Good morning. Thank you for attending our conference call to release the results of the Q3 of 2022. Few reminders before we get started. This conference call is being recorded and has simultaneous interpretation into English. If you want to listen in English, please click on Interpretation on the lower menu on your screen. During the presentation, we are going to show the slides in Portuguese. If you want to see the document in English, go to our investor relations website at the address that you can see on the screen during the presentation. Those of you who want to ask questions, please click on the Q&A button, and you will also be allowed to ask questions in audio in Portuguese only. Today with us, we have Ullisses Assis, CEO of BB Seguridade, and Rafael Sperendio, IRO and CFO.
Now I'll give the floor to Mr. Ullisses Assis to start the presentation. Please, Mr. Ullisses Assis, you may start.
Good morning, everyone. First of all, I would like to thank you immensely to join us to talk about the results of the Q3. We're very happy with our performance. Before going into numbers, I would like to talk to you a little bit and give you a few highlights and share with you what we've been doing in terms of strategies. Now, on the highlights of this quarter, we have BRL 1.65 billion.
This is a new record in net income for the company, and we are very happy because it's being built on very, very solid basis, and we can see the results growing 48% year-on-year, BRL 1.4 billion in consolidated numbers. All business lines are growing in a very robust manner. 45% growth in the issuance of premiums. Loss ratio is 14.7 percentage points lower than the same period last year. Pension plans have grown more than 20%. And then, also, in terms of our net inflow has also grown. In the same period of last year, we had BRL 1.2 billion negative in inflows. Now it's BRL 1.8 billion positive. Also inflow is positive in a market that where we lost leadership.
Now we are growing very consistently this year. All of these are making us to have a brokerage of BRL 1.3 billion in brokerage revenues. The operating result is growing on very solid basis in every business line. The net investment income is again gaining more share in our total revenues, getting to BRL 232 million this quarter, in contrast with BRL 14 million Q3 2021. Now, talking about the strategic lines, we have three fronts that we've been pursuing on this management, which is technological modernization, digital transformation, diversification of sales channels, and also the IT architecture. Starting on technological modernization, quarter-over-quarter, it's been growing in terms of its share of our total sales. We have grown 10% over the same period last year.
In this period of the first nine months of the year, we had 100% of our digital journeys were reviewed according to best practices. Very simplified contracting in our app. This is work that is being developed with great mastery. Now we have a record of BRL 2.9 billion in business originated from analytical intelligence. This means that of everything that we sold this year, 2.9 billion customers were impacted before buying, either physical or digital, but they were impacted by some action that we implemented in terms of digital marketing. This is a very major increase as compared to last year. This has provided great effect. We were very bold earlier this year, investing and planning to invest and approving total investments of BRL 600 million in digital transformation.
We are doing very good investments. We have reached 350 in terms of investments until September 2022. Our idea was to advance one year, to have it one year earlier, our new IT architecture. Originally it was in the end of 2023. We advanced it for the end of 2022. We have completed 75% by September, and we are going to deliver 100% by December, as previously announced. We are moving very fast, and we are going to complete all this process, which is going to provide us more potential for distribution in Brazil and in other channels.
This transformation is fundamental once we think in the new market, especially thinking of open finance, when we can work with the model of hyper-personalization, which is our main objective for future quarters and years. Now talking a little bit about our diversification and distribution strategy. This is another information that makes us very, very happy. Once I started talking about strategy, our initial aim was to have 10 partnerships in the first half of this year. We have ended June with 23, September 43 partnerships with many different types of companies. We are negotiating another 11 partnerships, and we are seeing the results of this strategy. If you look at the left-hand side, this year we have issued BRL 814 million through other channels. This is a business that didn't exist in the company, that we created from scratch.
Of course, this is still very much focused on rural and credit life insurance. We are going to use this distribution model, this diversification in other business lines. Considering the types of partnerships that we had with cooperatives and agro partners, of course, we expected it to go intensely in this segment. Just to give you an idea, to operationalize this strategy, we issued BRL 737 million in premiums. If we were just an insurance company, it would be number three in the market. We would be number one, and we would be the third in the open market. We created business from scratch in one year, and we are number three in the market, which demonstrates that we are on the right track in relation to our diversification strategy.
This is a business model that, as I said before, we have created structures inside BB Seguros for each one of our colleagues to extend these channels and really take our products to more and more customers. Now, talking a little bit about the customer experience, which is a very strong ambition that we have, and it's very much necessary, and we have done a lot this year. I just would like to explain this to you and to show how important and structuring are some of the actions that we are implementing. Our customer base has grown about 4% in terms of number of customers, 15% growth in customers from premium bonds, 9% more customers in home insurance, and 4% in life insurance.
