03/29/2024 – 8:53
The Brazilian market gained weight in the composition of reinsurance collections by IRB Re last year. Reinsurance accepted in Brazil accounted for 76% of the total, against 68% in 2022. The international market, on the other hand, fell from 32% to 24%.
The change in composition is the result of IRB's strategy of reducing exposure to a large part of the businesses abroad, considered more risky and difficult to make profitable than those in Brazil. This strategy is part of the reinsurer's broader plan to “clean up” the portfolio, by closing contracts that are not profitable.
In the fourth quarter of last year, the premium collected by IRB in Brazil grew 4.9% compared to the same period in 2022, to R$1.305 billion. The premium issued abroad, on the other hand, fell 50.4%, to R$270.3 million.
The segment that had the biggest increase in collection was Life in Brazil, in which the premium issued increased by 221.8% between the fourth quarter of 2022 and the same period last year, to R$383 million. There was also an increase in property reinsurance in the country, which grew 19%, to R$537.5 million.
In the international market, almost all segments had a drop in revenue on the same comparative basis. The biggest of these was in the aviation segment, which fell 99.4%.
Solvency
IRB Re's solvency ratio was 146% in the fourth quarter of 2023, an increase of 45 percentage points (pp) compared to the same range in 2022, according to the company.
According to the IRB, the sufficiency amounted to R$533.9 million in December. In other words: the company's net worth exceeded the possible reinsurance obligations accepted by more than half a billion. Coverage of technical provisions was R$438 million, compared to R$332 million in the same quarter of 2022.
The growth of both indicators is the result of the company's operational turnaround, which returned to profitability in recent quarters and has taken on fewer risks in the reinsurance market. Equity sufficiency indicates, among other things, the reinsurer's ability to grow in the following months.
“We started 2023 with a solvency ratio of 101% and ended it with 146%, with business results generated. We work to produce sustainable results in the long term”, says IRB CEO Marcos Falcão in a statement. “Of course, between months and quarters, there can be volatility inherent to the business. But we are confident that we will continue to evolve quarter by quarter.”
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