1Q25 Results Presentation Transcript

Good morning. Thank you for waiting. Welcome to IRB(Re) Q1 earnings call. We do have simultaneous interpretation services available. Click on the interpretation button at the bottom of your screen and pick the language of your preference.

For those listening in English, you can mute the original audio. This earnings call is being recorded and will be made available at the company's IR website. The material is available at the website too. You can download the presentation from the company's website. All participants will be in a listen only mode. We will then have a Q&A session. To pose a question, click on the Q&A icon at the bottom of the screen and write your question to be admitted to the queue.

A prompt to unmute or your mic will pop up on your screen. Please ask all questions at once. Information made available at this presentation and any forward-looking statements are related to business projections, financial and operational estimates. They're all based on the company's beliefs as well as information currently available to the company. These forward-looking statements are no guarantee of performance because they involve risks, uncertainties and premises, because they relate to future events, they depend on circumstances that may or may not occur. Investors should be aware that general economic conditions, market conditions, as well as other operational factors may impact future performance that will lead to results that are materially different from those expressed in forward looking statements.

We have Mr. Marcos Falcão, CEO and IR director of the company. Mr. Daniel Castillo, VP of reinsurance. Mr. Federico Knapp, the finance VP, Mr. Paulo Valle, director of IRB asset and Eduarda De La Rocque, Director of Internal Controls, Risks and Compliance. I'll Turn over to Mr. Marcos Falcão, CEO of IRB(Re). You may proceed, sir.

Good morning, everyone. Thank you for attending. And yet again, another earnings call. We'll have Fred available, our CFO. I'll be making my opening remarks, closing remarks and the questions. A year ago, we were faced with a major challenge. The floods in Rio Grande do Sul. Those were tough times, albeit important because we came out of it stronger. But there was a protection gap less 10% of the economic loss was insured.

Let's now read the first R&D IRB report. We researched the floods taking into account geology, weather related events and all the losses. That report is available at our website.

By sharing this type of information, the risk assessment can be perfected throughout the entire industry. Interest reached 14.75% last year, which contributed to our financial results. As time goes by, our profitability improves. Paulinho will explain that. However, financial results won't prevent us from having discipline to have underwriting results.

Castillo will address that we remain focused on improving our efficiency, reducing expenses.

We have reduced payroll. We are reviewing services contract to make the company even nimbler. We want to concentrate the data in a single place. We believe that these investments in technology and process review will speed up the decision-making process. Fred will address that topic later on.

As to capital management, Duda will show you that we are above 200%. We had significant claims according to the press coverage. This is part of our business. It's a volatile industry after all. We draw your attention that the quarterly view can be myopic. We have to take into account the entire year. We'll emphasize life and non-life segments separately. They are very different businesses. And once we have cleaned out the life portfolio, we'll address this segment differently. Focusing on profitability but with a cautious approach. Because unlike the non-life segment, we have a long tail in this business. Over to Castillo.

Thank you, Falcão. These are indicators of the life and non-life indicators.

On the top left the quarter had a R$135 million net income compared to the previous quarter that had R$74. In life we had negative results. The cancellation of last year did not generate more premiums but we still had to cover some claims. On the bottom left, the 975 million of premiums is below the same period of last year.

The combined ratio is due to two drivers. One, the movement of deadlines of the contract. So. So this should be incurring throughout the year. And number two, we expected better results in the agribusiness. On the top right, this is underwriting results. Below previous quarter there was a major claim in a lubricant plant affecting material losses and lost time. We had over R$200 million. The net result was R$119 million.

On the bottom right we had a combined ratio of 161% and non-life 98%. On to the next slide. This is the profile of our portfolio. As we said in the previous call, instead of having the written premium, we are now using the retained premiums. We change the contract from the first to the second quarters. And the fact that we expected better results in agribusiness.

The premiums reduction was due to major cancellation that we did not renew since it's not profitable. Geographic distribution 62% in Brazil of retained premiums. US and Europe accounted for 29% of our portfolio.

