This presentation may contain information about the company that would reflect current situation or its expectations and its senior management related to its performance and future events. Future statements will include, with no limitation, any statements that include projections, estimates about performance and future objectives. Words such as believe, anticipate, we hope, we expect, estimate, project, among other similar words. These statements are subjected to risks, uncertainties, and future events. We would like to inform investors that several important factors may impact substantially these plans, objectives, expectations, projections, and intentions expressed in this presentation.
Nor the company, its subsidiaries, directors, managers, or employees will be held liable by third parties, including investors, by any investments decisions made during this presentation or for any related damage. Market and competitive position information, including market projections mentioned during these presentations, were obtained through internal surveys, market surveys, public domain information, and business publications. Mr. Raphael de Carvalho will start his presentation now.
Good morning, and welcome to our first quarter results. I would like to start somewhat differently. Would like to say to our Billy Jordan, he was submitted to a very complicated surgery. If you can hear us, we're waiting for you, Billy . All the best. Let me now start with the results presentation. I'd like to give you an overview of the quarter. It's on page two. We've had substantial improvement of almost 60%. It's even better when we compare to Q1 2021. These improvements have taken place to dramatic times during the pandemic. I'll be giving you further detail during the presentation. These uncommon results have impacted us. We have BRL 150 million positive from lawsuits. Premiums were up 3.9% when compared to the same period of last year. Improvements in Brazil were at 19% level.
We keep on focusing on where we have more competitive advantage and having at least two-thirds in domestic operations. On the right, you can see how disciplined we were in executing our strategy. Brazil accounts for 62%, an 8% increase when compared to last year. Another highlight is the renewal rate, 86%. That indicates that our clients have been very confident. Our expanded results was 97%. Claims ratio and sales expenses along the lines of first quarter of last year. When we normalize these one-off effects about the weather and the pandemic that hit us in 13 percentage points, the expanded or the combined ratio was 83%, way better than those of last year. I'll give you more detailed information during the call. We've had robust financial results of almost BRL 160 million. Even when we discount that one-off BRL 150 million, we have maintained all the regulatory indices.
I would like to highlight the high renewal rates. This is the most important period of the year as far as renewals go. We reviewed conditions and prices, which make the process more complicated. Risk dilution is up next. Quarter after quarter, we have improved those numbers, both abroad and in Brazil. When we include that to the high renewal rates and risk dilution, we have almost 90 new businesses in line with our goal to maintain sustainability. Once again, I would like to thank our customers and our brokers. On page four, premiums. This first quarter, issues or premiums written were up almost 4%, a little over BRL 2 billion, when compared to BRL 1.93 billion in the same period last year. BRL 1.24 billion domestically, 19% above the same period of last year. Thanks to equity, life, and agricultural segments.
Internationally, BRL 765 million, down 14% when compared to last year. That drop was caused by more stringency in underwriting in our international operations. We have been focusing on Latin America, and it is important to dilute risk. I just would like to mention that. On the top right corner, you see information on retrocession. Expenses were BRL 607 million. The rate was 30%. Let me remind you that we had an LPT, and when we discount these LPT effect, these premiums were BRL 288 million, and the retrocession would be 19%, showing that we had retained premiums at a higher volume. BRL 1.15 billion. When we discount the LPT effect, BRL 1.27 billion, and they were concentrated domestically. On to the next slide, I will ask Tone to to discuss the cost of admin expenses.
Thank you, Raphael. Good morning, ladies and gentlemen. We should just. In order to find ourselves, we are in slide number five, and if you check the graph to the left and the trading costs and the commissioning index calculated over the won premiums, and if we check the amounts that were recorded in March 2022 were BRL 293 million, and that was the lowest observed in the last five quarters. The commissioning rate, that if we check on the points above, if compared to the last two quarters, at first seems reasonably high in 27.5% and 35.5% respectively. But as Raphael said himself, because of the LPT effects and excluding them, those rates are substantially reduced to 22% and 21% in the last quarter of 2021 and first quarter of 2022, with one percentage point lower than the previous quarter.
That is obviously positive to our operational results. In the graph to the right, and checking on the ADM expenses, the rates have been calculated over the won prices with and without the LPT, just as the commissioning expenses. This is obtained excluding the LPT as well. We are deducting it. The ADM expenses, which are subject to management, are reflected on the green line and in the yellow dots, and they range around 5% of the premiums won during this quarter. It is a pretty stable level if compared, and that was BRL 20 million lower than the last quarter of 2021. I remember well that in that year, we have reported some non-recurring expenses.
