BB Seguridade - Banco do Brasil

Institutional Presentation
September 13
BB Seguridade
Largest Insurance, Pension and Premium Bonds Company in Latin America *
Fast Growing with High Profitability
Largest Insurance Broker in Latin America
Largest Life Insurance Company in Brazil
2nd Largest P&C Insurance Company in Brazil
Leading Presence in Other Segments, such as Premium Bonds and Rural Insurance
Insurance Operations, Pension Plans and Premium Bonds Managed Through Private Partnerships with
Global Leaders
* Does not include health insurance.
Track Record
2013
IPO BB Seguridade
Equity investment in IRB –
Brasil RE
2012
Brasildental
Partnership with
Creation of BB Odontoprev*
Seguridade
2010
Established
Joint Venture
with Mapfre
2008-2011
Ownership
restructuring of
BB’s insurance,
Partnership
Pension Plans and
with Principal
Premium Bonds
Financial
division
Group in
Private
Pension Plans
1999
1996
1992
1981
1987
Creation of
BB’s
insurance
operations
BB Corretora’s
establishment
Creation of
Brasilprev
1995
Brasilcap’s
inception in
partnership
with
SulAmérica,
Icatu and
Aliança da
Bahia
Creation of
Brasilveículos in
partnership with
SulAmérica
* Pending approval by regulators, supervisors and inspectors.
Organizational Structure
Shareholders General Meeting
Fiscal Council
Board of Directors
Audit Commitee
Executive Officers
CEO
Marcelo Augusto Dutra Labuto
CFO
CCO
COO
Leonardo Giuberti Mattedi
André Luis Cortes Mussili
Ângela Beatriz de Assis
Shareholders Structure
Free-Float
33,75%
66,25%
100% Total
100% Total
BB Seguros
BB Corretora Holdings
BB Mapfre
SH1
Mapfre
BB SH2
Brasilprev
Brasilcap
IRB –
Brasil Re
Brasildental
BB Corretora
BB Seguridade Stake in
Terms of Total Shares (%)
74,9%
50,0%
74,9%
66,7%
20,5%
74,9%
100%
BB Seguridade Stake in
Terms of Voting Shares (%)
49,9%
49,0%
49,9%
49,9%
20,5%
49,9%
100%
50%
50%
50%
67%
20%
50%
Board of Directors
Representation (%)
Pending approval by regulators, supervisors and inspectors.
Corporate Governance Overview
Presidents, Vice Presidents and Directors
Board of Directors*
16 members
8 appointments
SH1
Life
8 appointments
16 members
SH2
P&C
Mapfre Vida S.A
Vida Seguradora S.A
6 appointments
6 appointments
6 appointments
6 appointments
6 appointments
6 appointments
Aliança do Brasil
Seguros S.A
BB Mapfre Assistência
Brasilveículos
Mapfre Affinity
Seguradora S.A
Mapfre Seguros Gerais
S.A
8 appointments
6 appointments
2 appointments
6 appointments
6 appointments
6 appointments
8 appointments
6 appointments
2 appointments
6 appointments
6 appointments
6 appointments
16 members
Brasilprev
Pension
Plans
Companhia de Seguros
Aliança do Brasil
3 appointments
8 appointments
8 appointments
3 appointments
12 members
Brasilcap
Premium
Bonds
8 appointments
4 appointments
2 appointments
2 appointments
3 appointments
Broker
10 members
IRB-RE
Reinsurance
2 appointments
* Effective members and substitutes
Distribution Channels
Banking Channel1
Non-banking channel2
61.0 mm clients
Sound non-banking network spread all over Brazil
Partnerships
Branches
5,416
140
1º
Points of sale
Correspondents
ATM
60,387
17,378
5,181
Shared
External Brokers
28,643
20,609
1Source:
2Source:
Banco do Brasil –September 2013
Grupo BB Mapfre – September 2013
Broker: exclusive access to BB network
SH1
SH2
Brasilprev
Brasilcap
 Exclusive access to Banco do Brasil’s network
 Access to BB Corretora
 20-year term
 Obligation to sell their products through BB Corretora’s banking network
 No termination clause