Even though we have a high rate of loss ratio, especially in Q1, more specifically in rural insurance, we were able to improve our NPS and to reduce the levels of claims significantly. When we look at reduction of complaints, we have reduced by 26% comparing the first nine months of 2021 to the first nine months of 2022. In terms of NPS, in rural, in spite of our loss ratio, has grown 5%, premium bonds 26%, term life 34%, and we have improved 67% our NPS in pension plans.
We want to hear our customers in each of the interactions that they have with our holding, so that we can effectively capture their needs, and we are able to provide services that are timely, fast and that can resolve and solve their problems. In last call, I mentioned that what we did this year was to segment our customer base in different levels, and we have different protection levels to do the segmentation. We completed the segmentation that Banco do Brasil already has, and we are more and more ready to assign new meaning. Customers were segmented in Banco do Brasil, but once they bought one of our products, they had the vision of that coligada in terms of their business model. Brasilprev had only saw their businesses, Cap, same thing.
We have the CRM implemented in each one of the coligadas, and now we are integrating the segments and the model, the platform of BB Corretora, the brokerage firm with the insurance business lines. This is going to be augmented in future quarters. Because once we analyze our base internally, almost half of our base only has one of our products. We have huge opportunity and also the obligation of working very intense in terms of cross-selling in our customer base. Also because the super protected and more engaged customers, they are 10 times higher profitability than other customers. We want to escalate so that these customers more and more products from BB Seguridade so that they have up engagement, and that's why we have this program.
This program started in October. It's still being tested with 50,000 customers. We are validating a few assumptions. We have two very robust tests in experience that we called Game for Life one and two. The Game for Life one, our objective was to seek more and more behavioral information of our customers, their needs, data sharing. In Game for Life two, we tested many tasks in terms of many different models, in terms of style of auto consumption. We brought all this intelligence to our relationship program, and its basis is to take many benefits to customers, progressive discounts, many benefits in terms of service testing, so that they are encouraged to centralize their businesses and their protection in our group.
They will think harder before they change insurance company because we are going to deliver effective value proposition, the right product at the right price at the right life moment. We are going to improve product between creation and revitalization of products. We have delivered more than 24 products this year. Combined with technology and this customer intelligence, we will be able to translate this into an effective value proposal, reducing churn, increasing profitability too.
Now I'm going to give the floor to Rafael. These were my initial words. Rafael is going to talk about the numbers, and at the end, I will be available for questions and answers.
Thank you, Ullisses. Good morning, ladies and gentlemen. These are the main highlights of the Q3 year-to-date numbers. We have BRL 1.7 billion in Q3 this year, 69% year-on-year, with a strong growth in sales. The main highlight in the quarter is the rural segment and credit life too, with strong recovery. Here I'm going to give you details. Also in premium bonds with a really amazing performance in terms of collection this year. Financial also provided significant contribution, especially in Q3 2021. In a combination of all companies, we had a financial of 14 million after tax, 232 million, which is 14.1% of the results of the quarter.
They're getting closer to the more normalized level that we used to have before in the past in terms of the net investment income, about one fourth of our bottom line. In the first nine months of the year, we had a net income of BRL 4.2 billion, growing 57% as compared to the same period last year. Here making the adjustment or the results because of the time mismatch in the update of the liabilities, that really makes sense once this effect at total zero in the time and there's no room for why we shouldn't count this effect. If we're segregating this effect, we added 123 million negative in the first nine months of the year, and our net income would be BRL 4.4 billion.
In the first nine months, we already exceed the record net income of the company that was in 2019. Now next page, you have the details. You can see the breakdown of this growth of the net income, BRL 1.5 billion in the first nine months of the year. Most of the growth came from improvement in the operations, BRL 1.5 billion. BRL 877 million came from the growth of the operation and the performance of sales, especially in the segment of insurance, materialized in the BRL 710 million growth in terms of earned premiums and other products, collection of pension and premium bonds, the brokerage revenues and an increase of BRL 261 million.
Another significant drive for the operation, operational result was the decrease in the loss ratio, although we had higher crop claims concentrated in the first half of the year. If we look at year-to-date numbers, the total effect, the accumulated impact was much lower because of the problem that we had in 2021 because of La Niña. The combined effect of the higher loss ratio in rural and reduction in life products ended up being very positive and thereby contributed for a net effect with a significant growth in the operating result.
