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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.
Adjusted ROAE 6.2 6.5 9.8 3.6 p.p. 3.3 p.p. 7.6 9.3 1.7 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.
Adjusted ROAE 58.4 54.5 58.7 0.2 p.p. 4.2 p.p. 49.7 50.1 0.5 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
Quarterly F lo w C hg. % 9 M o nths F lo w
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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
Quarterly F lo w
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adjusted
Operat ing revenues 1,116,393 - 1,116,393
Income from brokerage 609,849 - 609,849
Equity income 506,544 - 506,544
Insurance life, mortgage life and rural 252,659 - 252,659
Insurance auto and property & casualty 23,206 - 23,206
Pension plans 124,771 - 124,771
Premium bonds 59,538 - 59,538
Reinsurance 46,370 - 46,370
Other inco me (expenses) (90,087) - (90,087)
Interest revenue 39,908 - 39,908
Personnel expenses (10,739) - (10,739)
Administrative expenses (73,463) - (73,463)
Other revenues/expenses (45,793) - (45,793)
Earnings befo re taxes 1,026,306 - 1,026,306
Taxes (180,882) - (180,882)
N et inco me 845,424 - 845,424
Quarterly F lo w
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R $ tho usand 3Q13 A djustments3Q13
adjusted
Operat ing revenues 755,338 - 755,338
Income from brokerage 425,497 - 425,497
Equity income 329,841 - 329,841
Insurance life, mortgage life and rural 165,756 - 165,756
Insurance auto and property & casualty 19,594 - 19,594
Pension plans 114,931 - 114,931
Premium bonds 17,764 - 17,764
Reinsurance 11,796 - 11,796
Other inco me (expenses) (90,489) - (90,489)
Interest revenue 35,682 - 35,682
Personnel expenses (6,636) - (6,636)
Administrative expenses (65,437) - (65,437)
Other revenues/expenses (54,098) - (54,098)
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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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
Repo transactions 33,448 37,635 48,013 43.5 27.6 82,454 122,456 48.5
Financial assets designated at fair value
through P /L25 76 59 136.0 (22.4) 35 135 285.7
Other interest income 2,209 2,197 2,398 8.6 9.1 8,097 4,795 (40.8)
Interest revenue 35,682 39,908 50,470 41.4 26.5 90,586 127,386 40.6
Quarterly F lo w C hg. % 9 M o nths F lo w
C hg. %
R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
Insurance 16,561 18,348 17,286 4.4 (5.8) 44,322 48,735 10.0
Brokerage 19,121 21,560 33,184 73.5 53.9 46,264 78,651 70.0
Interest revenue 35,682 39,908 50,470 41.4 26.5 90,586 127,386 40.6
Quarterly F lo w C hg. % 9 M o nths F lo w
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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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
Quarterly F lo w C hg. % 9 M o nths F lo w
C hg. %
R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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
Quarterly F lo w C hg. % 9 M o nths F lo w
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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
C hg. %
R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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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R $ tho usand Sep/ 14 Sep/ 13 Jun/ 14 Sep/ 14
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
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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
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M apfre Seguros Gerais S.A . Insurance
M apfre Affinity Seguradora S.A. Insurance
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P ensio n P lans
B rasilprev Seguro s e
P revidênciaInsurance/ P ensio n P lans (2) 75.0 948,878 1,124,995 1,110,795
H ealth
B rasildental Operado ra de
P lano s Odo nto ló gico s S.AH ealth (2) 75.0 - 3,749 2,584
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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R $ tho usand Sep/ 14 Sep/ 13 Jun/ 14 Sep/ 14
Insurance bro kerage
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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C apital
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R eserve
Legal and
statuto ry
reserves
T reasury
Shares
R etained
earnings
( lo sses)
A ccumulated
o ther
co mprehensive
inco me T o tal
B alance in D ecember 31, 2012 5.633 .268 - - - - 5.106 5.638.374
Paid-in Capital 13.500 - - - - - 13.500
Legal and statuto ry reserves - - 204.462 - (204.462) - -
Dividends - - - - (817.848) - (817.848)
Accumulated o ther comprehensive income - - - - - (14.589) (14.589)
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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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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
Other operating income (expenses) (74,083) (62,298) (83,249) 12.4 33.6 (189,139) (225,897) 19.4
Underwrit ing result 250,335 398,454 432,292 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
Quarterly F lo w C hg. % 9 M o nths F lo w
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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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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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
Quarterly F lo w C hg. % 9 M o nths F lo w
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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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
Quarterly F lo w C hg. % 9 M o nths F lo w
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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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
Quarterly F lo w C hg. % 9 M o nths F lo w
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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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 - - - - -
Bancassurance Channel (272,069) (332,929) (351,424) 29.2 5.6 (760,740) (1,043,258) 37.1
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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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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
Other (1,007) (968) (795) (21.1) (17.9) (2,708) (3,132) 15.6
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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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)
Comisssion ratio 20.1 11.3 9.4 (10.7) (1.9) 12.9 10.5 (2.4)
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
Comisssion ratio 2.3 1.5 1.4 (0.8) (0.1) 1.7 1.5 (0.2)
Quarterly F lo w A bs. C hg. (p.p.) 9 M o nths F lo w
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B ancassurance C hannel
Loss ratio 29.7 29.0 27.8 (1.9) (1.2) 30.2 30.1 (0.1)
Comisssion ratio 28.7 28.1 27.6 (1.0) (0.5) 28.7 28.2 (0.5)
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)
Quarterly F lo w A bs. C hg. (p.p.) 9 M o nths F lo w
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R $ tho usand Sep/ 13 Jun/ 14 Sep/ 14 On Sep/ 13 On Jun/ 14
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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R $ tho usand Sep/ 13 Jun/ 14 Sep/ 14 On Sep/ 13 On Jun/ 14
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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R $ tho usand Sep/ 13 Jun/ 14 Sep/ 14 On Sep/ 13 On Jun/ 14
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)
Additional Capital for Operating Risk 14,022 20,286 23,774 69.6 17.2
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
Additional Capital for Credit Risk 207,015 240,064 225,117 8.7 (6.2)
Additional Capital for Operating Risk 16,478 22,723 26,211 59.1 15.4
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
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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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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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
Earnings befo re taxes and pro f it
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
Quarterly F lo w C hg. % 9 M o nths F lo w
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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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
Quarterly F lo w C hg. % 9 M o nths F lo w
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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
Q ua rt e rly F lo w A bs . C hg. ( p .p .) 9 M o nt hs F lo w
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C hg. %
R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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
Quarterly F lo w C hg. % 9 M o nths F lo w
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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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
Bancassurance Channel 593,143 630,449 726,832 22.5 15.3 1,787,447 1,932,367 8.1
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
Quarterly F lo w C hg. % 9 M o nths F lo w
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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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
C hannel
Bancassurance Channel 566,533 568,199 625,064 10.3 10.0 1,677,156 1,773,483 5.7
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
Quarterly F lo w C hg. % 9 M o nths F lo w
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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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
Bancassurance Channel (320,342) (325,538) (333,246) 4.0 2.4 (912,397) (965,301) 5.8
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
Quarterly F lo w C hg. % 9 M o nths F lo w
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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
Vehicles (173,149) (179,772) (188,424) 8.8 4.8 (515,150) (542,298) 5.3
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)
T o tal (400,361) (391,599) (400,215) (0 .0) 2.2 (1,168,051) (1,210,629) 3.6
C hannel
Bancassurance Channel (104,040) (102,259) (109,778) 5.5 7.4 (313,004) (322,321) 3.0
Other Channel (296,321) (289,340) (290,437) (2.0) 0.4 (855,047) (888,308) 3.9
T o tal (400,361) (391,599) (400,215) (0 .0) 2.2 (1,168,051) (1,210,629) 3.6
Quarterly F lo w C hg. % 9 M o nths F lo w
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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)
Quarterly F lo w A bs. C hg. (p.p.) 9 M o nths F lo w
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 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
Quarterly F lo w A bs. C hg. (p.p.) 9 M o nths F lo w
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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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R $ tho usand Sep/ 13 Jun/ 14 Sep/ 14 On Sep/ 13 On Jun/ 14
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
Accounts Payable 791,246 625,882 683,658 (13.6) 9.2
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)
A ddit io nal Capital fo r Operat ing R isk 4,273 4,771 4,792 12.1 0.4
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
A ddit io nal Capital fo r C redit R isk 132,944 133,240 132,465 (0.4) (0.6)
A ddit io nal Capital fo r Operat ing R isk 31,542 28,004 31,579 0.1 12.8
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
A ddit io nal Capital fo r C redit R isk 250,335 253,507 244,531 (2.3) (3.5)
A ddit io nal Capital fo r Operat ing R isk 46,940 53,696 54,174 15.4 0.9
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 .
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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
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
Other operating income (expenses) (2,976) (5,733) (7,734) 159.9 34.9 (11,380) (18,680) 64.1
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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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
Accounts Payable 256,600 199,896 255,718 (0.3) 27.9
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 - - - -
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M arket to market Securit ies 1,230,135 1,487,877 1,454,634 18.2 (2 .2)
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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
R $ tho usand Sep/ 13 Jun/ 14 Sep/ 14 On Sep/ 13 On Jun/ 14
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
Additional Capital for Credit Risk 48,234 57,516 56,251 16.6 (2.2)
Additional Capital for Operating Risk 62,560 77,624 86,372 38.1 11.3
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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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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A s s e t s 9 ,3 3 5 ,6 9 1 11,6 7 9 ,5 4 2 12 ,0 6 3 ,5 0 1 2 9 .2 3 .3
A v ailable 190 169 248 30.5 46.7
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
Other as s ets 4,264 1,524 1,790 (58.0) 17.5
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
S h a re h o ld e rs ' E q u it y 2 5 6 ,3 0 2 3 6 0 ,3 2 4 3 3 6 ,6 2 9 3 1.3 ( 6 .6 )
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A d ju s t e d s h a re h o ld e rs ' e q u it y ( a ) 2 3 9 ,9 4 8 3 4 2 ,112 3 2 0 ,7 9 1 3 3 .7 ( 6 .2 )
M in im u m C a p i t a l re q u ire d ( b ) 2 0 4 ,0 14 2 4 4 ,2 4 6 2 7 3 ,2 15 3 3 .9 11.9
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
C a p i t a l A d e q u a c y ( a ) - ( b ) 3 5 ,9 3 3 9 7 ,8 6 6 4 7 ,5 7 6 32.4 (51.4)
S o lv e n c y ra t io ( a ) / ( b ) - % 117 .6 14 0 .1 117 .4 - 0 ,2 p .p . - 2 2 ,7 p .p .
B a la n c e C h g . %
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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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R $ tho usand 3Q13 2Q14 3Q14 On 3Q13 On 2Q14 9M 13 9M 14 On 9M 13
P remiums writ ten 764 ,400 694,311 957,709 25.3 37.9 1,961,725 1,910,523 (2.6)
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
Administratives expenses (54,976) (76,217) (55,955) 1.8 (26.6) (151,672) (174,859) 15.3
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
Earnings befo re taxes and pro f it
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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Loss ratio 72.0 35.0 108.2 36.2 73.3 99.5 73.2 (26.3)
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
Combined ratio 87.0 76.9 107.2 20.2 30.3 101.9 92.5 (9.4)
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
ROAE 17.5 26.8 9.2 (8.3) (17.6) 1.1 16.2 15.1
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A ssets 12,746,418 11,580,115 12,581,229 (1.3) 8 .6
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
Personnel expenses (2,564) (1,935) (1,829) (28.7) (5.5) (7,749) (5,737) (26.0)
Other operating expenses (38,942) (47,821) (42,117) 8.2 (11.9) (112,096) (127,866) 14.1
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 - -
N et inco me 217,818 342,244 318,866 46.4 (6.8) 624,719 917,549 46.9
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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
Brasilcap 65,551 109,609 73,862 12.7 (32.6) 201,096 250,959 24.8
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Cash and cash equivalents 729,664 1,251,056 977,919 34.0 (21.8)
Securities 3,016 3,177 651 (78.4) (79.5)
Tax assets 66,407 94,885 99,762 50.2 5.1
Receivables 467,788 574,289 568,094 21.4 (1.1)
Other assets 138,218 144,053 146,647 6.1 1.8
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) -
9 M o nths F lo w
���������������� ����������
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2
ST
AT
EM
EN
TS
OF
INC
OM
E
R$
tho
usa
nd
(ex
cep
t ea
rnin
gs
per
sh
are)
No
te
Par
en
t C
on
solid
ate
d
3rd
Qu
arte
r/20
1401
.01
a 09
.30.
