Earnings Call: Q4 2025

Feb 13, 2026

Good morning, everyone, and thank you for waiting. Welcome to the IRBRE fourth quarter of 2025 earnings video conference. I would like to start by pointing out that for those who need simultaneous translation, we have this tool available on the platform. To access it, simply click on the interpretation button through the globe icon at the bottom of your screen and choose your preferred language, Portuguese or English. For those listening to the English conference, there's an option to mute the original audio in Portuguese by clicking on Mute Original Audio. Please note that this video conference is being recorded and it will be made available on the company's IR website, www.ri.irbre.com, where the complete material of our earnings release is available. You can also download the presentation from the chat icon, including in English. During the company's presentation, all participants will have their microphones in listen-only mode. Afterwards, we will begin the Q&A session. To ask questions, click on the Q&A icon at the bottom of your screen and write your question to join the queue. When your name is announced, a request to unmute your microphone will appear on the screen. You should then unmute your microphone to ask your question. We advise that all questions be asked at once. We would like to reinforce that the information contained as is in this presentation, and any statements that may be made during the video conference regarding the business prospects, projections, and operational and financial goals of IRB(Re), constitute beliefs and assumptions of the company's management, as well as information currently available. These forward-looking statements are no guarantees of performance. They involve risks, uncertainties, and assumptions as they refer to future events, and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, market conditions, and other operational factors could affect the future performance of IRB(Re) and lead to results that differ materially from those expressed in such forward-looking statements. Today, we have with us the company's executives, Marcos Falcão, CEO and Investor Relations Officer, Fred Knapp, Chief Financial Officer, Mr. Paulo Vale, General Director of IRB Asset, Mrs. Eduarda de La Rocque, Director of Internal Controls, Risks and Compliance, and Mr. Daniel Volpi, Technical Underwriting Director. I now would like to turn the conference over to Mr. Marcos Falcão, CEO of IRB(Re), to start his presentation. Good morning, everyone, and thank you for your attention. Thank you for attending our earnings call for quarter four, 2025. In this call, Daniel Volpi, our Technical Underwriting Director, will make comments on the reinsurance business because Daniel Castillo is now attending a busy schedule at the Miami Reinsurance Week. In quarter four, 2025, our shareholders approved our stock-based incentive plan. This is a program that will permeate the company and that have been designed for some time now, and has aligned the interests of shareholders and the managers of IRB(Re). In the first grant, in March 2026, up to 30 colleagues will receive the rights to use up to half of their bonuses to buy IRB shares at the market price. Linked to this decision, the company will offer a matching share for every share bought in 3 years and another one in 5 years. We believe that the effects of this program will be felt in the attraction and retention of talents, and will allow us to continue forming the best team in the industry. As a consequence of our stock incentive plan, we also approved the share buyback program, whose objective is to hold in treasury the shares that IRB will need to deliver its results in the future. Another important step was a decision that we made to begin working to establish a P&C insurance company and a life insurance company. The prior authorization to establish such insurance companies has already been granted by SUSEP, but we believe that the final approval is still pending, but we believe this will be an important step to grow our premiums in the future. Now, moving on to our figures on the next slide. Our retained premium moves sideways in quarter four, still impacted by the cancellations of contracts in the life portfolio, and when we look at P&C only, we already see a 10% increase year-over-year. The successive re-underwriting of the portfolio results in growth in our underwriting results, as well as in our net claims, in net income for the quarter, as you can see on this slide. On the next slide, we have the full picture of the year 2025, which looks a lot like what we saw for the fourth quarter of 2021, 2023. Retained premiums is still falling, mainly due to the issue of the life portfolio. We in 2025, we expected growth in the agro line, but contrary to what we expected, it had a reduction of almost BRL 200 million. Our underwriting result for the year, on the other hand, increased to BRL 771 million, as well as our net income, in line with what we had planned for 2025, reaching the level of BRL 505 million. Even with the disappointing result in the delivery of the top line growth, we are once again presenting robust operating profit and net income results. On the next slide, we see the main indicators for year 2025 and their evolution since 2023. This is how we like to look at our results. Like, the full picture starting in 2023, we see that our portfolio cleanup effort was very successful, generating a return on tangible equity, going from 7% in 2023 to 22% in 2025, and the combined rate going from 107% in 2023 to 95% in 2025, a 10 percentage point reduction in 2 years. Now, I'd like to turn the conference to Volpi, who will talk about our underwriting business in more detail. Thank you, Falcão. Good morning to everyone attending. At this moment, our Vice President for reinsurance, Daniel Castillo, is representing us at an important international event, the Miami Reinsurance Week, and therefore, I'm pleased to lead this presentation on the evolution of our business in the last quarter of 2025. On