Lastly, here, the last component, offsetting part of that growth, we had BRL 396 million negative impact, especially as a result of expenses, and these expenses are the result of variable costs associated to higher sales, to the growth of the operation, to the adjustment of the inflation expenses, especially because of collective bargaining agreements, and also investments, as Ullisses mentioned, in infrastructure, in technology and in other sales areas to support our channel expansion. In terms of net investment income, contributed BRL 654 million of the BRL 1.5 billion. BRL 476 million came from the higher volume and the rate change, as a result of the Selic interest rates.
As you look at the longer period, the impact is slightly lower than it was last year with BRL 13 million in terms of the time mismatch of Brasilprev. Lastly, we had an effect coming from the yield curve that was steeper this year, BRL 49 million of negative adjustments of mark-to-market in contrast to BRL 240 million in the first nine months of last year. Total BRL 654 million higher in the net investment income for the first nine months of the year. Now we have the details that you are used to by operation.
Starting insurance operations, you can see written premiums growing 45% year-on-year, quarter-on-quarter, 30% rural with fantastic performance, 73% growth year-on-year, 56% year-on-year in the first nine months. We still have a strong trend of recovering our performance growing above the market for the next nine months. For credit life, 46% year-on-year, 13% growth in the first nine months of the year. As to the operating performance, you can see here a substantial improvement in the company's combined ratio. In blue on the left below, the combined ratio improved 17.7% year-on-year, 13 points in year-to-date number, first nine months of the year. Loss ratio is the main driver that has been consistent in the levels of 20-something.
It's a level that we had already announced, segregating levels of COVID. The last ratio is more structural for the company. This is in the second and Q3, and we are not expecting any major changes in these levels from now towards the end of the year. Commissions has dropped comparing year-on-year, and most of the effect is related to the higher share of rural insurance, where commissions are much lower than other products in the portfolio, and this ends up providing lower average commissions. SG&A has also dropped year-on-year in the Q3 and also quarter-on-quarter, considered the substantial growth that we have seen in terms of earned premiums.
Net investment income has grown 144%, considering the first nine months of the year in terms of average balance. We have almost 80% of this portfolio mark-to-market. In insurance, it's both fixed, so it can make profit from the higher Selic rate. If we look at the higher premiums, better net investment, you can see 160% in the Q3 year-over-year as compared to the Q3 last year, and then the 15% growth if we see the year-to-date numbers. On the next page, you can see contributions, as I've said, and it's the highest record ever, BRL 40 billion, year to date.
The numbers 40% year-on-year in Q3, and 18% growth in collections for the first nine months of the year. Redemption ratio is at 10%, stable, growing 60 basis points as compared to the Q3 last year, 140 in the first nine months is a strong influence because of income available in the market in terms of fixed income and variable income somehow impacted the redemption and an outflow of funds. If we look at net inflow, we have been able to reverse this trend, and thereby, if you look at in the Q1, we had BRL 1 billion of net redemptions. In the Q3, we have the inflow of BRL 2 billion in net.
We could reverse this balance in terms of net inflows going from negative to positive in the first nine months of the year of 2022. It's important to highlight this level of redemption in the Q3. When we look at this indicator, it was higher in July and it's been falling on a downward trend ever since. I don't know whether we are going to be able to keep the trend, but it's a positive indication from now towards the end of the year. In terms of reserves, BRL 336 billion at the end of September, growing 8% year-on-year. Our participation in multi-market is also significant if we look at year-on-year numbers at 28.2%.
This is also a consequence of what we had in terms of net inflows. The volatility in the market led to risk aversion by customers, and most of their funds are being allocated on more defensive products. This is very clear here when we look at the chart on the bottom at the left, and you can see fixed incomes minus multi-market lowered admin fees from 1.03% in the Q3, annualized numbers last year to 0.98% annualized numbers in the Q3 this year and also in the first nine months, 1.02% to 1%.
Despite this growth in the balance of reserves, we end up being able to offset the drop in the average rate with a growth of revenue of 1% year-over-year, 4% in the first nine months because of net inflow and also because of the interest rates in the reserve balance in our portfolio is in the first and second quartiles as compared to the market. This has also contributed significantly for the growth of reserves. Net investment income, we went from BRL 220 million negative last year to a deficit of BRL 35 million in the Q3 this year.
We had a deficit of BRL 613 in the first nine months of 2021 to a surplus positive result of BRL 69 million in the first nine months of 2022. Also in the quarter, this reduction, if we compare year-on-year, it explains basically because of the real interest rate that offsets most of the negative impact coming from deflation that we have seen in the Q3 with a higher impact in IGPM also. This also brings a reduction in the cost of liability, but ends up having an impact on profitability of the assets. We have positive prospects. IPCA is already in a positive territory as IGPM reduces inflation along Q4 converging to zero and even positive.