201
43r
d Q
uar
ter/
2013
01.0
1 a
09.3
0.201
33r
d Q
uar
ter/
2014
01.0
1 a
09.3
0.201
43r
d Q
uar
ter/
2013
01.0
1 a
09.3
0.201
3
OP
ER
AT
ING
INC
OM
E
82
8,66
32,
340,
272
555,
487
1,57
8,12
91,
070,
854
3,07
2,63
775
5,33
82,
168,
265
Com
mis
sion
s in
com
e [2
4]
----
----
562,
559
1,66
0,31
142
5,49
71,
230,
052
Equ
ity in
com
e [1
0]
828,
663
2,34
0,27
255
5,48
71,
578,
129
508,
295
1,41
2,32
632
9,84
193
8,21
3
OT
HE
R O
PE
RA
TIN
G IN
CO
ME
/EX
PE
NS
ES
(6
,384
)(2
3,84
6)
(7,6
55)
(7,9
87)
(82,
957)
(276
,704)
(90,
489)
(266
,744)
Inte
rest
ear
ning
s of
fina
ncia
l ins
trum
ents
[2
0]
2,08
79,
616
1,54
72,
018
50,4
7012
9,43
635
,682
90,5
86
Per
sonn
el e
xpen
ses
[21]
(7
,080
)(2
1,44
4)(2
,909
)(3
,705
)(9
,246
)(2
8,34
8)(6
,636
)(1
5,55
0)
Adm
inis
trat
ive
expe
nses
[22]
(1
,474
)(7
,950
)(1
64)
(169
)(5
9,68
2)(2
10,2
50)
(65,
773)
(200
,553
)
Tax
exp
ense
s [1
2]
(72)
(1,4
25)
(4)
(4)
(41,
584)
(124
,052
)(3
1,01
6)(8
9,55
7)
Oth
er o
pera
ting
inco
me/
(exp
ense
) [2
3]
155
(2,6
43)
(6,1
25)
(6,1
27)
(22,
915)
(43,
490)
(22,
746)
(51,
670)
INC
OM
E B
EF
OR
E T
AX
ES
AN
D E
QU
ITIE
S
822,
279
2,31
6,42
654
7,83
21,
570,
142
987,
897
2,79
5,93
366
4,84
91,
901,
521
INC
OM
E T
AX
AN
D S
OC
IAL
CO
NT
RIB
UT
ION
[1
2]
----
----
(165
,618)
(479
,507)
(117
,017)
(331
,379)
NE
T IN
CO
ME
FO
R T
HE
PE
RIO
D
822,
279
2,31
6,42
654
7,83
21,
570,
142
822,
279
2,31
6,42
654
7,83
21,
570,
142
Num
ber
of s
hare
s 2,
000,
000,
000
2,00
0,00
0,00
02,
000,
000,
000
2,00
0,00
0,00
02,
000,
000,
000
2,00
0,00
0,00
02,
000,
000,
000
2,00
0,00
0,00
0
Ear
ning
s pe
r sh
are
(R$)
0,
4111
41,
1582
10,
2739
20,
7850
70,
4111
41,
1582
10,
2739
20,
7850
7
See
the
acco
mpa
nyin
g no
tes
to th
e fin
anci
al s
tate
men
ts.
ST
AT
EM
EN
T O
F C
OM
PR
EH
EN
SIV
E IN
CO
ME
R
$ th
ou
san
d
P
aren
t C
on
solid
ate
d
3rd
Qu
arte
r/20
1401
.01
a 09
.30.
201
43r
d Q
uar
ter/
2013
01.0
1 a
09.3
0.201
33r
d Q
uar
ter/
2014
01.0
1 a
09.3
0.201
43r
d Q
uar
ter/
2013
01.0
1 a
09.3
0.201
3
NE
T IN
CO
ME
FO
R T
HE
PE
RIO
D
822,
279
2,31
6,42
654
7,83
21,
570,
142
822,
279
2,31
6,42
654
7,83
21,
570,
142
Com
preh
ensi
ve in
com
e in
the
perio
d (4
,503
)11
,303
(10,
402)
(24,
315)
(4,5
03)
11,3
03(1
0,40
2)(2
4,31
5)
Tax
es in
com
preh
ensi
ve in
com
e 1,
801
(4,5
21)
4,16
19,
726
1,80
1(4
,521
)4,
161
9,72
6
CO
MP
RE
HE
NS
IVE
INC
OM
E F
OR
TH
E P
ER
IOD
NE
T O
F T
AX
81
9,57
72,
323,
208
541,
591
1,55
5,55
381
9,57
72,
323,
208
541,
591
1,55
5,55
3
See
the
acco
mpa
nyin
g no
tes
to th
e fin
anci
al s
tate
men
ts.
���������������� ����������
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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
Note Parent Consolidated
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
Unearned commissions [17] -- -- 634.965 495.868
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. � �
���������������� ����������
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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.
���������������� ����������
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5
ST
AT
EM
EN
TS
OF
CH
AN
GE
S IN
EQ
UIT
Y
R$
tho
usa
nd
�������
No
te
Cap
italC
ap
ital R
ese
rves
Inco
me R
eser
ves
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asu
ry s
har
esR
etai
ned
ear
nin
gs/
ac
cu
mu
late
d lo
sses
Accu
mu
late
d o
ther
C
om
pre
hen
siv
e In
co
me
To
tal
Leg
al
Rese
rve
Sta
tuto
ry R
eser
veP
rop
osed
Ad
dit
ion
al
Div
iden
d
Bal
an
ces
at D
ec
31,
201
2
5,63
3,26
8--
----
----
--5,
106
5,63
8,37
4
Pai
d-up
cap
ital
[19.
a]
13,5
00--
----
----
----
13,5
00
Rev
enue
res
erve
s [1
9.b]
--
--51
,115
153,
347
----
(204
,462
)--
--
Div
iden
ds
----
----
----
(817
,848
)--
(817
,848
)
Acc
umul
ated
oth
er c
ompr
ehen
sive
in
com
e [1
9.d]
--
----
----
----
(14,
589)
(14,
589)
Net
inco
me
for
the
perio
d --
----
----
--1,
570,
142
--1,
570,
142
Bal
an
ces
at S
ep
30,
201
3
5,6
46,
768
-- 5
1,115
153,
347
----
547,
832
(9,
483
) 6
,389,
579
Ch
an
ges
in t
he P
erio
d
13,
500
--
51,
115
153,
347
----
547,
832
(14,
589)
751,
205
Bal
an
ces
at D
ec
31,
201
3
5,64
6,76
8--
123,
688
371,
062
816,
436
----
(16,
681)
6,94
1,27
3
Sha
re-b
ased
pa
ymen
t tra
nsac
tions
--
266
----
--(2
66)
----
--
Add
ition
al D
ivid
ends
2nd
hal
f 201
3 --
----
--(8
16,4
36)
----
--(8
16,4
36)
Rev
enue
res
erve
s [1
9.b]
--
--74
,707
224,
123
----
(298
,830
)--
--
Add
ition
al D
ivid
ends
1st
hal
f 201
4 [1
9.c]
--
----
--84
0,45
7--
(840
,457
)--
--
Min
imum
man
dato
ry d
ivid
end
[19.
c]
----
----
----
(354
,860
)--
(354
,860
)
Add
ition
al D
ivid
ends
pai
d 1s
t hal
f 201
4[1
9.c]
--
----
--(8
40,4
57)
----
--(8
40,4
57)
Acc
umul
ated
oth
er c
ompr
ehen
sive
in
com
e [1
9.d]
--
----
----
----
6,78
26,
782
Net
inco
me
for
the
perio
d --
----
----
--2,
316,
426
--2,
316,
426
Bal
an
ces
at S
ep
30,
201
4
5,64
6,76
826
619
8,39
559
5,18
5--
(266
)82
2,27
9(9
,899
)7,
252,
728
Ch
an
ges
in t
he P
erio
d
--26
674
,707
224,
123
(816
,436)
(266
)82
2,27
96,
782
311,
455
See
the
acco
mpa
nyin
g no
tes
to th
e fin
anci
al s
tate
men
ts.
�
���������������� ����������
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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
See the accompanying notes to the financial statements.
������������������������ ����������
���������������
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.
������������������������ ����������
���������������
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.
������������������������ ����������
���������������
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.
IFRS 15 is effective for annual periods beginning on or after January 01, 2017.
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
Geographical region 01.01 to 09.30.2013
Other % Rural % Life % Total %
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
Other % Rural % Life % Total %
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
Geographical region 3rd Quarter/2013
Other % Rural % Life % Total %
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
Geographical region 01.01 to 09.30.2014
Other % Rural % Life % Total %
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
Geographical region 01.01 to 09.30.2013
Other % Rural % Life % Total %
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
Geographical region 3rd Quarter/2014
Other % Rural % Life % Total %
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
Geographical region 3rd Quarter/2013
Other % Rural % Life % Total %
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
Concentration of Risk by Region � Gross of Reinsurance
R$ thousand
Geographical region 01.01 to 09.30.2014
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
Geographical region 01.01 to 09.30.2013
Other % Damage % Auto % Total %
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
Geographical region 3rd Quarter/2014
Other % Damage % Auto % Total %
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
Geographical region 3rd Quarter/2013
Other % Damage % Auto % Total %
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%
Concentration of Risk by Region � Net of Reinsurance
R$ thousand
Geographical region 01.01 to 09.30.2014
Other % Damage % Auto % Total %
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
Geographical region 01.01 to 09.30.2013
Other % Damage % Auto % Total %
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
Geographical region 3rd Quarter/2014
Other % Damage % Auto % Total %
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
Geographical region 3rd Quarter/2013
Other % Damage % Auto % Total %
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
Risk Factor Sensitivity Impact on Shareholders� Equity / Profit
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)
b. Loss ratio Increase Increase of 5% in the loss ratio (199,900) (175,196)
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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
Net written premium(1)
Ceded reinsurance
RetentionNet written premium(1)
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
Local Admitted Eventual Total Local Admitted Eventual Total
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%
(1) Net written premium of Coinsurance and Cancellations. R$ thousand
Group of lines
3rd Quarter/2014 3rd Quarter/2013
Net written premium(1)Ceded reinsurance Retention
Net written premium(1)Ceded reinsurance Retention
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%
(1) Net written premium of Coinsurance and Cancellations.
In Sep 30, 2014, total reinsurance recoverable assets is R$ 482,373 thousand (R$ 247,450 thousand in Dec 31, 2013).
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
Financial Security � Rating Sep 30, 2014
AAA AA+ AA AA- A BBB+ BBB BB+ Total
Fixed income government securities 3,098,087 -- -- -- -- -- -- -- 3,098,087
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
Receivables Investment 43,790 -- -- -- -- -- -- -- 43,790
Promissory Notes -- 10,531 -- -- -- -- -- -- 10,531
Total 3,254,300 89,424 263,001 36,218 2,520 25,925 -- 13,719 3,685,107
d.3) Market Risk
Management of credit 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
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$ 1,336,296 thousand and DPVAT position of R$ 363,127 thousand.
R$ thousand
Risk Factor
Interest rate
Impact on Equity
Sep 30, 2014 Dec 31, 2013
Elevation of rates (1,088) (9,501)
Reduction of rates 2,323 9,540
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.
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
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 263,322 -- -- 263,322 150,091 -- -- 150,091
Cash equivalents 162,375 -- -- 162,375 -- -- -- --
Financial assets (*) 1,275,110 1,202,670 842,580 3,320,360 805,433 1,495,606 1,033,198 3,334,237
Receivables from insurance and reinsurance operations
3,716,635 49,779 - 3,766,414 2,833,022 62,878 -- 2,895,900
Reinsurance assets � technical provisions(***)
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
Prepaid expenses 24,241 -- -- 24,241 10,005 -- -- 10,005
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
Technical provisions (***) 4,562,707 1,598,597 563,672 6,724,976 4,620,170 1,101,477 248,072 5,969,719
Accounts payable 628,881 389 -- 629,270 696,111 394 -- 696,505
Obligations with insurance and reinsurance operations
1,560,879 -- -- 1,560,879 1,176,897 -- -- 1,176,897
Third party deposits 435,963 -- -- 435,963 170,414 -- -- 170,414
Total Liabilities 7,188,430 1,598,986 563,672 9,351,088 6,663,592 1,101,871 248,072 8,013,535
(*) 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.
(**)Financial assets related to legal and tax deposits, amounting to R$ 657,654 thousand in 2014 (R$ 601,104 thousand in 2013), and financial liabilities of the legal provisions, amounting of R$ 578,350 thousand in 2014 (R$ 546,549 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.
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
Impacts Sep 30, 2014
+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
MRC AdequacyAdjusted net
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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38
R$ thousand
Sep 30, 2014 Dec 31, 2013
Net AssetsTechnical
Provisions
Covering 20% of MCR
Excess of net assets
LiquidityNet Assets
Technical Provisions
Covering 20% of MCR
Excess of net assets
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
Financial security � rating
Dec 31, 2013
AAA AA A BBBExposure to market risk
Total
Fixed income government securities -- -- -- -- 7,598,536 7,598,536
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
Receivables investment 60,395 30,140 -- -- -- 90,535
Mortgage backed securities 2,138 -- -- -- -- 2,138
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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39
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
Risk Factors Sep 30, 2014 Dec 31, 2013
Pre-fixed interest rate 6,049,648 53.7% 5,312,519 54.8%
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%
Post-fixed interest rate 3,897,712 34.6% 2,771,422 28.6%
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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40
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
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
Shareholders�Equity after
income taxes
Gain/lossbefore
income taxes
Shareholders�Equity after
income taxes
Gain/lossbefore
income taxes
Shareholders�Equity after
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:
R$ thousand Sep 30, 2014 Dec 31, 2013
Increase by 1 p.a. in Interest Rate
Reduction by 1 p.a. in Interest Rate
�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
Shareholders�Equity after
income taxes
Gain/lossbefore
income taxes
Shareholders�Equity after
income taxes
Gain/lossbefore
income taxes
Shareholders�Equity after
income taxes
Gain/lossbefore
incometaxes
Pre-fixed interest rate (7,791) (12,985) 7,960 13,267 (6,796) (11,326) 6,988 11,647
Post-fixed interest rate 58 96 (57) (95) 82 136 (100) (167)
IPCA Coupon (4,880) (8,133) 5,144 8,573 (5,521) (9,201) 5,832 9,721
Liabilities TR (premium bonds) 39,953 66,588 (53,940) (89,901) 66,015 110,026 (46,468) (77,447)
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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41
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
Cashflow liabilities (1,889,772) (1,664,136) (1,846,972) (1,475,105) (2,324,988) (1,999,288) (475,061) (286,840) (327,308) (237,033)
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
Sensitivity Analysis
The underwriting risks considered herein are those linked to the formation of liabilities (technical provisions) from operations.