This distribution should change in the next two quarters because in Latin America we had April, June and July renewal dates. And we're in the middle of renewals in Peru, Argentina and Mexico. Our portfolio is usually short tail at 52% in property. In companies, our strategy is to grow while maintaining profitability. If we cannot take up risk at the right price, we won't jeopardize results for that.

On to the next slide. These are indicators in the past 12 months for both life and non-life. Look at net income growth that is consistent from R$185 to R$412 million. Underwriting premiums R$274 to R$433 million retained premiums in the last 12 months is above non-life at 10% increase from 2.9 billion to 3.3 billion. With the life reduction as expected, the

life segment accounted for 5% of total premiums in the quarter. Premiums in life segment is at the minimum level.

We want to start a new business plan focusing on profitability. Finally, they have a combined ratio of 129% in life and 97% in non-life.

Next slide. These are more granular indicators. Non-Life between domestic and international. Net income for non-Life was originated for domestic portfolios. The international business that is non-life showed positive results starting Q4 of last year. The same thing happens in underwriting results. The combined ratio Non-Life International is coming down at 102% today. Non-life domestic had a combined ratio 95% impacted by that major claim I've mentioned.

Next slide. You have the breakdown between life and non-life based on two indicators, retained claims and commission ratio. When you look at the claims rate, non-life has been stable at the expected level at 61%. Life had a more volatile profile due to the cancellation of that contract I mentioned. The commission ratio remains constant for non-life and stable in Life starting in Q3 of 2024.

Over to Fred now.

Good morning, everyone. It's a pleasure to be here. My name is Fred Knapp. This is my first earnings call as the CFO. Taking over in the largest reinsurer in Brazil is a landmark in my professional career. I have the responsibility of carrying the torch of the solid work of Marcos Falcão. I'm also committed to adding strategic view focused on efficiency, transparency and value creation for shareholders.

In Q1, my priority was to learn our operations, processes and our team. A team that is excellent and is highly committed to the company's goals. As to the results, I would like to point out a few important landmarks. Just like Castillo said, the technical discipline in underwriting is our main pillar. This is a strategy that is robust and it's focusing on profitability. We remain focused on operational efficiency. We have just started mapping out all processes. Our goal is to identify automation opportunities and process automations.

The project Data Lake is focused on optimizing internal data on to administrative expenses. Our challenge is to improve expenses. Part of it is related to depreciation and contingencies. And depreciation does not impact cash. We've implemented changes to more precisely capture those changes. IT investments, more specifically, were used to be recorded as capex. As a way to analyze administrative expenses, our focus is to analyze the last 12 months. On the left you have a 6% growth, when we compare 12 months ending in December 24 and the accrued in March in 2025. But when we compare recurring expenses excluding one-off impacts expenses is almost flat: R$368 million. In the first quarter we had three non-recurring impacts.

Number one, after employment benefits. That includes benefits offered by IRB throughout the history and they will continue after the employee is retired.

The second item are related to two fines. One, the fine for not offering profit of a subsidiary abroad and the other ones was for administrative processes.

The third factor is related to the voluntary program. When you look at the bar chart on the right, when you see the recurring administrative expenses in the last 12 months, that index is at the 9% level. Throughout this period, the total expense reached 11%.

Breaking down these expenditures, we see 2 percentage points refer to expenses related to the legacy of the company, not related to earnings, to premium and otherwise it would be at 9%. However, we don't consider this ratio ideal.

Going back to my initial talk, we have the challenge of bringing efficiency in expenses and cost control. Now I turn the floor over to Valle. We'll talk about financial results.

Looking at the next slide, we see that the financial results of the company. The portfolio we have 56% of funds in Brazil and the remainder abroad. It's worth mentioning that R$9.1 billion of assets under management from the fourth quarter to R$8.9 billion is due to the appreciation of 7.27% of real in the first quarter which impacted our positions in foreign currency. The results from investments were R$174 million in the quarter. Onshore R$145 million due to the good performance of fixed income, 105% of CDI and private credit or corporate credit.

