“Storm has passed”, says president of BB Seguridade
According to the president of the holding company, Ullisses Assis, in a press conference to present the results of the fourth quarter, the last months of 2021 show that ‘the storm [of the effects of the pandemic] has passed’. Last year, BB Seguridade disbursed BRL 864 million in compensation related to covid-19. This is almost four times the volume seen in 2020. Even with the high loss ratio, says Assis, the company obtained the highest quarterly net profit since the initial public offering (IPO) in 2013. ‘When we take away from this net income the effects that we call temporary, such as covid and the increase in CSLL [which lasted until December], this represented practically half a billion reais [less] in profit.’
According to the holding company’s calculations, net income would have reached R$ 4.4 billion without these effects. BB Seguridade earned BRL 3.9 billion in 2021. ‘[The fourth] quarter shows what our ability to generate results should be in 2022,’ said the director of Finance, IR and Management of Participations, Rafael Sperendio. The president of the insurance, pension and capitalization holding controlled by Banco do Brasil stated that the trend this year is for the company to have a ‘payout’, that is, the distribution of earnings, higher in percentage than last year. ‘In 2021, we paid an average of 73% in dividends, but in the fourth quarter the percentage was 83%’, he points out.
‘This year, the tendency is for the distribution to be greater,’ he said. Sperendio added that, in 2021, the distribution had a negative impact related to a one-off event. ‘The ‘payout’ was pulled down due to an investment in Brasilprev,’ he said. In relation to the loss ratio, which had a strong impact on results last year, the expectation, according to Assis, to remain at a lower level than seen in 2021. For now, he evaluated, the ômicron variant has not affected the indicator. ‘Regarding the onomicron, the data for January so far does not show any acceleration in reported claims compared to the fourth quarter,’ he said. ‘But we do not rule out a possible rebound. It may be that we observe this effect a little more for between February and March.’
The 2022 results should still benefit from a stabilization of the net inflow of private pension plans. In the last quarter of last year, the balance showed a net withdrawal, when withdrawals from gross contributions are withdrawn. Pension plans showed a negative net inflow of R$546 million between October and December. In 2021 as a whole, the balance was positive by R$ 3 billion. ‘The volume of redemptions as a result of the pandemic was much higher than we had in previous years’, said Assis. ‘There was a strong increase in redemptions for current expenses and for investment in real estate in the last year and a half’, added the president of the holding. For this year, ‘the expectation is that it will continue at a strong pace of collection, at least the same as last year, but also bringing in new customers”, he said. “Last year, we brought over 200,000 new customers to the base.” According to Sperendio, in January the pension plan already reversed the direction of the end of the year, with a positive net inflow. ‘We expect a much better year in terms of funding.’