Now, the overall expenses that are also include the turnover tax represented by the blue line and the red dots, they represent approximately 10% of the premiums that were won slightly higher than the quarter-on-quarter comparison. Obviously, in the other quarter, for exceptional reasons, we have had negative tax bases, and we obviously had negative results there. Now, if I could ask you to please move now to slide number six. We will check now the quarter progression of the main costs of the company, which are our claims. You can see that the nominal amount of claims reported in this quarter has reached BRL 933 million, which is also the lowest if compared to the five previous periods. The 81% claims ratio initially confirms the seasonal reduction that was observed in this Q1.
However, if we observe it with the year-on-year first quarter of 2021, that very first index there, we will check an apparent increase of 9%. I say apparent because as we will see in the following slides, this rate was also subject to the LPT variations, aside to some of the atypical events that Raphael mentioned, that will be mentioned in the future. Let me just highlight that as said by our Chief Financial Officer during this quarter, the claims derived basically from the previous years, 2020 and 2021, confirming a reduction of the impact of the previous production years. This is an important information that confirms our previous forecasts. We do not really have major effects of claims that were inherited from previous contracts to 2020. Let us now move to slide number seven.
I would like to, with your permission, start by explaining from the conceptual perspective, how is it that we register and record the agri or the rural insurance in the IRB. I think it is important for us to deeply understand how this product works. We are observing here two fiscal years, 2021 to the left and the present year to the right. It basically tells that during the year of 2021, we have underwritten contracts that were contemplating both winter and summer seasons or crops. Half of the sales were for summer crops and the others for the winter crops. Those contracts, they transcend the fiscal year of 2021, and most of them are in the year of 2022.
Likewise, those contracts, they got part of the claims results in 2021, predominantly from the winter crops, and also in 2022, in particular, counting on the summer crops. If we check the year of 2022, we can see that the renewals have already started. In other words, the contracts had started before and are being renewed. Those contracts that were standing before, they might bring results to the impact of 2022 and 2023. It is an interesting dynamics, and the conclusion is that during the fiscal year of 2022, we will see effects of contracts that were cut in 2021 and also the effects of contracts of this year itself. It is good to remember that the renewals in 2022 have been adjusted in specific conditions, given the claims ratio of the previous years.
Many contracts have been terminated and canceled, but most of them have had the rates reviewed, the technical conditions reviewed, and the IRB share was also reviewed. All that should contribute to improved results for the fiscal year of 2022. I think it is important for us to understand those movements, and once we conclude this conceptual explanation, it is important for us to start and pay attention to the climate conditions. The climate conditions in this, we could forecast part of them in 2021, but part of them also happened in 2022, and therefore, they are reflected in this 2022 Q1. As we know, those conditions were extremely relevant to the market as a whole, and they hit important production areas, both for winter and summer crops, rather atypically and much more intensely than usual.
It is important for us to talk about this severity. According to the public figures, ever since the Rural Insurance Subsidy Program was created 19 years ago, this was the worst historically speaking. If we check the state of Paraná, this was the worst. In the Rio Grande do Sul, the events have hit basically the whole state, and this was the worst drought in the last 70 years. We had heatwaves, and more than 300 municipalities have decreed emergency state due to the drought. I know that the IRB results have been affected partly the last quarters of 2021 and the first quarter of this year. In terms of the performance reports, you can see that the claims ratio, if we want to compare the Q1 of 2021 of the rural insurance was 73%.
Now, in this quarter, if we check the year, the adjustment was really pretty relevant and has reached 72%. I also would like to give you an important example here, which is obviously the insurance part. We are insured against catastrophes, and we have the reinsurers, and the reinsurers themselves have their own mechanisms. This is usually hired at the international market. In the case of the agribusiness in particular, we have the stop-loss, which is limiting the losses for the company to specifically a claims ratio. This is an important point to be highlighted. Another important point is the geographic diversity. In other words, the risks are pre-spread in a relatively interesting way through the national territory, and we also have to consider abroad. Considering the domestic environment, we have the risks with different conditions, obviously, with the different insurers.
All those aspects considered, diversity, different conditions, contract per contract basis, and different protections, extrapolating the losses in the insurance market without checking or without taking all those details into account, might lead to inadequate conclusions. This is a good caveat for us to start with. It is also important for us to consider that during this Q1, considering all the geographic spread and expansion and considering our portfolio of insurance, our company has pretty robust reserves to deal with the underwriting year contracts of 2021. According to our better understanding, they are more than enough to face all the losses that could possibly come from the portfolio. Only when we do the accountability for the Q1, then we might be able to adjust our forecasts.
