% in the first half of the year. And this is a result of the improvement that we saw in financial... in the net investment in term not just because of a new select but also with a positive effect on mark to market that also contributed at a drop of a gpm with a significant reduction and a list of liabilities are the main drivers for the growth of brazil even though we saw this acceleration in terms of operational But now Brazil cap went up 24% in collections, 11% in the year-to-date numbers. Brazil grew 1%. Lottery prices paid grew 6% year-on-year. And in the first quarter, we paid 31 million, so net investment income grew 6% year to year because of the financial margin. And in the first half of the year, it dropped 19% because compression of financial margin. And this is basically, we had in the first quarter the negative adjustment of the hedge because we opened the curve and then we decided to protect Most of our exposure to the company didn't have enough time to do the protection, and then we had a negative adjustment of the hedge in the first half of the first quarter. You can see that the net investment income has been growing in a solid way. And here you can see the variation in the net income, minus 5% here in the EU, 10% here to take numbers. And the NBD for Italy, the revenue was 6% year-on-year, 5% in year-to-date numbers. And so this was a big thing in sales from insurance products and increasing the savings of premium bonds. And that has a contribution in the brokerage. The net margin growth, 0.2 percentage points year-on-year, 2.4 in... year-to-date numbers and this is a result not just of an improvement in operating margins but also an improvement in investment income because of the high sell rate and the consequence of this is an increase of net income growing above the revenue because of a better financial result 11% year-on-year 9% in year-to-date numbers and yes in closing and we have our guidance So, non-interest operating received the range from 3 to 8, we delivered the stock 7.4 this quarter. In terms of premiums written, 2 to 7 was our range, but we made a 50.4, going down 3.4, as I mentioned during the presentation, a quite strong impact, same credit life. Pension plan reserves delivered a growth of 9.8 when the range was improved to 16. So we started on revised projections, and what we had to do is to adapt to the new regulation, So we have the IOS with the GPL that has a significant income in the short term, and then we had to adapt, and with an impact. And in operational results, the impact of IOS is the result of the collections in pension plans or premiums to collect in pension. And this had an impact in our operating results, and we had to revise the estimates. So this is one to three. In terms of premiums written, so the range is from minus 4 to 1% because of this really uncertain environment, especially in agribusiness, there are a few measures that are going on. to fire and accelerate the recovery on the credit line, so this is very volatile, so we decided to review for premiums return. In term of pension plan resumes 9 to 11, again, the impact of IOS, And this is the result of that lower collection that we expected. We had to incorporate this in our projection, so we raised it down for growth from 9% to 12%. So these were the highlights. And this is the result of the second quarter. And now we are moving to our Q&A session. Thank you so much.

to our questions and answers session.

We are moving to our questions and answers session. Please wait while we collect our questions.

Voltamos para a sessão de perguntas e respostas.

Now we are back for questions. A reminder, if you want to send a question in writing, just click on the Q&A button in the lower part of the Zoom screen. We'll try to answer all questions here live. If it's not possible because we don't have enough time, and then we will give you an answer by email. We are also going to allow some questions to be asked live by audio for some analysts if you click on the raise hand button at the bottom of your screen. So, as long as we say your name, please unmute your microphone and ask your question. Questions will always be answered in Portuguese, but if you want to ask a question in English, please feel free, and we will answer here live. The first question comes from Daniel Vaz from Banco Sacra. Daniel, please, you can open your microphone and ask your question.

Good morning, Felipe, Andre, Rafael.

Congratulations on your performance. I have two questions.

The first one I would like to hear, Rafael, about the commissions, unearned commissions in a brokerage company.

So could you explain? The cash commission and cash usually is BrazilCat, so the cash is very much related to BrazilCat, so it's slightly different in insurance and PREV.

Hello, Daniel.

