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RatioValues observed

20142014 Estimates (%)

2014 Estimates

Revised (%)

BB Seguridade - Adjusted ROAE 51,3 44 - 49 Maintained

Premiums Written Growth - Life, Rural and Housing - BB

Mapfre SH116.7 24 - 32 Maintained

Premiums Written Growth - P&C - Mapfre BB SH2 14.8 19 - 26 12 - 15

Collection Growth - Pensions Plans 38.0 33 - 47 Maintained

Collection Growth - Premium Bonds 5.0 10 - 15 3 - 6

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3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13

Earnings Summary (R $ tho usand)

Revenues 791,020 1,156,301 1,121,324 41.8 (3.0) 2,258,851 3,200,023 41.7

Expenses (126,171) (129,995) (133,427) 5.8 2.6 (357,330) (404,090) 13.1

Net income 547,832 845,424 822,279 50.1 (2.7) 1,570,142 2,316,426 47.5

Adjusted net income 547,832 845,424 822,279 50.1 (2.7) 1,553,106 2,316,426 49.1

Adjusted ROAE(%)¹ 42.6 64.9 60.9 18.2 p.p. -4.1 p.p. 37.2 51.3 14.1 p.p.

P erfo rmance R at io s (%)

Insurance - Life, mo rtgage life and rural

Loss ratio 34.7 31.5 31.7 -3.0 p.p. 0.2 p.p. 35.4 33.4 -2.0 p.p.

Comission ratio 27.2 26.4 26.1 -1.1 p.p. -0.2 p.p. 26.8 26.4 -0.5 p.p.

Technical margin 38.2 42.3 42.3 4.1 p.p. - 37.9 40.4 2.5 p.p.

Combined ratio 77.6 71.0 71.0 -6.6 p.p. - 77.5 73.5 -4.0 p.p.

Expanded combined ratio 71.5 65.8 66.1 -5.4 p.p. 0.4 p.p. 72.7 68.2 -4.5 p.p.

Adjusted ROAE 33.1 50.2 56.0 22.9 p.p. 5.8 p.p. 26.0 42.1 16.1 p.p.

Insurance - P ro perty & C asualty

Loss ratio 56.5 60.0 56.2 -0.3 p.p. -3.7 p.p. 54.7 57.3 2.6 p.p.

Comission ratio 24.0 22.4 22.3 -1.7 p.p. -0.1 p.p. 23.8 22.7 -1.1 p.p.

Technical margin 19.5 17.6 21.5 2.0 p.p. 3.9 p.p. 21.5 20.1 -1.4 p.p.

Combined ratio 99.8 101.5 97.8 -2.0 p.p. -3.7 p.p. 97.4 98.4 1.0 p.p.

Expanded combined ratio 96.1 95.5 93.0 -3.1 p.p. -2.5 p.p. 94.9 93.4 -1.5 p.p.


P ensio n plans

Comission ratio 1.7 0.8 1.1 -0.6 p.p. 0.3 p.p. 1.1 1.0 -0.1 p.p.


P remium bo nds

Comission ratio 43.9 49.1 45.1 1.3 p.p. -4.0 p.p. 44.6 47.3 2.7 p.p.

Premium bonds margin 10.9 15.1 21.1 10.2 p.p. 5.9 p.p. 18.8 17.5 -1.3 p.p.

Adjusted ROAE 51.7 171.0 116.4 64.7 p.p. -54.6 p.p. 51.0 109.4 58.4 p.p.

B ro kerage

Adjusted operating margin 74.9 80.8 81.8 7.0 p.p. 1.1 p.p. 74.2 79.8 5.5 p.p.

Adjusted net margin 51.2 56.1 56.7 5.5 p.p. 0.6 p.p. 50.8 55.3 4.5 p.p.

Quarterly F lo w C hg. % 9 M o nths F lo w

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Shareho lders Shares Share %

B anco do B rasil 1 1,325,000,000 66.25

T reasury Sto cks 1 9,287 0.00

F ree F lo at 46,586 674,990,713 33.75

Foreign 1,093 467,417,301 23.37

Companies 4,373 172,478,415 8.62

Individuals 41,120 35,094,997 1.75

T o tal 46,588 2,000,000,000 100.00

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R $ tho usand 2Q14 3Q14

Average daily volume traded BBSE3 131,070 135,504

Average daily volume traded BM &FBOVESPA 5,995,825 6,547,150

Percentage of BBSE3 in the average daily vo lume traded in the BM &FBOVESPA (%) 2.19 2.07

Earnings per share (R$)

Book Value (R$)

M arket Value (R$ million)

Price/Book value

BBSE3 Closing Price - (R$)

Dividend yield (% )

Sep/ 14

0.41

64,400

8.88

32.20

3.63

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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13

A djusted net inco me 547,832 845 ,424 822,279 50.1 (2 .7) 1,553,106 2,316 ,426 49.1

Brasilcap: changes in the accounting method fo r unique payment plans - - - - - 35,274 - -

BB Corretora: new comissions - - - - - (29,923) - -

BB Corretora: tax expenses on new commissions - - - - - 2,289 - -

Tax effects on extraordinary events - - - - - 9,395 - -

N et inco me 547,832 845 ,424 822,279 50.1 (2 .7) 1,570,142 2,316 ,426 47.5


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R $ tho usand 3Q14 A djustments3Q14

adjusted

Operat ing revenues 1,070,854 - 1,070,854

Income from brokerage 562,559 - 562,559

Equity income 508,295 - 508,295

Insurance life, mortgage life and rural 272,219 - 272,219

Insurance auto and property & casualty 35,372 - 35,372

Pension plans 139,620 - 139,620

Premium bonds 49,416 - 49,416

Reinsurance 12,833 - 12,833

Dental Insurance (1,165) - (1,165)

Other inco me (expenses) (82,957) - (82,957)

Interest revenue 50,470 - 50,470

Personnel expenses (9,246) - (9,246)

Administrative expenses (59,682) - (59,682)

Other revenues/expenses (64,499) - (64,499)

Earnings befo re taxes 987,897 - 987,897

Taxes (165,618) - (165,618)

N et inco me 822,279 - 822,279

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adjusted

Operat ing revenues 1,116,393 - 1,116,393


Equity income 506,544 - 506,544



Pension plans 124,771 - 124,771








Earnings befo re taxes 1,026,306 - 1,026,306

Taxes (180,882) - (180,882)

N et inco me 845,424 - 845,424

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Operat ing revenues 755,338 - 755,338


Equity income 329,841 - 329,841



Pension plans 114,931 - 114,931








Earnings befo re taxes 664,849 - 664,849

Taxes (117,017) - (117,017)

N et inco me 547,832 - 547,832

Quarterly F lo w

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Operat ing revenues 755,338 1,116,393 1,070,854 41.8 (4 .1) 2 ,162,914 3,072,637 42.1

Income from brokerage 425,497 609,849 562,559 32.2 (7.8) 1,259,975 1,660,311 31.8

Equity income 329,841 506,544 508,295 54.1 0.3 902,939 1,412,326 56.4

Insurance life, mortgage life and

rural165,756 252,659 272,219 64.2 7.7 446,787 697,414 56.1

Insurance auto and property &

casualty19,594 23,206 35,372 80.5 52.4 71,689 101,685 41.8

Pension plans 114,931 124,771 139,620 21.5 11.9 319,083 395,736 24.0

Premium bonds 17,764 59,538 49,416 178.2 (17.0) 53,584 150,879 181.6

Reinsurance 11,796 46,370 12,833 8.8 (72.3) 11,796 67,777 474.6

Dental Insurance - - (1,165) - - - (1,165) -

Other inco me (expenses) (90,489) (90,087) (82,957) (8.3) (7 .9) (269,033) (276,704) 2.9

Interest revenue 35,682 39,908 50,470 41.4 26.5 90,586 127,386 40.6

Personnel expenses (6,636) (10,739) (9,246) 39.3 (13.9) (15,550) (28,348) 82.3

Administrative expenses (65,437) (73,463) (59,682) (8.8) (18.8) (200,630) (211,778) 5.6

Other expenses (54,098) (45,793) (64,499) 19.2 40.8 (143,439) (163,964) 14.3

Earnings befo re taxes 664,849 1,026,306 987,897 48.6 (3 .7) 1,893,881 2,795,933 47.6

Taxes (117,017) (180,882) (165,618) 41.5 (8.4) (340,774) (479,507) 40.7

A djusted net inco me 547,832 845,424 822,279 50.1 (2 .7) 1,553,106 2,316,426 49.1


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through P /L25 76 59 136.0 (22.4) 35 135 285.7

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Brokerage 19,121 21,560 33,184 73.5 53.9 46,264 78,651 70.0



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Operational support (33,913) (31,719) (23,299) (31.3) (26.5) (94,772) (92,556) (2.3)

Data processing (16,798) (9,641) (8,482) (49.5) (12.0) (51,788) (36,083) (30.3)

Administrative cost o f products (14,440) (26,036) (26,177) 81.3 0.5 (52,068) (72,737) 39.7

Third-party services (180) (566) (41) (77.2) (92.8) (430) (607) 41.2

Communication (129) (1,139) (459) 255.8 (59.7) (603) (1,598) 165.0

Other 23 (4,362) (1,224) - (71.9) (969) (8,197) 745.9

A dministrat ive expenses (65,437) (73,463) (59,682) (8 .8) (18.8) (200,630) (211,778) 5.6


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Insurance (31) (5,853) (1,493) 4,716.1 (74.5) (1,169) (9,670) 727.2

Brokerage (65,406) (67,610) (58,189) (11.0) (13.9) (199,461) (202,108) 1.3

A dministrat ive expenses (65,437) (73,463) (59,682) (8 .8) (18.8) (200,630) (211,778) 5.6


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Tax expenses (30,991) (45,223) (41,584) 34.2 (8.0) (91,744) (122,525) 33.6

Expenses with payback of

commissions(7,982) - - - - (18,748) (1) (100.0)

Accrual in assets/liabilities (14,711) 386 (21,577) 46.7 - (30,929) (39,189) 26.7

(Constitution)/reversal of provisions

fo r labor, fiscal and civil contingencies(1,416) (1,406) (1,953) 37.9 38.9 (3,242) (5,956) 83.7

Other 1,002 450 615 (38.6) 36.7 1,224 3,707 202.9

A djusted o ther o perat ing

inco me (expenses)(54 ,098) (45 ,793) (64 ,499) 19.2 40.8 (143,439) (163,964) 14 .3

Extrao rdinary events - - - - - 2,289 - -

Tax expenses on new commissions - - - - - 2,289 - -

Other o perat ing inco me

(expenses)(54 ,098) (45 ,793) (64 ,499) 19.2 40.8 (141,150) (163,964) 16 .2

C hg. %Quarterly F lo w 9 M o nths F lo w

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A djusted o ther o perat ing

inco me (expenses)(54 ,098) (45 ,793) (64 ,499) 19.2 40.8 (143,439) (163,964) 14 .3

Insurance (8,201) (3,531) (7,791) (5.0) 120.6 (20,088) (20,041) (0.2)

Brokerage (45,897) (42,262) (56,708) 23.6 34.2 (123,351) (143,923) 16.7

Extrao rdinary events - - - - - 2,289 - -

Insurance - - - - - - - -

Brokerage - - - - - 2,289 - -

Other o perat ing inco me

(expenses)(54 ,098) (45 ,793) (64 ,499) 19.2 40.8 (141,126) (163,964) 16 .2

Insurance (8,201) (3,531) (7,791) (5.0) 120.6 (20,088) (20,041) (0.2)

Brokerage (45,897) (42,262) (56,708) 23.6 34.2 (121,062) (143,923) 18.9

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A ssets 7,826,383 9,354,988 8,981,330 14.8 (4.0)

Cash and cash equivalents 1,014,933 1,862,421 1,610,331 58.7 (13.5)

Financial assets 3,016 3,177 651 (78.4) (79.5)

Investments 6,112,205 6,651,794 6,518,222 6.6 (2.0)

Tax assets 93,685 118,962 137,225 46.5 15.4

Receivables 467,788 574,289 568,094 21.4 (1.1)

Other assets 134,756 144,345 146,807 8.9 1.7

Liabilit ies 1,436,804 2,081,380 1,728,602 20.3 (16.9)

Provision for fiscal, civil and tax contingencies 8,703 12,239 14,192 63.1 16.0

Dividends Payable 180 354,860 - - -

Tax liabilities 470,356 471,781 459,562 (2.3) (2.6)

Unearned commissions 911,692 1,202,130 1,221,478 34.0 1.6

Other liabilities 45,873 40,370 33,370 (27.3) (17.3)

Shareho lders' Equity 6,389,579 7,273,608 7,252,728 13.5 (0.3)

B alance C hg. %

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R $ tho usand Sep/ 14 Sep/ 13 Jun/ 14 Sep/ 14

Insurance, P rivate P ensio n and P remium B o nds

BB Seguros Participações Holding (1) 100.0 5,942,144 6,309,539 6,816,552

Insurance bro kerage

BB Cor Participações Holding (1) 100.0 259,787 43,452 362,400

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Insurance

B B M apfre SH 1 P art ic ipaçõ es

S.A .Ho lding (2) 75.0 2,580,210 2,662,079 2,512,865

Companhia de Seguros Aliança do

BrasilInsurance

M apfre Vida S.A . Insurance

Vida Seguradora S.A. Insurance

M apfre B B SH 2 P art ic ipaçõ es

S.A .Ho lding (2) 50.0 1,750,562 1,938,688 1,974,283

Aliança do Brasil Seguros S.A. Insurance

Brasilveículos Companhia de

SegurosInsurance

M apfre Seguros Gerais S.A . Insurance

M apfre Affinity Seguradora S.A. Insurance

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P ensio n P lans

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P revidênciaInsurance/ P ensio n P lans (2) 75.0 948,878 1,124,995 1,110,795

H ealth

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P remium B o nds

B rasilcap C apita lização P remium B o nds (2) 66.7 277,915 347,265 331,443

B B C apita lização P remium B o nds (1) 100.0 5,527 5,514 5,554

R einsurance

IR B R einsurance (2) 20.5 554,640 575,018 586,252

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B B C o rreto ra de Seguro s e

A dm. de B ensInsurance B ro ker (1) 100.0 251,219 35,010 353,872

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B alance in D ecember 31, 2012 5.633 .268 - - - - 5.106 5.638.374

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N et inco me fo r the perio d - - - - 1.570.142 - 1.570.142

Balance in September 30, 2013 5.646.768 - 204.462 - 547.832 (9.483) 6.389.579

C hanges in the P erio d 13.500 - 204.462 - 547.832 (14.589) 751.205

Balance in December 31, 2013 5.646.768 - 1.311.186 - - (16.681) 6.941.273

Transactions with stock payments - 266 - (266) - - -

Additional dividends proposed in 2º half,2013 - - (816.436) - - - (816.436)

Legal and statuto ry reserves - - 298.830 - (298.830) - -

Additional dividends proposed in 1º half,2014 - - 840.457 - (840.457) - -

M inimum mandatory dividend - - - - (354 .680) - (354 .680)

Additional dividends in 1º half,2014 - - (840.457) - - - (840.457)

Accumulated o ther comprehensive income - - - - - 6.782 6.782

N et inco me fo r the perio d - - - - 2 .316.426 - 2 .316.426

Balance in September 30, 2014 5.646.768 266 793.580 (266) 822.279 (9.899) 7.252.728

C hanges in the P erio d - 266 (517.606) (266) 822.279 6.782 311.455

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P remiums writ ten 1,520,681 2,148,096 1,552,505 2.1 (27.7) 4 ,504,732 5,256,773 16.7

Changes in technical reserves - premiums (272,093) (629,006) 85,756 - - (1,027,587) (656,588) (36.1)

Earned premiuns 1,248,588 1,519,090 1,638,261 31.2 7.8 3,477,145 4,600,185 32.3

Revenue o f policy issuance 1,238 2,219 1,931 56.0 (13.0) 4,783 7,156 49.6

Claims incurred (428,171) (437,315) (474,089) 10.7 8.4 (1,189,715) (1,680,148) 41.2

Acquisition costs (304,054) (362,130) (389,483) 28.1 7.6 (854,661) (1,100,918) 28.8

Result with reinsurance (91,150) (140,343) (146,762) 61.0 4.6 (229,978) (139,331) (39.4)

Administrative expenses (65,812) (75,259) (71,986) 9.4 (4.3) (190,727) (213,581) 12.0

Tax expenses (36,221) (45,510) (42,330) 16.9 (7.0) (110,977) (138,658) 24.9

Other operating income (expenses) (74,083) (62,298) (83,249) 12.4 33.6 (189,139) (225,897) 19.4

Underwrit ing result 250,335 398,454 432,293 72.7 8.5 716,731 1,108,808 54.7

N et investment inco me 94,968 109,202 109,486 15.3 0.3 209,904 322,527 53.7

Financial income 113,845 148,690 140,514 23.4 (5.5) 280,475 425,109 51.6

Financial expenses (18,877) (39,488) (31,028) 64.4 (21.4) (70,571) (102,582) 45.4

Equity income (6,848) (8,153) (8,086) 18.1 (0.8) (23,774) (22,791) (4.1)

Operat ing result 338,455 499,503 533,693 57.7 6.8 902,861 1,408,544 56.0

Gains or losses on non-current assets (46) 2 - - - 32 42 31.3

Earnings befo re taxes and pro f it

sharing338,409 499,505 533,693 57.7 6.8 902,893 1,408,586 56.0

Taxes (113,701) (158,633) (167,253) 47.1 5.4 (299,095) (466,761) 56.1

Profit sharing (3,668) (3,946) (3,434) (6.4) (13.0) (8,002) (11,815) 47.7

N et inco me 221,040 336,926 363,006 64.2 7.7 595,796 930,010 56.1


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C hg. %


P remiums writ ten 1,520,681 2,148,096 1,552,505 2.1 (27.7) 4,504,732 5,256,773 16.7

Premiums ceded reinsurance (171,691) (263,121) (99,306) (42.2) (62.3) (398,600) (478,956) 20.2

R eta ined P remiums 1,348,990 1,884,975 1,453,199 7.7 (22.9) 4,106,132 4,777,817 16.4

Changes in technical reserves - premiums (232,833) (511,325) 36,280 - - (920,197) (599,824) (34.8)

Earned premiuns 1,116,157 1,373,651 1,489,479 33.4 8 .4 3,185,936 4,177,994 31.1

Revenue of policy issuance 1,238 2,219 1,931 56.0 (13.0) 4,783 7,156 49.6

Claims incurred (386,890) (432,220) (472,072) 22.0 9.2 (1,128,484) (1,397,291) 23.8

Acquisition costs (304,054) (362,130) (389,483) 28.1 7.6 (854,661) (1,100,918) 28.8

Administrative expenses (65,812) (75,259) (71,986) 9.4 (4.3) (190,727) (213,581) 12.0

Tax expenses (36,221) (45,510) (42,330) 16.9 (7.0) (110,977) (138,658) 24.9


Underwrit ing result 250,335 398,454 432,292 72.7 8 .5 716,731 1,108,807 54.7

N et investment inco me 94,968 109,202 109,486 15.3 0 .3 209,904 322,527 53.7

Financial income 113,845 148,690 140,514 23.4 (5.5) 280,475 425,109 51.6

Financial expenses (18,877) (39,488) (31,028) 64.4 (21.4) (70,571) (102,582) 45.4

Equity income (6,848) (8,153) (8,086) 18.1 (0.8) (23,774) (22,791) (4.1)

Operat ing result 338,455 499,503 533,693 57.7 6 .8 902,861 1,408,544 56.0

Gains or losses on non-current assets (46) 2 - - - 32 42 31.3

Earnings befo re taxes and pro fit sharing 338,409 499,505 533,693 57.7 6 .8 902,893 1,408,586 56.0

Taxes (113,701) (158,633) (167,253) 47.1 5.4 (299,095) (466,761) 56.1

Profit sharing (3,668) (3,946) (3,434) (6.4) (13.0) (8,002) (11,815) 47.7

N et inco me 221,040 336,926 363,006 64.2 7 .7 595,796 930,010 56.1


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P erfo rmance rat io s

Loss ratio 34.7 31.5 31.7 (3.0) 0.2 35.4 33.4 (2.0)

Comisssion ratio 27.2 26.4 26.1 (1.1) (0.2) 26.8 26.4 (0.5)

Underwriting margin 38.2 42.3 42.3 4.1 (0.0) 37.9 40.4 2.5

G&A ratio 15.8 13.3 13.3 (2.5) (0.1) 15.4 13.8 (1.6)

Combined ratio 77.6 71.0 71.0 (6.6) (0.0) 77.5 73.5 (4.0)

Expanded combined ratio 71.5 65.8 66.1 (5.4) 0.4 72.7 68.2 (4.5)

Adjusted net margin 19.8 24.5 24.4 4.6 (0.2) 18.7 22.3 3.6

Adjusted ROAE 33.1 50.2 56.0 22.9 5.8 26.0 42.1 16.1

Quarterly F lo w A bs. C hg. (p.p.) 9 M o nths F lo w

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Life 632,709 687,744 714,224 12.9 3.9 1,933,439 2,112,041 9.2

Credit Life 407,202 682,531 344,950 (15.3) (49.5) 1,302,004 1,381,719 6.1

M ortgage Life 52,708 41,064 45,801 (13.1) 11.5 115,457 131,360 13.8

Rural 383,605 673,532 391,066 1.9 (41.9) 992,477 1,414,523 42.5

Other 44,458 63,226 56,465 27.0 (10.7) 161,356 217,130 34.6

T o tal 1,520,681 2 ,148,097 1,552,506 2.1 (27.7) 4,504 ,733 5,256,775 16.7

C hannel

Bancassurance Channel 1,330,217 1,933,061 1,342,163 0.9 (30.6) 3,844,020 4,535,383 18.0

Other Channel 190,465 215,036 210,343 10.4 (2.2) 660,712 721,392 9.2

T o tal 1,520,681 2 ,148,097 1,552,506 2.1 (27.7) 4,504 ,733 5,256,775 16.7


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Life 625,890 679,687 713,202 14.0 4.9 1,916,188 2,104,543 9.8

Credit Life 406,558 682,011 344,878 (15.2) (49.4) 1,299,955 1,380,814 6.2

M ortgage Life 19,497 32,543 42,065 115.8 29.3 76,290 110,621 45.0

Rural 252,587 427,508 296,590 17.4 (30.6) 652,345 964,710 47.9

Other 44,458 63,226 56,465 27.0 (10.7) 161,356 217,130 34.6

T o tal 1,348,990 1,884,976 1,453,200 7.7 (22.9) 4,106,133 4,777,818 16.4

C hannel

Bancassurance Channel 1,163,253 1,671,739 1,243,509 6.9 (25.6) 3,460,267 4,055,864 17.2

Other Channel 185,737 213,237 209,691 12.9 (1.7) 645,867 721,954 11.8

T o tal 1,348,990 1,884,976 1,453,200 7.7 (22.9) 4,106,133 4,777,818 16.4


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Life 592,989 682,987 701,253 18.3 2.7 1,773,255 2,052,599 15.8

Credit Life 252,409 299,553 369,889 46.5 23.5 640,074 929,969 45.3

M ortgage Life 21,060 30,118 41,143 95.4 36.6 70,006 106,412 52.0

Rural 205,129 298,341 321,251 56.6 7.7 541,472 874,070 61.4

Other 44,569 62,653 55,943 25.5 (10.7) 161,129 214,944 33.4

T o tal 1,116,157 1,373,651 1,489,479 33.4 8.4 3,185,936 4,177,994 31.1

C hannel

Bancassurance Channel 915,311 1,147,913 1,264,894 38.2 10.2 2,521,356 3,468,524 37.6

Other Channel 200,846 225,739 224,585 11.8 (0.5) 664,580 709,470 6.8

T o tal 1,116,157 1,373,651 1,489,479 33.4 8.4 3,185,936 4,177,994 31.1


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Life (240,788) (235,267) (254,040) 5.5 8.0 (717,526) (749,659) 4.5

Credit Life (55,648) (105,969) (123,983) 122.8 17.0 (146,118) (290,009) 98.5

M ortgage Life (340) (6,312) (4,629) 1,260.3 (26.7) (7,260) (9,713) 33.8

Rural (51,318) (29,702) (40,243) (21.6) 35.5 (116,152) (158,484) 36.4

Other (38,796) (54,970) (49,176) 26.8 (10.5) (141,429) (189,426) 33.9

T o tal (386,890) (432,220) (472,072) 22.0 9.2 (1,128,484) (1,397 ,291) 23.8

C hannel - - - - -

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Other Channel (114,821) (99,290) (120,648) 5.1 21.5 (367,744) (354,033) (3.7)

T o tal (386,890) (432,220) (472,072) 22.0 9.2 (1,128,484) (1,397 ,291) 23.8


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Life (190,932) (219,978) (222,504) 16.5 1.1 (565,174) (661,375) 17.0

Credit Life (66,751) (78,320) (97,698) 46.4 24.7 (167,264) (249,023) 48.9

M ortgage Life (4,236) (3,395) (3,875) (8.5) 14.1 (9,028) (11,141) 23.4

Rural (41,127) (59,470) (64,611) 57.1 8.6 (110,487) (176,248) 59.5

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T o tal (304,054) (362,130) (389,483) 28.1 7.6 (854,661) (1,100,918) 28.8

C hannel

Bancassurance Channel (262,446) (323,052) (349,541) 33.2 8.2 (723,437) (978,717) 35.3

Other Channel (41,608) (39,077) (39,942) (4.0) 2.2 (131,224) (122,201) (6.9)

T o tal (304,054) (362,130) (389,483) 28.1 7.6 (854,661) (1,100,918) 28.8


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(p.p.)

% 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13

Life

Loss ratio 40.6 34.4 36.2 (4.4) 1.8 40.5 36.5 (3.9)

Comisssion ratio 32.2 32.2 31.7 (0.5) (0.5) 31.9 32.2 0.3

C redit life

Loss ratio 22.0 35.4 33.5 11.5 (1.9) 22.8 31.2 8.4

Comisssion ratio 26.4 26.1 26.4 (0.0) 0.3 26.1 26.8 0.6

M o rtgage life

Loss ratio 1.6 21.0 11.3 9.6 (9.7) 10.4 9.1 (1.2)


R ural

Loss ratio 25.0 10.0 12.5 (12.5) 2.6 21.5 18.1 (3.3)

Comisssion ratio 20.0 19.9 20.1 0.1 0.2 20.4 20.2 (0.2)

Others

Loss ratio 87.0 87.7 87.9 0.9 0.2 87.8 88.1 0.4



A bs. C hg.

(p.p.)

% 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13

B ancassurance C hannel

Loss ratio 29.7 29.0 27.8 (1.9) (1.2) 30.2 30.1 (0.1)


Other C hannel

Loss ratio 57.2 44.0 53.7 (3.4) 9.7 55.3 49.9 (5.4)

Comisssion ratio 20.7 17.3 17.8 (2.9) 0.5 19.7 17.2 (2.5)


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A vailable fo r t rading

Pre-Fixed 199,967 118,321 203,320 1.7 71.8

Floating - CDI 1,426,438 1,545,566 1,683,898 18.0 9.0

Linked to inflation 176,078 264,243 147,600 (16.2) (44.1)

Other 318,465 395,890 376,064 18.1 (5.0)

T o tal 2 ,120,949 2,324,021 2,410,882 13.7 3.7

B alance C hg. %

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A ssets 10,912,128 12,652,416 12,695,514 16.3 0.3

Cash and cash equivalents 1,165,005 213,146 351,373 (69.8) 64.9

Financial assets 3,681,221 5,017,195 5,125,945 39.2 2.2

Receivables from insurance and reinsurance operations 2,034,233 2,637,935 2,718,423 33.6 3.1

Reinsurance and retrocession - technical reserves 312,952 584,589 425,028 35.8 (27.3)

Securities and credits receivable 1,433,835 1,631,958 1,503,387 4.9 (7.9)

Other 5,231 2,080 3,036 (42.0) 46.0

Prepaid expenses 8,573 11,274 12,269 43.1 8.8

Deferred costs 868,357 1,154,172 1,159,446 33.5 0.5

Investments 657,757 657,999 657,961 0.0 (0.0)

Fixed assets 15,763 20,601 20,593 30.6 (0.0)

Intangible 729,201 721,467 718,053 (1.5) (0.5)

Liabilit ies 7,816,391 9,465,697 9,707,772 24.2 2.6

Accounts Payable 771,995 617,761 763,714 (1.1) 23.6

Obligations with insurance and reinsurance operations 1,437,041 1,537,395 1,630,960 13.5 6.1

Technical reserves - insurance 4,782,281 6,595,084 6,391,472 33.6 (3.1)

Third party deposits 44,797 145,915 341,982 663.4 134.4

Other liabilities 780,277 569,542 579,644 (25.7) 1.8

Shareho lders' Equity 3,095,736 3,186,719 2,987,742 (3 .5) (6 .2)

B alance C hg. %

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M apfre Vida

A djusted shareho lders' equity (a) 161,423 179,169 175,550 8.8 (2 .0)

M inimum C apita l required (b) 146,350 138,569 137,960 (5.7) (0 .4)

Additional Capital for Underwritting Risk 126,343 127,573 128,401 1.6 0.6

Additional Capital for Credit Risk 31,953 17,557 15,040 (52.9) (14.3)

Additional Capital for Operating Risk 1,366 1,373 1,416 3.7 3.2

Benefit o f correlation between risks (13,311) (7,933) (6,897) (48.2) (13.1)

C apita l A dequacy (a) - (b) 15,072 40,600 37,590 149.4 (7 .4)

So lvency rat io (a) / (b) - % 110.3 129.3 127.2 16.9 p.p. -2.1 p.p.

A liança do B rasil

A djusted shareho lders' equity (a) 1,297,860 1,409,568 1,366,547 5.3 (3.1)

M inimum C apita l required (b) 982,812 1,146,788 1,150,778 17.1 0.3

Additional Capital for Underwritting Risk 875,874 1,004,725 1,012,370 15.6 0.8

Additional Capital for Credit Risk 164,713 213,111 201,959 22.6 (5.2)


Benefit o f correlation between risks (71,797) (91,334) (87,325) 21.6 (4.4)

C apita l A dequacy (a) - (b) 315,048 262,780 215,769 (31.5) (17.9)

So lvency rat io (a) / (b) - % 132.1 122.9 118.7 -13.3 p.p. -4 .2 p.p.

Vida Segurado ra

A djusted shareho lders' equity (a) 415,118 171,622 158,510 (61.8) (7 .6)

M inimum C apita l required (b) 47,615 48,023 47,151 (1.0) (1.8)

Additional Capital for Underwritting Risk 40,480 41,551 41,532 2.6 (0.0)

Additional Capital for Credit Risk 10,349 9,396 8,118 (21.6) (13.6)

Additional Capital for Operating Risk 1,090 1,064 1,021 (6.4) (4.1)

Benefit o f correlation between risks (4,303) (3,988) (3,520) (18.2) (11.7)

C apita l A dequacy (a) - (b) 367,503 123,599 111,359 (69.7) (9 .9)

So lvency rat io (a) / (b) - % 871.8 357.4 336.2 -535.6 p.p. -21.2 p.p.

T o tal B B M apfre SH 1

A djusted shareho lders' equity (a) 1,874,401 1,760,359 1,700,607 (9.3) (3 .4)

M inimum C apita l required (b) 1,176,777 1,333,380 1,335,889 13.5 0.2

Additional Capital for Underwritting Risk 1,042,697 1,173,849 1,182,303 13.4 0.7



Benefit o f correlation between risks (89,412) (103,255) (97,743) 9.3 (5.3)

C apita l A dequacy (a) - (b) 697,623 426,979 364,718 (47.7) (14.6)

So lvency rat io (a) / (b) - % 159.3 132.0 127.3 -32.0 p.p. -4 .7 p.p.

C hg. %B alance

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M arket share % 19.2 22.4 18.8

Ranking 1º 1º 2º

M o rtgage life

M arket share % 9.3 6.3 7.0

Ranking 3º 3º 3º

R ura l

M arket share % 76.6 80.3 71.8

Ranking 1º 1º 1º

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C hg. %


P remiums writ ten2,122,109 2,250,085 2,362,791 11.3 5.0 5,786,259 6,642,948 14.8

Changes in technical reserves -

premiums (184,421) (243,610) (318,292) 72.6 30.7 (319,855) (577,654) 80.6

Earned premiuns1,937,688 2,006,475 2,044,500 5.5 1.9 5,466,404 6,065,295 11.0

Revenue of policy issuance170 663 1,180 593.8 77.9 (429) 3,973 -

Claims incurred(1,021,427) (1,071,929) (1,472,808) 44.2 37.4 (2,990,511) (3,659,977) 22.4

Acquisition costs(400,362) (391,598) (400,216) (0.0) 2.2 (1,168,051) (1,210,629) 3.6

Result with reinsurance(190,561) (235,667) 213,337 - - (253,671) (130,518) (48.5)

Administrative expenses(220,131) (219,552) (213,982) (2.8) (2.5) (629,113) (646,892) 2.8

Tax expenses(40,944) (43,328) (43,734) 6.8 0.9 (129,953) (137,632) 5.9

Other operating income (expenses)(61,189) (70,611) (88,722) 45.0 25.6 (168,822) (199,621) 18.2

Underwrit ing result3 ,244 (25,547) 39,554 1,119.3 - 125,854 83,998 (33 .3 )

N et investment inco me65,174 108,796 92,427 41.8 (15 .0 ) 133,038 286,868 115.6

Financial income120,079 136,673 204,652 70.4 49.7 263,718 443,875 68.3

Financial expenses(54,905) (27,877) (112,225) 104.4 302.6 (130,680) (157,007) 20.1

Equity income(2,032) (1,694) (1,393) (31.4) (17.8) (5,020) (4,712) (6.1)

Operat ing result66 ,386 81,555 130,588 96.7 60.1 253,872 366,154 44.2

Gains or losses on non-current assets(82) (81) 50 - - (6) (32) 433.3


sharing 66,304 81,474 130,638 97.0 60.3 253,866 366,122 44.2

Taxes(18,093) (25,859) (51,019) 182.0 97.3 (81,912) (139,035) 69.7

Profit sharing (9,022) (9,204) (8,877) (1.6) (3.6) (28,574) (23,724) (17.0)

N et inco me 39,189 46,411 70,742 80.5 52.4 143,380 203,364 41.8


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P remiums writ ten2,122,109 2,250,085 2,362,791 11.3 5.0 5,786,259 6,642,948 14.8

Premiums ceded reinsurance (355,482) (352,542) (343,419) (3.4) (2.6) (602,283) (964,390) 60.1

R etained premiums 1,766,627 1,897,543 2,019,372 14.3 6.4 5,183,977 5,678,559 9.5

Changes in technical reserves - premiums(96,604) (151,096) (225,597) 133.5 49.3 (276,746) (351,795) 27.1

Earned premiuns1,670,023 1,746,447 1,793,775 7.4 2.7 4,907,230 5,326,764 8.5

Revenue of policy issuance 170 663 1,180 593.8 77.9 (429) 3,973 -

Claims incurred(944,323) (1,047,568) (1,008,746) 6.8 (3.7) (2,685,008) (3,051,963) 13.7

Acquisition costs(400,362) (391,598) (400,216) (0.0) 2.2 (1,168,051) (1,210,629) 3.6

Administrative expenses(220,131) (219,552) (213,982) (2.8) (2.5) (629,113) (646,892) 2.8

Tax expenses(40,944) (43,328) (43,734) 6.8 0.9 (129,953) (137,632) 5.9

Other operating income (expenses)(61,189) (70,611) (88,722) 45.0 25.6 (168,822) (199,621) 18.2

Underwrit ing result3 ,244 (25,548) 39,554 1,119.3 - 125,854 83,999 (33.3)

N et investment inco me65,174 108,796 92,427 41.8 (15.0) 133,038 286,868 115.6

Financial income120,079 136,673 204,652 70.4 49.7 263,718 443,875 68.3

Financial expenses(54,905) (27,877) (112,225) 104.4 302.6 (130,680) (157,007) 20.1

Equity income(2,032) (1,694) (1,393) (31.4) (17.8) (5,020) (4,712) (6.1)

Operating result66,386 81,554 130,588 96.7 60.1 253,872 366,155 44.2

Gains or losses on non-current assets(82) (81) 50 - - (6) (32) 433.3

T axes(18,093) (25,859) (51,019) 182.0 97.3 (81,912) (139,035) 69.7

Profit sharing (9,022) (9,204) (8,877) (1.6) (3.6) (28,574) (23,724) (17.0)

N et inco me39,189 46,411 70,742 80.5 52.4 143,380 203,364 41.8


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P e rf o rm a nc e ra t io s

Lo ss rat io 56.5 60.0 56.2 (0.3) (3.7) 54.7 57.3 2.6

Co m iss io n rat io 24.0 22.4 22.3 (1.7) (0.1) 23.8 22.7 (1.1)

Underwrit ing m argin 19.5 17.6 21.5 2.0 3.9 21.5 20.1 (1.4)

G&A ratio 19.3 19.1 19.3 0.0 0.2 18.9 18.5 (0.4)

Co m bined ratio 99.8 101.5 97.8 (2.0) (3.7) 97.4 98.4 1.0

Expanded co m bined rat io 96.1 95.5 93.0 (3.1) (2.5) 94.9 93.4 (1.5)

A djus ted net m argin 2.3 2.7 3.9 1.6 1.3 2.9 3.8 0.9

A djus ted R OA E 6.2 6.5 9.8 3.6 3.3 7.6 9.3 1.7

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Vehicles 1,180,029 1,229,918 1,305,209 10.6 6.1 3,297,295 3,589,131 8.9

Casualties 695,075 758,434 811,378 16.7 7.0 1,732,173 2,245,231 29.6

Other 247,005 261,733 246,202 (0.3) (5.9) 756,792 808,585 6.8

T o ta l 2,122 ,109 2,250 ,085 2,362 ,790 11.3 5.0 5,786,260 6,642,947 14.8

C hannel

Bancassurance Channel 623,056 645,522 738,710 18.6 14.4 1,835,782 1,965,207 7.1

Other Channel 1,499,054 1,604,563 1,624,080 8.3 1.2 3,950,477 4,677,740 18.4

T o ta l 2,122 ,109 2,250 ,085 2,362 ,790 11.3 5.0 5,786,260 6,642,947 14.8


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Vehicles 1,146,064 1,229,574 1,304,548 13.8 6.1 3,295,950 3,587,998 8.9

Casualties 374,126 406,463 468,757 25.3 15.3 1,132,994 1,282,506 13.2

Other 246,437 261,507 246,066 (0.2) (5.9) 755,033 808,053 7.0

T o ta l 1,766,627 1,897,543 2,019,371 14.3 6.4 5,183,977 5,678,557 9.5

C hannel


Other Channel 1,173,485 1,267,094 1,292,539 10.1 2.0 3,396,530 3,746,190 10.3

T o ta l 1,766,627 1,897,543 2,019,371 14.3 6.4 5,183,977 5,678,557 9.5


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Vehicles 1,062,362 1,104,587 1,157,924 9.0 4.8 3,070,709 3,348,574 9.0

Casualties 367,329 375,698 382,382 4.1 1.8 1,068,305 1,148,047 7.5

Other 240,332 266,161 253,468 5.5 (4.8) 768,216 830,142 8.1

T o ta l 1,670,023 1,746,447 1,793,774 7.4 2.7 4,907,230 5,326,763 8.5

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Other Channel 1,103,490 1,178,248 1,168,710 5.9 (0.8) 3,230,074 3,553,279 10.0

T o ta l 1,670,023 1,746,447 1,793,774 7.4 2.7 4,907,230 5,326,763 8.5


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Vehicles (687,241) (707,011) (759,250) 10.5 7.4 (1,924,343) (2,137,348) 11.1

Casualties (141,039) (179,896) (111,226) (21.1) (38.2) (404,088) (448,785) 11.1

Other (116,043) (160,661) (138,269) 19.2 (13.9) (356,576) (465,829) 30.6

T o tal (944,323) (1,047 ,568) (1,008,746) 6.8 (3 .7) (2,685,008) (3,051,963) 13.7

C hannel


Other Channel (623,981) (722,030) (675,500) 8.3 (6.4) (1,772,611) (2,086,662) 17.7

T o tal (944,323) (1,047 ,568) (1,008,746) 6.8 (3 .7) (2,685,008) (3,051,963) 13.7


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Casualties (136,650) (128,561) (166,363) 21.7 29.4 (380,218) (435,765) 14.6

Other (90,563) (83,266) (45,428) (49.8) (45.4) (272,683) (232,566) (14.7)

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T o tal (400,361) (391,599) (400,215) (0 .0) 2.2 (1,168,051) (1,210,629) 3.6


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Vehicles

Loss ratio 64.7 64.0 65.6 0.9 1.6 62.7 63.8 1.2

Comission ratio 16.3 16.3 16.3 (0.0) (0.0) 16.8 16.2 (0.6)

C asualt ies

Loss ratio 38.4 47.9 29.1 (9.3) (18.8) 37.8 39.1 1.3

Comission ratio 37.2 34.2 43.5 6.3 9.3 35.6 38.0 2.4

Other

Loss ratio 48.3 60.4 54.6 6.3 (5.8) 46.4 56.1 9.7

Comission ratio 37.7 31.3 17.9 (19.8) (13.4) 35.5 28.0 (7.5)


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% 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13

B ancassurance C hannel

Loss ratio 56.5 57.3 53.3 (3.2) (4.0) 54.4 54.4 0.0

Comission ratio 18.4 18.0 17.6 (0.8) (0.4) 18.7 18.2 (0.5)

Other C hannel

Loss ratio 51.6 61.3 57.8 6.2 (3.5) 55.3 58.7 3.4

Comission ratio 21.9 24.6 24.9 3.0 0.3 22.8 25.0 2.2


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R $ t h o u s a n d S e p / 13 J u n/ 14 S e p / 14 O n S e p / 13 O n J u n / 14

A v a ila b le f o r t ra d in g

P re-F ixed 228,156 124,178 45,495 (80.1) (63.4)

F lo at ing - C D I 902,427 1,092,865 1,217,796 34.9 11.4

Linked to inf lat io n 101,547 90,230 42,501 (58.1) (52.9)

Other 911,199 734,745 853,848 (6.3) 16.2

T o t a l 2 ,14 3 ,3 2 9 2 ,0 4 2 ,0 17 2 ,15 9 ,6 3 9 0 .8 5 .8

B a la n c e C h g. %

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A ssets 12,001,396 12,537,371 13,376,067 11.5 6.7

Cash and cash equivalents 1,305,736 141,997 425,186 (67.4) 199.4

Financial assets 2,844,014 3,744,681 3,686,681 29.6 (1.5)

Receivables from insurance and reinsurance operations 3,422,303 3,808,049 3,983,052 16.4 4.6

Reinsurance and retrocession - technical reserves 1,056,120 1,281,441 1,701,252 61.1 32.8

Securities and credits receivable 1,629,955 1,555,897 1,591,459 (2.4) 2.3

Other 250,460 497,280 452,111 80.5 (9.1)

Prepaid expenses 12,299 16,890 24,239 97.1 43.5

Deferred costs 871,116 848,598 863,589 (0.9) 1.8

Investments 265,326 264,994 265,199 (0.0) 0.1

Fixed assets 94,194 89,196 85,619 (9.1) (4.0)

Intangible 249,873 288,348 297,680 19.1 3.2

Liabilit ies 9,395,756 9,579,274 10,346,778 10.1 8.0


Obligations with insurance and reinsurance operations 1,350,876 1,485,656 1,560,879 15.5 5.1

Technical reserves - insurance 5,850,306 6,558,436 7,087,928 21.2 8.1

Third party deposits 251,205 346,137 435,963 73.5 26.0

Other liabilities 1,152,123 563,163 578,350 (49.8) 2.7

Shareho lders' Equity 2,605,640 2,958,098 3,029,289 16.3 2.4

B alance C hg. %

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R $ t ho us a nd S e p / 13 J un / 14 S e p / 14 O n S e p / 13 O n J un/ 14

B ra s ilv e í c ulo s

A djus t e d s ha re ho lde rs ' e quit y ( a ) 4 7 1,2 0 5 5 4 5 ,4 3 4 5 0 9 ,2 7 3 8 .1 ( 6 .6 )

M inim um C a pit a l re quire d ( b ) 4 2 3 ,9 6 1 4 3 8 ,7 2 9 4 2 9 ,5 0 7 1.3 ( 2 .1)

A ddit io nal Capital fo r Underwritt ing R isk 380,298 384,953 383,996 1.0 (0.2)

A ddit io nal Capital fo r C redit R isk 63,161 63,821 55,347 (12.4) (13.3)

A ddit io nal Capital fo r Operat ing R isk 8,466 18,217 15,056 77.8 (17.3)

B enef it o f co rrelat io n between risks (27,964) (28,262) (24,893) (11.0) (11.9)

C a pit a l A de qua c y ( a ) - ( b) 4 7 ,2 4 4 10 6 ,7 0 5 7 9 ,7 6 6 6 8 .8 ( 2 5 .2 )

S o lv e nc y ra t io ( a ) / ( b) - % 111.1 12 4 .3 118 .6 7 .4 p .p . - 5 .8 p .p .

M a pf re A f f in it y S e gura do ra

A djus t e d s ha re ho lde rs ' e quit y ( a ) 4 4 2 ,8 9 0 4 4 0 ,9 9 3 4 3 9 ,7 8 6 ( 0 .7 ) ( 0 .3 )

M inim um C a pit a l re quire d ( b ) 17 2 ,2 5 0 16 6 ,6 4 4 16 5 ,5 5 3 ( 3 .9 ) ( 0 .7 )

A ddit io nal Capital fo r Underwritt ing R isk 152,022 148,115 144,751 (4.8) (2.3)

A ddit io nal Capital fo r C redit R isk 30,892 28,033 31,504 2.0 12.4

A ddit io nal Capital fo r Operat ing R isk 2,659 2,705 2,748 3.3 1.6

B enef it o f co rrelat io n between risks (13,323) (12,209) (13,450) 1.0 10.2

C a pit a l A de qua c y ( a ) - ( b) 2 7 0 ,6 4 0 2 7 4 ,3 4 9 2 7 4 ,2 3 3 1.3 ( 0 .0 )

S o lv e nc y ra t io ( a ) / ( b) - % 2 5 7 .1 2 6 4 .6 2 6 5 .6 8 .5 p .p . 1.0 p .p .

A lia nç a do B ra s il S e guro s

A djus t e d s ha re ho lde rs ' e quit y ( a ) 16 8 ,18 5 17 1,5 8 4 14 9 ,0 7 8 ( 11.4 ) ( 13 .1)

M inim um C a pit a l re quire d ( b ) 12 2 ,116 12 1,2 8 3 12 2 ,4 8 8 0 .3 1.0

A ddit io nal Capital fo r Underwritt ing R isk 104,428 99,678 103,046 (1.3) 3.4

A ddit io nal Capital fo r C redit R isk 23,338 28,412 25,214 8.0 (11.3)


B enef it o f co rrelat io n between risks (9,923) (11,578) (10,564) 6.5 (8.8)

C a pit a l A de qua c y ( a ) - ( b) 4 6 ,0 6 9 5 0 ,3 0 1 2 6 ,5 9 0 ( 4 2 .3 ) ( 4 7 .1)

S o lv e nc y ra t io ( a ) / ( b) - % 13 7 .7 14 1.5 12 1.7 - 16 .0 p .p . - 19 .8 p .p .

M a pf re S e guro s G e ra is

A djus t e d s ha re ho lde rs ' e quit y ( a ) 1,0 0 2 ,3 8 3 9 4 2 ,9 9 4 9 4 0 ,4 12 ( 6 .2 ) ( 0 .3 )

M inim um C a pit a l re quire d ( b ) 7 4 7 ,17 5 8 4 5 ,8 9 8 8 8 2 ,8 9 7 18 .2 4 .4

A ddit io nal Capital fo r Underwritt ing R isk 639,839 743,093 777,321 21.5 4.6



B enef it o f co rrelat io n between risks (57,150) (58,440) (58,468) 2.3 0.0

C a pit a l A de qua c y ( a ) - ( b) 2 5 5 ,2 0 8 9 7 ,0 9 6 5 7 ,5 15 ( 7 7 .5 ) ( 4 0 .8 )

S o lv e nc y ra t io ( a ) / ( b) - % 13 4 .2 111.5 10 6 .5 - 2 7 .6 p .p . - 5 .0 p .p .

T o t a l M a pf re B B S H 2

A djus t e d s ha re ho lde rs ' e quit y ( a ) 2 ,0 8 4 ,6 6 3 2 ,10 1,0 0 5 2 ,0 3 8 ,5 4 9 ( 2 .2 ) ( 3 .0 )

M inim um C a pit a l re quire d ( b ) 1,4 6 5 ,5 0 2 1,5 7 2 ,5 5 4 1,6 0 0 ,4 4 6 9 .2 1.8

A ddit io nal Capital fo r Underwritt ing R isk 1,276,587 1,375,840 1,409,115 10.4 2.4



B enef it o f co rrelat io n between risks (108,360) (110,489) (107,374) (0.9) (2.8)

C a pit a l A de qua c y ( a ) - ( b) 6 19 ,16 1 5 2 8 ,4 5 1 4 3 8 ,10 3 ( 2 9 .2 ) ( 17 .1)

S o lv e nc y ra t io ( a ) / ( b) - % 14 2 .2 13 3 .6 12 7 .4 - 14 .9 p .p . - 6 .2 p .p .

C hg. %B a la nc e

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3Q13 2Q14 3Q14

Vehic les

Fleet (thousand) 2,683 2,768 2,825

M arket share % 14.7 15.3 15.0

Ranking 2º 2º 2º

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Inco me and premiums co ntributio n 3,694,345 9,349,163 7,152,099 93.6 (23.5) 15,627,081 21,565,265 38.0

Provision for benefits to be granted (3,660,729) (9,316,277) (7,117,584) 94.4 (23.6) (15,531,795) (21,465,916) 38.2

N et revenue with co ntribut io ns and VGB L

premiums33,616 32,886 34,515 2.7 5.0 95,286 99,349 4.3

M anagement fee 270,780 287,405 332,892 22.9 15.8 759,621 888,792 17.0

Change in other technical reserves (11,975) (13,592) 134 - - (42,839) (30,073) (29.8)

Expenses with benefits, redemptions and claims (16,916) (16,636) (35,598) 110.4 114.0 (40,760) (52,962) 29.9

Acquisition costs (61,446) (70,447) (78,839) 28.3 11.9 (178,190) (218,146) 22.4

Earned P remiuns 47,412 49,023 48,934 3.2 (0 .2) 138,576 145,184 4.8

Contributions to cover risks 47,505 48,695 49,099 3.4 0.8 140,411 146,086 4.0

Changes in technical reserves related to premiuns (93) 328 (165) 77.4 - (1,835) (902) (50.8)

Gro ss inco me 261,471 268,639 302,038 15.5 12.4 731,694 832,144 13.7

Administrative expenses (65,439) (64,820) (67,545) 3.2 4.2 (187,813) (189,897) 1.1

Tax expenses (22,640) (23,937) (26,288) 16.1 9.8 (63,364) (73,211) 15.5


R esult with pensio n plans and insurance 170,416 174,149 200,472 17.6 15.1 469,137 550,357 17.3

N et investment inco me 80,603 102,659 110,875 37.6 8.0 231,854 329,190 42.0

Financial income 1,355,694 2,349,805 2,164,989 59.7 (7.9) 1,593,704 6,315,334 296.3

Financial expenses (1,275,091) (2,247,146) (2,054,114) 61.1 (8.6) (1,361,850) (5,986,144) 339.6

Equity inco me 2,379 490 489 (79.4) (0 .2) 7 ,161 2,097 (70.7)

Operat ing result 253,398 277,298 311,835 23.1 12.5 708,152 881,643 24.5

Gains or losses on non-current assets 46 13 32 (31.3) 143.2 52 17 (68.1)

Earnings befo re taxes 253,444 277,311 311,867 23.1 12.5 708,204 881,660 24.5

Taxes (97,487) (108,430) (122,915) 26.1 13.4 (275,075) (347,364) 26.3

Profit Sharing (2,707) (2,505) (2,780) 2.7 11.0 (7,635) (6,611) (13.4)

N et inco me 153,250 166,376 186,172 21.5 11.9 425,494 527,685 24.0


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Comission ratio 1.7 0.8 1.1 (0.6) 0.3 1.1 1.0 (0.1)

ROAE 58.4 54.5 58.7 0.2 4.2 49.7 50.1 0.5

ROE 60.9 58.5 58.2 (2.7) (0.2) 54.2 48.4 (5.8)

ROAA 0.8 0.7 0.7 (0.1) 0.0 0.8 0.7 (0.0)

ROA 0.8 0.7 0.8 (0.0) 0.0 0.8 0.7 (0.1)


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A ssets 79,425,615 99,218,406 105,540,475 32.9 6.4

Cash and cash equivalents 5,077 6,565 5,776 13.8 (12.0)

Financial assets 78,542,255 98,123,016 104,383,297 32.9 6.4

Receivables from insurance and reinsurance operations 6,173 2,838 1,684 (72.7) (40.7)

Securities and credits receivable 258,925 313,746 338,400 30.7 7.9

Prepaid expenses 2,393 4,424 2,279 (4.8) (48.5)

Deferred costs 427,554 582,243 621,270 45.3 6.7

Credits from private pension transactions 3,980 4,321 4,250 6.8 (1.6)

Fixed assets 17,175 16,549 16,393 (4.6) (0.9)

Intangible 162,083 164,704 167,126 3.1 1.5

Liabilit ies 78,125,279 97,687,218 104,028,711 33.2 6.5


Liabilities with insurance and reinsurance operations 2,422 6,210 3,914 61.6 (37.0)

Debits from private pension transactions 1,150 1,025 1,540 34.0 50.2

Third party deposits 76,301 213,875 95,156 24.7 (55.5)

Technical reserves - insurance 50,164,850 67,012,175 72,753,617 45.0 8.6

Technical provisions - private pension 27,451,012 30,018,337 30,683,549 11.8 2.2

Other liabilities 172,945 235,700 235,217 36.0 (0.2)

Shareho lders' Equity 1,300,336 1,531,188 1,511,764 16.3 (1.3)

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H eld to maturity Securit ies 8,063,445 8,562,444 8,488,918 5.3 (0 .9)

Pre-Fixed 97,284 101,649 100,563 3.4 (1.1)

Floating - CDI 9,742 - - - -

Linked to inflation 7,956,418 8,460,794 8,388,355 5.4 (0.9)

M arket to market Securit ies 1,230,135 1,487,877 1,454,634 18.2 (2 .2)

Pre-Fixed 433,768 519,499 579,596 33.6 11.6

Floating - CDI 457,024 629,950 534,490 16.9 (15.2)

Linked to inflation 339,343 338,429 340,548 0.4 0.6

T OT A L 9,293,580 10,050,321 9,943,552 7.0 (1.1)

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Redemptions ratio - % (quarter) 12.5 8.9 9.1

Active contracts - thousand 3,011 3,549 3,552

M arket share - contributions (quarter) 29.4 41.6 37.9

M arket share - reserves 22.2 24.7 25.2

Ranking - contributions (quarter) 2º 1º 1º

Ranking - reserves 3º 2º 2º

Source: SUSEP and company managerial information


A djusted Shareho lder's Equity (a) 1,112,721 1,362,059 1,342,358 20.6 (1.4)

M inimum C apital R equirement (b) 976,757 1,089,942 1,111,199 13.8 2 .0

Additional Capital for Underwritting Risk 889,125 982,334 995,543 12.0 1.3



Correlation risk reduction (23,162) (27,532) (26,967) 16.4 (2.1)

C apita l A dequacy (a) - (b) 135,965 272,117 231,159 70.0 (15.1)

So lvency rat io (a) / (b) - % 113.9 125.0 120.8 6.9 p.p. -4.2 p.p.

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R$ thousand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13

Premium bonds collection 1,383,223 1,959,926 1,395,613 0.9 (28.8) 4,435,163 4,659,010 5.0

Changes in provisions for redemption (1,171,598) (1,630,954) (1,155,773) (1.4) (29.1) (3,751,976) (3,876,074) 3.3

Net revenue with premium bonds 211,625 328,972 239,840 13.3 (27.1) 683,187 782,936 14.6

Changes in technical reserves (11,377) (14,024) (6,456) (43.3) (54.0) 1,977 (25,633) -

Result with lottery (57,775) (70,640) (36,438) (36.9) (48.4) (170,798) (153,553) (10.1)

Acquisition costs (92,841) (161,563) (108,251) 16.6 (33.0) (304,677) (370,664) 21.7

Gross income 49,632 82,745 88,695 78.7 7.2 209,689 233,086 11.2

Administrative expenses (18,115) (20,238) (21,960) 21.2 8.5 (54,451) (59,265) 8.8

Tax expenses (7,283) (12,225) (10,049) 38.0 (17.8) (25,981) (30,519) 17.5

Other income/expenses (1,233) (471) (6,109) 395.5 1,197.0 (1,044) (6,413) 514.3

Result with premium bonds 23,001 49,811 50,577 119.9 1.5 128,213 136,889 6.8

Net investment income 24,398 99,575 72,543 197.3 (27.1) 11,408 238,457 1,990.3

Financial income 167,162 280,764 290,721 73.9 3.5 415,915 820,522 97.3

Financial expenses (142,764) (181,189) (218,178) 52.8 20.4 (404,507) (582,065) 43.9

Equity Income (50) 10 63 - 530.0 23 104 352.2

Operating result 47,349 149,396 123,183 160.2 (17.5) 139,644 375,450 168.9

Earnings before taxes 47,349 149,396 123,183 160.2 (17.5) 139,644 375,450 168.9

Taxes (19,800) (58,999) (48,093) 142.9 (18.5) (56,691) (146,138) 157.8

Profit sharing (881) (1,039) (919) 4.3 (11.5) (2,541) (2,848) 12.1

Adjusted net income 26,668 89,358 74,171 178.1 (17.0) 80,412 226,464 181.6

Extraordinary events - - - - - 52,916 - -

Premium bonds collection: changes in accounting method

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Tax expenses on changes in accounting method for unique

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Income taxes on changes in accounting method for unique

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Net income 26,668 89,358 74,171 178.1 (17.0) 133,328 226,464 69.9

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F inanc ial as s ets 8,690,318 10,944,860 11,348,627 30.6 3.7

Sec urit ies and c redits rec eiv able 620,771 711,770 695,012 12.0 (2.4)

P repaid expens es 3,904 6,109 3,502 (10.3) (42.7)

Inv es tm ents 1,277 1,260 1,256 (1.6) (0.3)

F ixed as s ets 6,917 7,267 6,290 (9.1) (13.4)

Intangible 8,050 6,583 6,776 (15.8) 2.9

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L ia b il i t ie s 9 ,0 7 9 ,3 8 9 11,3 19 ,2 18 11,7 2 6 ,8 7 2 2 9 .2 3 .6

A c c o unts P ayable 80,564 81,753 110,200 36.8 34.8

P rem ium bo nds o perat io ns debits 3,238 5,675 2,638 (18.5) (53.5)

T ec hnic al res erv es - prem ium bo nds 8,482,254 10,644,013 10,995,453 29.6 3.3

Other liabilit ies 513,333 587,777 618,581 20.5 5.2

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A ddit io nal C apital fo r Underwrit t ing R is k 47,245 47,004 52,855 11.9 12.4

A ddit io nal C apital fo r C redit R is k 156,885 197,343 224,112 42.9 13.6

A ddit io nal C apital fo r Operat ing R isk 18,928 19,681 18,528 (2.1) (5.9)

B enef it o f c o rrelat io n between ris k s (19,044) (19,782) (22,280) 17.0 12.6

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B o nds o uts tanding (except incent ive bo nds ) - tho usand 5,459 6,391 6,435

A warded bo nds (except incent ive bo nds ) 3,924 4,542 5,700

A m o unt o f prem iuns paid - R $ tho usand 50,366 33,248 87,827

M arket share - C o llec t io n - % 26.4 34.8 25.9

M arket share - R eserves - % 33.6 37.5 38.2

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Changes in technical reserves - premiums (79,410) 268,283 (155,949) 96.4 - (42,827) 195,734 -

Earned premiuns 684 ,990 962,594 801,760 17.0 (16.7) 1,918,898 2,106,257 9.8

Claims incurred (493,270) (336,629) (867,780) 75.9 157.8 (1,908,958) (1,542,283) (19.2)

Acquisition costs (28,989) (18,941) (27,321) (5.8) 44.2 (67,279) (55,679) (17.2)

Other operating income (expenses) (6,182) (8,630) (25,234) 308.2 192.4 (2,991) (87,971) 2,841.3

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Tax expenses (17,971) (10,367) (16,133) (10.2) 55.6 (55,788) (40,966) (26.6)

Inco me fro m retro cessio n 5,712 (289,308) 132,985 2,228.2 - 231,747 (46,730) -

N et investment inco me 86,916 144,240 137,255 57.9 (4.8) 161,077 326,490 102.7

Financial income 322,357 530,655 743,511 130.6 40.1 603,427 1,878,838 211.4

Financial expenses (235,441) (386,415) (606,256) 157.5 56.9 (442,351) (1,552,348) 250.9

Equity income (14,287) 10,866 17,527 - 61.3 (4,622) 42,403 -

Operat ing result 161,943 377,608 97 ,104 (40 .0) (74.3) 120,412 526,662 337.4

Gains or losses on non-current assets 3 25 2 (33.3) (92.0) 8 27 238.6


sharing161,946 377,633 97 ,106 (40 .0) (74.3) 120,420 526,689 337.4

Taxes (58,298) (151,557) (34,538) (40.8) (77.2) (99,993) (196,241) 96.3

N et inco me 103,648 226,076 62,568 (39 .6) (72.3) 20,427 330,448 1,517.7


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Comission ratio 4.2 2.0 3.4 (0.8) 1.4 3.5 2.6 (0.9)

Underwriting margin 24.6 33.0 4.9 (19.6) (28.1) 9.1 21.9 12.8

G&A ratio 11.6 9.9 12.1 0.6 2.2 11.0 14.4 3.5

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Expanded combined ratio 77.2 66.9 91.5 14.4 24.7 94.0 80.1 (13.9)

Net margin 15.1 23.5 7.8 (7.3) (15.7) 1.1 15.7 14.6

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Cash and cash equivalents 15,541 13,902 62,729 303.6 351.2

Securities 5,409,038 5,226,012 5,379,725 (0.5) 2.9

Receivables from insurance and reinsurance operations 2,548,952 1,725,558 2,091,381 (18.0) 21.2

Reinsurance and retrocession - technical reserves 3,687,575 3,201,059 3,575,283 (3.0) 11.7

Securities and credits receivable 774,238 1,025,423 1,070,800 38.3 4.4

Prepaid expenses 2,372 2,789 2,023 (14.7) (27.5)

Defered Acquisition costs - 72 82 - 13.9

Investments 239,713 221,204 235,494 (1.8) 6.5

Property and equipment 32,520 29,680 32,412 (0.3) 9.2

Intangible 36,467 134,416 131,300 260.0 (2.3)

Liabilit ies 10,123,204 8,801,469 9,747,431 (3 .7) 10.7

Third party deposits 32,859 25,477 24,429 (25.7) (4.1)

Technical reserves - Insurance 7,588,841 6,727,609 7,502,496 (1.1) 11.5

Accounts Payable 600,861 627,263 665,519 10.8 6.1

Obligations with insurance and reinsurance operations 1,546,825 1,016,454 1,130,703 (26.9) 11.2

Other liabilities 353,817 404,666 424,284 19.9 4.8

Shareho lders' Equity 2,623,213 2,778,645 2,833,798 8.0 2.0

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B ro kerage revenues 425,497 609,849 562,559 32.2 (7.8) 1,259,975 1,660,311 31.8

Administrative expenses (65,406) (67,610) (58,189) (11.0) (13.9) (199,461) (202,108) 1.3

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Operating result 318,585 492,483 460,424 44.5 (6.5) 940,670 1,324,601 40.8

N et investment inco me 12,167 26,755 22,705 86.6 (15.1) 34,978 66,341 89.7

Financial income 19,121 26,764 33,629 75.9 25.7 46,264 84,300 82.2

Financial expenses (6,954) (9) (10,924) 57.1 121,277.8 (11,286) (17,959) 59.1

Earnings befo re taxes 330,752 519,238 483,129 46.1 (7.0) 975,647 1,390,942 42.6

Taxes (112,934) (176,994) (164,263) 45.5 (7.2) (332,689) (473,393) 42.3

A djusted net inco me 217,818 342,244 318,866 46.4 (6.8) 642,957 917,549 42.7

Extrao rdinary events - - - - - (18,238) - -

Adjustment to the new brokerage fee - - - - - (29,923) - -

Tax expenses on the new brokerage fee - - - - - 2,289 - -

Taxes on extraordinary events - - - - - 9,395 - -

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SH2 79,568 80,106 83,486 4.9 4.2 225,007 244,812 8.8

Brasilprev 42,578 117,305 86,513 103.2 (26.2) 190,793 269,907 41.5

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Liabilit ies 1,153,874 2,032,451 1,439,201 24.7 (29.2)

Dividends payable - 598,683 - - -

Provision 8,154 11,059 11,843 45.2 7.1

Tax liabilities 192,615 193,013 179,460 (6.8) (7.0)

Unearned commissions 911,692 1,202,130 1,221,478 34.0 1.6

Other liabilities 41,413 27,566 26,420 (36.2) (4.2)

Shareho lders' Equity 251,219 35,009 353,872 40.9 910.8

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Financial Statements

3rd Quarter 2014

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INDEX

Management comments on performance 01

Consolidated Financial Statements 02

Statement of Income ................................................................................................................................ 02

Balance Sheet .......................................................................................................................................... 03

Statement of Cash Flows ......................................................................................................................... 04

Statement of Changes in Equity ............................................................................................................... 05

Statement of Value Added 06

Notes to the Consolidated Financial Statements ................................................................................ 07

Note 1 � Operations ................................................................................................................................. 07

Note 2 � Acquisitions, Disposals and Corporate Reestructuring ............................................................. 07

Note 3 � Presentation of Financial Statements ........................................................................................ 11

Note 4 � Significant Accounting Practices ................................................................................................ 12

Note 5 � Main Judgments and Accounting Estimates ............................................................................. 20

Note 6 � Risk Management ...................................................................................................................... 21

Note 7 � Information by Segment ............................................................................................................. 44

Note 8 � Cash and Cash Equivalents ...................................................................................................... 51

Note 9 � Financial Instruments ................................................................................................................. 51

Note 10 � Investment in Associates ......................................................................................................... 52

Note 11 � Dividends Receivable .............................................................................................................. 93

Note 12 � Taxes ....................................................................................................................................... 93

Note 13 � Commissions receivable .......................................................................................................... 96

Note 14 � Other Assets ............................................................................................................................ 96

Note 15 � Dividends Payable ................................................................................................................... 96

Note 16 � Provisions and Contingent Liabilities ....................................................................................... 96

Note 17 � Unearned Commissions .......................................................................................................... 98

Note 18 � Other Liabilities ........................................................................................................................ 98

Note 19 � Equity ....................................................................................................................................... 98

Note 20 � Financial Income ...................................................................................................................... 99

Note 21 � Personnel Expenses .............................................................................................................. 100

Note 22 � Administrative Expenses ....................................................................................................... 101

Note 23 � Other Operating Income/(Expense) ...................................................................................... 102

Note 24 � Commissions Income ........................................................................................................... 102

Note 25 � Currents and Non-Currents Assets and Liabilities ................................................................ 104

Note 26 � Related Party Transactions ................................................................................................... 105

Members of the Management Bodies 107

Management comments on the Guidance performance 108

Report on review of interim financial information 111

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ITR � Management comments on performance

Dear Shareholders,

BB Seguridade Participações (BB Seguridade) recorded a net income of R$2.3 billion in the first nine months of 2014, which represents an increase of 47.5% up as compared to the net income of the same period of last year.