this first slide, I would like to show you the composition of our portfolio. In the first chart, in the upper left, we have the annual evolution of retained premiums between P&C and Life. It is possible to see that the total portfolio registered a 12% decrease compared to 2024. Life shows a drop of BRL 544 million, which reflects the cancellation of some unprofitable contracts that we had, and in line with the strategy of focusing on the portfolio's profitability. In the P&C line, the volume of retained premiums remains stable in the annual comparison. We saw an increase of BRL 228 million in property, where we have been focusing our growth, cooled down by the BRL 185 million retraction in the agro segment due to the sectoral environment related to subsidies, credit, and agricultural insurance, and also due to some facultative special risks contracts with an 18-month term that will renew in 2026. Please note that in the lower left, in our life business in gray, which accounted for 17% of retained premiums in 2024, it now represents 4% in the past year, and that rural decreased from 16% to 13%. As announced in our previous call, we hired a life director, Ricardo Sicchiere, who will be now responsible for the development of this segment. Our goal is to build a sustainable portfolio, regaining the representativeness that this business once had in the past. Ricardo has already began approaching our cedants, focusing on the modeling of new products in light of his international experience. In the upper right chart, we see the composition of our retained premiums by geography. Note that we are following the international strategy already announced in previous calls, with a 19% increase in Latam and 9% increase in the rest of the world. The goal here is to maintain underwriting discipline, selecting risks, and growing in the most profitable businesses. In Brazil, we recorded a 23% decrease year-over-year, fully explained by the exit of some contracts from the lifeline. Also, the retraction in rural and some facultative risks with a term greater than one year, as I mentioned shortly ago. The Brazilian market imposes some challenges related to rural insurance and the export of reinsurance premiums. In rural, today, Brazil has just over 6% of the cultivated area insured, which is below international standards and incompatible with the stage of development of the Brazilian agri sector. Regarding the export of reinsurance premiums, according to SUSEP data, we estimate that 70% of reinsurance premiums are exported, often in intragroup operations. This scenario reinforces the strategic relevance of verticalizing our operation in Brazil. And finally, when looking at the recent renewals, we identified that prices continue on a downward trend, the soft market that Castillo mentioned in our previous call. Given this scenario, we maintain our underwriting discipline, taking on business with the expectation of generating a margin that is practically stable compared to the renewals in the same period of 2025. Regarding volume, renewals indicate moderate growth outside Brazil, a trend that is maintained, as we can observe. We are analyzing a larger amount of risks outside Brazil compared to previous renewals, which, in addition to the increase already materialized, contributes to the formation of a pipeline for future renewals. In Brazil, we renewed our main contracts, and we expect premium stability.... On the next slide, we highlight the results achieved with the live portfolio cleanup strategy. In the first chart, on the upper left, we see a reduction in retained premiums of BRL 544 million on the annual comparison, which is more pronounced in the domestic portfolio and already expected in the context of the portfolio cleanup. On the other hand, on the upper right, we see the positive effect of this strategy. The life line records a positive underwriting result for the third consecutive quarter, with a clearly favorable trend in the 12-month view. This progress already translates into a direct impact on profitability, with BRL 17 million in net income recorded in the quarter. On the next slide, we present the evolution of the P&C portfolio broken down by geography, segregating the domestic and international markets. In the upper left graph, we observe a 9.6% growth in retained premiums in the comparison between fourth Q 2025 and fourth Q 2024, mainly reflecting the selective expansion of the international operations, which contributes to the geographic diversification of the portfolio and less dependence on the isolated regions and clients. In domestic, we have a central impact from the rural line and some facultative risks that will be renewed this year of 2026. In the upper right graph, we highlight the evolution of the underwriting results, consistent with the careful action of our underwriting and the continuous focus on portfolio quality. In the 12-month view, the indicator maintains a positive trajectory. The trend is also positive for net income in the P&C line, with a 24% growth. In the annual comparison, it goes from BRL 394 million to BRL 490 million. In international, despite the positive underwriting results, net income was negative in the quarter when we consider the allocation of administrative expenses and taxes. In the twelve-month view of the combined ratio in the lower right graph, we observe stability of the indicator in international. In the domestic market, we maintained relevant underwriting margins. The next slide shows consolidated numbers segregated between P&C and Life. Although we registered a reduction in retained premiums in the annual comparison, the underwriting results maintain a consistent evolution trajectory, with a 64% growth compared to 2024, going from BRL 452 million to BRL 741 million in 2025, fully in line with the strategy of focusing on profitability, commonly reinforced by us, with positive results in both P&C and value and lifelines. As a direct consequence, net income also continues on a positive trajectory, with a 35% growth in the annual comparison. Finally, in