We might benefit from this positive movement either in Q2 2022 or in Q1 2023, depending on how fast this goes. Lastly, our growth in revenue in terms of management fees. So we had a marginal improvement in operational efficiency and the reduction of the negative impact in financial result. If we look at year-on-year and also for the Q3 and also in positive year-to-date numbers. There is a quite positive contribution for the company's performance, 82% growth year-on-year in Q3 and 98% growth in the first nine months of the year. Now going to premium bonds. Actions grew 43% year-on-year in the Q3, and if you look at the first nine months, 32% growth.
This is a very, very good performance of sales that will also affect the revenue of BB brokerage. We had approximately 160 basis points in the financial margin of interest rates. This is adjustment of the hedge in the portfolio available for sale, which explains this drop of 31% in the net investment income. When we look economically, this is zero because the positive contribution that offsets this is impacting the other part of the company in terms of cash generation, and this doesn't have much of an influence.
If we look at the first nine months of the year, you can see that even though this hedge in a financial adjustment is still positive, in year to date numbers, it's at 35% with a high of the Selic rate of growth in the net investment, for the nine months of the year with 60 basis points in the financial margin from interest rate. What happened, this dynamic that had an impact in the net investment income of the company also explains, the variation in the net income, for premium bonds with a drop of 37% quarter-on-quarter and the high. Also now dental plans, smaller operation.
Even so, we had a growth of 40% year-on-year considering the Q3, especially because of lower loss ratio and the profit of this operation grew 37% year-on-year and 37% in the first nine months. Now, in distribution brokerage, revenues grew 20% year-on-year, 18% quarter-on-quarter, and 15% if we consider the first nine months of the year. Rural insurance had a very, very good performance, also pension and premium bonds.
You can see this improvement of three points in the net margin is the result of the average balance of funds and also the high on Selic that has contributed for a growth of 30% of the net income year-over-year and 22% in the first nine months of the year. On the last page to wrap up, we have our guidance in terms of non-interest operating result. We had better loss ratio and that was more accelerated than we had expected before. That's why we're revising our range from 15 to 20. We are revising the estimate from 24 to 27.
In terms of premiums written, we are delivering 30.4% with a very significant contribution from rural insurance. We're also reviewing it with a growth from 25%-28% for the year of 2022. In terms of pension plans reserves, we delivered 8.2%. If we analyze this growth rate, that as we've been doing in our reports, would be 9.9% within our estimated range. For this reason, we are maintaining this range and we are not reviewing these estimates. These were the main points that I would like to highlight, and now we are available to answer any questions you may have. Thank you very much.
Thank you, Rafael. Now we are going to start questions and answers.
If you want to ask a question in audio in Portuguese, please click on Raise Hand, and you may ask your question. Or if you prefer, you can send your questions to us in writing in Portuguese or in English by clicking on the Q&A tab. If we cannot answer all questions here live, we are going to send you an answer by email as soon as we finish our conference call today. Our first question comes from Antonio Ruette from Bank of America. Please, Ruette.
Good morning, everyone. Congratulations on your performance. My question is for 2023. What can you tell us about growth in premiums and loss ratio? What are going to be the focuses? As rural is so strong and the credit life insurance is doing so well quarter after quarter.
What are the focus for growth in the next year in terms of lines, and what can you tell us in terms of loss ratio? Another question that is more specifically for rural, what are you seeing about La Niña month-on-month? What is the loss ratio for rural that you are seeing for future quarters? Thank you.
Antonio, I'm going to answer your question. Ullisses may contribute. First, loss ratio. At first, La Niña goes on and even though we understand the severity of this climate event will not be as bad as it was in the last cycle. In any way, we are much better prepared than we were in the last cycle. We had a few adjustments in our subscription model, in our negotiations with the reinsurance company.
We also reviewed our distribution of risk throughout the Brazilian territory. Even though La Niña might have the same severity as it was in the last agricultural season, we think that it's not going to have such an intense impact on loss ratio, at least not as high as we had in the Q1 this year. It's still too early to say anything. We are working very much based on assumptions. The scenario is going to be clearer in December and January. As to sales performance, the overall macro context is better than what we experienced in 2022. Talking about the same variables. Unemployment has been going down. We ended 2021 with 11%. Now it's already at one digit level. It hit the first level in the last 10 years.