On offshore, the result was R$29 million accounting for 87% of Fed funds and according to the profitability foreseen for our portfolio.

When we look at the total finance income and share profit of equity accounted investees R$210 million. We started the portfolio with an asset position and there was a result of lawsuit that became final and was converted from dollars into reals as commented in the last call.

In the next slide we break down the portfolio profitability by asset class. We see favorable fixed income and corporate credit. In inflation, given the highest figures of February and March, we see a profitability of 104% of CDI assets and 90% in legacy. Broken down on the chart on the right that talks 25, 26 and 28 that were made up until 2021, with less attractive interest rates.

In the offshore part, we have Brazilian sovereign bonds with 172% of Fed Funds profitability, which benefited from the closing of the rates in the quarter. In corporate credit, we have good performance of corporate bonds and CDs of emerging currencies with which we use for hedging of the company.

As for legacy of Brazilian sovereign funds that was not so favorable in previous years, we are zeroing the position of Global 2026, realizing the losses at market value and reinvesting in more favorable rates. We've done 45% of them, reducing the position of 6% to 4% of total assets and the idea is to settle that position until the end of this year.

As seen on explanatory note 6.2, this has impacted the results by R$17 million. In the lower right chart, we see the profitability and reinvestment rate onshore 102% of CDI with a return rate of 12.8% annualized. The onshore legacy funds account for 11% of total assets and one is mature in two days and accounts for 160 million. 3% will mature in 2026 and 6% in 2028. The maturity of the 2025 will be on May 15th.

Now I turn the floor over to Duda Della Rocque.

Thank you, Paulo. Good morning, everyone. In this first slide we'll talk about our regulatory solvency which continues to grow the sufficiency of tangible equity coverage. Regarding the regulatory the minimum required capital accounts today for 1 million 115 million as seen in the upper left chart, which is a sufficiency of 207%, an increase of 38 percentage points when compared to the first quarter of 2024.

This is due, as you can see on the right top chart, a substantial increase in our tangible equity without any increase in the minimum required capital, which results in a substantial improvement of return adjusted to risk both in the financial and underwriting areas. This is the result of a more efficient capital management. In the next slide you can see the second regulatory indicator that assesses according to Susep, the liquidity of our portfolio according to the amount of assets qualified as guarantees for our actuarial liabilities. This closed the first quarter with a sufficiency of R$728 million, equivalent to 10.9% of the need for coverage. Coverage requirement 1.2 percentage points to the figure in December 2024 and within the margin of volatility.

This indicator is 5.1 percentage points above the amount recorded in the first quarter of 2024. In addition to monitoring the coverage of technical provisions, we also manage the cash and banks of the company dynamically, including hedging. In this slide we show the several highlights in terms of initiatives we had in ESG.

We have reviewed of ESG policy that had been prepared in 2022. It was outdated compared to the benchmark we made compared to important stakeholders. We did the same the first inventory of Greenhouse effect and we wanted to be in compliance with the Paris Charter. This material is available in our website.

On this slide I show the highlights of the sustainability report, starting with governance data. Given our history, this is even more important. Now we are on the third and final year with the DOJ agreement with the Department of Justice of the US and not only because of that, we are investing and developing our Integrity program which is detailed in our report. In the social aspect, this year we were once again considered a great place to work. In the environmental area, we have recently published in our website the first RRB Research and Development report with a detailed analysis of the floods in the Rio Grande do Sul that happened in April and May last year and all the fires in the state of Sao Paulo last year.

Now I turn the floor over to Fred.

Now we present three slides about our performance under IFRS 17. First, we show the net income of R$134 million in the period compared to R$237 in the first quarter 2024. In this quarter the results from services accounted for R$235 million with a slight reduction when compared to the first quarter of 2024 when it was R$252 million. The main positive highlights were property and agriculture insurance which contributed positively for income. On the other side, life reduced when compared to the first quarter of 2024, reflecting our strategy to focus on profitable life insurance contracts.