the lower right corner, we observe that the consolidated combined ratio has a small reduction to 97%. The next slide shows the evolution of the loss ratio with continuous improvements in the P&C indicator, going from 61% in 2024 to 56% in 2025. In the dotted orange line, we break down the impacts of our active management of claims prior to 2020, with our cedants in a joint effort to reconcile old claims. This work resulted in a BRL 63 million reduction in claims in the fourth quarter of 2025, and a total of BRL 198 million throughout 2025. The next slide shows the evolution of the commission ratio, which is the sum of commissions paid to brokers and cedants, segregating between the P&C and lifelines. In P&C, the index showed a 1% improvement in the annual comparison. In the lifeline, the indicator remains at lower levels due to the cancellation of some unprofitable contracts, as already mentioned. Lastly, the next slide shows the consolidated loss and commission ratios, including the P&C and life operations. Please note that indicators linked to the underwriting business are at healthy levels, with the 2025 results benefiting from the active management of claims prior to 2020 with the cedants, as explained in the previous slide. Now, I'll give the floor to our CFO, Fred. Thank you, Volpi. Good morning, everyone. It's a pleasure to be with you again. The year 2025 was an important year for IRB. Confirming Volpi's comments, we are following the correct strategy regarding technical underwriting discipline, which remains our main focus. This discipline has been consistently reflected in the improvement of loss ratios and the company's technical profitability, showing that the actions implemented over the last quarters are delivering the expected results. Operationally speaking, we continue to advance in our efficiency and process modernization agenda. In the fourth quarter, we began implementing SAP S/4HANA, focusing on modernizing the systemic infrastructure and increasing operational efficiency. The project is on schedule. In parallel, Data Lake is in the final implementation phase, expanding the quality and availability of information to support decision making. The efficiency gains from these initiatives should be captured gradually over the next quarters. These projects are fully aligned with our strategy of operational strengthening and supporting technical discipline with AI. The platform was conceived with governance, security, and cost discipline, and already allows, together with the business areas, prioritizing opportunities with a direct focus on operational efficiency, productivity, and support for business scale. This set of initiatives reinforces our ability to incorporate technology in a way that's integrated into the company's strategy, with a consistent focus on value generation over time. The next slide, concerning administrative expenses, we continue with the challenge of bringing this total index to single digits levels. To eliminate seasonal effects, we continue to present the indicator on a 12-month accumulated basis, providing a more precise reading of the structural trend. We observe an increase compared to the previous year, explained by specific and structural factors. Post-employment obligations totaled BRL 13 million in 2025. The year-over-year effect was neutral, and the value mainly reflects actuarial adjustments of the liability, resulting from the update of discount and longevity assumptions. Another relevant aspect was the impact of technology projects, which represented approximately BRL 24 million additional. This value reflects both accounting, reclassifications, and the recognition of implementation and system expenses, investments that strengthen the company's technological and governance base. Additionally, we had an inflationary impact on service and technology contracts of around BRL 14 million, in line with average adjustments applied by the main strategy, strategic suppliers. As a company with a relevant history, we still carry a portion of legacy costs, which were being addressed by the current administration. These costs are divided into two fronts. The first are in-force costs, directly related to the current operation, which represent about 10% of the earned premium. The second are legacy costs, linked to contracts prior to 2020, which include claims, defense, lawsuits, and other associated obligations, currently representing about 3% of the earned premium. Additionally, we had fines related to sanctioning administrative proceedings from previous periods, which are currently in the final stage of completion, totaling BRL 16 million. This slide shows the behavior of the float, which is basically formed by outstanding claims and IBNR, in relation to the volume of retained premiums. What this graph shows is that the float has remained at healthy and stable level. It's also worth highlighting the reduction in the absolute amount of technical provisions as a direct result of the re-underwriting work done by the administration. Even with this reduction, we continue to maintain a high level of actuarial prudence, reinforcing our commitment to technical solidity and the proper measurement of our future obligations. This metric clearly shows that the resources from our cedants remain fully sufficient to cover both claims already reported and those that may still occur. In line with the subject, I'll give the floor to Paulo Vale, who will bring more details about our financial results. Thank you, Fred, and good morning, everyone. We ended 2025 with BRL 8.7 billion under management, compared to BRL 9.1 billion at the end of 2024, with 57% invested in the onshore market and 43% offshore. It's also worth noting that in spite of the portfolio's profitability, the reduction in our assets under management is mainly due to the 11% appreciation of the real, which impacts our dollar assets by BRL 388 million, which is offset by the opposite movement in liabilities and the payment of interest and amortization of debentures in the amount of BRL 286 million. It's