BB Seguridade Participações S.A.

Oh, good morning. Welcome to our virtual meeting to present the results of the third quarter of 2026. This event is being recorded and has simultaneous translation into English. To listen to the audio in English, press the interpretation button at the right-hand side of the screen. The event will be divided into two parts. In the first part, our CEO, Delano Valentim, and our CFO, Rafael Sperendio, are going to present the main deliveries of the quarter. The slide deck, both in Portuguese and in English, can be downloaded from our investor relations website at the address www.bbseguridade.com.br. In the second part of the event, there will be a questions and answers session when analysts and investors will be able to ask questions. I will be back after the presentation to answer To give instructions for those who want to ask questions. Now I would like to give the floor to Delano, who is going to talk about the main highlights of the quarter. Delano, please, the floor is yours. Thank you, Filipe. Good morning, everyone who's watching us. It's a pleasure to be with you to present the results of the period accumulated from January until September 2026. Despite the challenging context, we continue to deliver very consistent results, with a lot of discipline in terms of operational efficiency, preserving the profitability of operations and the company's ability to generate value. Going to the numbers that highlight our recurring managerial net income of 6.8 billion BRO. 0.1% compared to the same period last year. Our operating income net of taxes reached to 5.2 billion BRL, down 1.1%. In an economic environment, there's still contraction with high interest rates, which ends up sensitizing our products. At the same time, we have high-quality loss ratio and operational efficiency indicators, which have helped to offset part of this reduction in the volume of insurance premiums. On the other hand, the same high interest rate environment ends up favoring our investment income, which reached $1.6 billion after taxes grew in 4.4%, and a more favorable dynamic of inflation indices that update BrazilPred assets. Going to a little bit more detail about our main performance indicators. In insurance, the loss ratio ended the period at 22.7%, representing an improvement of 0.5 percentage points compared to the A consistent growth of 12.1% in the last 12 months. Another positive highlight of our pension operation, we recorded net inflow of 4.5 billion BRL, In the year up to September, driven by the increase in contributions and redemptions and possibility rates at the lowest level in recent years. In premium bonds, collections reached 5.2 billion BRL in the same period, and we distributed more than 60 million in raffle prizes. An increase of 18% compared to the same period in 2025, reinforcing the attractiveness and engagement of customers with our products. In our assessment, we have been able to deliver very solid results despite the maintenance of interest rates at a still very restrictive level and all the difficulty we have been facing in insurance products for every business. We are focusing our efforts on sustaining penetration in the credit portfolio and in products that do not depend on credit, especially pensions, which has had an extraordinary performance this year. I understand that this set of indicators reaffirms the consistency of the Disseguridade's strategy, the diversification of our business model, and the ability of our companies to continue generating value in a sustainable manner for customers, partners and shareholders. With that, I end my presentation, and I give the floor to Rafael, who's going to give you details about each one of our operations, and then I will join you back for the questions and answers session. Thank you so much. Thank you, Delano. Good morning, everyone. And so, going to a little bit more detail of our numbers for the third quarter, 3rd quarter this year with a dividend result of 2.4 billion BRL, down by 5% as compared to the income last year. This reduction is essentially explained by the reduction in the sales volume of insurance products, especially those related to credit, and also in premium bonds that is in BP Corridora. I'm going to give you details further ahead. Another factor that impacted further reduction and a lower performance in the third quarter in a year was the investment income. So this is a more difficult comparison basis with a reduction in the average SELIC comparing year on year. And this drove down the net investment income in addition to more details that I'm going to give you further ahead. which was the constitution of additional provisions at Brazil Prep that is fully reversed in the bottom line. But these are the main movements explaining the reduction in the profits if we compare the third quarter. Year-to-date numbers, the net income is 6.8, helped by the time mismatch. For the first nine months last year, there's a time mismatch of one month in the update of liabilities of pension plans. This has also contributed to the net investment income that grew 4% year on year in addition to the average SILIC. And even though it's there, the third quarter year on year, if we look year-to-date numbers, the first nine months of 2026, There is an average select that is above what we had