Thank you for your question. Good morning. So, as to the revenues in the brokerage company, so it varies a lot from product to product. I'm going to try and simplify without going into too much detail, but I think this will be enough for you to understand how it works and why. to explain the resilience of our brokerage business at the brokerage company and also the insurance company because of deferred revenue both in brokerage and premiums because they have the same dynamics of deferral because of time. So in the brokerage, credit life and pension We charge a brokerage fee over the volume collected, and this is put as cash, so there is no deferral. For insurance, it's completely different. The insurance products, both earned premiums in insurance and revenue from brokerage in a brokerage company, they are booked according to the effect of the risk of the product. So, for example, credit life, that we have the longest risk, and we defer commissions sometimes for five years, approximately. This is at the origin. of the business. So the effective times are slightly lower because they are not carried up to maturity and sometimes customers choose to renegotiate, so times are slightly shorter, but sometimes it's about five years. So today, commissions to be booked, that are still going to be booked at 5.7 million. This is the total that we call as prepaid, but pension and the premium bonds, so once the revenues are immediately booked as cash. That's why they're very sensitive in the short-term numbers. So once collection goes up in these two lines, immediately the brokerage revenues of the brokerage company go up. Well, I asked because there was a flattening of the curve, it was 4, then it went to 5.7, and then it remained at these levels, so there is a factor to be... So, the second question is related to... So, as part of BB Seguridade, we have Marcelo Labuto back to BrazilSec, one of the directors of the group Brazil, but in 2013 and 2015, they were at BB Seguridade at the time of the IPO and so on. I would like to try and relate this, whether it's possible, this potential discussion of contract renewal over the five next years, considering that we are getting close to 2031, the first renewal of BrazilSAC contract, and then we need to try and understand whether he's coming back to the group, exchanging, whether this has anything to do, and so that we have an update. And this is valid, especially considering the scenario of the bank, because capital... It's not so simple, and then it could kind of unlock BBC Greta. Well, regarding that, Daniel, it's important for us to try and understand the governance flow, which are the duties of each one of the executive officers. So here specifically, Marcelo D'Aputo has broad experience in Banco do Brasil, was even the president of the bank, temporarily and then was the president of BB Seguridade, but he is being appointed to CEO for insurance operations.

The discussion

all of agreements with partners, all the partners that we have will take place at the level of BB Seguridade and Banco do Brasil. So, the operational aspects... don't take part. So he's being considered as CEO of BrazilSeg to run the operation regardless of the discussions that take place at the level of partners. Just to make it slightly clear, the difference in terms of the duties and the roles of different executive officers and the companies of the group. So, in terms of shareholders' agreements, there's nothing going on now. Okay. Thank you so much. Thank you very much for the question, Daniel. Our next question comes from Antonio Ruia from the Bank of America. Antonio, good morning. You may open your microphone and ask your question, please. Good morning, everyone. Thank you so much for your time. My question is related to pricing.

So when we look at the loss ratio and then close to the plus 30 in terms of operational results and the growth in premium,

Has there been any change, or do you plan any change in pricing or pricing levels, especially considering this level of frequency, this level of loss ratio, or is the idea that something is going to change in loss ratio, or do you see any prospects of it going back to higher levels? I'm just trying to understand what you think when we compare loss ratio below historical levels and also contract prices, when we think in terms of growth.

Well, thank you so much for your question. As to pricing, the focus might be slightly more agricultural.

So it's according to expected credit life compared to historical levels, slightly above the historical levels. But here, because of changes that we have implemented, we expanded our target audience and now we're

risk in terms of insured capital, but we didn't expect it.

And now, it's actually going to be slightly above historical levels in any way. In terms of homeowners, insurance is slightly different from what we were expecting, so there are many... and we have a level of 30% to 40%, and the portfolio has been responding to that.

In other lines, no changes.

They're all performing very much in line as expected with... We don't see any indications that they need to change in our subscription policies or in the underwriting policy. So, in terms of crop insurance, we have some margin to be slightly more aggressive in terms of prices because in the last three cycles we've been having really great performance, but we need to be very careful because We are working with climate, and we need to be very careful with that.

Historically, it's not common to see that this pattern of three cycles in a row,

the quality of the crop without any major event causing any major impact in loss ratio of the company. So yes, we do have margin to work on, we are going to work on prices, to have slightly more aggressive prices than we had been working with it, but slightly more careful, very gradual, because the only line in our portfolio that is exposed to tail risk. So that's why we need to be very careful. So in principle, today, when we assess the projections, the most up-to-date in terms of climate, we are okay to work like that, and the predominance, especially next year, is for it to remain neutral. And so the perspective in terms of the weather is very favorable. Thank you very much, Antonio. Our next question comes from Arnaldo Sirazi from CDB. Good morning. You can open your microphone and ask your question, please. Hello, everyone.

Andrei, congratulations on the performance of this cycle.