The Company�s earnings growth was driven by growth in operating income, with emphasis on expansion of net investment income.

Operating revenues

In the first nine months of 2014, the net investment income reached R$1.4 billion, 50.5% higher yoy. ��

In 9M14, brokerage revenues reached R$1.7 billion, 35.0% higher yoy. The highlight is the increase in commissions from life, mortgage life and rural insurances (40.7%) and pension plans (56.2%).

For further information about BB Seguridade, please refer to www.bancodobrasilseguridade.com.br

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C hg. %

R $ tho usand 9M 13 9M 14 On 9M 13

Operat ing revenues 2,168,265 3,072,637 41.7

Income from brokerage 1,230,052 1,660,311 35.0

Equity income 938,213 1,412,326 50.5

Insurance life, mortgage life and rural

446,787 697,414 56.1

Insurance auto and property & casualty

71,689 101,685 41.8

Pension plans 319,083 395,736 24.0

Premium bonds 88,858 150,879 69.8

Reinsurance 11,796 67,777 474.6

Dental Insurance - (1,165) -

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3

BALANCE SHEET

R$ thousand

Note Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

CURRENT ASSETS

Cash and cash equivalents [8] 64,991 186,615 1,610,331 1,785,284

Financial assets at fair value through profit or loss [9] -- -- 574 2,966

Financial assets available for sale [9] -- -- 77 80

Dividends receivable [11] -- 1,077,382 -- 35,356

Current tax assets [12] 12,731 1,439 129,502 88,120

Commissions receivable [13] -- -- 568,094 509,216

Other assets [14] 73 -- 182 122

NON-CURRENT ASSETS

Investments in associates [10] 7,178,952 6,024,029 6,518,222 6,221,050

Deferred tax assets [12] -- -- 7,723 6,377

Other assets [14] -- -- 146,625 136,907

TOTAL ASSETS 7,256,747 7,289,465 8,981,330 8,785,478


Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

CURRENT LIABILITIES

Dividends payable [15] -- 344.719 -- 344.719

Contingent liabilities [16] -- -- 14.192 8.637

Current tax liabilities [12] 9 -- 185.585 152.910

Unearned commissions [17] -- -- 586.513 526.085

Other liabilities [18] 4.010 3.473 33.370 42.009

NON-CURRENT LIABILITIES

Deferred tax liabilities [12] -- -- 273.977 273.977


TOTAL LIABILITIES 4.019 348.192 1.728.602 1.844.205

EQUITY [19]

Capital 5.646.768 5.646.768 5.646.768 5.646.768

Capital reserves 266 -- 266 --

Income reserves 793.580 1.311.186 793.580 1.311.186

Other accumulated comprehensive income (9.899) (16.681) (9.899) (16.681)

Retained earnings 822.279 -- 822.279 --

Treasury shares (266) -- (266) --

TOTAL EQUITY 7.252.728 6.941.273 7.252.728 6.941.273

TOTAL LIABILITIES AND EQUITY 7.256.747 7.289.465 8.981.330 8.785.478

See the accompanying notes to the financial statements. � �

��

��

4

STATEMENTS OF CASH FLOWS R$ thousand

Parent Consolidated

01.01 a 09.30.2014 01.01 a 09.30.2013 01.01 a 09.30.2014 01.01 a 09.30.2013

Cash From Operations

Earnings before income taxes 2,316,426 1,570,142 2,795,933 1,901,521

Adjustments to income (loss) before income taxes -- --

Equity in the earnings of subsidiaries and associates (2,340,272) (1,578,129) (1,412,326) (938,213)

Other revenues/(expenses) 2,997 207 (38,234) --

Income adjusted before income taxes (20,849) (7,780) 1,345,373 963,308

Changes in assets and liabilities

Net change in financial assets at fair value through profit -- -- 2,392 (2,642)

Net change in available for sale financial assets -- -- 3 24

Income and social contribution taxes paid (1,661) (681) (437,359) (304,968)

Net change in current taxes (11,283) (1,373) (8,707) 37,725

Net change in deferred taxes -- -- (1,346) 396

Net change in contingent liabilities -- -- 5,555 2,985

Net change in other assets and liabilities 692 8,701 157,512 128,485

Net cash from operating activities (33,101) (1,133) 1,063,423 825,313

Cash from investment activities

Dividends received 2,306,366 1,003,903 1,160,262 867,238

Acquisition of interests in associates -- -- (3,749) (547,409)

Capital contribution in subsidiaries -- (1,080) --

Net cash from investment activities 2,306,366 1,002,823 1,156,513 319,829

Cash from financing activities

Capital subscription/increase -- 13,500 -- 13,500

Dividends paid (2,394,889) (828,955) (2,394,889) (1,471,640)

Net cash from financing activities (2,394,889) (815,455) (2,394,889) (1,458,140)

Net change in cash and cash equivalents (121,624) 186,235 (174,953) (312,998)

Opening balance 186,615 1,500 1,785,284 1,327,931

Closing balance 64,991 187,735 1,610,331 1,014,933

Increase (decrease) in cash and cash equivalents (121,624) 186,235 (174,953) (312,998)

See the accompanying notes to the financial statements.

��

��

5

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6

STATEMENT OF VALUE ADDED

R$ thousand

Parent Consolidated

01.01 a 09.30.2014 01.01 a 09.30.2013 01.01 a 09.30.2014 01.01 a 09.30.2013

Income -- -- 1,660,311 1,230,052

Commissions income -- -- 1,660,311 1,230,052

Input Acquired From Third Parties (10,593) (6,296) (253,740) (252,223)

Administrative expenses (7,950) (169) (210,250) (200,553)

Other expenses (2,643) (6,127) (43,490) (51,670)

Gross Added Value (10,593) (6,296) 1,406,571 977,829

Net Added Value Generated By The Entity (10,593) (6,296) 1,406,571 977,829

Added Value Received Through Transfer 2,349,888 1,580,147 1,541,762 1,028,799

Equity in the earnings of associates 2,340,272 1,578,129 1,412,326 938,213

Financial income 9,616 2,018 129,436 90,586

Total Added Value to Distribute 2,339,295 1,573,851 2,948,333 2,006,628

Distribution of Added Value 2,339,295 1,573,851 2,948,333 2,006,628

Personnel 21,444 3,705 28,348 15,550

Taxes, fees and contributions 1,425 4 603,559 420,936

Income reserves 298,830 752,294 298,830 752,294

Retained earnings 2,017,596 817,848 2,017,596 817,848


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7

1 � OPERATIONS

BB Seguridade Participações S.A. ("BB Seguridade" or "Group") was incorporated as a subsidiary of Banco do Brasil S.A. on December 20, 2012, in accordance with Brazilian law. The purpose of the Group is to participate in insurance companies, capitalization, open private pension funds, health insurance companies, reinsurance companies, as well as other companies whose corporate purpose is to broker and facilitate business involving personal, health, property and vehicle insurance, offer capitalization plans, private pension plans and manage asset.

BB Seguridade Participações S.A., enrolled with the CNPJ (Brazilian equivalent of IRS Registry of Legal Entities) 17.344.597/0001-94, is headquartered in Setor Bancário Sul, Quadra 1, Bloco A, Lote 31, Edifício Sede I, 15th Floor, Room 3, Brasilia, Distrito Federal, Brazil.

The Group's operations are conducted through its wholly owned subsidiaries BB Cor Participações S.A. (BB Cor) and BB Seguros Participações S.A. (BB Seguros), which are under common administrative and corporate control.

2 � Acquisitions, Disposals and Corporate Restructuring

a) Structuring of BB Seguridade and organization of subsidiaries BB Seguridade Participações S.A. and BB Cor Participações S.A.

As of December 2012, the Group established BB Seguridade Participações S.A. (BB Seguridade) and BB Cor Participações S.A. (BB Cor).

After the establishment of BB Seguridade, the company holds the following equity interest:

a) 100% of the shares of BB Cor; b) 100% of the shares of BB Seguros Participações S.A. (BB Seguros) which, in turn, holds interests in the followings companies:

(i) 74.9% of the total shares (49.9% common shares) of BB MAPFRE SH1 Participações S.A., which operates in the field of personal, property and rural insurance in partnership with MAPFRE Group; (ii) 50.0% of the total shares (49.0% common shares) of MAPFRE BB SH2 Participações S.A., which operates in the field of property insurance also in partnership with MAPFRE Group; (iii) 74.9% of the total shares (49.9% common shares) of Brasilprev Seguros e Previdência S.A., which operates in private pension plans in partnership with Principal Financial Group; (iv) 66.7% of the total shares (49.9% common shares) of Brasilcap Capitalização S.A., which operates in the capitalization market in partnership with Icatu Seguros S.A. and Companhia de Seguros Aliança da Bahia; (v) 100% of the shares of BB Capitalização S.A. (formerly Nossa Caixa Capitalização S.A.), which operates in the capitalization market.

The Group�s objectives for BB Seguridade are as follows:

(i) to consolidate, all BB activities in the areas of insurance, capitalization, open private pension and related activities under a single company, including any future expansion of these activities in Brazil or abroad, either organic or not; (ii) to realize economies of scale in these operations; (iii) to reduce costs and expenses in the insurance segment.

The administration, backed by monitoring tools that align executives' behavior to the interests of shareholders and society in general, is conducted with the best corporate governance practices, so as to allow BB Seguridade finds itself listed in a special segment of the market shares of BM&FBovespa S.A. - Bolsa de Valores, Mercadorias e Futuros, called New Market.

As of December 2012, BB Cor now holds 100% participation in the capital of BB Corretora de Seguros e Administradora de Bens S.A. (BB Corretora).

The Group's objective is to expand the market share of BB Corretora which will operate in and outside of the distribution channels of Banco do Brasil S.A., BB Corretora will sell third-party products in the fields in which the Group does not have exclusive agreements with partner companies.

��

��

8

BB Cor will also hold interest in the capital of other companies operating in the market as brokers in the markets of insurance, pension plans, capitalization and/or healthcare and dental plans in which the Group will participate in the future.

Finally, after the corporate reorganization promoted throughout the year 2013, BB Seguros, besides the aforementioned shareholdings, now holds the following companies:

a) 20.5% of the total shares (20.5% common shares) of IRB Brasil Resseguros S.A., which operates in the field of reinsurance and retrocession; and b) 74.99% of the total shares (49.99% common shares) of Brasildental Operadora de Planos Odontológicos

S.A., which operates in the field of dental plans, in partnership with Odontoprev S.A.

IPO

On February 20, 2013, by Special General Meeting, Banco do Brasil S.A. decided to approve Initial Public Offering (IPO) of BB Seguridade. The minutes of the General Meeting were filed in the Junta Comercial do Distrito Federal (Commercial Registry of the Federal District) on March 14, 2013, under No. 20130248401, published in the Diário Oficial da União (Union Official Gazette) and in the Jornal de Brasília (Journal of Brasilia) on March 25, 2013.

The IPO occurred on April 26, 2013, on the over-the-counter market, according CVM 400 Instruction. Simultaneously, there were efforts to issue shares abroad, in accordance with the Placement Facilitation Agreement, concluded between the Company, the Shareholder Seller and International Placement Agents.

Final data about the IPO, closed as of May 17, 2013, considering the sale of additional stock batches, is shown below:

Investor Quantities of shares buyers Number of shares acquired (1)

Individuals 103,359 105,448,951

Investments clubs 207 3,050,427

Investments fund 586 152,701,554

Pension plan entities 16 1,431,673

Insurance entities 2 1,494,600

Foreign investors 473 393,949,671

Intermediary institutions participants of distribution consortium -- --

Financial institutions linked to the Company and/or participants of consortium -- --

Other financial institutions 1 10,000

Other legal entities linked to the company and/or participants of consortium 9 8,740

Other legal entities 8,886 12,686,344

Partners, managers, employees, agents and other individual linked to the company and/or other participants of consortium

794 4,215,644

Others 2 2,396

Total 114,335 675,000,000

(1) Includes 109,484,800 shares acquired for J.P Morgan, 2,500,000 shares acquired for BTG Pactual and 5,810,000 shares acquired for Citi and/or individuals that, directly or indirectly, control, are under control or are under common control of J.P. Morgan, BTG Pactual and Citi, respectively, acting on behalf of its customers, in order to do hedge with derivative transactions, including as a result of contracts of total return swap and/or other financial instruments signed overseas with the same effect.

b) IRB Brasil Resseguros S.A. (IRB Brasil Re)

On May 24, 2013, BB Seguros Participações S.A. and the Federal Government signed an agreement (Contrato de Transferência de Ações) to transfer 212,421 common shares issued by IRB Brasil Re held by the Federal Government to BB Seguros.

Moreover, on the same date, a Shareholders Agreement was signed between BB Seguros, the Federal Government, Bradesco Auto Re � Companhia de Seguros S.A., Itaú Seguros S.A., Itaú Vida e Previdência S.A. and Fundo de Investimento em Participações Caixa Barcelona to create an IRB Brasil Re governance control group in order to regulate the relationship between the partners, as well as the company�s management structure and operation. Common shares were linked to the Shareholders Agreement, representing 20% of the total common shares held by BB Seguros; 15% of the total common shares held by the Federal Government; 15% of the total common shares held by Itaú Seguros Group; 20% of the total common shares held by Bradesco Seguros; and 3% of the total common shares held by FIP Caixa Barcelona.

��

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9

Besides the Shareholders� Agreement the restructuring process of IRB Brasil Re involves the following steps:

a) conversion of IRB Brasil Re non-voting shares into common shares (1:1); b) creation of a golden share held by the Federal Government (with the veto right to certain decisions), and; c) capital increase of IRB Brasil Re by its current shareholders, with the issuance of new shares, and the

commitment of the Federal Government not to exercise its preference rights.

On August 20, 2013, a Special Shareholders Meeting occurred to approve the capital increase of the IRB Brasil Re. The capital increase was a required condition for the acquisition of the common shares by BB Seguros..

On August 27, 2013, BB Seguros held 20.5% of the capital of IRB Brasil Re after the transfer of shares. Selected information about this transfer is as follows:

Fair Value of Assets and Liabilities of IRB Brasil Re

R$ thousand

Sep 30, 2013

Cash and bank deposits 15,541

Financial assets 5,465,934

Property and equipment 168,898

Identifiable intangible assets 127,236

Current tax assets 27,742

Deferred tax assets 236,626

Insurance and reinsurance operations 2,515,534

Other assets 4,362,013

Fair value of assets 12,919,524

Provision for labor, tax and civil claims 278,239

Liabilities for insurance contracts and pension plan 7,523,585

Current tax liabilities 73,011

Deferred tax liabilities 54,657

Insurance and reinsurance debts 1,568,776

Other liabilities 716,068

Fair value of liabilities 10,214,336

Fair value of net assets 2,705,188

BB Seguros participation - % 20.51%

BB Seguros participation 554,853

Acquisiton share price (20,51%) (547,409)

Acquisition purchase gain (7,444)

Identified Intangible Assets in the Transaction

R$ thousand

Sep 30, 2013

Related to customer portfolios 119,030

Brands 8,206

Total 127,236

The identified intangible assets have been amortized in accordance with the terms presented in the PPA�s report, prepared by a specialized and independent company. From Jan 01, 2013 to Sep 30, 2014, the amortized amounts totaled R$ 3,431 thousand.

The transaction was approved by Conselho Administrativo de Defesa Econômica (CADE) on April 16, 2013 and by Superintendência de Seguros Privados (SUSEP) on September 16, 2013.

��

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10

Regarding the nature of the transaction and the contractual conditions, the accounting standards were analyzed by the Group to establish which standard was more appropriate for this transaction. In this sense, the acquisition of the shares from IRB Brasil Re is qualified by an associate investment, due to the significant influence of BB Seguros in IRB Brasil Re.

c) Brasildental Operadora de Planos Odontológicos S.A. (�Brasildental�)

On June 11, 2013, Banco do Brasil S.A., BB Seguros Participações S.A. (BB Seguros), BB Corretora de Seguros e Administradora de Bens S.A. (BB Corretora), Odontoprev S.A. (Odontoprev) and Odontoprev Serviços Ltda. (Odontoprev Serviços) signed an Agreement (Acordo de Associação e Outras Avenças) to create a new company named Brasildental. This company will, in connection with BB Corretora, selldental plans under the brand BB Dental, exclusively through BB channels in the Brazilian territory.

Brasildental was created on March 12, 2014, with an R$ 5 million initial capital, distributed in 100,000 common shares (ON) and 100,000 preferred shares (PN) with the following shareholding structure:

Brasildental Operadora de Planos Odontológicos S.A.

% of Total Capital % Common stock % Preferred stock

BB Seguros 74.99 49.99 100.00

Odontoprev 25.01 50.01 --

On Brasildental�s constitution day it received R$ 1 thousand of its initial capital and R$ 4,999 thousand, on day April 15, 2014. BB Seguros and Odontoprev responded to Brasildental�s initial capital payment according to their respective ownership stake.

The Agreement was approved by the Conselho Administrativo de Defesa Econômica (CADE) on August 02, 2013 and on September 19, 2013, Banco Central do Brasil (BACEN) authorized the indirect participation of Banco do Brasil S.A. in the capital of Brasildental. On May 12, 2014, the register of the company in the Conselho Regional de Odontologia (CRO) was issued and, on July 07, 2014 and August 08, 2014, the operating authorization and registration of dental plans to be sold, respectively, from the Agência Nacional de Saúde Suplementar (ANS).

The Agreement will remain effective for 20 years and is renewable for equal periods.

Shareholding configuration on September 30, 2014:

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3 � Presentation of Financial Statements

a) Statement of Compliance

The individual financial statements have been prepared in accordance with the accounting guidelines derived from Brazilian corporation law and are presented in compliance with accounting practices adopted in Brazil, including pronouncements issued by the Comitê de Pronunciamentos Contábeis � CPC (Accounting Pronouncements Committee), approved by Conselho Federal de Contabilidade � CFC (Federal Accounting Council).

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB), and interpretations issued by the International Financial Reporting Interpretation Committee (IFRIC) and its predecessor institutions.

These financial statements were approved by the Executive Board of Directors on October 28, 2014.

b) Continuity

Management evaluated that the Group has the resources to continue their business in the future. The Management is not aware of any material uncertainty that might generate significant doubts about the companies ability to continue as a going concern.

c) Measurement Basis of Assets and Liabilities

These individual and consolidated financial statements have been prepared using historical cost as a measurement basis, except for the following items: (i) financial assets and liabilities held for trading, (ii) financial assets and liabilities measured at fair value through profit or loss, and (iii) financial assets available for sale, which were measured at fair value.

d) Functional and Presentation Currency

The financial statements are presented in Brazilian Reais (R$), the functional and presentation currency of the BB Seguridade. Except as otherwise indicated, the quantitative financial information is presented in thousands of Reais (R$ thousand). BB Seguridade did not have transactions in foreign currencies for the period presented.

e) Consolidation Basis

The consolidated financial statements of the Group include the consolidation of assets and liabilities from BB Seguridade and its controlled entities, as follows:

Company ActivityCountry of

constitution

% Share

Sep 30, 2014 Dec 31, 2013

BB Seguros Participações S.A. Holding Brasil 100% 100%

BB Cor Participações S.A. Holding Brasil 100% 100%

BB Corretora de Seguros e Administradora de Bens S.A. Brokerage Brasil 100% 100%

BB Capitalização S.A. Capitalization Plans Brasil 100% 100%

(1) Formerly Nossa Caixa Capitalização S.A.

The intra-group balances and transactions, such as any unrealized income or expenses on transactions between companies, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity method investments are eliminated against the investment to the extent of the BB Seguridade equity interest in the investee.

��hanges in Accounting Policies

The accounting policies and methods used in preparing these consolidated financial statements are equivalent to those applied to the consolidated financial statements for the year ended Dec 31, 2013.

g) Seasonality of Operations

BB Seguridade and its subsidiaries consider the nature of their transactions as non-seasonal and non-cyclical, taking into account the activities carried out by the Group. Consequently, no specific disclosures are provided in these notes for the nine months ended September 30, 2014.

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4 � SIGNIFICANT ACCOUNTING PRACTICES

a) Revenue and Expense Recognition

Revenue and expenses are recognized on an accrual basis and recorded in the financial statements in the period when they were generated or incurred. This concept is applied to the main revenue streams generated by BB Seguridade and its subsidiaries� activities, namely:

a.1) Revenue from equity investments � The revenue from the application of equity method of accounting for equity investments is recognized proportionally to the equity interest held by BB Seguridade in the investees� results.

a.2) Commission revenue � Commissions revenues are recognized when their value, their associated costs and the transaction stage can be reliably measured and when it is probable that the economic benefits will occur.

a.3) Interest revenue � Interest revenue and expenses resulting from assets and liabilities that yield and pay interest are recognized in income for the period on an accrual basis, using the effective interest rate method.

The effective interest rate method is a method used to calculate the amortized cost of a financial asset or of a financial liability (or of a group of financial assets or financial liabilities) and to allocate the interest revenue or expense over the corresponding period.

The effective interest rate is the rate that discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability. The effective interest rate is established upon the initial recognition of the financial asset or liability and is not subject to subsequent reviews. To calculate the effective interest rate, BB Seguridade estimates the future cash flows considering all contractual terms of the financial instrument, but not future credit losses.

The calculation of the effective rate includes all the commissions, the transaction costs and the discounts or premiums that are an integral part of the effective interest rate. The transaction costs correspond to incremental costs directly attributable to the acquisition, issuance or divestiture of a financial asset or liability.

In accordance with IAS 18, BB Seguridade appropriates revenues from finance charges when it is considered probable to receive the economic benefits related to the transaction.

b) Cash and Cash Equivalents

Cash and cash equivalents include funds available and investments immediately convertible into cash and subject to an insignificant risk of a change in value.

c) Financial Instruments

Financial instruments are classified in accordance with their nature and its intention towards the instrument. All financial assets and liabilities are initially recognized on the trading date, i.e., the date on which the Group becomes party to the contractual provisions of the instrument. Classification of financial assets and liabilities is determined on the date of initial recognition.

All financial instruments are initially measured at fair value plus associated transaction costs, except in cases in which the financial assets and liabilities are recorded at fair value through profit or loss. The accounting practices applied to each class of financial instruments are presented below.

c.1) Financial assets at fair value through profit or loss � Financial instruments are classified in this category if held for trading on the origination or acquisition date, or if designated as such by Management upon initial recognition.

A financial asset is classified as held for trading if: (i) it is acquired mainly to be sold in the near term; or (ii) upon initial recognition it is part of a portfolio of identified financial instruments that are managed jointly and for which there is evidence of a recent actual pattern of short-term profit-taking.

The Group only measures a financial instrument at fair value through profit or loss upon initial recognition when the following criteria are met: (i) the designation eliminates or significantly reduces the inconsistent treatment that would arise from measuring assets and liabilities or recognizing the corresponding gains and losses in different forms; or (ii) the assets and liabilities are part of a group of financial assets, financial liabilities or both, which are managed and have their performances evaluated on a fair value basis, pursuant to documented strategy of risk management or investment.

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Financial assets classified into this category will not be transferred to other categories, with the exception of non-derivative financial assets held for trading, which can be reclassified after initial recognition when: (i) in rare circumstances, the financial instrument is no longer held with the purpose of sale in the near term; or (ii) it meets the definition of a loan and receivable, and if the Group has the intention and ability to hold the financial asset for the foreseeable future or until maturity.

Financial instruments recorded in this category are initially recognized at fair value and their yields (interest and dividends) are appropriated as interest revenue. Transaction costs, when incurred, are recognized immediately in the Consolidated Income Statement.

Realized and unrealized gains or losses related to fair value variations of these instruments are included in net gains/(losses) under financial assets/liabilities at fair value through profit or loss.

Financial assets recorded in this category comprise securities and derivative financial instruments held for trading.

c.2) Financial assets available for sale � Securities are classified as financial assets available-for-sale when, in the opinion of Management, they can be sold in response to or in anticipation of changes in market conditions or they are not classified as (i) loans and receivables, (ii) investments held to maturity, or (iii) financial assets at fair value through profit or loss.

These securities are initially accounted for at fair value, including direct costs and incremental transaction costs. Also, subsequent measuring of these instruments is recorded at fair value.

Unrealized gains or losses (net of taxes) are recorded in a separate component of equity (Other accumulated comprehensive income) until their disposal. The yields (interest, dividends) of these assets are allocated as interest income. Gains and losses on disposal of financial assets available for sale are recorded as gains/(losses) on financial assets available for sale, on the date of disposal.

When there is a reclassification of financial assets available for sale to the trading category, the unrealized gains or losses until the date of reclassification are recorded in Other accumulated comprehensive income and are deferred over the remaining term of the asset.

Financial assets available for sale are valued for the purpose of determining their recoverable amount as discussed in the section entitled "impairment of financial assets�. Losses due to reduction in the recoverable amount of these financial instruments are recognized in the Consolidated Statement of Income, in gains/(losses) on financial assets available for sale, and written off from the amount recorded in Other accumulated comprehensive income.

c.3) Financial assets held to maturity � Financial assets that the Group has a positive intention and proven financial ability to hold to maturity are classified as financial assets held to maturity and are initially accounted at fair value, including incremental transaction costs. These financial instruments are subsequently measured at amortized cost. Interest, including premiums and discounts, are recorded as financial assets interest, using the effective interest rate, less impairment (if applicable).

In accordance with IAS 39, such assets are not classified as a financial asset held to maturity if it has been, during the current financial year or during the two preceding financial years, sold or reclassified in more than an insignificant amount of held-to-maturity investments before maturity. This does not include other sales or reclassifications that: (i) are so close to maturity or to the call date of the financial asset that changes in the market rate of interest would not have a significant effect on the financial asset's fair value; (ii) occur after the Group has collected substantially all of the financial asset's original principal through scheduled payments or prepayments; or (iii) are attributable to an isolated event that is beyond the entity's control, is non-recurring and could not have been reasonably foreseen by the entity.

Whenever the sales or reclassifications of more than an insignificant amount of held-to-maturity investments do not meet any of the conditions previously mentioned, any remaining held-to-maturity investment is reclassified as available for sale.

c.4) Determination of fair value � fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value of financial instruments traded in active markets on the base date of the balance sheet is based on the quoted market price or on the quotation of the over-the-counter price (sale price for long positions or purchase price for short positions), without any transaction cost deduction.

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In situations in which there is no market price for a particular financial instrument, its fair value is estimated based on valuation methods commonly used in financial markets; appropriate for the specific characteristics of the instrument and that capture the various risks to which it is exposed. Valuation methods include: the discounted cash flow method, comparison with similar financial instruments for which there is a market with observable prices, option pricing model, credit models and other known valuation models.

The aforesaid models are adjusted to capture the variation of purchase and sale prices, the cost of settlement of the position, to serve as a counter entry to credit and liquidity variations, and mainly, to overcome the theoretical limitations inherent to the models.

Internal pricing models may involve estimates and judgment of Management, whose substance will depend, among other factors, on the complexity of the financial instrument.

c.5) Financial liabilities � An instrument is classified as a financial liability when there is a contractual obligation of its settlement through the delivery of cash or other financial asset, regardless of its legal form. Financial liabilities include short-term and long term debts issued which are initially measured at fair value, which is the amount received, net of incurred transaction costs, and subsequently at amortized cost.

Financial liabilities held for trading and those designated by Management as financial liabilities at fair value through profit or loss are recorded in the Consolidated Balance Sheet at fair value.

When an existing financial liability is replaced by another from the same lender under substantially different terms, or the terms of the existing liability are substantially modified, such exchange or modification is treated as a write-off of the original liability and the recognition of a new liability, and the difference in the book value is recognized in net income of the period.

d) Derecognition of Financial Assets and Liabilities

d.1) Financial assets � A financial asset is derecognized when (i) the contractual rights relating to the respective cash flows expire; (ii) the Group transfers to third parties all the risks and rewards associated with the operation; or (iii) when control over the asset is transferred, even with the Group having retained part of the risks and rewards associated with the transaction.

The rights and obligations retained in the transfer are recognized separately as assets and as liabilities, when appropriate. If control over the asset is retained, the Group continues to recognize it to the extent of its continuous involvement, which is determined by the extent to which it remains exposed to changes in the value of the asset transferred.

d.2) Financial liabilities � A financial liability is derecognized when the respective obligation is eliminated, cancelled or expired. If an existing financial liability is replaced by another from the same lender under substantially different terms, or the terms of the existing liability are substantially modified, such modification is treated as derecognition of the original liability and the recognition of a new liability, and the difference between the respective carrying amounts is recognized in net income.

e) Impairment of Financial Assets

Annually, financial asset and/or group of financial assets are tested for whether there is any objective evidence of impairment. A financial asset is considered impaired if, cumulatively: (i) there is objective evidence of a reduction in its recoverable amount as a result of one or more events occurring after initial recognition of the asset; (ii) a loss event has an impact on the estimated future cash flows of the financial asset; and (iii) a reliable estimate of the loss amount can be made. Losses expected as a result of future events, no matter how likely, are not recognized.

In some cases, the observable data required to estimate the amount of an impairment loss on a financial asset may be limited or no longer fully relevant to the current circumstances. In such cases, BB Seguridade�s Management uses its judgment to estimate the amount of any impairment loss. The use of reasonable estimates is an essential part of the preparation of financial statements and does not undermine their reliability.

Financial assets subject to having their recoverable amounts tested are presented below.

e.1) Financial assets available for sale � For financial assets available for sale, the Group assesses annually whether there is any objective evidence that its financial assets are impaired.

To establish whether there is objective evidence of impairment of a financial asset, the likelihood of the recovery of its value is verified considering the following factors cumulatively: (i) duration and magnitude of the reduction of the

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asset's value below the book value; (ii) historical behavior of the value of the asset and the experience recovering such assets; and (iii) likelihood of non-receipt of the assets� principal and interest, due to difficulties relating to the issuer, such as application for bankruptcy or filing for chapter 11, deterioration of the credit risk rating and financial difficulties, related or not to the market conditions of the sector in which the issuer operates.

When a decline in the fair value of a financial asset available for sale has been recognized in Other comprehensive income and there is objective evidence of impairment, the accumulated loss that has been recognized by BB Seguridade will be reclassified from equity to income for the period as a reclassification adjustment, even if the financial asset has not been written off.

The value of the accumulated loss reclassified to income for the period will be recorded in net gains/(losses) on financial assets available for sale and corresponds to the difference between the book value of the devalued asset and its fair value on the valuation date, less any loss due to impairment previously recognized in income.

Reversals of impairment losses on assets classified as available for sale are only recognized in equity when they consist of investments in equity instruments. In the case of investments in debt instruments, the reversal of the impairment loss will be recognized directly in income for the period.

e.2) Financial assets held to maturity � If there is objective evidence of impairment of financial assets held to maturity, a loss is recognized, the amount of which corresponds to the difference between the carrying amount of the asset and the present value of estimated future cash flows. These assets are presented net of impairment losses. If, in a subsequent period, the amount of the impairment loss decreases and this decrease can be objectively related to an event occurring after the impairment recognition, it is reversed in a counter entry to net income for the period.

f) Offsetting of Financial Assets and Liabilities

Financial assets and liabilities are stated at net amount if, and only if, there is a legal right to offset one with the other and if there is an intention to settle them in this manner, or to realize an asset and to settle a liability simultaneously. In other situations they are presented gross.

g) Business Combination

The acquisition of a subsidiary by means of a business combination is recorded on the acquisition date, which is the date on which control is transferred to BB Seguridade, applying the acquisition method. According to this method, identified assets (including intangible assets not previously recognized), assumed liabilities and contingent liabilities are recognized at fair value on the acquisition date. Possible positive differences between acquisition cost and fair value of identifiable net assets acquired are recognized as goodwill. In case of a negative difference (gain from a bargain purchase), the identified amount is recognized in the income statement under Other operational income.

The transaction costs that BB Seguridade incurs in a business combination, except for the costs related to the issuance of debt or equity instruments are recorded in profit or loss in the period incurred. Any contingent consideration payable is measured at its fair value on the acquisition date.

The results of subsidiaries acquired during the accounting period are included in the financial statements as from acquisition date until the end of the year. By contrast, the results of disposed subsidiaries during the year are included in financial statements as from the beginning of the year until the date of disposal, or up to the date that BB Seguridade no longer has control.

h) Change of Equity Interest in Subsidiaries

Changes in the equity interest in a subsidiary that do not result in loss of control are accounted for as equity transactions (that is, transactions with owners in their capacity as owners). Consequently, no goodwill is recognized as a result of such transactions.

Under these circumstances, the book values of the controlling and non-controlling interest will be adjusted to reflect changes in their relative interests in the subsidiary. Any difference between the amount of non-controlling interest adjustments and the fair value of the consideration paid or received will be recognized directly in stockholders' equity and attributed to the owners of the parent company.

i) Loss of Control

In accordance with IAS 27, in the event of loss of control of a subsidiary on the date which control is lost, BB Seguridade derecognizes: (i) the assets, including goodwill, and the liabilities of the subsidiary at their book value; and (ii) the book value of any non-controlling interest in the former subsidiary, including any components of other comprehensive income attributed to it.

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Moreover, on the date of loss of control BB Seguridade recognizes: (i) the fair value of the consideration received, if any, originating from the transaction, event or circumstances that resulted in the loss of control; (ii) the distribution of shares of the subsidiary to the owners, if the transaction that resulted in the loss of control involves a distribution of shares; (iii) any investment held in the former subsidiary at its fair value; and (iv) any difference resulting as a gain or loss in the result attributable to the parent company.

j) Non-Monetary Contributions to Jointly Controlled Entities

In accordance with IFRS 11, when the Group contributes with non-monetary assets in exchange for an equity interest in a jointly controlled entity, the gain or loss on this transaction is recognized according the assets is being sold to other entrepreneurs. No gain or loss is recognized if: (i) the significant risks and rewards of ownership of the assets have not been transferred, (ii) the gain or loss cannot be measured reliably, or (iii) the transaction has no commercial substance.

k) Goodwill and Other Intangible Assets

Goodwill on the acquisition is accounted for by taking into consideration the fair value of the identifiable assets and liabilities of the acquired company on the acquisition date and, in accordance with IFRS 3, it is not amortized. However, it is tested at least annually for impairment. After initial recognition, goodwill is measured at the cost less any accumulated impairment losses.

Intangible assets are recognized separately from goodwill when they are separable or arise from contractual or other legal rights, their fair value can be reliably measured and estimated future economic benefits may flow to BB Seguridade. The cost of the intangible assets acquired in a business combination is the fair value on the acquisition date. Intangible assets acquired independently are initially measured at cost.

The useful life of the intangible assets is considered finite or indefinite. Intangible assets with a finite useful life are amortized over their economic life. They are initially stated at cost, less accumulated amortization and impairment losses. Intangible assets with an indefinite useful life are stated at cost, less any impairment losses.

Intangible assets with a finite useful life are amortized on a straight-line basis over their estimated useful life. Amortization period and method of an intangible asset with a defined useful life are reviewed at least on an annual basis. Changes to expected useful life or expected rate of use of future benefits incorporated to the asset are recognized through changing amortization period or method, when adequate, and treated as changes to accounting estimates.

The expenses from the amortization of intangible assets with a finite useful life are recognized in the income statement of the period, under "Amortization of intangible assets". Impairment losses are recorded as an adjustment to recoverable amount expenses (other expenses) in the Consolidated Income Statement.

l) Impairment of Non-financial Assets

Annually, it is evaluated, based on internal and external sources of information, whether there is any indication that a non-financial asset may be impaired. If there is indication of impairment, it is estimated the recoverable amount of the asset. The recoverable amount of the asset is the higher of fair value less costs to sell it or its value in use.

Regardless of the existence of any indication of impairment, impairment testing is performed annually on intangible assets with an indefinite useful life, including goodwill acquired in a business combination, or an intangible asset not yet available for use. This test may be performed at any time during the year, provided that it is carried out at the same time every year.

In case the recoverable amount of the asset is lower than its book value, the book value of the asset is reduced to its recoverable amount through a reduction account of impairment losses, whose counter-entry is recognized in income for the period in which is occurs, under Other expenses.

The existence of any indication that an impairment loss recognized in prior periods for an asset, except for goodwill due to expected future earnings, may have ceased to exist or may have decreased is also evaluated annually. If there is indication of impairment, the recoverable amount of this asset is estimated. Reversal of impairment losses of an asset will be immediately recognized in income for the period, rectifying Other expenses balance.

m) Investments in Associates

Under the equity method, investments are initially measured at cost and subsequently adjusted to the recognition of the investor's share in the investee�s assets changes. Furthermore, the share which comprises the results generated by the investee should appear in the income of the investor.

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n) Provisions, Contingent Liabilities and Legal Liabilities

In accordance with IAS 37, provisions are recognized when conditions show that: (i) BB Seguridade has a present obligation (legal or constructive) resulting from past events; (ii) it is more probable than not that a disbursement of funds that incorporate economic benefits will be required to settle the obligation; and (iii) the value of the obligation is presented based on reliable estimates. Provisions derived from IAS 37 application are recorded based on our best estimate of probable losses.

There is continuous monitoring of the lawsuits in progress to evaluate, among other things: (i) their nature and complexity; (ii) the progress of proceedings; (iii) the opinion of BB Seguridade legal advisors; and (iv) BB Seguridade experience with similar proceedings. In determining whether a loss is probable are considered: (i) the likelihood of loss resulting from claims that occurred prior to or at the balance sheet date, but that were identified after that date, yet prior to its disclosure; and (ii) the need to disclose the claims or events that occur after the balance sheet date, but prior to its publication.

Tax obligations subject to legal discussions on the constitutionality of laws that established them, up to the effective extinguishment of corresponding tax credits are recognized as liabilities. In these situations, it is considered that in fact there is a legal obligation to pay to the government. Accordingly, the legal obligation should be recorded, including interest and other charges, if applicable. Bookkeeping of these legal obligations might result in record of judicial deposits.

o) Income Taxes

o.1) Current taxes � current tax expense is the amount of income and social contribution taxes payable or recoverable in relation to taxable income for the period.

Current tax assets are the amounts of income and of social contribution taxes to be recovered in the next 12 months and deferred tax assets are the amounts to be recovered in future periods, including those arising from tax losses or tax credits not used.

Current taxes related to current and prior periods should, to the extent in which they are not paid, be recognized as liabilities. If the amount already paid for current and prior periods exceeds the amount owed for those periods, the excess should be recognized as an asset.

Current and prior taxable assets and liabilities are measured at expected recoverable amount or at recoverable amount paid to tax authorities. Tax rates and tax laws used for calculating this amount are those effective at the balance sheet date.

o.2) Deferred taxes � these are amounts of tax assets and liabilities to be recovered and paid in future periods, respectively. Deferred tax liabilities originate from taxable temporary differences and deferred tax assets from deductible temporary differences and from unused tax loss carry forwards.

Deferred tax assets from income and social contribution tax losses and from temporary differences are recognized to the extent that is probable the existence of taxable income against which deductible temporary differences may be used.

Book values of deferred tax assets will be reviewed at the end of each period. An entity will reduce the book value of deferred tax assets to the extent that it is no longer probable that it will obtain taxable income sufficient to allow the benefit from part of or the total deferred tax assets to be used. Any reduction will be reversed to the extent that the entity is likely to obtain sufficient taxable income.

Deferred tax assets and liabilities are measured at tax rates expectedly applicable in the year in which the asset or the liability is realized or settled, based on tax rates (or tax law) that were substantively enacted at balance sheet date.

o.3) Temporary differences � It is the differences that impact or may impact the calculation of income and social contribution taxes arising from temporary differences between the tax bases of an asset or liability and its carrying amount in the consolidated balance sheet.

Temporary differences can be taxable or deductible. Taxable temporary differences are temporary differences that will result in taxable amounts to determine taxable income (tax loss) for future periods when the book value of an asset or liability is recovered or settled. Deductible temporary differences are temporary differences that will result in deductible amounts to determine taxable income (tax loss) for future periods when the book value of the asset or liability is recovered or settled.

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The tax basis of an asset is the amount that will be deductible for tax purposes against any taxable economic benefits that will flow to the entity when it recovers that asset's book value. If those economic benefits are not taxable, the asset's tax basis will be equal to its book value.

The tax basis of a liability is its book value less any amount that will be deductible for tax purposes, in relation to that liability, in future periods. In case of revenue received in advance, the resulting liability tax basis is its book value less any revenue amount that will not be taxable in future periods.

o.4) Offsetting income taxes � Assets from current taxes and liabilities from current taxes are offset if, and only if, the entity: (i) has the right, legally executable, of clearing recognized amounts; and (ii) intends to settle on net bases, or simultaneously realize the asset and settle the liability.

Assets from deferred taxes and liabilities from deferred taxes are offset if, and only if: (i) the company has the right, legally executable, of offsetting current tax assets against current tax liabilities; and (ii) deferred tax assets and deferred tax liabilities are related to taxes on income owed to the same tax authority: (a) in the same taxable entity; or (b) in different taxable entities that intend to settle liabilities and current tax assets on net bases, or simultaneously realize assets and settle liabilities, in each future period in which significant deferred tax assets or liabilities are expected to be settled or recovered.

p) Segment Reporting

IFRS 8 requires the report of information related to operating segments consistent with the internal reports used by Management to allocate resources and assess their financial and economic performance. The information of the segments and sub-segments of the Group BB Seguridade are described in Note 7.

q) Deferred Costs

Deferred Costs include commissions on the cost of insurance policies that the allocation in income results performed according to the risk period coverage. The direct and indirect costs incurred during the financial maturity, from subscription or renewal of insurance contracts and contracts that explore the affinity chanel are deferred to the extent that such costs are recoverable from futures premiums. All other acquisition costs are recognized as expenses when incurred. The deferred costs are written off in the moment of the sale or liquidation of the respective contracts.

r) Liabilities from Insurance Contracts

The subsidiaries and associates issue contracts that contain insurance risks, financial risks or a combination of both. Contracts according to which is accepted a significant non-financial risk from an insured person, committing to compensate him/her upon uncertain future events, are characterized as insurance contracts, in accordance with IFRS 4.

The reinsurance contracts are also treated from the perspective of IFRS 4 because they represent significant risk transfer.

Mathematical provisions of pension plans represent the current value of the obligation, divided as survivor�s pension, disability pension, pension and funds, determined through calculation and actuarial standards, made in accordance with the Actuarial Technical Notes and the current laws and standards (Resolution CNSP n° 281/2013 and C ircular SUSEP n° 462/2013), in the financial regimes of capital ization, coverage capital distribution and simple distribution, respectively.

r.1) Mathematical provisions for future benefit and for vested benefit � correspond, respectively, to the participants who have not yet started receiving the benefits and those that already have. For pension plans and insurance in the models PGBL and VGBL, the mathematical provision of future benefit represents the total premiums and contributions of the participant, net of administration fares, plus the financial revenue determined in the deposit and deduced of withdraws and transfers.

r.2) Provision for unearned premiums � formed by the insurance premiums corresponding to the period of risk not yet elapsed. The measurement is individual by policy or endorsement of the current contracts, on the date of formation, by the pro rata method with a basis on the validity start and end dates of the insured risk. The generating factor of the formation of this provision is the issuance of the policy or endorsement.

r.3) Provision for claims � is constituted by the total notifications and notices of claims, but not yet paid, until the end of the balance sheet date.

r.4) Provision for claims incurred but not reported � IBNR � calculated in accordance with the expected amount of claims incurred in risks assumed in the portfolio and not reported.

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r.5) Provision for redemptions and other values to be regularized � includes amounts relating to the redemptions to be regularized, the repayments of contributions or premiums and the portability requested, which for any reason have not yet been executed.

r.6) Provision for unearned premiums of current risks but not issued (PPNG-RVNE) � represents the adjustment of PPNG given the existence of risks in force but not operationally issued. It is calculated based on historical experience and methodology provided for in actuarial technical note, involving the construction of triangles that consider the interval between the date of effectiveness of the risk and date of issuance of policies and endorsements.

r.7) Other provisions � mainly include provisions for related expenses of additional investment returns, of technical surplus and of benefits to be regularized and were made accordance with the provisions of Circular SUSEP 462/13.

r.8) Liability adequacy test � the liability adequacy test is completed � semiannually for all contracts that meet the definition of an insurance contract and that are in force on the date of execution. This test is designed considering the net book value of liabilities for insurance contracts, net of deferred acquisition costs and related intangible assets.

If the analysis shows that the carrying amount of insurance liabilities is less than the expected future cash flows of the contracts, record the failure as an expense in the income statement and provide the supplementary provision coverage (PCC) at the reporting date (Circular SUSEP 457/12).

s) Capitalization

s.1) Mathematical provision for capitalization: is calculated on the nominal value of the securities, restated according to the index and the interest rate defined in the plan.

s.2) Provision for redemptions: recognized by securities with maturities of finalized and rescinded capitalization, restated for the period between the date of the right of redemption and effective settlement.

s.3) Provision for raffles and raffles payable: are formed to meet premiums in future drawings (unrealized) and also prizes in sweepstakes where customers have already been selected (to pay).

t) Interest on Equity Capital and Dividends

Brazilian companies are allowed to assign a nominal interest expense, deductible for fiscal purposes, on their equity capital. The amount of interest on equity capital is considered a dividend and, when applicable, is presented in the consolidated financial statements as a direct reduction in equity.

Dividends distributed are calculated on adjusted net income. The Group's present policy is to pay dividends and interest on equity capital of 80% on adjusted net income, from which 25% are recognized each semester, due to the dividends recognition minimum requirement, as a liability on the Balance Sheet.

u) Improvements to IFRS and Pronouncements Recently Issued

Improvements to IFRS are amendments issued by the IASB and comprise amendments that result in accounting changes for recognition, measurement and disclosure related to several IFRS standards. A summary of certain amendments, as well as interpretations and pronouncements recently issued by the IASB which will become effective after September 30, 2014:

IFRS 9 � Financial instruments: recognition and measurement � IFRS 9 is the first standard issued as part of a larger project to replace IAS 39, as many financial statements' users and other stakeholders considered that requirements included in IAS 39 were difficult to understand, apply and interpret. To answer several requests to improve financial instruments' accounting, IAS 39 replacement project was divided into three main stages: (i) classification and measurement of financial assets and liabilities; (ii) impairment; and (iii) hedge accounting.

Accordingly, in November 2009, IFRS 9 chapters related to the classification and measurement of financial assets were issued and, in October 2010, requirements related to the classification and measurement of financial liabilities was added.

IFRS 9 simplifies the model of measurement for financial assets and establishes two main categories of measurement: (i) amortized cost and (ii) fair value. Classification basis depends on the business model of the entity and the contractual characteristics of financial asset cash flows. In relation to financial liabilities measurement and classification requirements, the most significant effect refers to the accounting of variations in the fair value of a financial liability measured at fair value through income. Changes to fair values of said liabilities attributable to

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changes in credit risks are now recognized in Other comprehensive income, unless the recognition of these changes increases or creates an income accounting mismatch.

In November, 2013, the IASB introduced new requirements for hedge accounting on IFRS 9. The requirement has the objective to align the hedge accounting with the risk management.

In July, 2014, the IASB concluded the substitution project of the IAS 39.

IFRS 9 is effective for annual periods beginning on or after January 01, 2018.

IFRS 15 � Revenue from Contracts with Customers � on May, 2014, the IASB published a new standard that specifies how and when an IFRS reporter will recognize revenue as well as requiring such entities to provide user of financial statements with more informative, relevant disclosures.


Amendments to IAS 16 � Property, Plant and Equipment � and to IAS 38 � Intangible Assets � on May, 2014, the IASB issued amendments to IAS 16 and to IAS 38, which has clarified that the calculation methods for depreciation/amortization of an asset based on revenue is not suitable, because the revenue generated by an activity that includes the use of an asset usually reflects other factors beyond the consumption of the economic benefits involved.

These amendments to IAS 16 and to IAS 38 are effective for annual periods beginning on or after January 01, 2016.

BB Seguridade decided not to adopt the changes before the suggested date and is currently identifying the potential impacts on the Group�s financial statements.

5 � MAIN JUDGMENTS AND ACCOUNTING ESTIMATES

The preparation of the financial statements in accordance with CPCs and IFRS requires that the Management make judgments and estimates affecting the recognized amounts referring to assets, liabilities, income and expenses. Estimates and assumptions adopted are analyzed on a continuous basis, and revisions are carried out and recognized in the period in which the estimate is reevaluated, with prospective effects. The actual results obtained may be different from estimates used herein.

Taking into consideration that there are certain alternatives to accounting treatments, the results which are disclosed could be different, in the event a different treatment had been chosen. Management considers that the choices made are appropriate and that the financial statements fairly present the consolidated financial position of BB Seguridade and the result of its operations in all material aspects.

Significant assets and liabilities subject to these estimates and assumptions encompass items for which an evaluation at fair value is necessary. The most relevant applications of the exercise on estimates judgments and usage occur in:

a) Fair value of Financial Instruments

When the fair value of financial assets and liabilities cannot be derived from an active market, it is determined through valuation techniques that include the use of mathematical models. These model variables are derived from data verifiable in the market whenever possible, but when market data is not available, judgment is necessary to determine fair value.

b) Impairment of Financial Assets Available for Sale

It is considered impairment of its financial assets available for sale exists when there is a significant or prolonged decline in its fair value to below cost. Such determination of what is significant or prolonged requires judgment in which is evaluated, among other factors, the ordinary volatility of prices of financial instruments. In addition, the recognition of impairment may be appropriate whenever there is evidence of a negative impact in the financial health of the investee, the performance of the relevant economic sector, changes in technology and in financing and operating cash flows.

Additionally, the preparation of impairment valuations take into consideration market prices (mark to market) or valuation models (mark to model), which require use of certain assumptions or judgments in establishing fair value estimates.

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c) Impairment of Non-Financial Assets

Annually, impairment of non-financial assets is evaluated, based on internal and external sources of information, whether there is any indication that a non-financial asset may be impaired. If this indication exists, estimates are used to define the asset's recoverable value.

Indications that an impairment loss recognized in prior periods for an asset, except for goodwill due to expected future earnings, may not exist anymore or may have decreased are evaluated annually. If there is indication of impairment, the recoverable amount of this asset is estimated.

Regardless of the indication of impairment losses, impairment tests are conducted annually on indefinite-lived intangible assets, including goodwill acquired in a business combination or on intangible assets not yet available for use.

Determining the recoverable amount upon valuation of non-financial assets impairment requires estimates based on market-quoted prices, present value calculations or other pricing techniques, or a combination of them, requiring that Management make subjective judgments and adopt assumptions.

d) Income Taxes

Since the corporate objective of the Group is to obtain profits, the income generated is subject to income tax payment. Determination of the global amount of income taxes requires certain interpretations and estimates. There are several transactions and calculations for which determination of the final value of tax payable is uncertain during the ordinary cycle of business. Other interpretations and estimates could result in a different value of income taxes recognized in the period.

The Brazilian tax authorities may review the procedures adopted by the Group during a period of five years from the date in which taxes are deemed to be due. Hence, it is possible that such tax authorities may question procedures adopted by the Group, mainly those arising from differences in interpreting tax legislation. However, Management believes that there will be no significant adjustments in the income taxes stated in the consolidated financial statements.

e) Deferred Taxes

Deferred tax assets are calculated on temporary differences and on tax loss carryforwards, and are accounted for whenever BB Seguridade expects to generate taxable profit in subsequent years in amounts sufficient to off-set such values. The expected realization of BB Seguridade tax credit is based on the projection of future income and on technical analysis, aligned with prevailing tax legislation.

The estimates considered by BB Seguridade for the recognition and valuation of deferred taxes are reviewed based on current expectations and projections of future events and trends. Major assumptions identified by BB Seguridade that may affect these estimates are related to factors such as: (i) changes in government regulation related to fiscal matters; (ii) changes in interest rates; (iii) changes in inflation rates; (iv) lawsuits or legal disputes with an adverse impact; (v) credit and market risks, as well as other risks arising from investment activities; and (vi) changes in internal and external economic conditions.

f) Provisions and Contingent Liabilities

Provisions are recognized in the financial statements when, based on the opinion of legal counsel and Management, the risk of loss of a judicial or administrative proceeding is considered probable, with a probable outflow of resources to settle the obligations and the amounts involved can be reliably measured, quantified when the citation/notice is received, and reviewed monthly.

The contingent liabilities classified as probable loss are not recognized in the financial statements, only being disclosed in its notes, while the one classified as remote do not require any sort of provision or disclosure.

6 � RISK MANAGEMENT

The corporate risk management covers the following categories: underwriting, market, credit, liquidity, legal and operations. BB Seguridade Conglomerate is exposed to risks mentioned primarily in the insurance, reinsurance, pension plan and premium bonds operations.

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BB Seguridade has corporate governance that manages the risks, adopted similarly by its subsidiaries and affiliates. By principle and observance of best practices in risk management, the structure and governance processes include aspects such as segregation of duties; specific structure for evaluating and monitoring risks; collegiate decisions and management rules and risks in internal institutional document.

In this context, although the Conglomerate has a distinct risk management, there is an uniformity between the practices, in order to ensuring consistent criteria in the management of these risks as a whole. In addition, BB Seguridade selects representatives on committees of its affiliates focused on financial and risk management.

a) Description of Risks

The main risks which BB Seguridade Conglomerate is exposed, and how they are managed are described below.

a.1) Underwriting Risk

BB Seguridade is indirectly exposed to underwriting risk on account of operational activities of its affiliates in the segments of insurance (BB MAPFRE SH1, MAPFRE BB SH2), open private pension (Brasilprev), premium bonds (Brasilcap) and reinsurance (IRB Brasil RE).

In the insurance market, where the theory of probability is applied to pricing and provisioning, insurers understand that the main risk transferred to them is the risk that reported claims and the resulting benefit payments from these events exceed the carrying value of liabilities of insurance contracts. Such situations arise, in fact, when the frequency and severity of claims and benefits to policyholders are larger than previously estimated, according to the calculation methodology for these liabilities.

To reduce these risks, risk´s diversity strategies and reinsurance programs are used with reinsurers with high quality credit risk rating, so that the adverse outcome of atypical and major events is minimized. Nevertheless, part of the credit and underwriting risks which insurance companies are exposed is minimized due to the fact that the minority of accepted risks represents large insured amounts.

In the reinsurance market as a way to reduce risk exposure, IRB Brasil RE works with a diversified reinsurance portfolios. The evolution of risks is monitored, as the actuarial assumptions, underwriting, accepting risks policies, and monitoring of technical provisions are constantly reviewed. In addition, the IRB Brasil RE uses the retrocession as technique of transferring risk to other reinsurance companies, in order to mitigate and control the underwriting risk.

In the pension market, the longevity risk is monitored by Brasilprev using technical provisions and the design of products, along with improvements in future life expectancy of the insured population and assisted by the Company. The risks associated with early cancellation of plans are also managed by Brasilprev.

In premium bonds, the subscription is divided into three aspects: the sweepstakes to be held risk, the guarantee of rescue by the customer as product conditions, both treated during the development process and throughout the life of the products and the risk of administrative expenses, also managed by Brasilcap.

The technical provisions related to BB Seguridade operating companies are calculated according to the technical notes approved by the Superintendência de Seguros Privados (Susep) and rules established by Susep and the Conselho Nacional de Seguros Privados (CNSP).

a.2) Credit Risk

Credit risk is the possibility of the occurrence of loss arising from any default by the counterparty of their financial obligations, as agreed, or deterioration of their creditworthiness conditions.

BB Seguridade, its subsidiaries and affiliates are exposed to credit risk, mainly due to investments made in the market, on reinsurance operations (counterparty risk) and premiums receivable.

Premiums receivable exposure to credit risk differs between the lines of elapse risk and elapsed risk. For the lines of elapsed risk the exposure is greater since cover precedes payment of the insurance premium. With regard to insurance operations there is a reduced exposure to credit risk. However, considering the characteristics of the business portfolio of the Group, and the profile of the customer portfolio, Management understands that the credit risk is present more intensely in financial applications and in reinsurance operations.

Priority is given to investments in counterparties with high quality credit rating, with positions predominantly concentrated in the national treasury risk, and in a lesser scale, in private risk maintained with counterparties with good credit risk.

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In the case of insurance transactions, there is credit risk associated with the counterparty of reinsurance operations. This risk is managed through strict rules of assignment, consolidated exposure limits for each business, transfer limits by rating and credit limits per reinsurer, respecting the regulatory limits.

a.3) Market Risk

Market risk is the possibility of financial or economic losses resulting from fluctuations in the value of market positions held. It includes the risks of transactions subject to foreign exchange, interest rate, stock prices, inflation rates and prices of goods (commodities).

a.4) Liquidity Risk

Liquidity risk is the possibility of the occurrence of losses arising from the lack of sufficient resources to comply by the dates set, the commitments.

To mitigate this risk, often studies of the flows of financial transactions expected in various scenarios are performed evaluating conservatively minimum limits of liquid resources to be maintained. Allied to this strategy, the best options of reinvestment are evaluated in order to maximize available resources.

a.5) Legal Risk

Legal risk is the level of uncertainty related to the returns of an institution for lack of a comprehensive legal foundation of its operations, reputation´s loss and poorly formalized operations.

To reduce these risks, BB Seguridade companies have legal structure responsible for reviewing insurance contracts in order to mitigate legal risk, and provide support for the lawsuits.

a.6) Operational Risk

Operational risk is defined as the possibility of losses resulting from failure, deficiency or inadequacy of internal processes, people and systems or from external events, except those related to market, credit, legal and underwriting risks.

The management of operational risks is performed with focus on controlling, monitoring, and reducing threats, external and internal, of the strategic objectives and operations. That way, the societies keep control activities to prevent risks not accepted and detection of residual risks updated. Specific tools and methodologies are used to identify previously the risk factors, which are rated and monitored periodically.

b) Risk Management in BB Seguridade Conglomerate

Risk management is essential in all business activities, being using in order to add value to the business once it provides support to the business areas in their activities planning, maximizing the use of own and third party resources.

The risk management process counts on the participation of all layers covered within the scope of the corporate governance, which extends from the senior management, to the different business and products areas in detecting, dealing with and monitoring those risks.

The management of all inherent risks to the activities of an integrated mode is included in a process supported on Internal Controls and Risk Management structure. This approach enables the risk management models to be continually enhanced, minimizing the existing gaps that might adversely affect the proper detection and correction of the risks.

Corporate risk management is based on statistical tools such as adequacy testing of liabilities, sensitivity analysis, Value at Risk (VaR) calculation and capital adequacy indicators, among others. Added to these tools is the qualitative aspect of risk management, using the results risk self-evaluation, the gathering of information about losses and the analyses of the results of testing and controls and audits.

BB Seguridade installed on Apr 02, 2014 its Financial and Risk Management Committee. Moreover, the Audit Committee is in the final phase of the constitution, statutory body to advise the Board of Directors which has, among other duties, the responsibility to review the financial statements in the light of current accounting practices; assess the quality of the internal control system in the light of current regulations and internal codes and; evaluate the effectiveness of internal and independent audits, and recommend to the Board the improvement of policies, practices and procedures identified in the course of their duties. The Internal Audit complements the governance structure that operates in risk management of BB Seguridade.