until September 2025. So, here, at the second level of detail, going into the numbers and the movements that I have just explained in the previous slide, our traditional comparison, looking at the year-to-date numbers and breaking it down in its main components. And here, it's very clear. The operating result dropped. The net investment income is up by 66, one offsetting the other, also explained in the retraction of operating result in lower retained earned premiums that Brazil said affecting the profit until September this year. So, brokerage revenue suffered a little bit of the impact, down by $54 million. In the bottom line, because of the collection of premium bonds. So, these are the revenues with management fee for BrazilPrev affecting the profit, especially due to higher volume. And loss ratio of BrazilSeg also had a positive contribution with 28 million. S.A. S.A. From the bottom line, more than offset by the time mismatch, because it was negative last year, positive this year. The delta was 19 million positive, in addition to mark-to-market, positive by 8 million in the first nine months of 2025, and also positive by 24 million in the first nine months of this year, contributing with 15% for the 66 million in the year-to-date numbers. Now going to the details of each one of the operations. So, retail premiums dropped 19% year-on-year in the third quarter, nine-year in year-to-date numbers. Here are the highlights of the lines that have a direct relationship with credit origination, especially rural insurance that has suffered a lot this year. So, 24 in the third quarter this year, 13% drop in year-to-date numbers, and 27% drop. So, here, home insurance main positive, 4.2% of the portfolio growing, 29 year-on-year, and 25 in the first nine months. So, here, we have more of the impact if we see year-on-year. Both are accumulated numbers, so retained premiums behave very much similarly to retained premiums, is down 18% year-to-year and 7% in year-to-date numbers. Now the performance ratios, we can see an increase in combined ratio, especially due to the increase of commissioning with two factors explaining. The more directly one is a reduction in the share of rural. We lower commissions in terms of the share of other projects with higher commissions. In addition to the factor that I mentioned before, reduction in profitability of crop insurance, so it goes into a positive amount. It's a reduction factor. For commissions, so it loses share. We have less revenue from reinsurance commissions. And what happens here is that the reduction factor is smaller because of that, because of increase in commission ratios. Loss ratio had a marginal increase of 0.4 percentage points year on year. And here, essentially, because of increase in loss ratio of profit insurance, If we look at year-to-date numbers, loss ratio dropped year-on-year, especially for crop and credit life at a very healthy level. And I highlight another factor, positive factor here, is for the operation of Brazil's second improvement in general administrative expenses that we've been following up during the year, dropping 0.4% year-on-year. on the third quarter improved 10.2% in year-to-date numbers. And then financial income dropped on year by 18% and 9% in the first nine months, so the main factor explaining the drop in year-to-date numbers is here on the screen. And now when we look at everything together combined, you can see the recurring net income with a drop in premiums and investment income. So the net income dropped 11% year-on-year, 4% in year-to-date numbers. Now going to pension, this is the positive highlight that we've been following along 2026, which is natural in a very restrictive interest rate environment. This is the best performance. So, the volume of contributions growing 5% year-on-year and 6% in year-to-date numbers. In terms of inflow, there is a significant reduction going from 11% in 2025 down, and the rate of redemption goes down to the level of 8%. This is what we've been seeing this year. and it's also 4 billion this year and reserves the balance going to 514 at the end of September with a 12% year-on-year growth in the last 12 months. Management fee grew a little bit compared to the previous years because of the lower average rate both In the quarter and year-to-date numbers, growing 6% year-on-year and 7% in year-to-date numbers because of the reduction in average rates, which is slightly below R$1 billion in quarter because of the flow that is concentrated in lower-risk markets. So there is still an aversion to risk that remains when more conservative resources with lower management fees. So, in terms of efficiency, the highlight for the operation here, despite quite robust growth in revenues, the discipline in costs remains, so 2.8 percentage points in cost-to-income ratio and 2.5% down in the year-to-date numbers, so net investment income. E.S.A. So it's positive in appeal and in the liabilities adaptation test. We also confirmed the surplus. So the adjustment here is reserved in the more comprehensive bottom line. So year-to-date numbers, 3% growth in net investment income. So the effect is more diluted here with a better performance because of the time mismatch. and also a growth in revenue, better efficiency, offset by efficiency. So, managerial net income stable year-on-year. We