On the next slide we talk about the CSM. As we mentioned in previous calls, CSM accounts for the profit expected for reinsurance agreements that yet have not been

recognized on the profit and loss and that will be as we deliver the contracts. This is a key component and measures the future profitability of our portfolio.

In this quarter we saw a reduction of 13.6% in the amortization of CSM which is the result of a higher amortization in life insurance, especially due to the last accounts with significant facts that received in 2023.

However, despite the non-renewal of life contracts, the underwritten business grew by 21.1% in CSM when compared to the previous period, showing the quality and of underwriting decisions made at IRB.

In the third slide, the main factor that negatively impact our results and the first quarter was the discount rates applied to assets and liabilities in retrocession and reinsurance agreements, resulting in a total expense of R$198 million.

This reflects the financial impact of future rates projected used to update the cash flows of these contracts. In the previous period, the same effect had a positive contribution of R$6 million boosted by a specific reassessment of cash flows of claims already incurred.

This reflects a change in interest rates, especially in a scenario with significant changes in actuarial curves in the macroeconomic scenario which influence the payment and receipts of operational payments.

Now I turn over floor to Falcão who make his final comments.

Thank you, Fred. I would like to share with you how excited I am in the new people hired for our team. Fred has been with us since January, and he's been adding a lot of value. Viviane Mardirossian, who is now the claims officer, she has more than 20 years of experience in the market. She helps Castillo and manages the area that shows the benefit for our customers to buy reinsurance. We have improved the quality of our services. It's very good to see IRB attracting the best talents in our market because this is the best place to work, I'm sure and our business: It's all about people.

We once again got the seal of the great place to work which reflects the energy and good work environment of our company. In the last annual meeting of shareholders, four board members were elected.

Louise Barsi, who is a value investor.

Vitoria Bejarano, from Colombia with a great international experience in strategic view of the reinsurance market.

Pedro Englert, a very successful entrepreneur with a vision from startups and technology and finally Otavio Damaso, who after finishing the quarantine will join the board in July bringing his experience as many years as an officer at the Central Bank.

In the fiscal committee, Ricardo Baldin will become the chairman bringing an extensive experience with Rise PwC Consulting Company and attending several boards including Itaú Bank. We are strong and energized to face the challenges of growing with profitability. Moved by the opportunity to reduce the protection gap and increase penetration of insurance in our society.

We are ready for the renewal of July 1st in Latin America closer to customers and with capital and capacity to be competitive. I lead a business plan that will be deeply discussed in in our planning process that will start in the second half of this year. We're quite confident in underwriting discipline. It may be a harder path to follow, but as I said before, if we have to make mistakes, the mistakes will be being excessively careful with underwriting criteria.

But the idea is to grow in the long run and serve shareholders. We work to bring long term consistent results to our shareholders. I see several opportunities in insurance and reinsurance businesses, and I believe that IRB can lead the opening of several areas that have not been explored, and I count on you, investors in this journey. Now let's move on to the Q&A session.

We'll now start our Q&A session. To ask a question, click on the Q&A icon at the bottom of the screen. Once your name is called, a prompt will pop up on your screen to unmute your mic.

Please ask all questions at once. Eduard Nishio from Genial Investimentos asks the first question. You may proceed now please.

Good morning, Castillo, Falcão, Fred and Duda. I have two questions of the mismatched despite the worst technical rate, you had an income growth quarter on quarter, year on year. Can you break down as to that rate throughout the year 2025? Do you believe you're going to reach less than 100%? Can you break that down between claims, commissions and administration and the tax rate that has gone up a lot this quarter?

And my second question is about your growth. You had some numbers coming down 13% on the quarter year over year. Life Brazil almost 62% drop. I understand you're more selective in choosing the premiums, however that may jeopardize future growth. Can you elaborate on the perspective of premiums throughout the year and if you could address the domestic market if you've been having hard time growing there too.