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c) Capital Management

BB Seguridade monitors capital management of its insurance, reinsurance, pension plan and premium bonds affiliates, in order to assure the maintenance of sufficient capital levels to meet the regulatory requirements established by CNSP and Susep, besides optimizing shareholders return.

In managing capital of affiliates supervised by Susep, the main indicator used is Minimum Required Capital - MRC � which indicates the total capital that companies must maintain at any time to operate and aims to address the inherent risks of the operations. The Underwriting Risk Capital is regulated by CNSP Resolution 280/2013, which was complemented by Susep Circular 486/2014 on Jan 23, 2014; the Credit Risk Capital by CNSP Resolution 228/2010; and the Operational Risk Capital by CNSP Resolution 283/2013 issued by Susep.

In addition to the above questions, it is required that insurers present amounts of net assets in excess of need for provisions coverage, more than 20% of CMR, starting at January 2015.

Insurance, reinsurance, pension plan and premium bonds affiliates, measure the CMR in accordance with the regulations issued by CNSP and Susep. In the calculation, for the purposes of the aforementioned resolutions, the following concepts are considered:

I � MRC: amount of capital that a supervised entity must maintain at any time to operate, being the higher of the base capital, risk capital, and the solvency margin, this last one only for reinsurers.

II � Base capital: fixed amount of capital that the company is required to maintain. III � Risk capital: variable amount of capital a local reinsurer shall have in order to ensure the risks inherent in its

operations, pursuant to specific regulation. IV � Solvency margin: the greater of the following amounts: (a) 20% of the total retained premiums in the past 12

months, and (b) 33% of the annual average of total retained losses in the last 36 months. V � Liquid Assets: all assets accepted by Conselho Monetário Nacional up to 100% (one hundred percent) in the

coverage of technical provisions.

Description of Risks

The follow details the main risks they are exposed to insurance, reinsurance, premium bonds and pension plan segments.

d) Insurance Segment � BB MAPFRE SH1 and MAPFRE BB SH2

BB MAPFRE SH1 and MAPRE BB SH2, holding companies that comprise the Group Insurance BB MAPFRE, hold interest in subsidiaries that operate in the insurance segment. The tables in this note show the individual information contained in the financial statements of subsidiaries.

d.1) Underwriting Risk

Concentration of Risks

Potential exposures to concentration of risk are monitored by analyzing certain concentrations in certain geographical regions, using assumptions about the potential threat characteristics. The tables below illustrate concentration of risk within the scope of the business by region and insurance products, based on the amount of premium net of reinsurance issuance of the Group.

BB MAPFRE SH1

Concentration of Risk by Region � Gross of Reinsurance

R$ thousand

Geographical region 01.01 to 09.30.2014

Other % Rural % Life % Total %

Midwest 18,980 0% 361,066 7% 532,441 11% 912,487 18%

Northeast 17,400 0% 102,627 2% 512,088 10% 632,115 12%

North 5,122 0% 42,048 1% 147,092 3% 194,262 4%

Southeast 58,433 1% 331,489 7% 1,732,521 35% 2,122,443 43%

South 24,220 1% 564,480 11% 546,801 11% 1,135,501 23%

Total 124,155 2% 1,401,710 28% 3,470,943 70% 4,996,808 100%

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R$ thousand



Midwest 16,042 3% 245,701 5% 418,987 9% 680,730 17%

Northeast 12,189 6% 61,560 8% 497,162 15% 570,911 29%

North 3,480 4% 22,964 5% 135,741 9% 162,185 18%

Southeast 44,224 2% 229,260 5% 1,679,033 14% 1,952,517 21%

South 17,824 2% 416,832 4% 493,282 9% 927,938 15%

Total 93,759 17% 976,317 27% 3,224,205 56% 4,294,281 100%

R$ thousand

Geographical region 3rd Quarter/2014


Midwest 5,807 0% 82,875 6% 181,306 12% 269,988 18%

Northeast 6,424 0% 30,405 2% 172,889 12% 209,718 14%

North 1,913 0% 14,975 1% 48,792 3% 65,680 4%

Southeast 20,951 1% 105,171 7% 477,090 32% 603,212 40%

South 8,836 1% 158,061 11% 176,499 12% 343,396 24%

Total 43,931 2% 391,487 27% 1,056,576 71% 1,491,994 100%

R$ thousand



Midwest 7,141 0% 77,579 5% 132,662 9% 217,382 14%

Northeast 4,617 0% 25,148 2% 157,333 11% 187,098 13%

North 1,278 0% 10,723 1% 40,930 3% 52,931 4%

Southeast 16,279 2% 100,964 7% 548,347 38% 665,590 47%

South 6,806 0% 157,375 11% 166,670 11% 330,851 22%

Total 36,121 2% 371,789 26% 1,045,942 72% 1,453,852 100%

Concentration of Risk by Region � Net of Reinsurance

R$ thousand



Midwest 15,795 0% 221,270 5% 532,727 12% 769,792 17%

Northeast 14,807 0% 70,491 2% 512,032 11% 597,330 13%

North 4,381 0% 35,513 1% 147,070 3% 186,964 4%

Southeast 49,654 1% 251,564 6% 1,723,334 38% 2,024,552 45%

South 20,677 1% 379,246 8% 547,436 12% 947,359 21%

Total 105,314 2% 958,084 22% 3,462,599 76% 4,525,997 100%

R$ thousand



Midwest 10,755 0% 143,549 4% 416,261 11% 570,565 15%

Northeast 6,659 0% 41,114 1% 496,998 13% 544,771 14%

North 2,052 0% 19,357 0% 135,660 3% 157,069 4%

Southeast 31,285 1% 172,764 4% 1,663,003 43% 1,867,052 48%

South 9,451 0% 267,351 7% 492,962 13% 769,764 20%

Total 60,202 1% 644,135 16% 3,204,884 83% 3,909,222 100%

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R$ thousand



Midwest 5,358 0% 59,744 4% 181,291 13% 246,393 17%

Northeast 5,904 0% 20,921 2% 172,884 12% 199,709 14%

North 1,764 0% 12,857 1% 48,791 4% 63,412 5%

Southeast 19,313 1% 84,043 6% 476,084 34% 579,440 41%

South 8,146 1% 117,981 9% 176,466 13% 302,593 23%

Total 40,485 2% 295,546 22% 1,055,516 76% 1,391,547 100%

R$ thousand



Midwest 2,608 0% 43,592 3% 131,824 10% 178,024 13%

Northeast (66) 0% 16,497 1% 157,291 12% 173,722 13%

North 96 0% 8,838 1% 40,908 3% 49,842 4%

Southeast 6,279 2% 70,885 5% 542,254 42% 619,418 49%

South (398) 0% 106,205 8% 166,226 13% 272,033 21%

Total 8,519 2% 246,017 18% 1,038,503 80% 1,293,039 100%

BB MAPFRE SH2


R$ thousand


Other % Damage % Auto % Total %

Midwest 64,075 1% 98,395 2% 376,959 6% 539,429 9%

Northeast 88,027 1% 104,399 2% 494,050 8% 686,476 11%

North 11,042 0% 34,832 1% 94,898 2% 140,772 3%

Southeast 868,844 14% 790,860 13% 1,784,538 27% 3,444,242 54%

South 400,519 6% 256,574 4% 814,319 13% 1,471,412 23%

Total 1,432,507 22% 1,285,060 22% 3,564,764 56% 6,282,331 100%

R$ thousand



Midwest 33,776 1% 82,494 2% 266,684 5% 382,954 8%

Northeast 45,882 1% 99,819 2% 371,925 7% 517,626 10%

North 5,511 0% 34,406 1% 78,870 1% 118,787 2%

Southeast 1,110,665 20% 638,606 12% 1,905,789 34% 3,655,060 66%

South 64,704 1% 153,637 3% 554,937 10% 773,278 14%

Total 1,260,538 23% 1,008,962 20% 3,178,205 57% 5,447,705 100%

R$ thousand



Midwest 25,131 1% 28,826 1% 140,944 6% 194,901 8%

Northeast 29,592 1% 34,373 2% 182,476 8% 246,441 11%

North 4,378 0% 13,149 1% 38,838 2% 56,365 3%

Southeast 321,068 14% 256,534 11% 634,924 28% 1,212,526 53%

South 163,142 7% 88,719 4% 308,693 14% 560,554 25%

Total 543,311 23% 421,601 19% 1,305,875 58% 2,270,787 100%

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R$ thousand



Midwest 10,167 1% 20,187 1% 84,242 4% 114,596 6%

Northeast 10,320 1% 24,600 1% 116,614 6% 151,534 8%

North 1,719 0% 10,907 1% 25,918 1% 38,544 2%

Southeast 459,112 23% 268,050 13% 735,311 35% 1,462,473 71%

South 30,258 2% 37,123 2% 179,721 9% 247,102 13%

Total 511,576 27% 360,867 18% 1,141,806 55% 2,014,249 100%


R$ thousand



Midwest 53,152 1% 72,743 1% 376,962 7% 502,857 9%

Northeast 80,897 2% 92,607 2% 494,050 9% 667,554 13%

North 9,306 0% 30,507 1% 94,899 2% 134,712 3%

Southeast 566,676 11% 352,832 7% 1,783,174 32% 2,702,682 50%

South 318,338 6% 205,812 4% 814,315 15% 1,338,465 25%

Total 1,028,369 20% 754,501 15% 3,563,400 65% 5,346,270 100%

R$ thousand



Midwest 24,451 1% 60,546 1% 266,658 6% 351,655 8%

Northeast 40,365 1% 88,427 2% 371,896 8% 500,688 11%

North 4,641 0% 29,371 1% 78,870 2% 112,882 3%

Southeast 824,241 17% 377,914 8% 1,903,484 37% 3,105,639 62%

South 41,760 1% 132,260 3% 554,866 12% 728,886 16%

Total 935,458 20% 688,518 15% 3,175,774 65% 4,799,750 100%

R$ thousand



Midwest 22,032 1% 24,624 1% 140,944 7% 187,600 9%

Northeast 27,878 1% 30,791 2% 182,477 9% 241,146 12%

North 3,242 0% 10,100 1% 38,838 2% 52,180 3%

Southeast 204,061 11% 120,698 6% 634,262 33% 959,021 50%

South 116,449 6% 72,267 4% 308,693 16% 497,409 26%

Total 373,662 19% 258,480 14% 1,305,214 67% 1,937,356 100%

R$ thousand



Midwest 8,921 1% 17,356 1% 84,242 5% 110,519 7%

Northeast 9,056 1% 22,500 1% 116,613 7% 148,169 9%

North 1,374 0% 7,261 0% 25,918 2% 34,553 2%

Southeast 315,440 18% 132,534 8% 734,863 42% 1,182,837 68%

South 17,739 1% 32,087 2% 179,713 11% 229,539 14%

Total 352,530 21% 211,738 12% 1,141,349 67% 1,705,617 100%

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Insurance Risk Sensitivity

The sensitivity test was developed to present how the Result and equity shall be affected in case of reasonable possible changes on the risk variables with regard to the statement date.

Technical Provisions

i) Provision for IBNR: It was simulated how a possible and reasonable increase in the delay between the report date and the date when the claims occurred could affect the balance of the provision for IBNR and, consequently, income and shareholders� equity. The sensitivity parameter used took into account aggravation in the IBNR factors regarding the development of claims, based on the average variability of those factors. The factor used for each company was based on the studies listed in the following table:

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Risk Factor Used factor

Sep 30, 2014 Dec 31, 2013

BB MAPFRE SH1

Companhia de Seguros Aliança do Brasil 19.22% 7.52%

Vida Seguradora S.A. 2.68% 10.11%

MAPFRE Vida S.A. 27.31% 5.07%

MAPFRE BB SH2

Brasilveículos Companhia de Seguros 12.62% 9.42%

Aliança do Brasil Seguros S.A. 21.61% 15.51%

MAPFRE Seguros Gerais S.A. 5.63% 9.78%

MAPFRE Affinity Seguradora S.A. 5.95% 18.87%

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ii) Supplementary Provision Coverage � SPC for long-term insurance (Ouro Vida Revisado): Provision made at Companhia de Seguros Aliança do Brasil to withstand the expected claims given the aging of the insured group and sealing of new entrants (discontinued marketing). We simulated how a deterioration of 5% in the mortality table and a reduction of 1% in the discount rate used for calculation of SPC might have affected its balance and consequently income and shareholders� equity as of the company.

Loss ratio

We simulated how a 5% increase in the portfolio loss ratio in last 12 months would have affected income and shareholders� equity of each company.

Considering the assumptions described above, the values recorded in Sep 30, 2014 and Dec 31, 2013 are as follows:

BB MAPFRE SH1

R$ thousand

Risk Factor Sensitivity Impact on Shareholders� Equity / Profit

Sep 30, 2014 Dec 31, 2013

a. Technical Provisions

Total Change in the principal assumptions for technical provisions (192,686) (167,508)

a1.IBNR Increase Coefficient of variation in IBNR Factors (54,009) (26,507)

a2.Long-term SPCIncrease Increase of 5% in Mortality (30,960) (31,885)

Reduction 1% reduction in discount rate (107,717) (109,116)

b. Loss ratio Increase Increase of 5% in the loss ratio (87,252) (73,601)

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MAPFRE BB SH2

R$ thousand


Sep 30, 2014 Dec 31, 2013

a. Technical ProvisionsTotal Change in the principal assumptions for technical provisions (21,318) (28,233)

a1. IBNR Increase Coefficient of variation in IBNR Factors (21,318) (28,233)


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d.2) Credit Risk

Management believes that, in relation to insurance transactions, there is a reduced credit risk exposure, since the Group offers a wide range of different products.

In respect of reinsurance operations, the Group is exposed to risk concentration for individual reinsurers, due to the nature of the reinsurance market and the narrow range of reinsurers with acceptable credit ratings. The tables below indicate the reinsurance partners of the Companies and the amount of net premiums written, with the opening of the assigned amount and percentage of retention.

BB MAPFRE SH1

R$ thousand

Rating Sep 30, 2014 Dec 31, 2013

Local Admitted Eventual Total Local Admitted Eventual Total

A -- 230,502 -- 230,502 -- -- -- --

A- -- -- -- -- -- 105,479 -- 105,479

No Rating 240,309 -- -- 240,309 419,005 -- -- 419,005

Total 240,309 230,502 -- 470,811 419,005 105,479 -- 524,484

R$ thousand

Group of lines 01.01.2014 to 09.30.2014 01.01.2013 to 09.30.2013

Net written premium(1)

Ceded reinsurance

RetentionNet written premium(1)

Ceded reinsurance

Retention

Life group 3,470,943 8,343 100% 3,224,205 19,321 99%

Rural 1,401,710 443,626 68% 976,317 332,181 66%

Others 124,155 18,842 85% 93,759 33,557 64%

Total 4,996,808 470,811 91% 4,294,281 385,059 91%

(1) Net written premium of Coinsurance and Cancellations. R$ thousand

Group of lines 3rd Quarter/2014 3rd Quarter/2013


Ceded reinsurance


Ceded reinsurance

Retention

Life group 1,056,575 1,059 100% 1,045,942 7,440 99%

Rural 391,488 95,943 76% 371,789 125,772 66%

Others 43,931 3,445 92% 36,121 27,601 24%

Total 1,491,994 100,447 93% 1,453,852 160,813 89%

(1) Net written premium of Coinsurance and Cancellations.

In Sep 30, 2014, total reinsurance recoverable assets is R$ 511,264 thousand (R$ 298,301 thousand in Dec 31, 2013).

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MAPFRE BB SH2

R$ thousand

Rating Sep 30, 2014 Dec 31, 2013


AA+ -- 270 13,337 13,607 -- -- 2,433 2,433

AA -- 4,055 1,982 6,037 -- 7,376 3,844 11,220

BBB+ -- -- 1,442 1,442 -- -- -- --

A+ -- 193,154 16,581 209,735 -- 236,968 7,680 244,648

A -- 75,879 2,523 78,402 -- 77,788 1,673 79,461

AA- -- 14,418 18,653 33,071 -- 18,609 7,404 26,013

A- -- 2,884 2,523 5,407 -- 14,057 6,844 20,901

No Rating 588,127 -- -- 588,127 446,258 -- -- 446,258

Total 588,127 290,660 57,041 935,828 446,258 354,798 29,878 830,934

R$ thousand

Group of lines

01.01.2014 to 09.30.2014 01.01.2013 to 09.30.2013

Net written premium(1)Ceded reinsurance Retention

Net writtenpremium(1)Ceded reinsurance Retention

Vehicle 3,564,755 1,134 100% 3,178,206 2,431 100%

Property 1,285,060 530,558 59% 1,008,961 320,443 68%

Transportation 186,823 18 100% 198,360 14,192 93%

Marine \ Aviation 206,835 159,898 23% 178,680 143,161 20%

Rural 314,858 102,667 67% 174,283 74,533 57%

Other 723,998 141,553 80% 709,215 93,195 87%

Total 6,282,329 935,828 85% 5,447,705 647,955 88%


Group of lines

3rd Quarter/2014 3rd Quarter/2013



Vehicle 1,305,874 661 100% 1,141,806 456 100%

Property 421,600 163,121 61% 360,867 149,129 59%

Transportation 63,104 2 100% 66,101 9 100%

Marine \ Aviation 88,243 72,300 18% 71,787 58,462 19%

Rural -- -- -- 86,817 37,471 57%

Other 391,965 97,348 75% 286,871 63,105 78%

Total 2,270,786 333,432 85% 2,014,249 308,632 85%



Management of credit risk

In addition to the exposure to credit risk to reinsurers the affiliates BB MAPFRE SH1 and MAPFRE BB SH2 actively manage the risks associated with investments.

The Financial Policy provides the diversification of the investment portfolio (financial assets), with the setting of exposure limits for each issuer with high credit quality, reflected in the ratings assigned by rating agencies for allocation.

Credit risk management for financial instruments includes the monitoring of credit risk exposure on the part of individual counterparties in relation to credit classifications by risk assessment companies, such as Fitch Ratings, Standard & Poor�s and Moody�s, being the Standard & Poor's the one used for conversion of the other ratings agencies.

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BB MAPFRE SH1

Credit risk rating

R$ thousand

Financial Security � Rating Sep 30, 2014

AAA AA+ AA AA- A BBB+ BBB BB+ Total

Fixed income government securities 4,401,003 -- -- -- -- -- -- -- 4,401,003

Time Deposit (CDB) 24,126 -- 116,605 -- -- -- -- -- 140,731

Time Deposit (CDB-DPGE) -- -- -- 26,901 -- -- -- 13,432 40,333

Debentures 72,334 65,986 58,174 13,312 5,039 5,089 -- -- 219,935

Financial Bills 101,012 -- 94,819 -- -- 45,157 -- -- 240,988

Receivables Investment 51,477 -- -- -- -- -- -- -- 51,477

Promissory Notes -- 31,297 -- -- -- -- -- -- 31,297

Total 4,649,952 97,283 269,597 40,213 5,039 50,247 0 13,432 5,125,764

MAPFRE BB SH2

Credit risk rating

R$ thousand




Time Deposit (CDB) 25,145 8,069 144,312 26,071 -- -- -- -- 203,597

Time Deposit (CDB-DPGE) -- -- 13,309 -- -- -- -- 13,719 27,028

Debentures 58,230 70,824 27,329 10,147 2,520 2,552 -- -- 171,602

Financial Bills 29,048 -- 78,051 -- -- 23,373 -- -- 130,472



Total 3,254,300 89,424 263,001 36,218 2,520 25,925 -- 13,719 3,685,107

d.3) Market Risk


The result of VaR is monitored daily by the Board of Finance. The methodology for calculating VaR is the historical series of 150 days, with a confidence level of 95% and time horizon of 1 business day.

Financial investments assets are subject to active management with an approach that strikes a balance between quality, diversification, liquidity and return on investment. The main purpose of the investment process is to improve the relationship between rate, risk and return, aligning investments with the cash flow of liabilities. For this purpose are used strategies that take into consideration acceptable risk levels, terms, profitability, sensitivity, liquidity and assets concentration limits by issuer and credit risk.

Diversification effect between the risk factors

R$ thousand

Company Index

Possibility of loss estimated by the model

of VaR for 1 day

Sep 30, 2014 Dec 31, 2013

Companhia de Seguros Aliança do Brasil Inflation indexes and fixed interest 8,591 5,468

Aliança do Brasil Seguros S.A. Inflation indexes and fixed interest 587 1,030

Brasilveículos Companhia de Seguros Inflation indexes and fixed interest 2,071 4,624

MAPFRE Vida S.A. Fixed interest 1,654 1,156

Vida Seguradora S.A. Fixed interest 1,564 1,210

MAPFRE Seguros Gerais Inflation indexes and fixed interest 8,635 5,070

MAPFRE Affinity Fixed interest 1,800 1,168

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It should be stressed that the Banco do Brasil and MAPFRE Insurance Group adopt strict control policies and strategies approved in advance by the Finance Committee and Management, which make it possible to reduce market risk exposure. Operations are controlled with the use of Stress Testing and Value at Risk tools and subsequently compared with the Stop Loss risk control policy. BB Seguridade monitors the VaR of the investment portfolio on a daily basis, using information supplied by MAPFRE DTVM and BB Gestão de Recursos DTVM. Portfolio risk is submitted to meetings of the Finance Committee, in order to identify any need for reallocating portfolio assets.

Sensitivity to interest rate

In this sensitivity analysis, the following risk factors are taken into account: (i) interest rates, and (ii) securities indexed to inflation indexes (INPC, IGP-M, and IPCA), due to their relevance in the Group�s asset and liability positions.

The quantitative parameters used in the sensitivity analysis (100 basis points for interest rate and inflation coupons) were defined based on an analysis of recent historical variations of interest rates and the assumption of maintenance of inflation expectations curves, which affect these securities as much as the interest rates.

Historically, companies do not redeem assets in advance, and such assets are held to maturity. Accordingly, securities placed in this category were excluded from the base for sensitivity analysis, as Management considers that it is not sensitive to interest rate variations in the case of these securities, given the policy of holding them to maturity.

BB MAPFRE SH1

In order to develop the sensitivity analysis, the financial assets existing as of the balance sheet base date were taken into account, except securities classified as held to maturity in the amount of R$ 1,916,895 thousand and DPVAT position of R$ 283,112 thousand.

R$ thousand

Risk Factor

Interest rate

Impact on Equity

Sep 30, 2014 Dec 31, 2013

Elevation of rates (16,925) (18,310)

Reduction of rates 18,933 18,579

Parameters:

a) 100 basis points for interest rate structures existing as in the base date.

b) 100 basis points for coupon rate structures existing as in the base date.

MAPFRE BB SH2


R$ thousand

Risk Factor

Interest rate

Impact on Equity

Sep 30, 2014 Dec 31, 2013



Parameters:



Limitations of sensitivity analysis

Sensitivity analyzes demonstrate the effect of a change in an important premise while the other assumptions remain unchanged. In reality, there is a correlation between the assumptions and other factors. It should also be noted that these sensitivities are not linear, larger or smaller impacts should not be interpolated or extrapolated from these results.

Sensitivity analyses do not take into account the fact that assets and liabilities are highly managed and controlled. Additionally, the financial position may vary upon the occurrence of any variation in the market. As investment markets move on through different levels, management actions may include selling investments and changing portfolio allocation, among other protective measures.

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Other limitations on sensitivity analyses include the use of hypothetical market variations to demonstrate a potential risk that only represents the Group's view of possible changes in the market in the near future, which cannot be forecasted with any certainty, and the assumption that all interest rates vary on an identical basis.

d.4) Liquidity Risk

Liquidity risk management involves a set of controls, principally in regard to the establishment of technical limits, with ongoing evaluation of the taken positions and financial instruments used. Each year the Executive Board approves minimum liquidity levels to be maintained, as well as the instruments that may be used to manage liquidity, on the basis of the assumptions contained in the Investment Policy, which is approved by the Board of Directors.

BB MAPFRE SH1

R$ thousand

Sep 30, 2014 Dec 31, 2013

Up to 1 yearBetween 1

and 5 yearsMore than 5

yearsTotal Up to 1 year

Between 1 and 5 years

More than 5 years

Total

Assets

Cash 310,405 -- -- 310,405 222,699 -- -- 222,699

Cash equivalents 40,968 -- -- 40,968 -- -- -- --

Financial assets (*) 1.854,448 2.062,474 925,730 4,842,652 991,544 2,156,414 960,040 4,107,998

Receivables from insurance and reinsurance operations

1,686,679 878,845 -- 2,565,524 1,450,447 743,683 -- 2,194,130

Reinsurance assets � technical provisions(***)

179,740 207,242 38,046 425,028 157,755 169,919 35,852 363,526

Others operational credits 152,899 -- -- 152,899 28,832 -- -- 28,832

Receivables(**) 302,948 1,270 -- 304,218 308,014 1,002 -- 309,016

Other 3,036 -- -- 3,036 6,506 -- -- 6,506

Prepaid expenses 12,270 -- -- 12,270 5,787 -- -- 5,787

Deferred costs 504,199 655,247 -- 1,159,446 460,923 523,752 -- 984,675

Other Assets -- 182 -- 182 -- 182 -- 182

Total Assets 5,047,592 3,805,260 963,776 9,816,628 3,632,507 3,594,952 995,892 8,223,351

Liabilities

Technical provisions (***) 2,330,066 2,866,706 911,683 6,108,455 1,999,488 2,388,190 863,243 5,250,921

Accounts payable 471,833 -- -- 471,833 354,588 -- -- 354,588

Obligations with insurance and reinsurance operations

1,630,960 -- -- 1,630,960 1,354,326 -- -- 1,354,326

Third party deposits 341,982 -- -- 341,982 168,391 -- -- 168,391

Total Liabilities 4,774,841 2,866,706 911,683 8,553,230 3,876,793 2,388,190 863,243 7,128,226

(*) Financial assets and technical provisions related to DPVAT, amounting to R$ 283,112 thousand in 2014 (R$ 203,989 thousand in 2013), and R$ 283,017 thousand in 2014 (R$ 158,067 thousand in 2013), respectively, were not classified in the table above since they were not under management.

(**)Financial assets related to legal and tax deposits, amounting to R$ 700,498 thousand in 2014 (R$ 665,874 thousand in 2013), and financial liabilities of the legal provisions, amounting of R$ 579,645 thousand in 2014 (R$ 551,075 thousand in 2013), were not classified in the table above due the uncertain expected resolution date(s).

(***)In relation to the outflow of reserves for claims and reinsurance assets related to claims it was considered the historical experience observed in the payment standard.

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MAPFRE BB SH2

R$ thousand

Sep 30, 2014 Dec 31, 2013





More than 5 years

Total

Assets

Cash 263,322 -- -- 263,322 150,091 -- -- 150,091


Financial assets (*) 1,275,110 1,202,670 842,580 3,320,360 805,433 1,495,606 1,033,198 3,334,237


3,716,635 49,779 - 3,766,414 2,833,022 62,878 -- 2,895,900


1,005,932 496,320 198,998 1,701,250 895,645 320,090 63,851 1,279,586

Others operational credits 216,639 8,092 -- 224,731 198,085 8,092 -- 206,177

Receivables(**) 270,491 17,194 -- 287,685 446,773 13,231 -- 460,004

Other 452,111 -- -- 452,111 254,622 -- -- 254,622


Deferred costs 798,679 64,910 -- 863,589 775,569 74,043 -- 849,612

Other Assets 551 517 -- 1,068 552 527 -- 1,079

Total Assets 8,186,086 1,839,482 1,041,578 11,067,146 6,369,797 1,974,467 1,097,049 9,441,313

Liabilities


Accounts payable 628,881 389 -- 629,270 696,111 394 -- 696,505


1,560,879 -- -- 1,560,879 1,176,897 -- -- 1,176,897



(*) Financial assets and technical provisions related to DPVAT, amounting to R$ 364,743 thousand in 2014 (R$ 264.094 thousand in 2013), and R$ 362,951 thousand in 2014 (R$ 247,514 thousand in 2013), respectively, were not classified in the table above since they were not under management.


(***) In relation to the outflow of reserves for claims and reinsurance assets related to claims it was considered the historical experience observed in the payment standard.

d.5) Regulatory Capital

R$ thousand

Sep 30, 2014 Dec 31, 2013

Adjusted net equity

MRC AdequacyAdjusted net

equityMRC Adequacy

SH1

Companhia de Seguros Aliança do Brasil 1,366,547 1,150,778 215,769 1,215,484 1,012,905 202,579

Vida Seguradora 158,510 47,151 111,359 179,914 47,247 132,667

MAPFRE Vida S.A. 175,550 137,960 37,590 168,802 142,994 25,808

SH2

Brasilveículos Companhia de Seguros 509,273 429,507 79,766 502,538 435,378 67,160

Aliança do Brasil Seguros S.A. 149,078 122,488 26,590 183,706 125,147 58,559

MAPFRE Affinity Seguradora S.A. 439,786 165,553 274,233 424,819 173,262 251,557

MAPFRE Seguros Gerais S.A. 940,412 882,897 57,515 853,437 767,875 85,562

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e) Reinsurance Segment � IRB Brasil RE

Risk Management in IRB Brasil RE is considered an essential tool for optimizing the use of capital and selecting the best business opportunities in order to obtain better risk/return for its shareholders.

In order to increase the relevance attached to the subject within the organizational context, in the 2014´s first quarter was established the Risk and Compliance Vice Presidency, which are subordinate to the Corporate Risk Management and Compliance Management, and that is the first responsible for overseeing the risk management of IRB Brasil RE. However, it remains the commitment of the Executive Board, the Board of Directors, the Risk Management Committee and other consultative or deliberative organs in the support and promotion of risk management within the Company.

After a review, in December 2013, the rank A- was confirmed by A.M. Best rating agency, based in the United States, which reflects, in the agency�s opinion, a capitalization strongly adequated to the company´s risks.

Main Types of Risk

The Corporate Risk Management covers the following risk categories: Underwriting, Market, Credit and Liquidity, which in turn are composed of several subcategories. The Company believes that these categories represents its main exhibitions, but are not exhaustive, since many risks can affect it.

To dealing with these risks, the Company uses several methodologies and strategies, such as Balanced Scorecard (BSC), development of a Business Continuity Program, the creation of a Risk Management Plan � aimed to identify, analyse, measure, resolve and report operational risks � addressing operational incidents, monitoring of counterparties credit risk and the VaR of the investment portfolio, among others.

e.1) Underwriting Risk

Monitoring of Reinsurance Liabilities by Business Line

The Company calculates its technical provisions following the standards of the CNSP and Susep. The table below shows liabilities (Provision for Unsettled Claims � PSL, provision for claims Incurred But Not Reported � IBNR, provision for claims Incurred But Not Enough Reported � IBNER, Provision of Technical Surplus � PET, Provision for Unearned Premiums � PPNG, e Provision of Related Expenses � PDR) gross and their respective assets retrocession by business line.

R$ thousand

Group Sep 30, 2014 Dec 31, 2013

Reinsurance liabilities Retrocession assets Reinsurance liabilities Retrocession assets

Property 2,926,650 (1,668,268) 2,713,370 (1,451,836)

Special risks 439,886 (314,289) 405,415 (309,354)

Responsibilities 600,206 (250,886) 657,922 (259,213)

Vessel 511,878 (432,024) 534,834 (465,052)

Vehicle 253,394 (3,750) 231,291 (5,356)

Transportation 359,268 (185,477) 303,883 (168,898)

Financial risks 723,595 (376,225) 734,746 (417,583)

Credit 23,986 (17,862) 19,519 (14,937)

Life 170,310 (37,899) 150,247 (36,774)

Mortgage 40,728 (2,071) 70,066 (995)

Rural 402,114 (80,778) 400,635 (99,922)

Marine 120,721 (36,402) 99,524 (31,576)

Aviation 256,464 (118,368) 187,225 (64,948)

Run-off (London) 169,161 -- 174,426 --

Other 503,319 (50,984) 595,474 (83,808)

Total 7,501,680 (3,575,283) 7,278,577 (3,410,252)

The nature of reinsurance transactions implies that the reinsurer receives most of information from transferor in aggregated form, usually having access to individualized data on facultative business only. Therefore, due to the absence of complete information about the geographical region segregation, and following the guidance of Susep Circular No. 486/2014, is not applicable disclosure of concentration risk by geographical area.

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Sensitivity Analysis

The table below shows possible impact on result and shareholders� equity, considering a 5% increase in claims.

R$ thousand

Impacts Sep 30, 2014

Gross effects Net effects

Income and shareholders� equity (70,892) (43,254)

Income (%) (22) (13)

Shareholders� equity (%) (3) (2)

The studies of liabilities development and ALM (Asset Liability Management) identified that due to the nature of the accepted operations by IRB Brasil Re, so that there is no exposure to convertibility, mortality or survival indexes. The same studies indicated that part of non-operating liabilities related to post-employment benefits are indexed to inflation, which are covered by securities with same index (NTN-B), so that there is no exposure to this index.

e.2) Credit Risk

The IRB Brasil Re understands that the main source of its credit risk are retrocession operations. To mitigate this risk, the Company adopted a policy of having retrocession transactions with companies that have at least half of the ratings on record, demonstrably, equal or higher than A- (S&P, Fitch and AM Best) or A3 (Moody's), and evaluates its retrocession operations through an own classification. The Reinsurer's exposure is continuously monitored, being controlled by counterpart limits, which are reviewed and approved, at least annually, by the Security Committee. The quality of the current retrocession partners of protection contracts IRB Brasil Re can be seen in the table below:

Range rating (%) of reinsurance contracts and protection of participants into force

Local Admitted Eventual Total

AAA or equivalent -- -- -- --

AA or equivalent -- 26.67 20.00 46.67

A or equivalent -- -- 53.33 53.33

BBB+ or equivalent -- -- -- --

BBB or equivalent/inferior -- -- -- --

No rating -- -- -- --

�� -- 26.67 73.33 100

The credit risk on funds and derivative financial instruments is limited because the counterparts are represented by banks with high credit rating attributed by international rating agencies. The following techniques are used to control and mitigate credit risk: setting limits for retrocession by entity; monitoring changes and trends in the insurance and reinsurance market and financial market; and preventive management of losses.

e.3) Market Risk

Value at Risk Analysis

The measurement of market risk, made through the VaR, estimates the potential loss in profit before income tax for a given time horizon given a specific probability of occurrence, considering the market volatilities and the risk diversification by recognizing compensatory positions and correlations between the product and the market. The daily VaR of the portfolio of assets of the Reinsurer, registered on September 30, 2014, was R$ 4.5 million, which represents a loss of 0.08% of the total portfolio of assets, according to the not-parametric method � historical daily VaR with significance level of 5% and mobile observation period of 150 business days.

Sensitivity Analysis for Foreign Currency

The reinsurer is mainly exposed to the U.S. dollar, however having exposure to a lesser extent other foreign currencies, which is the sterling pound, the euro and Argentine peso. The following table details the sensitivity of the reinsurer to the variation of these rates for major currencies, consolidating all other foreign currencies into U.S. dollars. The forward rates of market consensus are considered in September 30, 2014 to December 31, 2014, presented by Bloomberg Composite NY (CPMN).

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R$ thousand �Probable scenario Forward rate Dec 31, 2014 Projected impact Dec 31, 2014

�Surplus´s variation in U.S. Dollars USD 1.0000 / BRL 2,5027 5,068

Surplus´s variation in Pounds Sterling GBP 1,0000 / BRL 4,0593 (4,062)

Surplus´s variation in Euros EUR 1,0000 / BRL 3,1691 354

Surplus´s variation in Argentine Pesos ARS 1,0000 / BRL 0,2580 (5,507)

Result (4,147)

Sensitivity Analysis to Interest Rate

The Company is exposed to interest rate risk, as it has, mainly, securities tied to change in interest rates. The following table details the sensitivity of the Reinsurer to the variation of 1% (100bps) in the Selic rate:

R$ thousand


+1% -1%

Change in pre-fixed securities (33,610) 33,710

Change in post-fixed securities 29,723 (29,723)

Result (3,887) 3,987

Parameters:

a) 100 basis points for interest rate structures existing as in the date of base.

b) Assuming for conservatism that the real interest rate (NTN-B coupon) evolved proportionally to the Selic rate.

After analysis, it is possible to conclude that the sensitivity to interest rate by 100bps implies a change in the value of securities exposed to about 0,09% for the rate reduction and -0,09% for the rate increase.

Correlated Risk Management

The Company considers that the economic variables have no independent movement, correlation between the main risk factors associated with investments. Considering these variables, well as their correlations, concluded that the associated risks are partially mitigated, given that the variables analyzed act in compensatory movement, which can generate a maximum loss of 13% in the period. About the stress scenarios analyzed, considering large global crises that have occurred in the last fifteen years, it was concluded that the maximum loss of the portfolio would be 3%.

Currency Futures Contracts

As part of the investment policy of the Company, is expected the hiring hedge for the occurrence of surplus assets in foreign currency. On base date September 30, 2014, the Company had no forward currency contracts or other hedging instrument.

Future Contracts on Interest Rates � Fixed Incomes

On September 30, 2014, the Company owned all the shares of the Fund Peabiru BB - Fixed Income. Fund managers can adopt as the hedging policy using derivative financial instruments for the purpose of protecting the asset value from unexpected interest rate movements. The fund had dealings in futures contracts with active interest rate exposure of R$ 491.5 million at that date. This position is used to counteract the passive position of the fixed-interest fund assets.

e.4) Regulatory Capital

R$ thousand

Rating

Sep 30, 2014 Dec 31, 2013

Adjusted net equity


equityMRC Adequacy

IRB Brasil RE 2,578,873 615,289 1,963,584 2,520,623 635,557 1,885,066

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R$ thousand

Sep 30, 2014 Dec 31, 2013

Net AssetsTechnical

Provisions

Covering 20% of MCR

Excess of net assets

LiquidityNet Assets


Covering 20% of MCR


IRB Brasil RE 4,711,402 3,926,397 123,058 661,947 4,014,427 3,868,325 127,111 18,991

f) Premium Bonds Segment � Brasilcap Capitalização S.A.

f.1) Credit Risk

Credit Risk Policy

The policy approved by the Board of Directors applies to all transactions involving credit risk and complies with all legal restrictions, as well as with asset portfolio management. Currently, the credit risk exposure limit applicable to private entities is 24% of total assets, including securities of financial and non-financial institutions.

Measurement Systems

The Company also assesses any expected losses regarding the asset portfolio, based on rating grades and the terms of private securities, as per its own methodology. The table below shows the percentages used by the company for assessing these risks:

R$ thousand

Financial security � rating

Sep 30, 2014

AAA AA A BBBExposure to market risk

Total

Fixed income government securities -- -- -- -- 7,696,629 7,696,629

Time deposit (CDB) -- 125,502 60,871 -- -- 186,373

Time deposit (CDB-DPGE) -- -- -- -- -- --

Debentures 203,198 373,420 135,382 -- -- 712,000

Financial bills 1,163,227 258,734 37,441 -- -- 1,459,402

Receivables investment 32,363 25,490 -- -- -- 57,853

Mortgage backed securities 1,423 -- -- -- -- 1,423

Other -- -- -- -- 1,229,343 1,229,343

Total 1,400,211 783,146 233,694 -- 8,925,972 11,343,023

R$ thousand


Dec 31, 2013


Total


Time deposit (CDB) -- -- -- -- -- --

Time deposit (CDB-DPGE) 32,492 -- -- -- -- 32,492

Debentures 270,008 420,062 153,557 -- -- 843,627

Financial bills 315,643 68,899 34,536 -- -- 419,078



Other -- -- -- -- 787,250 787,250

Total 680,676 519,101 188,093 -- 8,385,786 9,773,656

Mitigation Policy

When engaging in any transaction subject to credit risk, the company adopts a conservative approach by using restrictive exposure and concentration limits in order to keep compliance with the limits established by Susep, based on the Minimum Required Capital and taking into account the best practices in asset management.

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Concentration

Credit risk management strategies guide the operational activities of the Group. The strategic decisions include, among other aspects, the materialization of the Company risk �appetite� and the definition of limits for risk exposure, concentration and estimated losses.

As defined in the Investment Policy, the Company establishes concentration limits for credit risk exposures based on the issuer or on the tranches issued. The following tables show the portfolio compositions and the distribution of private securities according to the notes of national scale rating:

Portfolio Composition Sep 30, 2014 Dec 31, 2013

Federal government securities �� 85.7%

Privates Securities 21.5% 14.3%

R$ thousand

Private risk rating Sep 30, 2014 Dec 31, 2013

Exposure Credit Risk Exposure Credit Risk

AAA 1,400,211 885 680,676 782

AA 783,146 1,557 519,101 2,055

A 233,694 832 188,093 1,650

Total 2,417,051 3,274 1,387,870 4,487

f.2) Market Risk

Market risks are monitored daily through the VaR, which is calculated based on historical simulations for one business day and offers a confidence level of 95%. In addition to daily monitoring, stress tests are carried out each month for marked-to-market assets, while sensitivity analyses are performed on a half-yearly basis and detailed on the �Sensitivity Analysis� item in this note.

Exposure

R$ thousand

Risk Factors Sep 30, 2014 Dec 31, 2013

Pre-fixed interest rate 6,049,648 53.7% 5,312,519 54.8%

Derivatives for hedging (adjustments) (1,583) -- (1,118) --

Post-fixed interest rate 3,897,712 34.6% 2,771,422 28.6%

IPCA Coupon 1,314,791 11.7% 1,616,510 16.6%

Assets TR 1,434 -- 2,173 --

Cash / 1-day repos 285 -- 294 --

Total 11,262,287 100% 9,701,800 100%

Part of the assets exposed to pre-fixed interest rates is hedged against market changes through derivative transactions, which alter the portfolio's exposure to market risk factors, as shown in the following table:

Hedge Effects on Market Risk Exposure

R$ thousand



Hedge effects on pre-fixed exposure (1,722,856) (15.3%) (1,355,147) (14.0%)

Total exposure to pre risk 4,326,792 38.4% 3,957,372 40.8%


Hedge effects on post-fixed exposure 1,722,856 15.3% 1,355,147 14.0%

Total exposure to post risk 5,620,568 49.9% 4,126,569 42.6%

The other market risk factors, such as those relating to commodity prices and foreign exchange, are not included in the portfolio of financial assets that are used as collateral by the company.

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Sensitivity analysis

Brasilcap makes the sensitivity analysis of liability and asset positions, considering the possibility of an eventual scenario in which the basic interest rate and interest rate coupons of securities indexed to inflation rates would increase or reduce by 100 basis points. The test results of the last periods are shown in the following table:

R$ thousand Sep 30, 2014 Dec 31, 2013

Increase by 1 p.a. in Interest Rate

Reduction by 1 p.a. in Interest Rate



Shareholders�Equity after

income taxes

Gain/lossbefore

income taxes


income taxes

Gain/lossbefore

income taxes


income taxes

Gain/lossbefore

income taxes


income taxes

Gain/lossbefore

incometaxes

Pre-fixed interest rate (21,527) (35,878) 22,004 36,673 (26,141) (43,569) 26,840 44,733

Post-fixed interest rate 55 92 (57) (95) 82 136 (100) (167)

IPCA Coupon (16,665) (27,774) 17,381 28,969 (21,178) (35,297) 22,111 36,851

Liabilities TR (premium bonds) 39,953 66,588 (53,940) (89,901) 66,015 110,026 (46,468) (77,447)

Total 1,816 3,028 (14,612) (24,354) 18,778 31,296 2,383 3,970

Part of the Financial Security of the Company's investment portfolio is marked on the curve, classified as Category III - Held to maturity, according to BACEN Circular 3.068/2001. Thus, the registry values of these assets do not change on the balance sheet of the Company from arising changes on interest rates and market prices.

The table below shows the results of the Sensitivity test, considering only the assets classified as Category I - Trading securities:




�Increase by 1 p.a. in

Interest Rate Reduction by 1 p.a. in

Interest Rate Shareholders�

Equity after income taxes

Gain/lossbefore

income taxes


income taxes

Gain/lossbefore

income taxes


income taxes

Gain/lossbefore

income taxes


income taxes

Gain/lossbefore

incometaxes



IPCA Coupon (4,880) (8,133) 5,144 8,573 (5,521) (9,201) 5,832 9,721


Total 27,340 45,566 (40,893) (68,156) 53,780 89,635 (33,748) (56,246)

The table below describes the composition of assets and liabilities:

R$ thousand

Sep 30, 2014 Dec 31, 2013

Total Assets 12,057,881 100.0% 10,394,815 100.0%

Investments 11,262,287 93.4% 9,701,800 93.3%

Fundo BB CAP Ações + BB 600mil (1) 80,736 0.7% 71,856 0.7%

Court deposits - Taxes (2) 576,103 4.8% 495,378 4.8%

Other assets (2) 138,755 1.1% 125,781 1.2%

Total Liabilities 12,057,881 100.0% 10,394,815 100.0%

Technical provisions 10,995,453 91.2% 9,488,698 91.3%

Tax litigation liabilities 617,956 5.1% 527,716 5.1%

Other liabilities (3) 113,397 1.0% 108,853 1.0%

Shareholders' Equity 331,075 2.7% 269,548 2.6%

The returns from Fundo BB Cap Ações (1) did not affect Company income, given that the profitability of this portfolio is entirely transferred to holders of Ourocap Flex products as bonuses. As a result, any changes in asset prices do not constitute a risk for the Company.

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The Company evaluated the risk exposure of other assets(2) and liabilities(3) and concluded that there was no need for effecting testing sensitivity analysis, given the small representation in both the ownership structure and business operations.

f.3) Liquidity Risk

The company liquidity risk management uses the Asset Liability Management - ALM analysis - as a tool to assess the level of maturity mismatch and exposure between the assets and liabilities.

The redemption terms of premium bonds issued by the Company are compared with the terms of the assets included in the portfolio that guarantees these certificates, identifying possible mismatching points. For this purpose of liquidity risk, the early projected redemptions were considered as the same distributions observed in the history of each capitalization product.

In this note were considered liquid assets in their respective maturities. However, most of the guarantors� financial assets have an active market that allows its sale before maturity.

Flow base date: Sep 30, 2014 R$ thousand

Flow description Oct 2014-Mar 2015

Apr-Sep2015

Oct 2015-Mar 2016

Apr-Sep2016

Oct 2016-Mar 2017

Abr-Sep2017

Oct 2017-Mar 2018

Abr-Sep2018

Oct 2018-Mar 2019

Abr-Sep2019

Cash flow assets 2,558,316 2,017,295 2,295,145 3,479,638 874,633 195,237 174,059 1,146,183 172,470 7,298

Cash receipts of other plots 1,005,530 762,121 567,459 405,236 302,873 217,088 159,902 74,671 26,861 6,188

Cashflow liabilities (2,299,211) (2,268,254) (2,270,827) (2,579,700) (2,290,896) (1,989,622) (609,441) (912,144) (317,909) (197,337)

Net cash - primary 1,264,635 511,162 591,777 1,305,174 (1,113,390) (1,577,297) (275,480) 308,710 (118,578) (183,851)

Previous cash + remuneration 54,163 1,421,674 2,003,466 2,841,058 4,138,583 3,329,367 1,755,447 1,550,049 1,953,879 1,931,745

Cash balance 1,318,798 1,932,836 2,595,243 4,146,232 3,025,193 1,752,070 1,479,967 1,858,759 1,835,301 1,747,894

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Flow description Jan-Jun

2014

Jul-Dec

2014

Jan-Jun

2015

Jul-Dec

2015

Jan-Jun

2016

Jul-Dec

2016

Jan-Jun

2017

Jul-Dec

2017

Jan-Jun

2018

Jul-Dec

2018

Cash flow assets 1,792,910 1,578,797 1,832,349 807,239 1,430,483 1,397,163 771,771 144,495 155,583 1,752,850

Cash receipts of other plots 746,934 578,689 415,264 302,012 194,691 129,292 74,845 45,588 25,710 6,959


Net cash - primary 650,072 493,350 400,641 (365,854) (699,814) (472,833) 371,555 (96,757) (146,015) 1,522,776

Previous cash + remuneration 37,164 735,509 1,291,229 1,793,483 1,540,190 887,854 477,029 860,026 800,049 722,043

Cash balance 687,236 1,228,859 1,691,870 1,427,629 840,376 415,021 848,584 763,269 ��

f.4) Regulatory Capital

R$ thousand

��

Sep 30, 2014 Dec 31, 2013

�!��

�"��#$�%� ��"��# �!��"��# $�% ��"��#

Brasilcap 320,791 273,215 47,576 258,786 216,676 42,110

g) Pension Plans Segment � Brasilprev Seguros e Previdência S.A.

To mitigate the risks to which the Company is exposed due to the activities of the Pension segment, aiming to protect its participants and shareholders, daily monitoring of exposure levels are conducted and periodic assessment of possible impacts of situations and adverse events are held. Necessary control measures are adopted to observe permanently high standards of economic, financial and actuarial security in order to preserve liquidity, solvency and the balance of benefit plans. In addition, the Company carries out capital management through monitoring of required limits (Minimum Required Capital).

g.1) Underwriting Risk


The underwriting risks considered herein are those linked to the formation of liabilities (technical provisions) from operations.

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The private pension products feature as the main business risk the possibility of accumulated reserves transformation in rents continuing. In this sense, the risk factors choice aimed to sensitize associated hypotheses the materialization expectation of this risk, as follows:

• cancellation assumptions reflect the expectations of redemption of accumulated reserves by the participants before their expected retirement dates. So, lower cancellation rates imply greater probabilities of transforming the accumulated reserves into continuing income;

• the possibility of annuitization reflects the expectations of transformation, by the participants, of the accumulated reserves into continuing income on their retirement dates. So, greater annuitization rates imply greater risks associated with the payment of continuing income;

• the possibility of longevity reflects the expectations on the length of time during which continuing income is paid, Accordingly, greater survival rates imply greater risks associated with the payment of continuing income; and,

• the ETTJ (the Term Structure of Interest Rates Estimated) released by Susep is used to discount realistic cash flows. Thus, the lower the rate, higher the flows present value.

R$ thousand

Risk Factors SensitivityImpacts Sep 30, 2014 Impacts Dec 31, 2013

Equity Income Equity Income

Redemption +100 bps -- -- 3,065 3,065

Redemption -100 bps -- -- (3,360) (3,360)

Annuitization 10% -- -- (15,389) (15,389)

Annuitization -10% -- -- 15,477 15,477

Longevity 5% (7,106) (7,106) (13,526) (13,526)

Longevity -5% 6,868 6,868 13,100 13,100

ETTJ +100 bps 78,332 78,332 585,269 585,269

ETTJ -100 bps (435,533) (435,533) (555,377) (555,377)

The table above demonstrates the sensitivity' analysis calculated by the Company for the main assumptions used in the actuarial calculations of the liabilities involved in the insurance contracts. The �sensitivity� column indicates a variation rate reasonably expected by Management for the selected assumptions. The preparation of the sensitivity analyses conducted by the Company was based on the best estimates of changes in the assumptions considering usual market scenarios and conditions. The results shown in these analyses may be significantly different from the actual results obtained in future periods as a result of favorable or adverse situations during the course of Company business.

g.2) Credit Risk

The table below includes all financial assets held by the company distributed according to the credit ratings informed by renowned ratings agencies. The assets classified as "other" include substantially variable income assets and other amounts receivable and payable recorded in investment funds.

R$ thousand


Sep 30, 2014

AAA AA A BBB BBExposure to market risk

No rating Total

Fixed income government securities 50,356,743 -- -- -- -- -- -- 50,356,743

Time deposit (CDB) 189,043 200,452 113,035 40,700 -- -- -- 543,230

Time deposit (CDB-DPGE) -- 13,511 -- 44,006 13,549 -- -- 71,066

Debentures 1,977,298 4,328,544 239,275 100,418 -- -- -- 6,645,535

Financial bills 13,151,474 148,832 -- -- -- -- -- 13,300,306

Receivables investment 540,007 242,576 -- -- -- -- -- 782,583

Repurchase agreement -- -- -- -- -- -- 30,464,570 30,464,570

Other 331,570 179,026 -- -- -- 1,749,744 (100,561) 2,159,779

Total 66,546,135 5,112,941 352,310 185,124 13,549 1,749,744 30,364,009 104,323,812

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R$ thousand


Dec 31, 2013


No rating Total

Fixed income government securities 51,762,101 -- -- -- -- -- 51,762,101

Time deposit (CDB) 1,551,506 100,095 -- -- -- -- 1,651,601

Time deposit (CDB-DPGE) -- 37,556 36,663 24,557 -- -- 98,776

Debentures 1,705,926 4,488,652 322,546 10,990 -- -- 6,528,114

Financial bills 9,381,553 108,727 -- -- -- -- 9,490,280

Receivables investment 650,975 253,808 -- -- -- -- 904,783

Repurchase agreement -- -- -- -- -- 11,573,764 11,573,764

Other 420,615 26,637 -- -- 1,944,641 155,617 2,547,510

Total 65,472,676 5,015,475 359,209 35,547 1,944,641 11,729,381 84,556,929

g.3) Market Risk


This analysis considers the following risk factors: (i) interest rates and (ii) coupons of securities linked to inflation index (IGP-M and IPCA) due to their importance for the assets and liabilities of the company. The definition of quantitative parameters used in the sensitivity analysis (100 basis points for interest rates and inflation coupons) was based on the analysis of the historical variations in interest rates in a recent period, as well as the assumption of non-variation in inflation expectations curves, which affect the relevant coupons as much as the interest rates.

This analysis takes into account only the securities classified as �fair value through income� and �trading securities�, which are marked-to-market according to the pricing and risk calculation methodologies used by Brasilprev. All active plans, except PGBL and VGBL plans in phase of accumulation, were considered in this analysis.

The sensitivity analysis considers the isolated effects of each risk factor. The ��sensitivity� column indicates a change index that was deemed to be possible for the assumptions selected. The preparation of the sensitivity analyses conducted by the Group was based on the best estimates of changes in these assumptions considering usual market scenarios and conditions.

The table below indicates the changes expected for these variables and their potential impacts on Brasilprev�s income for the period and equity:

R$ thousand

Risk Factor SensitivityImpact in Sep 30, 2014 Impact in Dec 31, 2013


Interest rate (1) + 100 bps 13 13 1 1

Interest rate (1) - 100 bps (13) (13) (1) (1)

Coupon + 100 bps (14,064) (14,064) (15,293) (15,293)

Coupon - 100 bps 15,337 15,337 16,871 16,871

(1) The impact considered for the interest rate is equivalent to the effects of a tax adjustment of 100 bps on earnings for one day, especially due to the impact from this effect on assets with immediate liquidity.

g.4) Liquidity Risk

The table below presents the financial assets and liabilities held by the Company and classified according to contractual maturity terms of cash flows.

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R$ thousand

Sep 30, 2014 Dec 31, 2013





More than 5 years

Total

Asset

Investments 95,352,897 3,297,269 5,673,646 104,323,812 76,210,781 567,805 7,778,343 84,556,929

Credits from insurance and reinsurance transactions

1,684 -- -- 1,684 1,471 -- -- 1,471

Credits from private pension transactions 991 -- -- 991 21 -- -- 21

Reinsurance and retrocession assets -- 216 -- 216 -- 222 -- 222

Other operating credits 3,043 -- -- 3,043 3,937 -- -- 3,937

Securities and credits receivable 27,574 295,883 -- 323,457 26,308 219,251 -- 245,559

Prepaid expenses not related to reinsurance 2,279 -- -- 2,279 386 -- -- 386

Deferred acquisition costs 264,974 356,294 -- 621,268 220,573 252,457 -- 473,030

Total asset 95,653,442 3,949,662 5,673,646 105,276,750 76,463,477 1,039,735 7,778,343 85,281,555

Liability

Technical provisions - insurance and private pension 10,667,420 22,989,107 69,780,639 103,437,166

8,604,740 18,512,367 56,425,922 83,543,029


Debts from insurance transactions 3,914 -- -- 3,914 2,880 -- -- 2,880

Debts of operations with private pension 1,540 -- -- 1,540 1,700 -- -- 1,700


Other debits (court provisions) -- 235,217 -- 235,217 -- 172,989 -- 172,989

Total liability 10,948,693 23,224,918 69,780,639 103,954,250 8,899,096 18,685,464 56,425,922 84,010,482

g.5) Regulatory Capital

R$ thousand

��

��&��' ��

�!��

�"��#$�% ��"��# �!��"��# $�% ��"��#

Brasilprev 1,342,358 1,111,199 231,159 1,288,495 1,029,884 258,611

7 � INFORMATION BY SEGMENT

The information by segment was prepared considering the criteria used by the Administration to evaluate the performance in decision making regarding the allocation of funds for investment and other purposes, the regulatory environment and the similarities between goods and services.

The operations of BB Seguridade are divided into two segments: (i) insurance (insurance and reinsurance, pension plans, health and capitalization) and (ii) brokerage.

Intersegment transactions are conducted under normal market conditions, substantially under the terms and conditions for comparable transactions, including interest rates and collateral. These transactions do not involve abnormal payment risks.

a) Insurance

In this segment, products and services offered are related to life, property and vehicle insurance, property and vehicle insurance, rural, special risks and financial, transport, hooves, and housing people, private pension plans, dental plans and capitalization plans, private pension plans and capitalization plans- reinsurance.

The profit of this segment comes mainly from revenues of insurance and reinsurance issued premiums, contributions for private pension plans, contributions for dental plans, capitalization bonds and investments in securities, net of commercialization expenses, technical provisions and expenses related to benefits and redemptions.

The recording of these results is made through equity investments in subsidiaries.

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b) Brokerage

BB Corretora de Seguros e Administradora de Bens S.A (BB Corretora) is a wholly owned subsidiary of BB Seguridade, which aims at social brokerage and management, fulfillment, promotion and facilitation of business insurance and reinsurance casualty and life and capitalization, private pension plans, dental plans and health insurance.

c) Financial Information by Reportable Segment

R$ thousand


Insurance Brokerage Total Insurance Brokerage Total

Operating income 508,336 562,559 1,070,895 329,861 425,497 755,358

Commissions income -- 562,559 562,559 -- 425,497 425,497

Share of profit of associate companies 508,336 -- 508,336 329,861 -- 329,861

Other income and expenses 2,679 (79,430) (76,751) 11,749 (94,747) (82,998)

Interest income from financial instruments 14,916 33,184 48,100 14,831 19,121 33,952

Personnel expenses (237) (1,828) (2,065) (1,068) (2,565) (3,633)

Administrative expenses (190) (58,189) (58,379) 121 (65,406) (65,285)

Other operating expenses (11,810) (52,597) (64,407) (2,135) (45,897) (48,032)

Income before taxes 511,015 483,129 994,144 341,610 330,750 672,360

Income taxes (1,303) (164,264) (165,567) (4,065) (112,934) (116,999)

Net income (1) 509,712 318,865 828,577 337,545 217,816 555,361

Total assets 7,101,781 1,793,075 8,894,856 6,223,582 1,405,093 7,628,675

Total liabilities 285,226 1,758,065 2,043,291 281,437 1,153,874 1,435,311

Total Equity 6,816,555 35,010 6,851,565 5,942,145 251,219 6,193,364

(1) The financial income and taxes expenses of BB Seguridade and BB Cor are not included. R$ thousand

01.01 to 09.30.2014 01.01 to 09.30.2013


Operating income 1,412,450 1,660,311 3,072,761 938,225 1,230,052 2,168,277

Commissions income -- 1,660,311 1,660,311 -- 1,230,052 1,230,052

Share of profit of associate companies 1,412,450 -- 1,412,450 938,225 -- 938,225




Administrative expenses (468) (202,108) (202,576) (984) (199,461) (200,445)


Income before taxes 1,428,484 1,390,941 2,819,425 961,445 948,011 1,909,456

Income taxes (5,977) (473,393) (479,370) (8,063) (323,295) (331,358)

Net income (1) 1,422,507 917,548 2,340,055 953,382 624,716 1,578,098

Total assets 7,101,781 1,793,075 8,894,856 6,223,582 1,405,093 7,628,675


Total Equity 6,816,555 35,010 6,851,565 5,942,145 251,219 6,193,364

(1) The financial income and taxes expenses of BB Seguridade and BB Cor are not included.

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d) Insurance Segment Subdivision

Insurance Segment results are evaluated considering the following lines of business: (i) Insurance, (ii) Reinsurance, (iii) Private Pension Plans and (iv) Capitalization Plans.

Insurance

The sub segment comprises insurance products offered through BB Mapfre SH1 Participações S.A. and Mapfre BB SH2 Participações S.A. It is formed by the life, mortgage life and rural insurance and property and casualty insurance.

Insurance � Life, Mortgage Life and Rural

Life, mortgage life and rural comprise the products offered by BB Mapfre SH1 (personal, property and rural insurance). Income arises mainly from insurance premiums revenues and investments in securities, net of selling expenses, technical provisions and claims expenses.

Insurance � Property and Casualty

Property and casualty insurance comprise the products offered by Mapfre BB SH2 (casualty and vehicle insurance), Income and expenses are recorded by the equity method and arise, mainly, from insurance premiums revenues and investments in securities, net of selling expenses, technical provisions and claims expenses.

Reinsurance

Reinsurance comprises the products offered by IRB Brasil Re (reinsurance operations), Income and expenses are recorded by the equity method and arise, mainly, from reinsurance premiums issued in the country and abroad revenues and investments in securities, net of selling expenses, technical provisions and claims expenses.

Private Pension Plans

Pension plans are offered in plans marketed by Brasilprev. Income arise mainly from administration fees and investments in securities, net of selling expenses, technical provisions and expenses with benefits and redemption.

Capitalization Plans

Brasilcap primarily responsible for offering capitalization plans. Income and expenses are recorded by the equity method and arise, mainly, from insurance premiums issued revenues and investments in securities, net of selling expenses, technical provisions and expenses with redemption and lottery.

Health

Reinsurance comprises the products offered by Brasildental Operadora de Planos Odontológicos S.A., (operation of private dental plans). Income and expenses are recorded by the equity method and arise, mainly, from health dental plans/ retained premiums and investments in securities, net of selling expenses and technical provisions.