The trend is of improvement, which will favor our commercial performance. We are confident that the economic context for businesses is likely to be better in 2023 than it was in 2022.
Can we have the same growth rates?
Well, in principle, no, not as big. There will be some slowdown, but we don't think that the slowdown is going to be significant. It's going to keep a significant pace of growth in all our business lines in 2023. This is what we are expecting. Specifically about credit life insurance, we understand that this new level is here to stay because today we have a product that is better. In the past, we had changed the product. There was a time of transition in the portfolio. This happened really.
We believe that we are at a different level of sales of credit life insurance, and we think this is going to be strong. For rural insurance, we still have a lot of space to grow. There is an increasing demand for this product, especially considering the claims that happened in the near past. Our loss ratio was one-third of the market, and this definitely provides us leverage to negotiate with reinsurance. We understand, and as it's been going on this year, we are still strong for next year. Not to mention planted insured area, which this is still a very low number, and we still have lots of room to grow.
Very clear, Ullisses. Thank you very much for answering my question.
Our next question comes from Tiago Binsfeld from Goldman Sachs. Tiago, please.
Tiago, you can ask your question. We're going to move to the next question. We have Marlon Medina from JPMorgan. Marlon, please, you may ask your question.
This is Grespan speaking. Thank you for opening for Q&A. My question is looking to 2023, but now from a different angle. If we analyze this quarter, when we look at your reported income of BRL 175, and we analyze, we get to BRL 7 billion, which is materially above what the market is seeing today. Once we do this analysis, what do you think is the main risk for this type of calculation? One variable would be the interest rate, but even if Selic goes down next year, the average Selic will have a higher Selic rate next year versus this year.
If we could criticize the annualization of this quarter's net income, what do you have to say about that?
Thank you for the question. Our performance this quarter, there weren't really any extraordinary events, no one-off events, meaning that we can continue from now on with this performance. If everything remains normal in the business environment, we don't see much risk in answering your question. If we look at all components, loss ratio is well within the more sustainable level for the operation of insurance. Our commercial performance, we think that these volumes are going to grow if we look into 2023.
If we look at the result and we see all the composition, so in our vision, we are not seeing any extraordinary event that may have driven up our performance in Q3. This is very much in line with what we think that is the company's capacity of generating profit.
Thank you very much, Rafael Sperendio. Very clear answer. Thank you.
Now, I'm going to Tiago Binsfeld.
Hi, Felipe Peres, can you hear me? Yes. Great. Well, the first question is about the new guidance, the new operational guidance. At the top of the guidance, a growth of 27% would be a slowdown as compared to what you have delivered in Q3. Is that right? And do you think this is a conservative assumption, or does this reflect what you're seeing for the Q4 in terms of October and November?
Then I have a second question to ask afterwards.
Tiago, thank you for the question. Very straightforward. If we compare Q4, last year was a very strong quarter. We expect a slowdown in this rate. We didn't have any COVID effects. This is very similar. We are really expecting a slowdown, even though small, in if we look at the whole year.
My question is also of the Q3. Do you think Q4 is going to be slightly weaker than Q3? This is what I'm seeing here. Does it make any sense, or can I interpret this guidance in any other way?
If we compare quarter on quarter, we're not expecting a reduction, a significant reduction in the generation of profit. Obviously, investment income is something different. It's separated.
If we think of the operation, there's no reason why we should expect a significant slowdown in our generation of net investment income. As to sales as a whole, we also have the seasonality of some products. For example, the rural insurance is seasonal, and it might have some impact on sales. As Rafael said, in terms of results, we are not seeing much of a difference. Now, of course, we have 1,000 variables. In many years, we expect an IGPM of five in the beginning of the year because of market indicators, and we end up with 20. We have IGPM, claims, pandemic, things that are kind of unexpected and that happened. If we keep all conditions as we are expecting, well, that shouldn't happen.
Thank you, Ullisses.
I have a second question, if I may. In terms of contributions that were quite strong this quarter, but if you could give us more details what you've done this quarter, why has it improved so much and so much above the market, and this is a trend for 2023 that you're going to keep.
Well, I'm going to start, and Rafael, please feel free. There are a few questions. Well, for rural insurance, in fact, also considering our excellent underwriting capacity, we were able to have capacity to operate slightly better than the competition. In some states in the last three months, we operated almost alone in some of those states because of capacity of other insurance companies. They had very high loss ratio earlier this year.