worth mentioning that in 2026, we will have a reduction in the financial expense of debentures due to the reduction of the stock from BRL 62 million to BRL 30 million, and greater profitability of legacies that will mature in 2026 and that matured in 2025. Regarding the result of the investment portfolios in the last twelve months, we had a total of BRL 666 million in 2025, with BRL 551 million onshore and BRL 115 million offshore. We also see the other lines of foreign exchange variation, BRL 44 million positive, and other financial and equity-related results, BRL 75 million, and financial expenses of BRL 62 million, that make up the total financial and equity result of the company, totaling an amount of BRL 722 million in the year. This slide shows that the number, the result numbers include the early rollover of the legacy, referring to the Global 2026 sovereign bond, with a negative impact of BRL 71 million, as we can see in the upper right corner. For 2026-... We'll have the maturity of NTN-B in August, purchased at the IPCA + 2.36% rate, with a current value close to BRL 316 million, which should be invested at more attractive rates for the company. On the left-hand side, we see the allocations by asset class and their respective results. On the onshore side, we have a positive highlight for the post-fixed, fixed income and private bond segment, which represent 54% of the portfolio, and which benefited from the high interest rates of about 14.4% in the year, as well as the increase of our allocation in equities, which benefited from the excellent performance of the stock market in the second half of the year, yielding about 27% in the year. Our shares of fund yielded above 30%, and the remaining ones are in a pair shares. On the other hand, the positions in inflation, given the high level of the Selic and the relatively low inflation, resulted in a profitability that was lower than the Selic CDI rate. Thus, the result of the onshore portfolio was 88% of the CDI. The offshore portfolio yielded 114% of Fed Funds as Global 2026, highlighting the active management of Brazilian sovereign and corporate bonds. Thus, the annual profitability of the onshore portfolio was 12.6% and 5.4% in the offshore portfolio, resulting in an average profitability of 9.5%, disregarding the exchange rate variation. The last slide shows the composition of the onshore portfolio, where we can see that we progressively increased the allocation in pre-fixed in equities starting from the fourth quarter of 2025. Given our base scenario of falling interest rates throughout 2026, from 15% to about 12.50%, we believe that the current interest rate levels are a relevant allocation opportunity for the company. Now I'll give the floor to Director Duda de La Rocque. Good morning, everyone. In terms of corporate risks, we had important advances in this half. In the first slide, we see that the company's solvency ratio grew continuously over the last year, reaching 268% in December 2025, which meant an increase of 85 percentage points relative to the ratio at the end of 2024. In the graph on the left, we see the accelerated increase in the sufficiency of the adjusted net equity in relation to the minimum capital required by SUSEP, which, as we see in the graph on the right-hand corner, fell marginally throughout 2025, with the PLA having had a 34% increase, reaching BRL 2,633 million at the end of last year, which led sufficiency to reach BRL 1,650 million. The significant results in improving the company's risk-adjusted returns reflects both underwriting and investment discipline, and the use of capital allocation tools developed last year. Now, regarding regulatory liquidity, we ended the year at 14.1% with a technical provisions coverage sufficiency of BRL 895 million. We must note that 2026 will be the last year of payment of our debentures, totaling approximately BRL 300 million between its interest and amortization. Now, in addition to the solvency and liquidity indicators, this was also a year of great evolution for the company in sustainability. In the last quarter, we published our first environmental and climate management policy. We updated our ESG double materiality matrix in consultation with 70 strategic stakeholders, and we offset 100% of our corporate emissions with carbon credits. We reached 85% adherence to the P3 ESG workspace, and closed the year participating in the Casa do Seguro at COP30, with the presentation of the tools developed by IRB R&D to tackle climate risks. Now, I'd like to give the floor back to Fred. Thank you, Duda. Now, moving on to the performance under IFRS 17. In 2025, we reported net income of BRL 391 million, compared to BRL 806 million in 2024. This reduction is mainly explained by the effect of the discount rate, a topic that we will detail in the next slides. The result from reinsurance services provided totaled BRL 579 million in 2025, below the BRL 777 million recorded in 2024. The life segment was the main negative impact in the period, reflecting contract cancellations carried out throughout 2025, and also the non-recurring effect of a specific contract that had positively benefited the result in 2024. As already mentioned by Volpi, the cooling down of the rural segment also contributed to the decrease in services provided in the year. On the other hand, it is important to note that even with the negative impact of rural, P&C performance remained resilient, presenting a positive evolution versus 2024, with an 11% increase in the portfolio. ...On the next slide, we see the movement of the CSM throughout 2025. We started the year with a balance of BRL 587 million, and ended the year with BRL 528 billion. This variation in the period is mainly explained by three factors. The first was the positive adjustments to the CSM, which totaled BRL 484 million, reflecting the update of actuarial loss assumptions, combined with expectations and premium receipts throughout the year. The second was the contribution of new businesses, which added BRL 488 million to the CSM, with highlight to