grew in the first nine months of the year in improvements both in revenue efficiency and investment income drove the 7% increase compared to the first nine months of 2025. Now, in premium bonds, you can see the drop of 5% year-in-year for the near-to-date number. Reserves dropped 1% in the first 12 months in terms of not really crisis-paid, down 9% year-in-year, but a growth of 18% in the first nine months of the year. This year, we have already paid $60 million BRL, and this is related to premium bonds. Net Investment Income, here there is a drop of 8% year-on-year, considering the quarter, and 40 basis in the financial margin, explained by SILIC rate, and near-to-date numbers, the investment income grew 17% with 60 basis in the margin, and average SILIC is still a very positive factor. Now, Net Income dropped 1% year-on-year and grew 23%, In-year-to-date numbers following the trends of the investment income. In-year-to-date numbers, we should remember that there is a driver here, so the net income grows more than investment income because of adjustments that we did in the beginning of the year because of a higher social contribution rate on net income. Now, the decoratorial or brokerage business. So, here we have brokerage revenues. So, insurance premiums with a positive impact and a reduction in collection of premium bonds, too, partially offsetting in brokerage revenues, dropped 5% year-on-year in the quarter and 2% in the first nine months of both years, of one year against the other. So, here, net margin down 2%. 0.9 percentage points year-on-year, and because of a reduction in the investment income, operational margin growth, but the average is lower, offsetting the investment income in the decorator with a post-fixed bond year-to-date numbers, the effect is diluted, net margin remains stable, and as a consequence, so there is a 6% drop In net income, year-on-year, considering the quarter, considering the first nine months, it dropped at the same pace of 2% drop in revenue and net income. And lastly, we move to the guidance for 2026, and what we have here are the indicators, the growth indicators. Pension Plan Reserves, Premiums Written and Non-Interest Operating Results. We have exceeded here, so we delivered to 12.6% in terms of the reserves, which is above our guidance. Selling premiums written, we exceeded the estimates, the first two lines, We are very confident, this is very good, along the year, that for these two indicators, we are going to deliver the results that will be at the top or marginal, considering the range. Now, for premiums written, it's slightly different, so there's a marginal deviation. In the first quarter, considering the projections, and the main variable that we had to observe was the performance, especially in terms of crop insurance premiums. The scenario was quite uncertain. There was a government plan and renegotiations. And now, after the last quarter, this recovery didn't come as we expected. So, because of this, Movements, especially, we had a range between minus 3 to 2. We ended with a drop of 9% after 9 months. We are reviewing our guidance, reviewing our expected drop from minus 15 to minus 11 for 2026. So, these are the main factors explaining our performance. And now I will join Delano and Filipe for the questions and answers session. S.A., Allan Trancoso Ferraz Silva, Ricardo Winchelo Vieira Branco We are now going to start our questions and answers session. As a reminder, If you want to send a question in writing, just click on the Q&A at the bottom of your screen. We'll try to answer all the questions here live during our session. And if we do not have enough time, we'll answer to you by email. We are also going to accept some questions from analysts that can open their microphones and ask their questions Live in Audio, just click on the raise hand button at the bottom of your screen too. And as a reminder, you may ask your questions either in Portuguese or in English, and we are always going to answer in Portuguese. So, our first question comes from Tiago Binzel from Goldman Sachs. Tiago, good morning. You can open your microphone and ask your question. Hello, good morning, Delano, Rafael and Filipe. Thank you very much for taking my question. I would like to ask about the review of the premium guidance with the drop between 15% and 11%. The fourth quarter is usually weaker and this is implied in your range. So, if you could give us details about those expectations, from which lines would come this Tiago, thank you very much for the question. As to the revised guidance, the answer is going to focus www.cdc.gov.br Thank you very much. Based on information that we have available, despite everything that is updated almost every day, based on information currently available, we do not yet have an optimistic vision of recovery and acceleration of those lines in 2027. And everything can change before the end of the year. But considering what is implicit in the curve, what has been announced by the Focus Bulletin, so we're going to still have a restrictive environment in 2027, and this is going to be no different for credit life or rural insurance comparing to next year to this year. And everything that we've been doing, so try and offset that in some way. Even in terms of credit lines, we have some opportunities. There