We are seeing that this is one of our strengths in terms of our growth in rural. We are operating normally all over Brazil. As I said, despite such robust growth, when we analyze the percentage of planted versus insured area, we have huge space to grow. As I showed you, in addition to the network of the bank, we have created a new distribution channel. Just in the open market, as we call it, just in terms of rural insurance, we made BRL 440 million, not depending on anyone from Banco do Brasil. Creating a new business model with these strategic partnerships. We had quite bold actions and because we have created and delivered to Banco do Brasil's network, the highest sales mobilization campaign in the history of the bank ever.
So this has an effect on the distribution potential, and we hope that we're going to maintain this next year, and we are negotiating to keep this new format that in our understanding is very appealing, and also using the experience that I brought from the time when I was network director with all the directors and vice presidents of that area, so that we can have a differentiated level in terms of positioning of insurance products within Banco do Brasil. This is translated into credit life product where we have. Also in premium bonds that we have grown significantly this year. There is a whole set of actions. Product improvement, process improvement, better customer experience, new distribution. There is not one silver bullet.
It's a set of actions that we have improved that have enabled our better or the improvement of our performance as a whole.
Thank you, Ullisses. Just a follow-up. When we look at pension, do you think these trends are going to continue? Was there any state specific that you did in pension that led to higher contributions?
Well, pension, we also have space. That's the whole insurance market. For pension, we have a lot of space to grow. I was talking recently or shortly ago to journalists that we have some penetration that we can improve a lot in terms of high retail and private. We still have a high potential for growth of pension plans, and we do not have appropriate penetration.
For us that have the highest portfolio, it's an extra challenge for us to defend our customer base. We see some players growing, but they're growing on much smaller basis. It's different for you to defend a BRL 40 billion portfolio, a BRL 330 billion portfolio. Along the year, we have implemented some actions, made it possible for us to be more efficient both in attack and defense. What we did last year in terms of multi-market, when we migrated a BRL 100 billion to multi-market, we took up products with diversification, but not necessarily with high volatility. This made it possible for us to provide an efficient value proposition when our penetration went from 32% to 28%, whereas some competitors had 70% share in the multi-market, and today have 15%.
We are much more focused on pension in terms of delivering an effective value proposition with investment in strategy rather than in migrating them from one investment to the other all the time. This improves our retention capacity. When we talk about portability, transferring, we improve performance, and we also improved our performance in the transfer out, so we are no longer losing funds. Now, considering our base makes us very optimistic in terms of pension. Also, because pension is not such an easy product to sell on a digital channel. The sale of pension plans requires specialization. The other thing that we did was in Brasilprev, we have what we call premium islands. We have many highly specialized consultants that have a virtual portfolio together with private relationship managers.
They have higher values, and they talk to those customers all the time through all the channels to have a more appropriate investment strategy and more effective communication. This also contributes not just to bringing in funds, but so that we are more agile. For all the reasons I have mentioned and also consider our basis.
Our next question comes from Eduardo Nishio from Genial. Nishio, please.
Good morning, everyone. Good morning, Ullisses, Rafael Sperendio, Felipe. Congratulations on your performance. I have two questions. Number one is the hedge of Brasilprev. You said that you are hedging already. How can we look at the result from now on? Is it going to be less volatile? Are the numbers going to be more normalized with a minor loss? How should we look at that? My second question is related to succession.
Unfortunately, this is a theme that comes up every time a new president is elected. I would like to hear from you. Will there be a succession? How would it be like? And what are the mechanisms that you have for shielding your growing profit trajectory in terms of protecting it, considering the political transition?
I'm going to answer the first question, and then Ullisses is going to answer your second question. As to hedging in Brasilprev, I talked about Brasilcap, but because both of them have different perspectives, but both of them, we are working with protection mechanisms. As to Brasilcap, our portfolio is prefixed and then matching our passive, which is also prefixed. It's available for sale, impacting the company. We started a protection strategy, locking that cost.
It was much higher in the second half. Last year, we've been reducing our protection, and in this quarter, the closing of the structure ended up creating negative results. On the other end, we have an offsetting effect with a gain on this mark-to-market coming from the closing of the curve. It totals to zero at the end. We are working here with shorter timeframe for this hedging, and we hope that we will be able to benefit from gain once the structure closes in 2023. Obviously it's still a little bit early to talk about that. In answering your question about Brasilcap, we're not expecting any negative effects arising from our protection strategy, quite the opposite. As to Brasilprev, we have the traditional structure.
In the current scenario, and also considering the past, it's important for us to bring this topic to discussion. Our main concern in managing this portfolio is much more in matching the duration than in the index, even though the index gets more attention because of the volatility. Economically, it makes more sense for us to match duration, and we were able to use well the opportunity in terms of negotiations with real rates or actual rates with 15-20 years, paying more than 6% in terms of the actual rate. We brought this into our portfolio. Going back to your question, in Brasilprev today, in terms of index, we have about 80% matched, but with a shorter duration.