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e) Combined Statement of Income by Sub Segment

R$ thousand

3rd Quarter/2014

Life, Mortgage and Rural

Property and Casualty

ReinsurancePrivate

Pension PlansCapitalization

PlansHealth

Insurance income �

Earned premiums 1,638,261 2,044,499 801,760 -- -- --

Retained premiums 1,552,505 2,362,791 957,709 -- -- --

Change in technical provisions 85,756 (318,292) (155,949) -- -- --

Income insurance 1,931 1,180 -- -- -- --

Retained claims (474,089) (1,472,808) (867,780) -- -- --

Costs acquisition (389,483) (400,216) (27,321) -- -- --

Result from Reinsurance income (146,762) 213,337 132,985 -- -- --

Reinsurance income 43,027 501,025 343,675 -- -- --

Reinsurance expenses (189,789) (287,688) (210,690) -- -- --

Other operation income (expenses) (83,249) (88,722) (25,234) -- -- --

Administrative expenses (71,986) (213,982) (55,955) -- -- --

Taxes expenses (42,330) (43,734) (16,133) -- -- --

Private Pension Plans income -- -- -- 34,514 -- --

Retained contributions -- -- -- 7,152,099 -- --

Benefits provision -- -- -- (7,117,584) -- --

Change in technical provisions -- -- -- (31) -- --

Income from management fees -- -- -- 332,892 -- --

Benefits and redemption expenses -- -- -- (1,386) -- --

Retained benefits -- -- -- (34,212) -- --

Risk contributions -- -- -- 49,099 -- --

Selling expenses -- -- -- (78,839) -- --

Other operation income (expenses) -- -- -- (7,734) -- --

Administrative expenses -- -- -- (67,545) -- --

Taxes expenses -- -- -- (26,287) -- --

Capitalization Plans income

Net securities capitalization -- -- -- -- 239,840 --

Fundraising with bonds -- -- -- -- 1,395,613 --

Change in provision for redemption -- -- -- -- (1,155,773) --

Change in technical provisions -- -- -- -- (6,456) --

Raffle results -- -- -- -- (36,438) --

Selling expenses -- -- -- -- (108,251) --

Other operation income (expenses) -- -- -- -- (6,109) --

Administrative expenses -- -- -- -- (21,960) --

Taxes expenses -- -- -- -- (10,049) --

Health income

Health dental plans income -- -- -- -- -- 5

Administrative expenses -- -- -- -- -- (1,739)

Taxes expenses -- -- -- -- -- --

Result from interest income 109,486 92,427 137,255 110,874 72,543 180

Interest income 140,514 204,652 743,511 2,164,988 290,721 206

Interest expenses (31,028) (112,225) (606,256) (2,054,114) (218,178) (26)

Equity in earnings (8,086) (1,393) 17,527 489 63 --

Operating results 533,693 130,588 97,104 311,836 123,183 (1,554)

Non-current assets results -- 50 2 32 -- --

Income before taxes 533,693 130,638 97,106 311,868 123,183 (1,554)

Interest taxes (167,253) (51,019) (34,538) (122,915) (48,093) --

Results participation (3,434) (8,877) -- (2,780) (919) --

Net income 363,006 70,742 62,568 186,172 74,171 (1,554)

Attributable to Group BB Seguridade 272,219 35,372 12,833 139,620 49,456 (1,165)

Attributable to other stockholders� 90,787 35,370 49,735 46,552 24,715 (389)

Total assets 12,695,514 13,376,067 12,581,229 105,540,475 12,063,501 3,841

Total liabilities 9,707,772 10,346,778 9,747,431 104,028,711 11,726,872 395

Total Equity 2,987,742 3,029,289 2,833,798 1,511,764 336,629 3,446

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R$ thousand

01.01 to 09.30.2014



ReinsurancePrivate


PlansHealth


Earned premiums 4,600,184 6,065,295 2,106,257 -- -- --

Retained premiums 5,256,773 6,642,948 1,910,522 -- -- --

Change in technical provisions (656,589) (577,653) 195,735 -- -- --


Retained claims (1,680,148) (3,659,977) (1,542,283) -- -- --

Costs acquisition (1,100,918) (1,210,629) (55,679) -- -- --

Result from Reinsurance income (139,331) (130,518) (46,730) -- -- --





Taxes expenses (138,658) (137,632) (40,966) -- -- --




Change in technical provisions -- -- -- (30,975) -- --








Taxes expenses -- -- -- (73,210) -- --






Raffle results -- -- -- -- (153,553) --




Taxes expenses -- -- -- -- (30,519) --

Health income




Result from interest income -- -- 326,490 -- -- 180

Interest income 425,109 443,875 1,878,838 6,315,333 820,522 206

Interest expenses (102,582) (157,006) (1,552,348) (5,986,144) (582,065) (26)

Equity in earnings (22,791) (4,710) 42,403 2,097 104 --

Operating results 1,408,543 366,158 526,662 881,643 375,450 (1,554)

Non-current assets results 42 (32) 27 17 -- --

Income before taxes 1,408,585 366,126 526,689 881,660 375,450 (1,554)

Interest taxes (466,761) (139,035) (196,241) (347,364) (146,138) --

Results participation (11,815) (23,724) -- (6,613) (2,848) --

Net income 930,009 203,367 330,448 527,683 226,464 (1,554)



Total assets 12,695,514 13,376,067 12,581,229 105,540,475 12,063,501 3,841


Total Equity 2,987,742 3,029,289 2,833,798 1,511,764 336,629 3,446

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R$ thousand

3rd Quarter/2013



ReinsurancePrivate Pension

PlansCapitalization

Plans


Earned premiums 1,248,588 1,937,688 684,990 -- --

Retained premiums 1,520,681 2,122,109 764,400 -- --

Change in technical provisions (272,093) (184,421) (79,410) -- --

Income insurance 1,238 170 -- -- --

Retained claims (428,171) (1,021,427) (493,270) -- --

Costs acquisition (304,054) (400,362) (28,989) --

Result from Reinsurance income (91,150) (190,561) (5,712) -- --

Reinsurance income 92,086 �� 298,110 -- --

Reinsurance expenses (183,236) �� (292,398) -- --

Other operation income (expenses) (74,083) (61,190) (6,182) -- --

Administrative expenses (65,812) (220,132) (54,976) -- --

Taxes expenses (36,221) (40,944) (17,971) -- --

Private Pension Plans income -- -- -- 33,616 --

Retained contributions -- -- -- 3,694,345 --

Benefits provision -- -- -- (3,660,729) --

Change in technical provisions -- -- -- (12,068) --

Income from management fees -- -- -- 270,780 --

Benefits and redemption expenses -- -- -- (2,814) --

Retained benefits -- -- -- (14,103) --

Risk contributions -- -- -- 47,504 --

Selling expenses -- -- -- (61,446) --

Other operation income (expenses) -- -- -- (2,975) --

Administrative expenses -- -- -- (65,438) --

Taxes expenses -- -- -- (22,641) --


Net securities capitalization -- -- -- -- 211,625

Fundraising with bonds -- -- -- -- 1,383,223

Change in provision for redemption -- -- -- -- (1,171,598)

Change in technical provisions -- -- -- -- (11,377)

Raffle results -- -- -- -- (57,775)

Selling expenses -- -- -- -- (92,841)

Other operation income (expenses) -- -- -- -- (1,233)

Administrative expenses -- -- -- -- (18,115)

Taxes expenses -- -- -- -- (7,283)

Result from interest income 94,968 65,174 86,916 80,604 24,398

Interest income 113,845 120,079 322,357 1,355,695 167,162

Interest expenses (18,877) (54,905) (235,441) (1,275,091) (142,764)

Equity in earnings (6,848) (2,032) (14,287) 2,380 (50)

Operating results 338,455 66,384 161,943 253,399 47,349

Non-current assets results (46) (82) 3 46 --

Income before taxes 338,409 66,302 161,946 253,445 47,349

Interest taxes (113,701) (18,093) (58,298) (97,487) (19,800)

Results participation (3,668) (9,022) -- (2,707) (881)

Net income 221,040 39,187 103,648 153,251 26,668

Attributable to Group BB Seguridade 165,756 19,594 11,796 114,931 17,783

Attributable to other stockholders� 55,284 19,593 91,852 38,320 8,885

Total assets 10,912,127 12,001,396 12,746,417 79,425,613 9,335,691

Total liabilities 7,816,391 9,395,756 10,123,204 78,125,277 9,079,389

Total Equity 3,095,736 2,605,640 2,623,213 1,300,336 256,302

��

��

50

R$ thousand

01.01 to 09.30.2013




PlansCapitalization

Plans


Earned premiums 3,477,145 5,466,404 1,918,899 -- --

Retained premiums 4,504,732 5,786,259 1,961,726 -- --

Change in technical provisions (1,027,587) (319,855) (42,827) -- --

Income insurance 4,783 (429) -- -- --

Retained claims (1,189,715) (2,990,511) (1,908,958) -- --

Costs acquisition (854,661) (1,168,051) (67,279) --

Result from Reinsurance income (229,978) (253,671) 231,747 -- --

Reinsurance income 218,144 437,475 1,070,017 -- --

Reinsurance expenses (448,122) (691,146) (838,270) -- --



Taxes expenses (110,977) (129,953) (55,789) -- --












Taxes expenses -- -- -- (63,364) --





Change in technical provisions -- -- -- -- 1,978

Raffle results -- -- -- -- (170,798)




Taxes expenses -- -- -- -- (36,345)


Interest income 280,475 263,718 603,427 1,593,704 415,915


Equity in earnings (23,774) (5,021) (4,622) 7,140 21


Non-current assets results 32 (6) 8 52 --


Interest taxes (299,095) (81,912) (99,992) (275,075) (91,968)

Results participation (8,002) (28,574) -- (7,637) (2,541)

Net income 595,796 143,378 20,428 425,472 133,312



Total assets 10,912,127 12,001,396 12,746,417 79,425,613 9,335,691


Total Equity 3,095,736 2,605,640 2,623,213 1,300,336 256,302

��

��

51

8 � CASH AND CASH EQUIVALENTS

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Cash 132 � 153 ��

Financial Applications(1) 64,859 �� 1,610,178 ��

Total 64,991 �� 1,610,331 ��

(1) Composed mainly for use in repurchase agreements backed by Brazilian Treasury Securities (LFT), with Banco do Brasil S.A, with remuneration indexed to 99% of TMS (Average Selic rate) and daily liquidity. These investments are used in order to fulfill short financial commitments.

9 � Financial Instruments

a) Financial Assets at Fair Value through Profit or Loss

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Cost

Value

Fair

Value

Cost

Value

Fair

Value

Cost

Value

Fair

Value

Cost

Value

Fair

Value

Certificate of Deposit -- -- -- -- 517 574 2,879 2,966

b) Financial Assets Available for Sale

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Cost

Value

Fair

Value

Cost

Value

Fair

Value

Cost

Value

Fair

Value

Cost

Value

Fair

Value

Investment Certificate -- -- -- -- 81 77 1,850 80

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3rd

Qu

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197,

223

570,

615

1,41

1,31

818

3,63

5--

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2,36

2,79

1

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k co

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----

----

----

----

Tec

hnic

al p

rovi

sion

s va

riatio

n �

(16,

119)

(86,

462)

(223

,532

)7,

821

----

--(3

18,2

92)

Ear

ned

pre

miu

ms

�18

1,10

448

4,15

31,

187,

786

191,

456

----

--2,

044,

499

�

Inco

me

insu

ranc

e �

600

650

(70)

----

----

1,18

0

Ret

aine

d cl

aim

s �

(100

,184

)(3

03,4

97)

(989

,202

)(7

9,92

5)--

----

(1,4

72,8

08)

Cos

ts a

cqui

sitio

n �

(62,

387)

(47,

808)

(245

,825

)(4

4,19

6)--

--(4

00,2

16)

Rei

nsu

ran

ce

inco

me

�43

,178

--17

0,15

9--

----

--21

3,33

7

Rei

nsur

ance

inco

me

�56

,864

--44

4,16

1--

----

--50

1,02

5

Rei

nsur

ance

exp

ense

s �

(13,

686)

--(2

74,0

02)

----

--(2

87,6

88)

Oth

er in

com

e/ex

pens

es

�(2

,856

)(1

3,75

9)(2

5,84

9)(4

6,81

8)56

0--

(88,

722)

Adm

inis

trat

ive

expe

nses

�(1

7,08

8)(6

9,53

4)(1

07,5

98)

(19,

483)

237

(516

)--

(213

,982

)

Tax

es e

xpen

ses

�(6

,552

)(9

,904

)(1

9,76

1)(6

,383

)(1

,099

)(3

5)--

(43,

734)

�

Inte

rest

inco

me

�7,

969

24,7

5450

,503

7,73

511

1,45

5--

92,4

27

Inte

rest

inco

me

�17

,236

38,6

5013

3,73

213

,568

111,

455

--20

4,65

2

Inte

rest

exp

ense

�

(9,2

67)

(13,

896)

(83,

229)

(5,8

33)

----

--(1

12,2

25)

�

Eq

uit

y in

ear

nin

gs

�--

--1,

445

2--

69,6

38(7

2,47

8)

(1,3

93)

�

Op

erati

ng

res

ult

s

�43

,784

65,0

5521

,588

2,38

8(2

91)

70,5

42(7

2,47

8)

130,

588

�

Non

-cur

rent

ass

ets

resu

lts

�--

52(2

)--

----

--50

�

Inco

me/(

loss)

befo

re t

axes

�

43,7

8465

,107

21,5

862,

388

(291

)70

,542

(72,

478)

130,

638

Inco

me

tax

�(1

2,09

0)(1

5,87

4)(3

,720

)(4

66)

7314

9--

(31,

928)

Soc

ial C

ontr

ibut

ion

tax

�(7

,299

)(9

,617

)(1

,891

)(3

92)

2682

--(1

9,09

1)

Res

ults

par

ticip

atio

n �

(30)

(897

)(7

,918

)(3

2)--

----

(8,8

77)

�

Net

inco

me/

(lo

ss)

�24

,365

38,7

198,

057

1,49

8(1

92)

70,7

73(7

2,47

8)

70,7

42

Attr

ibut

able

to G

roup

BB

Seg

urid

ade

�12

,183

19,3

594,

029

749

(96)

35,3

87(3

6,23

9)35

,372

Attr

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able

to o

ther

sto

ckho

lder

s�

12,1

8219

,360

4,02

874

9(9

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,386

(36,

239)

35,3

70

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s 55

1,47

71,

519,

285

3,99

6,79

657

5,39

0--

----

6,64

2,94

8

Ris

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----

----

----

--

Tec

hnic

al p

rovi

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s va

riatio

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1,96

4)(1

07,5

32)

(451

,221

)23

,064

----

--(5

77,6

53)

Ear

ned

pre

miu

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509,

513

1,41

1,75

33,

545,

575

598,

454

----

--6,

065,

295

Inco

me

insu

ranc

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146

1,90

1(7

4)--

----

--3,

973

Ret

aine

d cl

aim

s (2

38,8

61)

(866

,739

)(2

,298

,715

)(2

55,6

62)

----

--(3

,659

,977

)

Cos

ts a

cqui

sitio

n (1

76,2

83)

(147

,548

)(6

74,5

13)

(212

,285

)--

----

(1,2

10,6

29)

Rei

nsu

ran

ce

inco

me

37,5

87--

(168

,084)

(21)

----

--(1

30,5

18)

Rei

nsur

ance

inco

me

89,2

52--

613,

752

(3)

----

--70

3,00

1

Rei

nsur

ance

exp

ense

s (5

1,66

5)--

(781

,836

)(1

8)--

----

(833

,519

)

Oth

er in

com

e/ex

pens

es

(13,

338)

(45,

917)

(82,

096)

(61,

336)

3,06

6--

--(1

99,6

21)

Adm

inis

trat

ive

expe

nses

(48,

548)

(199

,247

)(3

34,4

66)

(62,

276)

(864

)(1

,491

)--

(646

,892

)

Tax

es e

xpen

ses

(17,

914)

(30,

891)

(63,

756)

(22,

582)

(2,3

76)

(113

)--

(137

,632

)

Inte

rest

inco

me

32,6

2680

,050

146,

969

23,3

1291

3,82

1--

286,

869

Inte

rest

inco

me

46,7

1412

1,06

723

3,48

338

,699

913,

821

--44

3,87

5

Inte

rest

exp

ense

(1

4,08

8)(4

1,01

7)(8

6,51

4)(1

5,38

7)--

----

(157

,006

)

Eq

uit

y in

ear

nin

gs

--18

4,36

2(7

)--

200,

408

(209

,491)

(4,7

10)

Op

erati

ng

res

ult

s

86,9

2820

3,38

075

,202

7,59

7(8

3)20

2,62

5(2

09,4

91)

366,

158

Non

-cur

rent

ass

ets

resu

lts

--52

(84)

----

----

(32)

Inco

me/(

loss)

befo

re t

axes

86

,928

203,

432

75,1

187,

597

(83)

202,

625

(209

,491)

366,

126

Inco

me

tax

(24,

258)

(48,

786)

(12,

361)

(1,7

35)

101

572

--(8

6,46

7)

Soc

ial C

ontr

ibut

ion

tax

(14,

566)

(29,

425)

(7,7

42)

(1,1

61)

3629

0--

(52,

568)

Res

ults

par

ticip

atio

n (2

31)

(3,5

37)

(19,

644)

(119

)(1

93)

----

(23,

724)

Net

inco

me/

(lo

ss)

47,8

7312

1,68

435

,371

4,58

2(1

39)

203,

487

(209

,491)

203,

367

Attr

ibut

able

to G

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BB

Seg

urid

ade

23,9

3760

,842

17,6

862,

291

(69)

101,

744

(104

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)10

1,68

5

Attr

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to o

ther

sto

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lder

s23

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60,8

4217

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2,29

1(7

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1,74

3(1

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101,

682

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6,14

147

8,32

71,

280,

158

197,

483

----

--2,

122,

109

Ris

k co

ntrib

utio

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----

----

----

--

Tec

hnic

al p

rovi

sion

s va

riatio

n (1

0,93

6)(2

8,74

0)(1

38,8

49)

(5,8

96)

----

--(1

84,4

21)

Ear

ned

pre

miu

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155,

205

449,

587

1,14

1,30

919

1,58

7--

----

1,93

7,68

8

----

--

Inco

me

insu

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4(4

5)(2

39)

----

----

170

Ret

aine

d cl

aim

s (4

9,29

9)(2

85,6

79)

(614

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)(7

1,72

3)--

----

(1,0

21,4

27)

Cos

ts a

cqui

sitio

n (5

5,17

9)(4

9,17

2)(2

07,0

89)

(88,

922)

----

--(4

00,3

62)

Rei

nsu

ran

ce

inco

me

(13,

893)

--(1

76,4

57)

(211

)--

----

(190

,561)

Rei

nsur

ance

inco

me

6,71

9--

114,

761

----

----

121,

480

Rei

nsur

ance

exp

ense

s (2

0,61

2)--

(291

,218

)(2

11)

----

(312

,041

)

Oth

er in

com

e/ex

pens

es

(8,1

96)

(21,

752)

(24,

652)

(7,5

15)

925

----

(61,

190)

Adm

inis

trat

ive

expe

nses

(13,

191)

(63,

760)

(119

,932

)(2

2,03

3)(8

17)

(399

)--

(220

,132

)

Tax

es e

xpen

ses

(5,7

07)

(9,2

15)

(18,

280)

(6,8

42)

(844

)(5

6)--

(40,

944)

Inte

rest

inco

me

10,4

0620

,317

27,1

647,

163

5272

--65

,174

Inte

rest

inco

me

13,4

9530

,981

65,4

3510

,044

5272

--12

0,07

9

Inte

rest

exp

ense

(3

,089

)(1

0,66

4)(3

8,27

1)(2

,881

)--

----

(54,

905)

Eq

uit

y in

ear

nin

gs

----

567

(1)

--38

,954

(41,

552)

(2,0

32)

Op

erati

ng

res

ult

s

20,6

0040

,281

7,66

51,

503

(684

)38

,571

(41,

552)

66,3

84

Non

-cur

rent

ass

ets

resu

lts

(1)

--(8

1)--

----

--(8

2)

Inco

me/(

loss)

befo

re t

axes

20

,599

40,2

817,

584

1,50

3(6

84)

38,5

71(4

1,55

2)

66,3

02

Inco

me

tax

(5,6

14)

(7,9

57)

2,65

1(6

2)16

945

327

1(1

0,08

9)

Soc

ial C

ontr

ibut

ion

tax

(3,3

72)

(5,0

77)

310

(281

)61

192

163

(8,0

04)

Res

ults

par

ticip

atio

n 1,

834

(1,5

41)

(9,2

81)

(34)

----

--(9

,022

)

Net

inco

me/

(lo

ss)

13,4

4725

,706

1,26

41,

126

(454

)39

,216

(41,

118)

39,1

87

Attr

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BB

Seg

urid

ade

6,72

412

,853

632

563

(227

)19

,608

(20,

559)

19,5

94

Attr

ibut

able

to o

ther

sto

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lder

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723

12,8

5363

256

3(2

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19,6

08(2

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Ad

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4,46

11,

381,

725

3,29

8,32

857

1,74

5--

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5,78

6,25

9

Ris

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utio

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----

----

----

--

Tec

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al p

rovi

sion

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2,94

6)(3

7,74

7)(2

13,2

78)

14,1

16--

----

(319

,855

)

Ear

ned

pre

miu

ms

451,

515

1,34

3,97

83,

085,

050

585,

861

----

--5,

466,

404

----

--

Inco

me

insu

ranc

e 1,

717

(814

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,334

)2

----

--(4

29)

Ret

aine

d cl

aim

s (1

28,5

16)

(830

,079

)(1

,835

,449

)(1

96,4

67)

----

--(2

,990

,511

)

Cos

ts a

cqui

sitio

n (1

68,1

16)

(146

,051

)(5

89,7

22)

(264

,162

)--

----

(1,1

68,0

51)

Rei

nsu

ran

ce

inco

me

(35,

882)

--(2

17,0

24)

(765

)--

----

(253

,671)

Rei

nsur

ance

inco

me

17,4

21--

420,

005

49--

----

437,

475

Rei

nsur

ance

exp

ense

s (5

3,30

3)--

(637

,029

)(8

14)

----

--(6

91,1

46)

Oth

er in

com

e/ex

pens

es

(25,

630)

(64,

165)

(66,

575)

(15,

284)

2,83

2--

--(1

68,8

22)

Adm

inis

trat

ive

expe

nses

(38,

398)

(194

,745

)(3

25,7

45)

(66,

607)

(2,4

82)

(1,1

36)

--(6

29,1

13)

Tax

es e

xpen

ses

(16,

101)

(28,

445)

(60,

173)

(22,

695)

(2,4

11)

(128

)--

(129

,953

)

--

Inte

rest

inco

me

21,0

8021

,526

72,6

0517

,375

9635

5--

133,

037

Inte

rest

inco

me

33,4

7650

,344

154,

951

24,4

9696

355

--26

3,71

8

Inte

rest

exp

ense

(1

2,39

6)(2

8,81

8)(8

2,34

6)(7

,121

)--

----

(130

,681

)

Eq

uit

y in

ear

nin

gs

--89

21,3

25(3

)--

143,

164

(169

,596)

(5,0

21)

Op

erati

ng

res

ult

s

61,6

6910

1,29

482

,958

37,2

55(1

,965

)14

2,25

5(1

69,5

96)

253,

870

Non

-cur

rent

ass

ets

resu

lts

(1)

--(5

)--

----

--(6

)

Inco

me/(

loss)

befo

re t

axes

61

,668

101,

294

82,9

5337

,255

(1,9

65)

142,

255

(169

,596)

253,

864

Inco

me

tax

(15,

648)

(22,

934)

(2,8

04)

(8,9

63)

489

1,30

527

1(4

8,28

4)

Soc

ial C

ontr

ibut

ion

tax

(9,4

89)

(14,

071)

(5,3

36)

(5,6

29)

176

558

163

(33,

628)

Res

ults

par

ticip

atio

n 1,

385

(3,1

39)

(26,

687)

(133

)--

----

(28,

574)

Net

inco

me/

(lo

ss)

37,9

1661

,150

48,1

2622

,530

(1,3

00)

144,

118

(169

,162)

143,

378

Attr

ibut

able

to G

roup

BB

Seg

urid

ade

18,9

5830

,575

24,0

6311

,265

(650

)72

,059

(84,

581)

71,6

89

Attr

ibut

able

to o

ther

sto

ckho

lder

s18

,958

30,5

7524

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11,2

65(6

50)

72,0

59(8

4,58

1)71

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910,

522

764,

400

1,96

1,72

6

Ris

k co

ntrib

utio

n --

----

--

Tec

hnic

al p

rovi

sion

s va

riatio

n (1

55,9

49)

195,

735

(79,

410)

(42,

827)

Ear

ned

pre

miu

ms

801,

760

2,10

6,25

768

4,99

01,

918,

899

Inco

me

insu

ranc

e --

----

--

Ret

aine

d cl

aim

s (8

67,7

80)

(1,5

42,2

83)

(493

,270

)(1

,908

,958

)

Cos

ts a

cqui

sitio

n (2

7,32

1)(5

5,67

9)(2

8,98

9)(6

7,27

9)

Rei

nsu

ran

ce

inco

me

132,

985

(46,

730)

5,71

223

1,74

7

Rei

nsur

ance

inco

me

343,

675

709,

752

298,

110

1,07

0,01

7

Rei

nsur

ance

exp

ense

s (2

10,6

90)

(756

,482

)(2

92,3

98)

(838

,270

)

Oth

er in

com

e/ex

pens

es

(25,

234)

(87,

971)

(6,1

82)

(2,9

91)

Adm

inis

trat

ive

expe

nses

(55,

955)

(174

,859

)(5

4,97

6)(1

51,6

71)

Tax

es e

xpen

ses

(16,

133)

(40,

966)

(17,

971)

(55,

789)

Inte

rest

inco

me

137,

255

326,

490

86,9

1616

1,07

6

Inte

rest

inco

me

743,

511

1,87

8,83

832

2,35

760

3,42

7

Inte

rest

exp

ense

(6

06,2

56)

(1,5

52,3

48)

(235

,441

)(4

42,3

51)

Eq

uit

y in

ear

nin

gs

17,5

2742

,403

(14,

287)

(4,6

22)

Op

erati

ng

res

ult

s

97,1

0452

6,66

216

1,94

312

0,41

2

Non

-cur

rent

ass

ets

resu

lts

227

38

Inco

me/(

loss)

befo

re t

axes

97

,106

526,

689

161,

946

120,

420

Inco

me

tax

(21,

275)

(121

,796

)(3

6,23

3)(6

2,15

4)

Soc

ial C

ontr

ibut

ion

tax

(13,

263)

(74,

445)

(22,

065)

(37,

838)

Res

ults

par

ticip

atio

n --

----

--

Net

inco

me/

(lo

ss)

62,5

6833

0,44

810

3,64

820

,428

Attr

ibut

able

to G

roup

BB

Seg

urid

ade

12,8

3367

,777

11,7

9611

,796

Attr

ibut

able

to o

ther

sto

ckho

lder

s49

,735

262,

671

91,8

528,

632

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, Pri

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R$

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3rd

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133r

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uar

ter/

2014

3rd

Qu

arte

r/20

133r

d Q

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ter/

2014

3rd

Qu

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r/20

13

Elim

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ão

Col

lect

ion

with

sav

ings

bon

ds

1,39

5,61

31,

383,

223

----

----

1,39

5,61

31,

383,

223

Tec

hnic

al p

rovi

sion

s va

riatio

n to

red

empt

ion

(1,1

55,7

73)

(1,1

71,5

98)

----

----

(1,1

55,7

73)

(1,1

71,5

98)

Net

secu

riti

es

cap

ital

izat

ion

23

9,84

021

1,62

5--

----

--23

9,84

021

1,62

5

Tec

hnic

al p

rovi

sion

cha

nges

(6

,456

)(1

1,37

7)--

----

--(6

,456

)(1

1,37

7)

Raf

fle r

esul

ts

(36,

438)

(57,

775)

----

----

(36,

438)

(57,

775)

Sel

ling

expe

nses

(1

08,2

51)

(92,

841)

----

----

(108

,251

)(9

2,84

1)

Resu

lts

88,6

9549

,632

----

----

88,6

9549

,632

Oth

er in

com

e/(e

xpen

ses)

(6

,109

)(1

,166

)--

(67)

----

(6,1

09)

(1,2

33)

Adm

inis

trat

ive

expe

nses

(21,

886)

(18,

111)

(74)

(4)

----

(21,

960)

(18,

115)

Tax

exp

ense

s (1

0,03

2)(7

,267

)(1

7)(1

6)--

--(1

0,04

9)(7

,283

)

Cap

italiz

ati

on

resu

lts

50,6

6823

,088

(91)

(87)

----

50,5

7723

,001

Fin

anci

al r

esu

lts

72,3

9524

,284

148

114

----

72,5

4324

,398

Inte

rest

inco

me

290,

572

167,

049

149

113

----

290,

721

167,

162

Inte

rest

exp

ense

(2

18,1

77)

(142

,765

)(1

)1

----

(218

,178

)(1

42,7

64)

Eq

uit

y in

ear

nin

gs

63(5

0)--

----

--63

(50)

Op

erati

ng

in

co

me

123,

126

47,3

2257

27--

--12

3,18

347

,349

Non

-cur

rent

ass

ets

resu

lts

----

----

----

----

Inco

me/(

loss)

befo

re t

axes

12

3,12

647

,322

5727

----

123,

183

47,3

49

Inco

me

tax

(29,

539)

(7,5

26)

(9)

(3)

----

(29,

548)

(7,5

29)

Soc

ial C

ontr

ibut

ion

tax

(18,

537)

(12,

266)

(8)

(5)

----

(18,

545)

(12,

271)

Res

ults

par

ticip

atio

n (9

19)

(881

)--

----

--(9

19)

(881

)

Net

inco

me/

(lo

ss)

74,1

3126

,649

4019

----

74,1

7126

,668

Attr

ibut

able

to G

roup

BB

Seg

urid

ade

49,4

1617

,764

4019

----

49,4

5617

,783

Attr

ibut

able

to o

ther

sto

ckho

lder

s24

,715

8,88

5--

----

--24

,715

8,88

5

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R$

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ati

on

s

To

tal

�01

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9.3

0.20

14

01.0

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09.3

0.20

13

01.0

1 to

09.3

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14

01.0

1 to

09.3

0.20

13

01.0

1 to

09.3

0.20

14

01.0

1 to

09.3

0.20

13

01.0

1 to

09.3

0.20

14

01.0

1 to

09.3

0.20

13

Elim

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ão

Col

lect

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with

sav

ings

bon

ds

4,65

9,01

04,

533,

719

----

----

4,65

9,01

04,

533,

719

Tec

hnic

al p

rovi

sion

s va

riatio

n to

red

empt

ion

(3,8

76,0

74)

(3,7

51,9

76)

----

----

(3,8

76,0

74)

(3,7

51,9

76)

Net

secu

riti

es

cap

ital

izat

ion

78

2,93

678

1,74

3--

----

--78

2,93

678

1,74

3

Tec

hnic

al p

rovi

sion

cha

nges

(2

5,63

3)1,

978

----

----

(25,

633)

1,97

8

Raf

fle r

esul

ts

(153

,553

)(1

70,7

98)

----

----

(153

,553

)(1

70,7

98)

Sel

ling

expe

nses

(3

70,6

64)

(304

,678

)--

----

--(3

70,6

64)

(304

,678

)

Resu

lts

233,

086

308,

245

----

----

233,

086

308,

245

Oth

er in

com

e/(e

xpen

ses)

(6

,413

)(9

50)

--(1

08)

----

(6,4

13)

(1,0

58)

Adm

inis

trat

ive

expe

nses

(59,

078)

(54,

333)

(187

)(1

18)

----

(59,

265)

(54,

451)

Tax

exp

ense

s (3

0,46

9)(3

6,29

3)(5

0)(5

2)--

--(3

0,51

9)(3

6,34

5)

Cap

italiz

ati

on

resu

lts

137,

126

216,

669

(237

)(2

78)

----

136,

889

216,

391

Fin

anci

al r

esu

lts

238,

044

11,1

0941

330

0--

--23

8,45

711

,409

Inte

rest

inco

me

820,

107

415,

615

415

300

----

820,

522

415,

915

Inte

rest

exp

ense

(5

82,0

63)

(404

,506

)(2

)--

----

(582

,065

)(4

04,5

06)

Eq

uit

y in

ear

nin

gs

104

21--

----

--10

421

Op

erati

ng

in

co

me

375,

274

227,

799

176

22--

--37

5,45

022

7,82

1

Non

-cur

rent

ass

ets

resu

lts

----

----

----

----

Inco

me/(

loss)

befo

re t

axes

37

5,27

422

7,79

917

622

----

375,

450

227,

821

Inco

me

tax

(90,

333)

(52,

265)

(27)

(5)

----

(90,

360)

(52,

270)

Soc

ial C

ontr

ibut

ion

tax

(55,

752)

(39,

693)

(26)

(5)

----

(55,

778)

(39,

698)

Res

ults

par

ticip

atio

n (2

,848

)(2

,541

)--

----

--(2

,848

)(2

,541

)

Net

inco

me/

(lo

ss)

226,

341

133,

300

123

12--

--22

6,46

413

3,31

2

Attr

ibut

able

to G

roup

BB

Seg

urid

ade

150,

879

88,8

5812

312

----

151,

002

88,8

70

Attr

ibut

able

to o

ther

sto

ckho

lder

s 75

,462

44,4

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,462

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1401

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152,

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21,5

65,2

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152,

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21,5

65,2

65B

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its p

rovi

sion

(7,1

17,5

84)

(21,

465,

916)

----

(7,1

17,5

84)

(21,

465,

916)

Pri

vate

Pen

sio

n P

lan

s in

co

me

34,5

1599

,349

----

34,5

1599

,349

Inco

me

from

man

agem

ent f

ees

and

prod

ucts

332,

892

888,

792

----

332,

892

888,

792

Cha

nge

in te

chni

cal p

rovi

sion

s13

4(3

0,07

3)--

--13

4(3

0,07

3)R

etai

ned

bene

fits

(34,

212)

(49,

321)

----

(34,

212)

(49,

321)

Cos

ts a

cqui

sitio

n(7

8,83

9)(2

18,1

46)

----

(78,

839)

(218

,146

)O

ther

inco

me/

expe

nse

(4,9

56)

(11,

359)

----

(4,9

56)

(11,

359)

Ris

ck c

ontr

ibut

ions

49,0

9914

6,08

6--

--49

,099

146,

086

Cha

nge

in te

chni

cal p

rovi

sion

s fr

om p

rem

ium

s(1

65)

(902

)--

--(1

65)

(902

)R

esu

lts

48,9

3414

5,18

4--

--48

,934

145,

184

Cla

ims

(1,3

86)

(3,6

41)

----

(1,3

86)

(3,6

41)

Cos

ts a

cqui

sitio

n--

----

----

--O

ther

inco

me/

expe

nse

(2,7

78)

(7,3

21)

----

(2,7

78)

(7,3

21)

Adm

inis

trat

ive

expe

nses

(67,

545)

(189

,897

)--

--(6

7,54

5)(1

89,8

97)

Tax

es e

xpen

ses

(26,

287)

(73,

210)

----

(26,

287)

(73,

210)

Fin

anci

al r

esu

lts

110,

874

329,

189

----

110,

874

329,

189

Inte

rest

inco

me

2,16

4,98

86,

315,

333

----

2,16

4,98

86,

315,

333

Inte

rest

exp

ense

(2,0

54,1

14)

(5,9

86,1

44)

----

(2,0

54,1

14)

(5,9

86,1

44)

Eq

uit

y in

ear

nin

gs

----

489

2,09

748

92,

097

Op

erati

ng

res

ult

s31

1,34

687

9,54

648

92,

097

311,

835

881,

643

Non

-cur

rent

ass

ets

inco

me

3217

----

3217

Inco

me/(

loss)

befo

re t

axes

311,

378

879,

563

489

2,09

731

1,86

788

1,66

0T

ax in

com

e(7

5,93

2)(2

14,5

94)

----

(75,

932)

(214

,594

)S

ocia

l Con

trib

utio

n ta

x(4

6,98

3)(1

32,7

70)

----

(46,

983)

(132

,770

)R

esul

ts p

artic

ipat

ion

(2,7

80)

(6,6

13)

----

(2,7

80)

(6,6

13)

Net

inco

me

185,

683

525,

586

489

2,09

718

6,17

252

7,68

3A

ttrib

utab

le to

Gro

up B

B S

egur

idad

e13

9,25

339

4,16

336

71,

573

139,

620

395,

736

Attr

ibut

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to o

ther

sto

ckho

lder

s46

,430

131,

423

122

524

46,5

5213

1,94

7

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Fu

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Seg

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P

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To

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3rd

Qu

arte

r/20

1301

.01

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9.3

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3rd

Qu

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r/20

1301

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9.3

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3rd

Qu

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r/20

1301

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9.3

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3rd

Qu

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1301

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Ret

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ntrib

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680,

420

15,5

83,5

3313

,925

43,5

48--

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694,

345

15,6

27,0

81

Ben

efits

pro

visi

on

(3,6

47,3

14)

(15,

489,

830)

(13,

415)

(41,

965)

----

(3,6

60,7

29)

(15,

531,

795)

Pri

vate

Pen

sio

n P

lan

s in

co

me

33,1

0693

,703

510

1,58

3--

--33

,616

95,2

86

Inco

me

from

man

agem

ent f

ees

and

prod

ucts

267,

971

751,

445

2,80

98,

176

----

270,

780

759,

621

Cha

nge

in te

chni

cal p

rovi

sion

s (1

3,73

4)(4

6,29

2)1,

759

3,45

3--

--(1

1,97

5)(4

2,83

9)

Ret

aine

d be

nefit

s(1

1,86

9)(3

0,35

0)(2

,234

)(3

,957

)--

--(1

4,10

3)(3

4,30

7)

Cos

ts a

cqui

sitio

n (6

1,25

1)(1

77,2

42)

(195

)(9

48)

----

(61,

446)

(178

,190

)

Oth

er in

com

e/ex

pens

e(2

,217

)(8

,514

)(3

4)(5

8)--

--(2

,251

)(8

,572

)

Ris

ck c

ontr

ibut

ions

47

,377

140,

011

127

400

----

47,5

0414

0,41

1

Cha

nge

in te

chni

cal p

rovi

sion

s fr

om p

rem

ium

s(8

9)(1

,824

)(4

)(1

1)--

--(9

3)(1

,835

)

Resu

lts

47,2

8813

8,18

712

338

9--

--47

,411

138,

576

Cla

ims

(2,8

14)

(6,3

80)

--(7

3)--

--(2

,814

)(6

,453

)

Cos

ts a

cqui

sitio

n --

----

----

----

--

Oth

er in

com

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e.3) Insurance, Private Pension Plans and Capitalization Segment: Reinsurance

R$ thousand

� IRB Brasil RE S/A

� �� Sep 30, 2014 Dec 31, 2013

Assets

Cash and bank deposits 62,729 55,018

Securities 5,379,725 5,168,274

Insurance and coinsurance operations 2,091,381 2,251,692

Reinsurance assets � Technical provisions 3,575,283 3,410,252

Receivables 1,070,800 952,269

Prepaid expenses 2,023 972

Costs of acquisition 82 --

Investment 235,494 199,339

Property and equipment 32,412 32,110

Intangible assets 131,300 166,718

Total 12,581,229 12,236,644

Liabilities

Payable accounts 665,519 577,837

Insurance and reinsurance debts 1,130,703 1,229,859

Technical provision 7,502,496 7,279,394

Deposits 24,429 29,087

Other liabilities 424,284 403,061

Equity 2,833,798 2,717,406

Attributable to Group BB Seguridade 581,232 557,359

Attributable to other stockholders 2,252,566 2,160,047

Total 12,581,229 12,236,644

e.4) Insurance, Private Pension Plans and Capitalization Segment: Capitalization

R$ thousand

Sep 30, 2014 Brasilcap Capitalização BB Capitalização Adjustments/Eliminations Total

Assets

Cash and bank deposits 248 -- -- 248

Securities 11,343,023 5,604 -- 11,348,627

Insurance and coinsurance operations 695,012 -- -- 695,012

Prepaid expenses 3,502 -- -- 3,502

Investments and goodwill 1,256 -- -- 1,256

Property and equipment 6,290 -- -- 6,290

Intangible assets 6,776 -- -- 6,776

Other assets 1,774 16 -- 1,790

Total 12,057,881 5,620 -- 12,063,501

Liabilities

Tax liabilities 110,134 66 -- 110,200

Capitalization technical provisions 2,638 -- -- 2,638

Provisions 10,995,453 -- -- 10,995,453

Other liabilities 618,581 -- -- 618,581

Equity 331,075 5,554 -- 336,629

Attributable to Group BB Seguridade 220,695 5,554 -- 226,249

Attributable to other stockholders 110,380 -- -- 110,380

Total 12,057,881 5,620 -- 12,063,501

��

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R$ thousand

Dec 31, 2013 Brasilcap Capitalização BB Capitalização Adjustments /Eliminations Total

Assets


Securities 9,773,656 5,585 -- 9,779,241






Other assets 3,935 -- -- 3,935

Total 10,394,815 5,585 -- 10,400,400

Liabilities

Tax liabilities 105,82 65 -- 105,885


Provisions 9,488,698 -- -- 9,488,698

Other liabilities 528,364 10 -- 528,374

Equity 269,548 5,51 -- 275,058



Total 10,394,815 5,585 -- 10,400,400

e.5) Insurance, Private Pension Plans and Capitalization segment: Private Pension Plans

R$ thousand

Sep 30, 2014 Brasilprev Seguros e Previdência S.A. Adjustments/Eliminations Total

Assets

Cash and bank deposits 5,776 -- 5,776

Securities 104,383,297 -- 104,383,297

Insurance and coinsurance operations 1,684 -- 1,684

Receivables 338,400 -- 338,400

Prepaid expenses 2,279 -- 2,279

Costs acquisitions 621,270 -- 621,270

Pension plan credits 4,250 -- 4,250

Property and equipment 16,393 -- 16,393

Intangible assets 167,126 -- 167,126

Total 105,540,475 -- 105,540,475

Liabilities

Accounts payable 255,718 -- 255,718

Insurance and reinsurance debts 3,914 -- 3,914

Pension plan debts 1,540 -- 1,540

Deposits 95,156 -- 95,156

Technical provisions 72,753,617 -- 72,753,617

Technical provisions - Pension plans 30,683,549 -- 30,683,549

Other liabilities 235,217 -- 235,217

Equity 1,511,764 -- 1,511,764

Attributable to Group BB Seguridade 1,133,672 -- 1,133,672

Attributable to other stockholders 378,092 -- 378,092

Total 105,540,475 -- 105,540,475

��

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R$ thousand

Dec 31, 2013 Brasilprev Seguros e Previdência S.A. Adjustments/Eliminations Total

Assets


Securities 84,386,959 -- 84,386,959


Receivables 253,576 -- 253,576

Prepaid expenses 386 -- 386





Total 85,479,010 -- 85,479,010

Liabilities




Deposits 23,885 -- 23,885




Equity 1,449,488 -- 1,449,488



Total 85,479,010 -- 85,479,010

e.6) Brokerage Segment

R$ thousand

BB Corretora de Seguros e Adm. de Bens

Sep 30, 2014 Dec 31, 2013

Assets

Cash and bank deposits 977,919 1,020,061

Securities 651 3,047

Tax assets 99,762 76,618

Other assets 714,741 646,161

Total 1,793,073 1,745,887

Liabilities

Dividends payable -- 499,986

Povisions 11,843 7,884

Tax liabilities 179,460 147,232

Other liabilities 1,247,898 1,057,385

Equity 353,872 33,400


Attributable to other stockholders -- --

Total 1,793,073 1,745,887

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e.7) Health Segment

R$ mil

Brasildental Operadora de Planos Odontológicos

Sep 30, 2014

Assets

Cash and bank deposits 40

Securities 3,699

Insurance and coinsurance operations 7

Tax assets 9

Other assets 86

Total 3,841

Liabilities

Dividends payable --

Povisions 4

Tax liabilities 45

Other liabilities 346

Equity 3,446

Attributable to Group BB Seguridade 2,584

Attributable to other stockholders 862

Total 3,841

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f) Insurance and Reinsurance Receivables of Equity Method Investments

R$ thousand

Sep 30, 2014 Dec 31, 2013

Insurance business operations � Life, mortgage life and rural 2,567,207 2,195,599

Premiums 2,090,411 1,909,509

Insurance business operations 18,674 23,314

Reinsurance business operations 516,690 298,301

(-) Credit risk impairment losses (58,568) (35,525)

Insurance business operations � Property and casualty 3,758,326 2,903,994

Premiums 3,211,071 2,631,783




Reinsurance 2,002,945 2,159,349

Premiums 1,744,938 1,768,527



Other credits 466,068 321,969

Total 8,794,546 7,580,911

Attributable to the Group BB Seguridade 4,460,296 3,681,533


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g) Balance of liabilities from Insurance Contracts and Technical Provisions for Capitalization of Equity Method Investments

R$ thousand

Sep 30, 2014 Dec 31, 2013

Insurance � Life, mortgage life, rural and life insurance with survivor coverage (1) 78,730,721 60,160,381

Mathematical provision for future benefits � VGBL 72,437,208 54,878,803

Provision for unearned premiums 3,764,463 3,174,996

Provision for unsettled claims 1,319,447 1,058,678

Incurred but not reported reserve � IBNR 435,183 377,960

Provision for premium insufficiency 347,906 363,562

Mathematical provision for redemptions 166,731 105,843

Mathematical provision for vested benefits � VGBL 82,276 52,483

Other provisions 177,507 148,056

Insurance � Property and casualty (1) 5,386,676 4,896,328





Reinsurance 3,926,397 3,868,325


Provision for unearned premiums 935,417 1,026,780



Private Pension Plans 30,672,887 28,436,537

Mathematical provision for future benefits �PGBL 27,566,040 25,489,123

Mathematical provision for vested benefits �PGBL 1,477,263 1,324,640

Provision for financial surplus 608,401 590,543


Other provisions 1,010,960 1,021,079

Capitalization Plans 10,995,453 9,488,698

Mathematical provision for redemptions 10,672,930 9,245,415

Provision for sweepstakes and redemptions 234,804 160,766


Total 129,712,134 106,850,269



(1) Values are presented net of reinsurance.

�

�

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h) Balance of Liabilities from Insurance Contracts and Technical Provisions for Capitalization by Products of Equity Method Investments

R$ thousand

Sep 30, 2014 Dec 31, 2013

Insurance � Life, Mortgage Life, Rural and life insurance with survivor coverage (1) 78,730,721 60,160,381

Living benefits life insurance � VGBL 72,764,280 55,106,491

Life 4,881,978 4,161,003

Property/casualty 801,446 688,983

Dpvat 283,017 203,904


Auto 3,346,023 2,843,509

Life 284,922 411,210

Property/casualty 1,392,774 1,250,055

Dpvat 362,957 391,554

Reinsurance 3,926,397 3,868,325

Auto 277,886 174,017

Life 190,013 61,018


Dpvat -- 54,600


Free benefit generating plan � PGBL 22,266,207 20,337,357

Traditional plans 8,406,680 8,099,180


Total 129,712,134 106,850,269




i) Guarantee of Liabilities from Insurance Contracts and Technical Provisions for Capitalization of Equity Method Investments

R$ thousand

Sep 30, 2014

Life, Mortgage life Rural, life

insurance with survivor coverage




Reinsurance Total

Shares in investment funds (VGBL e PGBL) 72,196,859 -- 22,194,186 -- -- 94,391,045

Shares in investment funds (except VGBL e PGBL) 8,869,836 2,720,301 1,523,923 5,050,476 120,000 18,284,536

Federal Government bonds 3,056,564 241,878 749,877 3,876,918 3,698,921 11,624,158

Corporate bonds 615,323 1,093,644 61,694 2,357,776 181,564 4,310,001

Credit rights 1,394,507 1,663,902 -- 57,853 -- 3,116,262

Property 3,562 21,559 -- -- -- 25,121

Deposits held at IRB and judicial deposits -- 516 -- -- -- 516

Reducing the need for coverage 613,219 615,483 -- -- -- 1,228,702

Total 86,749,870 6,357,283 24,529,680 11,343,023 4,000,485 132,980,341

Attributable to the Group BB Seguridade 65,053,727 3,178,641 18,396,033 7,561,259 820,499 95,010,159

Attributable to other stockholders 21,696,143 3,178,642 6,133,647 3,781,764 3,179,986 37,970,182

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R$ thousand

Dec 31, 2013






Reinsurance Total


Shares in investment funds (except VGBL e PGBL) 7,352,991 3,002,958 2,123,521 4,180,894 -- 16,660,364

Federal Government bonds 2,418,269 206,862 1,061,412 4,207,031 3,799,613 11,693,187

Corporate bonds 721,616 352,473 88,471 1,295,197 71,085 2,528,842

Credit rights 1,278,004 1,294,762 -- 90,535 -- 2,663,301

Property 3,941 19,280 -- -- -- 23,221

Deposits held at IRB and judicial deposits 10,264 1,487 -- -- -- 11,751

Reducing the need for coverage 518,863 437,116 -- -- -- 955,979

Total 61,735,773 5,314,938 28,781,650 9,773,657 3,870,698 109,476,716



j) Coverage of Technical Provisions of Equity Investments Valued by Equity Method

R$ thousand

Sep 30, 2014 Dec 31, 2013

Technical Provisions 132,189,198 108,776,338

Deferred Acquisition Cost of PPNG (1,076,396) (1,184,679)

Reinsurance Contracted Part (1,795,076) (1,643,374)

Credit Receivable (3,461,949) (2,581,268)

Provisions Retained by IRB (516) (517)

Judicial Deposits -- (130)

DPVAT (645,960) (467,885)

Total to be covered 125,209,301 102,898,485

Assets offered in covered:

Investment funds 112,606,399 91,998,099

Federal Securities 11,526,983 10,665,189

Private Securities 3,540,732 2,550,410

Property 25,121 23,221

Total 127,699,235 105,236,919

Sufficiency (insufficiency) 2,489,934 2,338,434

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k) Changes in Liabilities for Insurance Contracts and Supplementary Pension of Equity Investments Valued by Equity Method

R$ thousand

01.01 to 09.30.2014

Opening balance Constitution Reversals Updates Closing balance

Technical Provisions � Insurance and life insurance with survivor coverage 70,538,954 44,000,053 (28,600,249) 4,226,983 90,165,741

Mathematical provision for future benefits 54,886,048 13,346,433 (8,700) 4,213,427 72,437,208

Provision for unearned premiums 8,182,654 11,417,881 (10,400,349) 4,690 9,204,876

Provision for unsettled claims 5,475,588 18,041,229 (17,402,893) (2,306) 6,111,618

Provision for claims incurred but not reported 1,193,187 676,046 (383,905) 6,880 1,492,208

Provision for premium insufficiency 301,958 45,948 -- -- 347,906

Provision for redemption and other amounts to be regularized 105,843 154,980 (94,234) 141 166,730

Mathematical provision for vested benefits 52,483 144,557 (118,824) 4,060 82,276

Other provisions 341,193 172,979 (191,344) 91 322,919

Technical Provisions � Supplementary Pension 28,436,536 1,200,440 (760,930) 1,801,173 30,677,219

Mathematical provision for future benefits 25,489,123 553,783 (140,478) 1,663,612 27,566,040

Mathematical provision for vested benefits 1,324,640 360,705 (312,907) 104,825 1,477,263

Provision for unsettled claims 28,205 2,807 (5,823) 799 25,988

Provision for unearned premiums 9,940 96,252 (95,520) -- 10,672

Provision for claims incurred but not reported 11,152 95,490 (96,280) -- 10,362

Other provisions 1,573,476 91,403 (109,922) 31,937 1,586,894

Total Technical Provisions 98,975,490 45,200,493 (29,361,179) 6,028,156 120,842,960

Attributable to the Group BB Seguridade 70,575,278 23,604,340 (11,992,787) 4,522,959 86,709,790

Attributable to other stockholders 28,400,212 21,596,153 (17,368,392) 1,505,197 34,133,170

R$ thousand

01.01 a 09.30.2014


Technical provisions � Reinsurance 5,482,468 16,808,021 (16,221,094) (16,506) 6,052,889



Provision for claims incurred but not reported 485,809 502,873 (385,547) 6,880 610,015

Provision for claims incurred but not reported � IBNeR (39,149) 601 (23,853) -- (62,401)

Other provisions (PMBaC) 7,245 -- (7,245) -- --

Provision for related expenses 3,058 9,240 -- -- 12,298


Attributable to the Group BB Seguridade 1,688,453 1,483,664 (1,262,327) (11,639) 1,898,151

Attributable to other stockholders 3,794,015 15,324,357 (14,958,767) (4,867) 4,154,738

��

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R$ thousand

2013



Mathematical provision for future benefits 40,635,578 12,769,034 -- 1,481,436 54,886,048


Provision for unsettled claims 4,603,719 7,296,055 (6,482,536) 58,350 5,475,588

Provision for claims incurred but not reported 1,076,637 230,951 (114,401) -- 1,193,187




Other provisions 130,129 255,860 (44,796) -- 341,193


Mathematical provision for future benefits 23,426,007 1,310,354 (95,206) 847,968 25,489,123


Provision for unsettled claims 24,818 7,615 (5,350) 1,122 28,205



Provision for unexpired risks 7,881 -- (7,881) -- --




Attributable to other stockholders 22,989,736 13,274,852 (8,549,134) 684,758 28,400,212

R$ thousand

2013

Opening balance Constitution Reversals UpdatesClosing balance

Technical provisions � Reinsurance 4,483,471 4,450,135 (3,519,405) 68,267 5,482,468




Provision for claims incurred but not reported � IBNeR 191,828 36,947 (79,386) -- 149,389

Provision for technical surplus - PET 26,511 1,111 (7,804) -- 19,818

Other provisions (PMBaC) 5,410 1,835 -- -- 7,245

Provision for related expenses -- 6,564 -- -- 6,564

Other provisions 2,674 31,11 (33,784) -- --

Attributable to the Group BB Seguridade 1,305,346 1,964,680 (1,596,400) 14,826 1,688,452


��

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l) Income from Operations with Insurance and Complementary Social Security of Equity Investments Valued by Equity Method

R$ thousand


Insurance Pension plan Total Insurance Pension plan Total

Retained premiums and contributions 4,848,675 34,468 4,883,143 4,290,601 35,900 4,326,501

Technical provisions variation (358,109) (25,427) (383,536) (627,338) (17,374) (644,712)

Income from management fees and products (298,553) 631,444 332,891 166,752 101,219 267,971

Retained claims (2,449,800) -- (2,449,800) (1,651,732) -- (1,651,732)

Expenses with benefits and redemptions (51,426) (18,900) (70,326) (8,572) (6,111) (14,683)

Selling expenses (629,611) (10,125) (639,736) (518,403) (11,295) (529,698)

Deferred expenses (389,483) -- (389,483) (304,054) -- (304,054)

Other operating income/expense (205,021) (1,852) (206,873) (133,725) (766) (134,491)

Results of operations 466,672 609,608 1,076,280 1,213,529 101,573 1,315,102

Interest income 1,088,997 2,164,989 3,253,986 554,983 1,673,449 2,228,432

Interest expenses (749,622) (2,054,114) (2,803,736) (309,225) (1,593,212) (1,902,437)

Financial results 339,375 110,875 450,250 245,758 80,237 325,995

Total 806,047 720,483 1,526,530 1,459,287 181,810 1,641,097

Attributable to the Group BB Seguridade 463,167 540,325 1,003,492 829,323 136,349 965,672

Attributable to other stockholders 342,880 180,158 523,038 629,964 45,461 675,425

R$ thousand

01.01 to 09.30.2014 01.01 to 09.30.2013



Technical provisions variation (1,073,246) (61,138) (1,134,384) (1,553,192) (52,511) (1,605,703)

Income from management fees and products 59,818 828,973 888,791 463,348 288,097 751,445

Retained claims (6,194,338) -- (6,194,338) (5,049,493) -- (5,049,493)


Selling expenses (1,713,618) (30,288) (1,743,906) (1,513,403) (33,376) (1,546,779)

Deferred expenses (1,100,918) -- (1,100,918) (854,661) -- (854,661)

Other operating income/expense (531,028) (3,075) (534,103) (360,362) (2,011) (362,373)

Results of operations 2,959,287 825,454 3,784,741 2,982,229 283,079 3,265,308

Interest income 2,748,030 6,315,333 9,063,363 1,146,320 1,588,668 2,734,988

Interest expenses (1,811,962) (5,986,144) (7,798,106) (643,602) (1,356,947) (2,000,549)

Financial results 936,068 329,189 1,265,257 502,718 231,721 734,439

Total 3,895,355 1,154,643 5,049,998 3,484,947 514,800 3,999,747

Attributable to the Group BB Seguridade 2,218,376 865,924 3,084,300 2,115,171 386,074 2,501,245

Attributable to other stockholders 1,676,979 288,719 1,965,698 1,369,776 128,726 1,498,502

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m) Claims Development of Equity Investments Valued by Equity Method

R$ thousand

Year of Occurrence of the Sinister

2008 2009 2010 2011 2012 2013Sep 30, 2014 Total

Insurance Segment

Gross Reinsurance Claims

Estimated amount for claims

During the occurrence 2,966,165 3,190,299 3,605,777 4,447,301 4,707,610 5,879,113 4,961,446 29,757,711

A period of the occurrence 2,899,334 3,226,375 3,663,602 4,495,008 4,879,374 5,402,334 -- 24,566,027

Two periods after the occurrence 2,920,550 3,307,383 3,718,862 4,575,893 4,776,137 -- -- 19,298,825

Three periods after the occurrence 2,945,109 3,320,674 3,771,992 4,528,657 -- -- -- 14,566,432

Four periods after the occurrence 2,963,859 3,357,830 3,754,430 -- -- -- -- 10,076,119

Five periods after the occurrence 2,997,027 3,341,721 -- -- -- -- -- 6,338,748

Six periods after the occurrence 3,002,998 -- -- -- -- -- -- 3,002,998

Estimates based on claims data (Sep 30, 2014) 3,002,998 3,341,721 3,754,430 4,528,657 4,776,137 5,402,334 4,961,446 29,767,723

Payments of claims 2,911,584 3,243,952 3,661,427 4,380,103 4,547,877 4,833,578 3,090,412 26,668,933

Liability recognized in the Balance Sheet 91,414 97,769 93,003 148,554 228,260 568,756 1,871,034 3,098,790

Liability in respect of periods prior to Dec 31,2007 -- -- -- -- -- -- -- 1,053,170

Total liabilities -- -- -- -- -- -- -- 4,151,960

Attributable to the Group BB Seguridade -- -- -- -- -- -- -- 2,486,138

Attributable to other stockholders -- -- -- -- -- -- -- 1,665,822

Net Reinsurance claims












Liability in respect of periods prior to Dec 31,2007 -- -- -- -- -- -- -- 984,991




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86

R$ thousand


2008 2009 2010 2011 2012 2013Sep 30, 2014 Total

Reinsurance Segment

Gross Retrocession Claims


During the occurrence 777,939 738,882 340,142 200,595 342,520 1,107,829 1,045,674 4,553,581

A period of the occurrence 1,782,336 1,241,026 845,278 516,906 975,304 1,394,569 -- 6,755,419

Two periods after the occurrence 1,833,735 1,374,800 750,949 765,358 1,060,727 -- -- 5,785,569

Three periods after the occurrence 1,858,580 1,433,714 682,091 776,783 -- -- -- 4,751,169

Four periods after the occurrence 2,180,920 1,391,459 656,653 -- -- -- -- 4,229,032



Estimates based on claims data (Sep 30, 2014) 2,067,003 1,449,505 656,653 776,783 1,060,727 1,394,569 1,045,674 8,450,914

Payments of claims 1,793,515 1,260,128 590,225 432,432 471,759 558,098 14,973 5,121,131




Attributable to the Group BB Seguridade -- -- -- -- -- -- -- 963,600,


Net Retrocession claims


During the occurrence 500,531 458,107 257,280 146,828 212,493 713,804 665,945 2,954,987

A period of the occurrence 1,088,423 835,580 648,986 283,846 588,287 1,203,872 -- 4,648,994

Two periods after the occurrence 1,209,256 1,051,953 550,314 346,747 397,460 -- -- 3,555,731





Estimates based on claims data (Sep 30, 2014) 1,340,630 1,012,606 452,293 321,648 397,460 1,203,872 665,945 5,394,454

Payments of claims 1,274,388 944,347 438,555 277,346 257,370 368,065 8,332 3,568,403

Liability recognized in the Balance Sheet 66,242 68,259 13,738 44,301 140,091 835,807 657,613 1,826,051



Attributable to the Group BB Seguridade -- -- -- -- -- -- -- 464,522


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n) Breakdown of Financial Assets by Maturity of Equity Investments Valued by Equity Method

R$ thousand

Sep 30, 2014 1 to 30 31 to 180181 to

360 More than 360

Book value/ Fair value

Value Curve

Adjustment to fair value

Assets Designated at Fair Value Through Profit or Loss

Federal Securities 5,460,810 7,273,325 4,640,167 33,376,639 50,750,941 51,663,443 (912,502)

National Treasury Bills 2,609,190 5,702,368 2,116,551 21,375,925 31,804,034 32,518,487 (714,453)

National Treasury Notes (NTN-B) 1,064,109 523,921 1,128,703 10,147,477 12,864,210 13,058,344 (194,134)

Financial Treasure Bills 13,829 902,376 1,315,418 1,615,913 3,847,536 3,848,354 (818)

Other Cash/ Accounts Payble/ Receive 866,854 (13) (51) 21,200 887,990 887,990 --

Quotas in Investment Funds � DPVAT 646,239 -- -- -- 646,239 646,239 --

National Treasury Bills (NTN-C) 258,218 -- -- -- 258,218 258,218 --

National Treasury Bills (NTN-F) -- 112,250 30,614 101,145 244,009 247,106 (3,097)

Agrarian Debt Bonds 1,436 32,423 48,932 114,979 197,770 197,770 --

National Treasury Bills (NTN-O) 935 -- -- -- 935 935 --

Private Securities 33,748,043 3,972,478 3,262,759 16,983,365 57,966,645 58,128,069 (161,424)

Operations Compromised 31,614,760 -- -- -- 31,614,760 31,614,760 --

Financial Bills 26,221 3,065,258 2,288,090 9,380,139 14,759,708 14,757,354 2,354

Debentures 564 426,120 554,726 6,342,564 7,323,974 7,389,835 (65,861)

Shares 1,749,744 -- -- -- 1,749,744 1,759,314 (9,570)

Shares in Investment Funds Credit Rights -- 78,159 -- 857,543 935,702 1,071,682 (135,980)

Certificate of Deposits (CDB) 41,959 403,363 225,318 68,414 739,054 738,381 673

Other Cash/ Accounts Payble/ Receive (34,900) (422) (144) 333,282 297,816 250,856 46,960

Shares in Investment Funds 271,733 -- -- -- 271,733 271,733 --

Promissory Notes 46,389 -- 194,769 -- 241,158 241,158 --

Quotas in Investment Funds 31,573 -- -- -- 31,573 31,573 --

Receivables Certificate Real Estate (CRI) -- -- -- 1,423 1,423 1,423 --

Total 39,208,853 11,245,803 7,902,926 50,360,004 108,717,586 109,791,512 (1,073,926)

Attributable to the Group BB Seguridade 28,681,065 8,348,759 5,783,209 37,007,823 79,820,856 80,617,430 (796,574)

Attributable to other stockholders 10,527,788 2,897,044 2,119,717 13,352,181 28,896,730 29,174,082 (277,352)

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R$ thousand

Dec 31, 2013 1 to 30 31 to 180181 to

360 More than 360


Value Curve



Federal Securities 6,179,643 415,985 3,049,658 41,644,166 51,289,452 52,904,898 (1,615,446)

National Treasury Bills 2,598,042 351,482 914,974 22,934,281 26,798,779 27,752,681 (953,902)

National Treasury Notes (NTN-B) 2,027,767 -- 1,116,700 14,287,421 17,431,888 18,099,147 (667,259)

Financial Treasure Bills 849 63,720 1,010,425 4,054,956 5,129,950 5,125,615 4,335

National Treasury Notes (NTN-C) 821,603 -- -- -- 821,603 821,603 --


Other Cash/ Accounts Payble/ Receive 242,285 -- 9 21,705 263,999 263,999 --

Agrarian Debt Bonds 46 783 7,550 191,365 199,744 199,744 --

National Treasury Notes (NTN-F) 20,968 -- -- 134,614 155,582 154,202 1,380

Foreign Bonds -- -- -- 19,824 19,824 19,824 --


Other Cash/ Accounts Payble/ Receive 11,611,307 445,607 752,888 8,706,840 21,516,642 21,704,042 (187,400)

