Good morning, ladies and gentlemen. Welcome to Caixa Seguridade Conference Call to discuss results regarding the Q4 of 2024. This video conference is being recorded, and the replay can be accessed on the company's website at www.caixaseguridade.com.br. The presentation is also available for download. We would like to inform that participants attending the conference call will be in listen-only mode. So, during the presentation, we will then open the question-and-answer session, and further instructions will be provided. Present at this video conference are Mr. Felipe Montenegro Mattos, CEO of Caixa Seguridade, and Mr. Eduardo Costa Oliveira, Director of Finance and Investor Relations of the company. I would now like to turn the call over to Mr. Felipe Mattos, who will start the presentation. Mr. Mattos, you have the floor.
Thank you, Mateus. Thank you, Mateus. Thank you very much for taking part in this meeting to present the results of Caixa Seguridade. Today, we will present the company's results for the year 2024 with record numbers. On slide three, we start with the highlights with the branches that were favored directly or indirectly from the strong pace of granting of real estate credit at Caixa and achieved their best historical performance in 2024. Home insurance presented another year of consistent growth in premiums written, reflecting the product's accumulation characteristic together with the growth of Caixa's real estate finance portfolio, closing the year with more than BRL 3.6 billion in premiums issued, an increase of almost 12% compared to the previous year. This result maintains Caixa Seguridade's absolute market leadership.
In home insurance, the volume of BRL 243 million in premiums issued in the last quarter renewed for the third consecutive quarter, the issuance record resulting in the highest annual volume in history, which reached BRL 923 million in 2024, an increase of more than 50% compared to last year. This performance is the result of strategies we implemented that resulted in an increase in the length of time customers remained with the policy, such as offering multi-year policies, which grew nearly 90% in the year, and facilitated renewal policies, which led to a 3.1% increase in the renewal rate. Concluding this slide, always seeking to meet the needs of our customers with the best value proposition, we also highlight some improvements and new products that we developed throughout the year. We launched the expanded special home insurance, our home insurance with additional home coverage.
The product includes additional coverage and new assistance services, making it more responsive to our customers' needs. For home insurance, we diversified assistance plans into four categories, allowing the customer to choose the best product for their needs. Now, moving on to slide four, I'm going to present our performance in commercial campaigns, which brought great results throughout 2024, especially in the Q3. For pension funds, in addition to sales campaigns, we promoted retention and prospecting for portability, which resulted in an increase of almost 22% in contributions in the last quarter of 2024, the best quarterly performance for the segment in the last two years. During the year, contributions worth more than BRL 26 billion contributed to the amount of almost BRL 173 billion in reserves, an increase of nearly 12% compared to the end of 2023.
As for the credit letters, the sort-to-down sales campaign was a success, as we see in the segment's number. During the year, more than BRL 19 billion in letters of credit were sold, a growth of more than 25% year-on-year. In the second half of 2024, when the campaign began, the growth in letters was almost 40% compared to the same period in 2023. In other words, our performance was solid and very strong, and this performance also demonstrates that the credit letter product has presented itself as a real alternative to traditional financing, at this time with high interest rates. Now, moving on to slide five, in 2024, we adopted new approaches for some products, which translated into important numbers that I would like to share with you.
I'll start with the credit life, an insurance policy whose benefit is linked to the origination of commercial credit at Caixa, mainly payroll loans. We implemented improvements into the contracting process, which improved the level of proposed acceptance by 31%, reflecting the pace of commercial credit granting at Caixa. The BRL 2.3 billion of premiums issued this year accounted for a growth of 6.4% compared to the previous year. As for the premium bonds, we focus on the market strategy of monthly payment products. This modality generates greater sustainability of results as it requires lower need for retention provisions and consequently has a better operating margin. In the year, the funds collected grew by 4.3% with a volume of BRL 1.2 billion from the monthly payment method, representing more than 80% of the collections, a growth of 45% in relation to the previous year.
In the assistance sector, we also saw significant growth by in 2024, reaching 42%. In this product, similarly to home insurance, we focus on selling Rapidex Plurianual, a modality that has grown in representation and, above all, in revenue, with a growth of 385% when compared to 2023. On slide six, we highlight the changes promoted in this strategic scope with the simplification of the group's corporate structure. We concentrated live, credit life, and pension fund operations in a single company, Caixa Vida e Previdência, which incorporated XS2, bringing administrative, economic, and financial benefits to the company's operation. We reaffirm our focus on banc assurance Caixa with full divestment of the stake held with Wiz through CNP Seguros Holding, a commitment that Caixa Seguridade has assumed since 2023 in the search for improvement in products and journeys of our customers and sellers.