I would like to ask a question about the dynamic of premiums.

So July has ended.

So I would like to understand your dynamics, especially for rural insurance after the SAFRA plan. And if you allow me, also in terms of premium, there has been a variation in the technical provisions that was really significant now this quarter. If you could explain it better.

I'm going to answer your first question, and then I'm going to...

ask you to explain a little bit better your second question, about the first one. We've been seeing a reaction in crop insurance, and now it's still too early for us to extrapolate this from now to the end of the year, but that year-on-year variation rate that we saw in the first half of the year, it had a significant improvement in July and now in the beginning of August. so the downward curve is not so steep anymore. We have more funds being allocated to small and mid-sized farmers that is our target audience for crop insurance. So this composition favors us more than the composition that we used to have last year. But at the same time, there are some other factors that we need to consider more carefully, and especially the reduction of the subsidy for crop insurance.

So we need to estimate the size of demand, the appetite of farmers in terms of risk

and how this recovery is going to take place along the second half of the year, but still too early to say anything. About your second question, if you could repeat that, please.

I'm not sure I fully understood it.

In terms of retained earned premiums, there was a change in the technical provisions. There was significant discord of R$310 million compared to a much lower rate amount year on year, and is there any explanation?

Thank you. Well, I'm going to try and infer. the reason for your question. And this has a little bit to do with the answer that I gave to Daniel.

So, as part of provisions for unearned premiums at Brazil Sec, there is a strong component which is prepaid revenue coming especially from credit life. So when credit life slows down, as we've been seeing, it is a very long product. We are still booking lots of revenue and it's one of the lines that grew the most so that there is revenue from past cycles that we are booking. So we see written premiums going down by 3%. And so when we eliminate the noise of reinsurance with crop insurance, and most of the drop is related to crop insurance, when you take out crop insurance from the numbers, you can see that we think premiums is almost flat, zero risk, and a growth of 2% year on year. And when we... have retained earned premiums, and so there is the brief that I issued, and then I go to a second time, which is the booking of premiums from sales that were made in the last three years, more or less. most of them. So, then retainer and premiums go up by 9%. So, there's no change in the criteria yet. This is linear deferral, different from IFA.

IFRS 17, so deferral is linear.

So, it's a result of this big matrix of earned premiums that we've built over the last three years with sales of credit life that now are coming clear and being booked in our bottom line.

Thank you very much. Our next question comes from Tiago Binsfeld from Goldman Sachs.

Good morning, Filipe. I would like to understand the changes in operational guidance. So the second half of the year is going to be very much similar to the first half. I would just like to understand, well, you said something about the loss ratio and the crop insurance staying flat. Is there a significant higher deterioration of the loss ratio, or are you conservative because of any other component? of the operating result.

Thank you for your question. Just to make it clear, we just need to review the operating guidance because of the incidence of IOF in PGDL.

So, if nothing had changed, there would be no reason for us to review it down. in neither of the two ranges. Now, IOF and impact in collections, so it's directly related to the brokerage revenue and BB Corretora, our brokerage company.

So, if... I didn't have the new law, the new regulation.

We would be able to bear the previous range, because even though one line is slightly below what we initially expected, we had margin with event range. to absorb any other unexpected variation that has been reinforced in the second half, especially the lot ratio of crop insurance. We don't expect any significant changes, but there would be some space in the previous range to absorb it. Now, in the second half of the year, with the impact of IOF, In the end, this margin is not enough to absorb any type of unexpected variation that we may have. So, because we are very cautious, we decided to review down the range to have slightly more margin. if anything, varies in projections because the impact of IOF takes up one to two points depending on how we will be able to react in terms of the growth of operating results. So we had to incorporate this in our estimates. And the same thing applies to... Now, with IOF, this ended up taking out like three points on the growth of reserves, so this needed to be reflected in our projections, too. So this has been the main driver, the main reason that led us to review the range. Otherwise, you would only have reviewed the written premiums and based on actual numbers and forecast for the second half of the year with a lower volume of subsidies for crop insurance, we had to incorporate that.

Thank you, Rafael. If you allow me to ask a brief question. We saw that solvency of your subsidiaries has improved.

So how do you understand the capital of your affiliates and also payout considering this context?

Well, yes.

We are considering that, Tiago. In Brazil, so we are very close to our risk appetite and it varies from company to company about 1.2, 1.3, the regulatory capital. This is our risk appetite. Where we would have more room is in Brazil PREV.