Based on what was said and with everything that was said above, we obviously cannot just consider the volatility of the agri because of the second quarter effects. We understand that such potential volatilities can be compensated by the results coming from the contract renewals that we also mentioned. Let us now move to slide eight , where we will basically focus on another important point, which is the COVID-19 effect on the company's results. Here we are, slide eight, and the pandemic has indeed had an important role in almost all insurance companies around the world, and the effects, of course, have impacted the reinsurance market as well. IRB is no different. We can see here some important figures of the impact in the company. Since March 2020 to 2022, we have recorded BRL 232 million of impacts in our results and allegedly caused by COVID-19.
That impact was observed in many different portfolios, but in particular to the life fund and then personal insurance, as you can see. As we mentioned, since 2021, IRB started to offer COVID-19 coverage to our clients with a specific pricing for the life portfolio, and such coverage is there, accounted for almost BRL 64 million in the Q1 of 2022, and basically derived from the Omicron. It is important to highlight that those coverages, they will result in additional income to IRB, not only in this year but in the coming years as well. Except for any other incoming adverse conditions, we hope that the claims ratio is going down during the next semesters.
We would like to now, moving to slide number nine, we would like to report in a summarized manner the progression of the Amplified Combined Index, as Raphael said, that contemplates financial results as well. In Q1 of 2022, that index was presented here in 97% in the graph that you can see on the screen. In the previous years, we could see an important cooling of the market. We can see that if we compare this to the first quarter of 2021, we can see a slightly lower result. It is 94% against 97%. It is important to say that for a good comparison, we need to, number one, deduct the LPT and just for you to visualize, in the last column, we can see the COVID effects and the agri apart.
When we do this balancing and exclude those effects, it is the best figures of the last quarters. So it is very important for us to acknowledge this atypical effect on the agri sector. It is not recurrent, but it is rather atypical and the COVID effect. It is really important for us to, once those two events have been excluded, we can clearly see a growing trend and in a more assertivity in the actions taken by the company in how they conduct the businesses. Just to complete, let us now move to slide number nine. I do not intend to spend too much time here, but the combined index, or rather, still on slide number 9, rather slide number 10. Sorry, I got myself a bit mixed up here. So slide number 10.
We can state that our balance today has much better provisions if compared to before, and we have reduced here the deviation risks in between the claims and provisions. That could obviously result in important negative results. We would like to highlight that in the past, we had important growths in the premium with the higher risk exposure, and in terms of the reserves, 60% of the premiums won. That was the worst. This is twice-fold, pretty consistent vis-à-vis to Q1 of 2021, the year-on-year, and that indicates that we are competently managing the claims reserves. So now let us move to slide number 11, where we will talk about the regulatory indexes.
In this slide, I'll show you our position as to the regulatory indicators. IRB had sufficient adjusted equity at BRL 65 million, very similar to what we had in 2021. The 231% rate remained unchanged as of December 2021. When we talk about sufficiency of technical coverage, we are at BRL 17 million when compared to BRL 160 million we had in Q1 2021 and BRL 236 million in Q4 of 2021. I would like to once again repeat that statement. It's up to the management to analyze IRB capital structure to keep the company afloat whilst maintaining all the regulatory requirements. We have used some levers this quarter, such as the LPT.
If necessary, we'll implement other measures, and we will, of course, keep the market informed. Moving on. This is our cash flow. In Q1, we had negative cash at hand when compared to Q1 2021, a change of BRL 463 million.
This is the operational cash flow that is derived from the amount of premiums, less sales volumes, especially abroad. The local currency appreciation, our balance sheet is in reals, in local currency. It was substantially appreciated. We have better deposits. Other receivables, we had an important variation. That is due to that settlement of those third parties or deposits that haven't been identified. They affected our receivables. On the other hand, claims payment nominal values have remained the same with that smaller premiums and improving the settlement process. This effect impacts our cash in the quarter. Improvement in processes, speedier settlements have kept that volume of claims when compared to 2021. Non-operational cash generation showed important changes there. Reimbursements paid out, it's a one-off event and that reimbursement to Eletronorte, just like we said last year. This is our cash position.
On to the last slide before I give the floor over to Raphael again. On the top chart of slide 13 on your left, our top left chart, financial assets, BRL 8.2 billion in Q1. An BRL 800 million decrease when compared to December 2021. That drop can be explained by the fact that we have a significant exposure in foreign currency. When you take the appreciation real in the quarter, that impact alone brought those assets by BRL 500 million. The remainder of that difference is the operational cash that I talked about in the previous slide, BRL 1,082. When you add up these two effects, you have that BRL 800 million drop in our financial assets. On the bottom left chart, this is the nominal evolution, BRL 260 million in the quarter.