are some lines for credit life. We want to expand sales channels for credit life insurance to use the whole potential of credit origination that the bank provides, but especially for the products that have no relationship, that are not related to credit. We hope to focus them on 2027, and we do not take part in underwriting. This is small, there is brokerage, less than 1%, but it's been growing in a very accelerated way. 50% of the revenue is coming from products that today we do not underwrite, especially vehicle insurances. and a large risk. So, this is what we've been doing in 2026. This is going to be our focus in 2027, in addition to pension. So, we have insurance as a more challenging environment because it is dependent on credit. Almost three-quarters of the insurance companies are in premiums, written are for products related to credit. On the other hand, our pensions, Obrigado, Flávio. Okay, thank you so much, Rafael. Thank you, Tiago. Now we have a question from Guilherme Grinspen from J.P. Morgan. Hello, Grinspen, you can open your microphone and ask your question, please. Hello, thank you so much for the presentation and for opening for questions. I just have a follow-up question considering the previous one. And as a reminder, and Sperendio might be able to answer, is the duration and the booking of premiums. The main lines that we see more difficulties is in terms of credit lines and rule for the different segments. And if you could remind us how you book premiums for each one of those lines. Is it one, two, three years of duration? So, to understand the impact of this worsening in a premiums return and how it impacts the non-interest related performance. So, how do you expect X percent in 2027 and then a spillover into 2028? So, how do you see that curve? Vincent, thank you very much for your question. In a nutshell, If we consider both in crop with duration of one year, lean about two years, and we have products that have a shorter insurance. So, private life is slightly longer, comes from individuals Confined Credit. So, it has lost space for companies that have one year and a half. So, if we consider payroll loans for individuals and companies, it's important to highlight it's not related to the duration of the credit because they do not Evolve at the same speed that are different audiences in their social security payroll alone, considering the turnaround rate is about two to three years. But this portfolio is losing space to companies that is about one year and a half of duration. So, overall, if I understand your question correctly, you're concerned Thank you, Grispan. Thank you, Grispen. The next question from Ardu Shukri from Bradesco BI.

Please, you can open your microphone and ask your question.

Good morning, everyone. Thank you very much for the space. I have two questions. The first one is about contracts. Do you have any predictability about the negotiation timelines? Is it going to be towards At the end of 2027, when the landlord's term ends and they're getting to the end of the year, maybe you're already designing projections and budgets for 2027, which interest rate are you working with for next year? And could you please remind us of the sensitivity of an investment income? Good morning. Well, what's the contract so far? We haven't started any discussions with the bank. The bank leads this conversation, but for now, no prospects and nothing has been defined yet. So, Rafael, if you want to talk about the financial aspect. Well, financially speaking, as I said, it's quite difficult because it's been changing Every year, we have macro aspects and we have the interest rates. In essence, or in a nutshell, everything indicates that it may be implied in the interest rate curve until we have a higher CILIC next year. So, this affects the operational aspect The numbers or rates, because it's more restrictive, that are embedded in the credit operations. On the other hand, there is a direct positive impact in investment income, especially in post-fixed, which is part of our portfolio. So, this is the most up-to-date information that we have and this is implicit information In the interest curve, even though it means a reduction, the curve is still high and we need to be based on the market and this is what defines. As to inflation, which is another important component, it's also beneficial What we see, realized numbers for 2025, where we would have a reduction in IPCA, but a reduction of IGPM that is going to be stronger, which would benefit the composition between assets and liabilities in Brazil PREV. In terms of sensitivity to bottom lines, well, Paul speaks, so we think about SELIC, each 100 bases, Inflation, slightly different. For each point up, IGPM, there is a negative impact of 12 million in our results. So, this is what we are expecting a reduction in IGPM next year. So, it would be the opposite. So, we are going to have a positive impact of 12 million. For IPCA, for each point up, it's 34 million of positive impact and reductions is 34 down. So, today the focus is projecting a reduction. So this is in the assumptions of today's focused bulletin. So if there is an impact of those movements, except for SILIC, because there we are using, Brazil needs to implicit in the interest curve with a positive impact in Brazil prep. Thank you so much.