Good morning, this is Daniel Castillo. This is the one-million-dollar question. The combined ratio. Choosing risk is the number one challenge in underwriting. But choosing risk with profitability, the risk is even higher, or the challenge is even higher. You have to have 80% of science, 20% art. That's why we have so many professionals working with us to make the right calculations to make sure we are profitable. Our business is priced as 95% combined ratio. But it would be a mistake to look at just one quarter.

We might as well look at the last 12 months. A quarter can give you a snapshot, but 12 months give you a picture or a movie. To be exact, the Life combined ratio is at 129%. It may come down as we clean the portfolio. In Life, we canceled a major contract last year. The premium is not there, but the claims keep coming in. Since the Life business has a longer tail. Non-life business is at 97%. When you break that down between domestic and international, International came down from 125% to 102%.

In other words, we're having much better results in international. Domestic is at 95%

according to expectations. We believe these number should remain stable and improving. The international coming closer to the domestic. But the combined duration is a composition of several numbers. SG&A are also important. As we reduce SG&A, the combined ratio improves. Don't forget that SG&A is a percentage of that premium. As we increase premiums, SG&A comes down. Going Back to that $1 million question, our challenge is in which science should come first. It's not 50/50: science 80% art 20%.

We're threading the pathway, and we are confident we'll keep on improving international business and reducing the combined ratio for the Life segment. I don't know whether I answered your question or not.

Yes, thank you. And for premiums, what's the outlook for 2025?

Well, we had a premiums reduction in Q1 because we had to move the time frame of relevant contracts from the first to the second quarter. That premium will be generated throughout the year.

On the other hand, agribusiness is very important to us, and we haven't been able to achieve the production we expected because of market conditions. So, we were let down by agribusiness. We were expecting to produce even more.

On the other hand, we have renewals in Latin America that are taking place as we speak, concentrated both in June and July. And we have high hopes of improving those businesses while maintaining profitability.

Do you believe there will be growth for the written premiums for the rest of the year?

Our focus is on the retained. Eduardo.

This is the most important aspect. We believe it's going to grow, but we have to make that calculation. This is Falcão speaking. Well, the Life portfolio, once we canceled that contract, is about 250 million annualized when compared to last year. It won't happen.

For Non-Life, we had good premium growth, but Life is coming down because of that cancellation.

Perfect, thank you.

When you cancel 250 million in life, we can recover many other results. Right. It's a good premium to be canceled. We're very pleased we canceled it. Okay, thank you.

Thank you.

Daniel Vaz from Safra asks the next question. The mic is unmuted now.

Good morning. Congratulations on the positive results. My question is about something you mentioned during the presentation. You're going back to focus on life. And you mentioned that it's a long tail. It requires a different strategy. We've heard you've canceled a contract. A couple of things have to be adjusted. And what would be the time frame for that adjustment so that life can contribute both in premiums, guaranteed and retained? What would be that time frame? If you could elaborate on that. The second question. How do you break that down between international and domestic for that appetite? Where does the major opportunity lie for life so we can adjust our models?

Thank you.

All right, let's go, Daniel. The life business has reached a minimum premium level. We don't believe it's going to come down because I've already cleaned a portfolio. We're now preparing a business plan to develop life businesses that will bring in results in the next 24 months. We believe that our opportunities in Brazil and Latam, but we have to carefully consider them because we had some negative surprises in the past. We want to look at the life business but focusing on the scientific part way more than we did in the past. We remain optimistic, therefore, that the opportunities we are considering can come true in the next 24 months.

If I may ask another question. My question is about cash generation. The regulatory capital is at the good level. We're looking at this indicator and it's getting better and better. Right. Can you hear me?

Yes, we can hear. Go ahead.

So, the question is to learn more about your approach in the next 12 months now that you have good solvency numbers.

Well, this question: our cash generation is not based only on those projections for net profit, but also tax credits.