Debentures 82,256 459,718 53,117 6,745,433 7,340,524 7,392,141 (51,617)

Shares 1,944,641 -- -- -- 1,944,641 1,944,641 --

Certificate of Deposits (CDB) 109,275 1,089,508 280,913 174,457 1,654,153 1,653,398 755

Shares in Investment Funds Credit Rights 904,783 -- 23,432 184,959 1,113,174 1,143,191 (30,017)

Quotas in Investment Funds 530,527 46 (27,589) 2,138 505,122 505,122 --

Financial Bills -- -- 123,416 295,662 419,078 418,882 196


Promissory Notes -- 132,361 42,844 -- 175,205 175,205 --

Total 21,644,289 2,543,225 4,298,679 57,753,655 86,239,848 88,123,377 (1,883,529)

Attributable to the Group BB Seguridade 15,373,507 1,886,727 3,202,090 42,486,682 62,949,006 64,346,541 (1,397,535)

Attributable to other stockholders 6,270,782 656,498 1,096,589 15,266,973 23,290,842 23,776,836 (485,994)

R$ thousand

�Sep 30, 2014 1 to 30 31 to 180

181 to 360

More than 360Book value/

Fair value Value

CurveAdjustment to fair value

Asset Available for Sale

Federal Securities -- 760,659 370,660 2,786,735 3,918,054 3,947,430 (29,376)

Financial Treasure Bills -- 759,857 306,703 1,905,784 2,972,344 2,973,340 (996)

National Treasury Notes (NTN-B) -- -- 62,281 339,756 402,037 421,839 (19,802)

National Treasury Bills -- -- -- 223,810 223,810 225,968 (2,158)

Brazilian External Debt Bonds -- -- -- 147,404 147,404 151,512 (4,108)

National Treasury Bills (NTN-F) -- -- -- 108,893 108,893 111,087 (2,194)

National Treasury Bills (NTN-C) -- -- -- 34,535 34,535 33,969 566

Foreign Bonds -- 802 1,676 26,553 29,031 29,715 (684)

Private Securities 4,521 73,662 327,178 544,408 949,769 962,129 (12,360)

Debentures -- 7,559 11,177 370,934 389,670 391,579 (1,909)

Financial Bills -- 66,103 211,913 93,444 371,460 370,995 465

Other Cash/ Accounts Payble/ Receive -- -- -- 67,361 67,361 67,916 (555)

Receivables Certificate Real Estate (CRI) -- -- 38,134 12,669 50,803 50,757 46

Promissory Notes -- -- 41,828 -- 41,828 42,124 (296)

Certificate of Deposits (CDB) -- -- 24,126 -- 24,126 24,033 93

Shares in Listed Companies 4,521 -- -- -- 4,521 14,725 (10,204)

Total 4,521 834,321 697,838 3,331,143 4,867,823 4,909,559 (41,736)

Attributable to the Group BB Seguridade 927 202,872 324,278 1,104,891 1,632,968 1,647,429 (14,461)

Attributable to other stockholders 3,594 631,449 373,560 2,226,252 3,234,855 3,262,130 (27,275)

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R$ thousand

�Dec 31, 2013 1 to 30 31 to 180

181 to 360


Fair value Value






National Treasury Notes (NTN-F) -- -- -- 142,900 142,900 151,538 (8,638)

Brazilian External Debt Bonds -- -- -- 119,814 119,814 112,513 7,301

Foreign Bonds -- 2,810 2,287 26,456 31,553 30,632 921

Private Securities 14,070 52,204 1,747 671,226 739,247 731,321 7,926

Debentures -- 9,205 1,744 324,255 335,204 337,959 (2,755)

Financial bills -- 5,877 -- 246,789 252,666 252,000 666

Other Cash/ Accounts Payble/ Receive -- 37,122 3 62,486 99,611 99,646 (35)

Certificate of Deposits (CDB) -- -- -- 22,296 22,296 22,179 117

Bank Credit -- -- -- 15,400 15,400 15,342 58

Shares in Listed Companies 14,070 -- -- -- 14,070 4,195 9,875

Total 14,070 379,234 823,060 2,512,194 3,728,558 3,728,374 184

Attributable to the Group BB Seguridade 2,885 104,097 182,414 1,013,874 1,303,270 1,317,418 (14,148)

Attributable to other stockholders 11,185 275,137 640,646 1,498,320 2,425,288 2,410,956 14,332

R$ thousand

Sep 30, 2014 1 to 30 31 to 180 181 to 360More than

360Book value

Value Curve

Asset Held to Maturity

Federal Securities 514,798 567,398 751,725 13,736,606 15,570,527 15,475,877

National Treasury Notes (NTN-B) -- 132,555 224,823 11,691,985 12,049,363 11,975,485

National Treasury Bills 514,798 419,579 526,902 1,488,165 2,949,444 2,914,830

National Treasury Notes (NTN-F) -- 15,264 -- 538,824 554,088 553,651

National Treasury Notes (NTN-C) -- -- -- 16,291 16,291 16,291

Foreign Bonds -- -- -- 1,341 1,341 1,341

Private Securities 431,436 38,905 4,185 295,756 770,282 766,414

Certificate of Deposits (CDB) 431,436 38,905 4,185 227,405 701,931 698,233

Debentures -- -- -- 35,429 35,429 35,259

Eurobonds -- -- -- 32,922 32,922 32,922

Total 946,234 606,303 755,910 14,032,362 16,340,809 16,228,012

Attributable to the Group BB Seguridade 428,257 400,124 485,290 9,848,590 11,162,261 11,087,900

Attributable to other stockholders 517,977 206,179 270,620 4,183,772 5,178,548 5,140,112

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R$ thousand

Dec 31, 2013 1 to 30 31 to 180 181 to 360 More than 360 Book valueValue

Curve


Federal Securities 771,929 195,313 1,289,334 13,955,809 16,212,385 17,598,204

National Treasury Notes (NTN-B) 152,018 -- 483,505 11,219,195 11,854,718 13,304,847


National Treasury Notes (NTN-F) 548,828 -- -- 921,231 1,470,059 1,507,562

Financial Treasure Bills -- -- -- 17,522 17,522 17,522


Foreign Bonds -- -- -- 1,354 1,354 1,354

Quotas in Investment Funds (117) -- -- -- (117) (117)

Private Securities 499,652 200,857 -- 314,046 1,014,555 1,015,164

Certificate of Deposits (CDB) 497,220 200,857 -- 240,752 938,829 938,468

Eurobonds -- -- -- 39,889 39,889 39,753

Debentures -- -- -- 33,405 33,405 34,511

Quotas in Investment Funds 2,432 -- -- -- 2,432 2,432

Total 1,271,581 396,170 1,289,334 14,269,855 17,226,940 18,613,368



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o) Fair Value of Equity Investments Valued by Equity Method

R$ thousand

Sep 30, 2014 Dec 31, 2013

Level 1 Level 2 Total Level 1 Level 2 Total

Assets Designated at Fair Value Through Profit

Shares 1,818,771 -- 1,818,771 2,007,146 -- 2,007,146

Certificate of Deposits (CDB) -- 739,054 739,054 -- 1,654,152 1,654,152

Shares in Investment Funds 788,813 25,342 814,155 1,000,482 409,545 1,410,027

Shares in Investment Funds � DPVAT 646,239 -- 646,239 468,083 -- 468,083

Receivables Certificate Real Estate (CRI) -- 94,810 94,810 -- 97,594 97,594

Agreements DI Future (39,384) -- (39,384) (14,735) -- (14,735)

Bovespa Index Futures Contracts (1,692) -- (1,692) 382 -- 382

Foreign Government Bonds -- -- -- -- 19,824 19,824

Shares in Investment Funds Variable Income 191,623 -- 191,623 210,608 -- 210,608

Debentures -- 7,323,974 7,323,974 -- 7,340,523 7,340,523

Time Deposits Special Guarantees (DPGE) -- 71,066 71,066 -- 131,246 131,246

National Treasury Bills 28,715,788 3,088,246 31,804,034 24,669,882 2,128,891 26,798,773

Treasury Financial Bills 3,228,200 -- 3,228,200 4,115,046 -- 4,115,046

National Treasury Notes (NTN-B) 8,715,566 112,134 8,827,700 9,956,710 248,804 10,205,514

National Treasury Notes (NTN-C) 19,766 -- 19,766 19,516 -- 19,516

Mortgage (LH) -- 176,051 176,051 -- 176,592 176,592

Operation Compromised 258,218 31,626,879 31,885,097 -- 12,405,153 12,405,153

Agricultural Debt Securities 197,758 12 197,770 199,710 34 199,744

National Treasury Notes (NTN-F) 4,260,754 -- 4,260,754 7,362,440 -- 7,362,440

National Treasury Notes (NTN-O) 935 -- 935 -- -- --

Other DPGE � Time Deposits Special Guarantees -- -- -- -- 63,127 63,127

Promissory Notes -- 241,158 241,158 -- 175,205 175,205

Financial Bills -- 15,379,044 15,379,044 -- 10,924,263 10,924,263

Shares in Investment Funds Credit rights -- 153,119 153,119 -- 141,498 141,498

Other box / Payables / Receive 886,936 (1,596) 885,340 258,327 67,395 325,722

Total 49,688,291 59,029,293 108,717,584 50,253,597 35,983,846 86,237,443

Attributable to the Group BB Seguridade 36,195,742 38,701,611 74,897,353 36,649,415 23,512,639 60,162,054


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R$ thousand

Sep 30, 2014 Dec 31, 2013


Financial Assets Available for Sale

National Treasury Notes (NTN-B) 402,037 -- 402,037 461,935 -- 461,935

National Treasury Notes (NTN-F) 108,893 -- 108,893 142,900 -- 142,900

National Treasury Notes (NTN-C) 34,535 -- 34,535 -- -- --

Debentures -- 389,671 389,671 -- 335,204 335,204

Certificate of Deposits (CDB) -- 74,929 74,929 -- 37,696 37,696

Financial Treasure Bills 2,980,083 -- 2,980,083 2,233,110 -- 2,233,110

Financial Bills (LF) -- 371,461 371,461 -- 252,666 252,666

Other DPGE � Time Deposits Special Guarantees -- 67,361 67,361 80 99,531 99,611

Brazilian Foreign Debt Securities -- 147,404 147,404 -- 119,814 119,814

ADRS 4,521 -- 4,521 14,070 -- 14,070

Promissory Notes -- 41,828 41,828 -- -- --

Fixed-income Securities Abroad 29,030 -- 29,030 -- 31,553 31,553

National Treasury Bills 216,071 -- 216,071 -- -- --

Total 3,775,170 1,092,654 4,867,824 2,852,095 876,464 3,728,558

Attributable to the Group BB Seguridade 983,689 649,279 1,632,968 790,295 512,976 1,303,270


R$ thousand

Sep 30, 2014 Dec 31, 2013




Debentures -- 35,429 35,429 -- 33,405 33,405

National Treasury Bills 223,046 2,726,397 2,949,443 254,304 2,600,637 2,854,942

National Treasury Notes (NTN-B) 5,272,761 1,150,521 6,423,282 4,976,717 1,606,394 6,583,110

National Treasury Notes (NTN-C) 5,223,495 -- 5,223,495 5,222,965 -- 5,222,965

National Treasury Notes (NTN-F) 972,964 -- 972,964 1,550,855 -- 1,550,855

Financial Treasury Bills -- -- -- 17,522 -- 17,522

Shares in Investment Funds -- -- -- 2,432 -- 2,432

Fixed-income Securities Abroad 1,341 -- 1,341 1,354 -- 1,354

Eurobonds -- 32,922 32,922 -- 39,889 39,889

Total 11,693,607 4,647,201 16,340,808 12,026,150 5,219,154 17,245,304



p) Liability Adequacy Test

As defined in IFRS 4, the Group shall perform the Liability Adequacy Test for all contracts that fulfill the definition of an insurance contract, which are effective on the execution date, in order to determine the sufficiency or insufficiency of the balances recorded in the balance sheet.

This test corresponds to the comparison of the net book value of technical and mathematical provisions, called Net Carrying Amount (NCA), net of deferred acquisition costs and intangible assets related, to the actuarial calculation of future cash flows� current estimates of insurance and pension plan contracts.

If there is a deficiency in this comparison, i.e., the value of future cash flows exceeds the NCA, these deficiencies will be recognized by a provision.

The assumptions used by the insurance subsidiaries and joint ventures are set out below:

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a) discount rates used to discount the cash flows: risk-free interest rate, obtained from the extrapolated yield curve of government bonds, considered risk-free credit, available in the Brazilian financial market,

b) claims, administrative and operational costs, deferred acquisition costs, cancellation, future contributions, partial redemptions and conversions to income based on historical behavior, and

c) mortality and survival, following the biometric tables built considering the experience in the Brazilian insurance market.

On Jun 30, 2014, the Liability Adequacy Test did not indicate adjustments in technical provisions.

11 � ��

R$ thousand

Parent Consolidated

Jun 30, 2014(1) Dec 31, 2013(2) Jun 30, 2014 Dec 31, 2013(3)

Dividends receivable 1,192,131 1,077,382 -- 35,356

(1) Refers to dividends receivable coming from BB Seguros Participações S.A (R$ 593,317 thousand) and BB Cor Participações S.A. (R$ 598,814 thousand).

(2) On Dec 31, 2013, refers to dividends receivable coming from BB Seguros Participações S.A (R$ 577,175 thousand) and BB Cor Participações S.A. (R$ 500,207 thousand).

(3) On Dec 31, 2013, refers to dividends receivable coming from BrasilCap Capitalização S.A. (R$ 22,033 thousand) BrasilPrev Seguros e Previdência S.A. (R$ 11,269 thousand) and IRB Brasil (R$ 2,054 thousand).

12 � TAXES

a) Current and Deferred Tax Assets

R$ thousand

�� Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Current tax assets ��

Deferred tax assets -- -- ��

Total ��

b) Deferred Tax Assets

R$ thousand

�� Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Deferred tax assets

Amortization of goodwill -- -- ��

Liabilities provision -- -- ��

Negative mark to market of securities -- -- -- ��

Others provisions -- -- � � ��

Total -- -- ��

Off Balance Sheet

R$ thousand

�� Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Deferred tax assets

Temporary differences -- -- ��

Tax losses/negative bases ��

Total ��

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c) Realization Expectative

R$ thousand

Nominal Value Present Value

In 2014 -- --

In 2015 -- --

In 2016 -- --

In 2017 1,541 1,090

In 2018 1,839 1,233

From 2019 4,076 2,136

Total 7,456 4,459

Expected realization of deferred tax assets (tax credits), referring to the onslaughts BB and BB Insurance Brokerage, They support in technical study prepared on 06/30/2014 and is calculated based on the average funding rate present value.

During the year 2014, there was the realization of tax credits in the amount of R$ 445 thousand, surpassing the forecast for use in the exercise.

During the 3rd quarter of 2014, there was no realization of tax credits.

d) Current Tax Liabilities

R$ thousand

�� Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Current tax liabilities

Income tax -- -- ��

Social contribution tax -- -- ��

COFINS � -- ��

PASEP � -- ��

ISS -- -- � � ��

Total � -- ��

e) Deferred Tax Liabilities

R$ thousand

�� Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Deferred tax liabilities

From partnership with MAPFRE -- -- ��

Arising from amortization of Brasilcap�s goodwill -- -- ��

Bargain purchase -- -- ��

Other timing differences -- -- ��

Total -- -- ��

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f) Reconciliation of Income Tax and Social Contribution Expenses

R$ thousand

�� Consolidated

3rd Quarter, 2014 3rd Quarter, 2013 3rd Quarter, 2014 3rd Quarter, 2013

Profit before tax and profit sharing 822,279 �� 987,897 ��

Total charges of IR (25%) and CSLL (9%) (279,575) �� (335,885) ��

Equity in earnings of subsidiaries and associates 281,745 �� 172,820 ��

Other amounts (2,170) �� (2,553) ��

Income tax and social contribution -- -- (165,618) ��

R$ thousand

�� Consolidated

! ��"��!!� � ! ��"��!!� ! ��"��!!� � ! ��"��!!�

Profit before tax and profit sharing 2,316,426 �� 2,795,933 ��



Other amounts (8,107) �� (9,081) ��


g) Tax Expenses

�� Consolidated

3rd Quarter, 2014

3rd Quarter, 2013

3rd Quarter, 2014

3rd Quarter, 2013

Cofins (8) -- (23.861) (17.505)

ISSQN -- -- (13.583) ��

PIS/Pasep (2) -- (3.878) ��

IOF (58) �� (247) ��

Other (4) �� (15) ��

Total (72) �� (41.584) ! ��

�� Consolidated

01.01 to 09.30.2014

01.01 to 09.30.2013

01.01 to 09.30.2014

01.01 to 09.30.2013

Cofins (21) -- (69.822) (50.353)

ISSQN -- -- (41.094) ��

PIS/Pasep (5) -- (11.347) ��

IOF (1.306) �� (1.517) ��

Other (93) �� (272) ��

Total (1.425) �� (124.052) ��!��

h) Law n° 12,973 (Conversion of the Provisory Measu re n° 627/2013)

The Law n° 12,973, issued on May 13, 2014 (Law 12,9 73/2014), converted from the Provisory Measure n° 62 7/2013, alters the federal tax legislation upon IRPJ, CSLL, PIS/Pasep and Cofins, in particular with the purpose of:

i) revoking the Transition Tax Regime (Regime Tributário de Transição � RTT); ii) altering the regulation of taxes over profit on abroad operations; and iii) changing the taxes aspects of the accounting criteria and procedures determined by the laws 11,638/2007 e

11,941/2009, which addressed the convergence between the Brazilian and international accounting standards.

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For a more conclusive analysis, the BB Seguridade will wait for the Brazil�s Federal Revenue (Receita Federal do Brasil � RFB) regulation, in the terms predicted by the Law 12,973/2014. Nevertheless, according to preliminary studies and based on the text of the mentioned Law, meaningful impacts on the Financial Statements of BB Seguridade are not expected.

13 � COMMISSIONS RECEIVABLE

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

BB Mapfre SH1 -- -- 476,124 433,261

Mapfre BB SH2 -- -- 91,970 75,955

Total -- -- 568,094 509,216

�

14 � OTHER ASSETS

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31,2013 Sep 30, 2014 Dec 31,2013

Judicial deposits -- -- 146,475 136,774

Other 73 -- 332 255

Total 73 -- 146,807 137,029

15 � DIVIDENDS PAYABLE

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Dividends payable (1) -- 344,719 -- 344,719

(1) The balance as is related to minimum mandatory dividends payable.

16 � PROVISIONS AND CONTINGENT LIABILITIES

Tax Lawsuits

Tax lawsuits derived mainly from assessments of municipal tax and refer to ISSQN (Service Tax).

Civil Lawsuits

The most significant civil lawsuits are the indemnity claims (material damage, moral damage etc.), disputes regarding the payment of claims and applicability of the consumer�s protection code.

a) Provision

In accordance with IAS 37, the BB Seguridade recognizes provisions for civil and tax lawsuits classified as �probable�.

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Provisions for civil and tax lawsuits classified as probable

R$ thousand

Parent Consolidated (1)

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Tax lawsuits

Initial balance -- -- 2,767 1,245

Addition -- -- 170 1,522

Reversal of the provision -- -- -- --

Closing balance -- -- 2,937 2,767

Civil lawsuits


Addition -- -- 7,249 3,179

Reversal of the provision -- -- (1,864) (1,782)


Total -- -- 14,192 8,637

(1) Related, mainly, to contingents recorded in BB Corretora.

b) Contingent Liabilities

The tax and civil lawsuits classified as �possible� are not recorded in the balance sheet but disclosed based on IAS 37.

Balances of contingent liabilities classified as possible

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Labor lawsuits -- -- -- 37

Tax lawsuits -- -- 876 811

Civil lawsuits -- -- 5,704 6,246

Total -- -- 6,580 7,094

BB Seguridade has no contingent liabilities of associates shared jointly with other investors and is not jointly liable for all or part of the liabilities of its affiliates.

c) Deposits in Guarantee of Funds

Balances of escrow deposits formed for provisions and contingent liabilities

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Tax lawsuits (1) -- -- 139,340 130,446


Total -- -- 146,474 136,774

(1) Refers to tax lawsuit aiming to annul the administrative decision that not endorsed statements to offset negative average of IRPJ with owned taxes. The value of this deposit is R$ 107,751 thousand (R$ 101,941 thousand as of December 31, 2013), related to BB Corretora, updated by SELIC index.

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17 � UNEARNED COMMISSIONS

R$ thousand

�� Consolidated

��#�� Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

$��%�&"''())("�)

BB Mapfre SH1 -- -- � ��

Mapfre BB SH2 -- -- ��

Total -- -- ��

18 � OTHER LIABILITIES

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Payable to related companies ��

�� -- -- ��

Other � � ��

Total ��

19 � EQUITY

a) Capital

The capital of the Group BB Seguridade amounted to R$ 5,646,768 thousand as of Sep 30, 2014 and Dec 31, 2013 and it is divided into 2,000,000,000 (two billion) shares as of Sep 30, 2014 and Dec 31, 2013. The shareholders� equity amounted R$ 7,252,728 thousand (R$ 6,941,273 thousand as of Dec 31, 2013), corresponding a book value per share of R$ 3.62636 (R$ 3.47064 per share as of Dec 31, 2013).

The BB Seguridade was created through capital subscribed of R$ 15,000 thousand and 10% paid in capital (R$ 1,500 thousand). The capital increases made by Banco do Brasil S.A., were made by a transfer of investment in BB Cor Participações S.A. and BB Seguros Participações S.A., amounting to R$ 5,631,768 thousand, and were performed on Dec 31, 2012. As of January 2013, there was a paid in capital of R$ 13,500 thousand.

b) Profit Reserves

R$ thousand

Parent and Consolidated

��#�� &� ��

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Additional proposed dividend -- ��

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c) Dividends

R$ thousand


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Calculation Basis: 2,241,719 1,519,027

Net Income 2,316,426 1,570,142

Legal reserve in the period (74,707) (51,115)

Minimum mandatory dividend 354,860 242,799

Additional dividend 840,457 575,049

Statutory reserve 224,123 153,347

Balance of net income after allocation 822,279 547,832

The dividends declared in the 1st half of 2014 were approved by the Board of Directors on August 08, 2014 and paid on August 29, 2014 restated by the Selic rate.

d) Other Accumulated Comprehensive Income

The other accumulated comprehensive income mainly derived from gains and losses related to fair value adjustments, net of tax effects, of available for sale financial assets, using in counterpart the appropriate asset account.

e) Stockholdings (number of stocks)

��#�� Dec 31, 2013

Stockholders Stocks % Total Stocks % Total

Banco do Brasil 1,325,000,000 66.25 1,325,000,000 66.25

Other stockholders 674,990,713 33.75 675,000,000 33.75

Treasury shares 9,287 -- -- --

Total 2,000,000,000 100.00 2,000,000,000 100.00

Locals 1,532,582,699 76.63 1,585,406,527 79.27

Foreign 467,417,301 23.37 414,593,473 20.73

20 � FINANCIAL INCOME

R$ thousand

�� Consolidated

3rd Quarter/2014 3rd Quarter/2013 3rd Quarter/2014 3rd Quarter/2013

$�� !��#��%��

Judicial deposits income -- -- ��

Valuation of exclusive fund shares -- -- � � ��

Financial assets at fair value through profit or loss -- -- ��

Other interest income -- -- -- ��

Total ��

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R$ thousand

�� Consolidated

01.01 to 09.30.2014 01.01 to 09.30.2013 01.01 to 09.30.2014 01.01 to 09.30.2013

$�� !��#��%��


Valuation of exclusive fund shares -- -- ��



Total ��

21 � PERSONNEL EXPENSES

a) Personnel Expenses

R$ thousand

�� Consolidated

�%�+,��-� � �%�+,��-� �%�+,��-� � �%�+,��-�

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R$ thousand

�� Consolidated

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b) Treasury shares

The Variable Wage Program Board of BB Seguridade for the year 2013 determined that, of the total amount allocated to the payment of variable compensation, 50% will be made in shares of BB Seguridade (BBSE3). From the total paid in shares, 20% will be immediately transferred to the beneficiary ownership and 80% will be deferred for a period of four years.

In May 2014, it was determined that the variable wage for the achievements in 2013 that the directors would have the right to 11,600 shares of the BB Seguridade these shares were acquired and all placed in the treasury, as defined in the Program. In June and July 2014 were transferred to the members of the Board 2,313 shares, remaining in treasury 9,287 shares.

c) Share-Based Payment

In March 2013, BB Seguridade approved the payment of variable wage to the members of the Executive Board in the form of stocks or share-based instruments. They will receive an annual bonus related to 2013 and according to the global amount approved at the Annual Meeting of Stockholders on March 28, 2013, an amount between six and twelve monthly salaries, based on the achievement of the Return on Equity � ROE � target.

For the financial year 2013, in accordance with the global amount approved by Annual General Meeting of March 28, 2013, the BB Seguridade accrued R$ 1,849 thousand, which is equivalent to 12 fees per beneficiary, for the payment of variable remuneration to the members of the Executive Board.

Based on the results of the 1st half of 2013, on October 22, 2013, an advance of 2.5 fees was carried out for each member of the Executive Board. On January 28, 2014, the Brazilian Securities and Exchange Commission (CVM)

��

��

101

authorized BB Seguridade to make the private trading of its own shares, in order to fund, through these shares, part of the payment of the variable remuneration compensation of its Executive Board members.

On April 3, 2014, according to the total amount approved by Annual General Meeting on March 28, 2013, the BB Seguridade made the second cash payment of the variable remuneration of Executive Board.

To continue the variable remuneration policy for the year 2013, the BB Seguridade acquired 11,600 shares through direct acquisition of treasury shares of BB Seguridade. In 2014, 2,313 shares were transferred to members of the Executive Board and blocked for movement. Thus, 9,287 treasury shares were left for subsequent transfers, as shown on the following timeline tables:

2013 program

Estimated timeline for transfer �,'0��"��)�"&1) Scheduled date

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)*��%�� (��

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The costs per share were as follows:

Date of purchase �,'0��"��)�"&1) �&2,(��%�

(��,�(�)Cost of purchase

in R$

+ ��

+ ��

22 � ADMINISTRATIVE EXPENSES

R$ thousand

�� Consolidated

�%�+,��-� � �%�+,��-� �%�+,��-� � �%�+,��-�

Administrative cost of products -- -- (26,177) (14,440)

Operational support -- -- (23,299) (33,913)

Data processing -- -- (8,482) (16,798)

Condominium fee (664) -- (664) --

Communication expenses (284) -- (459) (129)

Specialized technical services (87) -- (88) --

Outsourced services (41) -- (41) (180)

Other (398) (164) (472) (313)

Total (1,474) (164) (59,682) (65,773)

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R$ thousand

�� Consolidated

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Data processing (7) -- (36,083) (51,788)

Condominium fee (2,919) -- (2,919) --

Communication expenses (1,370) -- (1,888) (602)



Publications (357) -- (357) (290)

Other (2,068) (169) (2,458) (602)

Total (7,950) (169) (210,250) (200,553)

23 � OTHER OPERATING INCOME/EXPENSE

R$ thousand

�� Consolidated

�%�+,��-� � �%�+,��-� �%�+,��-� � �%�+,��-�

Restatement of assets 21,746 �� 32,869 ��

Restatement of liabilities (21,791) �� (54,446) ��

(Recording)/Reversal of provisions for labor, tax and civil lawsuits -- -- (1,953) (1,079)�

,-%��'�� -- -- -- ��

Other 200 � 615 ��

Total 155 �� (22,915) (22,746)

R$ thousand

�� Consolidated

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Restatement of liabilities (39,936) �� (94,739) � ��

(Recording)/Reversal of provisions for labor, tax and civil lawsuits -- -- (5,555) ��

,-%��'�� -- -- -- ��

Other 354 � 1,259 ��

Total (2,643)� (6,127)� (43,490) (51,670)�

24 � COMMISSIONS INCOME

R$ thousand

�� Consolidated

�%�+,��-� � �%�+,��-� �%�+,��-� � �%�+,��-�

&&�+ %'��.� -- -- 316,973 ��

Brasilprev -- -- 86,513 ��

Mapfre BB SH2 -- -- 83,486 ��

Brasilcap -- -- 73,862 ��

Other companies -- -- 1,725 ��

Total -- -- 562,559 ��

��

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103

R$ thousand

�� Consolidated

! ��"��!!� � ! ��"��!!� ! ��"��!!� � ! ��"��!!�

&&�+ %'��.� -- -- 890,201 ��

Brasilprev -- -- 269,908 ��

Mapfre BB SH2 -- -- 244,811 ��

Brasilcap -- -- 250,959 ��


Provision of services for incentives to products sale -- -- -- ��

Total -- -- 1,660,311 ��

��

��

104

25 � CURRENTS AND NON-CURRENTS ASSETS AND LIABILITIES

R$ thousand

Sep 30, 2014(1)

Until 1 year After 1 year Total

Assets

Cash and cash equivalents 1,610,331 -- 1,610,331

Financial assets at fair value through profit or loss 574 -- 574

Financial assets available for sale 77 -- 77

Equity method investments -- 6,518,222 6,518,222

Current tax assets 129,502 -- 129,502

Deferred tax assets -- 7,723 7,723

Commissions receivable 568,094 -- 568,094

Other assets 182 146,625 146,807

Total 2,308,760 6,672,570 8,981,330

Liabilities

Provisions for labor, tax and civil claims 14,192 -- 14,192

Current tax liabilities 185,585 -- 185,585

Deferred tax liabilities -- 273,977 273,977

Unearned commissions 586,513 634,965 1,221,478


Equity 7,252,728 -- 7,252,728

Total 8,072,388 908,942 8,981,330

(1) Consolidated position. R$ thousand

Dec 31, 2013(1)


Assets


Financial assets at fair value through profit or loss 2,966 -- 2,966



Dividends receivable 35,356 -- 35,356




Other assets 122 136,907 137,029

Total 2,421,144 6,364,334 8,785,478

Liabilities

Dividends payable 344,719 -- 344,719






Equity -- 6,941,273 6,941,273

Total 1,074,360 7,711,118 8,785,478

(1) Consolidated position.

��

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105

26 � RELATED PARTY TRANSACTIONS

The costs of benefits granted to fiscal council of the Group totaled R$ 209 thousand in 3rd Quarter 2014 (R$ 329 thousand in 3rd Quarter 2013) and R$ 787 thousand in 01.01 to 09.30.2014 (R$ 811 thousand in 01.01 to 09.30.2014).

The Group has banking transactions with its Controller, Banco do Brasil S.A., such as non-interest bearing current accounts and short-term investments. There are also service agreements, guarantee agreements and refunds of direct and indirect costs.

These transactions are conducted under normal market conditions, mainly under the terms and conditions for comparable transactions, including interest rates and collateral. These transactions do not involve unusual payment risks.

The Group does not grant loans to its Executive Committee or Fiscal Council members.

The tables below show the main transactions between the Group and related parties.

a) Summary of Related party Transactions

R$ thousand

Sep 30, 2014

Parent(1) Subsidiaries(2) Associates(3) Total

Assets

Cash and cash equivalents 1,610,331 -- -- 1,610,331

Commissions to be received -- -- 568,094 568,094

Liabilities

Obligations with related parties 25,197 -- -- 25,197

Unearned Commissions -- -- 1,221,478 1,221,478

R$ thousand

3rd Quarter/2014

Parent(1) Subsidiaries(2) Associates(3) Other related parties (4 Total

Income

Income from financial instruments 48,221 -- -- -- 48,221

Income from commission -- -- 562,559 -- 562,559

Expense of portfolio management -- -- -- (19,133) (19,133)

Personnel expenses (9,246) -- -- -- (9,246)

Administrative expenses (5) (59,615) -- -- -- (59,615)

Monetary liabilities changes (54,446) -- -- -- (54,446)

R$ thousand

01.01 to 09.30.2014

Parent(1) Subsidiaries(2) Associates(3) Other related parties (4) Total

Income


Income from commission -- -- 1,660,311 -- 1,660,311





��

��

106

R$ thousand

Dec 31, 2013


Assets



Dividends to be received -- 1,077,382 35,356 1,112,738

Liabilities

Dividends payable 228,376 -- -- 228,376



R$ thousand

3rd Quarter/2013


Income

Income from financial instruments 33,838 113 -- -- 33,951






R$ thousand

01.01 to 09.30.2013


Income







(1) Banco do Brasil S.A.

(2) BB Seguros S.A, BB Corretora, BB Cor S.A. e BB Capitalização S.A. on the financial position.

(3) Related companies BB MAPFRE SH1 Participações S.A. and its subsidiaries, MAPFRE BB SH2 Participações S.A and its subsidiaries, Brasilprev Seguros e Previdência S.A. and Brasilcap Capitalização S.A and IRB.

(4) This includes administration services of financial investments portfolio by the BB DTVM to associated companies of the Group BB Seguridade.

(5) Refers to expenses as sharing contract customer data, use of staff, distribution network and resource materials technological and administrative, between the Bank, BB Corretora and BB Seguros.

b) Compensation Paid to Employees and Directors

On March 15, 2013, an agreement of assignment of employees of Banco do Brasil S.A. to BB Seguridade, for the office of Director levels, Management and other positions of trust was signed. The assignment of employees is given in the form of availability, without charge. The Banco do Brasil S.A. continues to process the payroll of the transfered employees, receiving a monthly repayment of all current costs from BB Seguridade.

� �

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107

BB SEGURIDADE PARTICIPAÇÕES S.A.

MEMBERS OF THE MANAGEMENT BODIES

DIRECTOR-PRESIDENT

Marcelo Augusto Dutra Labuto

DIRECTORS

Leonardo Giuberti Mattedi

Ângela Beatriz de Assis

Werner Romera Suffert

BOARD OF DIRECTORS

Alexandre Corrêa Abreu (President)

Ivan de Souza Monteiro (Vice-President)

Isabel da Silva Ramos


Francisca Lucileide de Carvalho

José Henrique Paim Fernandes

FISCAL COUNCIL

Pablo Fonseca Pereira dos Santos

Antonio Pedro da Silva Machado

Giorgio Bampi

ACCOUNTING DEPT.

Eduardo Cesar Pasa

General Accountant

Accountant CRC-DF 017.601/O-5

CPF 541.035.920-87

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� ��

��

�

ITR � Comments on Estimates (Guidance)

2014 Guidance

The following table presents the monitoring of the 2014 Guidance (estimates X annualized observed values), calculated based on the BB Seguridade financial statements for the first nine months of 2014. The ratios were measured upon the following methodologies:

The ROAE is calculated by the annualized percentage observed in the period, considering the division of the adjusted net income by average equity of the period, both calculated under IFRS, as disclosed by the Company in its MD&A report.

The average equity is calculated based on:

� Initial shareholders� equity: R$6,125 million, calculated as December/2013 equity, deducted from the dividends paid in February of 2014 (not considering interest);

� End of the period shareholders� equity: Shareholders� equity deducted from dividends to be paid.

Premiums written and collection are calculated upon the percentage growth, observed in comparison with same period of prior year.

Ratio9M14

PerfomancePrevious

Estimates - %Revised

Range - %

BB Seguridade - Adjusted ROAE 51.3 44 - 49 Maintained

Premiums Written Growth - Life, Rural and Housing - BB Mapfre SH1 16.7 24 - 32 Maintained


Contribution Growth - Pension Plans 38.0 33 - 47 Maintained


�

As appointed in the table above, deviations were observed in the indicators "Adjusted ROAE", "Written Premiums � Life, Rural and Housing", "Written Premiums � P&C" and "Collection of Premiums Bonds". The first exceeded the Guidance in the first nine months of the year, while the others performed below estimates. The reasons for the deviations are as follows:

a) Adjusted ROAE: BB Seguridade net income presented higher than expected performance, mainly due to the financial results of affiliates, as a result of a better than predicted behavior of the future yield curve in the first nine months of 2014, which generated a positive mark to market effect in fixed income and inflation-linked securities.

b) Life, Rural and Housing - premiums written growth: The deviation was due to lower than expected sales in the segments of life and credit life.

��

� ��

��

�

c) P & C � premiums written growth: The deviation was due to increased competition, from the first half of 2014, primarily impacting the sales of auto insurance in the bancassurance channel. �

�

d) Premium Bonds Collection growth: Result was due to lower than expected sales, and changes in the mix, with an increased focus on �monthly payment� plans. These bonds historically provide higher recurrence to revenues, but present a lower average ticket.

The Company decided to keep the Guidance unchanged for growth in the segment of life, housing and rural (BB Mapfre SH1), due to a better performance expected in the last quarter of the year.

The Company expects an acceleration of sales in the segments of life, housing and rural (BB Mapfre SH1) in the last quarter of 2014, why keep the range of expected growth in its guidance for 2014.

Considering the results observed in the first nine months of the year, the 2014 Guidance was revised in items "Growth of Premiums Written - Mapfre BB SH2 � P&C Segments" and "Growing Collection of Premium Bond

KPDS 100074

BB Seguridade Participações S.A.

Interim Financial Information

September 30, 2014 (a free translation of the original report in Portuguese on individual

interim financial information prepared in accordance with CPC

21(R1) - Interim Financial Reporting and on consolidated interim

financial information prepared in accordance with CPC 21 (R1)

and IAS 34 - Interim Financial Reporting issued by the

International Accounting Standards Board - IASB)

2

Report on review of interim financial information

To

The Board of Directors, Shareholders and Management

BB Seguridade e Participações S.A.

Brasília - DF

Introduction

We have reviewed the accompanying individual and consolidated interim financial information

of BB Seguridade e Participações S.A. (�Company�), for the period ended September 30, 2014 ,

which comprises the balance sheet as of September 30, 2014 and the related statements of

income and the statements of comprehensive income, for the quarter and the period of nine

months then ended, the statement of changes in equity and the statements of cash flows for the

period of nine months then ended, including the summary of significant accounting practices

and others explanatory notes.

The Company´s Management is responsible for the preparation of the individual interim

financial information in accordance with Accounting Pronouncement CPC 21 (R1) - Interim

Financial Reporting and the consolidated interim financial information in accordance with CPC

21 (R1) and IAS 34 - Interim Financial Reporting , issued by the International Accounting

Standards Board - IASB. Our responsibility is to express a conclusion on this interim financial

information based on our review.

Scope of the review

We conducted our review in accordance with Brazilian and international standards on review of

interim financial information (NBC TR 2410 and ISRE 2410 Review of Interim Financial

Information Performed by the Independent Auditor of the Entity). A review of interim financial

information consists of making inquiries, primarily of persons responsible for financial and

accounting matters, and applying analytical and other review procedures. A review is

substantially less in scope than an audit conducted in accordance with standards on auditing and

consequently does not enable us to obtain assurance that we would become aware of all

significant matters that might be identified in an audit. Accordingly, we do not express an audit

opinion.

Conclusion on the individual interim financial information

Based on our review, we are not aware of any fact that could lead us to believe that the

accompanying individual interim information referred above has not been prepared, in all

material respects, in accordance with CPC 21 (R1) applicable to the preparation of individual

interim financial information.

3

Conclusion on the consolidated interim financial information


accompanying consolidated interim information referred above has not been prepared, in all

material respects, in accordance with CPC 21 (R1) and IAS 34 applicable to the preparation of

consolidated interim financial information.

Other matters

Interim Statement of Value Added

We have also reviewed the individual and consolidated interim statement of value added

(�DVA�), for the period of nine months ended September 30, 2014, prepared under the

responsibility of the Company's Management, the presentation of which is required by standards

issued by the Brazilian Securities and Exchange Commission (CVM), and as supplemental

information under IFRS, which does not require the presentation of a DVA. These statements

were subject to the same review procedures described above, and based on our review, we are

not aware of any fact that could lead us to believe that they have not been prepared, in all

material respects, consistently with individual and consolidated interim financial information

taken as a whole.

Review of values presented for comparative purposes

The accompanying individual and consolidated interim financial information for the year ended

December 31, 2013 and the quarter and the period of nine months ended September, 30 2013,

presented for comparative purposes, were previously audited and reviewed, respectively, by

other independent auditors who issued their reports dated on February 7, 2014 and November 8,

2013, respectively, which did not contain any modification.

Brasília, November 3, 2014

KPMG Auditores Independentes

CRC SP-014428/O-6 F-DF

Original report in Portuguese signed by

Carlos Massao Takauthi

Contador CRC 1SP206103/O-4

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INDEX

Management comments on performance 01

Consolidated Financial Statements 02

Statement of Income ................................................................................................................................ 02

Balance Sheet .......................................................................................................................................... 03

Statement of Cash Flows ......................................................................................................................... 04

Statement of Changes in Equity ............................................................................................................... 05

Statement of Value Added 06

Notes to the Consolidated Financial Statements ................................................................................ 07

Note 1 � Operations ................................................................................................................................. 07

Note 2 � Acquisitions, Disposals and Corporate Reestructuring ............................................................. 07

Note 3 � Presentation of Financial Statements ........................................................................................ 11

Note 4 � Significant Accounting Practices ................................................................................................ 12

Note 5 � Main Judgments and Accounting Estimates ............................................................................. 20

Note 6 � Risk Management ...................................................................................................................... 21

Note 7 � Information by Segment ............................................................................................................. 44

Note 8 � Cash and Cash Equivalents ...................................................................................................... 51

Note 9 � Financial Instruments ................................................................................................................. 51

Note 10 � Investment in Associates ......................................................................................................... 52

Note 11 � Dividends Receivable .............................................................................................................. 93

Note 12 � Taxes ....................................................................................................................................... 93

Note 13 � Commissions receivable .......................................................................................................... 96

Note 14 � Other Assets ............................................................................................................................ 96

Note 15 � Dividends Payable ................................................................................................................... 96

Note 16 � Provisions and Contingent Liabilities ....................................................................................... 96

Note 17 � Unearned Commissions .......................................................................................................... 98

Note 18 � Other Liabilities ........................................................................................................................ 98

Note 19 � Equity ....................................................................................................................................... 98

Note 20 � Financial Income ...................................................................................................................... 99

Note 21 � Personnel Expenses .............................................................................................................. 100

Note 22 � Administrative Expenses ....................................................................................................... 101

Note 23 � Other Operating Income/(Expense) ...................................................................................... 102

Note 24 � Commissions Income ........................................................................................................... 102

Note 25 � Currents and Non-Currents Assets and Liabilities ................................................................ 104

Note 26 � Related Party Transactions ................................................................................................... 105

Members of the Management Bodies 107

Management comments on the Guidance performance 108

Report on review of interim financial information 111

��

� ��

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ITR � Management comments on performance

Dear Shareholders,

BB Seguridade Participações (BB Seguridade) recorded a net income of R$2.3 billion in the first nine months of 2014, which represents an increase of 47.5% up as compared to the net income of the same period of last year.

The Company�s earnings growth was driven by growth in operating income, with emphasis on expansion of net investment income.

Operating revenues

In the first nine months of 2014, the net investment income reached R$1.4 billion, 50.5% higher yoy. ��

In 9M14, brokerage revenues reached R$1.7 billion, 35.0% higher yoy. The highlight is the increase in commissions from life, mortgage life and rural insurances (40.7%) and pension plans (56.2%).

For further information about BB Seguridade, please refer to www.bancodobrasilseguridade.com.br

�

C hg. %

R $ tho usand 9M 13 9M 14 On 9M 13

Operat ing revenues 2,168,265 3,072,637 41.7

Income from brokerage 1,230,052 1,660,311 35.0

Equity income 938,213 1,412,326 50.5

Insurance life, mortgage life and rural

446,787 697,414 56.1

Insurance auto and property & casualty

71,689 101,685 41.8

Pension plans 319,083 395,736 24.0

Premium bonds 88,858 150,879 69.8

Reinsurance 11,796 67,777 474.6

Dental Insurance - (1,165) -

9 M o nths F lo w

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555,

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1,57

8,12

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3,07

2,63

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5,33

82,

168,

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Com

mis

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s in

com

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----

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562,

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1,66

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5,49

71,

230,

052

Equ

ity in

com

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828,

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3

BALANCE SHEET

R$ thousand


Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

CURRENT ASSETS

Cash and cash equivalents [8] 64,991 186,615 1,610,331 1,785,284

Financial assets at fair value through profit or loss [9] -- -- 574 2,966

Financial assets available for sale [9] -- -- 77 80

Dividends receivable [11] -- 1,077,382 -- 35,356

Current tax assets [12] 12,731 1,439 129,502 88,120

Commissions receivable [13] -- -- 568,094 509,216

Other assets [14] 73 -- 182 122

NON-CURRENT ASSETS

Investments in associates [10] 7,178,952 6,024,029 6,518,222 6,221,050

Deferred tax assets [12] -- -- 7,723 6,377

Other assets [14] -- -- 146,625 136,907

TOTAL ASSETS 7,256,747 7,289,465 8,981,330 8,785,478


Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

CURRENT LIABILITIES

Dividends payable [15] -- 344.719 -- 344.719

Contingent liabilities [16] -- -- 14.192 8.637

Current tax liabilities [12] 9 -- 185.585 152.910


Other liabilities [18] 4.010 3.473 33.370 42.009

NON-CURRENT LIABILITIES

Deferred tax liabilities [12] -- -- 273.977 273.977


TOTAL LIABILITIES 4.019 348.192 1.728.602 1.844.205

EQUITY [19]

Capital 5.646.768 5.646.768 5.646.768 5.646.768

Capital reserves 266 -- 266 --

Income reserves 793.580 1.311.186 793.580 1.311.186

Other accumulated comprehensive income (9.899) (16.681) (9.899) (16.681)

Retained earnings 822.279 -- 822.279 --

Treasury shares (266) -- (266) --

TOTAL EQUITY 7.252.728 6.941.273 7.252.728 6.941.273

TOTAL LIABILITIES AND EQUITY 7.256.747 7.289.465 8.981.330 8.785.478

See the accompanying notes to the financial statements. � �

��

��

4

STATEMENTS OF CASH FLOWS R$ thousand

Parent Consolidated

01.01 a 09.30.2014 01.01 a 09.30.2013 01.01 a 09.30.2014 01.01 a 09.30.2013

Cash From Operations

Earnings before income taxes 2,316,426 1,570,142 2,795,933 1,901,521

Adjustments to income (loss) before income taxes -- --

Equity in the earnings of subsidiaries and associates (2,340,272) (1,578,129) (1,412,326) (938,213)

Other revenues/(expenses) 2,997 207 (38,234) --

Income adjusted before income taxes (20,849) (7,780) 1,345,373 963,308

Changes in assets and liabilities

Net change in financial assets at fair value through profit -- -- 2,392 (2,642)

Net change in available for sale financial assets -- -- 3 24

Income and social contribution taxes paid (1,661) (681) (437,359) (304,968)

Net change in current taxes (11,283) (1,373) (8,707) 37,725

Net change in deferred taxes -- -- (1,346) 396

Net change in contingent liabilities -- -- 5,555 2,985

Net change in other assets and liabilities 692 8,701 157,512 128,485

Net cash from operating activities (33,101) (1,133) 1,063,423 825,313

Cash from investment activities

Dividends received 2,306,366 1,003,903 1,160,262 867,238

Acquisition of interests in associates -- -- (3,749) (547,409)

Capital contribution in subsidiaries -- (1,080) --

Net cash from investment activities 2,306,366 1,002,823 1,156,513 319,829

Cash from financing activities

Capital subscription/increase -- 13,500 -- 13,500

Dividends paid (2,394,889) (828,955) (2,394,889) (1,471,640)

Net cash from financing activities (2,394,889) (815,455) (2,394,889) (1,458,140)

Net change in cash and cash equivalents (121,624) 186,235 (174,953) (312,998)

Opening balance 186,615 1,500 1,785,284 1,327,931

Closing balance 64,991 187,735 1,610,331 1,014,933

Increase (decrease) in cash and cash equivalents (121,624) 186,235 (174,953) (312,998)


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5

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6

STATEMENT OF VALUE ADDED

R$ thousand

Parent Consolidated

01.01 a 09.30.2014 01.01 a 09.30.2013 01.01 a 09.30.2014 01.01 a 09.30.2013

Income -- -- 1,660,311 1,230,052

Commissions income -- -- 1,660,311 1,230,052

Input Acquired From Third Parties (10,593) (6,296) (253,740) (252,223)

Administrative expenses (7,950) (169) (210,250) (200,553)

Other expenses (2,643) (6,127) (43,490) (51,670)

Gross Added Value (10,593) (6,296) 1,406,571 977,829

Net Added Value Generated By The Entity (10,593) (6,296) 1,406,571 977,829

Added Value Received Through Transfer 2,349,888 1,580,147 1,541,762 1,028,799

Equity in the earnings of associates 2,340,272 1,578,129 1,412,326 938,213

Financial income 9,616 2,018 129,436 90,586

Total Added Value to Distribute 2,339,295 1,573,851 2,948,333 2,006,628

Distribution of Added Value 2,339,295 1,573,851 2,948,333 2,006,628

Personnel 21,444 3,705 28,348 15,550

Taxes, fees and contributions 1,425 4 603,559 420,936

Income reserves 298,830 752,294 298,830 752,294

Retained earnings 2,017,596 817,848 2,017,596 817,848


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7

1 � OPERATIONS

BB Seguridade Participações S.A. ("BB Seguridade" or "Group") was incorporated as a subsidiary of Banco do Brasil S.A. on December 20, 2012, in accordance with Brazilian law. The purpose of the Group is to participate in insurance companies, capitalization, open private pension funds, health insurance companies, reinsurance companies, as well as other companies whose corporate purpose is to broker and facilitate business involving personal, health, property and vehicle insurance, offer capitalization plans, private pension plans and manage asset.

BB Seguridade Participações S.A., enrolled with the CNPJ (Brazilian equivalent of IRS Registry of Legal Entities) 17.344.597/0001-94, is headquartered in Setor Bancário Sul, Quadra 1, Bloco A, Lote 31, Edifício Sede I, 15th Floor, Room 3, Brasilia, Distrito Federal, Brazil.

The Group's operations are conducted through its wholly owned subsidiaries BB Cor Participações S.A. (BB Cor) and BB Seguros Participações S.A. (BB Seguros), which are under common administrative and corporate control.

2 � Acquisitions, Disposals and Corporate Restructuring

a) Structuring of BB Seguridade and organization of subsidiaries BB Seguridade Participações S.A. and BB Cor Participações S.A.

As of December 2012, the Group established BB Seguridade Participações S.A. (BB Seguridade) and BB Cor Participações S.A. (BB Cor).

After the establishment of BB Seguridade, the company holds the following equity interest:

a) 100% of the shares of BB Cor; b) 100% of the shares of BB Seguros Participações S.A. (BB Seguros) which, in turn, holds interests in the followings companies:

(i) 74.9% of the total shares (49.9% common shares) of BB MAPFRE SH1 Participações S.A., which operates in the field of personal, property and rural insurance in partnership with MAPFRE Group; (ii) 50.0% of the total shares (49.0% common shares) of MAPFRE BB SH2 Participações S.A., which operates in the field of property insurance also in partnership with MAPFRE Group; (iii) 74.9% of the total shares (49.9% common shares) of Brasilprev Seguros e Previdência S.A., which operates in private pension plans in partnership with Principal Financial Group; (iv) 66.7% of the total shares (49.9% common shares) of Brasilcap Capitalização S.A., which operates in the capitalization market in partnership with Icatu Seguros S.A. and Companhia de Seguros Aliança da Bahia; (v) 100% of the shares of BB Capitalização S.A. (formerly Nossa Caixa Capitalização S.A.), which operates in the capitalization market.

The Group�s objectives for BB Seguridade are as follows:

(i) to consolidate, all BB activities in the areas of insurance, capitalization, open private pension and related activities under a single company, including any future expansion of these activities in Brazil or abroad, either organic or not; (ii) to realize economies of scale in these operations; (iii) to reduce costs and expenses in the insurance segment.

The administration, backed by monitoring tools that align executives' behavior to the interests of shareholders and society in general, is conducted with the best corporate governance practices, so as to allow BB Seguridade finds itself listed in a special segment of the market shares of BM&FBovespa S.A. - Bolsa de Valores, Mercadorias e Futuros, called New Market.

As of December 2012, BB Cor now holds 100% participation in the capital of BB Corretora de Seguros e Administradora de Bens S.A. (BB Corretora).

The Group's objective is to expand the market share of BB Corretora which will operate in and outside of the distribution channels of Banco do Brasil S.A., BB Corretora will sell third-party products in the fields in which the Group does not have exclusive agreements with partner companies.

��

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8

BB Cor will also hold interest in the capital of other companies operating in the market as brokers in the markets of insurance, pension plans, capitalization and/or healthcare and dental plans in which the Group will participate in the future.

Finally, after the corporate reorganization promoted throughout the year 2013, BB Seguros, besides the aforementioned shareholdings, now holds the following companies:

a) 20.5% of the total shares (20.5% common shares) of IRB Brasil Resseguros S.A., which operates in the field of reinsurance and retrocession; and b) 74.99% of the total shares (49.99% common shares) of Brasildental Operadora de Planos Odontológicos

S.A., which operates in the field of dental plans, in partnership with Odontoprev S.A.

IPO

On February 20, 2013, by Special General Meeting, Banco do Brasil S.A. decided to approve Initial Public Offering (IPO) of BB Seguridade. The minutes of the General Meeting were filed in the Junta Comercial do Distrito Federal (Commercial Registry of the Federal District) on March 14, 2013, under No. 20130248401, published in the Diário Oficial da União (Union Official Gazette) and in the Jornal de Brasília (Journal of Brasilia) on March 25, 2013.

The IPO occurred on April 26, 2013, on the over-the-counter market, according CVM 400 Instruction. Simultaneously, there were efforts to issue shares abroad, in accordance with the Placement Facilitation Agreement, concluded between the Company, the Shareholder Seller and International Placement Agents.

Final data about the IPO, closed as of May 17, 2013, considering the sale of additional stock batches, is shown below:

Investor Quantities of shares buyers Number of shares acquired (1)

Individuals 103,359 105,448,951

Investments clubs 207 3,050,427

Investments fund 586 152,701,554

Pension plan entities 16 1,431,673

Insurance entities 2 1,494,600

Foreign investors 473 393,949,671

Intermediary institutions participants of distribution consortium -- --

Financial institutions linked to the Company and/or participants of consortium -- --

Other financial institutions 1 10,000

Other legal entities linked to the company and/or participants of consortium 9 8,740

Other legal entities 8,886 12,686,344

Partners, managers, employees, agents and other individual linked to the company and/or other participants of consortium

794 4,215,644

Others 2 2,396

Total 114,335 675,000,000

(1) Includes 109,484,800 shares acquired for J.P Morgan, 2,500,000 shares acquired for BTG Pactual and 5,810,000 shares acquired for Citi and/or individuals that, directly or indirectly, control, are under control or are under common control of J.P. Morgan, BTG Pactual and Citi, respectively, acting on behalf of its customers, in order to do hedge with derivative transactions, including as a result of contracts of total return swap and/or other financial instruments signed overseas with the same effect.

b) IRB Brasil Resseguros S.A. (IRB Brasil Re)

On May 24, 2013, BB Seguros Participações S.A. and the Federal Government signed an agreement (Contrato de Transferência de Ações) to transfer 212,421 common shares issued by IRB Brasil Re held by the Federal Government to BB Seguros.

Moreover, on the same date, a Shareholders Agreement was signed between BB Seguros, the Federal Government, Bradesco Auto Re � Companhia de Seguros S.A., Itaú Seguros S.A., Itaú Vida e Previdência S.A. and Fundo de Investimento em Participações Caixa Barcelona to create an IRB Brasil Re governance control group in order to regulate the relationship between the partners, as well as the company�s management structure and operation. Common shares were linked to the Shareholders Agreement, representing 20% of the total common shares held by BB Seguros; 15% of the total common shares held by the Federal Government; 15% of the total common shares held by Itaú Seguros Group; 20% of the total common shares held by Bradesco Seguros; and 3% of the total common shares held by FIP Caixa Barcelona.

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9

Besides the Shareholders� Agreement the restructuring process of IRB Brasil Re involves the following steps:

a) conversion of IRB Brasil Re non-voting shares into common shares (1:1); b) creation of a golden share held by the Federal Government (with the veto right to certain decisions), and; c) capital increase of IRB Brasil Re by its current shareholders, with the issuance of new shares, and the

commitment of the Federal Government not to exercise its preference rights.

On August 20, 2013, a Special Shareholders Meeting occurred to approve the capital increase of the IRB Brasil Re. The capital increase was a required condition for the acquisition of the common shares by BB Seguros..

On August 27, 2013, BB Seguros held 20.5% of the capital of IRB Brasil Re after the transfer of shares. Selected information about this transfer is as follows:

Fair Value of Assets and Liabilities of IRB Brasil Re

R$ thousand

Sep 30, 2013

Cash and bank deposits 15,541

Financial assets 5,465,934

Property and equipment 168,898

Identifiable intangible assets 127,236

Current tax assets 27,742

Deferred tax assets 236,626

Insurance and reinsurance operations 2,515,534

Other assets 4,362,013

Fair value of assets 12,919,524

Provision for labor, tax and civil claims 278,239

Liabilities for insurance contracts and pension plan 7,523,585

Current tax liabilities 73,011

Deferred tax liabilities 54,657

Insurance and reinsurance debts 1,568,776

Other liabilities 716,068

Fair value of liabilities 10,214,336

Fair value of net assets 2,705,188

BB Seguros participation - % 20.51%

BB Seguros participation 554,853

Acquisiton share price (20,51%) (547,409)

Acquisition purchase gain (7,444)

Identified Intangible Assets in the Transaction

R$ thousand

Sep 30, 2013

Related to customer portfolios 119,030

Brands 8,206

Total 127,236

The identified intangible assets have been amortized in accordance with the terms presented in the PPA�s report, prepared by a specialized and independent company. From Jan 01, 2013 to Sep 30, 2014, the amortized amounts totaled R$ 3,431 thousand.

The transaction was approved by Conselho Administrativo de Defesa Econômica (CADE) on April 16, 2013 and by Superintendência de Seguros Privados (SUSEP) on September 16, 2013.

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10

Regarding the nature of the transaction and the contractual conditions, the accounting standards were analyzed by the Group to establish which standard was more appropriate for this transaction. In this sense, the acquisition of the shares from IRB Brasil Re is qualified by an associate investment, due to the significant influence of BB Seguros in IRB Brasil Re.

c) Brasildental Operadora de Planos Odontológicos S.A. (�Brasildental�)

On June 11, 2013, Banco do Brasil S.A., BB Seguros Participações S.A. (BB Seguros), BB Corretora de Seguros e Administradora de Bens S.A. (BB Corretora), Odontoprev S.A. (Odontoprev) and Odontoprev Serviços Ltda. (Odontoprev Serviços) signed an Agreement (Acordo de Associação e Outras Avenças) to create a new company named Brasildental. This company will, in connection with BB Corretora, selldental plans under the brand BB Dental, exclusively through BB channels in the Brazilian territory.

Brasildental was created on March 12, 2014, with an R$ 5 million initial capital, distributed in 100,000 common shares (ON) and 100,000 preferred shares (PN) with the following shareholding structure:

Brasildental Operadora de Planos Odontológicos S.A.

% of Total Capital % Common stock % Preferred stock

BB Seguros 74.99 49.99 100.00

Odontoprev 25.01 50.01 --

On Brasildental�s constitution day it received R$ 1 thousand of its initial capital and R$ 4,999 thousand, on day April 15, 2014. BB Seguros and Odontoprev responded to Brasildental�s initial capital payment according to their respective ownership stake.

The Agreement was approved by the Conselho Administrativo de Defesa Econômica (CADE) on August 02, 2013 and on September 19, 2013, Banco Central do Brasil (BACEN) authorized the indirect participation of Banco do Brasil S.A. in the capital of Brasildental. On May 12, 2014, the register of the company in the Conselho Regional de Odontologia (CRO) was issued and, on July 07, 2014 and August 08, 2014, the operating authorization and registration of dental plans to be sold, respectively, from the Agência Nacional de Saúde Suplementar (ANS).

The Agreement will remain effective for 20 years and is renewable for equal periods.

Shareholding configuration on September 30, 2014:

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11

3 � Presentation of Financial Statements

a) Statement of Compliance

The individual financial statements have been prepared in accordance with the accounting guidelines derived from Brazilian corporation law and are presented in compliance with accounting practices adopted in Brazil, including pronouncements issued by the Comitê de Pronunciamentos Contábeis � CPC (Accounting Pronouncements Committee), approved by Conselho Federal de Contabilidade � CFC (Federal Accounting Council).

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB), and interpretations issued by the International Financial Reporting Interpretation Committee (IFRIC) and its predecessor institutions.

These financial statements were approved by the Executive Board of Directors on October 28, 2014.

b) Continuity

Management evaluated that the Group has the resources to continue their business in the future. The Management is not aware of any material uncertainty that might generate significant doubts about the companies ability to continue as a going concern.

c) Measurement Basis of Assets and Liabilities

These individual and consolidated financial statements have been prepared using historical cost as a measurement basis, except for the following items: (i) financial assets and liabilities held for trading, (ii) financial assets and liabilities measured at fair value through profit or loss, and (iii) financial assets available for sale, which were measured at fair value.

d) Functional and Presentation Currency

The financial statements are presented in Brazilian Reais (R$), the functional and presentation currency of the BB Seguridade. Except as otherwise indicated, the quantitative financial information is presented in thousands of Reais (R$ thousand). BB Seguridade did not have transactions in foreign currencies for the period presented.

e) Consolidation Basis

The consolidated financial statements of the Group include the consolidation of assets and liabilities from BB Seguridade and its controlled entities, as follows:

Company ActivityCountry of

constitution

% Share

Sep 30, 2014 Dec 31, 2013

BB Seguros Participações S.A. Holding Brasil 100% 100%

BB Cor Participações S.A. Holding Brasil 100% 100%

BB Corretora de Seguros e Administradora de Bens S.A. Brokerage Brasil 100% 100%

BB Capitalização S.A. Capitalization Plans Brasil 100% 100%

(1) Formerly Nossa Caixa Capitalização S.A.

The intra-group balances and transactions, such as any unrealized income or expenses on transactions between companies, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity method investments are eliminated against the investment to the extent of the BB Seguridade equity interest in the investee.

��hanges in Accounting Policies

The accounting policies and methods used in preparing these consolidated financial statements are equivalent to those applied to the consolidated financial statements for the year ended Dec 31, 2013.

g) Seasonality of Operations

BB Seguridade and its subsidiaries consider the nature of their transactions as non-seasonal and non-cyclical, taking into account the activities carried out by the Group. Consequently, no specific disclosures are provided in these notes for the nine months ended September 30, 2014.

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4 � SIGNIFICANT ACCOUNTING PRACTICES

a) Revenue and Expense Recognition

Revenue and expenses are recognized on an accrual basis and recorded in the financial statements in the period when they were generated or incurred. This concept is applied to the main revenue streams generated by BB Seguridade and its subsidiaries� activities, namely:

a.1) Revenue from equity investments � The revenue from the application of equity method of accounting for equity investments is recognized proportionally to the equity interest held by BB Seguridade in the investees� results.

a.2) Commission revenue � Commissions revenues are recognized when their value, their associated costs and the transaction stage can be reliably measured and when it is probable that the economic benefits will occur.

a.3) Interest revenue � Interest revenue and expenses resulting from assets and liabilities that yield and pay interest are recognized in income for the period on an accrual basis, using the effective interest rate method.

The effective interest rate method is a method used to calculate the amortized cost of a financial asset or of a financial liability (or of a group of financial assets or financial liabilities) and to allocate the interest revenue or expense over the corresponding period.