the property portfolio and improvement in the expected loss ratio of these portfolios. The third was the exchange rate effect on the contractual margin, mainly due to the fall of the dollar in the period. These effects were partially offset by the amortization of the CSM, totaling BRL 1.1 billion in the year, concentrated mainly in the property portfolio and in line with the pattern of services provided. Now, compared with 2024, we see a lower volume of adjustments to the CSM in 2025, offset by the higher contribution of new business and the exchange rate effect in the period. The amortization of the CSM was 21% lower against 2024, mainly impacted by the life portfolio, due to the cancellation of contracts that occurred in the period. Now, on the next slide, we see the financial result of the reinsurance and retrocession contracts, which was the main impact observed in 2025 under IFRS 17. Under the accounting standard, reinsurance liabilities and retrocession assets are measured based on projected cash flows, discounted by discount rate curves and defined according to the maturity of these flows. These projections are updated at each balance sheet date by the current rate, and relevant variations in the yield curves directly impact the financial result. In 2024, the increase in discount rates versus 2023 generated a positive effect, with the recognition of financial revenue of BRL 283 million. In 2025, however, we see a reduction in current discount rate curves versus 2024, both in reals and dollars, currencies that concentrate our main exposures. This movement generated a financial expense of BRL 174 million, associated exclusively with the variation of the current rate. The charts on the right show the fall of the curves, especially in the 1-, 3-, 5-, and 10-year vertices, which concentrate most of the claim payment flows. The reduction in rates for these terms increase the present value of liabilities and pressure the financial result of the contract. Additionally, we had the recurring effect of updating the locked-in rate. Added to the variation in the current rate, this resulted in a total financial expense of BRL 652 million in 2025, versus the BRL 130 million in 2024. These fluctuations reflect a macroeconomic and monetary policy dynamics and are inherent to the measurement of liabilities under IFRS 17. I stop here, and I pass the floor back to Falcão. Thank you, Fred. Now, before concluding this presentation, I want to call your attention to the effects of a topic that will be more and more present in 2026, which is the tax reform, which will become effective in 2027. The reinsurance sector was graced with a zero rate, which in the long term will generate a beneficial economic effect on our business. We have been holding some very intense discussions with our teams, our auditors, and some tax consultants, considering the complexity of this topic. Like any reform, we go through a period of uncertainty and transition, and throughout 2026, these questions will be answered so that we arrive in 2027 with a complete understanding of the subject and the impacts on our financial statements. Now, I would like to call your attention to explanatory notes 10.1, 25.7, and 27.18, which covered specifically these matters. Part of the balance of our deferred assets in 2025 are related to PIS and COFINS on technical claims provisions. During 2025, we wrote off about BRL 81 million of this asset. Now, in December 2025, we reversed at once BRL 57 million due to the limitation of the future taxable base of PIS and COFINS that we see at this moment. This means we reached the end of 2025 with a balance of BRL 228 million. You can see the explanation for these values in the explanatory notes that I mentioned before, and throughout this year, we will be constantly available to answer your questions about the evolution of our understanding of this topic. Now, we're getting close to the end of this presentation, but I would like to highlight some developments that we had in 2025.... In the view of our clients, we reached the zone of excellence in the NPS survey that was applied to our clients in Brazil in 2025. We scored 75 points, an evolution from the 73 points in 2024. Client satisfaction is a key point for the company, because not only it generates recurring long-term premiums, but also it allows customers to perceive the value created by our services. In respect to products, we will resume our life business with the arrival now of Ricardo Sicchiere, who is now assembling his team. We want to be relevant in this business again, and we have room to grow. In the efficiency agenda, we are investing heavily in technology, in the upgrade of our ERP, centralization of our database in a single data lake, and the implementation of artificial intelligence tools to speed up business and particularly to automate our processes. Finally, as I always say, this is a business made by technology and people. We once again reached the top 50 in the Great Place to Work survey. It ranked us among the best companies to work in Rio de Janeiro. We also moved up from the 43rd position to the 27th position. We will continually reinforce these actions that strengthen the culture of protagonism, collaboration, dialogue, and mutual care. Now, looking at risk management, we improved our rating in the view of the risk rating agency, S&P, which upgraded our rating to AAA. AM Best, a risk rating agency niched in an insurance segment, maintained our rating in 2025, and we are now confidently working to show an improvement in 2026. Finally, when we look at our shareholders, we're very happy to have overcome the losses accumulated and to have reached solvency indicators to be able to propose to the board and to the ASM the payment of dividends, which will now begin a new phase for our investors. The share incentive plan for the company's management also directs our ex-executives to think like owners and to look at long-term value creation. In 2025, the IRB(Re) share appreciated 27%, which now added to the payment of dividends, returns