Brazil PREV has not yet

paid out the profit of the first half of the year, so there is a capital surplus, which is well above our risk appetite and Brazil cap. There is a situation, if you remember, that because of the strong movement in the opening of the curve in the end of last year, we had to take capital from third parties to cover the liquidity deficit But in the middle of the second half, we had recovered the capital basis, and we are very conservative, so this third-party capital, and we are likely to use the results that have been generated to settle the debt now in September. So, with all of this, we expect the payout for the first half, it's almost 90%, and it should be expected that in the second half of the year, the payout is going to be slightly higher than the first half, of course, considering a higher basis of profit than in the first half. So, for the whole year, it should be higher than the first half. Thank you very much, Rafael. Second question from Marcelo from Bradesco. Marcelo, you can open your microphone and ask your question. Thank you very much for the opportunity. Number one, I would like to have a follow-up on payout. So the company has most of 1 billion and 100 of shares in treasury And as you had the buyback program, so the situation of Banco do Brasil was slightly different. Now we are seeing what's going on, the discussion at the bank in terms of capital and preservation. So does the... situation in the bank change in any way, what you're going to do with the shares in the treasury, whether you're going to sell, and then the bank is going to pay and have a higher payout.

So, I would like to understand better the shares in the treasury. So, the second question is what you think will be...

collection or in terms, so if you could explain to us a little bit about what you were going, your inflow, at least gross inflows in pension in the second half of the year.

Thank you very much, Ms.

Ari, for your question.

So, about the shares that are in Treasury, we had the buyback program. So, our understanding here So, we have here the vision that the shares are not at a fair price, but we are aware of the impact it has in the bank's capital.

So, for now, we are not planning to launch any new buyback program. As to what we are going to do about that, this is a decision that is up to the board of directors, so on our end here, today, we don't have any reason to sell those shares to the market. Even though the program has been approved, we have the authorization for them to be kept in treasury and canceled or sold, but So far, we have no reason in the management of the basic regard. We're not planning to sell those shares. But this is a decision that is up to the board of directors, and depending on what they decide, we, as executive officers, are going to do what they tell us to do. but so far we have nothing, no decision has been made about that. As to the IOF, according to the new rule, it's very difficult for us to get to a number. Exactly. that is exact misery. This varies greatly in the breakdown of products. And our group of farmers have a cash flow that is very much concentrated at certain times of the year that will have pension contributions in amounts that will be higher than those defined.

So in our understanding, we think that it can veto 20% to 30% thinking in terms of collection.

No, but then on the other hand, we are not going to be passive, and we have been adopting different commercial strategies to deal with that, working better on the scale of payment, on the schedule of payment along the year, avoiding concentration at certain times of the year to try and minimize this effect. That's why it's difficult for us to give you an exact percentage, but it has the potential to get in terms of collection.

Thank you.

Thank you.

Thank you, Marcelo. Our next question comes from Pedro Leduc from Itaú BBA. Pedro, good morning. You can open your microphone and ask your question. Good morning. Thank you for... I'm forgetting to ask a question. As part of rural premiums, we've been seeing the crop insurance getting weaker and being offset by rural lean.

This quarter, there is a kind of slowdown in these two products, but I would like to hear from you.

How do you see the relative penetration of the rural lean and farmer's life, and how do you see this in the future in terms of growth and how these products are going to grow?

Maybe penetration is high.

So how do these two products within your rural portfolio, how are they likely to behave in the mid-term? Thank you, Pedro. Thank you for your question.

Now, trying to say what to expect in terms of the rural portfolio in the second half of the year.

So, you are right, there has been a slowdown in the second quarter, but this is the result of the comparison basis. So in the second half, you can expect the same movement. This rate is going to slow down both in rural union and for farmers insurance too, so an acceleration in crop insurance in the second half, so that the combined growth or the combined variation in terms of premiums written in the rural segment, the rural portfolio, the level is going to be higher than we have today if we consider year-to-date numbers until June. So, this variation rate is going to be better in our rural portfolio in the second half of the year with slightly different composition. So, if you think in terms of retained premiums, crop interest is just 2%, so very low level. So, as I said before,

in one of the answers.