It is a constant action, which includes greater clarity of information about products, simplification of sales journey, improvements in the service flow of the omnichannel and customer service. As a result of this trajectory, we ended the year of 2024 with a reduction of more than 70% in the number of complaints registered with [embassy] Ombudsman Office related to the insurance products compared to 2023. During the year, we launched more products aligned with the ESG theme. I highlight Seguro Apoio Vida Plus Futuro and Prev Juntos Plus Futuro Pension, both focused on environmental causes. Also, in 2024, we will make assistance appetites being available. In 2024, Caixa Seguridade became a signatory of the UN Global Compact. We therefore undertake to promote fair working conditions, respect for human rights, and reduce environmental impact, always in line with the global sustainability and responsible governance guidelines.
We also joined the Pact for Racial Equity, an initiative that encourages companies and institutional investors to adopt practices that promote diversity and racial equity in Brazil. With us, strengthen our commitment to promoting racial equality and inclusion in the corporate environment. To conclude this part, we'll move on to the company's main figures. I'll start with our result: profit of BRL 3.8 billion in 2024, the best result for the company so far, both in the annual and the quarterly view. In the year, growth was almost 8% in the last quarter. Growth was more than 14%. This result has an impact on our main indicator, ROE, which ended the year at 67.5%, 1.3 percentage points above that recorded at the end of 2023. This robust result translates into more dividends for our shareholders.
In addition to having adopted the practice of quarterly payments in 2024, which is a great improvement, we will end the year with more than BRL 3.4 billion in dividends distributed, a payout greater than 91% of this amount. BRL 960 million refers to the profit for the Q4 of 2024, approved yesterday by our board of directors, which will be submitted to the company's annual general meeting with payments scheduled for May this year. Finally, I would like to highlight an important achievement for Caixa Seguridade and all of the company's employees and shareholders: inclusion in the IBOVESPA index portfolio, which is the main performance indicator for shares traded on B3, in addition to the inclusion in the MSCI at the beginning of 2024, an important index that measures the international stock performance.
These are important milestones for a company that expand the participation, relevance, and liquidity of Caixa Seguridade's shares. I will now hand over to Eduardo Oliveira, who will continue the presentation, providing further details on the financial and commercial performance of 2024.
Edu, please. Thank you, Felipe, and good morning, everyone who is following us today. I will present now in more detail the commercial and financial performance of the company's business, starting with the financial performance on slide nine. The company is operating with revenues with volume exceeding BRL 5 billion in 2024, grew 10.9% compared to 2023, of which BRL 1.4 billion refers to the Q4 of this year. These amounts represented the best historical annual and quarterly revenue performance.
Of the total revenue for the year, 54% comes from income and participations via equity method, which grew 6.3% compared to 2023, with highlights for the performances of the companies Caixa Consórcios, 86.7%, Caixa Residencial, 36.2%, and Caixa Assistência, 31.8%. In addition to the revenues from the participations, 46% of the total comes from the distribution revenues, composed mainly of brokerage, which grew 16.8% between 2024 and 2023, with emphasis on revenues from mortgage insurance, 54.3%, credit letters, 16.4%, and home, 14.3%. Our net managerial profit, as already mentioned by Felipe, reached BRL 3.8 billion in 2024, a growth of 7.9% in one year. In the quarter, the record amount of BRL 1 billion and 57% represents the growth of 14.6% year-on-year from an accounting perspective. In accordance to IFRS 17, it had a growth of 5.1% compared to 2023.
In the graph on the right, we see historical ROE, which reached 67.5%, a growth of 1.3 percentage points compared to the end of 2023, with a clear upward dynamic throughout the year. Now, moving on to the next slide, talking about insurances, we would like to look at the residential and assistance. All of them grew by 10% year-on-year. As a result, the total issued in 2024, worth of BRL 9.8 billion, represents the largest historical volume and an increase of 6.5% compared to 2023. Here, it's worth highlighting again two points already addressed by Felipe, which are the growth of mortgage linked to the increase in granting of real estate credit at Caixa and the strategy adopted throughout the year for home. The premiums written in 2024 grew by 5.1% compared to 2023, and in the quarterly view, growth was 6.7% in relation to the Q4 of 2023.
This reflects the sustainability of our commercial performance. On screen 11, we show some insurance operational performance indicators. The annual loss ratio of 29.7% reflects the impact of non-recurring events on the loss ratio that occurred in the Q2 of last year, especially the recognition of notices from other periods that were a topic of a material fact that we published in July and the notices related to the floods in Rio Grande do Sul in May. I would like to remind you that the financial impact of May tragedy was mitigated by our reinsurance policies, which caused the net loss ratio to fall to 26.8% for the year and 43.5% in the Q2. I would also like to emphasize that the loss ratio returned to historical levels in the Q3 of 2024.
In the same way as the loss ratio, the operating margin of 2023 was also impacted by non-recurring events in the Q2. However, in the quarterly view, we observed the growth of the margin in relation to the previous period, exceeding 10.7% in the amount earned for the last quarter of 2023. In the year, the mortgage segment represented almost half of the margin for the reinsurance segment, 48%, with a drop of credit life being directly related to the recognition of claims notices in the second half of the year. This non-recurring event also explained the reduction in the representation of the risk business group in relation to the total operating margin of all segments. On slide 12, we move on to the performance of accumulation businesses, starting with pension.