For the next three years, five years, no more than that, is the duration of this hedging of the index. Well, talking about any possible changes, well, we are not worried about that because if they happen, the company has quite robust governance, very well-defined strategic documents, very well-designed planning for the next few years in the case of BB Seguridade. All of us are employees of Banco do Brasil. These changes do not depend on elections. I was a director of the bank, then I came to Brasilprev. Along our careers, some changes occur, obviously, not because of change in government. Any change to become a member of the board, whether CEO and director of any area, you need to be an active employee of the bank.
You need to have technical expertise that needs to be approved by the company, so there is governance. You shouldn't be worried or concerned about that. The company's corporate structure is very well designed. If any changes happen, there is no risk for continuity, much to the opposite.
Thank you very much.
Our next question comes from Kaio Prato from UBS. Prato, you can open your microphone.
Hello, can you hear us? Yes. Opa. Well, thank you for the question. On rural, there are a few regions, and in some mines, you're operating alone on the rural.
I would understand why you think you are the only ones who can operate on those areas, but looking on the downside, if there is any effect in terms of loss ratio similar to what we had earlier this year, that you would suffer a stronger impact as compared to what we had this year on these renewals or higher penetration, you have had some increase in terms of reinsurance that could offset this factor.
Well, Kaio, I will say the following: We do not have a concern and can assure you that we are not operating and assuming unn ecessary risk because we want to grow, but with quality.
Why are we still operating?
Because we have more reinsurance capacity.
As our loss ratio in the Q1 this year was 1/3 of that of the market, it's easier for us to discuss with reinsurance companies any capacity. The risk with us has demonstrated to be much lower. We are still growing in all regions. We have this advantage of the capillarity. We're still growing quite robustly in every region, but we have the analysis capacity per municipality. For example, in Rio Grande do Sul, we analyze per sub-region in the state, not the state as a whole. We have historical data. We know the farmers for a long time. We have people working, giving advice to those farmers out in the field. This improves our subscription or underwriting capacity. We are growing, but in a very, very careful and responsible way.
We are operating in the niches and regions where we think risk is acceptable and also considering our negotiation capacity with reinsurance companies, considering that our loss ratio is well below that of our competitors. Rest assured that we're being very careful in this growth, and we are monitoring the risks that we think that are absolutely acceptable.
Okay, thank you.
The next question comes from William, from Itaú BBA. William, you can open your microphone.
Thank you very much for the opportunity. I have a follow-up regarding pension. So we have 30% average contribution in market share. You think you can gain share and contribution in some segments of the market still?
Thinking of your new share and what you see and comparing it to your current share, where do you think your total share will be in terms of total contribution? Also in terms of redemption, it's been growing. It was 11.9% this year. Do you think 11.9% is a stable level, or is it going to still go up in future quarters?
I'm going to go first, and then Rafael may complement, William. Well, what we see in the market today in terms of pension is that in terms of redemptions, somehow the behavior is kind of not really at what we consider normal levels in the past, considering the economic conditions. We have a very robust follow-up of funds that are redeemed. We monitor what is being transferred to other players, to the competition.
We measure what is being redeemed to buy real estate and what is being redeemed for cashing. We still have a strong share of our redemptions in what is being redeemed for cashing. It slowed down a little bit, but it's still persisting. It continues, and it's going to be like that until the end of this year. As to our sales capacity, where do we think we can increase our portfolio? Even though we've been selling a lot, when we talk about BRL 40 billion in nine months, this is collection well above the second runner. We think collection is going to remain strong. I wouldn't say growing, but as we see, we are going to exceed BRL 50 billion in terms of collection for the year. It's not easy to sell that much.
We do that because we still have a lot of room to grow in the network of Banco do Brasil. As I said shortly ago, we are going to get closer and closer to customers with an investment strategy that will make sense, that they can relate to. Customers that redeem for consumption, for costing, we can't do. They need the money. Now, those customers that redeem and transfer the funds to a competitor, well, then, yes, we have something to do. What we are doing is that with product improvement, even products from other organizations with open architecture, with a closer relationship, we've been able to drive down redemptions. This is translated into positive net inflow, which is something that hadn't happened in a long time.