value to our shareholders who have supported and trusted our management. I reiterate my excitement to be heading IRB(Re), and I believe we are even stronger now to seek expansion of our business on other fronts, with more available capital and a very capable team that will continue generating excellent results. Now we can open the floor for questions. Thank you for your attention. We will now open the floor for questions. To ask a question, please click on the Q&A icon at the bottom of your screen to join the queue. When your name is announced, a prompt to open your microphone will appear on your screen. Please ask all your questions at once. Let's start with our first question. It is from Arnaud Shirazi, Citi. Arnaud, you can open your microphone now. You can go ahead now, Arnaud. Hello, Falcão and the rest of the team. Good morning. Congratulations on your results, and the construction of the last three years of results was very positive. And now I'd like to explore what you expect for 2026, where you should keep expanding your results. Is it in premiums? Is it in efficiency or a combination of everything? And my second question: in quarter four, there was an expense relative to taxes that was higher. Is this related to the tax reform, or was there any other explanation? Thank you, and congratulations once again. Arnaud. Good morning, Arnaud. How are you? This is Falcão. Thank you for your question. So let me start, let me start with your second question, which is more straightforward. Yes, the tax change—the tax difference is exactly explains, explained precisely by that. If you've seen our explanatory notes that I mentioned, 10.1, 25.7, and 27.18, they cover these topics. They talk about the tax reform. So what we see is that when we wrote off the deferred assets, this was done manually in December to BRL 57 million, and then throughout 2026 and also 2027, we will be monitoring the tax reform because it's not yet clear how the transition will be conducted and the different scenarios, and we still have a balance of this deferred asset of BRL 228 million. But what's interesting, Arnaud, is that people will look at this as a write-off and as an expense, but in reality, this tax has been paid. So this is just an accounting adjustment that that's being made. The good news, that we always have to announce the good news when we approach this topic, is that the result from this write-off comes precisely from the drop of the tax rate to zero. The tax rate was dropped to zero, so economically, this is beneficial to us. Now, to answer your first question, yes, you're right. 2026 is already starting with clear growth in our life portfolio. We have been doing some work in this direction, and we are seeing the results. We are also starting the two companies, the insurance companies, and we expect them to start operating in the second half of the year. So they will, they will also have an impact on the second half. But we'll start seeing the impact of these two insurance companies, the impact on the premium in the second half. We also have other initiatives that we're carrying out throughout the year. This is a year . . . We're calling this year a structuring year. It's a year to change some foundations and preparing ourselves for growth, and the more robust results will come in 2027 and 2028. In 2027 and 2028, the results will be much clearer than the results that we will see in 2026, considering these short-term changes that we're making, that will also, of course, bring about some expenses. Then it will take a while until we start seeing the revenue from this. But I'm highly confident that we will deliver profit growth, that will be quite reasonable in 2026, but nothing as incredible as I think that, 2027 and 2028 might be. Did I answer your questions? Yes, you did. Thank you. Once again, congratulations. Thank you, Arnon. Our next question comes from Maria Louisa from Safra. Maria, we'll enable your microphone so that you can ask your question. Go ahead, please. Good morning, and thank you for taking my question. Following up on Arnaud's question, but thinking about the longer term, I liked the graph that you showed with the VLT growing from 7%-22% in 2025. And by looking at the long term, I'd like to understand if the company is already thinking about a goal for these metrics, considering that you have several leverages to improve operations. You have insurers, a reconstruction of the life portfolio. I mean, there are several things to be done, but currently, the financial results are being helpful. So thinking about the dynamics of the moving parts and how they should behave in the long term, and what could be sustainable in your opinion? I'm not talking about 2026, but to the years ahead. Maria Louisa, thank you for your question. We could talk about it during the entire morning, but I'll try to be succinct. Starting with the financial results, obviously, the dynamics of the financial results are based on the speed at which we grow the assets, that's related to the interest rate. But since our portfolio is highly based on the legacy portfolio, our investment rate was far from our benchmark rate, so it's becoming closer and closer in terms of this gap. In addition to that, we've been paying dividends, so the financial expenses drop. This is the first dynamics of the financial results that we have to follow up together. We see that there will be a decrease in the interest rate, but we think there is still some ground to cover, close to 10%. That will really determine robust financial results. The important thing to say is that if we elongate our life portfolio, we are able to grow assets and the financial results. So I think that will happen, and let's see how the insurance companies will contribute to that. I'm pretty curious, I should say, to follow up on that, Maria Louisa, but these are the levers that we're working on. I think that in terms of premium and growth moving forward, you asked about the sustainable ROTE. To me, I think that we should work with a 20% ROTE. And when we invest capital