The effective interest rate is the rate that discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability. The effective interest rate is established upon the initial recognition of the financial asset or liability and is not subject to subsequent reviews. To calculate the effective interest rate, BB Seguridade estimates the future cash flows considering all contractual terms of the financial instrument, but not future credit losses.

The calculation of the effective rate includes all the commissions, the transaction costs and the discounts or premiums that are an integral part of the effective interest rate. The transaction costs correspond to incremental costs directly attributable to the acquisition, issuance or divestiture of a financial asset or liability.

In accordance with IAS 18, BB Seguridade appropriates revenues from finance charges when it is considered probable to receive the economic benefits related to the transaction.

b) Cash and Cash Equivalents

Cash and cash equivalents include funds available and investments immediately convertible into cash and subject to an insignificant risk of a change in value.

c) Financial Instruments

Financial instruments are classified in accordance with their nature and its intention towards the instrument. All financial assets and liabilities are initially recognized on the trading date, i.e., the date on which the Group becomes party to the contractual provisions of the instrument. Classification of financial assets and liabilities is determined on the date of initial recognition.

All financial instruments are initially measured at fair value plus associated transaction costs, except in cases in which the financial assets and liabilities are recorded at fair value through profit or loss. The accounting practices applied to each class of financial instruments are presented below.

c.1) Financial assets at fair value through profit or loss � Financial instruments are classified in this category if held for trading on the origination or acquisition date, or if designated as such by Management upon initial recognition.

A financial asset is classified as held for trading if: (i) it is acquired mainly to be sold in the near term; or (ii) upon initial recognition it is part of a portfolio of identified financial instruments that are managed jointly and for which there is evidence of a recent actual pattern of short-term profit-taking.

The Group only measures a financial instrument at fair value through profit or loss upon initial recognition when the following criteria are met: (i) the designation eliminates or significantly reduces the inconsistent treatment that would arise from measuring assets and liabilities or recognizing the corresponding gains and losses in different forms; or (ii) the assets and liabilities are part of a group of financial assets, financial liabilities or both, which are managed and have their performances evaluated on a fair value basis, pursuant to documented strategy of risk management or investment.

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Financial assets classified into this category will not be transferred to other categories, with the exception of non-derivative financial assets held for trading, which can be reclassified after initial recognition when: (i) in rare circumstances, the financial instrument is no longer held with the purpose of sale in the near term; or (ii) it meets the definition of a loan and receivable, and if the Group has the intention and ability to hold the financial asset for the foreseeable future or until maturity.

Financial instruments recorded in this category are initially recognized at fair value and their yields (interest and dividends) are appropriated as interest revenue. Transaction costs, when incurred, are recognized immediately in the Consolidated Income Statement.

Realized and unrealized gains or losses related to fair value variations of these instruments are included in net gains/(losses) under financial assets/liabilities at fair value through profit or loss.

Financial assets recorded in this category comprise securities and derivative financial instruments held for trading.

c.2) Financial assets available for sale � Securities are classified as financial assets available-for-sale when, in the opinion of Management, they can be sold in response to or in anticipation of changes in market conditions or they are not classified as (i) loans and receivables, (ii) investments held to maturity, or (iii) financial assets at fair value through profit or loss.

These securities are initially accounted for at fair value, including direct costs and incremental transaction costs. Also, subsequent measuring of these instruments is recorded at fair value.

Unrealized gains or losses (net of taxes) are recorded in a separate component of equity (Other accumulated comprehensive income) until their disposal. The yields (interest, dividends) of these assets are allocated as interest income. Gains and losses on disposal of financial assets available for sale are recorded as gains/(losses) on financial assets available for sale, on the date of disposal.

When there is a reclassification of financial assets available for sale to the trading category, the unrealized gains or losses until the date of reclassification are recorded in Other accumulated comprehensive income and are deferred over the remaining term of the asset.

Financial assets available for sale are valued for the purpose of determining their recoverable amount as discussed in the section entitled "impairment of financial assets�. Losses due to reduction in the recoverable amount of these financial instruments are recognized in the Consolidated Statement of Income, in gains/(losses) on financial assets available for sale, and written off from the amount recorded in Other accumulated comprehensive income.

c.3) Financial assets held to maturity � Financial assets that the Group has a positive intention and proven financial ability to hold to maturity are classified as financial assets held to maturity and are initially accounted at fair value, including incremental transaction costs. These financial instruments are subsequently measured at amortized cost. Interest, including premiums and discounts, are recorded as financial assets interest, using the effective interest rate, less impairment (if applicable).

In accordance with IAS 39, such assets are not classified as a financial asset held to maturity if it has been, during the current financial year or during the two preceding financial years, sold or reclassified in more than an insignificant amount of held-to-maturity investments before maturity. This does not include other sales or reclassifications that: (i) are so close to maturity or to the call date of the financial asset that changes in the market rate of interest would not have a significant effect on the financial asset's fair value; (ii) occur after the Group has collected substantially all of the financial asset's original principal through scheduled payments or prepayments; or (iii) are attributable to an isolated event that is beyond the entity's control, is non-recurring and could not have been reasonably foreseen by the entity.

Whenever the sales or reclassifications of more than an insignificant amount of held-to-maturity investments do not meet any of the conditions previously mentioned, any remaining held-to-maturity investment is reclassified as available for sale.

c.4) Determination of fair value � fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value of financial instruments traded in active markets on the base date of the balance sheet is based on the quoted market price or on the quotation of the over-the-counter price (sale price for long positions or purchase price for short positions), without any transaction cost deduction.

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In situations in which there is no market price for a particular financial instrument, its fair value is estimated based on valuation methods commonly used in financial markets; appropriate for the specific characteristics of the instrument and that capture the various risks to which it is exposed. Valuation methods include: the discounted cash flow method, comparison with similar financial instruments for which there is a market with observable prices, option pricing model, credit models and other known valuation models.

The aforesaid models are adjusted to capture the variation of purchase and sale prices, the cost of settlement of the position, to serve as a counter entry to credit and liquidity variations, and mainly, to overcome the theoretical limitations inherent to the models.

Internal pricing models may involve estimates and judgment of Management, whose substance will depend, among other factors, on the complexity of the financial instrument.

c.5) Financial liabilities � An instrument is classified as a financial liability when there is a contractual obligation of its settlement through the delivery of cash or other financial asset, regardless of its legal form. Financial liabilities include short-term and long term debts issued which are initially measured at fair value, which is the amount received, net of incurred transaction costs, and subsequently at amortized cost.

Financial liabilities held for trading and those designated by Management as financial liabilities at fair value through profit or loss are recorded in the Consolidated Balance Sheet at fair value.

When an existing financial liability is replaced by another from the same lender under substantially different terms, or the terms of the existing liability are substantially modified, such exchange or modification is treated as a write-off of the original liability and the recognition of a new liability, and the difference in the book value is recognized in net income of the period.

d) Derecognition of Financial Assets and Liabilities

d.1) Financial assets � A financial asset is derecognized when (i) the contractual rights relating to the respective cash flows expire; (ii) the Group transfers to third parties all the risks and rewards associated with the operation; or (iii) when control over the asset is transferred, even with the Group having retained part of the risks and rewards associated with the transaction.

The rights and obligations retained in the transfer are recognized separately as assets and as liabilities, when appropriate. If control over the asset is retained, the Group continues to recognize it to the extent of its continuous involvement, which is determined by the extent to which it remains exposed to changes in the value of the asset transferred.

d.2) Financial liabilities � A financial liability is derecognized when the respective obligation is eliminated, cancelled or expired. If an existing financial liability is replaced by another from the same lender under substantially different terms, or the terms of the existing liability are substantially modified, such modification is treated as derecognition of the original liability and the recognition of a new liability, and the difference between the respective carrying amounts is recognized in net income.

e) Impairment of Financial Assets

Annually, financial asset and/or group of financial assets are tested for whether there is any objective evidence of impairment. A financial asset is considered impaired if, cumulatively: (i) there is objective evidence of a reduction in its recoverable amount as a result of one or more events occurring after initial recognition of the asset; (ii) a loss event has an impact on the estimated future cash flows of the financial asset; and (iii) a reliable estimate of the loss amount can be made. Losses expected as a result of future events, no matter how likely, are not recognized.

In some cases, the observable data required to estimate the amount of an impairment loss on a financial asset may be limited or no longer fully relevant to the current circumstances. In such cases, BB Seguridade�s Management uses its judgment to estimate the amount of any impairment loss. The use of reasonable estimates is an essential part of the preparation of financial statements and does not undermine their reliability.

Financial assets subject to having their recoverable amounts tested are presented below.

e.1) Financial assets available for sale � For financial assets available for sale, the Group assesses annually whether there is any objective evidence that its financial assets are impaired.

To establish whether there is objective evidence of impairment of a financial asset, the likelihood of the recovery of its value is verified considering the following factors cumulatively: (i) duration and magnitude of the reduction of the

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asset's value below the book value; (ii) historical behavior of the value of the asset and the experience recovering such assets; and (iii) likelihood of non-receipt of the assets� principal and interest, due to difficulties relating to the issuer, such as application for bankruptcy or filing for chapter 11, deterioration of the credit risk rating and financial difficulties, related or not to the market conditions of the sector in which the issuer operates.

When a decline in the fair value of a financial asset available for sale has been recognized in Other comprehensive income and there is objective evidence of impairment, the accumulated loss that has been recognized by BB Seguridade will be reclassified from equity to income for the period as a reclassification adjustment, even if the financial asset has not been written off.

The value of the accumulated loss reclassified to income for the period will be recorded in net gains/(losses) on financial assets available for sale and corresponds to the difference between the book value of the devalued asset and its fair value on the valuation date, less any loss due to impairment previously recognized in income.

Reversals of impairment losses on assets classified as available for sale are only recognized in equity when they consist of investments in equity instruments. In the case of investments in debt instruments, the reversal of the impairment loss will be recognized directly in income for the period.

e.2) Financial assets held to maturity � If there is objective evidence of impairment of financial assets held to maturity, a loss is recognized, the amount of which corresponds to the difference between the carrying amount of the asset and the present value of estimated future cash flows. These assets are presented net of impairment losses. If, in a subsequent period, the amount of the impairment loss decreases and this decrease can be objectively related to an event occurring after the impairment recognition, it is reversed in a counter entry to net income for the period.

f) Offsetting of Financial Assets and Liabilities

Financial assets and liabilities are stated at net amount if, and only if, there is a legal right to offset one with the other and if there is an intention to settle them in this manner, or to realize an asset and to settle a liability simultaneously. In other situations they are presented gross.

g) Business Combination

The acquisition of a subsidiary by means of a business combination is recorded on the acquisition date, which is the date on which control is transferred to BB Seguridade, applying the acquisition method. According to this method, identified assets (including intangible assets not previously recognized), assumed liabilities and contingent liabilities are recognized at fair value on the acquisition date. Possible positive differences between acquisition cost and fair value of identifiable net assets acquired are recognized as goodwill. In case of a negative difference (gain from a bargain purchase), the identified amount is recognized in the income statement under Other operational income.

The transaction costs that BB Seguridade incurs in a business combination, except for the costs related to the issuance of debt or equity instruments are recorded in profit or loss in the period incurred. Any contingent consideration payable is measured at its fair value on the acquisition date.

The results of subsidiaries acquired during the accounting period are included in the financial statements as from acquisition date until the end of the year. By contrast, the results of disposed subsidiaries during the year are included in financial statements as from the beginning of the year until the date of disposal, or up to the date that BB Seguridade no longer has control.

h) Change of Equity Interest in Subsidiaries

Changes in the equity interest in a subsidiary that do not result in loss of control are accounted for as equity transactions (that is, transactions with owners in their capacity as owners). Consequently, no goodwill is recognized as a result of such transactions.

Under these circumstances, the book values of the controlling and non-controlling interest will be adjusted to reflect changes in their relative interests in the subsidiary. Any difference between the amount of non-controlling interest adjustments and the fair value of the consideration paid or received will be recognized directly in stockholders' equity and attributed to the owners of the parent company.

i) Loss of Control

In accordance with IAS 27, in the event of loss of control of a subsidiary on the date which control is lost, BB Seguridade derecognizes: (i) the assets, including goodwill, and the liabilities of the subsidiary at their book value; and (ii) the book value of any non-controlling interest in the former subsidiary, including any components of other comprehensive income attributed to it.

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Moreover, on the date of loss of control BB Seguridade recognizes: (i) the fair value of the consideration received, if any, originating from the transaction, event or circumstances that resulted in the loss of control; (ii) the distribution of shares of the subsidiary to the owners, if the transaction that resulted in the loss of control involves a distribution of shares; (iii) any investment held in the former subsidiary at its fair value; and (iv) any difference resulting as a gain or loss in the result attributable to the parent company.

j) Non-Monetary Contributions to Jointly Controlled Entities

In accordance with IFRS 11, when the Group contributes with non-monetary assets in exchange for an equity interest in a jointly controlled entity, the gain or loss on this transaction is recognized according the assets is being sold to other entrepreneurs. No gain or loss is recognized if: (i) the significant risks and rewards of ownership of the assets have not been transferred, (ii) the gain or loss cannot be measured reliably, or (iii) the transaction has no commercial substance.

k) Goodwill and Other Intangible Assets

Goodwill on the acquisition is accounted for by taking into consideration the fair value of the identifiable assets and liabilities of the acquired company on the acquisition date and, in accordance with IFRS 3, it is not amortized. However, it is tested at least annually for impairment. After initial recognition, goodwill is measured at the cost less any accumulated impairment losses.

Intangible assets are recognized separately from goodwill when they are separable or arise from contractual or other legal rights, their fair value can be reliably measured and estimated future economic benefits may flow to BB Seguridade. The cost of the intangible assets acquired in a business combination is the fair value on the acquisition date. Intangible assets acquired independently are initially measured at cost.

The useful life of the intangible assets is considered finite or indefinite. Intangible assets with a finite useful life are amortized over their economic life. They are initially stated at cost, less accumulated amortization and impairment losses. Intangible assets with an indefinite useful life are stated at cost, less any impairment losses.

Intangible assets with a finite useful life are amortized on a straight-line basis over their estimated useful life. Amortization period and method of an intangible asset with a defined useful life are reviewed at least on an annual basis. Changes to expected useful life or expected rate of use of future benefits incorporated to the asset are recognized through changing amortization period or method, when adequate, and treated as changes to accounting estimates.

The expenses from the amortization of intangible assets with a finite useful life are recognized in the income statement of the period, under "Amortization of intangible assets". Impairment losses are recorded as an adjustment to recoverable amount expenses (other expenses) in the Consolidated Income Statement.

l) Impairment of Non-financial Assets

Annually, it is evaluated, based on internal and external sources of information, whether there is any indication that a non-financial asset may be impaired. If there is indication of impairment, it is estimated the recoverable amount of the asset. The recoverable amount of the asset is the higher of fair value less costs to sell it or its value in use.

Regardless of the existence of any indication of impairment, impairment testing is performed annually on intangible assets with an indefinite useful life, including goodwill acquired in a business combination, or an intangible asset not yet available for use. This test may be performed at any time during the year, provided that it is carried out at the same time every year.

In case the recoverable amount of the asset is lower than its book value, the book value of the asset is reduced to its recoverable amount through a reduction account of impairment losses, whose counter-entry is recognized in income for the period in which is occurs, under Other expenses.

The existence of any indication that an impairment loss recognized in prior periods for an asset, except for goodwill due to expected future earnings, may have ceased to exist or may have decreased is also evaluated annually. If there is indication of impairment, the recoverable amount of this asset is estimated. Reversal of impairment losses of an asset will be immediately recognized in income for the period, rectifying Other expenses balance.

m) Investments in Associates

Under the equity method, investments are initially measured at cost and subsequently adjusted to the recognition of the investor's share in the investee�s assets changes. Furthermore, the share which comprises the results generated by the investee should appear in the income of the investor.

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n) Provisions, Contingent Liabilities and Legal Liabilities

In accordance with IAS 37, provisions are recognized when conditions show that: (i) BB Seguridade has a present obligation (legal or constructive) resulting from past events; (ii) it is more probable than not that a disbursement of funds that incorporate economic benefits will be required to settle the obligation; and (iii) the value of the obligation is presented based on reliable estimates. Provisions derived from IAS 37 application are recorded based on our best estimate of probable losses.

There is continuous monitoring of the lawsuits in progress to evaluate, among other things: (i) their nature and complexity; (ii) the progress of proceedings; (iii) the opinion of BB Seguridade legal advisors; and (iv) BB Seguridade experience with similar proceedings. In determining whether a loss is probable are considered: (i) the likelihood of loss resulting from claims that occurred prior to or at the balance sheet date, but that were identified after that date, yet prior to its disclosure; and (ii) the need to disclose the claims or events that occur after the balance sheet date, but prior to its publication.

Tax obligations subject to legal discussions on the constitutionality of laws that established them, up to the effective extinguishment of corresponding tax credits are recognized as liabilities. In these situations, it is considered that in fact there is a legal obligation to pay to the government. Accordingly, the legal obligation should be recorded, including interest and other charges, if applicable. Bookkeeping of these legal obligations might result in record of judicial deposits.

o) Income Taxes

o.1) Current taxes � current tax expense is the amount of income and social contribution taxes payable or recoverable in relation to taxable income for the period.

Current tax assets are the amounts of income and of social contribution taxes to be recovered in the next 12 months and deferred tax assets are the amounts to be recovered in future periods, including those arising from tax losses or tax credits not used.

Current taxes related to current and prior periods should, to the extent in which they are not paid, be recognized as liabilities. If the amount already paid for current and prior periods exceeds the amount owed for those periods, the excess should be recognized as an asset.

Current and prior taxable assets and liabilities are measured at expected recoverable amount or at recoverable amount paid to tax authorities. Tax rates and tax laws used for calculating this amount are those effective at the balance sheet date.

o.2) Deferred taxes � these are amounts of tax assets and liabilities to be recovered and paid in future periods, respectively. Deferred tax liabilities originate from taxable temporary differences and deferred tax assets from deductible temporary differences and from unused tax loss carry forwards.

Deferred tax assets from income and social contribution tax losses and from temporary differences are recognized to the extent that is probable the existence of taxable income against which deductible temporary differences may be used.

Book values of deferred tax assets will be reviewed at the end of each period. An entity will reduce the book value of deferred tax assets to the extent that it is no longer probable that it will obtain taxable income sufficient to allow the benefit from part of or the total deferred tax assets to be used. Any reduction will be reversed to the extent that the entity is likely to obtain sufficient taxable income.

Deferred tax assets and liabilities are measured at tax rates expectedly applicable in the year in which the asset or the liability is realized or settled, based on tax rates (or tax law) that were substantively enacted at balance sheet date.

o.3) Temporary differences � It is the differences that impact or may impact the calculation of income and social contribution taxes arising from temporary differences between the tax bases of an asset or liability and its carrying amount in the consolidated balance sheet.

Temporary differences can be taxable or deductible. Taxable temporary differences are temporary differences that will result in taxable amounts to determine taxable income (tax loss) for future periods when the book value of an asset or liability is recovered or settled. Deductible temporary differences are temporary differences that will result in deductible amounts to determine taxable income (tax loss) for future periods when the book value of the asset or liability is recovered or settled.

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The tax basis of an asset is the amount that will be deductible for tax purposes against any taxable economic benefits that will flow to the entity when it recovers that asset's book value. If those economic benefits are not taxable, the asset's tax basis will be equal to its book value.

The tax basis of a liability is its book value less any amount that will be deductible for tax purposes, in relation to that liability, in future periods. In case of revenue received in advance, the resulting liability tax basis is its book value less any revenue amount that will not be taxable in future periods.

o.4) Offsetting income taxes � Assets from current taxes and liabilities from current taxes are offset if, and only if, the entity: (i) has the right, legally executable, of clearing recognized amounts; and (ii) intends to settle on net bases, or simultaneously realize the asset and settle the liability.

Assets from deferred taxes and liabilities from deferred taxes are offset if, and only if: (i) the company has the right, legally executable, of offsetting current tax assets against current tax liabilities; and (ii) deferred tax assets and deferred tax liabilities are related to taxes on income owed to the same tax authority: (a) in the same taxable entity; or (b) in different taxable entities that intend to settle liabilities and current tax assets on net bases, or simultaneously realize assets and settle liabilities, in each future period in which significant deferred tax assets or liabilities are expected to be settled or recovered.

p) Segment Reporting

IFRS 8 requires the report of information related to operating segments consistent with the internal reports used by Management to allocate resources and assess their financial and economic performance. The information of the segments and sub-segments of the Group BB Seguridade are described in Note 7.

q) Deferred Costs

Deferred Costs include commissions on the cost of insurance policies that the allocation in income results performed according to the risk period coverage. The direct and indirect costs incurred during the financial maturity, from subscription or renewal of insurance contracts and contracts that explore the affinity chanel are deferred to the extent that such costs are recoverable from futures premiums. All other acquisition costs are recognized as expenses when incurred. The deferred costs are written off in the moment of the sale or liquidation of the respective contracts.

r) Liabilities from Insurance Contracts

The subsidiaries and associates issue contracts that contain insurance risks, financial risks or a combination of both. Contracts according to which is accepted a significant non-financial risk from an insured person, committing to compensate him/her upon uncertain future events, are characterized as insurance contracts, in accordance with IFRS 4.

The reinsurance contracts are also treated from the perspective of IFRS 4 because they represent significant risk transfer.

Mathematical provisions of pension plans represent the current value of the obligation, divided as survivor�s pension, disability pension, pension and funds, determined through calculation and actuarial standards, made in accordance with the Actuarial Technical Notes and the current laws and standards (Resolution CNSP n° 281/2013 and C ircular SUSEP n° 462/2013), in the financial regimes of capital ization, coverage capital distribution and simple distribution, respectively.

r.1) Mathematical provisions for future benefit and for vested benefit � correspond, respectively, to the participants who have not yet started receiving the benefits and those that already have. For pension plans and insurance in the models PGBL and VGBL, the mathematical provision of future benefit represents the total premiums and contributions of the participant, net of administration fares, plus the financial revenue determined in the deposit and deduced of withdraws and transfers.

r.2) Provision for unearned premiums � formed by the insurance premiums corresponding to the period of risk not yet elapsed. The measurement is individual by policy or endorsement of the current contracts, on the date of formation, by the pro rata method with a basis on the validity start and end dates of the insured risk. The generating factor of the formation of this provision is the issuance of the policy or endorsement.

r.3) Provision for claims � is constituted by the total notifications and notices of claims, but not yet paid, until the end of the balance sheet date.

r.4) Provision for claims incurred but not reported � IBNR � calculated in accordance with the expected amount of claims incurred in risks assumed in the portfolio and not reported.

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r.5) Provision for redemptions and other values to be regularized � includes amounts relating to the redemptions to be regularized, the repayments of contributions or premiums and the portability requested, which for any reason have not yet been executed.

r.6) Provision for unearned premiums of current risks but not issued (PPNG-RVNE) � represents the adjustment of PPNG given the existence of risks in force but not operationally issued. It is calculated based on historical experience and methodology provided for in actuarial technical note, involving the construction of triangles that consider the interval between the date of effectiveness of the risk and date of issuance of policies and endorsements.

r.7) Other provisions � mainly include provisions for related expenses of additional investment returns, of technical surplus and of benefits to be regularized and were made accordance with the provisions of Circular SUSEP 462/13.

r.8) Liability adequacy test � the liability adequacy test is completed � semiannually for all contracts that meet the definition of an insurance contract and that are in force on the date of execution. This test is designed considering the net book value of liabilities for insurance contracts, net of deferred acquisition costs and related intangible assets.

If the analysis shows that the carrying amount of insurance liabilities is less than the expected future cash flows of the contracts, record the failure as an expense in the income statement and provide the supplementary provision coverage (PCC) at the reporting date (Circular SUSEP 457/12).

s) Capitalization

s.1) Mathematical provision for capitalization: is calculated on the nominal value of the securities, restated according to the index and the interest rate defined in the plan.

s.2) Provision for redemptions: recognized by securities with maturities of finalized and rescinded capitalization, restated for the period between the date of the right of redemption and effective settlement.

s.3) Provision for raffles and raffles payable: are formed to meet premiums in future drawings (unrealized) and also prizes in sweepstakes where customers have already been selected (to pay).

t) Interest on Equity Capital and Dividends

Brazilian companies are allowed to assign a nominal interest expense, deductible for fiscal purposes, on their equity capital. The amount of interest on equity capital is considered a dividend and, when applicable, is presented in the consolidated financial statements as a direct reduction in equity.

Dividends distributed are calculated on adjusted net income. The Group's present policy is to pay dividends and interest on equity capital of 80% on adjusted net income, from which 25% are recognized each semester, due to the dividends recognition minimum requirement, as a liability on the Balance Sheet.

u) Improvements to IFRS and Pronouncements Recently Issued

Improvements to IFRS are amendments issued by the IASB and comprise amendments that result in accounting changes for recognition, measurement and disclosure related to several IFRS standards. A summary of certain amendments, as well as interpretations and pronouncements recently issued by the IASB which will become effective after September 30, 2014:

IFRS 9 � Financial instruments: recognition and measurement � IFRS 9 is the first standard issued as part of a larger project to replace IAS 39, as many financial statements' users and other stakeholders considered that requirements included in IAS 39 were difficult to understand, apply and interpret. To answer several requests to improve financial instruments' accounting, IAS 39 replacement project was divided into three main stages: (i) classification and measurement of financial assets and liabilities; (ii) impairment; and (iii) hedge accounting.

Accordingly, in November 2009, IFRS 9 chapters related to the classification and measurement of financial assets were issued and, in October 2010, requirements related to the classification and measurement of financial liabilities was added.

IFRS 9 simplifies the model of measurement for financial assets and establishes two main categories of measurement: (i) amortized cost and (ii) fair value. Classification basis depends on the business model of the entity and the contractual characteristics of financial asset cash flows. In relation to financial liabilities measurement and classification requirements, the most significant effect refers to the accounting of variations in the fair value of a financial liability measured at fair value through income. Changes to fair values of said liabilities attributable to

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changes in credit risks are now recognized in Other comprehensive income, unless the recognition of these changes increases or creates an income accounting mismatch.

In November, 2013, the IASB introduced new requirements for hedge accounting on IFRS 9. The requirement has the objective to align the hedge accounting with the risk management.

In July, 2014, the IASB concluded the substitution project of the IAS 39.


IFRS 15 � Revenue from Contracts with Customers � on May, 2014, the IASB published a new standard that specifies how and when an IFRS reporter will recognize revenue as well as requiring such entities to provide user of financial statements with more informative, relevant disclosures.


Amendments to IAS 16 � Property, Plant and Equipment � and to IAS 38 � Intangible Assets � on May, 2014, the IASB issued amendments to IAS 16 and to IAS 38, which has clarified that the calculation methods for depreciation/amortization of an asset based on revenue is not suitable, because the revenue generated by an activity that includes the use of an asset usually reflects other factors beyond the consumption of the economic benefits involved.

These amendments to IAS 16 and to IAS 38 are effective for annual periods beginning on or after January 01, 2016.

BB Seguridade decided not to adopt the changes before the suggested date and is currently identifying the potential impacts on the Group�s financial statements.

5 � MAIN JUDGMENTS AND ACCOUNTING ESTIMATES

The preparation of the financial statements in accordance with CPCs and IFRS requires that the Management make judgments and estimates affecting the recognized amounts referring to assets, liabilities, income and expenses. Estimates and assumptions adopted are analyzed on a continuous basis, and revisions are carried out and recognized in the period in which the estimate is reevaluated, with prospective effects. The actual results obtained may be different from estimates used herein.

Taking into consideration that there are certain alternatives to accounting treatments, the results which are disclosed could be different, in the event a different treatment had been chosen. Management considers that the choices made are appropriate and that the financial statements fairly present the consolidated financial position of BB Seguridade and the result of its operations in all material aspects.

Significant assets and liabilities subject to these estimates and assumptions encompass items for which an evaluation at fair value is necessary. The most relevant applications of the exercise on estimates judgments and usage occur in:

a) Fair value of Financial Instruments

When the fair value of financial assets and liabilities cannot be derived from an active market, it is determined through valuation techniques that include the use of mathematical models. These model variables are derived from data verifiable in the market whenever possible, but when market data is not available, judgment is necessary to determine fair value.

b) Impairment of Financial Assets Available for Sale

It is considered impairment of its financial assets available for sale exists when there is a significant or prolonged decline in its fair value to below cost. Such determination of what is significant or prolonged requires judgment in which is evaluated, among other factors, the ordinary volatility of prices of financial instruments. In addition, the recognition of impairment may be appropriate whenever there is evidence of a negative impact in the financial health of the investee, the performance of the relevant economic sector, changes in technology and in financing and operating cash flows.

Additionally, the preparation of impairment valuations take into consideration market prices (mark to market) or valuation models (mark to model), which require use of certain assumptions or judgments in establishing fair value estimates.

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c) Impairment of Non-Financial Assets

Annually, impairment of non-financial assets is evaluated, based on internal and external sources of information, whether there is any indication that a non-financial asset may be impaired. If this indication exists, estimates are used to define the asset's recoverable value.

Indications that an impairment loss recognized in prior periods for an asset, except for goodwill due to expected future earnings, may not exist anymore or may have decreased are evaluated annually. If there is indication of impairment, the recoverable amount of this asset is estimated.

Regardless of the indication of impairment losses, impairment tests are conducted annually on indefinite-lived intangible assets, including goodwill acquired in a business combination or on intangible assets not yet available for use.

Determining the recoverable amount upon valuation of non-financial assets impairment requires estimates based on market-quoted prices, present value calculations or other pricing techniques, or a combination of them, requiring that Management make subjective judgments and adopt assumptions.

d) Income Taxes

Since the corporate objective of the Group is to obtain profits, the income generated is subject to income tax payment. Determination of the global amount of income taxes requires certain interpretations and estimates. There are several transactions and calculations for which determination of the final value of tax payable is uncertain during the ordinary cycle of business. Other interpretations and estimates could result in a different value of income taxes recognized in the period.

The Brazilian tax authorities may review the procedures adopted by the Group during a period of five years from the date in which taxes are deemed to be due. Hence, it is possible that such tax authorities may question procedures adopted by the Group, mainly those arising from differences in interpreting tax legislation. However, Management believes that there will be no significant adjustments in the income taxes stated in the consolidated financial statements.

e) Deferred Taxes

Deferred tax assets are calculated on temporary differences and on tax loss carryforwards, and are accounted for whenever BB Seguridade expects to generate taxable profit in subsequent years in amounts sufficient to off-set such values. The expected realization of BB Seguridade tax credit is based on the projection of future income and on technical analysis, aligned with prevailing tax legislation.

The estimates considered by BB Seguridade for the recognition and valuation of deferred taxes are reviewed based on current expectations and projections of future events and trends. Major assumptions identified by BB Seguridade that may affect these estimates are related to factors such as: (i) changes in government regulation related to fiscal matters; (ii) changes in interest rates; (iii) changes in inflation rates; (iv) lawsuits or legal disputes with an adverse impact; (v) credit and market risks, as well as other risks arising from investment activities; and (vi) changes in internal and external economic conditions.

f) Provisions and Contingent Liabilities

Provisions are recognized in the financial statements when, based on the opinion of legal counsel and Management, the risk of loss of a judicial or administrative proceeding is considered probable, with a probable outflow of resources to settle the obligations and the amounts involved can be reliably measured, quantified when the citation/notice is received, and reviewed monthly.

The contingent liabilities classified as probable loss are not recognized in the financial statements, only being disclosed in its notes, while the one classified as remote do not require any sort of provision or disclosure.

6 � RISK MANAGEMENT

The corporate risk management covers the following categories: underwriting, market, credit, liquidity, legal and operations. BB Seguridade Conglomerate is exposed to risks mentioned primarily in the insurance, reinsurance, pension plan and premium bonds operations.

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BB Seguridade has corporate governance that manages the risks, adopted similarly by its subsidiaries and affiliates. By principle and observance of best practices in risk management, the structure and governance processes include aspects such as segregation of duties; specific structure for evaluating and monitoring risks; collegiate decisions and management rules and risks in internal institutional document.

In this context, although the Conglomerate has a distinct risk management, there is an uniformity between the practices, in order to ensuring consistent criteria in the management of these risks as a whole. In addition, BB Seguridade selects representatives on committees of its affiliates focused on financial and risk management.

a) Description of Risks

The main risks which BB Seguridade Conglomerate is exposed, and how they are managed are described below.

a.1) Underwriting Risk

BB Seguridade is indirectly exposed to underwriting risk on account of operational activities of its affiliates in the segments of insurance (BB MAPFRE SH1, MAPFRE BB SH2), open private pension (Brasilprev), premium bonds (Brasilcap) and reinsurance (IRB Brasil RE).

In the insurance market, where the theory of probability is applied to pricing and provisioning, insurers understand that the main risk transferred to them is the risk that reported claims and the resulting benefit payments from these events exceed the carrying value of liabilities of insurance contracts. Such situations arise, in fact, when the frequency and severity of claims and benefits to policyholders are larger than previously estimated, according to the calculation methodology for these liabilities.

To reduce these risks, risk´s diversity strategies and reinsurance programs are used with reinsurers with high quality credit risk rating, so that the adverse outcome of atypical and major events is minimized. Nevertheless, part of the credit and underwriting risks which insurance companies are exposed is minimized due to the fact that the minority of accepted risks represents large insured amounts.

In the reinsurance market as a way to reduce risk exposure, IRB Brasil RE works with a diversified reinsurance portfolios. The evolution of risks is monitored, as the actuarial assumptions, underwriting, accepting risks policies, and monitoring of technical provisions are constantly reviewed. In addition, the IRB Brasil RE uses the retrocession as technique of transferring risk to other reinsurance companies, in order to mitigate and control the underwriting risk.

In the pension market, the longevity risk is monitored by Brasilprev using technical provisions and the design of products, along with improvements in future life expectancy of the insured population and assisted by the Company. The risks associated with early cancellation of plans are also managed by Brasilprev.

In premium bonds, the subscription is divided into three aspects: the sweepstakes to be held risk, the guarantee of rescue by the customer as product conditions, both treated during the development process and throughout the life of the products and the risk of administrative expenses, also managed by Brasilcap.

The technical provisions related to BB Seguridade operating companies are calculated according to the technical notes approved by the Superintendência de Seguros Privados (Susep) and rules established by Susep and the Conselho Nacional de Seguros Privados (CNSP).

a.2) Credit Risk

Credit risk is the possibility of the occurrence of loss arising from any default by the counterparty of their financial obligations, as agreed, or deterioration of their creditworthiness conditions.

BB Seguridade, its subsidiaries and affiliates are exposed to credit risk, mainly due to investments made in the market, on reinsurance operations (counterparty risk) and premiums receivable.

Premiums receivable exposure to credit risk differs between the lines of elapse risk and elapsed risk. For the lines of elapsed risk the exposure is greater since cover precedes payment of the insurance premium. With regard to insurance operations there is a reduced exposure to credit risk. However, considering the characteristics of the business portfolio of the Group, and the profile of the customer portfolio, Management understands that the credit risk is present more intensely in financial applications and in reinsurance operations.

Priority is given to investments in counterparties with high quality credit rating, with positions predominantly concentrated in the national treasury risk, and in a lesser scale, in private risk maintained with counterparties with good credit risk.

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In the case of insurance transactions, there is credit risk associated with the counterparty of reinsurance operations. This risk is managed through strict rules of assignment, consolidated exposure limits for each business, transfer limits by rating and credit limits per reinsurer, respecting the regulatory limits.

a.3) Market Risk

Market risk is the possibility of financial or economic losses resulting from fluctuations in the value of market positions held. It includes the risks of transactions subject to foreign exchange, interest rate, stock prices, inflation rates and prices of goods (commodities).

a.4) Liquidity Risk

Liquidity risk is the possibility of the occurrence of losses arising from the lack of sufficient resources to comply by the dates set, the commitments.

To mitigate this risk, often studies of the flows of financial transactions expected in various scenarios are performed evaluating conservatively minimum limits of liquid resources to be maintained. Allied to this strategy, the best options of reinvestment are evaluated in order to maximize available resources.

a.5) Legal Risk

Legal risk is the level of uncertainty related to the returns of an institution for lack of a comprehensive legal foundation of its operations, reputation´s loss and poorly formalized operations.

To reduce these risks, BB Seguridade companies have legal structure responsible for reviewing insurance contracts in order to mitigate legal risk, and provide support for the lawsuits.

a.6) Operational Risk

Operational risk is defined as the possibility of losses resulting from failure, deficiency or inadequacy of internal processes, people and systems or from external events, except those related to market, credit, legal and underwriting risks.

The management of operational risks is performed with focus on controlling, monitoring, and reducing threats, external and internal, of the strategic objectives and operations. That way, the societies keep control activities to prevent risks not accepted and detection of residual risks updated. Specific tools and methodologies are used to identify previously the risk factors, which are rated and monitored periodically.

b) Risk Management in BB Seguridade Conglomerate

Risk management is essential in all business activities, being using in order to add value to the business once it provides support to the business areas in their activities planning, maximizing the use of own and third party resources.

The risk management process counts on the participation of all layers covered within the scope of the corporate governance, which extends from the senior management, to the different business and products areas in detecting, dealing with and monitoring those risks.

The management of all inherent risks to the activities of an integrated mode is included in a process supported on Internal Controls and Risk Management structure. This approach enables the risk management models to be continually enhanced, minimizing the existing gaps that might adversely affect the proper detection and correction of the risks.

Corporate risk management is based on statistical tools such as adequacy testing of liabilities, sensitivity analysis, Value at Risk (VaR) calculation and capital adequacy indicators, among others. Added to these tools is the qualitative aspect of risk management, using the results risk self-evaluation, the gathering of information about losses and the analyses of the results of testing and controls and audits.

BB Seguridade installed on Apr 02, 2014 its Financial and Risk Management Committee. Moreover, the Audit Committee is in the final phase of the constitution, statutory body to advise the Board of Directors which has, among other duties, the responsibility to review the financial statements in the light of current accounting practices; assess the quality of the internal control system in the light of current regulations and internal codes and; evaluate the effectiveness of internal and independent audits, and recommend to the Board the improvement of policies, practices and procedures identified in the course of their duties. The Internal Audit complements the governance structure that operates in risk management of BB Seguridade.

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c) Capital Management

BB Seguridade monitors capital management of its insurance, reinsurance, pension plan and premium bonds affiliates, in order to assure the maintenance of sufficient capital levels to meet the regulatory requirements established by CNSP and Susep, besides optimizing shareholders return.

In managing capital of affiliates supervised by Susep, the main indicator used is Minimum Required Capital - MRC � which indicates the total capital that companies must maintain at any time to operate and aims to address the inherent risks of the operations. The Underwriting Risk Capital is regulated by CNSP Resolution 280/2013, which was complemented by Susep Circular 486/2014 on Jan 23, 2014; the Credit Risk Capital by CNSP Resolution 228/2010; and the Operational Risk Capital by CNSP Resolution 283/2013 issued by Susep.

In addition to the above questions, it is required that insurers present amounts of net assets in excess of need for provisions coverage, more than 20% of CMR, starting at January 2015.

Insurance, reinsurance, pension plan and premium bonds affiliates, measure the CMR in accordance with the regulations issued by CNSP and Susep. In the calculation, for the purposes of the aforementioned resolutions, the following concepts are considered:

I � MRC: amount of capital that a supervised entity must maintain at any time to operate, being the higher of the base capital, risk capital, and the solvency margin, this last one only for reinsurers.

II � Base capital: fixed amount of capital that the company is required to maintain. III � Risk capital: variable amount of capital a local reinsurer shall have in order to ensure the risks inherent in its

operations, pursuant to specific regulation. IV � Solvency margin: the greater of the following amounts: (a) 20% of the total retained premiums in the past 12

months, and (b) 33% of the annual average of total retained losses in the last 36 months. V � Liquid Assets: all assets accepted by Conselho Monetário Nacional up to 100% (one hundred percent) in the

coverage of technical provisions.

Description of Risks

The follow details the main risks they are exposed to insurance, reinsurance, premium bonds and pension plan segments.

d) Insurance Segment � BB MAPFRE SH1 and MAPFRE BB SH2

BB MAPFRE SH1 and MAPRE BB SH2, holding companies that comprise the Group Insurance BB MAPFRE, hold interest in subsidiaries that operate in the insurance segment. The tables in this note show the individual information contained in the financial statements of subsidiaries.

d.1) Underwriting Risk

Concentration of Risks

Potential exposures to concentration of risk are monitored by analyzing certain concentrations in certain geographical regions, using assumptions about the potential threat characteristics. The tables below illustrate concentration of risk within the scope of the business by region and insurance products, based on the amount of premium net of reinsurance issuance of the Group.

BB MAPFRE SH1


R$ thousand



Midwest 18,980 0% 361,066 7% 532,441 11% 912,487 18%

Northeast 17,400 0% 102,627 2% 512,088 10% 632,115 12%

North 5,122 0% 42,048 1% 147,092 3% 194,262 4%

Southeast 58,433 1% 331,489 7% 1,732,521 35% 2,122,443 43%

South 24,220 1% 564,480 11% 546,801 11% 1,135,501 23%

Total 124,155 2% 1,401,710 28% 3,470,943 70% 4,996,808 100%

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R$ thousand



Midwest 16,042 3% 245,701 5% 418,987 9% 680,730 17%

Northeast 12,189 6% 61,560 8% 497,162 15% 570,911 29%

North 3,480 4% 22,964 5% 135,741 9% 162,185 18%

Southeast 44,224 2% 229,260 5% 1,679,033 14% 1,952,517 21%

South 17,824 2% 416,832 4% 493,282 9% 927,938 15%

Total 93,759 17% 976,317 27% 3,224,205 56% 4,294,281 100%

R$ thousand



Midwest 5,807 0% 82,875 6% 181,306 12% 269,988 18%

Northeast 6,424 0% 30,405 2% 172,889 12% 209,718 14%

North 1,913 0% 14,975 1% 48,792 3% 65,680 4%

Southeast 20,951 1% 105,171 7% 477,090 32% 603,212 40%

South 8,836 1% 158,061 11% 176,499 12% 343,396 24%

Total 43,931 2% 391,487 27% 1,056,576 71% 1,491,994 100%

R$ thousand



Midwest 7,141 0% 77,579 5% 132,662 9% 217,382 14%

Northeast 4,617 0% 25,148 2% 157,333 11% 187,098 13%

North 1,278 0% 10,723 1% 40,930 3% 52,931 4%

Southeast 16,279 2% 100,964 7% 548,347 38% 665,590 47%

South 6,806 0% 157,375 11% 166,670 11% 330,851 22%

Total 36,121 2% 371,789 26% 1,045,942 72% 1,453,852 100%


R$ thousand



Midwest 15,795 0% 221,270 5% 532,727 12% 769,792 17%

Northeast 14,807 0% 70,491 2% 512,032 11% 597,330 13%

North 4,381 0% 35,513 1% 147,070 3% 186,964 4%

Southeast 49,654 1% 251,564 6% 1,723,334 38% 2,024,552 45%

South 20,677 1% 379,246 8% 547,436 12% 947,359 21%

Total 105,314 2% 958,084 22% 3,462,599 76% 4,525,997 100%

R$ thousand



Midwest 10,755 0% 143,549 4% 416,261 11% 570,565 15%

Northeast 6,659 0% 41,114 1% 496,998 13% 544,771 14%

North 2,052 0% 19,357 0% 135,660 3% 157,069 4%

Southeast 31,285 1% 172,764 4% 1,663,003 43% 1,867,052 48%

South 9,451 0% 267,351 7% 492,962 13% 769,764 20%

Total 60,202 1% 644,135 16% 3,204,884 83% 3,909,222 100%

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R$ thousand



Midwest 5,358 0% 59,744 4% 181,291 13% 246,393 17%

Northeast 5,904 0% 20,921 2% 172,884 12% 199,709 14%

North 1,764 0% 12,857 1% 48,791 4% 63,412 5%

Southeast 19,313 1% 84,043 6% 476,084 34% 579,440 41%

South 8,146 1% 117,981 9% 176,466 13% 302,593 23%

Total 40,485 2% 295,546 22% 1,055,516 76% 1,391,547 100%

R$ thousand



Midwest 2,608 0% 43,592 3% 131,824 10% 178,024 13%

Northeast (66) 0% 16,497 1% 157,291 12% 173,722 13%

North 96 0% 8,838 1% 40,908 3% 49,842 4%

Southeast 6,279 2% 70,885 5% 542,254 42% 619,418 49%

South (398) 0% 106,205 8% 166,226 13% 272,033 21%

Total 8,519 2% 246,017 18% 1,038,503 80% 1,293,039 100%

BB MAPFRE SH2


R$ thousand



Midwest 64,075 1% 98,395 2% 376,959 6% 539,429 9%

Northeast 88,027 1% 104,399 2% 494,050 8% 686,476 11%

North 11,042 0% 34,832 1% 94,898 2% 140,772 3%

Southeast 868,844 14% 790,860 13% 1,784,538 27% 3,444,242 54%

South 400,519 6% 256,574 4% 814,319 13% 1,471,412 23%

Total 1,432,507 22% 1,285,060 22% 3,564,764 56% 6,282,331 100%

R$ thousand



Midwest 33,776 1% 82,494 2% 266,684 5% 382,954 8%

Northeast 45,882 1% 99,819 2% 371,925 7% 517,626 10%

North 5,511 0% 34,406 1% 78,870 1% 118,787 2%

Southeast 1,110,665 20% 638,606 12% 1,905,789 34% 3,655,060 66%

South 64,704 1% 153,637 3% 554,937 10% 773,278 14%

Total 1,260,538 23% 1,008,962 20% 3,178,205 57% 5,447,705 100%

R$ thousand



Midwest 25,131 1% 28,826 1% 140,944 6% 194,901 8%

Northeast 29,592 1% 34,373 2% 182,476 8% 246,441 11%

North 4,378 0% 13,149 1% 38,838 2% 56,365 3%

Southeast 321,068 14% 256,534 11% 634,924 28% 1,212,526 53%

South 163,142 7% 88,719 4% 308,693 14% 560,554 25%

Total 543,311 23% 421,601 19% 1,305,875 58% 2,270,787 100%

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R$ thousand



Midwest 10,167 1% 20,187 1% 84,242 4% 114,596 6%

Northeast 10,320 1% 24,600 1% 116,614 6% 151,534 8%

North 1,719 0% 10,907 1% 25,918 1% 38,544 2%

Southeast 459,112 23% 268,050 13% 735,311 35% 1,462,473 71%

South 30,258 2% 37,123 2% 179,721 9% 247,102 13%

Total 511,576 27% 360,867 18% 1,141,806 55% 2,014,249 100%


R$ thousand



Midwest 53,152 1% 72,743 1% 376,962 7% 502,857 9%

Northeast 80,897 2% 92,607 2% 494,050 9% 667,554 13%

North 9,306 0% 30,507 1% 94,899 2% 134,712 3%

Southeast 566,676 11% 352,832 7% 1,783,174 32% 2,702,682 50%

South 318,338 6% 205,812 4% 814,315 15% 1,338,465 25%

Total 1,028,369 20% 754,501 15% 3,563,400 65% 5,346,270 100%

R$ thousand



Midwest 24,451 1% 60,546 1% 266,658 6% 351,655 8%

Northeast 40,365 1% 88,427 2% 371,896 8% 500,688 11%

North 4,641 0% 29,371 1% 78,870 2% 112,882 3%

Southeast 824,241 17% 377,914 8% 1,903,484 37% 3,105,639 62%

South 41,760 1% 132,260 3% 554,866 12% 728,886 16%

Total 935,458 20% 688,518 15% 3,175,774 65% 4,799,750 100%

R$ thousand



Midwest 22,032 1% 24,624 1% 140,944 7% 187,600 9%

Northeast 27,878 1% 30,791 2% 182,477 9% 241,146 12%

North 3,242 0% 10,100 1% 38,838 2% 52,180 3%

Southeast 204,061 11% 120,698 6% 634,262 33% 959,021 50%

South 116,449 6% 72,267 4% 308,693 16% 497,409 26%

Total 373,662 19% 258,480 14% 1,305,214 67% 1,937,356 100%

R$ thousand



Midwest 8,921 1% 17,356 1% 84,242 5% 110,519 7%

Northeast 9,056 1% 22,500 1% 116,613 7% 148,169 9%

North 1,374 0% 7,261 0% 25,918 2% 34,553 2%

Southeast 315,440 18% 132,534 8% 734,863 42% 1,182,837 68%

South 17,739 1% 32,087 2% 179,713 11% 229,539 14%

Total 352,530 21% 211,738 12% 1,141,349 67% 1,705,617 100%

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Insurance Risk Sensitivity

The sensitivity test was developed to present how the Result and equity shall be affected in case of reasonable possible changes on the risk variables with regard to the statement date.


i) Provision for IBNR: It was simulated how a possible and reasonable increase in the delay between the report date and the date when the claims occurred could affect the balance of the provision for IBNR and, consequently, income and shareholders� equity. The sensitivity parameter used took into account aggravation in the IBNR factors regarding the development of claims, based on the average variability of those factors. The factor used for each company was based on the studies listed in the following table:

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Risk Factor Used factor

Sep 30, 2014 Dec 31, 2013

BB MAPFRE SH1

Companhia de Seguros Aliança do Brasil 19.22% 7.52%

Vida Seguradora S.A. 2.68% 10.11%

MAPFRE Vida S.A. 27.31% 5.07%

MAPFRE BB SH2

Brasilveículos Companhia de Seguros 12.62% 9.42%

Aliança do Brasil Seguros S.A. 21.61% 15.51%

MAPFRE Seguros Gerais S.A. 5.63% 9.78%

MAPFRE Affinity Seguradora S.A. 5.95% 18.87%

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ii) Supplementary Provision Coverage � SPC for long-term insurance (Ouro Vida Revisado): Provision made at Companhia de Seguros Aliança do Brasil to withstand the expected claims given the aging of the insured group and sealing of new entrants (discontinued marketing). We simulated how a deterioration of 5% in the mortality table and a reduction of 1% in the discount rate used for calculation of SPC might have affected its balance and consequently income and shareholders� equity as of the company.

Loss ratio

We simulated how a 5% increase in the portfolio loss ratio in last 12 months would have affected income and shareholders� equity of each company.

Considering the assumptions described above, the values recorded in Sep 30, 2014 and Dec 31, 2013 are as follows:

BB MAPFRE SH1

R$ thousand


Sep 30, 2014 Dec 31, 2013

a. Technical Provisions

Total Change in the principal assumptions for technical provisions (192,686) (167,508)

a1.IBNR Increase Coefficient of variation in IBNR Factors (54,009) (26,507)

a2.Long-term SPCIncrease Increase of 5% in Mortality (30,960) (31,885)

Reduction 1% reduction in discount rate (107,717) (109,116)


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MAPFRE BB SH2

R$ thousand


Sep 30, 2014 Dec 31, 2013

a. Technical ProvisionsTotal Change in the principal assumptions for technical provisions (21,318) (28,233)

a1. IBNR Increase Coefficient of variation in IBNR Factors (21,318) (28,233)


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d.2) Credit Risk

Management believes that, in relation to insurance transactions, there is a reduced credit risk exposure, since the Group offers a wide range of different products.

In respect of reinsurance operations, the Group is exposed to risk concentration for individual reinsurers, due to the nature of the reinsurance market and the narrow range of reinsurers with acceptable credit ratings. The tables below indicate the reinsurance partners of the Companies and the amount of net premiums written, with the opening of the assigned amount and percentage of retention.

BB MAPFRE SH1

R$ thousand

Rating Sep 30, 2014 Dec 31, 2013


A -- 230,502 -- 230,502 -- -- -- --

A- -- -- -- -- -- 105,479 -- 105,479

No Rating 240,309 -- -- 240,309 419,005 -- -- 419,005

Total 240,309 230,502 -- 470,811 419,005 105,479 -- 524,484

R$ thousand

Group of lines 01.01.2014 to 09.30.2014 01.01.2013 to 09.30.2013


Ceded reinsurance


Ceded reinsurance

Retention

Life group 3,470,943 8,343 100% 3,224,205 19,321 99%

Rural 1,401,710 443,626 68% 976,317 332,181 66%

Others 124,155 18,842 85% 93,759 33,557 64%

Total 4,996,808 470,811 91% 4,294,281 385,059 91%


Group of lines 3rd Quarter/2014 3rd Quarter/2013


Ceded reinsurance


Ceded reinsurance

Retention

Life group 1,056,575 1,059 100% 1,045,942 7,440 99%

Rural 391,488 95,943 76% 371,789 125,772 66%

Others 43,931 3,445 92% 36,121 27,601 24%

Total 1,491,994 100,447 93% 1,453,852 160,813 89%



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MAPFRE BB SH2

R$ thousand

Rating Sep 30, 2014 Dec 31, 2013


AA+ -- 270 13,337 13,607 -- -- 2,433 2,433

AA -- 4,055 1,982 6,037 -- 7,376 3,844 11,220

BBB+ -- -- 1,442 1,442 -- -- -- --

A+ -- 193,154 16,581 209,735 -- 236,968 7,680 244,648

A -- 75,879 2,523 78,402 -- 77,788 1,673 79,461

AA- -- 14,418 18,653 33,071 -- 18,609 7,404 26,013

A- -- 2,884 2,523 5,407 -- 14,057 6,844 20,901

No Rating 588,127 -- -- 588,127 446,258 -- -- 446,258

Total 588,127 290,660 57,041 935,828 446,258 354,798 29,878 830,934

R$ thousand

Group of lines

01.01.2014 to 09.30.2014 01.01.2013 to 09.30.2013


Net writtenpremium(1)Ceded reinsurance Retention

Vehicle 3,564,755 1,134 100% 3,178,206 2,431 100%

Property 1,285,060 530,558 59% 1,008,961 320,443 68%

Transportation 186,823 18 100% 198,360 14,192 93%

Marine \ Aviation 206,835 159,898 23% 178,680 143,161 20%

Rural 314,858 102,667 67% 174,283 74,533 57%

Other 723,998 141,553 80% 709,215 93,195 87%

Total 6,282,329 935,828 85% 5,447,705 647,955 88%


Group of lines




Vehicle 1,305,874 661 100% 1,141,806 456 100%

Property 421,600 163,121 61% 360,867 149,129 59%

Transportation 63,104 2 100% 66,101 9 100%

Marine \ Aviation 88,243 72,300 18% 71,787 58,462 19%

Rural -- -- -- 86,817 37,471 57%

Other 391,965 97,348 75% 286,871 63,105 78%

Total 2,270,786 333,432 85% 2,014,249 308,632 85%




In addition to the exposure to credit risk to reinsurers the affiliates BB MAPFRE SH1 and MAPFRE BB SH2 actively manage the risks associated with investments.

The Financial Policy provides the diversification of the investment portfolio (financial assets), with the setting of exposure limits for each issuer with high credit quality, reflected in the ratings assigned by rating agencies for allocation.

Credit risk management for financial instruments includes the monitoring of credit risk exposure on the part of individual counterparties in relation to credit classifications by risk assessment companies, such as Fitch Ratings, Standard & Poor�s and Moody�s, being the Standard & Poor's the one used for conversion of the other ratings agencies.

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BB MAPFRE SH1

Credit risk rating

R$ thousand




Time Deposit (CDB) 24,126 -- 116,605 -- -- -- -- -- 140,731

Time Deposit (CDB-DPGE) -- -- -- 26,901 -- -- -- 13,432 40,333

Debentures 72,334 65,986 58,174 13,312 5,039 5,089 -- -- 219,935

Financial Bills 101,012 -- 94,819 -- -- 45,157 -- -- 240,988



Total 4,649,952 97,283 269,597 40,213 5,039 50,247 0 13,432 5,125,764

MAPFRE BB SH2

Credit risk rating

R$ thousand




Time Deposit (CDB) 25,145 8,069 144,312 26,071 -- -- -- -- 203,597

Time Deposit (CDB-DPGE) -- -- 13,309 -- -- -- -- 13,719 27,028

Debentures 58,230 70,824 27,329 10,147 2,520 2,552 -- -- 171,602

Financial Bills 29,048 -- 78,051 -- -- 23,373 -- -- 130,472



Total 3,254,300 89,424 263,001 36,218 2,520 25,925 -- 13,719 3,685,107

d.3) Market Risk


The result of VaR is monitored daily by the Board of Finance. The methodology for calculating VaR is the historical series of 150 days, with a confidence level of 95% and time horizon of 1 business day.

Financial investments assets are subject to active management with an approach that strikes a balance between quality, diversification, liquidity and return on investment. The main purpose of the investment process is to improve the relationship between rate, risk and return, aligning investments with the cash flow of liabilities. For this purpose are used strategies that take into consideration acceptable risk levels, terms, profitability, sensitivity, liquidity and assets concentration limits by issuer and credit risk.

Diversification effect between the risk factors

R$ thousand

Company Index

Possibility of loss estimated by the model

of VaR for 1 day

Sep 30, 2014 Dec 31, 2013

Companhia de Seguros Aliança do Brasil Inflation indexes and fixed interest 8,591 5,468

Aliança do Brasil Seguros S.A. Inflation indexes and fixed interest 587 1,030

Brasilveículos Companhia de Seguros Inflation indexes and fixed interest 2,071 4,624

MAPFRE Vida S.A. Fixed interest 1,654 1,156

Vida Seguradora S.A. Fixed interest 1,564 1,210

MAPFRE Seguros Gerais Inflation indexes and fixed interest 8,635 5,070

MAPFRE Affinity Fixed interest 1,800 1,168

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It should be stressed that the Banco do Brasil and MAPFRE Insurance Group adopt strict control policies and strategies approved in advance by the Finance Committee and Management, which make it possible to reduce market risk exposure. Operations are controlled with the use of Stress Testing and Value at Risk tools and subsequently compared with the Stop Loss risk control policy. BB Seguridade monitors the VaR of the investment portfolio on a daily basis, using information supplied by MAPFRE DTVM and BB Gestão de Recursos DTVM. Portfolio risk is submitted to meetings of the Finance Committee, in order to identify any need for reallocating portfolio assets.

Sensitivity to interest rate

In this sensitivity analysis, the following risk factors are taken into account: (i) interest rates, and (ii) securities indexed to inflation indexes (INPC, IGP-M, and IPCA), due to their relevance in the Group�s asset and liability positions.

The quantitative parameters used in the sensitivity analysis (100 basis points for interest rate and inflation coupons) were defined based on an analysis of recent historical variations of interest rates and the assumption of maintenance of inflation expectations curves, which affect these securities as much as the interest rates.

Historically, companies do not redeem assets in advance, and such assets are held to maturity. Accordingly, securities placed in this category were excluded from the base for sensitivity analysis, as Management considers that it is not sensitive to interest rate variations in the case of these securities, given the policy of holding them to maturity.

BB MAPFRE SH1


R$ thousand

Risk Factor

Interest rate

Impact on Equity

Sep 30, 2014 Dec 31, 2013



Parameters:



MAPFRE BB SH2


R$ thousand

Risk Factor

Interest rate

Impact on Equity

Sep 30, 2014 Dec 31, 2013



Parameters:



Limitations of sensitivity analysis

Sensitivity analyzes demonstrate the effect of a change in an important premise while the other assumptions remain unchanged. In reality, there is a correlation between the assumptions and other factors. It should also be noted that these sensitivities are not linear, larger or smaller impacts should not be interpolated or extrapolated from these results.

Sensitivity analyses do not take into account the fact that assets and liabilities are highly managed and controlled. Additionally, the financial position may vary upon the occurrence of any variation in the market. As investment markets move on through different levels, management actions may include selling investments and changing portfolio allocation, among other protective measures.

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Other limitations on sensitivity analyses include the use of hypothetical market variations to demonstrate a potential risk that only represents the Group's view of possible changes in the market in the near future, which cannot be forecasted with any certainty, and the assumption that all interest rates vary on an identical basis.

d.4) Liquidity Risk

Liquidity risk management involves a set of controls, principally in regard to the establishment of technical limits, with ongoing evaluation of the taken positions and financial instruments used. Each year the Executive Board approves minimum liquidity levels to be maintained, as well as the instruments that may be used to manage liquidity, on the basis of the assumptions contained in the Investment Policy, which is approved by the Board of Directors.

BB MAPFRE SH1

R$ thousand

Sep 30, 2014 Dec 31, 2013





More than 5 years

Total

Assets

Cash 310,405 -- -- 310,405 222,699 -- -- 222,699


Financial assets (*) 1.854,448 2.062,474 925,730 4,842,652 991,544 2,156,414 960,040 4,107,998


1,686,679 878,845 -- 2,565,524 1,450,447 743,683 -- 2,194,130


179,740 207,242 38,046 425,028 157,755 169,919 35,852 363,526

Others operational credits 152,899 -- -- 152,899 28,832 -- -- 28,832

Receivables(**) 302,948 1,270 -- 304,218 308,014 1,002 -- 309,016

Other 3,036 -- -- 3,036 6,506 -- -- 6,506


Deferred costs 504,199 655,247 -- 1,159,446 460,923 523,752 -- 984,675

Other Assets -- 182 -- 182 -- 182 -- 182

Total Assets 5,047,592 3,805,260 963,776 9,816,628 3,632,507 3,594,952 995,892 8,223,351

Liabilities


Accounts payable 471,833 -- -- 471,833 354,588 -- -- 354,588


1,630,960 -- -- 1,630,960 1,354,326 -- -- 1,354,326



(*) Financial assets and technical provisions related to DPVAT, amounting to R$ 283,112 thousand in 2014 (R$ 203,989 thousand in 2013), and R$ 283,017 thousand in 2014 (R$ 158,067 thousand in 2013), respectively, were not classified in the table above since they were not under management.


(***)In relation to the outflow of reserves for claims and reinsurance assets related to claims it was considered the historical experience observed in the payment standard.

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MAPFRE BB SH2

R$ thousand

Sep 30, 2014 Dec 31, 2013





More than 5 years

Total

Assets

Cash 263,322 -- -- 263,322 150,091 -- -- 150,091


Financial assets (*) 1,275,110 1,202,670 842,580 3,320,360 805,433 1,495,606 1,033,198 3,334,237


3,716,635 49,779 - 3,766,414 2,833,022 62,878 -- 2,895,900


1,005,932 496,320 198,998 1,701,250 895,645 320,090 63,851 1,279,586

Others operational credits 216,639 8,092 -- 224,731 198,085 8,092 -- 206,177

Receivables(**) 270,491 17,194 -- 287,685 446,773 13,231 -- 460,004

Other 452,111 -- -- 452,111 254,622 -- -- 254,622


Deferred costs 798,679 64,910 -- 863,589 775,569 74,043 -- 849,612

Other Assets 551 517 -- 1,068 552 527 -- 1,079

Total Assets 8,186,086 1,839,482 1,041,578 11,067,146 6,369,797 1,974,467 1,097,049 9,441,313

Liabilities




1,560,879 -- -- 1,560,879 1,176,897 -- -- 1,176,897



(*) Financial assets and technical provisions related to DPVAT, amounting to R$ 364,743 thousand in 2014 (R$ 264.094 thousand in 2013), and R$ 362,951 thousand in 2014 (R$ 247,514 thousand in 2013), respectively, were not classified in the table above since they were not under management.