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42
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
Financial security � rating
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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43
R$ thousand
Financial security � rating
Dec 31, 2013
AAA AA A BBBExposure to market risk
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
Sensitivity Analysis
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
Equity Income Equity Income
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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44
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
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
Accounts payable 180,663 594 -- 181,257 265,891 108 -- 265,999
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
Third party deposits 95,156 -- -- 95,156 23,885 -- -- 23,885
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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45
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
3rd Quarter/2014 3rd Quarter/2013
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
Insurance Brokerage Total Insurance Brokerage Total
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
Other income and expenses 16,034 (269,370) (253,336) 23,220 (282,041) (258,821)
Interest income from financial instruments 36,207 82,762 118,969 41,922 46,264 88,186
Personnel expenses (837) (5,737) (6,574) (3,750) (7,782) (11,532)
Administrative expenses (468) (202,108) (202,576) (984) (199,461) (200,445)
Other operating expenses (18,868) (144,287) (163,155) (13,968) (121,062) (135,030)
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 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.
������������������������ ����������
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46
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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47
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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48
R$ thousand
01.01 to 09.30.2014
Life, Mortgage and Rural
Property and Casualty
ReinsurancePrivate
Pension PlansCapitalization
PlansHealth
Insurance income �
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 -- -- --
Income insurance 7,156 3,973 -- -- -- --
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) -- -- --
Reinsurance income 440,206 703,001 709,752 -- -- --
Reinsurance expenses (579,537) (833,519) (756,482) -- -- --
Other operation income (expenses) (225,897) (199,621) (87,971) -- -- --
Administrative expenses (213,581) (646,892) (174,859) -- -- --
Taxes expenses (138,658) (137,632) (40,966) -- -- --
Private Pension Plans income -- -- -- 99,348 -- --
Retained contributions -- -- -- 21,565,265 -- --
Benefits provision -- -- -- (21,465,916) -- --
Change in technical provisions -- -- -- (30,975) -- --
Income from management fees -- -- -- 888,792 -- --
Benefits and redemption expenses -- -- -- (3,641) -- --
Retained benefits -- -- -- (49,321) -- --
Risk contributions -- -- -- 146,086 -- --
Selling expenses -- -- -- (218,146) -- --
Other operation income (expenses) -- -- -- (18,680) -- --
Administrative expenses -- -- -- (189,897) -- --
Taxes expenses -- -- -- (73,210) -- --
Capitalization Plans income
Net securities capitalization -- -- -- -- 782,936 --
Fundraising with bonds -- -- -- -- 4,659,010 --
Change in provision for redemption -- -- -- -- (3,876,074) --
Change in technical provisions -- -- -- -- (25,633) --
Raffle results -- -- -- -- (153,553) --
Selling expenses -- -- -- -- (370,664) --
Other operation income (expenses) -- -- -- -- (6,413) --
Administrative expenses -- -- -- -- (59,265) --
Taxes expenses -- -- -- -- (30,519) --
Health income
Health dental plans income -- -- -- -- -- 5
Administrative expenses -- -- -- -- -- (1,739)
Taxes expenses -- -- -- -- -- --
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)
Attributable to Group BB Seguridade 697,414 101,685 67,777 395,736 151,002 (1,165)
Attributable to other stockholders� 232,595 101,682 262,671 131,947 75,462 (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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49
R$ thousand
3rd Quarter/2013
Life, Mortgage and Rural
Property and Casualty
ReinsurancePrivate Pension
PlansCapitalization
Plans
Insurance income �
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) --
Capitalization Plans income
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
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���������������
50
R$ thousand
01.01 to 09.30.2013
Life, Mortgage and Rural
Property and Casualty
ReinsurancePrivate Pension
PlansCapitalization
Plans
Insurance income �
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) -- --
Other operation income (expenses) (189,139) (168,822) (2,991) -- --
Administrative expenses (190,727) (629,113) (151,671) -- --
Taxes expenses (110,977) (129,953) (55,789) -- --
Private Pension Plans income -- -- -- 95,286 --
Retained contributions -- -- -- 15,627,081 --
Benefits provision -- -- -- (15,531,795) --
Change in technical provisions -- -- -- (44,674) --
Income from management fees -- -- -- 759,621 --
Benefits and redemption expenses -- -- -- (6,453) --
Retained benefits -- -- -- (34,307) --
Risk contributions -- -- -- 140,411 --
Selling expenses -- -- -- (178,190) --
Other operation income (expenses) -- -- -- (11,380) --
Administrative expenses -- -- -- (187,812) --
Taxes expenses -- -- -- (63,364) --
Capitalization Plans income
Net securities capitalization -- -- -- -- 781,743
Fundraising with bonds -- -- -- -- 4,533,719
Change in provision for redemption -- -- -- -- (3,751,976)
Change in technical provisions -- -- -- -- 1,978
Raffle results -- -- -- -- (170,798)
Selling expenses -- -- -- -- (304,678)
Other operation income (expenses) -- -- -- -- (1,058)
Administrative expenses -- -- -- -- (54,451)
Taxes expenses -- -- -- -- (36,345)
Result from interest income 209,904 133,037 161,076 231,854 11,409
Interest income 280,475 263,718 603,427 1,593,704 415,915
Interest expenses (70,571) (130,681) (442,351) (1,361,850) (404,506)
Equity in earnings (23,774) (5,021) (4,622) 7,140 21
Operating results 902,861 253,870 120,412 708,132 227,821
Non-current assets results 32 (6) 8 52 --
Income before taxes 902,893 253,864 120,420 708,184 227,821
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
Attributable to Group BB Seguridade 446,787 71,689 11,796 319,083 88,870
Attributable to other stockholders� 149,009 71,689 8,632 106,389 44,442
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
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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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52
10 �
INV
ES
TM
EN
T IN
AS
SO
CIA
TE
S
a) In
form
atio
n a
bo
ut
Inves
tmen
t in
Asso
ciat
es
R$
tho
usa
nd
Co
mp
any
Cap
ital
Sto
ckh
old
ers'
eq
uit
y ad
juste
d(1
)
Par
en
t C
on
solid
ate
d
Car
ryin
g
amo
un
t M
ove
men
ts f
rom
Jan
01,
2014
to
Sep
30, 2
014
C
arry
ing
am
ou
nt
Sh
are
of
pro
fit
Car
ryin
g a
mo
un
t
Dec
31,
2013
Div
iden
ds
Eq
uit
y va
luati
on
ad
justm
en
ts
Oth
er
eve
nts
Sh
are
of
pro
fit
Sep
30,
2014
3rd
Qu
arte
r/20
1401
.01
to
09.3
0.20
14
S
ep 3
0, 2
014
Dec
31, 2
013
BB
Seg
uro
s P
arti
cip
açõ
es S
.A.
3,10
3,20
1 6,
816,
552
5,98
2,18
7 (
593,
317)
5,17
5 --
1,42
2,50
7 6,
816,
552
----
----
BB
Map
fre
SH
1 P
artic
ipaç
ões
S.A
. (2)
2,05
0,19
8 2,
421,
146
2,44
6,35
7 (
632,
091)
1,18
5--
697,
414
2,51
2,86
5 27
2,21
9 69
7,41
4 2,
512,
865
2,44
6,35
7
Map
fre
BB
SH
2 P
artic
ipaç
ões
S.A
. (3)
1,96
8,38
0 2,
923,
707
1,86
8,78
5 -
-3,
813
--10
1,68
5 1,
974,
283
35,3
72
101,
685
1,97
4,28
3 1,
868,
785
Bra
silp
rev
Seg
uros
e P
revi
dênc
ia S
.A.
602,
955
1,51
1,76
4 1,
062,
519
(34
8,00
6)54
6 --
395,
736
1,11
0,79
5 13
9,62
0 39
5,73
6 1,
110,
795
1,06
2,51
9
IRB
Bra
sil R
E
1,45
3,08
0 2,
827,
359
552,
960
(34
,116
)(3
69)
--67
,777
58
6,25
2 12
,833
67
,777
58
6,25
2 55
2,96
0
Bra
silc
ap C
apita
lizaç
ão S
.A. (4
)11
1,26
4 33
1,07
5 29
0,42
9 (
109,
865)
----
150,
879
331,
443
49,4
16
150,
879
331,
443
290,
429
Bra
sild
enta
l Ope
rado
ra d
e P
lano
s O
dont
ológ
icos
S.A
. (5)
5,00
0 3,
446
----
--3,
749
(1,1
65)
2,58
4 (1
,165
)(1
,165
)2,
584
--
BB
Cap
italiz
ação
S.A
. 5,
400
5,55
4 5,
510
(79
)--
--12
3 5,
554
----
----
BB
Co
r P
arti
cip
açõ
es
S.A
. 36
,211
36
2,40
0 41
,842
(59
8,81
4)
1,60
7 --
917,
765
362,
400
----
----
BB
Cor
reto
ra d
e S
egur
os e
Adm
inis
trad
ora
de B
ens
S.A
. 26
,918
35
3,87
2 33
,400
(59
8,68
3)1,
607
--91
7,54
8 35
3,87
2 --
----
--
To
tal
6,02
4,02
9 (
1,19
2,13
1)
6,78
2--
2,34
0,27
2 7,
178,
952
508,
295
1,41
2,32
6 6,
518,
222
6,22
1,05
0
(1)
Sto
ckho
lder
s' e
quity
not
adj
uste
d by
the
perc
enta
ge o
f equ
ity in
tere
st h
eld
by
the
Gro
up,
(2)
Thi
s in
clud
es, i
n th
e ca
rryi
ng a
mou
nt o
f the
inve
stm
ent a
s of
Sep
tem
ber
30, 2
014,
the
amou
nt o
f R$
693,
836
thou
sand
rel
ated
to th
e go
odw
ill a
risin
g fr
om th
e pa
rtne
rshi
p w
ith M
apfr
e,
(3)
Thi
s in
clud
es, i
n th
e ca
rryi
ng a
mou
nt o
f the
inve
stm
ent a
s of
Sep
tem
ber
30, 2
014,
the
amou
nt o
f R$
97,7
04 th
ousa
nd r
elat
ed to
the
good
will
aris
ing
from
the
part
ners
hip
with
Map
fre,
(4)
Thi
s in
clud
es, i
n th
e ca
rryi
ng a
mou
nt o
f the
inve
stm
ent a
s of
Sep
tem
ber
30, 2
014,
the
amou
nt o
f R$
110,
749
thou
sand
rel
atin
g to
the
good
will
aris
ing
from
the
acqu
isiti
on o
f Sul
acap
by
BB
Seg
uros
, occ
urr
ed in
Jul
y 22
, 201
1,
(5)
Inve
stm
ent m
ade
by
agre
emen
t as
of M
arch
12,
201
4, a
s de
scrib
ed in
Not
e 2.