In the Q4, the implementation of action that campaigns focused on the retention and prospecting for portability contributed to the best quarterly performance for the segment in the last two years. Thus, the gross contribution volume of BRL 7.4 billion in the last quarter of the year represented a growth of 21.7% compared to the same period of 2023. In the year, contributions exceeded the previous year's result by 4.4%. Still in pension, private pension reserves increased by 11.6% compared to an amount of BRL 172.9 billion. In 2024, the collection of premium bonds resources grew by 4.3%. It's important to observe the increase in representation of the monthly payment modality. As represented by Felipe, part of the product strategy is to focus on sales in this modality, which brings greater sustainability of the results.
Premium bonds reserves reached almost BRL 2.4 billion at the end of 2024, an increase of 57% in comparison to 2023. Letters of credit sold by Caixa Consorcio reached BRL 33 billion in stock in 2024, a growth of 62% in 12 months. This total, BRL 6.7 billion, referred to the new sales in the Q4, a result of the success of sales campaigns carried out during the period, in addition to a more favorable macroeconomic scenario for the product. Moving on to the next slide, we have a grouped view of the operational performance of the accumulation business. Operating revenue of 2024 was 18.2% higher than 2023, with a growth in all segments, with emphasis on credit letter, which once again recorded significant growth and increase of 37% in the quarter and 52% in the year.
This strong revenue performance has a positive influence on the segment's operating margin, which grew 18.8% compared to 2023. Thus, the representativity of the total operating margin increased by two percentage points compared to the previous year, rising to 26% at the end of 2024. Moving on to slide 14 about operational performance of the distribution business, which includes, in addition to the results from brokerage, the results from revenues from access to the distribution network and the use of Caixa Brand, in addition to the profit sharing that we have. In 2024, brokerage revenues increased by 16.8% compared to 2023, with emphasis on mortgage, home, and credit letter insurance sectors.
This growth reflects the commercial performance and, in the case of mortgage, also due to the effect of the transition of revenues via BDF from runoff portfolio to Caixa Residential's brokerage revenue, which resulted in a growth of 54% in the segment's revenue in the year. The top right graph provides a managerial view of the distribution total brokerage. In 2024, 70% of the commission amount paid by JVs remained in the brokerage firm. 80% was allocated to the payment of employees and partner award fees, and 12% was allocated to Caixa's service to Caixa. For this calculation, they consider all those fees related to credit life, pension fund insurance, which are paid directly by the insurer to Caixa, while for the other insurance policies, the costs are paid by the broker.
The operating margin of the distribution businesses grew by 16.2% between 2024 and 2023, with an increase in the share of risk management between the periods. Regarding the total operating margin of 2024, distribution businesses accounted for 30% of the total, with 5% related to accumulation brokerage and 25% to risk brokerage. On the next slide, well, the operational indicators are presented in a grouped manner, considering the percentages of economic participation of Caixa Seguridade in each invested company. The annualized administrative expense at 10.9% was the same that was measured in 2023. In 2024, this indicator was pressured by the increase in administrative expenses of IT and investments made with tax incentives related to Rouanet Law, which totaled BRL 51.5 million.
If we disregard the amount allocated to tax incentives, since they are resources that bring about a reduction in tax expenditure of the same magnitude, the annual indicator would have been 10.6%, a gain of 0.3 percentage points in the year-on-year comparison. Moving to the combined index, it's possible to see the quarterly curve, the effects of non-recurring claims events that occurred in the Q2 of 2024, which impacted the indicators of Caixa Residencial, Caixa Vida Previdência, and CNP Holding. Thus, the 2024 indicator was 2.6 percentage points higher than that of 2023. For the broad combined index, just like the combined index, the extraordinary events of 2024 put pressure on the year's indicator. On my last slide, the graph on the left shows a comparison between the operational and financial results in relation to net profit.
In its managerial view, it considers the Caixa Seguridade participation in each subsidiary. The financial result was responsible for 28% of Caixa Seguridade's net managerial profit in 2024, and its amount was in line with that observed in 2023. In the quarterly view, the financial result had a growth of 2.9% in comparison to the Q4 of 2023 and a growth of 6.1% when compared to the immediately previous quarter, reflecting the variations in the Selic rate and the better profitability of the portfolio. Moving on to the graph of the grouped comparison of Caixa Seguridade investment portfolio, which includes, in addition to the companies on portfolio, the portfolios of each company, also weighted by the percentages of participation of each one.