(***) In relation to the outflow of reserves for claims and reinsurance assets related to claims it was considered the historical experience observed in the payment standard.

d.5) Regulatory Capital

R$ thousand

Sep 30, 2014 Dec 31, 2013

Adjusted net equity


equityMRC Adequacy

SH1

Companhia de Seguros Aliança do Brasil 1,366,547 1,150,778 215,769 1,215,484 1,012,905 202,579

Vida Seguradora 158,510 47,151 111,359 179,914 47,247 132,667

MAPFRE Vida S.A. 175,550 137,960 37,590 168,802 142,994 25,808

SH2

Brasilveículos Companhia de Seguros 509,273 429,507 79,766 502,538 435,378 67,160

Aliança do Brasil Seguros S.A. 149,078 122,488 26,590 183,706 125,147 58,559

MAPFRE Affinity Seguradora S.A. 439,786 165,553 274,233 424,819 173,262 251,557

MAPFRE Seguros Gerais S.A. 940,412 882,897 57,515 853,437 767,875 85,562

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e) Reinsurance Segment � IRB Brasil RE

Risk Management in IRB Brasil RE is considered an essential tool for optimizing the use of capital and selecting the best business opportunities in order to obtain better risk/return for its shareholders.

In order to increase the relevance attached to the subject within the organizational context, in the 2014´s first quarter was established the Risk and Compliance Vice Presidency, which are subordinate to the Corporate Risk Management and Compliance Management, and that is the first responsible for overseeing the risk management of IRB Brasil RE. However, it remains the commitment of the Executive Board, the Board of Directors, the Risk Management Committee and other consultative or deliberative organs in the support and promotion of risk management within the Company.

After a review, in December 2013, the rank A- was confirmed by A.M. Best rating agency, based in the United States, which reflects, in the agency�s opinion, a capitalization strongly adequated to the company´s risks.

Main Types of Risk

The Corporate Risk Management covers the following risk categories: Underwriting, Market, Credit and Liquidity, which in turn are composed of several subcategories. The Company believes that these categories represents its main exhibitions, but are not exhaustive, since many risks can affect it.

To dealing with these risks, the Company uses several methodologies and strategies, such as Balanced Scorecard (BSC), development of a Business Continuity Program, the creation of a Risk Management Plan � aimed to identify, analyse, measure, resolve and report operational risks � addressing operational incidents, monitoring of counterparties credit risk and the VaR of the investment portfolio, among others.

e.1) Underwriting Risk

Monitoring of Reinsurance Liabilities by Business Line

The Company calculates its technical provisions following the standards of the CNSP and Susep. The table below shows liabilities (Provision for Unsettled Claims � PSL, provision for claims Incurred But Not Reported � IBNR, provision for claims Incurred But Not Enough Reported � IBNER, Provision of Technical Surplus � PET, Provision for Unearned Premiums � PPNG, e Provision of Related Expenses � PDR) gross and their respective assets retrocession by business line.

R$ thousand

Group Sep 30, 2014 Dec 31, 2013

Reinsurance liabilities Retrocession assets Reinsurance liabilities Retrocession assets

Property 2,926,650 (1,668,268) 2,713,370 (1,451,836)

Special risks 439,886 (314,289) 405,415 (309,354)

Responsibilities 600,206 (250,886) 657,922 (259,213)

Vessel 511,878 (432,024) 534,834 (465,052)

Vehicle 253,394 (3,750) 231,291 (5,356)

Transportation 359,268 (185,477) 303,883 (168,898)

Financial risks 723,595 (376,225) 734,746 (417,583)

Credit 23,986 (17,862) 19,519 (14,937)

Life 170,310 (37,899) 150,247 (36,774)

Mortgage 40,728 (2,071) 70,066 (995)

Rural 402,114 (80,778) 400,635 (99,922)

Marine 120,721 (36,402) 99,524 (31,576)

Aviation 256,464 (118,368) 187,225 (64,948)

Run-off (London) 169,161 -- 174,426 --

Other 503,319 (50,984) 595,474 (83,808)

Total 7,501,680 (3,575,283) 7,278,577 (3,410,252)

The nature of reinsurance transactions implies that the reinsurer receives most of information from transferor in aggregated form, usually having access to individualized data on facultative business only. Therefore, due to the absence of complete information about the geographical region segregation, and following the guidance of Susep Circular No. 486/2014, is not applicable disclosure of concentration risk by geographical area.

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The table below shows possible impact on result and shareholders� equity, considering a 5% increase in claims.

R$ thousand


Gross effects Net effects

Income and shareholders� equity (70,892) (43,254)

Income (%) (22) (13)

Shareholders� equity (%) (3) (2)

The studies of liabilities development and ALM (Asset Liability Management) identified that due to the nature of the accepted operations by IRB Brasil Re, so that there is no exposure to convertibility, mortality or survival indexes. The same studies indicated that part of non-operating liabilities related to post-employment benefits are indexed to inflation, which are covered by securities with same index (NTN-B), so that there is no exposure to this index.

e.2) Credit Risk

The IRB Brasil Re understands that the main source of its credit risk are retrocession operations. To mitigate this risk, the Company adopted a policy of having retrocession transactions with companies that have at least half of the ratings on record, demonstrably, equal or higher than A- (S&P, Fitch and AM Best) or A3 (Moody's), and evaluates its retrocession operations through an own classification. The Reinsurer's exposure is continuously monitored, being controlled by counterpart limits, which are reviewed and approved, at least annually, by the Security Committee. The quality of the current retrocession partners of protection contracts IRB Brasil Re can be seen in the table below:

Range rating (%) of reinsurance contracts and protection of participants into force

Local Admitted Eventual Total

AAA or equivalent -- -- -- --

AA or equivalent -- 26.67 20.00 46.67

A or equivalent -- -- 53.33 53.33

BBB+ or equivalent -- -- -- --

BBB or equivalent/inferior -- -- -- --

No rating -- -- -- --

�� -- 26.67 73.33 100

The credit risk on funds and derivative financial instruments is limited because the counterparts are represented by banks with high credit rating attributed by international rating agencies. The following techniques are used to control and mitigate credit risk: setting limits for retrocession by entity; monitoring changes and trends in the insurance and reinsurance market and financial market; and preventive management of losses.

e.3) Market Risk

Value at Risk Analysis

The measurement of market risk, made through the VaR, estimates the potential loss in profit before income tax for a given time horizon given a specific probability of occurrence, considering the market volatilities and the risk diversification by recognizing compensatory positions and correlations between the product and the market. The daily VaR of the portfolio of assets of the Reinsurer, registered on September 30, 2014, was R$ 4.5 million, which represents a loss of 0.08% of the total portfolio of assets, according to the not-parametric method � historical daily VaR with significance level of 5% and mobile observation period of 150 business days.

Sensitivity Analysis for Foreign Currency

The reinsurer is mainly exposed to the U.S. dollar, however having exposure to a lesser extent other foreign currencies, which is the sterling pound, the euro and Argentine peso. The following table details the sensitivity of the reinsurer to the variation of these rates for major currencies, consolidating all other foreign currencies into U.S. dollars. The forward rates of market consensus are considered in September 30, 2014 to December 31, 2014, presented by Bloomberg Composite NY (CPMN).

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R$ thousand �Probable scenario Forward rate Dec 31, 2014 Projected impact Dec 31, 2014

�Surplus´s variation in U.S. Dollars USD 1.0000 / BRL 2,5027 5,068

Surplus´s variation in Pounds Sterling GBP 1,0000 / BRL 4,0593 (4,062)

Surplus´s variation in Euros EUR 1,0000 / BRL 3,1691 354

Surplus´s variation in Argentine Pesos ARS 1,0000 / BRL 0,2580 (5,507)

Result (4,147)

Sensitivity Analysis to Interest Rate

The Company is exposed to interest rate risk, as it has, mainly, securities tied to change in interest rates. The following table details the sensitivity of the Reinsurer to the variation of 1% (100bps) in the Selic rate:

R$ thousand


+1% -1%

Change in pre-fixed securities (33,610) 33,710

Change in post-fixed securities 29,723 (29,723)

Result (3,887) 3,987

Parameters:

a) 100 basis points for interest rate structures existing as in the date of base.

b) Assuming for conservatism that the real interest rate (NTN-B coupon) evolved proportionally to the Selic rate.

After analysis, it is possible to conclude that the sensitivity to interest rate by 100bps implies a change in the value of securities exposed to about 0,09% for the rate reduction and -0,09% for the rate increase.

Correlated Risk Management

The Company considers that the economic variables have no independent movement, correlation between the main risk factors associated with investments. Considering these variables, well as their correlations, concluded that the associated risks are partially mitigated, given that the variables analyzed act in compensatory movement, which can generate a maximum loss of 13% in the period. About the stress scenarios analyzed, considering large global crises that have occurred in the last fifteen years, it was concluded that the maximum loss of the portfolio would be 3%.

Currency Futures Contracts

As part of the investment policy of the Company, is expected the hiring hedge for the occurrence of surplus assets in foreign currency. On base date September 30, 2014, the Company had no forward currency contracts or other hedging instrument.

Future Contracts on Interest Rates � Fixed Incomes

On September 30, 2014, the Company owned all the shares of the Fund Peabiru BB - Fixed Income. Fund managers can adopt as the hedging policy using derivative financial instruments for the purpose of protecting the asset value from unexpected interest rate movements. The fund had dealings in futures contracts with active interest rate exposure of R$ 491.5 million at that date. This position is used to counteract the passive position of the fixed-interest fund assets.

e.4) Regulatory Capital

R$ thousand

Rating

Sep 30, 2014 Dec 31, 2013

Adjusted net equity


equityMRC Adequacy

IRB Brasil RE 2,578,873 615,289 1,963,584 2,520,623 635,557 1,885,066

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R$ thousand

Sep 30, 2014 Dec 31, 2013

Net AssetsTechnical

Provisions

Covering 20% of MCR


LiquidityNet Assets


Covering 20% of MCR


IRB Brasil RE 4,711,402 3,926,397 123,058 661,947 4,014,427 3,868,325 127,111 18,991

f) Premium Bonds Segment � Brasilcap Capitalização S.A.

f.1) Credit Risk

Credit Risk Policy

The policy approved by the Board of Directors applies to all transactions involving credit risk and complies with all legal restrictions, as well as with asset portfolio management. Currently, the credit risk exposure limit applicable to private entities is 24% of total assets, including securities of financial and non-financial institutions.

Measurement Systems

The Company also assesses any expected losses regarding the asset portfolio, based on rating grades and the terms of private securities, as per its own methodology. The table below shows the percentages used by the company for assessing these risks:

R$ thousand


Sep 30, 2014


Total


Time deposit (CDB) -- 125,502 60,871 -- -- 186,373

Time deposit (CDB-DPGE) -- -- -- -- -- --

Debentures 203,198 373,420 135,382 -- -- 712,000

Financial bills 1,163,227 258,734 37,441 -- -- 1,459,402



Other -- -- -- -- 1,229,343 1,229,343

Total 1,400,211 783,146 233,694 -- 8,925,972 11,343,023

R$ thousand


Dec 31, 2013


Total


Time deposit (CDB) -- -- -- -- -- --

Time deposit (CDB-DPGE) 32,492 -- -- -- -- 32,492

Debentures 270,008 420,062 153,557 -- -- 843,627

Financial bills 315,643 68,899 34,536 -- -- 419,078



Other -- -- -- -- 787,250 787,250

Total 680,676 519,101 188,093 -- 8,385,786 9,773,656

Mitigation Policy

When engaging in any transaction subject to credit risk, the company adopts a conservative approach by using restrictive exposure and concentration limits in order to keep compliance with the limits established by Susep, based on the Minimum Required Capital and taking into account the best practices in asset management.

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Concentration

Credit risk management strategies guide the operational activities of the Group. The strategic decisions include, among other aspects, the materialization of the Company risk �appetite� and the definition of limits for risk exposure, concentration and estimated losses.

As defined in the Investment Policy, the Company establishes concentration limits for credit risk exposures based on the issuer or on the tranches issued. The following tables show the portfolio compositions and the distribution of private securities according to the notes of national scale rating:

Portfolio Composition Sep 30, 2014 Dec 31, 2013

Federal government securities �� 85.7%

Privates Securities 21.5% 14.3%

R$ thousand

Private risk rating Sep 30, 2014 Dec 31, 2013

Exposure Credit Risk Exposure Credit Risk

AAA 1,400,211 885 680,676 782

AA 783,146 1,557 519,101 2,055

A 233,694 832 188,093 1,650

Total 2,417,051 3,274 1,387,870 4,487

f.2) Market Risk

Market risks are monitored daily through the VaR, which is calculated based on historical simulations for one business day and offers a confidence level of 95%. In addition to daily monitoring, stress tests are carried out each month for marked-to-market assets, while sensitivity analyses are performed on a half-yearly basis and detailed on the �Sensitivity Analysis� item in this note.

Exposure

R$ thousand



Derivatives for hedging (adjustments) (1,583) -- (1,118) --


IPCA Coupon 1,314,791 11.7% 1,616,510 16.6%

Assets TR 1,434 -- 2,173 --

Cash / 1-day repos 285 -- 294 --

Total 11,262,287 100% 9,701,800 100%

Part of the assets exposed to pre-fixed interest rates is hedged against market changes through derivative transactions, which alter the portfolio's exposure to market risk factors, as shown in the following table:

Hedge Effects on Market Risk Exposure

R$ thousand



Hedge effects on pre-fixed exposure (1,722,856) (15.3%) (1,355,147) (14.0%)

Total exposure to pre risk 4,326,792 38.4% 3,957,372 40.8%


Hedge effects on post-fixed exposure 1,722,856 15.3% 1,355,147 14.0%

Total exposure to post risk 5,620,568 49.9% 4,126,569 42.6%

The other market risk factors, such as those relating to commodity prices and foreign exchange, are not included in the portfolio of financial assets that are used as collateral by the company.

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Sensitivity analysis

Brasilcap makes the sensitivity analysis of liability and asset positions, considering the possibility of an eventual scenario in which the basic interest rate and interest rate coupons of securities indexed to inflation rates would increase or reduce by 100 basis points. The test results of the last periods are shown in the following table:







income taxes

Gain/lossbefore

income taxes


income taxes

Gain/lossbefore

income taxes


income taxes

Gain/lossbefore

income taxes


income taxes

Gain/lossbefore

incometaxes



IPCA Coupon (16,665) (27,774) 17,381 28,969 (21,178) (35,297) 22,111 36,851


Total 1,816 3,028 (14,612) (24,354) 18,778 31,296 2,383 3,970

Part of the Financial Security of the Company's investment portfolio is marked on the curve, classified as Category III - Held to maturity, according to BACEN Circular 3.068/2001. Thus, the registry values of these assets do not change on the balance sheet of the Company from arising changes on interest rates and market prices.

The table below shows the results of the Sensitivity test, considering only the assets classified as Category I - Trading securities:




�Increase by 1 p.a. in

Interest Rate Reduction by 1 p.a. in

Interest Rate Shareholders�

Equity after income taxes

Gain/lossbefore

income taxes


income taxes

Gain/lossbefore

income taxes


income taxes

Gain/lossbefore

income taxes


income taxes

Gain/lossbefore

incometaxes



IPCA Coupon (4,880) (8,133) 5,144 8,573 (5,521) (9,201) 5,832 9,721


Total 27,340 45,566 (40,893) (68,156) 53,780 89,635 (33,748) (56,246)

The table below describes the composition of assets and liabilities:

R$ thousand

Sep 30, 2014 Dec 31, 2013

Total Assets 12,057,881 100.0% 10,394,815 100.0%

Investments 11,262,287 93.4% 9,701,800 93.3%

Fundo BB CAP Ações + BB 600mil (1) 80,736 0.7% 71,856 0.7%

Court deposits - Taxes (2) 576,103 4.8% 495,378 4.8%

Other assets (2) 138,755 1.1% 125,781 1.2%

Total Liabilities 12,057,881 100.0% 10,394,815 100.0%

Technical provisions 10,995,453 91.2% 9,488,698 91.3%

Tax litigation liabilities 617,956 5.1% 527,716 5.1%

Other liabilities (3) 113,397 1.0% 108,853 1.0%

Shareholders' Equity 331,075 2.7% 269,548 2.6%

The returns from Fundo BB Cap Ações (1) did not affect Company income, given that the profitability of this portfolio is entirely transferred to holders of Ourocap Flex products as bonuses. As a result, any changes in asset prices do not constitute a risk for the Company.

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The Company evaluated the risk exposure of other assets(2) and liabilities(3) and concluded that there was no need for effecting testing sensitivity analysis, given the small representation in both the ownership structure and business operations.

f.3) Liquidity Risk

The company liquidity risk management uses the Asset Liability Management - ALM analysis - as a tool to assess the level of maturity mismatch and exposure between the assets and liabilities.

The redemption terms of premium bonds issued by the Company are compared with the terms of the assets included in the portfolio that guarantees these certificates, identifying possible mismatching points. For this purpose of liquidity risk, the early projected redemptions were considered as the same distributions observed in the history of each capitalization product.

In this note were considered liquid assets in their respective maturities. However, most of the guarantors� financial assets have an active market that allows its sale before maturity.

Flow base date: Sep 30, 2014 R$ thousand

Flow description Oct 2014-Mar 2015

Apr-Sep2015

Oct 2015-Mar 2016

Apr-Sep2016

Oct 2016-Mar 2017

Abr-Sep2017

Oct 2017-Mar 2018

Abr-Sep2018

Oct 2018-Mar 2019

Abr-Sep2019

Cash flow assets 2,558,316 2,017,295 2,295,145 3,479,638 874,633 195,237 174,059 1,146,183 172,470 7,298

Cash receipts of other plots 1,005,530 762,121 567,459 405,236 302,873 217,088 159,902 74,671 26,861 6,188


Net cash - primary 1,264,635 511,162 591,777 1,305,174 (1,113,390) (1,577,297) (275,480) 308,710 (118,578) (183,851)

Previous cash + remuneration 54,163 1,421,674 2,003,466 2,841,058 4,138,583 3,329,367 1,755,447 1,550,049 1,953,879 1,931,745

Cash balance 1,318,798 1,932,836 2,595,243 4,146,232 3,025,193 1,752,070 1,479,967 1,858,759 1,835,301 1,747,894

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Flow description Jan-Jun

2014

Jul-Dec

2014

Jan-Jun

2015

Jul-Dec

2015

Jan-Jun

2016

Jul-Dec

2016

Jan-Jun

2017

Jul-Dec

2017

Jan-Jun

2018

Jul-Dec

2018

Cash flow assets 1,792,910 1,578,797 1,832,349 807,239 1,430,483 1,397,163 771,771 144,495 155,583 1,752,850

Cash receipts of other plots 746,934 578,689 415,264 302,012 194,691 129,292 74,845 45,588 25,710 6,959


Net cash - primary 650,072 493,350 400,641 (365,854) (699,814) (472,833) 371,555 (96,757) (146,015) 1,522,776

Previous cash + remuneration 37,164 735,509 1,291,229 1,793,483 1,540,190 887,854 477,029 860,026 800,049 722,043

Cash balance 687,236 1,228,859 1,691,870 1,427,629 840,376 415,021 848,584 763,269 ��

f.4) Regulatory Capital

R$ thousand

��

Sep 30, 2014 Dec 31, 2013

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Brasilcap 320,791 273,215 47,576 258,786 216,676 42,110

g) Pension Plans Segment � Brasilprev Seguros e Previdência S.A.

To mitigate the risks to which the Company is exposed due to the activities of the Pension segment, aiming to protect its participants and shareholders, daily monitoring of exposure levels are conducted and periodic assessment of possible impacts of situations and adverse events are held. Necessary control measures are adopted to observe permanently high standards of economic, financial and actuarial security in order to preserve liquidity, solvency and the balance of benefit plans. In addition, the Company carries out capital management through monitoring of required limits (Minimum Required Capital).

g.1) Underwriting Risk


The underwriting risks considered herein are those linked to the formation of liabilities (technical provisions) from operations.

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The private pension products feature as the main business risk the possibility of accumulated reserves transformation in rents continuing. In this sense, the risk factors choice aimed to sensitize associated hypotheses the materialization expectation of this risk, as follows:

• cancellation assumptions reflect the expectations of redemption of accumulated reserves by the participants before their expected retirement dates. So, lower cancellation rates imply greater probabilities of transforming the accumulated reserves into continuing income;

• the possibility of annuitization reflects the expectations of transformation, by the participants, of the accumulated reserves into continuing income on their retirement dates. So, greater annuitization rates imply greater risks associated with the payment of continuing income;

• the possibility of longevity reflects the expectations on the length of time during which continuing income is paid, Accordingly, greater survival rates imply greater risks associated with the payment of continuing income; and,

• the ETTJ (the Term Structure of Interest Rates Estimated) released by Susep is used to discount realistic cash flows. Thus, the lower the rate, higher the flows present value.

R$ thousand

Risk Factors SensitivityImpacts Sep 30, 2014 Impacts Dec 31, 2013


Redemption +100 bps -- -- 3,065 3,065

Redemption -100 bps -- -- (3,360) (3,360)

Annuitization 10% -- -- (15,389) (15,389)

Annuitization -10% -- -- 15,477 15,477

Longevity 5% (7,106) (7,106) (13,526) (13,526)

Longevity -5% 6,868 6,868 13,100 13,100

ETTJ +100 bps 78,332 78,332 585,269 585,269

ETTJ -100 bps (435,533) (435,533) (555,377) (555,377)

The table above demonstrates the sensitivity' analysis calculated by the Company for the main assumptions used in the actuarial calculations of the liabilities involved in the insurance contracts. The �sensitivity� column indicates a variation rate reasonably expected by Management for the selected assumptions. The preparation of the sensitivity analyses conducted by the Company was based on the best estimates of changes in the assumptions considering usual market scenarios and conditions. The results shown in these analyses may be significantly different from the actual results obtained in future periods as a result of favorable or adverse situations during the course of Company business.

g.2) Credit Risk

The table below includes all financial assets held by the company distributed according to the credit ratings informed by renowned ratings agencies. The assets classified as "other" include substantially variable income assets and other amounts receivable and payable recorded in investment funds.

R$ thousand


Sep 30, 2014

AAA AA A BBB BBExposure to market risk

No rating Total

Fixed income government securities 50,356,743 -- -- -- -- -- -- 50,356,743

Time deposit (CDB) 189,043 200,452 113,035 40,700 -- -- -- 543,230

Time deposit (CDB-DPGE) -- 13,511 -- 44,006 13,549 -- -- 71,066

Debentures 1,977,298 4,328,544 239,275 100,418 -- -- -- 6,645,535

Financial bills 13,151,474 148,832 -- -- -- -- -- 13,300,306

Receivables investment 540,007 242,576 -- -- -- -- -- 782,583

Repurchase agreement -- -- -- -- -- -- 30,464,570 30,464,570

Other 331,570 179,026 -- -- -- 1,749,744 (100,561) 2,159,779

Total 66,546,135 5,112,941 352,310 185,124 13,549 1,749,744 30,364,009 104,323,812

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R$ thousand


Dec 31, 2013


No rating Total

Fixed income government securities 51,762,101 -- -- -- -- -- 51,762,101

Time deposit (CDB) 1,551,506 100,095 -- -- -- -- 1,651,601

Time deposit (CDB-DPGE) -- 37,556 36,663 24,557 -- -- 98,776

Debentures 1,705,926 4,488,652 322,546 10,990 -- -- 6,528,114

Financial bills 9,381,553 108,727 -- -- -- -- 9,490,280

Receivables investment 650,975 253,808 -- -- -- -- 904,783

Repurchase agreement -- -- -- -- -- 11,573,764 11,573,764

Other 420,615 26,637 -- -- 1,944,641 155,617 2,547,510

Total 65,472,676 5,015,475 359,209 35,547 1,944,641 11,729,381 84,556,929

g.3) Market Risk


This analysis considers the following risk factors: (i) interest rates and (ii) coupons of securities linked to inflation index (IGP-M and IPCA) due to their importance for the assets and liabilities of the company. The definition of quantitative parameters used in the sensitivity analysis (100 basis points for interest rates and inflation coupons) was based on the analysis of the historical variations in interest rates in a recent period, as well as the assumption of non-variation in inflation expectations curves, which affect the relevant coupons as much as the interest rates.

This analysis takes into account only the securities classified as �fair value through income� and �trading securities�, which are marked-to-market according to the pricing and risk calculation methodologies used by Brasilprev. All active plans, except PGBL and VGBL plans in phase of accumulation, were considered in this analysis.

The sensitivity analysis considers the isolated effects of each risk factor. The ��sensitivity� column indicates a change index that was deemed to be possible for the assumptions selected. The preparation of the sensitivity analyses conducted by the Group was based on the best estimates of changes in these assumptions considering usual market scenarios and conditions.

The table below indicates the changes expected for these variables and their potential impacts on Brasilprev�s income for the period and equity:

R$ thousand

Risk Factor SensitivityImpact in Sep 30, 2014 Impact in Dec 31, 2013


Interest rate (1) + 100 bps 13 13 1 1

Interest rate (1) - 100 bps (13) (13) (1) (1)

Coupon + 100 bps (14,064) (14,064) (15,293) (15,293)

Coupon - 100 bps 15,337 15,337 16,871 16,871

(1) The impact considered for the interest rate is equivalent to the effects of a tax adjustment of 100 bps on earnings for one day, especially due to the impact from this effect on assets with immediate liquidity.

g.4) Liquidity Risk

The table below presents the financial assets and liabilities held by the Company and classified according to contractual maturity terms of cash flows.

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R$ thousand

Sep 30, 2014 Dec 31, 2013





More than 5 years

Total

Asset

Investments 95,352,897 3,297,269 5,673,646 104,323,812 76,210,781 567,805 7,778,343 84,556,929

Credits from insurance and reinsurance transactions

1,684 -- -- 1,684 1,471 -- -- 1,471

Credits from private pension transactions 991 -- -- 991 21 -- -- 21

Reinsurance and retrocession assets -- 216 -- 216 -- 222 -- 222

Other operating credits 3,043 -- -- 3,043 3,937 -- -- 3,937

Securities and credits receivable 27,574 295,883 -- 323,457 26,308 219,251 -- 245,559

Prepaid expenses not related to reinsurance 2,279 -- -- 2,279 386 -- -- 386

Deferred acquisition costs 264,974 356,294 -- 621,268 220,573 252,457 -- 473,030

Total asset 95,653,442 3,949,662 5,673,646 105,276,750 76,463,477 1,039,735 7,778,343 85,281,555

Liability

Technical provisions - insurance and private pension 10,667,420 22,989,107 69,780,639 103,437,166

8,604,740 18,512,367 56,425,922 83,543,029


Debts from insurance transactions 3,914 -- -- 3,914 2,880 -- -- 2,880

Debts of operations with private pension 1,540 -- -- 1,540 1,700 -- -- 1,700


Other debits (court provisions) -- 235,217 -- 235,217 -- 172,989 -- 172,989

Total liability 10,948,693 23,224,918 69,780,639 103,954,250 8,899,096 18,685,464 56,425,922 84,010,482

g.5) Regulatory Capital

R$ thousand

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Brasilprev 1,342,358 1,111,199 231,159 1,288,495 1,029,884 258,611

7 � INFORMATION BY SEGMENT

The information by segment was prepared considering the criteria used by the Administration to evaluate the performance in decision making regarding the allocation of funds for investment and other purposes, the regulatory environment and the similarities between goods and services.

The operations of BB Seguridade are divided into two segments: (i) insurance (insurance and reinsurance, pension plans, health and capitalization) and (ii) brokerage.

Intersegment transactions are conducted under normal market conditions, substantially under the terms and conditions for comparable transactions, including interest rates and collateral. These transactions do not involve abnormal payment risks.

a) Insurance

In this segment, products and services offered are related to life, property and vehicle insurance, property and vehicle insurance, rural, special risks and financial, transport, hooves, and housing people, private pension plans, dental plans and capitalization plans, private pension plans and capitalization plans- reinsurance.

The profit of this segment comes mainly from revenues of insurance and reinsurance issued premiums, contributions for private pension plans, contributions for dental plans, capitalization bonds and investments in securities, net of commercialization expenses, technical provisions and expenses related to benefits and redemptions.

The recording of these results is made through equity investments in subsidiaries.

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b) Brokerage

BB Corretora de Seguros e Administradora de Bens S.A (BB Corretora) is a wholly owned subsidiary of BB Seguridade, which aims at social brokerage and management, fulfillment, promotion and facilitation of business insurance and reinsurance casualty and life and capitalization, private pension plans, dental plans and health insurance.

c) Financial Information by Reportable Segment

R$ thousand



Operating income 508,336 562,559 1,070,895 329,861 425,497 755,358

Commissions income -- 562,559 562,559 -- 425,497 425,497

Share of profit of associate companies 508,336 -- 508,336 329,861 -- 329,861




Administrative expenses (190) (58,189) (58,379) 121 (65,406) (65,285)


Income before taxes 511,015 483,129 994,144 341,610 330,750 672,360

Income taxes (1,303) (164,264) (165,567) (4,065) (112,934) (116,999)

Net income (1) 509,712 318,865 828,577 337,545 217,816 555,361

Total assets 7,101,781 1,793,075 8,894,856 6,223,582 1,405,093 7,628,675


Total Equity 6,816,555 35,010 6,851,565 5,942,145 251,219 6,193,364

(1) The financial income and taxes expenses of BB Seguridade and BB Cor are not included. R$ thousand

01.01 to 09.30.2014 01.01 to 09.30.2013


Operating income 1,412,450 1,660,311 3,072,761 938,225 1,230,052 2,168,277

Commissions income -- 1,660,311 1,660,311 -- 1,230,052 1,230,052

Share of profit of associate companies 1,412,450 -- 1,412,450 938,225 -- 938,225




Administrative expenses (468) (202,108) (202,576) (984) (199,461) (200,445)


Income before taxes 1,428,484 1,390,941 2,819,425 961,445 948,011 1,909,456

Income taxes (5,977) (473,393) (479,370) (8,063) (323,295) (331,358)

Net income (1) 1,422,507 917,548 2,340,055 953,382 624,716 1,578,098

Total assets 7,101,781 1,793,075 8,894,856 6,223,582 1,405,093 7,628,675


Total Equity 6,816,555 35,010 6,851,565 5,942,145 251,219 6,193,364

(1) The financial income and taxes expenses of BB Seguridade and BB Cor are not included.

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d) Insurance Segment Subdivision

Insurance Segment results are evaluated considering the following lines of business: (i) Insurance, (ii) Reinsurance, (iii) Private Pension Plans and (iv) Capitalization Plans.

Insurance

The sub segment comprises insurance products offered through BB Mapfre SH1 Participações S.A. and Mapfre BB SH2 Participações S.A. It is formed by the life, mortgage life and rural insurance and property and casualty insurance.

Insurance � Life, Mortgage Life and Rural

Life, mortgage life and rural comprise the products offered by BB Mapfre SH1 (personal, property and rural insurance). Income arises mainly from insurance premiums revenues and investments in securities, net of selling expenses, technical provisions and claims expenses.

Insurance � Property and Casualty

Property and casualty insurance comprise the products offered by Mapfre BB SH2 (casualty and vehicle insurance), Income and expenses are recorded by the equity method and arise, mainly, from insurance premiums revenues and investments in securities, net of selling expenses, technical provisions and claims expenses.

Reinsurance

Reinsurance comprises the products offered by IRB Brasil Re (reinsurance operations), Income and expenses are recorded by the equity method and arise, mainly, from reinsurance premiums issued in the country and abroad revenues and investments in securities, net of selling expenses, technical provisions and claims expenses.


Pension plans are offered in plans marketed by Brasilprev. Income arise mainly from administration fees and investments in securities, net of selling expenses, technical provisions and expenses with benefits and redemption.


Brasilcap primarily responsible for offering capitalization plans. Income and expenses are recorded by the equity method and arise, mainly, from insurance premiums issued revenues and investments in securities, net of selling expenses, technical provisions and expenses with redemption and lottery.

Health

Reinsurance comprises the products offered by Brasildental Operadora de Planos Odontológicos S.A., (operation of private dental plans). Income and expenses are recorded by the equity method and arise, mainly, from health dental plans/ retained premiums and investments in securities, net of selling expenses and technical provisions.

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e) Combined Statement of Income by Sub Segment

R$ thousand

3rd Quarter/2014



ReinsurancePrivate


PlansHealth


Earned premiums 1,638,261 2,044,499 801,760 -- -- --

Retained premiums 1,552,505 2,362,791 957,709 -- -- --

Change in technical provisions 85,756 (318,292) (155,949) -- -- --


Retained claims (474,089) (1,472,808) (867,780) -- -- --

Costs acquisition (389,483) (400,216) (27,321) -- -- --

Result from Reinsurance income (146,762) 213,337 132,985 -- -- --





Taxes expenses (42,330) (43,734) (16,133) -- -- --




Change in technical provisions -- -- -- (31) -- --








Taxes expenses -- -- -- (26,287) -- --






Raffle results -- -- -- -- (36,438) --




Taxes expenses -- -- -- -- (10,049) --

Health income




Result from interest income 109,486 92,427 137,255 110,874 72,543 180

Interest income 140,514 204,652 743,511 2,164,988 290,721 206

Interest expenses (31,028) (112,225) (606,256) (2,054,114) (218,178) (26)

Equity in earnings (8,086) (1,393) 17,527 489 63 --

Operating results 533,693 130,588 97,104 311,836 123,183 (1,554)

Non-current assets results -- 50 2 32 -- --

Income before taxes 533,693 130,638 97,106 311,868 123,183 (1,554)

Interest taxes (167,253) (51,019) (34,538) (122,915) (48,093) --

Results participation (3,434) (8,877) -- (2,780) (919) --

Net income 363,006 70,742 62,568 186,172 74,171 (1,554)



Total assets 12,695,514 13,376,067 12,581,229 105,540,475 12,063,501 3,841


Total Equity 2,987,742 3,029,289 2,833,798 1,511,764 336,629 3,446

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R$ thousand

01.01 to 09.30.2014



ReinsurancePrivate


PlansHealth


Earned premiums 4,600,184 6,065,295 2,106,257 -- -- --

Retained premiums 5,256,773 6,642,948 1,910,522 -- -- --

Change in technical provisions (656,589) (577,653) 195,735 -- -- --


Retained claims (1,680,148) (3,659,977) (1,542,283) -- -- --

Costs acquisition (1,100,918) (1,210,629) (55,679) -- -- --

Result from Reinsurance income (139,331) (130,518) (46,730) -- -- --





Taxes expenses (138,658) (137,632) (40,966) -- -- --




Change in technical provisions -- -- -- (30,975) -- --








Taxes expenses -- -- -- (73,210) -- --






Raffle results -- -- -- -- (153,553) --




Taxes expenses -- -- -- -- (30,519) --

Health income




Result from interest income -- -- 326,490 -- -- 180

Interest income 425,109 443,875 1,878,838 6,315,333 820,522 206

Interest expenses (102,582) (157,006) (1,552,348) (5,986,144) (582,065) (26)

Equity in earnings (22,791) (4,710) 42,403 2,097 104 --

Operating results 1,408,543 366,158 526,662 881,643 375,450 (1,554)

Non-current assets results 42 (32) 27 17 -- --

Income before taxes 1,408,585 366,126 526,689 881,660 375,450 (1,554)

Interest taxes (466,761) (139,035) (196,241) (347,364) (146,138) --

Results participation (11,815) (23,724) -- (6,613) (2,848) --

Net income 930,009 203,367 330,448 527,683 226,464 (1,554)



Total assets 12,695,514 13,376,067 12,581,229 105,540,475 12,063,501 3,841


Total Equity 2,987,742 3,029,289 2,833,798 1,511,764 336,629 3,446

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R$ thousand

3rd Quarter/2013




PlansCapitalization

Plans


Earned premiums 1,248,588 1,937,688 684,990 -- --

Retained premiums 1,520,681 2,122,109 764,400 -- --

Change in technical provisions (272,093) (184,421) (79,410) -- --

Income insurance 1,238 170 -- -- --

Retained claims (428,171) (1,021,427) (493,270) -- --

Costs acquisition (304,054) (400,362) (28,989) --

Result from Reinsurance income (91,150) (190,561) (5,712) -- --

Reinsurance income 92,086 �� 298,110 -- --

Reinsurance expenses (183,236) �� (292,398) -- --



Taxes expenses (36,221) (40,944) (17,971) -- --












Taxes expenses -- -- -- (22,641) --





Change in technical provisions -- -- -- -- (11,377)

Raffle results -- -- -- -- (57,775)




Taxes expenses -- -- -- -- (7,283)


Interest income 113,845 120,079 322,357 1,355,695 167,162


Equity in earnings (6,848) (2,032) (14,287) 2,380 (50)


Non-current assets results (46) (82) 3 46 --


Interest taxes (113,701) (18,093) (58,298) (97,487) (19,800)

Results participation (3,668) (9,022) -- (2,707) (881)

Net income 221,040 39,187 103,648 153,251 26,668



Total assets 10,912,127 12,001,396 12,746,417 79,425,613 9,335,691


Total Equity 3,095,736 2,605,640 2,623,213 1,300,336 256,302

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R$ thousand

01.01 to 09.30.2013




PlansCapitalization

Plans


Earned premiums 3,477,145 5,466,404 1,918,899 -- --

Retained premiums 4,504,732 5,786,259 1,961,726 -- --

Change in technical provisions (1,027,587) (319,855) (42,827) -- --

Income insurance 4,783 (429) -- -- --

Retained claims (1,189,715) (2,990,511) (1,908,958) -- --

Costs acquisition (854,661) (1,168,051) (67,279) --

Result from Reinsurance income (229,978) (253,671) 231,747 -- --

Reinsurance income 218,144 437,475 1,070,017 -- --

Reinsurance expenses (448,122) (691,146) (838,270) -- --



Taxes expenses (110,977) (129,953) (55,789) -- --












Taxes expenses -- -- -- (63,364) --





Change in technical provisions -- -- -- -- 1,978

Raffle results -- -- -- -- (170,798)




Taxes expenses -- -- -- -- (36,345)


Interest income 280,475 263,718 603,427 1,593,704 415,915


Equity in earnings (23,774) (5,021) (4,622) 7,140 21


Non-current assets results 32 (6) 8 52 --


Interest taxes (299,095) (81,912) (99,992) (275,075) (91,968)

Results participation (8,002) (28,574) -- (7,637) (2,541)

Net income 595,796 143,378 20,428 425,472 133,312



Total assets 10,912,127 12,001,396 12,746,417 79,425,613 9,335,691


Total Equity 3,095,736 2,605,640 2,623,213 1,300,336 256,302

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8 � CASH AND CASH EQUIVALENTS

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Cash 132 � 153 ��

Financial Applications(1) 64,859 �� 1,610,178 ��

Total 64,991 �� 1,610,331 ��

(1) Composed mainly for use in repurchase agreements backed by Brazilian Treasury Securities (LFT), with Banco do Brasil S.A, with remuneration indexed to 99% of TMS (Average Selic rate) and daily liquidity. These investments are used in order to fulfill short financial commitments.

9 � Financial Instruments

a) Financial Assets at Fair Value through Profit or Loss

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Cost

Value

Fair

Value

Cost

Value

Fair

Value

Cost

Value

Fair

Value

Cost

Value

Fair

Value

Certificate of Deposit -- -- -- -- 517 574 2,879 2,966

b) Financial Assets Available for Sale

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Cost

Value

Fair

Value

Cost

Value

Fair

Value

Cost

Value

Fair

Value

Cost

Value

Fair

Value

Investment Certificate -- -- -- -- 81 77 1,850 80

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--(6

56,5

89)

Ear

ned

pre

miu

ms

�35

9,23

322

5,62

84,

015,

323

----

4,60

0,18

4

�

Inco

me

insu

ranc

e �

(48)

--7,

204

----

7,15

6

Ret

aine

d cl

aim

s �

(244

,733

)(1

09,0

57)

(1,3

26,3

58)

----

(1,6

80,1

48)

Cos

ts a

cqui

sitio

n �

(96,

341)

(25,

860)

(978

,717

)--

--(1

,100

,918

)

Rei

nsu

ran

ce

inco

me

�61

0(3

97)

(139

,544)

----

(139

,331)

Rei

nsur

ance

inco

me

�2,

729

454

437,

023

----

440,

206

Rei

nsur

ance

exp

ense

s �

(2,1

19)

(851

)(5

76,5

67)

----

(579

,537

)

Oth

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com

e/ex

pens

es

�(1

4,77

9)(1

6,47

0)(1

94,6

48)

----

(225

,897

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Adm

inis

trat

ive

expe

nses

�(2

2,07

3)(1

3,35

3)(1

76,7

40)

(1,4

15)

--(2

13,5

81)

Tax

es e

xpen

ses

�(9

,269

)(9

,015

)(1

18,9

77)

(1,3

97)

--(1

38,6

58)

�

Inte

rest

inco

me

�31

,693

20,2

4225

9,15

611

,436

--32

2,52

7

Inte

rest

inco

me

�38

,432

26,3

1634

8,77

611

,585

--42

5,10

9

Inte

rest

exp

ense

�

(6,7

39)

(6,0

74)

(89,

620)

(149

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(102

,582

)�

Eq

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ear

nin

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�(6

3)(3

4)45

291

4,98

1(9

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(22,

791)

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Op

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ng

res

ult

s

�4,

230

71,6

841,

347,

151

923,

605

(938

,127)

1,40

8,54

3

�

Non

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rent

ass

ets

resu

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�36

--6

----

42�

Inco

me/(

loss)

befo

re t

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�

4,26

671

,684

1,34

7,15

792

3,60

5(9

38,1

27)

1,40

8,58

5

Inco

me

tax

�(4

08)

(17,

686)

(240

,686

)3,

818

--(2

54,9

62)

Soc

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ontr

ibut

ion

tax

�(1

16)

(10,

785)

(202

,743

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845

--(2

11,7

99)

Res

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par

ticip

atio

n �

(3,6

32)

(173

)(8

,010

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--(1

1,81

5)�

Net

inco

me/

(lo

ss)

�11

043

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895,

718

929,

268

(938

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930,

009

Attr

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able

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urid

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�82

32,2

7667

1,69

969

6,85

8(7

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697,

414

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2810

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224,

019

232,

410

(234

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2,59

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sT

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110,

102

58,1

301,

352,

449

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1,52

0,68

1

Ris

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utio

n �

----

----

----

Tec

hnic

al p

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s va

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1,08

113

,895

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--(2

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miu

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�11

1,18

372

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1,06

5,38

0--

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248,

588

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me

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(32)

--1,

270

----

1,23

8

Ret

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(85,

521)

(37,

615)

(305

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)--

--(4

28,1

71)

Cos

ts a

cqui

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n �

(30,

994)

(10,

614)

(262

,446

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--(3

04,0

54)

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inco

me

�1,

641

1,51

4(9

4,30

5)

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(91,

150)

Rei

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inco

me

�5,

346

2,55

784

,183

----

92,0

86

Rei

nsur

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exp

ense

s �

(3,7

05)

(1,0

43)

(178

,488

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--(1

83,2

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Oth

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com

e/ex

pens

es

�(2

,347

)2,

023

(73,

837)

78--

(74,

083)

Adm

inis

trat

ive

expe

nses

�(8

,133

)(4

,074

)(5

3,12

8)(4

77)

--(6

5,81

2)

Tax

es e

xpen

ses

�(1

,846

)(2

,492

)(3

1,75

5)(1

28)

--(3

6,22

1)

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Inte

rest

inco

me

�6,

220

10,8

5772

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4,94

3--

94,9

68

Inte

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inco

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�11

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12,4

7085

,317

4,95

7--

113,

845

Inte

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�

(4,8

81)

(1,6

13)

(12,

369)

(14)

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8,87

7)

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ear

nin

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�(1

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3721

5,71

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�(9

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319,

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129

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455

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�34

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(46)

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loss)

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(9,8

14)

31,6

2431

9,12

722

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1(2

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79)

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409

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764

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071)

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ontr

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�1,

658

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409)

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(575

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n �

(1,3

42)

(29)

(2,2

97)

----

(3,6

68)

Net

inco

me/

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(6,7

34)

19,3

3221

1,35

022

1,20

4(2

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221,

040

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165,

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355,

698

225,

822

3,92

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2--

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504,

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Tec

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618

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27,5

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5,70

424

4,72

72,

876,

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3,47

7,14

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4,89

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cqui

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n �

(101

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9,94

5)(7

23,4

37)

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(854

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inco

me

�(2

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(227

,388)

----

(229

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nsur

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inco

me

�9,

199

3,04

220

5,90

3--

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8,14

4

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810)

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48,1

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�(1

0,74

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972

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89,1

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trat

ive

expe

nses

�(2

7,95

4)(1

6,46

4)(1

45,2

29)

(1,0

80)

--(1

90,7

27)

Tax

es e

xpen

ses

�(6

,500

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5,08

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98)

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10,9

77)

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�16

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526

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4

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31,9

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2,20

227

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577)

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31,

187,

786

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600

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9--

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--21

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7

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--50

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7,08

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483)

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)

Tax

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--50

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43,7

8465

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478)

130,

638

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6,64

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513

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1,75

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545,

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598,

454

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37,5

87--

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89,2

52--

613,

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)

Tax

es e

xpen

ses

(17,

914)

(30,

891)

(63,

756)

(22,

582)

(2,3

76)

(113

)--

(137

,632

)

Inte

rest

inco

me

32,6

2680

,050

146,

969

23,3

1291

3,82

1--

286,

869

Inte

rest

inco

me

46,7

1412

1,06

723

3,48

338

,699

913,

821

--44

3,87

5

Inte

rest

exp

ense

(1

4,08

8)(4

1,01

7)(8

6,51

4)(1

5,38

7)--

----

(157

,006

)

Eq

uit

y in

ear

nin

gs

--18

4,36

2(7

)--

200,

408

(209

,491)

(4,7

10)

Op

erati

ng

res

ult

s

86,9

2820

3,38

075

,202

7,59

7(8

3)20

2,62

5(2

09,4

91)

366,

158

Non

-cur

rent

ass

ets

resu

lts

--52

(84)

----

----

(32)

Inco

me/(

loss)

befo

re t

axes

86

,928

203,

432

75,1

187,

597

(83)

202,

625

(209

,491)

366,

126

Inco

me

tax

(24,

258)

(48,

786)

(12,

361)

(1,7

35)

101

572

--(8

6,46

7)

Soc

ial C

ontr

ibut

ion

tax

(14,

566)

(29,

425)

(7,7

42)

(1,1

61)

3629

0--

(52,

568)

Res

ults

par

ticip

atio

n (2

31)

(3,5

37)

(19,

644)

(119

)(1

93)

----

(23,

724)

Net

inco

me/

(lo

ss)

47,8

7312

1,68

435

,371

4,58

2(1

39)

203,

487

(209

,491)

203,

367

Attr

ibut

able

to G

roup

BB

Seg

urid

ade

23,9

3760

,842

17,6

862,

291

(69)

101,

744

(104

,746

)10

1,68

5

Attr

ibut

able

to o

ther

sto

ckho

lder

s23

,936

60,8

4217

,685

2,29

1(7

0)10

1,74

3(1

04,7

45)

101,

682

��

��

61

R$

tho

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3rd

Qu

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r/20

13

Alia

nça

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Bra

sil

Seg

uro

sB

rasilv

eíc

ulo

sM

apfr

e S

eg

uro

s

Ger

ais

Map

fre A

ffin

ity

Seg

ura

do

raM

apfr

e

Assi

stên

cia

Map

fre B

B S

H2

Ad

just

men

ts/

Elim

inat

ion

sT

ota

l

Issu

ed p

rem

ium

s 16

6,14

147

8,32

71,

280,

158

197,

483

----

--2,

122,

109

Ris

k co

ntrib

utio

n --

----

----

----

--

Tec

hnic

al p

rovi

sion

s va

riatio

n (1

0,93

6)(2

8,74

0)(1

38,8

49)

(5,8

96)

----

--(1

84,4

21)

Ear

ned

pre

miu

ms

155,

205

449,

587

1,14

1,30

919

1,58

7--

----

1,93

7,68

8

----

--

Inco

me

insu

ranc

e 45

4(4

5)(2

39)

----

----

170

Ret

aine

d cl

aim

s (4

9,29

9)(2

85,6

79)

(614

,726

)(7

1,72

3)--

----

(1,0

21,4

27)

Cos

ts a

cqui

sitio

n (5

5,17

9)(4

9,17

2)(2

07,0

89)

(88,

922)

----

--(4

00,3

62)

Rei

nsu

ran

ce

inco

me

(13,

893)

--(1

76,4

57)

(211

)--

----

(190

,561)

Rei

nsur

ance

inco

me

6,71

9--

114,

761

----

----

121,

480

Rei

nsur

ance

exp

ense

s (2

0,61

2)--

(291

,218

)(2

11)

----

(312

,041

)

Oth

er in

com

e/ex

pens

es

(8,1

96)

(21,

752)

(24,

652)

(7,5

15)

925

----

(61,

190)

Adm

inis

trat

ive

expe

nses

(13,

191)

(63,

760)

(119

,932

)(2

2,03

3)(8

17)

(399

)--

(220

,132

)

Tax

es e

xpen

ses

(5,7

07)

(9,2

15)

(18,

280)

(6,8

42)

(844

)(5

6)--

(40,

944)

Inte

rest

inco

me

10,4

0620

,317

27,1

647,

163

5272

--65

,174

Inte

rest

inco

me

13,4

9530

,981

65,4

3510

,044

5272

--12

0,07

9

Inte

rest

exp

ense

(3

,089

)(1

0,66

4)(3

8,27

1)(2

,881

)--

----

(54,

905)

Eq

uit

y in

ear

nin

gs

----

567

(1)

--38

,954

(41,

552)

(2,0

32)

Op

erati

ng

res

ult

s

20,6

0040

,281

7,66

51,

503

(684

)38

,571

(41,

552)

66,3

84

Non

-cur

rent

ass

ets

resu

lts

(1)

--(8

1)--

----

--(8

2)

Inco

me/(

loss)

befo

re t

axes

20

,599

40,2

817,

584

1,50

3(6

84)

38,5

71(4

1,55

2)

66,3

02

Inco

me

tax

(5,6

14)

(7,9

57)

2,65

1(6

2)16

945

327

1(1

0,08

9)

Soc

ial C

ontr

ibut

ion

tax

(3,3

72)

(5,0

77)

310

(281

)61

192

163

(8,0

04)

Res

ults

par

ticip

atio

n 1,

834

(1,5

41)

(9,2

81)

(34)

----

--(9

,022

)

Net

inco

me/

(lo

ss)

13,4

4725

,706

1,26

41,

126

(454

)39

,216

(41,

118)

39,1

87

Attr

ibut

able

to G

roup

BB

Seg

urid

ade

6,72

412

,853

632

563

(227

)19

,608

(20,

559)

19,5

94

Attr

ibut

able

to o

ther

sto

ckho

lder

s6,

723

12,8

5363

256

3(2

27)

19,6

08(2

0,55

9)19

,593

��

��

62

R$

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01.0

1 to

09.3

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Alia

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Seg

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sM

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Ger

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Map

fre A

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Seg

ura

do

raM

apfr

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Assi

stên

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Map

fre B

B S

H2

Ad

just

men

ts/

Elim

inat

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sT

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Issu

ed p

rem

ium

s 53

4,46

11,

381,

725

3,29

8,32

857

1,74

5--

----

5,78

6,25

9

Ris

k co

ntrib

utio

n --

----

----

----

--

Tec

hnic

al p

rovi

sion

s va

riatio

n (8

2,94

6)(3

7,74

7)(2

13,2

78)

14,1

16--

----

(319

,855

)

Ear

ned

pre

miu

ms

451,

515

1,34

3,97

83,

085,

050

585,

861

----

--5,

466,

404

----

--

Inco

me

insu

ranc

e 1,

717

(814

)(1

,334

)2

----

--(4

29)

Ret

aine

d cl

aim

s (1

28,5

16)

(830

,079

)(1

,835

,449

)(1

96,4

67)

----

--(2

,990

,511

)

Cos

ts a

cqui

sitio

n (1

68,1

16)

(146

,051

)(5

89,7

22)

(264

,162

)--

----

(1,1

68,0

51)

Rei

nsu

ran

ce

inco

me

(35,

882)

--(2

17,0

24)

(765

)--

----

(253

,671)

Rei

nsur

ance

inco

me

17,4

21--

420,

005

49--

----

437,

475

Rei

nsur

ance

exp

ense

s (5

3,30

3)--

(637

,029

)(8

14)

----

--(6

91,1

46)

Oth

er in

com

e/ex

pens

es

(25,

630)

(64,

165)

(66,

575)

(15,

284)

2,83

2--

--(1

68,8

22)

Adm

inis

trat

ive

expe

nses

(38,

398)

(194

,745

)(3

25,7

45)

(66,

607)

(2,4

82)

(1,1

36)

--(6

29,1

13)

Tax

es e

xpen

ses

(16,

101)

(28,

445)

(60,

173)

(22,

695)

(2,4

11)

(128

)--

(129

,953

)

--

Inte

rest

inco

me

21,0

8021

,526

72,6

0517

,375

9635

5--

133,

037

Inte

rest

inco

me

33,4

7650

,344

154,

951

24,4

9696

355

--26

3,71

8

Inte

rest

exp

ense

(1

2,39

6)(2

8,81

8)(8

2,34

6)(7

,121

)--

----

(130

,681

)

Eq

uit

y in

ear

nin

gs

--89

21,3

25(3

)--

143,

164

(169

,596)

(5,0

21)

Op

erati

ng

res

ult

s

61,6

6910

1,29

482

,958

37,2

55(1

,965

)14

2,25

5(1

69,5

96)

253,

870

Non

-cur

rent

ass

ets

resu

lts

(1)

--(5

)--

----

--(6

)

Inco

me/(

loss)

befo

re t

axes

61

,668

101,

294

82,9

5337

,255

(1,9

65)

142,

255

(169

,596)

253,

864

Inco

me

tax

(15,

648)

(22,

934)

(2,8

04)

(8,9

63)

489

1,30

527

1(4

8,28

4)

Soc

ial C

ontr

ibut

ion

tax

(9,4

89)

(14,

071)

(5,3

36)

(5,6

29)

176

558

163

(33,

628)

Res

ults

par

ticip

atio

n 1,

385

(3,1

39)

(26,

687)

(133

)--

----

(28,

574)

Net

inco

me/

(lo

ss)

37,9

1661

,150

48,1

2622

,530

(1,3

00)

144,

118

(169

,162)

143,

378

Attr

ibut

able

to G

roup

BB

Seg

urid

ade

18,9

5830

,575

24,0

6311

,265

(650

)72

,059

(84,

581)

71,6

89

Attr

ibut

able

to o

ther

sto

ckho

lder

s18

,958

30,5

7524

,063

11,2

65(6

50)

72,0

59(8

4,58

1)71

,689

��

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63

d.3

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R$

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Bra

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/A

3rd

Qu

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to 0

9.3

0.20

14

3rd

Qu

arte

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1301

.01

to 0

9.3

0.20

13

Issu

ed p

rem

ium

s 95

7,70

91,

910,

522

764,

400

1,96

1,72

6

Ris

k co

ntrib

utio

n --

----

--

Tec

hnic

al p

rovi

sion

s va

riatio

n (1

55,9

49)

195,

735

(79,

410)

(42,

827)

Ear

ned

pre

miu

ms

801,

760

2,10

6,25

768

4,99

01,

918,

899

Inco

me

insu

ranc

e --

----

--

Ret

aine

d cl

aim

s (8

67,7

80)

(1,5

42,2

83)

(493

,270

)(1

,908

,958

)

Cos

ts a

cqui

sitio

n (2

7,32

1)(5

5,67

9)(2

8,98

9)(6

7,27

9)

Rei

nsu

ran

ce

inco

me

132,

985

(46,

730)

5,71

223

1,74

7

Rei

nsur

ance

inco

me

343,

675

709,

752

298,

110

1,07

0,01

7

Rei

nsur

ance

exp

ense

s (2

10,6

90)

(756

,482

)(2

92,3

98)

(838

,270

)

Oth

er in

com

e/ex

pens

es

(25,

234)

(87,

971)

(6,1

82)

(2,9

91)

Adm

inis

trat

ive

expe

nses

(55,

955)

(174

,859

)(5

4,97

6)(1

51,6

71)

Tax

es e

xpen

ses

(16,

133)

(40,

966)

(17,

971)

(55,

789)

Inte

rest

inco

me

137,

255

326,

490

86,9

1616

1,07

6

Inte

rest

inco

me

743,

511

1,87

8,83

832

2,35

760

3,42

7

Inte

rest

exp

ense

(6

06,2

56)

(1,5

52,3

48)

(235

,441

)(4

42,3

51)

Eq

uit

y in

ear

nin

gs

17,5

2742

,403

(14,

287)

(4,6

22)

Op

erati

ng

res

ult

s

97,1

0452

6,66

216

1,94

312

0,41

2

Non

-cur

rent

ass

ets

resu

lts

227

38

Inco

me/(

loss)

befo

re t

axes

97

,106

526,

689

161,

946

120,

420

Inco

me

tax

(21,

275)

(121

,796

)(3

6,23

3)(6

2,15

4)

Soc

ial C

ontr

ibut

ion

tax

(13,

263)

(74,

445)

(22,

065)

(37,

838)

Res

ults

par

ticip

atio

n --

----

--

Net

inco

me/

(lo

ss)

62,5

6833

0,44

810

3,64

820

,428

Attr

ibut

able

to G

roup

BB

Seg

urid

ade

12,8

3367

,777

11,7

9611

,796

Attr

ibut

able

to o

ther

sto

ckho

lder

s49

,735

262,

671

91,8

528,

632

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R$

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Bra

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Cap

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3rd

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3rd

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Elim

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Col

lect

ion

with

sav

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bon

ds

1,39

5,61

31,

383,

223

----

----

1,39

5,61

31,

383,

223

Tec

hnic

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rovi

sion

s va

riatio

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red

empt

ion

(1,1

55,7

73)

(1,1

71,5

98)

----

----

(1,1

55,7

73)

(1,1

71,5

98)

Net

secu

riti

es

cap

ital

izat

ion

23

9,84

021

1,62

5--

----

--23

9,84

021

1,62

5

Tec

hnic

al p

rovi

sion

cha

nges

(6

,456

)(1

1,37

7)--

----

--(6

,456

)(1

1,37

7)

Raf

fle r

esul

ts

(36,

438)

(57,

775)

----

----

(36,

438)

(57,

775)

Sel

ling

expe

nses

(1

08,2

51)

(92,

841)

----

----

(108

,251

)(9

2,84

1)

Resu

lts

88,6

9549

,632

----

----

88,6

9549

,632

Oth

er in

com

e/(e

xpen

ses)

(6

,109

)(1

,166

)--

(67)

----

(6,1

09)

(1,2

33)

Adm

inis

trat

ive

expe

nses

(21,

886)

(18,

111)

(74)

(4)

----

(21,

960)

(18,

115)

Tax

exp

ense

s (1

0,03

2)(7

,267

)(1

7)(1

6)--

--(1

0,04

9)(7

,283

)

Cap

italiz

ati

on

resu

lts

50,6

6823

,088

(91)

(87)

----

50,5

7723

,001

Fin

anci

al r

esu

lts

72,3

9524

,284

148

114

----

72,5

4324

,398

Inte

rest

inco

me

290,

572

167,

049

149

113

----

290,

721

167,

162

Inte

rest

exp

ense

(2

18,1

77)

(142

,765

)(1

)1

----

(218

,178

)(1

42,7

64)

Eq

uit

y in

ear

nin

gs

63(5

0)--

----

--63

(50)

Op

erati

ng

in

co

me

123,

126

47,3

2257

27--

--12

3,18

347

,349

Non

-cur

rent

ass

ets

resu

lts

----

----

----

----

Inco

me/(

loss)

befo

re t

axes

12

3,12

647

,322

5727

----

123,

183

47,3

49

Inco

me

tax

(29,

539)

(7,5

26)

(9)

(3)

----

(29,

548)

(7,5

29)

Soc

ial C

ontr

ibut

ion

tax

(18,

537)

(12,

266)

(8)

(5)

----

(18,

545)

(12,

271)

Res

ults

par

ticip

atio

n (9

19)

(881

)--

----

--(9

19)

(881

)

Net

inco

me/

(lo

ss)

74,1

3126

,649

4019

----

74,1

7126

,668

Attr

ibut

able

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49,4

1617

,764

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----

49,4

5617

,783

Attr

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to o

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sto

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s24

,715

8,88

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----

--24

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01.0

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01.0

1 to

09.3

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01.0

1 to

09.3

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14

01.0

1 to

09.3

0.20

13

01.0

1 to

09.3

0.20

14

01.0

1 to

09.3

0.20

13

Elim

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Col

lect

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with

sav

ings

bon

ds

4,65

9,01

04,

533,

719

----

----

4,65

9,01

04,

533,

719

Tec

hnic

al p

rovi

sion

s va

riatio

n to

red

empt

ion

(3,8

76,0

74)

(3,7

51,9

76)

----

----

(3,8

76,0

74)

(3,7

51,9

76)

Net

secu

riti

es

cap

ital

izat

ion

78

2,93

678

1,74

3--

----

--78

2,93

678

1,74

3

Tec

hnic

al p

rovi

sion

cha

nges

(2

5,63

3)1,

978

----

----

(25,

633)

1,97

8

Raf

fle r

esul

ts

(153

,553

)(1

70,7

98)

----

----

(153

,553

)(1

70,7

98)

Sel

ling

expe

nses

(3

70,6

64)

(304

,678

)--

----

--(3

70,6

64)

(304

,678

)

Resu

lts

233,

086

308,

245

----

----

233,

086

308,

245

Oth

er in

com

e/(e

xpen

ses)

(6

,413

)(9

50)

--(1

08)

----

(6,4

13)

(1,0

58)

Adm

inis

trat

ive

expe

nses

(59,

078)

(54,

333)

(187

)(1

18)

----

(59,

265)

(54,

451)

Tax

exp

ense

s (3

0,46

9)(3

6,29

3)(5

0)(5

2)--

--(3

0,51

9)(3

6,34

5)

Cap

italiz

ati

on

resu

lts

137,

126

216,

669

(237

)(2

78)

----

136,

889

216,

391

Fin

anci

al r

esu

lts

238,

044

11,1

0941

330

0--

--23

8,45

711

,409

Inte

rest

inco

me

820,

107

415,

615

415

300

----

820,

522

415,

915

Inte

rest

exp

ense

(5

82,0

63)

(404

,506

)(2

)--

----

(582

,065

)(4

04,5

06)

Eq

uit

y in

ear

nin

gs

104

21--

----

--10

421

Op

erati

ng

in

co

me

375,

274

227,

799

176

22--

--37

5,45

022

7,82

1

Non

-cur

rent

ass

ets

resu

lts

----

----

----

----

Inco

me/(

loss)

befo

re t

axes

37

5,27

422

7,79

917

622

----

375,

450

227,

821

Inco

me

tax

(90,

333)

(52,

265)

(27)

(5)

----

(90,

360)

(52,

270)

Soc

ial C

ontr

ibut

ion

tax

(55,

752)

(39,

693)

(26)

(5)

----

(55,

778)

(39,

698)

Res

ults

par

ticip

atio

n (2

,848

)(2

,541

)--

----

--(2

,848

)(2

,541

)

Net

inco

me/

(lo

ss)

226,

341

133,

300

123

12--

--22

6,46

413

3,31

2

Attr

ibut

able

to G

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BB

Seg

urid

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150,

879

88,8

5812

312

----

151,

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88,8

70

Attr

ibut

able

to o

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s 75

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(7,1

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465,

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Pri

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Pen

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co

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34,5

1599

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34,5

1599

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Inco

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man

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and

prod

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332,

892

888,

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332,

892

888,

792

Cha

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in te

chni

cal p

rovi

sion

s13

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0,07

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0,07

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bene

fits

(34,

212)