and risk, and risk retention or capital allocation, we should be trying to chase these returns. So whatever we can't find in terms of returns close to 20%, we should distribute in dividends. In any case, this is the rational to my mind. But I think that, moving forward, again, since there is too many moving parts, as you call them, we need to find out how these things will behave over the course of this year and how much we'll be able to deliver with the insurance companies. There's a lot of synergy. We've set up insurance companies with a lot of efficiency, so I'm quite curious about that. And we're also expanding internationally, where it's easier to seek international reinsurance premiums currently than domestic premiums. And we are trying to find a way to make the international portfolio as profitable as it is domestically. So I don't have a straight, straight-up answer to you, but I can tell you that our intention is that it shouldn't be lower than 20% moving forward. That's our goal, and hopefully we'll deliver it. Did I answer your question? Yes, super clear. Thank you.... The next question comes from Bruno Kenji, and we'll now enable your audio, Bruno, so that you can ask your question. Please proceed, Bruno. Hello, and thanks for taking my question. I would like to go back to the insurance business. I believe that it will gain traction in 2026 and 2027, but I'd like to understand if you have an overview about how much this business should account for in terms of the company premium in the medium and long term. Thank you. Hi, Bruno. Morning. Thank you for your question. Well, obviously, If you look at our benchmarks abroad, Life is growing so much in relation to this reinsurance business. It's a highly reinsured business, especially because it has sophisticated risks, such as the survival risk and the longevity risk. There's nowadays which in Brazil are almost non-existent. So abroad, usually, it becomes an independent business. Actually, there, they have a highly independent business line from P&C. We like diversification, but since our business is still limited, our market is still limited in terms of life risk retention, we think that it should go back at least to where it was before in terms of the premium when we started cleaning up the portfolio. So we see that naturally, over the course of the next 2-3 years, it should go back to 20%-22% of our premiums. That's our initial goal, at least. And I think that... Well, we'll follow up on that and keep reporting on that and letting you, letting you know which areas we're being successful in. But we have a slightly more ambitious goal, which is to help create products. And we think that maybe by bringing reinsurance to some business lines, maybe we could have the cedants redistribute these products. That's one thing that we are—we've been thinking about, and we have considered that a challenge to the team. Let's see how it evolves. Thank you, Bruno. Thank you, Falcão. That was very clear. Our next question comes from Tiago Batista from BPG. Tiago, we'll enable your microphone so that you can ask your question. Please proceed, Tiago. Hi, everybody. Good morning, and thanks for the opportunity. It's great to be able to talk to all of you, Falcão, Natasha, and the entire team. My question is about the combined ratio that you're considering moving forward. Again, congratulations on the trajectory. When we started talking to Falcão back in 2023, we were reinforcing this goal of having a 95% combined ratio. Actually, you did get there already. So thinking about the future and considering that you consider that the life segment will expand positively, it used to be the attracting segment, but it will probably be positive moving forward. We might even consider a lower combined ratio moving forward. I know how much claims how many claims are embedded in this but would it be reasonable to talk about a combined ratio that's below 90%, or is it too early? Considering the embedded loss ratio and considering the profitability of underwriting per se, so that we're able to adjust our models moving forward. Thank you. Tiago, thank you for your question. I would love to be able to tell you that we're gonna get there quickly get to 90 quickly, but let me discuss a few things that you know well and that we'll monitor together. The administrative expenses over the premium are extremely exaggerated. We have to cut back on expenses from legacy. In the first quarter, we'll probably come up with a plan to decrease these legacy expenses. Then, we have a company that is now greater than the premium that we deliver, and we have two options. We'll either, cut the flesh and become a small company, or carry over an expense over premium that's slightly higher than we would like to, giving us the opportunity to expand these branches, such as life insurance and, without significantly increasing the expense. So if I had to tell you about the technical results, as we call it, which is a loss ratio plus commission, and by segregating the day, these dynamics would be simpler to administer. But I think that everything that you mentioned is valid. Whenever the insurance company is working, we also wanna know which type of synergies that it's gonna generate for us. So there's a lot of uncertainties, but I think that the management, the administration, is gonna be quite positive. And also, the visibility right now of a specific number, well, I must tell you that I don't have that to give you, but in reinsurance, we're still moving on solidly and towards convergence. Sometimes there are some hiccups and some legacy claims that affects us, and agreements from old reserves that are helpful sometimes. So, yeah, I think that we have to be a bit patient. I'm as anxious as you are, and I'm eager to get to a better combined. And actually, in terms of life, depending on the products line, it could have very interesting combined ratios. And it's hard now to compare ourselves to the combined ratios to the ones abroad, because everybody's reporting them according to IFRS 17. If you