We observed that the amount in December of 2024 of the investment portfolio showed a growth of 10.4% compared to the end of 2023 and 3.7%, 3.7% when compared to September 2024. Of the total of BRL 13.9 billion in financial investments, 44% were invested in post-fixed securities, 38% in prefixed securities, 13% in inflation index, and 5% in other types of funds. The average yield of the prefixed portfolio at the end of 2024 reached 11.4%. With that, I conclude the presentation of the results for the quarter of 2024, and we will begin the Q&A session. Thank you very much, everyone.
Okay, we're now going to start the Q&A session for investors and analysts. If you wish to ask a question, please press the reaction button and then raise your hand. If your question is answered, you can leave the queue by clicking on the lower hand. If you would like to ask a question via Zoom, click on your name. I will type in your name, your company in the Q&A field. We would like to remind you that all the questions have to be made in Portuguese. The first question comes from Tiago Binsfeld with Goldman Sachs. You may proceed, sir.
Hello, good morning, everyone. Felipe do Mateus. Thank you very much for the opportunity of asking questions. I would like to go back to a topic you've already discussed, which is the perspective of growth of mortgage credit this year. We come from a very strong year, but I would like to hear from you what you expect for the next 12 months, and the ABC have indicated that there has been a drop in the origination, and FGTS is probably stable, but how do you imagine that the industry will operate this year? We understand the dynamics of stacking on the product, but what do you expect from the deceleration from the industry?
Thank you, Tiago, for the question. I'm going to start answering your question. In addition to thank you for the question, I'm going to share some data. Last year, we had historic growth for the company, also growth of more than two digits, and we celebrated the success. Everything shows, and according to what we've said, we expect a year in line with what we had last year. In other words, we are going to have another year, if not breaking records, we expect growth very similar to what we had. We do not expect a two-digit growth because the demand for housing and for mortgage credit continues to be high, and we still continue offering the best rates of the market.
If you would like to talk about SBPE, yes, Felipe has had right. Caixa has been very vocal in relation to the expectations of the mortgage credit for 2024, provide transparency in terms of the expectations of the bank, in terms of the maintenance of the volume of concession of granting for this year. In line with what Felipe has said, Caixa had a growth record in 2024, and we've continued with these dynamics for 2024. This is going to be great news for us. As you said, Tiago, the stacking, the accumulation perspective is very positive, so we are going to be accumulating an expressive volume of grantings.
Something else related to your, the dynamics of FGTS, considering what we offered of grants was used the funding of SBPE and FGTS, so this dynamic is not likely to change according to the signaling that we have been given to the market, so 2025 is likely to have a reality very similar to what we saw in 2024 for Caixa Seguridade.
Thank you, Edu and Felipe. That was very clear.
Thank you, Tiago.
Our next question comes from Maria Guedes with Banco Safra. You may proceed, ma'am.
Hello everyone. Thank you very much for taking my question. My question is in relation to the credit life. Caixa has not provided the guidance for 2025, but it's expected that there will be a deceleration in the credit for the year. I would like to understand how you see the future for the credit life and also in relation to the loss ratio, even not considering the non-recurring effects that we saw in the Q4. We saw the loss ratio of 12% after you published the material fact related to the claims that were delayed and were recognized. We understood that this loss ratio should reach the historical level of lower 20s. Is there any structural reason for the reduction of normalized claims considering the new systems that you have implemented? What could you expect the normalization in relation close to the lower 20s?
Thank you, Maria, for the question. I'm going to answer in part, as you said, in relation to our expectation for the performance. You're right. There is no clear guidance in relation to the commercial granting of credit. Our impression at the bank and Caixa Seguridade, when we look at a macro in a macro view and all the effects that could increase the fund price of commercial grant, we imagine that this is likely to affect the granting of credit life insurance, and even in the Q4 of 2024, we saw those signs.
We expect that credit life insurance for 2024 to be very positive. We imagine that we are going to bring some growth when compared to 2024, but we understand these dynamics of high interest rates and a possible impact that this can have on the level of commercial grant of credit, especially for low payrolls and for small and micro companies, may affect the level of granting credits, but in 2025, we're not likely to have a growth in the credit life segment the same or higher than what we saw in 2024.
We understand that this is going to be more challenging for this year. In terms of loss ratio, the question was well put. We made some improvements in the process of regulation. There were some notices that were made during the year, and the documentation that didn't were not presented resulted in cancellations, and you can see this clearly in our release. But as you said, even if we disavow the effects of the loss ratio of the credit life, the loss ratio is still low at 12%. We were not able to identify any structural reason for this drop of loss ratio.
Okay, Maria, what we saw, in fact, it was a lower level of notices, and we imagine that this level is going to increase going back to the historical levels in 2024. This is how we see it at this moment. We expected the lower loss ratio that we saw in last quarter. We could not identify the reason exactly, and we have been receiving fewer claim notices. If this is going to remain along 2025, it's something to be seen, and we are going to monitor very carefully in 2025 to check if that low ratio historical level that we had in the credit life segment will be a good reference for the low ratio of 2025.