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53
R$
tho
usa
nd
Co
mp
any
Cap
ital
Sto
ckh
old
ers'
eq
uit
y ad
juste
d(1
)
Par
en
t C
on
solid
ate
d
Car
ryin
g
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31, 2
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841,
347,
151
923,
605
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1,40
8,54
3
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4,26
671
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1,34
7,15
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3,60
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8,58
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Inco
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�(4
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686)
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54,9
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�(1
16)
(10,
785)
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11,7
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ticip
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(3,6
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Net
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043
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895,
718
929,
268
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009
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�82
32,2
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1,69
969
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2810
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inat
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sT
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ed p
rem
ium
s �
110,
102
58,1
301,
352,
449
----
1,52
0,68
1
Ris
k co
ntrib
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n �
----
----
----
Tec
hnic
al p
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1,08
113
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(287
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)--
--(2
72,0
93)
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pre
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1,18
372
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1,06
5,38
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--1,
248,
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insu
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(32)
--1,
270
----
1,23
8
Ret
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(85,
521)
(37,
615)
(305
,035
)--
--(4
28,1
71)
Cos
ts a
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sitio
n �
(30,
994)
(10,
614)
(262
,446
)--
--(3
04,0
54)
Rei
nsu
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ce
inco
me
�1,
641
1,51
4(9
4,30
5)
----
(91,
150)
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nsur
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inco
me
�5,
346
2,55
784
,183
----
92,0
86
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nsur
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ense
s �
(3,7
05)
(1,0
43)
(178
,488
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--(1
83,2
36)
Oth
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com
e/ex
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�(2
,347
)2,
023
(73,
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78--
(74,
083)
Adm
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trat
ive
expe
nses
�(8
,133
)(4
,074
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3,12
8)(4
77)
--(6
5,81
2)
Tax
es e
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ses
�(1
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,492
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1,75
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--(3
6,22
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Inte
rest
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�6,
220
10,8
5772
,948
4,94
3--
94,9
68
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rest
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me
�11
,101
12,4
7085
,317
4,95
7--
113,
845
Inte
rest
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�
(4,8
81)
(1,6
13)
(12,
369)
(14)
--(1
8,87
7)
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ear
nin
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�(1
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3721
5,71
3(2
22,5
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�(9
,848
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319,
129
220,
129
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338,
455
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�34
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(9,8
14)
31,6
2431
9,12
722
0,05
1(2
22,5
79)
338,
409
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�2,
764
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3)
Soc
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�1,
658
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62)
(47,
409)
520
(575
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0,56
8)
Res
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par
ticip
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n �
(1,3
42)
(29)
(2,2
97)
----
(3,6
68)
Net
inco
me/
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ss)
(6,7
34)
19,3
3221
1,35
022
1,20
4(2
24,1
12)
221,
040
Attr
ibut
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to G
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urid
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�(5
,050
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,497
158,
490
165,
881
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5,75
6
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4,83
552
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55,3
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sT
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rem
ium
s �
355,
698
225,
822
3,92
3,21
2--
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504,
732
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k co
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n �
----
----
----
Tec
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al p
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618
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46,4
98)
----
(1,0
27,5
87)
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pre
miu
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�35
5,70
424
4,72
72,
876,
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3,47
7,14
5
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insu
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(108
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4,89
1--
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783
Ret
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d cl
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s �
(260
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22,6
56)
(806
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--(1
,189
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ts a
cqui
sitio
n �
(101
,279
)(2
9,94
5)(7
23,4
37)
----
(854
,661
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Rei
nsu
ran
ce
inco
me
�(2
,611
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(227
,388)
----
(229
,978)
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nsur
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inco
me
�9,
199
3,04
220
5,90
3--
--21
8,14
4
Rei
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(11,
810)
(3,0
21)
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48,1
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�(1
0,74
5)2,
972
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89,1
39)
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trat
ive
expe
nses
�(2
7,95
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6,46
4)(1
45,2
29)
(1,0
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90,7
27)
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es e
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ses
�(6
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,091
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5,08
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98)
--(1
10,9
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Inte
rest
inco
me
�16
,506
26,0
2114
0,62
526
,752
--20
9,90
4
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rest
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�28
,957
31,9
2819
2,20
227
,388
--28
0,47
5
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rest
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(12,
451)
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(51,
577)
(636
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(70,
571)
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110
568,
572
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95,5
8584
2,83
159
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902,
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(37,
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95,5
8584
2,82
959
4,02
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902,
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65,0
75)
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�6,
401
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par
ticip
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(4,2
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57,4
6156
2,83
059
3,97
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93,9
31)
595,
796
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8,40
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6,78
7
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14,3
7114
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197,
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570,
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1,31
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3,63
5--
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2,36
2,79
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187,
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600
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1,18
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(100
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03,4
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(62,
387)
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4,19
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--17
0,15
9--
----
--21
3,33
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�56
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4,16
1--
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--50
1,02
5
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(13,
686)
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74,0
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----
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87,6
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3,75
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6,81
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7,08
8)(6
9,53
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483)
237
(516
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(213
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9,76
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5450
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7,73
511
1,45
5--
92,4
27
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�17
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38,6
5013
3,73
213
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111,
455
--20
4,65
2
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�
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896)
(83,
229)
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12,2
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5521
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42(7
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588
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----
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43,7
8465
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21,5
862,
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478)
130,
638
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me
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2,09
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5,87
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,720
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(30)
(897
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198,
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73(7
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42
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594,
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12,1
8219
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5,39
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6,64
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,064
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77,6
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513
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1,75
33,
545,
575
598,
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065,
295
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146
1,90
1(7
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----
--3,
973
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38,8
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(866
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55,6
62)
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--(3
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76,2
83)
(147
,548
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74,5
13)
(212
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----
(1,2
10,6
29)
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nsu
ran
ce
inco
me
37,5
87--
(168
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(21)
----
--(1
30,5
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inco
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89,2
52--
613,
752
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--70
3,00
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1,66
5)--
(781
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8)--
----
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com
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(13,
338)
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3,06
6--
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99,6
21)
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trat
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(48,
548)
(199
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34,4
66)
(62,
276)
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,491
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(646
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Tax
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(17,
914)
(30,
891)
(63,
756)
(22,
582)
(2,3
76)
(113
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(137
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rest
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me
32,6
2680
,050
146,
969
23,3
1291
3,82
1--
286,
869
Inte
rest
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me
46,7
1412
1,06
723
3,48
338
,699
913,
821
--44
3,87
5
Inte
rest
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ense
(1
4,08
8)(4
1,01
7)(8
6,51
4)(1
5,38
7)--
----
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Eq
uit
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ear
nin
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--18
4,36
2(7
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200,
408
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10)
Op
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ng
res
ult
s
86,9
2820
3,38
075
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7,59
7(8
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2,62
5(2
09,4
91)
366,
158
Non
-cur
rent
ass
ets
resu
lts
--52
(84)
----
----
(32)
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me/(
loss)
befo
re t
axes
86
,928
203,
432
75,1
187,
597
(83)
202,
625
(209
,491)
366,
126
Inco
me
tax
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258)
(48,
786)
(12,
361)
(1,7
35)
101
572
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6,46
7)
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566)
(29,
425)
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(1,1
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3629
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568)
Res
ults
par
ticip
atio
n (2
31)
(3,5
37)
(19,
644)
(119
)(1
93)
----
(23,
724)
Net
inco
me/
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ss)
47,8
7312
1,68
435
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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
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61
R$
tho
usa
nd
3rd
Qu
arte
r/20
13
Alia
nça
do
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
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62
R$
tho
usa
nd
01.0
1 to
09.3
0.20
13
Alia
nça
do
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 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
) In
sura
nce
, Pri
vat
e P
en
sio
n P
lan
s an
d C
apit
aliz
atio
n S
eg
men
t: R
ein
sura
nce
R$
tho
usa
nd
IRB
Bra
sil R
E S
/A
3rd
Qu
arte
r/20
1401
.01
to 0
9.3
0.20
14
3rd
Qu
arte
r/20
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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64
d.4
) In
sura
nce
, Pri
vat
e P
en
sio
n P
lan
s an
d C
apit
aliz
atio
n S
eg
men
t: C
ap
italiz
atio
n
R$
tho
usa
nd
Bra
silc
ap
Cap
ital
izaç
ão
S.A
. B
B C
ap
italiz
açã
o
Ad
just
men
ts/E
limin
ati
on
s
To
tal
�3r
d Q
uar
ter/
2014