(49,

321)

----

(34,

212)

(49,

321)

Cos

ts a

cqui

sitio

n(7

8,83

9)(2

18,1

46)

----

(78,

839)

(218

,146

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ther

inco

me/

expe

nse

(4,9

56)

(11,

359)

----

(4,9

56)

(11,

359)

Ris

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ontr

ibut

ions

49,0

9914

6,08

6--

--49

,099

146,

086

Cha

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in te

chni

cal p

rovi

sion

s fr

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rem

ium

s(1

65)

(902

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--(1

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48,9

3414

5,18

4--

--48

,934

145,

184

Cla

ims

(1,3

86)

(3,6

41)

----

(1,3

86)

(3,6

41)

Cos

ts a

cqui

sitio

n--

----

----

--O

ther

inco

me/

expe

nse

(2,7

78)

(7,3

21)

----

(2,7

78)

(7,3

21)

Adm

inis

trat

ive

expe

nses

(67,

545)

(189

,897

)--

--(6

7,54

5)(1

89,8

97)

Tax

es e

xpen

ses

(26,

287)

(73,

210)

----

(26,

287)

(73,

210)

Fin

anci

al r

esu

lts

110,

874

329,

189

----

110,

874

329,

189

Inte

rest

inco

me

2,16

4,98

86,

315,

333

----

2,16

4,98

86,

315,

333

Inte

rest

exp

ense

(2,0

54,1

14)

(5,9

86,1

44)

----

(2,0

54,1

14)

(5,9

86,1

44)

Eq

uit

y in

ear

nin

gs

----

489

2,09

748

92,

097

Op

erati

ng

res

ult

s31

1,34

687

9,54

648

92,

097

311,

835

881,

643

Non

-cur

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ass

ets

inco

me

3217

----

3217

Inco

me/(

loss)

befo

re t

axes

311,

378

879,

563

489

2,09

731

1,86

788

1,66

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ax in

com

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5,93

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14,5

94)

----

(75,

932)

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x(4

6,98

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32,7

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(46,

983)

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ts p

artic

ipat

ion

(2,7

80)

(6,6

13)

----

(2,7

80)

(6,6

13)

Net

inco

me

185,

683

525,

586

489

2,09

718

6,17

252

7,68

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71,

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46,5

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Ret

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15,5

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Ben

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(3,6

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(15,

489,

830)

(13,

415)

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965)

----

(3,6

60,7

29)

(15,

531,

795)

Pri

vate

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sio

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lan

s in

co

me

33,1

0693

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1,58

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86

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man

agem

ent f

ees

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prod

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267,

971

751,

445

2,80

98,

176

----

270,

780

759,

621

Cha

nge

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chni

cal p

rovi

sion

s (1

3,73

4)(4

6,29

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759

3,45

3--

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1,97

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2,83

9)

Ret

aine

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nefit

s(1

1,86

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0,35

0)(2

,234

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4,10

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4,30

7)

Cos

ts a

cqui

sitio

n (6

1,25

1)(1

77,2

42)

(195

)(9

48)

----

(61,

446)

(178

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)

Oth

er in

com

e/ex

pens

e(2

,217

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,514

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4)(5

8)--

--(2

,251

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Ris

ck c

ontr

ibut

ions

47

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140,

011

127

400

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47,5

0414

0,41

1

Cha

nge

in te

chni

cal p

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rem

ium

s(8

9)(1

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1)--

--(9

3)(1

,835

)

Resu

lts

47,2

8813

8,18

712

338

9--

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,411

138,

576

Cla

ims

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14)

(6,3

80)

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3)--

--(2

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,453

)

Cos

ts a

cqui

sitio

n --

----

----

----

--

Oth

er in

com

e/ex

pens

e(7

24)

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08)

----

----

(724

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)

Adm

inis

trat

ive

expe

nses

(6

4,14

9)(1

83,9

73)

(1,2

89)

(3,8

39)

----

(65,

438)

(187

,812

)

Tax

es e

xpen

ses

(22,

250)

(62,

144)

(391

)(1

,220

)--

--(2

2,64

1)(6

3,36

4)

--F

inan

cial

resu

lts

80,2

3723

1,72

136

713

3--

--80

,604

231,

854

Inte

rest

inco

me

1,35

2,40

31,

588,

668

3,29

25,

036

----

1,35

5,69

51,

593,

704

Inte

rest

exp

ense

(1,2

72,1

66)

(1,3

56,9

47)

(2,9

25)

(4,9

03)

----

(1,2

75,0

91)

(1,3

61,8

50)

Eq

uit

y in

ear

nin

gs

856

2,20

9--

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524

4,93

12,

380

7,14

0

Op

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res

ult

s25

0,45

069

9,56

21,

425

3,63

91,

524

4,93

125

3,39

970

8,13

2

Non

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rent

ass

ets

inco

me

4652

----

----

4652

Inco

me/(

loss)

befo

re t

axes

25

0,49

669

9,61

41,

425

3,63

91,

524

4,93

125

3,44

570

8,18

4

Tax

inco

me

(59,

037)

(168

,914

)(3

56)

(886

)--

--(5

9,39

3)(1

69,8

00)

Soc

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880)

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75)

Res

ults

par

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atio

n(2

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----

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)

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150,

872

418,

334

855

2,20

71,

524

4,93

115

3,25

142

5,47

2

Attr

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113,

146

313,

730

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1,65

61,

143

3,69

711

4,93

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9,08

3

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104,

604

213

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56

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46

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1

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318,

584

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088

Inte

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22

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66,3

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12,1

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Inte

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33,6

29

84,

300

19,1

2046

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Inte

rest

exp

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(1

0,92

4)

(17,

960)

(6,9

54)

(11,

339)

Inco

me/(

loss)

befo

re t

axes

48

3,12

9

1

,390

,941

330,

750

948,

012

Tax

es

(164

,263

)

(4

73,3

93)

(112

,934

)(3

23,2

96)

Net

inco

me

318,

866

9

17,5

48

217,

816

624,

716

Attr

ibut

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BB

Seg

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318,

866

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7,54

8 21

7,81

662

4,71

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5

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5

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Per

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adm

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Op

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Inte

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18

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Inte

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206

206

Inte

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Inco

me/(

loss)

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Tax

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----

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(1,5

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74

e.3) Insurance, Private Pension Plans and Capitalization Segment: Reinsurance

R$ thousand

� IRB Brasil RE S/A

� �� Sep 30, 2014 Dec 31, 2013

Assets

Cash and bank deposits 62,729 55,018

Securities 5,379,725 5,168,274

Insurance and coinsurance operations 2,091,381 2,251,692

Reinsurance assets � Technical provisions 3,575,283 3,410,252

Receivables 1,070,800 952,269

Prepaid expenses 2,023 972

Costs of acquisition 82 --

Investment 235,494 199,339

Property and equipment 32,412 32,110

Intangible assets 131,300 166,718

Total 12,581,229 12,236,644

Liabilities

Payable accounts 665,519 577,837

Insurance and reinsurance debts 1,130,703 1,229,859

Technical provision 7,502,496 7,279,394

Deposits 24,429 29,087

Other liabilities 424,284 403,061

Equity 2,833,798 2,717,406



Total 12,581,229 12,236,644

e.4) Insurance, Private Pension Plans and Capitalization Segment: Capitalization

R$ thousand

Sep 30, 2014 Brasilcap Capitalização BB Capitalização Adjustments/Eliminations Total

Assets


Securities 11,343,023 5,604 -- 11,348,627






Other assets 1,774 16 -- 1,790

Total 12,057,881 5,620 -- 12,063,501

Liabilities

Tax liabilities 110,134 66 -- 110,200


Provisions 10,995,453 -- -- 10,995,453

Other liabilities 618,581 -- -- 618,581

Equity 331,075 5,554 -- 336,629



Total 12,057,881 5,620 -- 12,063,501

��

��

75

R$ thousand

Dec 31, 2013 Brasilcap Capitalização BB Capitalização Adjustments /Eliminations Total

Assets


Securities 9,773,656 5,585 -- 9,779,241






Other assets 3,935 -- -- 3,935

Total 10,394,815 5,585 -- 10,400,400

Liabilities

Tax liabilities 105,82 65 -- 105,885


Provisions 9,488,698 -- -- 9,488,698

Other liabilities 528,364 10 -- 528,374

Equity 269,548 5,51 -- 275,058



Total 10,394,815 5,585 -- 10,400,400

e.5) Insurance, Private Pension Plans and Capitalization segment: Private Pension Plans

R$ thousand

Sep 30, 2014 Brasilprev Seguros e Previdência S.A. Adjustments/Eliminations Total

Assets


Securities 104,383,297 -- 104,383,297


Receivables 338,400 -- 338,400

Prepaid expenses 2,279 -- 2,279





Total 105,540,475 -- 105,540,475

Liabilities




Deposits 95,156 -- 95,156




Equity 1,511,764 -- 1,511,764



Total 105,540,475 -- 105,540,475

��

��

76

R$ thousand

Dec 31, 2013 Brasilprev Seguros e Previdência S.A. Adjustments/Eliminations Total

Assets


Securities 84,386,959 -- 84,386,959


Receivables 253,576 -- 253,576

Prepaid expenses 386 -- 386





Total 85,479,010 -- 85,479,010

Liabilities




Deposits 23,885 -- 23,885




Equity 1,449,488 -- 1,449,488



Total 85,479,010 -- 85,479,010

e.6) Brokerage Segment

R$ thousand

BB Corretora de Seguros e Adm. de Bens

Sep 30, 2014 Dec 31, 2013

Assets

Cash and bank deposits 977,919 1,020,061

Securities 651 3,047

Tax assets 99,762 76,618

Other assets 714,741 646,161

Total 1,793,073 1,745,887

Liabilities

Dividends payable -- 499,986

Povisions 11,843 7,884

Tax liabilities 179,460 147,232

Other liabilities 1,247,898 1,057,385

Equity 353,872 33,400


Attributable to other stockholders -- --

Total 1,793,073 1,745,887

��

��

77

e.7) Health Segment

R$ mil

Brasildental Operadora de Planos Odontológicos

Sep 30, 2014

Assets

Cash and bank deposits 40

Securities 3,699

Insurance and coinsurance operations 7

Tax assets 9

Other assets 86

Total 3,841

Liabilities

Dividends payable --

Povisions 4

Tax liabilities 45

Other liabilities 346

Equity 3,446

Attributable to Group BB Seguridade 2,584

Attributable to other stockholders 862

Total 3,841

��

��

78

f) Insurance and Reinsurance Receivables of Equity Method Investments

R$ thousand

Sep 30, 2014 Dec 31, 2013

Insurance business operations � Life, mortgage life and rural 2,567,207 2,195,599

Premiums 2,090,411 1,909,509




Insurance business operations � Property and casualty 3,758,326 2,903,994

Premiums 3,211,071 2,631,783




Reinsurance 2,002,945 2,159,349

Premiums 1,744,938 1,768,527



Other credits 466,068 321,969

Total 8,794,546 7,580,911



��

��

79

g) Balance of liabilities from Insurance Contracts and Technical Provisions for Capitalization of Equity Method Investments

R$ thousand

Sep 30, 2014 Dec 31, 2013

Insurance � Life, mortgage life, rural and life insurance with survivor coverage (1) 78,730,721 60,160,381

Mathematical provision for future benefits � VGBL 72,437,208 54,878,803




Provision for premium insufficiency 347,906 363,562

Mathematical provision for redemptions 166,731 105,843

Mathematical provision for vested benefits � VGBL 82,276 52,483







Reinsurance 3,926,397 3,868,325


Provision for unearned premiums 935,417 1,026,780




Mathematical provision for future benefits �PGBL 27,566,040 25,489,123

Mathematical provision for vested benefits �PGBL 1,477,263 1,324,640

Provision for financial surplus 608,401 590,543


Other provisions 1,010,960 1,021,079


Mathematical provision for redemptions 10,672,930 9,245,415

Provision for sweepstakes and redemptions 234,804 160,766


Total 129,712,134 106,850,269




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h) Balance of Liabilities from Insurance Contracts and Technical Provisions for Capitalization by Products of Equity Method Investments

R$ thousand

Sep 30, 2014 Dec 31, 2013

Insurance � Life, Mortgage Life, Rural and life insurance with survivor coverage (1) 78,730,721 60,160,381

Living benefits life insurance � VGBL 72,764,280 55,106,491

Life 4,881,978 4,161,003

Property/casualty 801,446 688,983

Dpvat 283,017 203,904


Auto 3,346,023 2,843,509

Life 284,922 411,210


Dpvat 362,957 391,554

Reinsurance 3,926,397 3,868,325

Auto 277,886 174,017

Life 190,013 61,018


Dpvat -- 54,600


Free benefit generating plan � PGBL 22,266,207 20,337,357

Traditional plans 8,406,680 8,099,180


Total 129,712,134 106,850,269




i) Guarantee of Liabilities from Insurance Contracts and Technical Provisions for Capitalization of Equity Method Investments

R$ thousand

Sep 30, 2014






Reinsurance Total


Shares in investment funds (except VGBL e PGBL) 8,869,836 2,720,301 1,523,923 5,050,476 120,000 18,284,536

Federal Government bonds 3,056,564 241,878 749,877 3,876,918 3,698,921 11,624,158

Corporate bonds 615,323 1,093,644 61,694 2,357,776 181,564 4,310,001

Credit rights 1,394,507 1,663,902 -- 57,853 -- 3,116,262

Property 3,562 21,559 -- -- -- 25,121

Deposits held at IRB and judicial deposits -- 516 -- -- -- 516

Reducing the need for coverage 613,219 615,483 -- -- -- 1,228,702

Total 86,749,870 6,357,283 24,529,680 11,343,023 4,000,485 132,980,341



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R$ thousand

Dec 31, 2013






Reinsurance Total


Shares in investment funds (except VGBL e PGBL) 7,352,991 3,002,958 2,123,521 4,180,894 -- 16,660,364

Federal Government bonds 2,418,269 206,862 1,061,412 4,207,031 3,799,613 11,693,187

Corporate bonds 721,616 352,473 88,471 1,295,197 71,085 2,528,842

Credit rights 1,278,004 1,294,762 -- 90,535 -- 2,663,301

Property 3,941 19,280 -- -- -- 23,221

Deposits held at IRB and judicial deposits 10,264 1,487 -- -- -- 11,751

Reducing the need for coverage 518,863 437,116 -- -- -- 955,979

Total 61,735,773 5,314,938 28,781,650 9,773,657 3,870,698 109,476,716



j) Coverage of Technical Provisions of Equity Investments Valued by Equity Method

R$ thousand

Sep 30, 2014 Dec 31, 2013

Technical Provisions 132,189,198 108,776,338

Deferred Acquisition Cost of PPNG (1,076,396) (1,184,679)

Reinsurance Contracted Part (1,795,076) (1,643,374)

Credit Receivable (3,461,949) (2,581,268)

Provisions Retained by IRB (516) (517)

Judicial Deposits -- (130)

DPVAT (645,960) (467,885)

Total to be covered 125,209,301 102,898,485

Assets offered in covered:

Investment funds 112,606,399 91,998,099

Federal Securities 11,526,983 10,665,189

Private Securities 3,540,732 2,550,410

Property 25,121 23,221

Total 127,699,235 105,236,919

Sufficiency (insufficiency) 2,489,934 2,338,434

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k) Changes in Liabilities for Insurance Contracts and Supplementary Pension of Equity Investments Valued by Equity Method

R$ thousand

01.01 to 09.30.2014



Mathematical provision for future benefits 54,886,048 13,346,433 (8,700) 4,213,427 72,437,208



Provision for claims incurred but not reported 1,193,187 676,046 (383,905) 6,880 1,492,208






Mathematical provision for future benefits 25,489,123 553,783 (140,478) 1,663,612 27,566,040


Provision for unsettled claims 28,205 2,807 (5,823) 799 25,988






Attributable to other stockholders 28,400,212 21,596,153 (17,368,392) 1,505,197 34,133,170

R$ thousand

01.01 a 09.30.2014


Technical provisions � Reinsurance 5,482,468 16,808,021 (16,221,094) (16,506) 6,052,889



Provision for claims incurred but not reported 485,809 502,873 (385,547) 6,880 610,015

Provision for claims incurred but not reported � IBNeR (39,149) 601 (23,853) -- (62,401)

Other provisions (PMBaC) 7,245 -- (7,245) -- --

Provision for related expenses 3,058 9,240 -- -- 12,298


Attributable to the Group BB Seguridade 1,688,453 1,483,664 (1,262,327) (11,639) 1,898,151

Attributable to other stockholders 3,794,015 15,324,357 (14,958,767) (4,867) 4,154,738

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R$ thousand

2013



Mathematical provision for future benefits 40,635,578 12,769,034 -- 1,481,436 54,886,048



Provision for claims incurred but not reported 1,076,637 230,951 (114,401) -- 1,193,187




Other provisions 130,129 255,860 (44,796) -- 341,193


Mathematical provision for future benefits 23,426,007 1,310,354 (95,206) 847,968 25,489,123


Provision for unsettled claims 24,818 7,615 (5,350) 1,122 28,205



Provision for unexpired risks 7,881 -- (7,881) -- --





R$ thousand

2013

Opening balance Constitution Reversals UpdatesClosing balance

Technical provisions � Reinsurance 4,483,471 4,450,135 (3,519,405) 68,267 5,482,468




Provision for claims incurred but not reported � IBNeR 191,828 36,947 (79,386) -- 149,389

Provision for technical surplus - PET 26,511 1,111 (7,804) -- 19,818

Other provisions (PMBaC) 5,410 1,835 -- -- 7,245

Provision for related expenses -- 6,564 -- -- 6,564

Other provisions 2,674 31,11 (33,784) -- --

Attributable to the Group BB Seguridade 1,305,346 1,964,680 (1,596,400) 14,826 1,688,452


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l) Income from Operations with Insurance and Complementary Social Security of Equity Investments Valued by Equity Method

R$ thousand




Technical provisions variation (358,109) (25,427) (383,536) (627,338) (17,374) (644,712)

Income from management fees and products (298,553) 631,444 332,891 166,752 101,219 267,971

Retained claims (2,449,800) -- (2,449,800) (1,651,732) -- (1,651,732)


Selling expenses (629,611) (10,125) (639,736) (518,403) (11,295) (529,698)

Deferred expenses (389,483) -- (389,483) (304,054) -- (304,054)

Other operating income/expense (205,021) (1,852) (206,873) (133,725) (766) (134,491)

Results of operations 466,672 609,608 1,076,280 1,213,529 101,573 1,315,102

Interest income 1,088,997 2,164,989 3,253,986 554,983 1,673,449 2,228,432

Interest expenses (749,622) (2,054,114) (2,803,736) (309,225) (1,593,212) (1,902,437)

Financial results 339,375 110,875 450,250 245,758 80,237 325,995

Total 806,047 720,483 1,526,530 1,459,287 181,810 1,641,097

Attributable to the Group BB Seguridade 463,167 540,325 1,003,492 829,323 136,349 965,672

Attributable to other stockholders 342,880 180,158 523,038 629,964 45,461 675,425

R$ thousand

01.01 to 09.30.2014 01.01 to 09.30.2013



Technical provisions variation (1,073,246) (61,138) (1,134,384) (1,553,192) (52,511) (1,605,703)

Income from management fees and products 59,818 828,973 888,791 463,348 288,097 751,445

Retained claims (6,194,338) -- (6,194,338) (5,049,493) -- (5,049,493)


Selling expenses (1,713,618) (30,288) (1,743,906) (1,513,403) (33,376) (1,546,779)

Deferred expenses (1,100,918) -- (1,100,918) (854,661) -- (854,661)

Other operating income/expense (531,028) (3,075) (534,103) (360,362) (2,011) (362,373)

Results of operations 2,959,287 825,454 3,784,741 2,982,229 283,079 3,265,308

Interest income 2,748,030 6,315,333 9,063,363 1,146,320 1,588,668 2,734,988

Interest expenses (1,811,962) (5,986,144) (7,798,106) (643,602) (1,356,947) (2,000,549)

Financial results 936,068 329,189 1,265,257 502,718 231,721 734,439

Total 3,895,355 1,154,643 5,049,998 3,484,947 514,800 3,999,747

Attributable to the Group BB Seguridade 2,218,376 865,924 3,084,300 2,115,171 386,074 2,501,245


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m) Claims Development of Equity Investments Valued by Equity Method

R$ thousand


2008 2009 2010 2011 2012 2013Sep 30, 2014 Total

Insurance Segment

Gross Reinsurance Claims
















Net Reinsurance claims
















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R$ thousand


2008 2009 2010 2011 2012 2013Sep 30, 2014 Total

Reinsurance Segment

Gross Retrocession Claims


During the occurrence 777,939 738,882 340,142 200,595 342,520 1,107,829 1,045,674 4,553,581

A period of the occurrence 1,782,336 1,241,026 845,278 516,906 975,304 1,394,569 -- 6,755,419

Two periods after the occurrence 1,833,735 1,374,800 750,949 765,358 1,060,727 -- -- 5,785,569





Estimates based on claims data (Sep 30, 2014) 2,067,003 1,449,505 656,653 776,783 1,060,727 1,394,569 1,045,674 8,450,914

Payments of claims 1,793,515 1,260,128 590,225 432,432 471,759 558,098 14,973 5,121,131




Attributable to the Group BB Seguridade -- -- -- -- -- -- -- 963,600,


Net Retrocession claims


During the occurrence 500,531 458,107 257,280 146,828 212,493 713,804 665,945 2,954,987

A period of the occurrence 1,088,423 835,580 648,986 283,846 588,287 1,203,872 -- 4,648,994

Two periods after the occurrence 1,209,256 1,051,953 550,314 346,747 397,460 -- -- 3,555,731





Estimates based on claims data (Sep 30, 2014) 1,340,630 1,012,606 452,293 321,648 397,460 1,203,872 665,945 5,394,454

Payments of claims 1,274,388 944,347 438,555 277,346 257,370 368,065 8,332 3,568,403

Liability recognized in the Balance Sheet 66,242 68,259 13,738 44,301 140,091 835,807 657,613 1,826,051



Attributable to the Group BB Seguridade -- -- -- -- -- -- -- 464,522


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n) Breakdown of Financial Assets by Maturity of Equity Investments Valued by Equity Method

R$ thousand

Sep 30, 2014 1 to 30 31 to 180181 to

360 More than 360


Value Curve



Federal Securities 5,460,810 7,273,325 4,640,167 33,376,639 50,750,941 51,663,443 (912,502)

National Treasury Bills 2,609,190 5,702,368 2,116,551 21,375,925 31,804,034 32,518,487 (714,453)

National Treasury Notes (NTN-B) 1,064,109 523,921 1,128,703 10,147,477 12,864,210 13,058,344 (194,134)

Financial Treasure Bills 13,829 902,376 1,315,418 1,615,913 3,847,536 3,848,354 (818)

Other Cash/ Accounts Payble/ Receive 866,854 (13) (51) 21,200 887,990 887,990 --


National Treasury Bills (NTN-C) 258,218 -- -- -- 258,218 258,218 --

National Treasury Bills (NTN-F) -- 112,250 30,614 101,145 244,009 247,106 (3,097)

Agrarian Debt Bonds 1,436 32,423 48,932 114,979 197,770 197,770 --

National Treasury Bills (NTN-O) 935 -- -- -- 935 935 --


Operations Compromised 31,614,760 -- -- -- 31,614,760 31,614,760 --

Financial Bills 26,221 3,065,258 2,288,090 9,380,139 14,759,708 14,757,354 2,354

Debentures 564 426,120 554,726 6,342,564 7,323,974 7,389,835 (65,861)

Shares 1,749,744 -- -- -- 1,749,744 1,759,314 (9,570)

Shares in Investment Funds Credit Rights -- 78,159 -- 857,543 935,702 1,071,682 (135,980)

Certificate of Deposits (CDB) 41,959 403,363 225,318 68,414 739,054 738,381 673

Other Cash/ Accounts Payble/ Receive (34,900) (422) (144) 333,282 297,816 250,856 46,960


Promissory Notes 46,389 -- 194,769 -- 241,158 241,158 --

Quotas in Investment Funds 31,573 -- -- -- 31,573 31,573 --

Receivables Certificate Real Estate (CRI) -- -- -- 1,423 1,423 1,423 --

Total 39,208,853 11,245,803 7,902,926 50,360,004 108,717,586 109,791,512 (1,073,926)

Attributable to the Group BB Seguridade 28,681,065 8,348,759 5,783,209 37,007,823 79,820,856 80,617,430 (796,574)

Attributable to other stockholders 10,527,788 2,897,044 2,119,717 13,352,181 28,896,730 29,174,082 (277,352)

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R$ thousand

Dec 31, 2013 1 to 30 31 to 180181 to

360 More than 360


Value Curve



Federal Securities 6,179,643 415,985 3,049,658 41,644,166 51,289,452 52,904,898 (1,615,446)

National Treasury Bills 2,598,042 351,482 914,974 22,934,281 26,798,779 27,752,681 (953,902)

National Treasury Notes (NTN-B) 2,027,767 -- 1,116,700 14,287,421 17,431,888 18,099,147 (667,259)

Financial Treasure Bills 849 63,720 1,010,425 4,054,956 5,129,950 5,125,615 4,335

National Treasury Notes (NTN-C) 821,603 -- -- -- 821,603 821,603 --


Other Cash/ Accounts Payble/ Receive 242,285 -- 9 21,705 263,999 263,999 --

Agrarian Debt Bonds 46 783 7,550 191,365 199,744 199,744 --

National Treasury Notes (NTN-F) 20,968 -- -- 134,614 155,582 154,202 1,380

Foreign Bonds -- -- -- 19,824 19,824 19,824 --


Other Cash/ Accounts Payble/ Receive 11,611,307 445,607 752,888 8,706,840 21,516,642 21,704,042 (187,400)

Debentures 82,256 459,718 53,117 6,745,433 7,340,524 7,392,141 (51,617)

Shares 1,944,641 -- -- -- 1,944,641 1,944,641 --

Certificate of Deposits (CDB) 109,275 1,089,508 280,913 174,457 1,654,153 1,653,398 755

Shares in Investment Funds Credit Rights 904,783 -- 23,432 184,959 1,113,174 1,143,191 (30,017)

Quotas in Investment Funds 530,527 46 (27,589) 2,138 505,122 505,122 --

Financial Bills -- -- 123,416 295,662 419,078 418,882 196


Promissory Notes -- 132,361 42,844 -- 175,205 175,205 --

Total 21,644,289 2,543,225 4,298,679 57,753,655 86,239,848 88,123,377 (1,883,529)

Attributable to the Group BB Seguridade 15,373,507 1,886,727 3,202,090 42,486,682 62,949,006 64,346,541 (1,397,535)

Attributable to other stockholders 6,270,782 656,498 1,096,589 15,266,973 23,290,842 23,776,836 (485,994)

R$ thousand

�Sep 30, 2014 1 to 30 31 to 180

181 to 360


Fair value Value






National Treasury Bills -- -- -- 223,810 223,810 225,968 (2,158)

Brazilian External Debt Bonds -- -- -- 147,404 147,404 151,512 (4,108)

National Treasury Bills (NTN-F) -- -- -- 108,893 108,893 111,087 (2,194)

National Treasury Bills (NTN-C) -- -- -- 34,535 34,535 33,969 566

Foreign Bonds -- 802 1,676 26,553 29,031 29,715 (684)

Private Securities 4,521 73,662 327,178 544,408 949,769 962,129 (12,360)

Debentures -- 7,559 11,177 370,934 389,670 391,579 (1,909)

Financial Bills -- 66,103 211,913 93,444 371,460 370,995 465

Other Cash/ Accounts Payble/ Receive -- -- -- 67,361 67,361 67,916 (555)

Receivables Certificate Real Estate (CRI) -- -- 38,134 12,669 50,803 50,757 46

Promissory Notes -- -- 41,828 -- 41,828 42,124 (296)

Certificate of Deposits (CDB) -- -- 24,126 -- 24,126 24,033 93

Shares in Listed Companies 4,521 -- -- -- 4,521 14,725 (10,204)

Total 4,521 834,321 697,838 3,331,143 4,867,823 4,909,559 (41,736)

Attributable to the Group BB Seguridade 927 202,872 324,278 1,104,891 1,632,968 1,647,429 (14,461)

Attributable to other stockholders 3,594 631,449 373,560 2,226,252 3,234,855 3,262,130 (27,275)

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R$ thousand

�Dec 31, 2013 1 to 30 31 to 180

181 to 360


Fair value Value






National Treasury Notes (NTN-F) -- -- -- 142,900 142,900 151,538 (8,638)

Brazilian External Debt Bonds -- -- -- 119,814 119,814 112,513 7,301

Foreign Bonds -- 2,810 2,287 26,456 31,553 30,632 921

Private Securities 14,070 52,204 1,747 671,226 739,247 731,321 7,926

Debentures -- 9,205 1,744 324,255 335,204 337,959 (2,755)

Financial bills -- 5,877 -- 246,789 252,666 252,000 666

Other Cash/ Accounts Payble/ Receive -- 37,122 3 62,486 99,611 99,646 (35)

Certificate of Deposits (CDB) -- -- -- 22,296 22,296 22,179 117

Bank Credit -- -- -- 15,400 15,400 15,342 58

Shares in Listed Companies 14,070 -- -- -- 14,070 4,195 9,875

Total 14,070 379,234 823,060 2,512,194 3,728,558 3,728,374 184

Attributable to the Group BB Seguridade 2,885 104,097 182,414 1,013,874 1,303,270 1,317,418 (14,148)

Attributable to other stockholders 11,185 275,137 640,646 1,498,320 2,425,288 2,410,956 14,332

R$ thousand

Sep 30, 2014 1 to 30 31 to 180 181 to 360More than

360Book value

Value Curve


Federal Securities 514,798 567,398 751,725 13,736,606 15,570,527 15,475,877

National Treasury Notes (NTN-B) -- 132,555 224,823 11,691,985 12,049,363 11,975,485


National Treasury Notes (NTN-F) -- 15,264 -- 538,824 554,088 553,651


Foreign Bonds -- -- -- 1,341 1,341 1,341

Private Securities 431,436 38,905 4,185 295,756 770,282 766,414

Certificate of Deposits (CDB) 431,436 38,905 4,185 227,405 701,931 698,233

Debentures -- -- -- 35,429 35,429 35,259

Eurobonds -- -- -- 32,922 32,922 32,922

Total 946,234 606,303 755,910 14,032,362 16,340,809 16,228,012



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R$ thousand

Dec 31, 2013 1 to 30 31 to 180 181 to 360 More than 360 Book valueValue

Curve


Federal Securities 771,929 195,313 1,289,334 13,955,809 16,212,385 17,598,204

National Treasury Notes (NTN-B) 152,018 -- 483,505 11,219,195 11,854,718 13,304,847


National Treasury Notes (NTN-F) 548,828 -- -- 921,231 1,470,059 1,507,562

Financial Treasure Bills -- -- -- 17,522 17,522 17,522


Foreign Bonds -- -- -- 1,354 1,354 1,354

Quotas in Investment Funds (117) -- -- -- (117) (117)

Private Securities 499,652 200,857 -- 314,046 1,014,555 1,015,164

Certificate of Deposits (CDB) 497,220 200,857 -- 240,752 938,829 938,468

Eurobonds -- -- -- 39,889 39,889 39,753

Debentures -- -- -- 33,405 33,405 34,511

Quotas in Investment Funds 2,432 -- -- -- 2,432 2,432

Total 1,271,581 396,170 1,289,334 14,269,855 17,226,940 18,613,368



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o) Fair Value of Equity Investments Valued by Equity Method

R$ thousand

Sep 30, 2014 Dec 31, 2013


Assets Designated at Fair Value Through Profit

Shares 1,818,771 -- 1,818,771 2,007,146 -- 2,007,146

Certificate of Deposits (CDB) -- 739,054 739,054 -- 1,654,152 1,654,152

Shares in Investment Funds 788,813 25,342 814,155 1,000,482 409,545 1,410,027

Shares in Investment Funds � DPVAT 646,239 -- 646,239 468,083 -- 468,083

Receivables Certificate Real Estate (CRI) -- 94,810 94,810 -- 97,594 97,594

Agreements DI Future (39,384) -- (39,384) (14,735) -- (14,735)

Bovespa Index Futures Contracts (1,692) -- (1,692) 382 -- 382

Foreign Government Bonds -- -- -- -- 19,824 19,824

Shares in Investment Funds Variable Income 191,623 -- 191,623 210,608 -- 210,608

Debentures -- 7,323,974 7,323,974 -- 7,340,523 7,340,523

Time Deposits Special Guarantees (DPGE) -- 71,066 71,066 -- 131,246 131,246

National Treasury Bills 28,715,788 3,088,246 31,804,034 24,669,882 2,128,891 26,798,773

Treasury Financial Bills 3,228,200 -- 3,228,200 4,115,046 -- 4,115,046

National Treasury Notes (NTN-B) 8,715,566 112,134 8,827,700 9,956,710 248,804 10,205,514

National Treasury Notes (NTN-C) 19,766 -- 19,766 19,516 -- 19,516

Mortgage (LH) -- 176,051 176,051 -- 176,592 176,592

Operation Compromised 258,218 31,626,879 31,885,097 -- 12,405,153 12,405,153

Agricultural Debt Securities 197,758 12 197,770 199,710 34 199,744

National Treasury Notes (NTN-F) 4,260,754 -- 4,260,754 7,362,440 -- 7,362,440

National Treasury Notes (NTN-O) 935 -- 935 -- -- --

Other DPGE � Time Deposits Special Guarantees -- -- -- -- 63,127 63,127

Promissory Notes -- 241,158 241,158 -- 175,205 175,205

Financial Bills -- 15,379,044 15,379,044 -- 10,924,263 10,924,263

Shares in Investment Funds Credit rights -- 153,119 153,119 -- 141,498 141,498

Other box / Payables / Receive 886,936 (1,596) 885,340 258,327 67,395 325,722

Total 49,688,291 59,029,293 108,717,584 50,253,597 35,983,846 86,237,443



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92

R$ thousand

Sep 30, 2014 Dec 31, 2013



National Treasury Notes (NTN-B) 402,037 -- 402,037 461,935 -- 461,935

National Treasury Notes (NTN-F) 108,893 -- 108,893 142,900 -- 142,900

National Treasury Notes (NTN-C) 34,535 -- 34,535 -- -- --

Debentures -- 389,671 389,671 -- 335,204 335,204


Financial Treasure Bills 2,980,083 -- 2,980,083 2,233,110 -- 2,233,110

Financial Bills (LF) -- 371,461 371,461 -- 252,666 252,666

Other DPGE � Time Deposits Special Guarantees -- 67,361 67,361 80 99,531 99,611

Brazilian Foreign Debt Securities -- 147,404 147,404 -- 119,814 119,814

ADRS 4,521 -- 4,521 14,070 -- 14,070

Promissory Notes -- 41,828 41,828 -- -- --

Fixed-income Securities Abroad 29,030 -- 29,030 -- 31,553 31,553

National Treasury Bills 216,071 -- 216,071 -- -- --

Total 3,775,170 1,092,654 4,867,824 2,852,095 876,464 3,728,558

Attributable to the Group BB Seguridade 983,689 649,279 1,632,968 790,295 512,976 1,303,270


R$ thousand

Sep 30, 2014 Dec 31, 2013




Debentures -- 35,429 35,429 -- 33,405 33,405

National Treasury Bills 223,046 2,726,397 2,949,443 254,304 2,600,637 2,854,942

National Treasury Notes (NTN-B) 5,272,761 1,150,521 6,423,282 4,976,717 1,606,394 6,583,110

National Treasury Notes (NTN-C) 5,223,495 -- 5,223,495 5,222,965 -- 5,222,965

National Treasury Notes (NTN-F) 972,964 -- 972,964 1,550,855 -- 1,550,855

Financial Treasury Bills -- -- -- 17,522 -- 17,522

Shares in Investment Funds -- -- -- 2,432 -- 2,432

Fixed-income Securities Abroad 1,341 -- 1,341 1,354 -- 1,354

Eurobonds -- 32,922 32,922 -- 39,889 39,889

Total 11,693,607 4,647,201 16,340,808 12,026,150 5,219,154 17,245,304



p) Liability Adequacy Test

As defined in IFRS 4, the Group shall perform the Liability Adequacy Test for all contracts that fulfill the definition of an insurance contract, which are effective on the execution date, in order to determine the sufficiency or insufficiency of the balances recorded in the balance sheet.

This test corresponds to the comparison of the net book value of technical and mathematical provisions, called Net Carrying Amount (NCA), net of deferred acquisition costs and intangible assets related, to the actuarial calculation of future cash flows� current estimates of insurance and pension plan contracts.

If there is a deficiency in this comparison, i.e., the value of future cash flows exceeds the NCA, these deficiencies will be recognized by a provision.

The assumptions used by the insurance subsidiaries and joint ventures are set out below:

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a) discount rates used to discount the cash flows: risk-free interest rate, obtained from the extrapolated yield curve of government bonds, considered risk-free credit, available in the Brazilian financial market,

b) claims, administrative and operational costs, deferred acquisition costs, cancellation, future contributions, partial redemptions and conversions to income based on historical behavior, and

c) mortality and survival, following the biometric tables built considering the experience in the Brazilian insurance market.

On Jun 30, 2014, the Liability Adequacy Test did not indicate adjustments in technical provisions.

11 � ��

R$ thousand

Parent Consolidated

Jun 30, 2014(1) Dec 31, 2013(2) Jun 30, 2014 Dec 31, 2013(3)

Dividends receivable 1,192,131 1,077,382 -- 35,356

(1) Refers to dividends receivable coming from BB Seguros Participações S.A (R$ 593,317 thousand) and BB Cor Participações S.A. (R$ 598,814 thousand).

(2) On Dec 31, 2013, refers to dividends receivable coming from BB Seguros Participações S.A (R$ 577,175 thousand) and BB Cor Participações S.A. (R$ 500,207 thousand).

(3) On Dec 31, 2013, refers to dividends receivable coming from BrasilCap Capitalização S.A. (R$ 22,033 thousand) BrasilPrev Seguros e Previdência S.A. (R$ 11,269 thousand) and IRB Brasil (R$ 2,054 thousand).

12 � TAXES

a) Current and Deferred Tax Assets

R$ thousand

�� Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Current tax assets ��

Deferred tax assets -- -- ��

Total ��

b) Deferred Tax Assets

R$ thousand

�� Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Deferred tax assets

Amortization of goodwill -- -- ��

Liabilities provision -- -- ��

Negative mark to market of securities -- -- -- ��

Others provisions -- -- � � ��

Total -- -- ��

Off Balance Sheet

R$ thousand

�� Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Deferred tax assets

Temporary differences -- -- ��

Tax losses/negative bases ��

Total ��

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c) Realization Expectative

R$ thousand

Nominal Value Present Value

In 2014 -- --

In 2015 -- --

In 2016 -- --

In 2017 1,541 1,090

In 2018 1,839 1,233

From 2019 4,076 2,136

Total 7,456 4,459

Expected realization of deferred tax assets (tax credits), referring to the onslaughts BB and BB Insurance Brokerage, They support in technical study prepared on 06/30/2014 and is calculated based on the average funding rate present value.

During the year 2014, there was the realization of tax credits in the amount of R$ 445 thousand, surpassing the forecast for use in the exercise.

During the 3rd quarter of 2014, there was no realization of tax credits.

d) Current Tax Liabilities

R$ thousand

�� Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Current tax liabilities

Income tax -- -- ��

Social contribution tax -- -- ��

COFINS � -- ��

PASEP � -- ��

ISS -- -- � � ��

Total � -- ��

e) Deferred Tax Liabilities

R$ thousand

�� Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Deferred tax liabilities

From partnership with MAPFRE -- -- ��

Arising from amortization of Brasilcap�s goodwill -- -- ��

Bargain purchase -- -- ��

Other timing differences -- -- ��

Total -- -- ��

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f) Reconciliation of Income Tax and Social Contribution Expenses

R$ thousand

�� Consolidated

3rd Quarter, 2014 3rd Quarter, 2013 3rd Quarter, 2014 3rd Quarter, 2013

Profit before tax and profit sharing 822,279 �� 987,897 ��



Other amounts (2,170) �� (2,553) ��


R$ thousand

�� Consolidated

! ��"��!!� � ! ��"��!!� ! ��"��!!� � ! ��"��!!�

Profit before tax and profit sharing 2,316,426 �� 2,795,933 ��



Other amounts (8,107) �� (9,081) ��


g) Tax Expenses

�� Consolidated

3rd Quarter, 2014

3rd Quarter, 2013

3rd Quarter, 2014

3rd Quarter, 2013

Cofins (8) -- (23.861) (17.505)

ISSQN -- -- (13.583) ��

PIS/Pasep (2) -- (3.878) ��

IOF (58) �� (247) ��

Other (4) �� (15) ��

Total (72) �� (41.584) ! ��

�� Consolidated

01.01 to 09.30.2014

01.01 to 09.30.2013

01.01 to 09.30.2014

01.01 to 09.30.2013

Cofins (21) -- (69.822) (50.353)

ISSQN -- -- (41.094) ��

PIS/Pasep (5) -- (11.347) ��

IOF (1.306) �� (1.517) ��

Other (93) �� (272) ��

Total (1.425) �� (124.052) ��!��

h) Law n° 12,973 (Conversion of the Provisory Measu re n° 627/2013)

The Law n° 12,973, issued on May 13, 2014 (Law 12,9 73/2014), converted from the Provisory Measure n° 62 7/2013, alters the federal tax legislation upon IRPJ, CSLL, PIS/Pasep and Cofins, in particular with the purpose of:

i) revoking the Transition Tax Regime (Regime Tributário de Transição � RTT); ii) altering the regulation of taxes over profit on abroad operations; and iii) changing the taxes aspects of the accounting criteria and procedures determined by the laws 11,638/2007 e

11,941/2009, which addressed the convergence between the Brazilian and international accounting standards.

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For a more conclusive analysis, the BB Seguridade will wait for the Brazil�s Federal Revenue (Receita Federal do Brasil � RFB) regulation, in the terms predicted by the Law 12,973/2014. Nevertheless, according to preliminary studies and based on the text of the mentioned Law, meaningful impacts on the Financial Statements of BB Seguridade are not expected.

13 � COMMISSIONS RECEIVABLE

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

BB Mapfre SH1 -- -- 476,124 433,261

Mapfre BB SH2 -- -- 91,970 75,955

Total -- -- 568,094 509,216

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14 � OTHER ASSETS

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31,2013 Sep 30, 2014 Dec 31,2013

Judicial deposits -- -- 146,475 136,774

Other 73 -- 332 255

Total 73 -- 146,807 137,029

15 � DIVIDENDS PAYABLE

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Dividends payable (1) -- 344,719 -- 344,719

(1) The balance as is related to minimum mandatory dividends payable.

16 � PROVISIONS AND CONTINGENT LIABILITIES

Tax Lawsuits

Tax lawsuits derived mainly from assessments of municipal tax and refer to ISSQN (Service Tax).

Civil Lawsuits

The most significant civil lawsuits are the indemnity claims (material damage, moral damage etc.), disputes regarding the payment of claims and applicability of the consumer�s protection code.

a) Provision

In accordance with IAS 37, the BB Seguridade recognizes provisions for civil and tax lawsuits classified as �probable�.

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Provisions for civil and tax lawsuits classified as probable

R$ thousand

Parent Consolidated (1)

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Tax lawsuits


Addition -- -- 170 1,522

Reversal of the provision -- -- -- --


Civil lawsuits


Addition -- -- 7,249 3,179

Reversal of the provision -- -- (1,864) (1,782)


Total -- -- 14,192 8,637

(1) Related, mainly, to contingents recorded in BB Corretora.

b) Contingent Liabilities

The tax and civil lawsuits classified as �possible� are not recorded in the balance sheet but disclosed based on IAS 37.

Balances of contingent liabilities classified as possible

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Labor lawsuits -- -- -- 37

Tax lawsuits -- -- 876 811


Total -- -- 6,580 7,094

BB Seguridade has no contingent liabilities of associates shared jointly with other investors and is not jointly liable for all or part of the liabilities of its affiliates.

c) Deposits in Guarantee of Funds

Balances of escrow deposits formed for provisions and contingent liabilities

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Tax lawsuits (1) -- -- 139,340 130,446


Total -- -- 146,474 136,774

(1) Refers to tax lawsuit aiming to annul the administrative decision that not endorsed statements to offset negative average of IRPJ with owned taxes. The value of this deposit is R$ 107,751 thousand (R$ 101,941 thousand as of December 31, 2013), related to BB Corretora, updated by SELIC index.

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17 � UNEARNED COMMISSIONS

R$ thousand

�� Consolidated

��#�� Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

$��%�&"''())("�)

BB Mapfre SH1 -- -- � ��

Mapfre BB SH2 -- -- ��

Total -- -- ��

18 � OTHER LIABILITIES

R$ thousand

Parent Consolidated

Sep 30, 2014 Dec 31, 2013 Sep 30, 2014 Dec 31, 2013

Payable to related companies ��

�� -- -- ��

Other � � ��

Total ��

19 � EQUITY

a) Capital

The capital of the Group BB Seguridade amounted to R$ 5,646,768 thousand as of Sep 30, 2014 and Dec 31, 2013 and it is divided into 2,000,000,000 (two billion) shares as of Sep 30, 2014 and Dec 31, 2013. The shareholders� equity amounted R$ 7,252,728 thousand (R$ 6,941,273 thousand as of Dec 31, 2013), corresponding a book value per share of R$ 3.62636 (R$ 3.47064 per share as of Dec 31, 2013).

The BB Seguridade was created through capital subscribed of R$ 15,000 thousand and 10% paid in capital (R$ 1,500 thousand). The capital increases made by Banco do Brasil S.A., were made by a transfer of investment in BB Cor Participações S.A. and BB Seguros Participações S.A., amounting to R$ 5,631,768 thousand, and were performed on Dec 31, 2012. As of January 2013, there was a paid in capital of R$ 13,500 thousand.

b) Profit Reserves

R$ thousand


��#�� &� ��

��"�(��)��*�) ��

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�� #� ��

Additional proposed dividend -- ��

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c) Dividends

R$ thousand


! ��"��!!� � ! ��"��!!�

Calculation Basis: 2,241,719 1,519,027

Net Income 2,316,426 1,570,142

Legal reserve in the period (74,707) (51,115)

Minimum mandatory dividend 354,860 242,799

Additional dividend 840,457 575,049

Statutory reserve 224,123 153,347

Balance of net income after allocation 822,279 547,832

The dividends declared in the 1st half of 2014 were approved by the Board of Directors on August 08, 2014 and paid on August 29, 2014 restated by the Selic rate.

d) Other Accumulated Comprehensive Income

The other accumulated comprehensive income mainly derived from gains and losses related to fair value adjustments, net of tax effects, of available for sale financial assets, using in counterpart the appropriate asset account.

e) Stockholdings (number of stocks)

��#�� Dec 31, 2013

Stockholders Stocks % Total Stocks % Total

Banco do Brasil 1,325,000,000 66.25 1,325,000,000 66.25

Other stockholders 674,990,713 33.75 675,000,000 33.75

Treasury shares 9,287 -- -- --

Total 2,000,000,000 100.00 2,000,000,000 100.00

Locals 1,532,582,699 76.63 1,585,406,527 79.27

Foreign 467,417,301 23.37 414,593,473 20.73

20 � FINANCIAL INCOME

R$ thousand

�� Consolidated

3rd Quarter/2014 3rd Quarter/2013 3rd Quarter/2014 3rd Quarter/2013

$�� !��#��%��


Valuation of exclusive fund shares -- -- � � ��



Total ��

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R$ thousand

�� Consolidated

01.01 to 09.30.2014 01.01 to 09.30.2013 01.01 to 09.30.2014 01.01 to 09.30.2013

$�� !��#��%��


Valuation of exclusive fund shares -- -- ��



Total ��

21 � PERSONNEL EXPENSES

a) Personnel Expenses

R$ thousand

�� Consolidated

�%�+,��-� � �%�+,��-� �%�+,��-� � �%�+,��-�

� ! ��

�� !��

$��

&��'��

."��/ ��

R$ thousand

�� Consolidated

! ��"��!!� � ! ��"��!!� ! ��"��!!� � ! ��"��!!�

� ! ��

�� !��

$��

&��'��

."��/ � ��

b) Treasury shares

The Variable Wage Program Board of BB Seguridade for the year 2013 determined that, of the total amount allocated to the payment of variable compensation, 50% will be made in shares of BB Seguridade (BBSE3). From the total paid in shares, 20% will be immediately transferred to the beneficiary ownership and 80% will be deferred for a period of four years.

In May 2014, it was determined that the variable wage for the achievements in 2013 that the directors would have the right to 11,600 shares of the BB Seguridade these shares were acquired and all placed in the treasury, as defined in the Program. In June and July 2014 were transferred to the members of the Board 2,313 shares, remaining in treasury 9,287 shares.

c) Share-Based Payment

In March 2013, BB Seguridade approved the payment of variable wage to the members of the Executive Board in the form of stocks or share-based instruments. They will receive an annual bonus related to 2013 and according to the global amount approved at the Annual Meeting of Stockholders on March 28, 2013, an amount between six and twelve monthly salaries, based on the achievement of the Return on Equity � ROE � target.

For the financial year 2013, in accordance with the global amount approved by Annual General Meeting of March 28, 2013, the BB Seguridade accrued R$ 1,849 thousand, which is equivalent to 12 fees per beneficiary, for the payment of variable remuneration to the members of the Executive Board.

Based on the results of the 1st half of 2013, on October 22, 2013, an advance of 2.5 fees was carried out for each member of the Executive Board. On January 28, 2014, the Brazilian Securities and Exchange Commission (CVM)

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authorized BB Seguridade to make the private trading of its own shares, in order to fund, through these shares, part of the payment of the variable remuneration compensation of its Executive Board members.

On April 3, 2014, according to the total amount approved by Annual General Meeting on March 28, 2013, the BB Seguridade made the second cash payment of the variable remuneration of Executive Board.

To continue the variable remuneration policy for the year 2013, the BB Seguridade acquired 11,600 shares through direct acquisition of treasury shares of BB Seguridade. In 2014, 2,313 shares were transferred to members of the Executive Board and blocked for movement. Thus, 9,287 treasury shares were left for subsequent transfers, as shown on the following timeline tables:

2013 program

Estimated timeline for transfer �,'0��"��)�"&1) Scheduled date

$��%�� (��

��%�� (��

)*��%�� (��

$��*�%�� (��

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The costs per share were as follows:

Date of purchase �,'0��"��)�"&1) �&2,(��%�

(��,�(�)Cost of purchase

in R$

+ ��

+ ��

22 � ADMINISTRATIVE EXPENSES

R$ thousand

�� Consolidated

�%�+,��-� � �%�+,��-� �%�+,��-� � �%�+,��-�



Data processing -- -- (8,482) (16,798)

Condominium fee (664) -- (664) --

Communication expenses (284) -- (459) (129)



Other (398) (164) (472) (313)

Total (1,474) (164) (59,682) (65,773)

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R$ thousand

�� Consolidated

! ��"��!!� � ! ��"��!!� ! ��"��!!� � ! ��"��!!�



Data processing (7) -- (36,083) (51,788)

Condominium fee (2,919) -- (2,919) --

Communication expenses (1,370) -- (1,888) (602)



Publications (357) -- (357) (290)

Other (2,068) (169) (2,458) (602)

Total (7,950) (169) (210,250) (200,553)

23 � OTHER OPERATING INCOME/EXPENSE

R$ thousand

�� Consolidated

�%�+,��-� � �%�+,��-� �%�+,��-� � �%�+,��-�


Restatement of liabilities (21,791) �� (54,446) ��

(Recording)/Reversal of provisions for labor, tax and civil lawsuits -- -- (1,953) (1,079)�

,-%��'�� -- -- -- ��

Other 200 � 615 ��

Total 155 �� (22,915) (22,746)

R$ thousand

�� Consolidated

! ��"��!!� �

! ��"��!!�

! ��"��!!� �

! ��"��!!�


Restatement of liabilities (39,936) �� (94,739) � ��

(Recording)/Reversal of provisions for labor, tax and civil lawsuits -- -- (5,555) ��

,-%��'�� -- -- -- ��

Other 354 � 1,259 ��

Total (2,643)� (6,127)� (43,490) (51,670)�

24 � COMMISSIONS INCOME

R$ thousand

�� Consolidated

�%�+,��-� � �%�+,��-� �%�+,��-� � �%�+,��-�

&&�+ %'��.� -- -- 316,973 ��

Brasilprev -- -- 86,513 ��

Mapfre BB SH2 -- -- 83,486 ��

Brasilcap -- -- 73,862 ��


Total -- -- 562,559 ��

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R$ thousand

�� Consolidated

! ��"��!!� � ! ��"��!!� ! ��"��!!� � ! ��"��!!�

&&�+ %'��.� -- -- 890,201 ��

Brasilprev -- -- 269,908 ��

Mapfre BB SH2 -- -- 244,811 ��

Brasilcap -- -- 250,959 ��


Provision of services for incentives to products sale -- -- -- ��

Total -- -- 1,660,311 ��

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25 � CURRENTS AND NON-CURRENTS ASSETS AND LIABILITIES

R$ thousand

Sep 30, 2014(1)


Assets


Financial assets at fair value through profit or loss 574 -- 574






Other assets 182 146,625 146,807

Total 2,308,760 6,672,570 8,981,330

Liabilities






Equity 7,252,728 -- 7,252,728

Total 8,072,388 908,942 8,981,330

(1) Consolidated position. R$ thousand

Dec 31, 2013(1)


Assets


Financial assets at fair value through profit or loss 2,966 -- 2,966



Dividends receivable 35,356 -- 35,356




Other assets 122 136,907 137,029

Total 2,421,144 6,364,334 8,785,478

Liabilities

Dividends payable 344,719 -- 344,719






Equity -- 6,941,273 6,941,273

Total 1,074,360 7,711,118 8,785,478

(1) Consolidated position.

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26 � RELATED PARTY TRANSACTIONS

The costs of benefits granted to fiscal council of the Group totaled R$ 209 thousand in 3rd Quarter 2014 (R$ 329 thousand in 3rd Quarter 2013) and R$ 787 thousand in 01.01 to 09.30.2014 (R$ 811 thousand in 01.01 to 09.30.2014).

The Group has banking transactions with its Controller, Banco do Brasil S.A., such as non-interest bearing current accounts and short-term investments. There are also service agreements, guarantee agreements and refunds of direct and indirect costs.

These transactions are conducted under normal market conditions, mainly under the terms and conditions for comparable transactions, including interest rates and collateral. These transactions do not involve unusual payment risks.

The Group does not grant loans to its Executive Committee or Fiscal Council members.

The tables below show the main transactions between the Group and related parties.

a) Summary of Related party Transactions

R$ thousand

Sep 30, 2014


Assets



Liabilities



R$ thousand

3rd Quarter/2014

Parent(1) Subsidiaries(2) Associates(3) Other related parties (4 Total

Income







R$ thousand

01.01 to 09.30.2014


Income







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R$ thousand

Dec 31, 2013


Assets



Dividends to be received -- 1,077,382 35,356 1,112,738

Liabilities

Dividends payable 228,376 -- -- 228,376



R$ thousand

3rd Quarter/2013


Income







R$ thousand

01.01 to 09.30.2013


Income







(1) Banco do Brasil S.A.

(2) BB Seguros S.A, BB Corretora, BB Cor S.A. e BB Capitalização S.A. on the financial position.

(3) Related companies BB MAPFRE SH1 Participações S.A. and its subsidiaries, MAPFRE BB SH2 Participações S.A and its subsidiaries, Brasilprev Seguros e Previdência S.A. and Brasilcap Capitalização S.A and IRB.

(4) This includes administration services of financial investments portfolio by the BB DTVM to associated companies of the Group BB Seguridade.

(5) Refers to expenses as sharing contract customer data, use of staff, distribution network and resource materials technological and administrative, between the Bank, BB Corretora and BB Seguros.

b) Compensation Paid to Employees and Directors

On March 15, 2013, an agreement of assignment of employees of Banco do Brasil S.A. to BB Seguridade, for the office of Director levels, Management and other positions of trust was signed. The assignment of employees is given in the form of availability, without charge. The Banco do Brasil S.A. continues to process the payroll of the transfered employees, receiving a monthly repayment of all current costs from BB Seguridade.

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107

BB SEGURIDADE PARTICIPAÇÕES S.A.

MEMBERS OF THE MANAGEMENT BODIES

DIRECTOR-PRESIDENT


DIRECTORS

Leonardo Giuberti Mattedi

Ângela Beatriz de Assis

Werner Romera Suffert

BOARD OF DIRECTORS

Alexandre Corrêa Abreu (President)

Ivan de Souza Monteiro (Vice-President)

Isabel da Silva Ramos


Francisca Lucileide de Carvalho

José Henrique Paim Fernandes

FISCAL COUNCIL

Pablo Fonseca Pereira dos Santos

Antonio Pedro da Silva Machado

Giorgio Bampi

ACCOUNTING DEPT.

Eduardo Cesar Pasa

General Accountant

Accountant CRC-DF 017.601/O-5

CPF 541.035.920-87

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ITR � Comments on Estimates (Guidance)

2014 Guidance

The following table presents the monitoring of the 2014 Guidance (estimates X annualized observed values), calculated based on the BB Seguridade financial statements for the first nine months of 2014. The ratios were measured upon the following methodologies:

The ROAE is calculated by the annualized percentage observed in the period, considering the division of the adjusted net income by average equity of the period, both calculated under IFRS, as disclosed by the Company in its MD&A report.

The average equity is calculated based on:

� Initial shareholders� equity: R$6,125 million, calculated as December/2013 equity, deducted from the dividends paid in February of 2014 (not considering interest);

� End of the period shareholders� equity: Shareholders� equity deducted from dividends to be paid.

Premiums written and collection are calculated upon the percentage growth, observed in comparison with same period of prior year.

Ratio9M14

PerfomancePrevious

Estimates - %Revised

Range - %

BB Seguridade - Adjusted ROAE 51.3 44 - 49 Maintained

Premiums Written Growth - Life, Rural and Housing - BB Mapfre SH1 16.7 24 - 32 Maintained


Contribution Growth - Pension Plans 38.0 33 - 47 Maintained


�

As appointed in the table above, deviations were observed in the indicators "Adjusted ROAE", "Written Premiums � Life, Rural and Housing", "Written Premiums � P&C" and "Collection of Premiums Bonds". The first exceeded the Guidance in the first nine months of the year, while the others performed below estimates. The reasons for the deviations are as follows:

a) Adjusted ROAE: BB Seguridade net income presented higher than expected performance, mainly due to the financial results of affiliates, as a result of a better than predicted behavior of the future yield curve in the first nine months of 2014, which generated a positive mark to market effect in fixed income and inflation-linked securities.

b) Life, Rural and Housing - premiums written growth: The deviation was due to lower than expected sales in the segments of life and credit life.

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c) P & C � premiums written growth: The deviation was due to increased competition, from the first half of 2014, primarily impacting the sales of auto insurance in the bancassurance channel. �

�

d) Premium Bonds Collection growth: Result was due to lower than expected sales, and changes in the mix, with an increased focus on �monthly payment� plans. These bonds historically provide higher recurrence to revenues, but present a lower average ticket.

The Company decided to keep the Guidance unchanged for growth in the segment of life, housing and rural (BB Mapfre SH1), due to a better performance expected in the last quarter of the year.

The Company expects an acceleration of sales in the segments of life, housing and rural (BB Mapfre SH1) in the last quarter of 2014, why keep the range of expected growth in its guidance for 2014.

Considering the results observed in the first nine months of the year, the 2014 Guidance was revised in items "Growth of Premiums Written - Mapfre BB SH2 � P&C Segments" and "Growing Collection of Premium Bond

KPDS 100074

BB Seguridade Participações S.A.

Interim Financial Information

September 30, 2014 (a free translation of the original report in Portuguese on individual

interim financial information prepared in accordance with CPC

21(R1) - Interim Financial Reporting and on consolidated interim

financial information prepared in accordance with CPC 21 (R1)

and IAS 34 - Interim Financial Reporting issued by the

International Accounting Standards Board - IASB)

2

Report on review of interim financial information

To

The Board of Directors, Shareholders and Management

BB Seguridade e Participações S.A.

Brasília - DF

Introduction

We have reviewed the accompanying individual and consolidated interim financial information

of BB Seguridade e Participações S.A. (�Company�), for the period ended September 30, 2014 ,

which comprises the balance sheet as of September 30, 2014 and the related statements of

income and the statements of comprehensive income, for the quarter and the period of nine

months then ended, the statement of changes in equity and the statements of cash flows for the

period of nine months then ended, including the summary of significant accounting practices

and others explanatory notes.

The Company´s Management is responsible for the preparation of the individual interim

financial information in accordance with Accounting Pronouncement CPC 21 (R1) - Interim

Financial Reporting and the consolidated interim financial information in accordance with CPC

21 (R1) and IAS 34 - Interim Financial Reporting , issued by the International Accounting

Standards Board - IASB. Our responsibility is to express a conclusion on this interim financial

information based on our review.

Scope of the review

We conducted our review in accordance with Brazilian and international standards on review of

interim financial information (NBC TR 2410 and ISRE 2410 Review of Interim Financial

Information Performed by the Independent Auditor of the Entity). A review of interim financial

information consists of making inquiries, primarily of persons responsible for financial and

accounting matters, and applying analytical and other review procedures. A review is

substantially less in scope than an audit conducted in accordance with standards on auditing and

consequently does not enable us to obtain assurance that we would become aware of all

significant matters that might be identified in an audit. Accordingly, we do not express an audit

opinion.

Conclusion on the individual interim financial information


accompanying individual interim information referred above has not been prepared, in all

material respects, in accordance with CPC 21 (R1) applicable to the preparation of individual

interim financial information.

3

Conclusion on the consolidated interim financial information


accompanying consolidated interim information referred above has not been prepared, in all

material respects, in accordance with CPC 21 (R1) and IAS 34 applicable to the preparation of

consolidated interim financial information.

Other matters

Interim Statement of Value Added

We have also reviewed the individual and consolidated interim statement of value added

(�DVA�), for the period of nine months ended September 30, 2014, prepared under the

responsibility of the Company's Management, the presentation of which is required by standards

issued by the Brazilian Securities and Exchange Commission (CVM), and as supplemental

information under IFRS, which does not require the presentation of a DVA. These statements

were subject to the same review procedures described above, and based on our review, we are

not aware of any fact that could lead us to believe that they have not been prepared, in all

material respects, consistently with individual and consolidated interim financial information

taken as a whole.

Review of values presented for comparative purposes

The accompanying individual and consolidated interim financial information for the year ended

December 31, 2013 and the quarter and the period of nine months ended September, 30 2013,

presented for comparative purposes, were previously audited and reviewed, respectively, by

other independent auditors who issued their reports dated on February 7, 2014 and November 8,

2013, respectively, which did not contain any modification.

Brasília, November 3, 2014

KPMG Auditores Independentes

CRC SP-014428/O-6 F-DF

Original report in Portuguese signed by

Carlos Massao Takauthi

Contador CRC 1SP206103/O-4

Documents

MD&A 3Q14 - FS · ˇ ˇˆ 4 56ˆ˙1˙J˚ 0 3 1 = K9H 9' =:ˆ Jˇ ˘ + Shareholders Shares Share % Banco do Brasil 1 1,325,000,000 66.25