Okay, perfect. Thank you.
Thank you, Maria. Our next question comes from Ricardo Buchpiguel from BTG Pactual. Your line is open, sir.
Good morning, everyone. Thank you very much for the opportunity of asking questions. I have two questions on my side. We noticed that the commissioning level of the home segment increased to 11.4%-16.1% in the Q4. I understand that there's the dynamics of renewal gaining representativeness in the commissions, but I believe there is something beyond that, and I would like to understand that, and the second question is, we saw there was an increase in the cost and expenses for the operations that is related to the credit letters.
We saw these numbers increasing a lot, but we saw a drop in the profit of the subsidiaries. I would like to understand why we have the impact and what we can expect for 2025, and still thinking about the credit letters, we understand that this is something that is gaining in relevance, but we would like to know what would be the maturity level of the portfolio in stock, and that would help us a lot. Thank you.
Thank you, Ricardo.
I'm going to start answering your question, and then I'll turn it over to Felipe for him to complement. In relation to the commissioning in the home segment, there's some in the mortgage. There was something that was related to a lot of discussion in 2025, and this has a positive impact on the commissioning of the home. Yes, this accumulation will always bring a positive effect for the commissioning and brokerage in this field of business. Since the year is very strong in the mortgage and with these dynamics of accumulation for the period, it has had a very positive effect because of these dynamics. But this is not the only dynamics.
At the end of 2024, we also recognized in the result, and we also received the payment of profit sharing that we have with Tokio Marine, which is the insurance company responsible for offering the second option of mortgage insurance at Caixa. As you know well, not only Caixa, but all financial institutions need to offer two alternatives of insurance. One, which is by the group itself, and another offer from an independent insurance company. In our case, the insurance responsible for this independent insurance is Tokio Marine. And considering the dynamics, the BITWAT has considered that according to the performance, in other words, according to the volume of insurance that that insurance company can sell as a second option for Caixa, it needs to pay a profit sharing for Caixa Seguridade.
So at the end of the year, we received the profit sharing related to the years of 2022 and 2023. This is a discussion that we had during 2024 on how we would do that, and this is something that is likely to happen every year. So every year, we are likely to receive a profit sharing amount, which is consistent with the sale of mortgage insurance, and the insurance company is Tokio Marine. In relation, say, to the credit letters, in fact, the credit letter segment has a cost of commercialization, which is high. It's a characteristic of this product. So the expenses, the cost, in fact, of the premium is high, and because of that, it reflects an increase in sales. When we see the growth of the credit letters, as we saw in 2024, we also have an increase of this cost.
I would like to remind you that the dynamics of payment of the costs in the credit letter is well concentrated at the moment, the first month of operation of the sale. When we grow a lot, at first, we have an addition, an increase of this cost, which is related to, say, this cost of the fee.
Since Edu mentioned my name, so we have more expenses, but this is good news because this is something that is going to be diluted along the time, and the profitability is going to be higher, and this is great news, and we hope to give other great news in this area of invoicing and sales. I have another question in relation to the average maturation of the credit letters. What is it? The credit letters will depend because we work with two different products, the Auto car, and Home.
It's difficult to talk about duration now because this is a recent operation. We started in 2021, and the period of contracting is higher than 10 years, longer than 10 years. So the duration, well, we don't know exactly when the client will settle this credit letter, but the reference that we actually presently have is 100 months. So and close to 10 years yet.
Okay, that's great. Thank you very much for the answers.
Thank you, Ricardo.
Our next question comes from Pedro Leduc with Itaú. Pedro, you may proceed.
Thank you. Congratulations on the year. In the private pension business, we had a growth contribution, and it exceeded BRL 7 billion. And my first question is really in relation to this. Could you explain the dynamics, the commercial dynamics, how it played out, and also the average administration fee that is very stable at 1.9%? It's not so obvious, but it is stable considering the mix of projects, so if you could describe or clarify those lines, I would appreciate it. Thank you.
Hello, Pedro. Thank you very much for the question. I'm going to say briefly in relation to the private pension. Okay, here we go. We started the year with a great expectation in relation to our results, our sales, and we ended the year after campaigns and after our operation in the market to maintain our reserves and also to achieve the portability. We also launched the cashback campaign, especially in the last quarter, and those two modalities, both related to the maintenance and also the cashback, they showed very effective in the maintenance of reserves, so in private pension, we did very well. We expected it at the beginning of the year.
We wanted to sell more in the private pension results, but we celebrated our results at the end of the year. There was a growth in reserves, at least based on the data of November. We ranked third in the market share, and our prospects for 2025 are to have another good year in private pension, even though it's not as broad as the smaller players, so we ranked third with almost BRL 7 billion in reserves. We have a major market to maintain and to participate in growth expected according to the average of the market, and we know that we are going to have a very challenging year only for us, but for all the private pension market.