We compare tax credits as if it were miles. You save the money, and you pay that with miles. So, we generate more cash than our net profit. In other words, of course, we had debentures that have to be paid out at year's end. We're going to use that part of that generated cash. We have about R$600 million in debt, R$300 to be paid out this year, a little less and R$300 for next year.

And we're going to use part of that cash to get rid of that debt. A debt that's above the interest rate. We don't want it. And it's not welcome that debt. So it's in the money. It's okay to carry that. That's why we did not pay that in advance. We've been carrying at its term. But if we were to issue debt, if you wanted to roll it out would be way more expensive than the interest rate and it's not interesting. We pay the debt when you have the accumulated loss that is at R$300 million based on our projections. If everything happens according to plan, based on analysts' projections, our net profit will be above that number. And by doing so we'll be paying out dividends 25% according to the bylaws. It's going to be approved by the assembly, by the board. But we'll be able to pay that dividend this year. Did I answer your question?

100%. Thank you very much.

Thank you.

The next question comes from Arnon Shirazi from CITI. Arnon, well open your microphone so that you can ask a question. Please go ahead.

Good morning. Thank you for the opportunity to ask a question. My question is related to your administrative expenses. Clear on the slide you showed that the ratio is around 11% and then you mentioned that there is a 9% of ratio wouldn't be ideal. So, I would like to understand what is the level you consider ideal and with initiatives you had, the voluntary dismissal program, how that will result in good results in the second quarter.

Okay, thank you for the question.

When we look at the expense ratio, we think it's too high. Even the 9%, we could be a bit more effective for the combined ratio. Of course we're looking for an efficiency. There is a denominator that we need which is the growth in premiums. As Castillo mentioned, the higher the premiums, the more able we are to dilute administrative expenses. So always seeking admin operational efficiency. There are two examples, data lake and mapping of processes that will be beneficial to the company. We're still a bit restless with this figure. We want to seek growth in premiums and a more adequate expense level. We are renegotiating several contracts with all our suppliers, and we've created a project

area to identify opportunities in items that we're not using and that could be more efficient in their use.

So, we also did the voluntary dismissal program as mentioned in the earnings conference call and all that should provide benefits in the medium term to the company.

That's very clear. Thank you. And congratulations on the research and development report. That's quite interesting. Thank you.

The next question comes from Guilherme Grespan from JP Morgan, Guilherme Grespan, you may continue.

Good morning, everyone. Falcão, Castillo and the entire team. Thank you for the presentation and congratulations on your earnings. And people talk a lot about operations and your message for the strategy is very clear.

So, while ask about the financial part, maybe I missed something in the presentation, but there were R$45 million in foreign exchange variance gain. I would like to understand what generated this gain and what we calculated. R$210 and it was marked to market for R$17 million and also R$230 for financial gain results in the quarter. So, what generated this R$45 million and if it's sustainable from now on.

And two quick clarifications. I think it was said that you expect a negative impact of R$52 million in the portfolio. I would like to understand if this includes what has been done already. So, R$37 and a bit more. R$52 is in addition, or does it include the past? And the impact from the Lube oil plant, has it been accounted for in this quarter as a whole?

Thank you. Hello, Guilherme, this is Paulo Valle speaking. Thank you for the question.

Okay, first, the foreign exchange variance in R$210 million in results, R$40 million comes from that. We ended last year as mentioned in the conference call for the first quarter of 2024 we ended with a net position in positive due to receivables from lawsuits which used to be an asset in dollars that was changed by court into real. So that we started with a positive position in real. And in the beginning of the year, we had an appreciation of 5.85% and 7.37% in the quarter. So, this appreciation in the Riyadh had a positive effect of R$45 million as a globe 25, 26 effect.