 Remuneration: fixed percentage of policies, in operational contracts signed
product by product
 Signed in January 2013
 Relationship managed by shareholder agreements with 23-year term for
PFG, 20-year term for Mapfre and indefinite for Icatu / Aliança do Brasil
Related Parties’ Transaction Policy
 Enhanced transparency and certainty to minority shareholders
 BB Seguridade’s commitment to reaffirm its best corporate governance practices
 Creating a committee related parties, composed of at least one independent member, who must have a favorable vote for
approval and signature changes in contracts with related parties
Backed by BB and Private Partnerships
BB Seguridade plays an active role in its operational companies´ governance
BB Seguridade – Earnings Breakdown
Insurance, Pension Plans and Premium Bonds
Distribution
Holding
Business Lines
SH1
Life1
Ranking 10
1st
3
SH2
P&C2
nd
Pension Plans
1st
8
Premium Bonds
Brokerage
1st
1st
425
Net Revenues (2Q13)5
(R$ mm)
1,521
2,122
3,694
1,383
Adjusted ROAE
(2Q13)
33.1%
6.2%
58.4%
51.7%
Adjusted net income
(2Q13) 6 (R$ mm)
165.8
19.6
114.9
17.8
217.9
% of BB Seguridade
adjusted net income 9
30.3%
3.6%
21.0%
3.2%
39.8%
1st
38.0%
547.87
Source: Company fillings and Susep
1. SH1 comprises Life, Credit Insurance, Housing and Rural Insurance / 2. SH2 comprises Auto, Casualty and Others (except for Housing and Rural Insurance) / 3. 1ST position: Represents BB Seguridade’s Life products / 4.
2nd position: Represents BB Seguridade’s P&C products / 5. Premiums written for BB Mapfre SH1 and Mapfre BB SH2; Collections for Brasilcap; Contributions for Brasilprev; Operational revenues for BB Corretora / 6.
Considers the net income attributable to BB Seguridade / 7. BB Seguridade’s net income includes R$ 11.8mm related to result of IRB Brasil RE, holding revenues/expenses and taxes, which are not shown above / 8. 1ST
position: Represents BB Seguridade’s collections products / 9. Considers the results of holdings BB Seguridade, BB Seguros and BB Cor / 10. Position in 9M13
10
Consolidated Earnings
Adjusted net income 27% higher even in an adverse environment for financial income
BB Seguridade Adjusted
Adjusted net income
ROAE (%)
430.7
(R$ mm)
Net income
Adjusted net income: +27.2%
33.3
BB Seguridade
(R$ mm)
ROAE (%)
Net income: +74.8%
38.0
547.8
38.0
23.5
547.8
313.4
3Q12
3Q13
3Q12
3Q13
BB Mapfre SH1
SH1 Life
Life
 Life comprehends life insurance, personal accidents and credit-life insurance.
 Life insurance is a product focused on individual aiming at assuring financial protection to the beneficiaries chosen by the policy holder, in case of natural or
accidental death, or permanent disability of the individual.
 Credit life insurance (life insurance linked to loans) is intended to ensure the payment of a debt in the event of death, permanent disability of the borrower,
preventing family member to inherit this liability.
Mortgage
 Housing insurance is related to the payment of housings. In case of death or disability of the insured, the insurance policy gives the guarantee that his family will
receive the property and the bank will receive the full payment of the property debt. A housing insurance can also protect against physical damage to the insured
property.
Rural Insurance
 Rural insurance protects farmers against adverse natural events, up to a maximum limit. It also covers cattle, farmer’s equity, farm assets, credit to commercialize
production, and the risk of death of producers.