3rd
Qu
arte
r/20
133r
d Q
uar
ter/
2014
3rd
Qu
arte
r/20
133r
d Q
uar
ter/
2014
3rd
Qu
arte
r/20
133r
d Q
uar
ter/
2014
3rd
Qu
arte
r/20
13
Elim
inaç
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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65
R$
tho
usa
nd
Bra
silc
ap
Cap
ital
izaç
ão
S.A
. B
B C
ap
italiz
açã
o
Ad
just
men
ts/E
limin
ati
on
s
To
tal
�01
.01
to 0
9.3
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
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
inaç
ão
Col
lect
ion
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
42--
----
--75
,462
44,4
42
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sura
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, Pri
vat
e P
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sio
n P
lan
s an
d C
apit
aliz
atio
n S
eg
men
t: P
rivat
e P
en
sio
n P
lan
s
R$
tho
usa
nd
Bra
silp
rev
Seg
uro
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Pre
vid
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cia
S.A
Ad
just
men
ts/E
limin
ati
on
sT
ota
l
�3r
d Q
uar
ter/
2014
01.0
1 to
09.3
0.20
14
3rd
Qu
arte
r/20
1401
.01
to 0
9.3
0.20
14
3rd
Qu
arte
r/20
1401
.01
to 0
9.3
0.20
14
� �Ret
aine
d co
ntrib
utio
n7,
152,
099
21,5
65,2
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152,
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21,5
65,2
65B
enef
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
able
to o
ther
sto
ckho
lder
s46
,430
131,
423
122
524
46,5
5213
1,94
7
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67
R$
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silp
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Seg
uro
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vid
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cia
S.A
.B
rasilp
rev
No
sso
Fu
turo
Seg
uro
s e
P
revi
dên
cia
S.A
. A
dju
stm
en
ts/E
limin
ati
on
s
To
tal
3rd
Qu
arte
r/20
1301
.01
to 0
9.3
0.20
13
3rd
Qu
arte
r/20
1301
.01
to 0
9.3
0.20
13
3rd
Qu
arte
r/20
1301
.01
to 0
9.3
0.20
13
3rd
Qu
arte
r/20
1301
.01
to 0
9.3
0.20
13
Ret
aine
d co
ntrib
utio
n3,
680,
420
15,5
83,5
3313
,925
43,5
48--
--3,
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
e/ex
pens
e(7
24)
(2,8
08)
----
----
(724
)(2
,808
)
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--
--1,
524
4,93
12,
380
7,14
0
Op
erati
ng
res
ult
s25
0,45
069
9,56
21,
425
3,63
91,
524
4,93
125
3,39
970
8,13
2
Non
-cur
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
ial C
ontr
ibut
ion
tax
(37,
880)
(104
,729
)(2
14)
(546
)--
--(3
8,09
4)(1
05,2
75)
Res
ults
par
ticip
atio
n(2
,707
)(7
,637
)--
----
--(2
,707
)(7
,637
)
Net
inco
me
150,
872
418,
334
855
2,20
71,
524
4,93
115
3,25
142
5,47
2
Attr
ibut
able
to G
roup
BB
Seg
urid
ade
113,
146
313,
730
642
1,65
61,
143
3,69
711
4,93
131
9,08
3
Attr
ibut
able
to o
ther
sto
ckho
lder
s37
,726
104,
604
213
551
381
1,23
438
,320
106,
389
(1)
Com
pan
y B
rasi
lpre
v N
osso
Fut
uro
Seg
uros
e P
revi
dênc
ia S
.A. i
ncor
pora
ted
by
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Seg
uros
e P
revi
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men
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tho
usa
nd
BB
Co
rreto
ra d
e S
eg
uro
s e
Ad
min
istr
ado
ra d
e B
en
s
3rd
Qu
arte
r/20
1401
.01
to 0
9.3
0.20
14
3rd
Qu
arte
r/20
1301
.01
to 0
9.3
0.20
13
Op
erati
ng
in
co
me
56
2,55
9
1,6
60,
311
425,
497
1,23
0,05
2
Bro
kera
ge in
com
e 56
2,55
9
1
,660
,311
42
5,49
71,
230,
052
Oth
er in
com
e an
d e
xp
enses
(1
02,1
35)
(3
35,7
10)
(106
,913)
(316
,964)
Per
sonn
el e
xpen
ses
(1,8
29)
(329
,973
)(1
04,3
95)
(309
,313
)
adm
inis
trat
ive
expe
nses
(1
00,3
06)
(
5,73
7)(2
,518
)(7
,651
)
Op
erati
ng
in
co
me
46
0,42
4
1
,324
,601
318,
584
913,
088
Inte
rest
inco
me
22
,705
66,3
40
12,1
6634
,924
Inte
rest
inco
me
33,6
29
84,
300
19,1
2046
,263
Inte
rest
exp
ense
(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
able
to G
roup
BB
Seg
urid
ade
318,
866
91
7,54
8 21
7,81
662
4,71
6
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sild
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l Op
erad
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de
Pla
no
s O
do
nto
lóg
ico
s
3rd
Qu
arte
r/20
1401
.01
to 0
9.3
0.20
14
Op
erati
ng
in
co
me
5
5
Hea
lth d
enta
l pla
ns in
com
e 5
5
Oth
er in
com
e an
d e
xp
enses
(1
,739
)(1
,739
)
Per
sonn
el e
xpen
ses
(1,7
39)
(1,7
39)
adm
inis
trat
ive
expe
nses
--
--
Op
erati
ng
in
co
me
(1
,734
)(1
,734
)
Inte
rest
inco
me
18
018
0
Inte
rest
inco
me
206
206
Inte
rest
exp
ense
(2
6)(2
6)
Inco
me/(
loss)
befo
re t
axes
(1
,554
)(1
,554
)
Tax
es
----
Net
inco
me
(1,5
54)
(1,5
54)
Attr
ibut
able
to G
roup
BB
Seg
urid
ade
(1,1
65)
(1,1
65)
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men
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Acc
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wit
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tern
atio
nal F
inan
cial
Rep
ort
Sta
nd
ard
s
e.1)
Insu
ran
ce,
Pri
vat
e P
en
sio
n P
lan
s an
d C
apit
aliz
atio
n S
eg
men
t: In
su
ran
ce
� L
ife,
Mo
rtg
age
Lif
e In
sura
nce
an
d R
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l
R$
tho
usa
nd
Sep
30,
2014
M
apfr
e V
ida S
.AV
ida
Seg
ura
do
raC
ia, d
e S
egu
ros
Alia
nça
do
Bra
sil
BB
Map
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7,51
83,
207
340,
526
122
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437,
815
329,
356
4,32
9,76
929
,005
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125,
945
Insu
ranc
e an
d co
insu
ranc
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erat
ions
12
0,04
551
,670
2,54
6,70
8--
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718,
423
Rei
nsur
ance
ass
ets
� T
echn
ical
pro
visi
ons
9,16
61,
637
414,
225
----
425,
028
Sec
uriti
es
201,
158
69,5
251,
229,
007
3,69
7--
1,50
3,38
7
Oth
er
1,47
190
665
9--
--3,
036
Pre
paid
exp
ense
s 99
494
11,1
6516
--12
,269
Cos
ts o
f acq
uisi
tion
9,90
22,
356
1,14
7,18
8--
--1,
159,
446
Inve
stm
ents
4,
126
336
6,28
22,
586,
992
(1,9
39,7
75)
657,
961
Pro
pert
y an
d eq
uipm
ent
543
7,10
612
,944
----
20,5
93
Inta
ngib
le a
sset
s 14
,403
1,54
639
,355
662,
749
--71
8,05
3
To
tal
807,
141
467,
739
10,0
77,8
28
3,28
2,58
1(1
,939
,775)
12,6
95,5
14
Lia
bili
ties
Acc
ount
s pa
yabl
e41
,344
18,0
1340
9,51
829
4,83
9--
763,
714
Insu
ranc
e an
d co
insu
ranc
e op
erat
ions
71
,670
27,7
411,
531,
549
----
1,63
0,96
0
Insu
ranc
e te
chni
cal p
rovi
sion
s 32
8,39
726
0,03
75,
803,
038
----
6,39
1,47
2
Dep
osits
1,
197
783
340,
002
----
341,
982
Oth
er li
abili
ties
911
694
578,
039
----
579,
644
Eq
uit
y 36
3,62
216
0,47
11,
415,
682
2,98
7,74
2(1
,939
,775)
2,98
7,74
2
Attr
ibut
able
to G
roup
BB
Seg
urid
ade
272,
680
120,
337
1,06
1,62
02,
240,
508
(1,4
54,6
37)
2,24
0,50
8
Attr
ibut
able
to o
ther
sto
ckho
lder
s90
,942
40,1
3435
4,06
274
7,23
4(4
85,1
38)
747,
234
To
tal
807,
141
467,
739
10,0
77,8
28
3,28
2,58
1(1
,939
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12,6
95,5
14
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R$
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Dec
31, 2
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M
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ura
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ros
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ts/
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ts
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Cas
h an
d ba
nk d
epos
its
162,
763
158,
238
818,
772
40,4
34--
1,18
0,20
7
Sec
uriti
es
254,
347
181,
676
2,90
2,12
016
,519
--3,
354,
662
Insu
ranc
e an
d co
insu
ranc
e op
erat
ions
10
7,98
046
,935
2,06
8,04
5--
--2,
222,
960
Rei
nsur
ance
ass
ets
� T
echn
ical
pro
visi
ons
18,3
863,
456
329,
919
--(1
1,76
6)33
9,99
5
Sec
uriti
es
230,
467
95,4
371,
203,
615
8,75
0--
1,53
8,26
9
Oth
ers
4,92
51,
573
8--
--6,
506
Pre
paid
exp
ense
s 78
715
84,
839
261
--6,
045
Cos
ts o
f acq
uisi
tion
11,2
223,
592
969,
861
----
984,
675
Inve
stm
ents
4,
133
466
5,93
02,
435,
603
(1,7
88,3
85)
657,
747
Pro
pert
y an
d eq
uipm
ent
772
8,05
89,
406
----
18,2
36
Inta
ngib
le a
sset
s 10
,386
740
30,4
4168
6,63
5--
728,
202
----
----
----
To
tal
806,
168
500,
329
8,34
2,95
63,
188,
202
(1,8
00,1
51)
11,0
37,5
04
Lia
bili
ties
Acc
ount
s pa
yabl
e46
,203
37,3
5927
5,61
931
0,37
414
,963
684,
518
Insu
ranc
e an
d co
insu
ranc
e op
erat
ions
81
,875
24,6
441,
247,
808
----
1,35
4,32
7
Insu
ranc
e te
chni
cal p
rovi
sion
s 29
3,58
524
9,03
54,
863,
029
--(4
9,17
4)5,
356,
475
Dep
osits
22
,177
3,01
914
3,19
5--
--16
8,39
1
Oth
er li
abili
ties
1,08
486
154
9,13
1--
--55
1,07
6
Eq
uit
y 36
1,24
418
5,41
11,
264,
174
2,87
7,82
8(1
,765
,940)
2,92
2,71
7
Attr
ibut
able
to G
roup
BB
Seg
urid
ade
270,
897
139,
040
948,
004
2,15
8,08
3(1
,324
,278
)2,
191,
746
Attr
ibut
able
to o
ther
sto
ckho
lder
s90
,347
46,3
7131
6,17
071
9,74
5(4
41,6
62)
730,
971
To
tal
806,
168
500,
329
8,34
2,95
63,
188,
202
(1,8
00,1
51)
11,0
37,5
04
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su
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alty
R$
tho
usa
nd
Sep
30,
2014
A
lian
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Seg
uro
sB
rasilv
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ulo
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uro
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ais
Map
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ura
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fre B
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just
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Cas
h an
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nk d
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its
110,
746
110,
098
60,7
606,
366
1,28
913
5,92
7--
425,
186
Sec
uriti
es
426,
406
1,01
9,27
01,
857,
706
383,
299
----
--3,
686,
681
Insu
ranc
e an
d co
insu
ranc
e op
erat
ions
46
4,38
569
3,71
22,
624,
513
200,
442
----
--3,
983,
052
Rei
nsur
ance
ass
ets
� T
echn
ical
pro
visi
ons
181,
335
--1,
519,
867
50--
----
1,70
1,25
2
Sec
uriti
es
64,1
1264
3,02
357
2,49
930
3,96
36,
137
1,72
5--
1,59
1,45
9
Oth
ers
187
169,
255
282,
389
280
----
--45
2,11
1
Pre
paid
exp
ense
s 7,
875
3,52
112
,661
169
--13
--24
,239
Cos
ts o
f acq
uisi
tion
84,7
1711
7,83
543
0,52
823
0,50
9--
----
863,
589
Inve
stm
ents
41
11,
784
458,
080
401
--2,
886,
367
(3,0
81,8
44)
265,
199
Pro
pert
y an
d eq
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ent
1,55
04,
144
79,8
6362
----
--85
,619
Inta
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le a
sset
s 5,
232
15,6
3420
8,30
48,
292
--60
,218
--29
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0
To
tal
1,34
6,95
62,
778,
276
8,10
7,17
01,
133,
833
7,42
63,
084,
250
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13,3
76,0
67
Lia
bili
ties
Acc
ount
s pa
yabl
e96
,366
142,
480
354,
620
30,1
425,
088
54,9
62--
683,
658
Insu
ranc
e an
d co
insu
ranc
e op
erat
ions
28
2,83
785
,076
1,10
5,11
887
,848
----
--1,
560,
879
Insu
ranc
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chni
cal p
rovi
sion
s 72
2,90
31,
499,
372
4,42
2,44
844
3,20
5--
----
7,08
7,92
8
Dep
osits
63
,248
104,
802
261,
507
6,40
6--
----
435,
963
Oth
er li
abili
ties
26,6
9241
7,70
916
,335
117,
614
----
--57
8,35
0
Eq
uit
y 15
4,91
052
8,83
71,
947,
142
448,
618
2,33
83,
029,
288
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81,8
44)
3,02
9,28
9
Attr
ibut
able
to G
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Seg
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ade
77,4
5526
4,41
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3,57
122
4,30
91,
169
1,51
4,64
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,922
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514,
645
Attr
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s77
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264,
418
973,
571
224,
309
1,16
91,
514,
644
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40,9
22)
1,51
4,64
4
To
tal
1,34
6,95
62,
778,
276
8,10
7,17
01,
133,
833
7,42
63,
084,
250
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R$
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210,
948
221,
341
109,
757
160,
252
573
76--
702,
947
Sec
uriti
es
263,
616
801,
268
1,80
9,20
916
9,45
22,
006
1,00
3--
3,04
6,55
4
Insu
ranc
e an
d co
insu
ranc
e op
erat
ions
35
5,61
058
1,64
21,
928,
312
236,
512
----
--3,
102,
076
Rei
nsur
ance
ass
ets
� T
echn
ical
pro
visi
ons
142,
782
--1,
119,
376
3--
--(1
7,42
5)1,
244,
736
Sec
uriti
es
67,3
4374
9,27
664
2,56
032
4,26
53,
886
911
--1,
788,
241
Oth
ers
195
74,3
2217
7,65
42,
448
----
--25
4,61
9
Pre
paid
exp
ense
s 4,
972
164
4,85
712
----
--10
,005
Cos
ts o
f acq
uisi
tion
72,7
8310
5,55
241
8,82
125
2,45
6--
----
849,
612
Ris
k di
ferr
ed
----
----
----
----
Inve
stm
ents
33
21,
756
437,
494
306
--2,
782,
716
(2,9
57,4
28)
265,
176
Pro
pert
y an
d eq
uipm
ent
1,09
995
590
,622
305
----
--92
,981
Inta
ngib
le a
sset
s 3,
613
18,4
0217
5,84
02,
607
--64
,739
--26
5,20
1
Oth
er a
sset
s --
----
----
----
--
To
tal
1,12
3,29
32,
554,
678
6,91
4,50
21,
148,
618
6,46
52,
849,
445
(2,9
74,8
53)
11,6
22,1
48
Lia
bili
ties
Acc
ount
s pa
yabl
e94
,719
164,
919
374,
910
74,4
493,
989
55,9
7616
,529
785,
491
Insu
ranc
e an
d co
insu
ranc
e op
erat
ions
22
7,50
563
,256
766,
457
119,
679
----
--1,
176,
897
Insu
ranc
e te
chni
cal p
rovi
sion
s 56
5,11
51,
356,
299
3,84
2,75
339
4,32
2--
--(5
8,74
6)6,
099,
743
Dep
osits
22
,561
41,0
0399
,018
7,83
2--
----
170,
414
Oth
er li
abili
ties
25,0
3039
8,79
112
,784
109,
944
----
--54
6,54
9
Eq
uit
y 18
8,36
353
0,41
01,
818,
580
442,
392
2,47
62,
793,
469
(2,9
32,6
36)
2,84
3,05
4
Attr
ibut
able
to G
roup
BB
Seg
urid
ade
94,1
8226
5,20
590
9,29
022
1,19
61,
238
1,39
6,73
5(1
,466
,318
)1,
421,
528
Attr
ibut
able
to o
ther
sto
ckho
lder
s94
,181
265,
205
909,
290
221,
196
1,23
81,
396,
734
(1,4
66,3
18)
1,42
1,52
6
To
tal
1,12
3,29
32,
554,
678
6,91
4,50
21,
148,
618
6,46
52,
849,
445
(2,9
74,8
53)
11,6
22,1
48
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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
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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75
R$ thousand
Dec 31, 2013 Brasilcap Capitalização BB Capitalização Adjustments /Eliminations Total
Assets
Cash and bank deposits 191 -- -- 191
Securities 9,773,656 5,585 -- 9,779,241
Insurance and coinsurance operations 596,379 -- -- 596,379
Prepaid expenses 2,57 -- -- 2,57
Investments and goodwill 1,272 -- -- 1,272
Property and equipment 8,625 -- -- 8,625
Intangible assets 8,187 -- -- 8,187
Other assets 3,935 -- -- 3,935
Total 10,394,815 5,585 -- 10,400,400
Liabilities
Tax liabilities 105,82 65 -- 105,885
Capitalization technical provisions 2,385 -- -- 2,385
Provisions 9,488,698 -- -- 9,488,698
Other liabilities 528,364 10 -- 528,374
Equity 269,548 5,51 -- 275,058
Attributable to Group BB Seguridade 179,681 5,51 -- 185,191
Attributable to other stockholders 89,867 -- -- 89,867
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
������������������������ ����������
���������������
76
R$ thousand
Dec 31, 2013 Brasilprev Seguros e Previdência S.A. Adjustments/Eliminations Total
Assets
Cash and bank deposits 181,550 -- 181,550
Securities 84,386,959 -- 84,386,959
Insurance and coinsurance operations 1,471 -- 1,471
Receivables 253,576 -- 253,576
Prepaid expenses 386 -- 386
Costs acquisitions 473,029 -- 473,029
Pension plan credits 4,181 -- 4,181
Property and equipment 17,251 -- 17,251
Intangible assets 160,607 -- 160,607
Total 85,479,010 -- 85,479,010
Liabilities
Accounts payable 285,039 -- 285,039
Insurance and reinsurance debts 2,880 -- 2,880
Pension plan debts 1,700 -- 1,700
Deposits 23,885 -- 23,885
Technical provisions 55,106,491 -- 55,106,491
Technical provisions - Pension plans 28,436,537 -- 28,436,537
Other liabilities 172,990 -- 172,990
Equity 1,449,488 -- 1,449,488
Attributable to Group BB Seguridade 1,086,971 -- 1,086,971
Attributable to other stockholders 362,517 -- 362,517
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 Group BB Seguridade 353,872 33,400
Attributable to other stockholders -- --
Total 1,793,073 1,745,887
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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
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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 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
Insurance business operations 129,391 72,312
Reinsurance business operations 498,877 290,759
(-) Credit risk impairment losses (81,013) (90,860)
Reinsurance 2,002,945 2,159,349
Premiums 1,744,938 1,768,527
Insurance business operations 460,173 495,461
(-) Credit risk impairment losses (202,166) (104,639)
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
Attributable to other stockholders 4,334,250 3,899,378
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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 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
Provision for unearned premiums 3,480,439 3,224,338
Provision for unsettled claims 1,307,579 1,198,121
Incurred but not reported reserve � IBNR 447,149 329,569
Other provisions 151,509 144,300
Reinsurance 3,926,397 3,868,325
Provision for unsettled claims 2,429,104 2,406,426
Provision for unearned premiums 935,417 1,026,780
Incurred but not reported reserve � IBNR 513,096 411,796
Other provisions 48,780 23,323
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
Incurred but not reported reserve � IBNR 10,223 11,152
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
Other provisions 87,719 82,517
Total 129,712,134 106,850,269
Attributable to the Group BB Seguridade 92,869,977 76,005,552
Attributable to other stockholders 36,842,157 30,844,717
(1) Values are presented net of reinsurance.