And so crop insurance now is reacting in July and in August it's good too. So this is going to persist along the second half of the year so that rural as a whole will have a better performance. And this is implicit. in the reviewed growth range that we have in our guidance. So, in terms of penetration, we have a higher penetration. In terms of lien insurance, slightly more than in life. But here, so lien is mandatory. There are some lines that we still operate very little and with a growth potential In terms of Banco do Brasil, in terms of livestock for grains, it's very high, but in livestock, still very low. Our next question comes from Evandro Medeiros from Sona Research. Evandro, please, you can open your microphone and ask your question.

Good morning.

The volume of reserves in Brazil cap, when adjusted by inflation, it has been growing since 2012. How do you explain that in Brazil cap?

Thank you. Evangel, thank you for your question.

So it's a little bit difficult for us to analyze such a long time span because along all this time there have been many changes in our products.

So what influences directly the reserves?

is very much the average time of bonds. So when we shorten the time, the reserve for the next two or three years goes down. If we have longer times, the reserve responds by growing. So 2012 and 2013, there was very strong growth in reserves, precisely because of the longer times, and then we had a movement of shortening times, which persisted. until 2019, 18, 19 more or less, and then now we have longer times again, with ODOCAP 30 years product, so we have longer portfolios, so reserves are likely to grow again. So this is very much related to the timing, to time, and that's why you see this variation. Thank you very much. My next question comes from Carlos Gomez from HSBC. Hi, Carlos.

Good morning. You can unmute now. The floor is yours.

Hello, Carlos. You can unmute. The floor is yours. You may ask your question. One on the IOF and the impact, the dramatic impact it is having on the pension business. Have you had discussions with the authorities? Do you have any prospect that this could be modified or reversed in the future? And second, on the contracts both for the subsidiaries and for the correctora, when would it be a realistic time in which the company should start negotiating with both partners? Thank you.

Hi, Carlos. Thank you very much for your question. I'm going to start addressing the first one. For sure, we had many discussions with the government and authorities, and not just through the BCBD Dodge, but also with our confederation that unite all the biggest insurance companies in Brazil. This topic has been discussed between Congress, the executive, and now in the judiciary, so in the legal system. So it's a little bit hard to foresee any changes for now. This topic must be discussed again between Congress and executive so maybe they can reach an agreement. For sure the sector is working on a different perspective that we could – reach a new agreement, but so far it is what it is. We have no perspectives. The Congress just restarted their legislative year so far, so we can expect that these discussions can come along, but we know that there are other topics that have been taken over the news and taken over the agenda. So, so far we have to work what we have in the hands Right now. The second question?

It was about the negotiations with the Bank of Brazil about the distribution.

So far we've remained where we started. The discussions will take place when they must take place. I believe that we are far from... the end of the agreements that we have in place. So, so far, we are working along with our partners to make the best and to profit with them. So, that's it. And for sure, we discuss, we talk about it. It's not taboo, but we have nothing solid so far that we could bring to the table and tell you guys.

We understand that. I guess the question is, what is realistic? Is it two years, three years? When should you start talking so that it is not disruptive to the business?

Carlos, generally, like, we haven't met in, like, seven years so far until we reach the first deadline. I believe, like... The end of next year, beginning of 2017, this must be a good time for starting a discussion. Generally, M&As, you do not start like one year before, but three, four years in a good manner when you're talking about large companies like us. So I would tell you that. But you can ask this question again. Have a different answer for the next CEO. So that's it.

That's a good answer. Very good answer. Thank you so much.

Thank you, Carlos.