Just like Raphael said, BRL 150 million was a one-off event when we booked lawsuits, something that we made available to you in detail. Higher interest rates, it's worth mentioning too, that benefited our results and profitability of assets in reals were at 131% when compared to the CDI. On the pie chart on your top right portion of the slide, you can see the breakdown of our portfolio. 59% is in local currency, 41% pegged to the dollar. That change in foreign currency from 36% to 41% when you look the first quarter of 2021, that is caused by more technical reserves in foreign currency. As a consequence, we have to maintain more assets in the same currency to have the required hedging. That concludes my presentation, and I'll turn the floor over back to Raphael for his final remarks. Thank you.
On to the final remarks, and this is what we can expect for the future to a certain extent. I would like to once again restating our commitment to be very disciplined to the strategy we came up with. Local businesses will be on the rise because it is there that we have more competitive advantage, and IRB can make a difference in the price setting realm. Another pillar to reduce concentration by contracts will remain the same. Of course, there is a limitation there. Just like we see opportunities to deconcentrate, we are paying very close attention during the renewal phase to improve our positions even further in those contracts we are interested in to acquire new businesses. Administrative expenses demand our full attention, and they may be variating below inflation rates, helping us have more scale. Conditions and prices will be adjusted according to the risk.
That is our guiding principle. Toneto just mentioned how important it is to invest in the country. With higher interest rates and expanding our operations in the country, we expect to have positive effects in the quarters to come. Finally, just recently, we had an shareholders' assembly. We changed our bylaws to adapt to the B3 requirements to have better governance, and we also had a BRL 1.2 billion increase in authorized capital because that had all been used. We have recently hired financial consultants to keep on helping us to do what makes sense to us, which is to assess options to optimize our capital. That is a commitment on our part, and we will keep doing it. That is key to make the best out of all the possibilities. I will turn over back to the operator for the questions.
We will now start the Q&A session. If you would like to ask a question, please press star one. If your question is answered, please press star two to remove your question from the queue. Questions will be answered in the order they are received. Keep your phones off the hook for better sound quality. Please hold. The webcast platforms brings us the first question. Tesley Takahashi asks the following question: Will the company give you any more guidance?
2020, we have withdrawn some forecasts and informed that as soon as the higher management would be comfortable with assumptions and forecasts, we would release them again. So we would assess how convenient it would be to release them. What I can say is that we are keeping the same stance, and we are committed to being extremely transparent towards stakeholders and shareholders, and we will keep everybody posted as soon as we have relevant information to be shared. So far, we think it does not really make sense for us to have any guidance being released.
We would like to remind you that you have to press star one to ask a question. Maurilio F. Cruz asks the following question: For a layman investors, what are these LPT operations? What are the fundamentals there? What are the benefits for the company?
Well, Maurilio, let me go a little deeper on the LPT. In reality, what we do with that is as follows. We try to look for a set of risks and claims that are taken up by the company, and we sort of transfer those claims through retrocession operations to other reinsurers that might be interested. They are usually from abroad or even here in the domestic market. We basically assign those portfolios, and this assignment basically exempt us from covering reserves and as provided, we pay a fee. The assumption of those responsibilities or the reassignment of that to a third party will obviously result in a cost. But on the other hand, this will increase and improve the technical provision indexes and the regulatory compliance, and this will have some seasonal effects in the solvency of the company.
This is a tool that IRB has resorted to before other times, and this is obviously something that other insurance companies do as well. We obviously keep it up our sleeves just to maintain the company within the regulatory standards that are required by the legislation. In short, that would be it.
To ask a question, please press star one. If your question is answered, please press star two. Please hold. Press star one to ask a question, please. Please hold. If you have a question, please press star one. We do have a question here. What are the next steps to cover provisions? Can you give further detail?
Well, I guess Toneto has covered one of the tools that we have been resorting to the provisions coverage, which is LPT, that basically exempts us from using reserves. Bear in mind that we have a few tools, which are not only capital tools. Maybe the question is if we have something planned about the capital. I would like to remind you that we permanently assess capital opportunities, not only to be fully compliant from the regulatory arena, but obviously in order to give good deliveries. We have been assisted by Itaú BBA and Bradesco Investments in order to identify opportunities to be more assertive with our strategies and the execution of our strategy.
Please hold. We are still selecting a few questions. Press star one to ask a question. This concludes the Q&A session. I will turn over to Mr. Raphael de Carvalho for his final remarks.
I would like to thank you all for your interest and participation, and if for whatever reason, due to connection problems, we have left any questions unaddressed, please feel free to just send it to us and see you in the next call.
IRB Brasil conference is now closed. Thank you for your participation, and we wish you a great day.