On the explanatory note for 4Q24 we mentioned that there was a liability mark to market of R$77 million that we had realized the losses in December and then we started with R$77 million. We're making these adjustments on a monthly basis. This first quarter R$17 million impact and this expected loss went from R$77 million to R$51.7 million. Our intent is to zero that in this year. And if we divide this amount in eight installments, there will be an impact of R$6 to R$7 million per month. In addition, there was a good performance on corporate bonds and there was an impact of inflation in February and

March. And we have an active management in terms of coverage to try to find the best results possible.

Okay, that's very detailed, very clear. Thank you.

The next question comes from Thiago Paura from BTG Pactual. Thiago you may ask a question. The mic is open.

Hello. Good morning Falcão, Castillo, Fred, it's a pleasure to talk to you. Just to follow up on premiums growth. You provided a good disclosure about the major portion of the renewals that were made in the first quarter regarding the domestic portfolio with the combined ratio even lower than what you have guided the market to. And now we are in the midst of the renewals for latam.

So what do you envisage in terms of price dynamics for this portfolio specifically and if we could expect because Castillo mentioned that there may be a change in the geographic breakdown going forward because it used to have a larger portfolio in Brazil and that those 80% Brazil and 20% the rest is remains the same comparing to what you're seeing renewals for LATAM right now?

And finally, what do you see as competitive advantages for IRB in this portfolio? Because Castillo, Falcão have also talked about the advantages in underwriting for the local portfolio and it's clear it's important for us as Brazilian citizens to see these advantages. But looking abroad, especially to Latam, what are the most significant items that make you so competitive in that portfolio as well?

I apologize, Thiago, I'll answer your question shortly about Latin America, but I think the previous question was about claims and there was a loss, a claim for a large lube oil plant in Rio de Janeiro which accounted for a value of R$252 million. But net of retrocession, it should be R$130, R$140 million which is loss of profits and material damages.

I'm sorry for not having answered that earlier, Guillerme.

Now Thiago, let's talk about Latin America. In Latin America the main competitive advantage we have is services, not only prices. Prices is a matter of science and art. We are now using a lot more science in our LATAM business. But today we have a large team of people who are fluent in Spanish who are visiting this market frequently. I am visiting the market with another three colleagues next month. And last week there were 18 customers from Latin America in Rio, Mexico, Colombia, Peru and Argentina visiting us. We had an insurance game which is one of the best marketing tools we have, which is the simulation of a company that's doing very poorly, and we run different scenarios and there were 18 people taking part in this game and a presentation that lasted for eight hours, all in Spanish. So, we believe that this is our competitive advantage. We'll be

present with the customers in Latin America bringing all the experience we have in Brazil and speaking Spanish. And the project is to remain 70% of the business within Brazil and 30% within Latin America. The Latam market is not hard now, I would say it's soft. But we must do a risk selection and using more science than art.

Okay, thank you. Excellent, Castillo.

The Q&A session has now ended. Now let's go return the floor to Mr. Marcos Falcão for his final remarks.

Thank you all for attending the call and we have great expectations for the next call. The call for the second quarter for us is good because we have a greater visibility of the year. It's good to share with you and so that we can look at IRB as two different businesses live and non-life and not looking at the quarter only but as a film of the last 12 months. I would just like to touch on one point. There were some questions that were not specifically answered, and the main one is why did we cancel our treasury stock? That this. It's a regulatory answer. We need to cancel the treasury stock due to a regulatory requirement. Okay. And with that I close this call, and I thank you all for attending. Let's continue working our challenges to grow premiums with profitability. As Castillo always says, Fred is now dealing with expenses, and I hope Castillo improves premiums so that Fred will work on a better ratio, and he will also work to reduce expenses. And now we're starting again this three-year business plan project to focus on growth. In the beginning of the year, we declared the end of turnaround, so we are looking forward very excited with this team we have so that we can achieve consistent returns in a perennial company.

Thank you all and have a good day.

The video conference call for the earnings release of the first quarter of 2025 of IRB(Re) has now ended. The Investor Relations department is available to answer any questions you may have. Thank you all for attending and have a good afternoon!