Only Ed was going to comment. Now, just to add, this perception that we have, it was a very good year for a private pension, and it's there within a context where we have had a very challenging dynamic considering the Caixa ecosystem. For Caixa to sustain this, we need to raise a lot of funding, and we do that through LCI, and this competes with our pension fund as an alternative. It competes internally, but we were successful in growing our businesses, and considering what we saw in 2024, this is very relevant to us, and in 2024, it's the same context. It comes from the assumption, as I mentioned, so what we expect for credit, so if Caixa is going to grant at the same level, so we're going to continue with the need for funding.
So we understand that we are still going to have a very challenging year for the private pension segment, but we are looking for alternatives. We are adopting actions so that we can have another positive year with growth in 2025, as mentioned before. Pedro, in terms of administration fees, yes. In fact, for some time, we have seen that we have an expectation of a downward price. So it ended at 1.9% a year. So this is a rate that we believe to be in a very comfortable level still. But as we try to accelerate the level of new money that comes into the reserve, the level of growth contribution, the average of this fee is likely to fall.
Even if we have managed to maintain this level at stable grounds, the trend is that it's going to drop a little bit in 2025, regardless of our effort in retention strategies or project mix. We're going to do what we can in order to maintain this administration fee at a healthy level, at a level that we believe that is going to be adequate to our clients' profile, what our clients look for.
Thank you very much for the answers.
Thank you, Ledunki. Now, our next question comes from Antonio Josue with Bank of America. You may proceed, Antonio.
Good morning, everyone. Thank you very much for your time, and congratulations on the results. I have two questions on my side. First, I would like to know if you could give some more color on the initiative that you mentioned in the release related to higher control of claims and loss ratio in what lines you're focused on and what would be your initiatives? The second question is related to the success of credit letters, credit group, more higher than 6%. And now we look at premium bonds, whose growth is a little bit lower. So my question is, is the growth lower because it already has a fair share, or is there an opportunity in the premium bonds in order to be explored? Thank you very much.
Good morning, Antonio. So I'm going to start answering the question, and then I'll turn the floor to Felipe for him to complement. First, in relation to the initiatives related to loss ratio. It's very simple, in fact. Loss ratio is loss ratio.
We get the claim, and we start the regulation process, so the fewer claims, the better for us, for the client as well. But a claim is a claim. There's no way we can decrease the loss ratio along those lines. What we can do is to improve the process of regulation, and this is where we made improvements along the year, and this was tangible in the last periods. At CVP Caixa Vida e Previdência, we made some improvements in the regulation process of the credit life so that we do the announcement of claims in an automated way if the documentation was not received by the insurance company in the legal period, so it's an operational adjustment that we made to our routine so that the loss ratio wouldn't play a negative role, and that would only happen if the client provided all the documents necessary.
This was something that was done at the operational level, and we work not only at the holding level, but with all the companies. We look for opportunities within the process so that we can make automations, we can improve the efficiency, and make our results ever more profitable considering this operational aspect. As for premium bonds, sometimes we say that, but sometimes it's not very clear in our messages. When we look at CAP, we saw that it grew in relative terms, except for in 2024. But it's important to look at the composition of this growth and how we have been focusing on efforts to sell premium bonds products and the migration of sales PU of a single payment where the client pays at once for all the services in relation to the monthly payment when the client pays on a monthly basis for that product.
In the first year, at least in the year when you're changing the strategy, you're going to see a comparison that would not favor that dynamic because you start selling every month. So you compare one-twelfth in comparison to a payment that was done all at once. So at first, this comparison seems to be unfavorable considering the growth results. But in fact, it does not really capture the benefit that this dynamic is going to give to the premium bonds because the need for the provisions for the payment is lower. So it's a more profitable product for Caixa Capitalização. But if we think about 2025, for example, when we made the focus on the monthly payment strategy, the comparison is going to be fair. So we're going to have a 2024 result also focused on monthly payment.
We believe that this result is going to grow in relative terms, in robust terms, different from what happened in 2025. You said that this is normalized. This was your question. Far from this, we see that there are many opportunities for us to grow in the premium bonds in all the channels of distribution of cash. We understand there is a lot of space for us to grow in the premium bonds, especially this year. The dynamic, when we do a fair comparison, is going to reflect more appropriately our speed of growth. Edu, I think you mentioned all the important information, and thank you for the question. In terms of premium bonds, you asked about share and everything. We are not the size we want it to be yet.
When we think about Caixa, we think about lottery, we think about the lottery houses and everything, and all the digital means. I can ensure that we haven't reached the point where we want to be, and we're going to be there this year or next year. This focus being changed was very important for us. We are, instead of focusing on a unique payment, we are focusing on monthly payment. There was a reduction in the sales when compared to 2023. We are much better than we expected in considering the results of 2025, and we expect to happen in 2025.