BB Mapfre SH1
Underwriting results and net investment income sustained growth of adjusted net income
BB Mapfre SH1
Underwriting result
Net investment income
Adjusted net income
169.0
Life
(R$ mm)
Underwriting result: +29.6%
Net investment income: +23.9%
Adjusted net income: +30.8%
221.0
250.3
193.2
Mortgage Life
Premiums
Market Share
Market Share
∆%
BB Seguridade: +17.0
Industry: +14.7
18.8%
19.2%
1,031.9
1,207.4
3Q13
3Q12
Rural
(Insurance Premium) (R$ mm)
∆%
BB Seguridade: +156.7
Industry: +24.2
9.3%
4.5%
Premiums
95.0
76.6
3Q12
(Insurance Premium) (R$ mm)
Premiums
Market Share
67.0%
3Q13
(Insurance Premium) (R$ mm)
∆%
BB Seguridade: +52.9
Industry: +33.7
76.6%
470.2
53.0
307.5
3Q13
3Q12
20.6
3Q12
3Q13
Source: SUSEP Data: September/13
BB Mapfre SH1
Adjusted ROAE reached 33.1%, an increase of 1,054 bps yoy
Earned premiums
Claims
(R$ mm)
Earned premiums
Claims
Adjusted earned premiums
Adjusted claims
+678 bps
+34.8%
+236 bps
+27.1%
926.2
(%)
1,248.6
836.6
3Q12
1,063.4
3Q13
Adjusted ROAE
(%)
36.4
34.3
3Q12
3Q13
Combined ratio
34.0
27.5
(%)
Combined ratio
Adjusted Combined ratio
+1,054 bps
+81 bps
33.1
-45 bps
79.1
76.9
3Q12
80.0
3Q13
76.5
22.6
3Q12
3Q13
BB Mapfre SH1
Bancassurance channel sustains the growth of premiums written, specially in credit life and
rural segments
Premiums written
(R$ mm)
Breakdown of premiums 3Q12 vs 3Q13
3Q12
+28.4%
1,520.7
1,184.1
Mortagage life
Others
insurance
1.7%
Rural
3.3%
22.0%
3Q13
Mortgage life insurance Others
Rural
46.5% Life
x
3.5%
2.9%
25.2%
26.5%
3Q12
3Q13
Selling channels 3Q12
15.6%
84.4%
Bancassurance channel
Life
26.8%
Credit insurance
Credit insurance
Selling channels 3Q13
Other channel
Other channel
41.6%
12.5%
87.5%
Bancassurance channel
Mapfre BB SH2
SH2 P&C
Property
 Property insurance consists in products developed to protect assets or property from individuals or companies, linked or not to loans. The main products of this
segment are housing insurance (covers the risk related to the property, and not to the individual, as it is the case for mortgage life or housing life insurance),
businesses insurance (protection for companies assets) and insurance for machines and equipment (protection of goods belonging to individuals and businesses).
Auto
 Auto insurance is a product aimed at protecting vehicles, for commercial or private use, from damage sustained and caused in accidents or other situations, besides
other assistances provided to the policy holder for their daily lives.
Mapfre BB SH2
Underwriting result
Net investment income
Adjusted net income
Auto
(R$ mm)
Underwriting result: -78.4%
Net investment income: -33.9%
Adjusted net income: -32.6%
58.1
39.2
98.5
15.0
3Q12
Premiums
Market Share
(Insurance Premium) (R$ mm)
∆%
BB Seguridade: +14.1
Industry: +16.8
15.1%
14.7%
1,004.5
1,146.5
3Q12
3Q13
65.2
3.2
3Q13
Source: SUSEP Data: September/13
Mapfre BB SH2
Solid growth in earned premiums
Earned premiums
Claims
(R$ mm)
Earned premiums
(%)
Claims
Adjusted earned premiums
Adjusted claims
+21.1%
-624 bps
+13.5%
1,600.1 1,448.4
+144 bps
1,937.7
3Q12
1,644.0
3Q13
Combined ratio
59.0
56.0
3Q12
3Q13
Adjusted ROAE
(%)
57.4
52.7
(%)
Combined ratio
Adjusted Combined ratio
+77 bps
9.7
+84 bps
99.1
99.0
3Q12
99.8
6.2
99.8
3Q13
-348 bps
3Q12
3Q13
Mapfre BB SH2
Growth in premiums written sustained mainly by auto and casualties segments, with
growth above 15%
Premiums written
+15.1%
1,843.4
(R$ mm)
Breakdown of premiums 3Q12 vs 3Q13
3Q12
2,122.1
3Q13
Others
Others
11.6%
12.8%
Auto
54.5%
32.7%
x
32.8%
55.6%
Auto
3Q12
3Q13
Selling channels 3Q12
Casualties
Casualties
Selling channels 3Q13
Bancassurance channel
Bancassurance channel
29.4%
31.3%
68.7%
Other channel
70.6%
Other channel
Brasilprev
Pension Plans
 Complementary pension plans are an optional product giving individuals additional financial protection outside of public retirement plans.
 The two most important products in this segment are PGBL (Plano Gerador de Benefício Livre) and VGBL (Vida Gerador de Benefício Livre). They are pension plans in
which individuals contribute during their working lives in return for receiving a monthly income or a single payment usually upon retirement.