We are delivering effective value propositions so that we lose less and less those customers that are going to migrate. In the past, it was easier. They came to us, "Well, take from fixed income, give it to me, that I'm going to give it to you." That, well, and sometimes they go, and then they do not receive or see what they were promised. Considering our diversification of strategies through communication with customers, we see the value proposition. We offer a diversified portfolio, and we build an investment strategy that are much more suitable to a tax, and that's why we have reduced transfer out. It goes through product improvement with process improvement and those relationship with customers. This is already strengthening our retention and thereby reducing transfer for the outflow of funds.
All in all, I would say that our sales capacity, we are sure that we have a very strong sales capacity. Considering everything that I told you, we can see that our retention capacity is also better.
Thank you very much for your answer, Ullisses. You were very clear.
Our next question comes from Matheus Amaral from Banco Inter.
Good morning. Congratulations on your results. I was wondering about the diversification of distribution. You put BRL 800 million in terms of premiums written. Is this related to the growth platform? Can you explain this number better? And also the impact in terms of contribution. And this is related to the strategy that you were building in terms of reducing exposure. And how can you expect the strategy in the future?
Well, I'll tell you about the diversification. Well, on diversification.
In the sales of the group, we do not compute open C. We compute that in the digital sales, what comes through the bank's app sales. You will note that we had a corporate movement with a bank. We are creating a new company to monetize. This depends a lot on Banco do Brasil. It attracts the customers, and there's a whole appropriate value proposition, and we go in with insurance and the exclusive model as it grows up. We really believe on this strategy as a whole. Thinking in the midterm, what we have in terms of strengths of our diversification strategy are the partnerships with cooperatives, with agronomists.
We have almost 500 technical analysts that are on a day-to-day with farmers, that used to work in banking correspondence of Banco do Brasil for credit, but not in insurance. They have an additional portfolio for them to work with and also considering resales. For now, we think that we should build a business that can scale as fast as possible and can provide results. Our main focus was that. Our focus on that is going to continue. At the same time, we are closing many partnerships to distribute our products in our portfolio. Of course, each one of those partnerships requires adapting systems, sales force training, adaptation of sales force, many different things, because each one of those partners have specific needs.
That's why we need to accelerate the digital transformation so that we have adaptability to each partner's needs, because sometimes the new partner comes, "Well, I need to sell home insurance with X, Y, and Z coverage." Some while ago, it took us a while for us to build that product. Our products are very easily customizable. Next, we are going to have hyper customization or personalization. The new partnerships require some time for adaptation. That's why we give priority to those ones that we thought had more capacity for the business to advance faster. All the 45 that I mentioned, the ones we're still working on, have specific products that for which we are going to develop sales strategies along the next few months.
As to reinsurance materials, until 2018, if I'm not mistaken, we used to have a panel that was very much concentrated on just two reinsurers. Since then, we have built a reinsurance panel. Now we have five reinsurers. We don't want to be focused too not on one specific reinsurer. We want to pulverize, not to focus on a single reinsurer. As to IRB specifically, this keeps until the end of the cycle, between next year, Q1 or Q2, this is when we are going to sit down with insurers and talk about commissions, competition, distribution of the risk with our reinsurance panel. Maybe we could add someone else. Everything is still open. Nothing has been defined yet in principle. Obviously, we are going to consider this discussion with capital, service provision. Very good service provision.
Considering the payment flow and all of this is going to be discussed and the decision is going to made for next year. Nothing has been decided yet.
Thank you very much.
Now we have time for one last question, and there's a question on the chat from Thiago Paura from BTG. He wants to know about investment prospects and the growth of OPEX and the digital transformation in Q4, and especially next year.
As to investments, so for 2022, there were no significant changes for OPEX. Most of them is on CapEx. We are not expecting any significant changes in Q4.
Next year, we're still discussing, but most of the investments that should be made has already been made in the technology transformation in terms of improvements, that will be implemented along 2023, but most of the investment has already been made. I would like to take the opportunity. There's a question on the chat, by Navarro about reinsurance. I think this is clear. Negotiations already took place in the first half of the year, so we are not seeing any major impact. He was asking about the renegotiation, of prices for agricultural reinsurance, and I said, yes, we did it in the first half of the year. In this manner, we finalize our conference call for the Q3 of 2022. At the end, you will see a link. If you could please answer the questionnaire and give your opinions.
Ullisses, Rafael, any final remarks?
Once again, I would like to thank everyone for being with us to hear about our results. I'm very happy, but I'm aware that we still have a lot of work to do for the company to become increasingly strong, robust and sustainable. We are working towards that. Greetings. I would like to thank again for your participation, for your questions, and we are available along with the investor relations team for everyone. Thank you all very much.