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80
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
Insurance � Property and casualty (1) 5,386,676 4,896,328
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
Property/casualty 3,458,498 3,578,690
Dpvat -- 54,600
Private Pension Plans 30,672,887 28,436,537
Free benefit generating plan � PGBL 22,266,207 20,337,357
Traditional plans 8,406,680 8,099,180
Capitalization Plans 10,995,453 9,488,698
Total 129,712,134 106,850,269
Attributable to the Group BB Seguridade 92,869,977 76,005,552
Attributable to other stockholders 36,842,157 30,844,717
(1) Values are presented net of reinsurance.
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
Property and Casualty
Private Pension Plans
Capitalization Plans
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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81
R$ thousand
Dec 31, 2013
Life, Mortgage life Rural, life
insurance with survivor coverage
Property and Casualty
Private Pension Plans
Capitalization Plans
Reinsurance Total
Shares in investment funds (VGBL e PGBL) 49,431,825 -- 25,508,246 -- -- 74,940,071
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
Attributable to the Group BB Seguridade 46,295,656 2,657,469 21,584,798 6,515,119 793,880 77,846,922
Attributable to other stockholders 15,440,117 2,657,469 7,196,852 3,258,538 3,076,818 31,629,794
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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82
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
Opening balance Constitution Reversals Updates Closing balance
Technical provisions � Reinsurance 5,482,468 16,808,021 (16,221,094) (16,506) 6,052,889
Provision for unsettled claims 3,218,792 13,271,684 (12,978,915) (28,166) 3,483,395
Provision for unearned premiums 1,783,390 2,907,076 (2,738,839) 4,690 1,956,317
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
Other provisions 23,323 116,547 (86,695) 90 53,265
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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83
R$ thousand
2013
Opening balance Constitution Reversals Updates Closing balance
Technical Provisions � Insurance and life insurance with survivor coverage 53,028,014 35,131,755 (19,178,136) 1,557,321 70,538,954
Mathematical provision for future benefits 40,635,578 12,769,034 -- 1,481,436 54,886,048
Provision for unearned premiums 6,235,792 14,144,527 (12,211,603) 13,938 8,182,654
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
Provision for premium insufficiency 254,398 47,560 -- -- 301,958
Provision for redemption and other amounts to be regularized 61,432 198,899 (154,616) 128 105,843
Mathematical provision for vested benefits 30,329 188,869 (170,184) 3,469 52,483
Other provisions 130,129 255,860 (44,796) -- 341,193
Technical Provisions � Supplementary Pension 26,209,378 2,086,829 (893,945) 1,034,274 28,436,536
Mathematical provision for future benefits 23,426,007 1,310,354 (95,206) 847,968 25,489,123
Mathematical provision for vested benefits 1,130,245 404,966 (352,329) 141,758 1,324,640
Provision for unsettled claims 24,818 7,615 (5,350) 1,122 28,205
Provision for claims incurred but not reported 20,818 120,558 (130,224) -- 11,152
Provision for unearned premiums 8,130 102,225 (100,415) -- 9,940
Provision for unexpired risks 7,881 -- (7,881) -- --
Other provisions 1,591,479 141,111 (202,540) 43,426 1,573,476
Total Technical Provisions 79,237,392 37,218,584 (20,072,081) 2,591,595 98,975,490
Attributable to the Group BB Seguridade 56,247,656 23,943,732 (11,522,947) 1,906,837 70,575,278
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 unsettled claims 2,346,423 2,075,357 (1,445,856) 54,329 3,030,253
Provision for unearned premiums 1,436,894 2,137,879 (1,805,322) 13,938 1,783,389
Provision for claims incurred but not reported 473,731 159,332 (147,253) -- 485,810
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
Attributable to other stockholders 3,178,125 2,485,455 (1,923,005) 53,441 3,794,016
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84
l) Income from Operations with Insurance and Complementary Social Security of Equity Investments Valued by Equity Method
R$ thousand
3rd Quarter/2014 3rd Quarter/2013
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
Insurance Pension plan Total Insurance Pension plan Total
Retained premiums and contributions 13,552,908 103,653 13,656,561 11,862,516 107,086 11,969,602
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)
Expenses with benefits and redemptions (40,291) (12,671) (52,962) (12,524) (24,206) (36,730)
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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85
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
Estimated amount for claims
During the occurrence 2,537,104 2,857,743 3,361,328 3,968,802 3,957,191 5,093,936 4,020,721 25,796,825
A period of the occurrence 2,533,247 2,905,206 3,414,601 4,090,601 4,079,443 4,688,792 -- 21,711,890
Two periods after the occurrence 2,553,292 2,955,083 3,458,994 4,153,108 4,005,471 -- -- 17,125,948
Three periods after the occurrence 2,574,841 2,974,504 3,513,413 4,116,623 -- -- -- 13,179,381
Four periods after the occurrence 2,597,767 3,011,120 3,495,729 -- -- -- -- 9,104,616
Five periods after the occurrence 2,625,628 2,994,488 -- -- -- -- -- 5,620,116
Six periods after the occurrence 2,629,440 -- -- -- -- -- -- 2,629,440
Estimates based on claims data (Sep 30, 2014) 2,629,440 2,994,488 3,495,729 4,116,623 4,005,471 4,688,792 4,020,721 25,951,264
Payments of claims 2,553,996 2,929,226 3,421,185 4,009,174 3,840,551 4,383,059 2,748,067 23,885,258
Liability recognized in the Balance Sheet 75,444 65,262 74,544 107,449 164,920 305,733 1,272,654 2,066,006
Liability in respect of periods prior to Dec 31,2007 -- -- -- -- -- -- -- 984,991
Total liabilities -- -- -- -- -- -- -- 3,050,997
Attributable to the Group BB Seguridade -- -- -- -- -- -- -- 1,908,525
Attributable to other stockholders -- -- -- -- -- -- -- 1,142,472
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86
R$ thousand
Year of Occurrence of the Sinister
2008 2009 2010 2011 2012 2013Sep 30, 2014 Total
Reinsurance Segment
Gross Retrocession Claims
Estimated amount for 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
Five periods after the occurrence 2,043,347 1,449,505 -- -- -- -- -- 3,492,852
Six periods after the occurrence 2,067,003 -- -- -- -- -- -- 2,067,003
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
Liability recognized in the Balance Sheet 273,488 189,377 66,428 344,351 588,968 836,471 1,030,701 3,329,784
Liability in respect of periods prior to Dec 31,2007 -- -- -- -- -- -- -- 1,368,252
Total liabilities -- -- -- -- -- -- -- 4,698,036
Attributable to the Group BB Seguridade -- -- -- -- -- -- -- 963,600,
Attributable to other stockholders -- -- -- -- -- -- -- 3,734,436
Net Retrocession claims
Estimated amount for 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
Three periods after the occurrence 1,237,117 1,052,361 471,303 321,648 -- -- -- 3,082,430
Four periods after the occurrence 1,380,918 1,011,430 452,293 -- -- -- -- 2,844,641
Five periods after the occurrence 1,378,820 1,012,606 -- -- -- -- -- 2,391,426
Six periods after the occurrence 1,340,630 -- -- -- -- -- -- 1,340,630
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
Liability in respect of periods prior to Dec 31,2007 -- -- -- -- -- -- -- 438,727
Total liabilities -- -- -- -- -- -- -- 2,264,778
Attributable to the Group BB Seguridade -- -- -- -- -- -- -- 464,522
Attributable to other stockholders -- -- -- -- -- -- -- 1,800,256
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87
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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88
R$ thousand
Dec 31, 2013 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 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 --
Quotas in Investment Funds � DPVAT 468,083 -- -- -- 468,083 468,083 --
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 --
Private Securities 15,464,646 2,127,240 1,249,021 16,109,489 34,950,396 35,218,479 (268,083)
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
Shares in Investment Funds 281,857 -- -- -- 281,857 281,857 --
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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89
R$ thousand
�Dec 31, 2013 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 -- 327,030 821,313 1,840,968 2,989,311 2,997,053 (7,742)
Financial Treasure Bills -- 324,220 795,812 1,113,078 2,233,110 2,233,189 (79)
National Treasury Notes (NTN-B) -- -- 23,214 438,720 461,934 469,181 (7,247)
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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90
R$ thousand
Dec 31, 2013 1 to 30 31 to 180 181 to 360 More than 360 Book valueValue
Curve
Asset Held to Maturity
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 Bills 71,200 195,313 805,829 1,781,635 2,853,977 2,751,157
National Treasury Notes (NTN-F) 548,828 -- -- 921,231 1,470,059 1,507,562
Financial Treasure Bills -- -- -- 17,522 17,522 17,522
National Treasury Notes (NTN-C) -- -- -- 14,872 14,872 15,879
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
Attributable to the Group BB Seguridade 600,960 170,104 830,275 9,973,785 11,575,124 12,617,607
Attributable to other stockholders 670,621 226,066 459,059 4,296,070 5,651,816 5,995,761
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91
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
Attributable to other stockholders 13,492,549 20,327,682 33,820,231 13,604,182 12,471,207 26,075,389
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92
R$ thousand
Sep 30, 2014 Dec 31, 2013
Level 1 Level 2 Total Level 1 Level 2 Total
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
Attributable to other stockholders 2,791,481 443,375 3,234,856 2,061,800 363,488 2,425,288
R$ thousand
Sep 30, 2014 Dec 31, 2013
Level 1 Level 2 Total Level 1 Level 2 Total
Financial Assets Available for Sale
Certificate of Deposits (CDB) -- 701,932 701,932 -- 938,829 938,829
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
Attributable to the Group BB Seguridade 8,325,871 2,861,978 11,187,849 8,490,358 3,121,714 11,612,072
Attributable to other stockholders 3,367,736 1,785,223 5,152,959 3,535,792 2,097,440 5,633,232
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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93
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 ��� � �� ��� ����
������������������������ ����������
���������������
94
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 -- -- ������ ������
������������������������ ����������
���������������
95
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 �� ���
Total charges of IR (25%) and CSLL (9%) (787,585) ����� �� (950,617) �� �����
Equity in earnings of subsidiaries and associates 795,692 ����� 480,191 ������
Other amounts (8,107) ������ (9,081) ���� �
Income tax and social contribution -- -- (479,507) ����
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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���������������
96
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�.
������������������������ ����������
���������������
97
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
Initial balance -- -- 5,870 4,473
Addition -- -- 7,249 3,179
Reversal of the provision -- -- (1,864) (1,782)
Closing balance -- -- 11,255 5,870
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
Civil lawsuits -- -- 7,134 6,328
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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98
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 ���� ���� ����� ����
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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
Parent and Consolidated
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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
$�� ��� !���#���������%�� ���� ���� ��� ��� �� �� �
Judicial deposits income -- -- ��� ���
Valuation of exclusive fund shares -- -- �� �
Financial assets at fair value through profit or loss -- -- �� ��
Other interest income -- -- -- ���
Total ��� � �� � ����� �����
21 � PERSONNEL EXPENSES
a) Personnel Expenses
R$ thousand
������ Consolidated
�%�+,�����-� � �%�+,�����-� �%�+,�����-� � �%�+,�����-�
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R$ thousand
������ Consolidated
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���� !��������������� ������ �� � ������ ������
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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)
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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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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
! ��"��!!� � ! ��"��!!� ! ��"��!!� � ! ��"��!!�
Operational support -- -- (92,556) (94,772)
Administrative cost of products -- -- (72,738) (52,069)
Data processing (7) -- (36,083) (51,788)
Condominium fee (2,919) -- (2,919) --
Communication expenses (1,370) -- (1,888) (602)
Specialized technical services (630) -- (633) --
Outsourced services (599) -- (618) (430)
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 assets 36,939 �� 55,545 ����
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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R$ thousand
������ Consolidated
! ��"��!!� � ! ��"��!!� ! ��"��!!� � ! ��"��!!�
&&�+ %'����.� -- -- 890,201 ������
Brasilprev -- -- 269,908 ������
Mapfre BB SH2 -- -- 244,811 �� ���
Brasilcap -- -- 250,959 �����
Other companies -- -- 4,432 ���
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)
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
Other liabilities 33,370 -- 33,370
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)
Until 1 year After 1 year Total
Assets
Cash and cash equivalents 1,785,284 -- 1,785,284
Financial assets at fair value through profit or loss 2,966 -- 2,966
Financial assets available for sale 80 -- 80
Equity method investments -- 6,221,050 6,221,050
Dividends receivable 35,356 -- 35,356
Current tax assets 88,120 -- 88,120
Deferred tax assets -- 6,377 6,377
Commissions receivable 509,216 -- 509,216
Other assets 122 136,907 137,029
Total 2,421,144 6,364,334 8,785,478
Liabilities
Dividends payable 344,719 -- 344,719
Provisions for labor, tax and civil claims 8,637 -- 8,637
Current tax liabilities 152,910 -- 152,910
Deferred tax liabilities -- 273,977 273,977
Unearned commissions 526,085 495,868 1,021,953
Other liabilities 42,009 -- 42,009
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
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 financial instruments 123,076 -- -- -- 123,076
Income from commission -- -- 1,660,311 -- 1,660,311
Expense of portfolio management -- -- -- (51,682) (51,682)
Personnel expenses (28,348) -- -- -- (28,348)
Administrative expenses (5) (209,961) -- -- -- (209,961)
Monetary liabilities changes (94,739) -- -- -- (94,739)
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R$ thousand
Dec 31, 2013
Parent(1) Subsidiaries(2) Associates(3) Total
Assets
Cash and cash equivalents 1,785,284 -- -- 1,785,284
Commissions to be received -- -- 509,216 509,216
Dividends to be received -- 1,077,382 35,356 1,112,738
Liabilities
Dividends payable 228,376 -- -- 228,376
Obligations with related parties 29,301 -- -- 29,301
Unearned Commissions -- -- 1,021,953 1,021,953
R$ thousand
3rd Quarter/2013
Parent(1) Subsidiaries(2) Associates(3) Other related parties (4) Total
Income
Income from financial instruments 33,838 113 -- -- 33,951
Income from commission -- -- 425,497 -- 425,497
Expense of portfolio management -- -- -- (16,102) (16,102)
Personnel expenses (6,636) -- -- -- (6,636)
Administrative expenses (5) (65,439) -- -- -- (65,439)
Monetary liabilities changes (7,439) -- -- -- (7,439)
R$ thousand
01.01 to 09.30.2013
Parent(1) Subsidiaries(2) Associates(3) Other related parties (4) Total
Income
Income from financial instruments 85,663 300 -- -- 85,963
Income from commission -- -- 1,230,052 -- 1,230,052
Expense of portfolio management -- -- -- (42,459) (42,459)
Personnel expenses (15,550) -- -- -- (15,550)
Administrative expenses (5) (200,071) -- -- -- (200,071)
Monetary liabilities changes (22,356) -- -- -- (22,356)
(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
Marcelo Augusto Dutra Labuto
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
Premiums Written Growth - P&C - Mapfre BB SH2 14.8 19 - 26 12 - 15
Contribution Growth - Pension Plans 38.0 33 - 47 Maintained
Collection Growth - Premium Bonds 5.0 10 - 15 3 - 6
�
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. �
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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
Based on our review, we are not aware of any fact that could lead us to believe that the
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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2
ST
AT
EM
EN
TS
OF
INC
OM
E
R$
tho
usa
nd
(ex
cep
t ea
rnin
gs
per
sh
are)
No
te
Par
en
t C
on
solid
ate
d
3rd
Qu
arte
r/20
1401
.01
a 09
.30.