 PGBL products are recommended for people who declare income tax (IR) in complete form because the contributions are deductible in the calculation basis of income
tax up to the limit of 12% of annual gross income taxable. In this modality, in case of redemption or income receipt, IR is calculated on the amount redeemed or income
received.
 VGBL products are recommended for those who declares income tax in simplified format or is exempt, since the contributions are not deductible in calculating the tax
base. In this modality, in case of redemption or income received, the incidence of IR is only on the value of income.
Brasilprev
Result with pension plan
Net investment income
Adjusted net income
Pension Plans
(R$ mm)
Result with pension plans: +56.1%
Net investment income: +1.9%
Adjusted net income: +48.9%
153.3
103.0
109.2
79.1
3Q12
170.4
Contribution
Market Share
(Collection) (R$ mm)
∆%
BB Seguridade: +10.0
Industry: -16.1
29.4%
22.4%
3,405.1
3,746.8
3Q12
3Q13
80.6
3Q13
Source: SUSEP Data: September/13
Brasilprev
Increase in the volume of AuM boosted adjusted ROAE to 58%
Gross revenue from pension plans
Adjusted ROAE (%)
(R$ mm)
+912 bps
+10.1%
3,356.3
3Q12
3,694.3
49.3
3Q13
3Q12
Technical Reserves
+25.9%
(R$ bn)
77.6
61.7
Sep/12
Sep/13
58.4
3Q13
Brasilcap
Premium Bonds
 Premium bonds is a typical product of the Brazilian market, which links into a single financial instrument components of accumulation (savings) and lottery.
 Customers can choose between single payment bonds or perform monthly payments. In both cases, during the period, savers participate in draws with cash prizes. Part
of the payments is directed to the company to pay, for example, the cost of the plan and the expenses with draws. The remaining amount compose a reserve that the
participant gets back at the end of the plan.
 There are similar products in Spain and United Kingdom.
Brasilcap
Result with premium bond
Net investment income
Adjusted net income
Premium Bonds
(R$ mm)
Result with premium bond: -31.6%
Net investment income: -36.0%
Adjusted net income: -21.8%
Collection
Market Share
34.1
26.7
33.6
3Q12
21.8%
38.1
23.0
3Q13
24.4
918.3
3Q12
(Collection) (R$ mm)
∆%
BB Seguridade: +50.6
Industry: +24.6
26.4%
1,383.2
3Q13
Source: SUSEP Data: September/13
Brasilcap
Robust growth of premium bonds collection allowed reaching a market share of 26%
Technical Reserves
+44.5%
Adjusted ROAE (%)
(R$ bn)
8.5
101.4
-4,968 bps
5.9
51.7
Sep/12
Sep/13
3Q12
3Q13
BB Corretora
Brokerage
 The brokerage businesses consist in intermediating the sale of insurance products between the insurance company and clients.
 Due to the intermediation services, the broker receives a commission, which is calculated as a % of the value of the premium.
 There are no direct underwriting risks involved.
Commercialization of BB Seguridade’s products in BB’s retail banking base
Commercialization process
Gross premium
SH1
SH2
Reimbursement
of costs /
expenses
BB’s client
Brokerage
BB Corretora
Brasilprev
Banking service fees
Brasilcap
BB Corretora
The predominance of sales through the bancassurance channel boosted the growth of
brokerage revenues and net margin
Brokerage Revenues
+28.9%
(R$ mm)
Revenues Breakdown 3Q12 vs 3T13
3Q12
425.5
Brasilcap
330.0
Other
10.8%
3.7%
Brasilprev
13.9%
3Q13
Adjusted Net Income
(R$ mm)
+35.3%
217.8
161.0
3Q12
3Q13
Brasilcap
Brasilprev
51.3%
x
Other
15.4%
0.5%
10.0%
18.7%
20.3%
3Q12
3Q13
SH1
SH2
Performance
55.4% SH1
SH2
(R$ mm)
3Q12
3Q13
Brokerage Revenues
Operating Result
Adjusted Net Income
330.0
243.7
161.0
425.5
318.6
217.8
Net Margin
48.8%
51.2%
Contacts:
Investor Relations
SBS – Quadra 1 – Bloco A –
Ed. Sede I – 4º andar
70.073-900 – Brasília, DF
Tel: +55 (61) 3102-5771
www.bancodobrasilseguridade.com.br
ri@bbseg.com.br
Apresentação Institucional
Março 2013