apply that to our own combined ratio, it will be much lower than that. Thanks, Falcão, that was very clear. The next question comes from Tiago, from Goldman Sachs. Well, now, open your microphone, Tiago. You may proceed, please. Good morning, Falcão, Natasha, the entire team. Thanks for taking my questions. About the expenses, actually, you already started to answer that in the last question. The message seems to be clear, it will be a year heavier on expenses, but just try to quantify them a bit more in 2025 when the expenses grew by 10%. Maybe you could tell us more about how much that will require new investments for the new operations that you're launching, if there is more technology, because that accounted for most of the investments in 2025. That's my first question, and the second one is about the dividends. You said that you're going to propose the first dividend in March, so are you going to maintain the dividends at the minimum of 25% of payout, or would the idea to be able to improve the capital as soon as possible? Thank you. Well, Tiago, thank you for your question. I'm gonna start with the one about the dividend, since the question about the expense is gonna be answered by Fred. About the dividend, well, there's a legal process, as you know so well, and in the assembly, we're going to propose a minimum legal dividend. And our aim is that over the course of the year, we will be able to pay out dividends. At least the 25%, which is the total we're trying to achieve, either through dividends or JCP or whatever is more efficient. And we're going to propose to the board, once we close the second quarter, we will have a better visibility of the remaining of the year. You know that when we get to the end of the first half, we have a good visibility of the business itself, and at the end of the year, we'll be paying the debentures, and I think that then we'll be able to assess the solvency, and then we'll reassess whether we have a room for better payouts. In 2027, there'll be no debentures, so I think that in 2026, the profit is gonna grow at least a little bit. So that will give us better visibility of what type of capital we can use, trying to achieve this ROE. And whatever capital we will not be able to use, and then only we'll be able to start a more robust payout. That's the trajectory I have in mind, but we have to present that to the board, and then there'll be the assembly. I'd like to take the opportunity to invite you, shareholders, to participate in the assembly, because your vote is extremely important, and for this decision, which will represent a major change after five years. Now I'll give the floor to Fred. Good morning, Tiago, this is Fred. Now, based on the expenses, we have some levers that we're working on. We talked during the call, we talked about the implementation of SAP S/4HANA, the structure of our new system, because we still have the old system. So we will now attempt this migration, and it will somehow relevantly impact our expenses. We also had implementation of the digital transformation strategy, which should be completed this year. And we also have our search for efficiency and synergy in terms of the constitution of the insurance companies. Like you heard from Falcão, our expense level is increased when compared to our production, so we are seeking greater efficiency, but the constitution of the new insurance companies will be a driver for reducing these expenses over the gains that we have. So these growth levers should start reduce, to see and helping us reach synergies and efficiencies with the formation of the two new companies. Now, we also have the legacy, which accounts for about 3%, and we actively seeking to decrease the legacy expenses, so these are items that have not yet been completed. So there's still room to keep decreasing expenses as a whole. Tiago, this is Falcão again. I think in our first quarter earnings call, we will give more details about this. But what's interesting is that this is the dynamics right now. On one hand, we are intensely managing this trajectory towards reducing our expenses, and also we are carefully choosing expenses that will generate revenue, so good quality expenses for the future. So this is the way to go. I hope I answered your question. Yes, thank you, very clear. Thank you, Falcão. Thank you, Fred, and congratulations again. ... This question and answer session is now closed. Now, I would like to turn the conference over to the company's management for their final remarks. Thank you all for attending. I think this earnings call is the closure of the cycle that we had in the past three years. Based on your questions and the level of curiosity in your questions, I think this is well in line with what we expected. I know that in our next earning calls, we will start talking about the dynamics of reducing our expenses over premium, the growth of our premiums, the new business areas, and the search for a combined ratio with diversification of other products, our growth, a different international. We have a very busy and distinct agenda looking forward. We will start talking about how, with our cash generation and our capital, how can we pay more dividends, improve our payout? And of course, we still have the one-off issue with the tax reform, which can cause a certain level of uncertainty in the short term, and that could have an impact on our financial statements for the year 2026 and maybe 2027. But we will remain committed to being fully transparent. And as soon as we have more clearer information, we will invite you all for a session to discuss specifically this topic with the company experts, our accounting and tax experts, to explain all this to you in detail. So everything we'll do, we will have predictability and full transparency. So this is our commitment to all of you. Thank you once again for attending our call, and have a great Carnival. The Q4 2024 earnings call of IRB-RE is now closed. The IR relations team will remain available to answer your questions if you still have any. Have a great day!