201
43r
d Q
uar
ter/
2013
01.0
1 a
09.3
0.201
33r
d Q
uar
ter/
2014
01.0
1 a
09.3
0.201
43r
d Q
uar
ter/
2013
01.0
1 a
09.3
0.201
3
OP
ER
AT
ING
INC
OM
E
82
8,66
32,
340,
272
555,
487
1,57
8,12
91,
070,
854
3,07
2,63
775
5,33
82,
168,
265
Com
mis
sion
s in
com
e [2
4]
----
----
562,
559
1,66
0,31
142
5,49
71,
230,
052
Equ
ity in
com
e [1
0]
828,
663
2,34
0,27
255
5,48
71,
578,
129
508,
295
1,41
2,32
632
9,84
193
8,21
3
OT
HE
R O
PE
RA
TIN
G IN
CO
ME
/EX
PE
NS
ES
(6
,384
)(2
3,84
6)
(7,6
55)
(7,9
87)
(82,
957)
(276
,704)
(90,
489)
(266
,744)
Inte
rest
ear
ning
s of
fina
ncia
l ins
trum
ents
[2
0]
2,08
79,
616
1,54
72,
018
50,4
7012
9,43
635
,682
90,5
86
Per
sonn
el e
xpen
ses
[21]
(7
,080
)(2
1,44
4)(2
,909
)(3
,705
)(9
,246
)(2
8,34
8)(6
,636
)(1
5,55
0)
Adm
inis
trat
ive
expe
nses
[22]
(1
,474
)(7
,950
)(1
64)
(169
)(5
9,68
2)(2
10,2
50)
(65,
773)
(200
,553
)
Tax
exp
ense
s [1
2]
(72)
(1,4
25)
(4)
(4)
(41,
584)
(124
,052
)(3
1,01
6)(8
9,55
7)
Oth
er o
pera
ting
inco
me/
(exp
ense
) [2
3]
155
(2,6
43)
(6,1
25)
(6,1
27)
(22,
915)
(43,
490)
(22,
746)
(51,
670)
INC
OM
E B
EF
OR
E T
AX
ES
AN
D E
QU
ITIE
S
822,
279
2,31
6,42
654
7,83
21,
570,
142
987,
897
2,79
5,93
366
4,84
91,
901,
521
INC
OM
E T
AX
AN
D S
OC
IAL
CO
NT
RIB
UT
ION
[1
2]
----
----
(165
,618)
(479
,507)
(117
,017)
(331
,379)
NE
T IN
CO
ME
FO
R T
HE
PE
RIO
D
822,
279
2,31
6,42
654
7,83
21,
570,
142
822,
279
2,31
6,42
654
7,83
21,
570,
142
Num
ber
of s
hare
s 2,
000,
000,
000
2,00
0,00
0,00
02,
000,
000,
000
2,00
0,00
0,00
02,
000,
000,
000
2,00
0,00
0,00
02,
000,
000,
000
2,00
0,00
0,00
0
Ear
ning
s pe
r sh
are
(R$)
0,
4111
41,
1582
10,
2739
20,
7850
70,
4111
41,
1582
10,
2739
20,
7850
7
See
the
acco
mpa
nyin
g no
tes
to th
e fin
anci
al s
tate
men
ts.
ST
AT
EM
EN
T O
F C
OM
PR
EH
EN
SIV
E IN
CO
ME
R
$ th
ou
san
d
P
aren
t C
on
solid
ate
d
3rd
Qu
arte
r/20
1401
.01
a 09
.30.
201
43r
d Q
uar
ter/
2013
01.0
1 a
09.3
0.201
33r
d Q
uar
ter/
2014
01.0
1 a
09.3
0.201
43r
d Q
uar
ter/
2013
01.0
1 a
09.3
0.201
3
NE
T IN
CO
ME
FO
R T
HE
PE
RIO
D
822,
279
2,31
6,42
654
7,83
21,
570,
142
822,
279
2,31
6,42
654
7,83
21,
570,
142
Com
preh
ensi
ve in
com
e in
the
perio
d (4
,503
)11
,303
(10,
402)
(24,
315)
(4,5
03)
11,3
03(1
0,40
2)(2
4,31
5)
Tax
es in
com
preh
ensi
ve in
com
e 1,
801
(4,5
21)
4,16
19,
726
1,80
1(4
,521
)4,
161
9,72
6
CO
MP
RE
HE
NS
IVE
INC
OM
E F
OR
TH
E P
ER
IOD
NE
T O
F T
AX
81
9,57
72,
323,
208
541,
591
1,55
5,55
381
9,57
72,
323,
208
541,
591
1,55
5,55
3
See
the
acco
mpa
nyin
g no
tes
to th
e fin
anci
al s
tate
men
ts.
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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
Note Parent Consolidated
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
Unearned commissions [17] -- -- 634.965 495.868
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. � �
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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
ST
AT
EM
EN
TS
OF
CH
AN
GE
S IN
EQ
UIT
Y
R$
tho
usa
nd
�������
No
te
Cap
italC
ap
ital R
ese
rves
Inco
me R
eser
ves
Tre
asu
ry s
har
esR
etai
ned
ear
nin
gs/
ac
cu
mu
late
d lo
sses
Accu
mu
late
d o
ther
C
om
pre
hen
siv
e In
co
me
To
tal
Leg
al
Rese
rve
Sta
tuto
ry R
eser
veP
rop
osed
Ad
dit
ion
al
Div
iden
d
Bal
an
ces
at D
ec
31,
201
2
5,63
3,26
8--
----
----
--5,
106
5,63
8,37
4
Pai
d-up
cap
ital
[19.
a]
13,5
00--
----
----
----
13,5
00
Rev
enue
res
erve
s [1
9.b]
--
--51
,115
153,
347
----
(204
,462
)--
--
Div
iden
ds
----
----
----
(817
,848
)--
(817
,848
)
Acc
umul
ated
oth
er c
ompr
ehen
sive
in
com
e [1
9.d]
--
----
----
----
(14,
589)
(14,
589)
Net
inco
me
for
the
perio
d --
----
----
--1,
570,
142
--1,
570,
142
Bal
an
ces
at S
ep
30,
201
3
5,6
46,
768
-- 5
1,115
153,
347
----
547,
832
(9,
483
) 6
,389,
579
Ch
an
ges
in t
he P
erio
d
13,
500
--
51,
115
153,
347
----
547,
832
(14,
589)
751,
205
Bal
an
ces
at D
ec
31,
201
3
5,64
6,76
8--
123,
688
371,
062
816,
436
----
(16,
681)
6,94
1,27
3
Sha
re-b
ased
pa
ymen
t tra
nsac
tions
--
266
----
--(2
66)
----
--
Add
ition
al D
ivid
ends
2nd
hal
f 201
3 --
----
--(8
16,4
36)
----
--(8
16,4
36)
Rev
enue
res
erve
s [1
9.b]
--
--74
,707
224,
123
----
(298
,830
)--
--
Add
ition
al D
ivid
ends
1st
hal
f 201
4 [1
9.c]
--
----
--84
0,45
7--
(840
,457
)--
--
Min
imum
man
dato
ry d
ivid
end
[19.
c]
----
----
----
(354
,860
)--
(354
,860
)
Add
ition
al D
ivid
ends
pai
d 1s
t hal
f 201
4[1
9.c]
--
----
--(8
40,4
57)
----
--(8
40,4
57)
Acc
umul
ated
oth
er c
ompr
ehen
sive
in
com
e [1
9.d]
--
----
----
----
6,78
26,
782
Net
inco
me
for
the
perio
d --
----
----
--2,
316,
426
--2,
316,
426
Bal
an
ces
at S
ep
30,
201
4
5,64
6,76
826
619
8,39
559
5,18
5--
(266
)82
2,27
9(9
,899
)7,
252,
728
Ch
an
ges
in t
he P
erio
d
--26
674
,707
224,
123
(816
,436)
(266
)82
2,27
96,
782
311,
455
See
the
acco
mpa
nyin
g no
tes
to th
e fin
anci
al s
tate
men
ts.
�
���������������� ����������
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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
See the accompanying notes to the financial statements.
������������������������ ����������
���������������
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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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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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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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.
IFRS 15 is effective for annual periods beginning on or after January 01, 2017.
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
Geographical region 01.01 to 09.30.2013
Other % Rural % Life % Total %
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
Other % Rural % Life % Total %
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
Geographical region 3rd Quarter/2013
Other % Rural % Life % Total %
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
Geographical region 01.01 to 09.30.2014
Other % Rural % Life % Total %
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
Geographical region 01.01 to 09.30.2013
Other % Rural % Life % Total %
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
Geographical region 3rd Quarter/2014
Other % Rural % Life % Total %
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
Geographical region 3rd Quarter/2013
Other % Rural % Life % Total %
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
Concentration of Risk by Region � Gross of Reinsurance
R$ thousand
Geographical region 01.01 to 09.30.2014
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
Geographical region 01.01 to 09.30.2013
Other % Damage % Auto % Total %
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
Geographical region 3rd Quarter/2014
Other % Damage % Auto % Total %
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
Geographical region 3rd Quarter/2013
Other % Damage % Auto % Total %
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%
Concentration of Risk by Region � Net of Reinsurance
R$ thousand
Geographical region 01.01 to 09.30.2014
Other % Damage % Auto % Total %
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
Geographical region 01.01 to 09.30.2013
Other % Damage % Auto % Total %
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
Geographical region 3rd Quarter/2014
Other % Damage % Auto % Total %
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
Geographical region 3rd Quarter/2013
Other % Damage % Auto % Total %
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
Risk Factor Sensitivity Impact on Shareholders� Equity / Profit
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)
b. Loss ratio Increase Increase of 5% in the loss ratio (199,900) (175,196)
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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
Net written premium(1)
Ceded reinsurance
RetentionNet written premium(1)
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
Local Admitted Eventual Total Local Admitted Eventual Total
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%
(1) Net written premium of Coinsurance and Cancellations. R$ thousand
Group of lines
3rd Quarter/2014 3rd Quarter/2013
Net written premium(1)Ceded reinsurance Retention
Net written premium(1)Ceded reinsurance Retention
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%
(1) Net written premium of Coinsurance and Cancellations.
In Sep 30, 2014, total reinsurance recoverable assets is R$ 482,373 thousand (R$ 247,450 thousand in Dec 31, 2013).
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
Financial Security � Rating Sep 30, 2014
AAA AA+ AA AA- A BBB+ BBB BB+ Total
Fixed income government securities 3,098,087 -- -- -- -- -- -- -- 3,098,087
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
Receivables Investment 43,790 -- -- -- -- -- -- -- 43,790
Promissory Notes -- 10,531 -- -- -- -- -- -- 10,531
Total 3,254,300 89,424 263,001 36,218 2,520 25,925 -- 13,719 3,685,107
d.3) Market Risk
Management of credit 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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32
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
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$ 1,336,296 thousand and DPVAT position of R$ 363,127 thousand.
R$ thousand
Risk Factor
Interest rate
Impact on Equity
Sep 30, 2014 Dec 31, 2013
Elevation of rates (1,088) (9,501)
Reduction of rates 2,323 9,540
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.