Our next question comes from Guilherme Grispan from JP Morgan. Grispan, you may ask your question, please. Good morning, Felipe and Andres. Thank you for the call. Thank you for taking my question. And I would like to hear your diagnosis. So there's a... positive diagnosis in your market share and Banco do Brasil's market share in the agribusiness, and my question is because it's becoming increasingly relevant, and so in our numbers two-thirds of Brazil's sector is agro. But when I look at the market share of Banco do Brasil ten years ago, they used to have 65% of the market share in YouTube, And in the last 10 years, Banco do Brasil dropped to 53% market share. And after the last crop, 53% is going to drop even further. But I find it is indeed, you remain with 63%, 64% market share in this industry. And so there was a... mismatch or detachment, a difference. So why do you think you have this market share in the industry? Are you going to lose it? That's become more competitive, both in terms of incumbents joining this industry. So what is your diagnosis and how do you see your leadership, please? Good morning. I'm going to answer this first and then I'm going to give it over to Rafael. So, considering the size of the market and our capacity to innovate and create new products and look not just to the origination but inventory too, and we can see this in rural Lien, and we think that we still have room to grow, and this is the way I see it. Of course, we see incumbents taking up space, we are way ahead of them, and the market is going to become increasingly more competitive, we can see major competitors, and we have this industry and we are worried about that, that's why we have to become increasingly more efficient, innovation, monitoring, And in defining parameters, we have been reaching new levels in terms of the offer of products, and we need to remain very competitive. But in my opinion, of course, this is going to take a while still. And the vision of the bank I'm not going to say, because it belongs to the bank and I don't speak for them. There are many factors that need to be considered in the market, especially considering collateral and credit, loss ratio, capacity to protect our customers. So we think that we are going to be different for quite some time. But if you're not creative and have competitive value offer, yes, we are going to be affected more strongly in future years. remain at very good levels, always paying attention, so that we can have the best in technology to offer to our customers. Just complementing, so when we see the insurance products that they have quite strong synergy with banking products, so undeniably, on average, If we see the life cycle of products, they have a level of maturity that is higher than insurance products. And this makes it possible for us to advance these movements and to try to delay even further this context of more competitiveness. and margin reduction, which is likely to happen. But as you said, this is going to be more slowly. A practical example of that, in terms of funding projects for farmers, so there has been a significant increase in recent years in the share of other funding lines, especially for farmers. until recently we didn't have an insurance product but two farmers and now we are advanced significantly in terms of crop insurance to combine it with a new funding mechanism so we've been using very much the platform which is a joint investment with Banco do Brasil to try and find alternative ways for traditional bank loans in the agribusiness segment. This is very clear. Thank you so much.

Thank you, Guilherme.

We have two questions here that were posted in our Q&A. One is very frequent, but those who are joining us now, it's interesting to answer. This is about the change in the flow of payments of dividends that went from every six months to every three months to be quarterly. And the second question is what we think about the macroeconomic scenario and the main variables and how this can affect our businesses.

Of course, the frequency of payout of dividends.

So far, we are having our practice of paying it every six months, also considering the cash generation of the company. So the brokerage is a major source of cash generation. It can only... its dividends every six months, so we have no intention of changing that frequency, and this may vary depending on availability. We might have an extraordinary payout, but we are not saying that we are going to have a quarterly payout of dividends. As to the scenario, this is a very broad question. What we've been seeing In the short term, this scenario of a higher SELIC ends up being beneficial for us. For our bottom line, it has had a direct impact in our net investment income. In terms of inflation, very beneficial. with the plan of benefits in Brazil PREV and with the IPCA at 5% and IGPM at 1.3%, if I'm not mistaken. This is up to date. So every point that IPCA is above IGPM, we have an impact of 30 million in our profit.

So this is very positive, but then on the other hand, this makes it more difficult.

If we have a high interest rate scenario, this makes it difficult for us to grow operationally because the operational growth is formed by lines that are somehow related to the SILIC. If we have a 15% rate, so having a life protection or credit life for a credit operation is not the same as if the SILIC is 8 or 7. And so this makes it slightly more difficult for us to grow, especially in terms of companies. As I said during the presentation, we are seeing a reaction of individuals, but for companies, we are feeling it even stronger. It's even more difficult. So this is what we have been seeing, and then we see the financial much more than offsetting the slowdown, and this is not the best environment that we have when we look in the medium-long term, but in the short term, this is very favorable.

Any other follow-up?

Thank you, Rafael. Now we are ending our questions and answers session. Rafael, André, if you want to make any closing remarks. So, I would just like to thank everyone for being with us and to say that I am available along with the investor relations team to answer any questions. that you may still have if we didn't answer during our meeting here. So, I'm ending my cycle in the company. So, first of all, I would like to thank our shareholders, our controlling shareholders, Banco do Brasil, and especially the military shareholders that believe in our company. My special gratitude to the whole team and our team that made this company be what it is, truly. And I would like to thank everyone supporting us, everyone here at the studio. Thank you very much. Thank you all very much. And I hope to see you soon. Thank you. And as a reminder, we have a satisfaction survey with a QR code on the screen. If you could answer, we are very grateful to you. Have a good day. Thank you.