Thank you very much for the answers.
Thank you, Antonio.
Our next question comes from Arnon Shirazi with Citi. Arnon, you have the floor. Hello everyone. Congratulations on the results.
My question is basically about the runoff portfolio that you have and the representativeness in the revenues. How do you, when do you expect it to end?
Arnon , good morning. This is a very difficult question to answer because you're right. Today, runoff is basically to the mortgage insurance. It's very relevant for us. 2/3 of what we issue in mortgage are in the runoff. So they're credit to the real estate credit that we made up to 2020. In other words, it has a relevant share of our portfolio in the runoff. So this is what happens. The reduction of the runoff portfolio is intrinsically related to the level of the interest rate and the cost of real estate credit.
Because if we think about a client that had a loan that was made three years ago, and at that moment, he adopted the rate of TR plus 8% a year. Remember that we had lower interest rates than 8% a year in the past. So it doesn't have a lot of incentive to replace this real estate now, paying a rate of TR plus 11%, for example, or to prepay this loan. So the runoff portfolio is dropping at a lower level than expected because of the macroeconomic situation. So the speed of the portfolio, this is how we see it, it's only going to increase when the interest rate, when the cost of real estate credit drops.
Meanwhile, what we see is a high level of clients who are delaying replacing their real estate, or maybe because they're using the FGDS, or they're using the Christmas bonus that could be used for deducting the balance of this debt, and that would help the runoff portfolio to drop, but people are holding back these resources. They are either investing in other things or making different uses to those resources, so I believe that this is the point. Today, it's very difficult to imagine at what speed the runoff portfolio is going to continue dropping because it's closely connected with the macroeconomic situation, so if we think about the expectation of the market of considering the interest rate dynamics for this year, we imagine that this portfolio is going to continue to drop at a slow speed, slow pace.
It's still going to continue to be relevant in our business for some time yet. We do not expect this to become a lower or a less important business in the short term.
Okay, thank you. Great.
Thank you, Arnon.
Our next question comes from Guilherme Grespan with J.P. Morgan. Grespan, you may proceed.
Hello, good morning. Thank you very much for the presentation and for taking my questions. I have two questions. One is related to the credit letters. I would like to have your medium-term view. Credit letters seem to be very important in your basis, and it's under-penetrated as I see it. I saw you grew a lot, but when I look at the market share, you have 3.5% of market share. And I think there's a natural catch-up that is related to CNP, which is related to four or five.
But even when I look at this market share, I tend to imagine that other products and other banks operate at a share of 7%-14%. And there's a profile of clients who are very aligned with the Caixa. There are some banks that do not operate with the products, such as Nubank. So there is something that you might be able to capture in a quick way. So do you agree with me that this product is under-penetrated in your basis? And what are the initiatives that you are adopting to capture this market share? My second question is going the other way. I have seen a lower performance in the credit life segment, especially when we talk about the origination by Caixa. But when I look at the medium term and the market share, I see that you lost the 300 basis points.
It's a speed that is higher than the cash lost, considering the speed that you sell your insurance. I would like to understand your diagnosis in relation to the credit life. Why do you think the commercial performance has been lower than the market would expect? How do you see this dynamic of market share for the future?
Guilherme, thank you very much for the question. You have already answered. This is a pain that we have. In fact, the credit life has not reached the level we wanted it to be. It's a very new company. We started to write credit life as of 2021, very focused on the home and not so much on auto. Because we have a new portfolio, we are growing fast. You can look at the figures we have when you compare 2023 and 2024.
Even if we make a 20-quarter-on-quarter comparison, we are going to have another record in 2025. As a whole, the market grows a lot. We understand this. This is what we touched upon in the last earnings call that we had. We understand that credit letters can, considering the Selic rate increase and also considering the way the market is behaving, it can be a way out. It can be an alternative, and it can complement in relation to the mortgage area. We can have this as a viable strategy, an option, a strong option for those who want to make their dream come true. In terms of market share, we have a lot to grow. We are comparing a portfolio that started from zero in 2021 to the portfolio in 2025. We are going to show the result in the next years.
You have no doubt about it, and our strategy is to complement the mortgage strategy of Caixa. So we are talking about mortgage and also real estate loans, but we can also talk about mortgage loans. And by the way, our auto strategy, the first strategy, is also very important in our Caixa Seguridade. If you could complement, yeah, for sure. There is something that is important reinforcing relation to credit letters. The scenario that we have today with high interest rates, in fact, this makes the credit letter to be a possible alternative for the real estate credit in a moment when the real estate credit has a high demand. So there is this need in the market, and the factor that makes the demand increase is its cost. So considering the scenario where the cost is higher, the credit letter of product will be a good alternative.
And Caixa naturally is demanded by clients, by the Brazilian population in general. When you're looking for a real estate loan, they go for Caixa. And maybe they cannot move on with Caixa, and they can have the option of a credit letter. And this is a very important alternative. It is very much in line with our strategy. And in relation to Vida Prestamista, there are some points that we understand that shows the possibility of using the potential that distribution channels, the client bases bring when we're talking about selling those products. And the commercial area of our company is focusing on this. And so that we can identify the gaps that our product may have, where in fact we are losing potential sales. So we have this movement. There is a long path to be followed so that we can start growing again.
We had a deceleration in credit life, but we are very confident that we are going to recover all the grounds that we lost in credit life in 2025. As I said, due to a structural viewpoint, it's not going to be easy to grow, continue growing, as we saw in 2025. But in life insurance, we see this growth. If we see the share that we have today, compared to the credit life share that we had in the past, we have to take into consideration that some years ago, there were some credit lines, commercial credit lines for legal entities that had some subsidies. And they were operated by Banco do Brasil and also by Caixa. And they were an important source of what we sold as credit life and corporations and companies. Those subsidized lines no longer exist. It's a different line nowadays.
So that previous benefit that we used to have when we had the premiums for the credit life, we no longer have. So this share shows the current snapshot that we have today, more realistically. But always reinforcing what I've said. There's room to growth. And if we think specifically about credit life, our penetration in the new payroll grant that we've had, as you mentioned, it keeps at a high level. We were relatively successful in selling credit life products for the clients who use the payroll credit. But it takes time. It's not an immediate dynamic because you're not going to sell a credit life for a person who is not receiving credit at the time.
So this is something that is done in a combined way when somebody is going to renew payroll credit. That's the moment when a product is offered by the client. So those dynamics are very connected. One is connected to the other.
To add, Guilherme speaking here, something which is very important to mention is the fact that Caixa has a commitment with its customers to sell the proper product when it is strictly necessary. So our commitment to sell a product according to the real needs of the client so that we are going to keep the same client along the time. So our strategies do not tend to be very aggressive when compared to the other banks. And we are very proud of this. We want to make adaptations and offer the best product to that client.
Oh, great. Thank you.
Thank you, Grespan.
The last question that we have is by Camila Azevedo with UBS. You may proceed, ma'am.
Hello. Oh, it's Kaio here. Hello, Kaio. How are you? Thank you for the opportunity.
I think all the answers have been answered.
I would only like to double-check a question related to Vida because we understand the credit life has a driver with the origination from Caixa. But I would like to understand your expectation for growth and what could be the driver for this growth so that we can be confident for the years to come. Is there any adjustment that you're going to make to the product, a new launch, or a stronger campaign, maybe coming from Caixa? So you had a campaign in the pension fund. Is there anything similar that you are planning for this year?
Good morning, Kaio. That's the idea, really. We are very pragmatic, right, Kaio? If we face difficulties, if Caixa reduces the volume of commercial credit for individuals and small size companies, and we do not have a lot of opportunities to do the cross-sell with the credit life, the alternative would be life. The products are very similar. If we consider credit life and life products, they are related to life. The difference is the commercial dynamics of both. Of course, we have been making improvements in other products at all times. But the main point that makes us believe that we are going to have a year which will be better for life segments than we had in 2024 is related to commercial aspects.
Not only campaigns, but the dynamics that there are going to be adopted along the year, encouraging, incentivizing the life product. We always say this. The big strength of Caixa Seguridade is Caixa. So we are always going to try to align our strategies to what the bank is doing. If the bank, for one reason or another, as I said, there's no guidance in relation to the commercial credit. But if the bank understands or if the bank expects that they should reduce the volume of credit granted, we are going to adapt our commercial focus of the credit life towards life. So maybe this is the main factor that would make us believe that we are going to have a life segment with better performance this year.
So this is a movement that we saw going in opposite directions when compared to the credit life. If we were living a moment when there was a lower interest rate and there were more opportunities for commercial credits, and if we had more opportunities for ourselves for the credit life, life segment would be a second priority for us. And this is what happened in 2024 to a certain degree. So we believe that we're going to have a reversion of these dynamics in 2025. Instead of having credit life growing at a higher pace and life moving sideways or even dropping, as we saw in 2024, we are going to have growth in credit life, a growth, sorry, a growth in life and a lower credit life pace.
The expectations that we have for this year is not to launch a new product, even though we have lots of initiatives to improve our portfolio, but we are going to have a change in the commercial focus. Okay, Kaio?
That was clear. Thank you very much.
Thank you.
Q&A session has come to an end. If you still have a question to be answered, get in touch with our investor relations area. I would like to turn the floor back to Felipe Mattos to make his final considerations.
One more year. 2024 was a record year with record results. We proved our worth to society, and we also return to society a relevant part of our results. Thank you, every one of us who took part in this earnings conference call, especially for those who asked questions. We are at your service to answer all the questions and to talk about the solidity and the importance of Caixa Seguridade, not only for us, but for society at large. Thank you very much.