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
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 263,322 -- -- 263,322 150,091 -- -- 150,091
Cash equivalents 162,375 -- -- 162,375 -- -- -- --
Financial assets (*) 1,275,110 1,202,670 842,580 3,320,360 805,433 1,495,606 1,033,198 3,334,237
Receivables from insurance and reinsurance operations
3,716,635 49,779 - 3,766,414 2,833,022 62,878 -- 2,895,900
Reinsurance assets � technical provisions(***)
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
Prepaid expenses 24,241 -- -- 24,241 10,005 -- -- 10,005
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
Technical provisions (***) 4,562,707 1,598,597 563,672 6,724,976 4,620,170 1,101,477 248,072 5,969,719
Accounts payable 628,881 389 -- 629,270 696,111 394 -- 696,505
Obligations with insurance and reinsurance operations
1,560,879 -- -- 1,560,879 1,176,897 -- -- 1,176,897
Third party deposits 435,963 -- -- 435,963 170,414 -- -- 170,414
Total Liabilities 7,188,430 1,598,986 563,672 9,351,088 6,663,592 1,101,871 248,072 8,013,535
(*) 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.
(**)Financial assets related to legal and tax deposits, amounting to R$ 657,654 thousand in 2014 (R$ 601,104 thousand in 2013), and financial liabilities of the legal provisions, amounting of R$ 578,350 thousand in 2014 (R$ 546,549 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.
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
Impacts Sep 30, 2014
+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
MRC AdequacyAdjusted net
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
Technical Provisions
Covering 20% of MCR
Excess of net assets
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
Financial security � rating
Dec 31, 2013
AAA AA A BBBExposure to market risk
Total
Fixed income government securities -- -- -- -- 7,598,536 7,598,536
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
Receivables investment 60,395 30,140 -- -- -- 90,535
Mortgage backed securities 2,138 -- -- -- -- 2,138
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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39
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
Risk Factors Sep 30, 2014 Dec 31, 2013
Pre-fixed interest rate 6,049,648 53.7% 5,312,519 54.8%
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%
Post-fixed interest rate 3,897,712 34.6% 2,771,422 28.6%
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
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
Shareholders�Equity after
income taxes
Gain/lossbefore
income taxes
Shareholders�Equity after
income taxes
Gain/lossbefore
income taxes
Shareholders�Equity after
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:
R$ thousand Sep 30, 2014 Dec 31, 2013
Increase by 1 p.a. in Interest Rate
Reduction by 1 p.a. in Interest Rate
�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
Shareholders�Equity after
income taxes
Gain/lossbefore
income taxes
Shareholders�Equity after
income taxes
Gain/lossbefore
income taxes
Shareholders�Equity after
income taxes
Gain/lossbefore
incometaxes
Pre-fixed interest rate (7,791) (12,985) 7,960 13,267 (6,796) (11,326) 6,988 11,647
Post-fixed interest rate 58 96 (57) (95) 82 136 (100) (167)
IPCA Coupon (4,880) (8,133) 5,144 8,573 (5,521) (9,201) 5,832 9,721
Liabilities TR (premium bonds) 39,953 66,588 (53,940) (89,901) 66,015 110,026 (46,468) (77,447)
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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41
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
Cashflow liabilities (1,889,772) (1,664,136) (1,846,972) (1,475,105) (2,324,988) (1,999,288) (475,061) (286,840) (327,308) (237,033)
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
Sensitivity Analysis
The underwriting risks considered herein are those linked to the formation of liabilities (technical provisions) from operations.
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42
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
Financial security � rating
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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43
R$ thousand
Financial security � rating
Dec 31, 2013
AAA AA A BBBExposure to market risk
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
Sensitivity Analysis
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
Equity Income Equity Income
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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44
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
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
Accounts payable 180,663 594 -- 181,257 265,891 108 -- 265,999
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
Third party deposits 95,156 -- -- 95,156 23,885 -- -- 23,885
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
3rd Quarter/2014 3rd Quarter/2013
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
Insurance Brokerage Total Insurance Brokerage Total
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
Other income and expenses 16,034 (269,370) (253,336) 23,220 (282,041) (258,821)
Interest income from financial instruments 36,207 82,762 118,969 41,922 46,264 88,186
Personnel expenses (837) (5,737) (6,574) (3,750) (7,782) (11,532)
Administrative expenses (468) (202,108) (202,576) (984) (199,461) (200,445)
Other operating expenses (18,868) (144,287) (163,155) (13,968) (121,062) (135,030)
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 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.
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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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47
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
Life, Mortgage and Rural
Property and Casualty
ReinsurancePrivate
Pension PlansCapitalization
PlansHealth
Insurance income �
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 -- -- --
Income insurance 7,156 3,973 -- -- -- --
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) -- -- --
Reinsurance income 440,206 703,001 709,752 -- -- --
Reinsurance expenses (579,537) (833,519) (756,482) -- -- --
Other operation income (expenses) (225,897) (199,621) (87,971) -- -- --
Administrative expenses (213,581) (646,892) (174,859) -- -- --
Taxes expenses (138,658) (137,632) (40,966) -- -- --
Private Pension Plans income -- -- -- 99,348 -- --
Retained contributions -- -- -- 21,565,265 -- --
Benefits provision -- -- -- (21,465,916) -- --
Change in technical provisions -- -- -- (30,975) -- --
Income from management fees -- -- -- 888,792 -- --
Benefits and redemption expenses -- -- -- (3,641) -- --
Retained benefits -- -- -- (49,321) -- --
Risk contributions -- -- -- 146,086 -- --
Selling expenses -- -- -- (218,146) -- --
Other operation income (expenses) -- -- -- (18,680) -- --
Administrative expenses -- -- -- (189,897) -- --
Taxes expenses -- -- -- (73,210) -- --
Capitalization Plans income
Net securities capitalization -- -- -- -- 782,936 --
Fundraising with bonds -- -- -- -- 4,659,010 --
Change in provision for redemption -- -- -- -- (3,876,074) --
Change in technical provisions -- -- -- -- (25,633) --
Raffle results -- -- -- -- (153,553) --
Selling expenses -- -- -- -- (370,664) --
Other operation income (expenses) -- -- -- -- (6,413) --
Administrative expenses -- -- -- -- (59,265) --
Taxes expenses -- -- -- -- (30,519) --
Health income
Health dental plans income -- -- -- -- -- 5
Administrative expenses -- -- -- -- -- (1,739)
Taxes expenses -- -- -- -- -- --
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)
Attributable to Group BB Seguridade 697,414 101,685 67,777 395,736 151,002 (1,165)
Attributable to other stockholders� 232,595 101,682 262,671 131,947 75,462 (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
3rd Quarter/2013
Life, Mortgage and Rural
Property and Casualty
ReinsurancePrivate Pension
PlansCapitalization
Plans
Insurance income �
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) --
Capitalization Plans income
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
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50
R$ thousand
01.01 to 09.30.2013
Life, Mortgage and Rural
Property and Casualty
ReinsurancePrivate Pension
PlansCapitalization
Plans
Insurance income �
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) -- --
Other operation income (expenses) (189,139) (168,822) (2,991) -- --
Administrative expenses (190,727) (629,113) (151,671) -- --
Taxes expenses (110,977) (129,953) (55,789) -- --
Private Pension Plans income -- -- -- 95,286 --
Retained contributions -- -- -- 15,627,081 --
Benefits provision -- -- -- (15,531,795) --
Change in technical provisions -- -- -- (44,674) --
Income from management fees -- -- -- 759,621 --
Benefits and redemption expenses -- -- -- (6,453) --
Retained benefits -- -- -- (34,307) --
Risk contributions -- -- -- 140,411 --
Selling expenses -- -- -- (178,190) --
Other operation income (expenses) -- -- -- (11,380) --
Administrative expenses -- -- -- (187,812) --
Taxes expenses -- -- -- (63,364) --
Capitalization Plans income
Net securities capitalization -- -- -- -- 781,743
Fundraising with bonds -- -- -- -- 4,533,719
Change in provision for redemption -- -- -- -- (3,751,976)
Change in technical provisions -- -- -- -- 1,978
Raffle results -- -- -- -- (170,798)
Selling expenses -- -- -- -- (304,678)
Other operation income (expenses) -- -- -- -- (1,058)
Administrative expenses -- -- -- -- (54,451)
Taxes expenses -- -- -- -- (36,345)
Result from interest income 209,904 133,037 161,076 231,854 11,409
Interest income 280,475 263,718 603,427 1,593,704 415,915
Interest expenses (70,571) (130,681) (442,351) (1,361,850) (404,506)
Equity in earnings (23,774) (5,021) (4,622) 7,140 21
Operating results 902,861 253,870 120,412 708,132 227,821
Non-current assets results 32 (6) 8 52 --
Income before taxes 902,893 253,864 120,420 708,184 227,821
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
Attributable to Group BB Seguridade 446,787 71,689 11,796 319,083 88,870
Attributable to other stockholders� 149,009 71,689 8,632 106,389 44,442
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
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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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52
10 �
INV
ES
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tmen
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Asso
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ts f
rom
Jan
01,
2014
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inco
me
�(1
54)
1,20
041
,981
----
43,0
27
Rei
nsur
ance
exp
ense
s �
(5,6
21)
(182
)(1
83,9
86)
----
(189
,789
)
Oth
er in
com
e/ex
pens
es
�(5
,467
)(2
,875
)(7
4,90
7)--
--(8
3,24
9)
Adm
inis
trat
ive
expe
nses
�(7
,099
)(4
,490
)(5
9,89
3)(5
04)
--(7
1,98
6)
Tax
es e
xpen
ses
�(2
,411
)(2
,498
)(3
7,00
3)(4
18)
--(4
2,33
0)�
Inte
rest
inco
me
�12
,051
8,78
385
,301
3,35
1--
109,
486
Inte
rest
inco
me
�14
,391
9,36
911
3,25
43,
500
--14
0,51
4
Inte
rest
exp
ense
�
(2,3
40)
(586
)(2
7,95
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49)
--(3
1,02
8)�
Eq
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�(1
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3535
8,70
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86)
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res
ult
s
�(3
,363
)28
,618
514,
135
361,
129
(366
,826)
533,
693
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Non
-cur
rent
ass
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resu
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�--
----
----
--�
Inco
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loss)
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re t
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(3,3
63)
28,6
1851
4,13
536
1,12
9(3
66,8
26)
533,
693
Inco
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�1,
022
(6,9
18)
(85,
369)
1,38
4--
(89,
881)
Soc
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ontr
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�65
4(4
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4,32
7)65
4--
(77,
372)
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par
ticip
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n �
(1,0
65)
12(2
,381
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--(3
,434
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Net
inco
me/
(lo
ss)
�(2
,752
)17
,359
352,
058
363,
167
(366
,826)
363,
006
Attr
ibut
able
to G
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Seg
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�(2
,064
)13
,018
264,
008
272,
339
(275
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2,21
9
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(688
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341
88,0
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inat
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sT
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rem
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s �
366,
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228,
283
4,66
1,63
1--
--5,
256,
773
Ris
k co
ntrib
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----
----
----
Tec
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al p
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s va
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n �
(7,6
26)
(2,6
55)
(646
,308
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--(6
56,5
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pre
miu
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�35
9,23
322
5,62
84,
015,
323
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4,60
0,18
4
�
Inco
me
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(48)
--7,
204
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7,15
6
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aine
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s �
(244
,733
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09,0
57)
(1,3
26,3
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----
(1,6
80,1
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Cos
ts a
cqui
sitio
n �
(96,
341)
(25,
860)
(978
,717
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--(1
,100
,918
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Rei
nsu
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ce
inco
me
�61
0(3
97)
(139
,544)
----
(139
,331)
Rei
nsur
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inco
me
�2,
729
454
437,
023
----
440,
206
Rei
nsur
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exp
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s �
(2,1
19)
(851
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76,5
67)
----
(579
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com
e/ex
pens
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�(1
4,77
9)(1
6,47
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94,6
48)
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(225
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Adm
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trat
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expe
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�(2
2,07
3)(1
3,35
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76,7
40)
(1,4
15)
--(2
13,5
81)
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es e
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�(9
,269
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,015
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18,9
77)
(1,3
97)
--(1
38,6
58)
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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
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rest
exp
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�
(6,7
39)
(6,0
74)
(89,
620)
(149
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(102
,582
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Eq
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�(6
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291
4,98
1(9
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(22,
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Op
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�4,
230
71,6
841,
347,
151
923,
605
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1,40
8,54
3
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�36
--6
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4,26
671
,684
1,34
7,15
792
3,60
5(9
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8,58
5
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�(4
08)
(17,
686)
(240
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818
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54,9
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�(1
16)
(10,
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(202
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845
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11,7
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par
ticip
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(3,6
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(173
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1,81
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Net
inco
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043
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895,
718
929,
268
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009
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�82
32,2
7667
1,69
969
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2810
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224,
019
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410
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2,59
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s �
110,
102
58,1
301,
352,
449
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1,52
0,68
1
Ris
k co
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n �
----
----
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Tec
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1,08
113
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--(2
72,0
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�11
1,18
372
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5,38
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--1,
248,
588
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(32)
--1,
270
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1,23
8
Ret
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d cl
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(85,
521)
(37,
615)
(305
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--(4
28,1
71)
Cos
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cqui
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n �
(30,
994)
(10,
614)
(262
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--(3
04,0
54)
Rei
nsu
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ce
inco
me
�1,
641
1,51
4(9
4,30
5)
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(91,
150)
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inco
me
�5,
346
2,55
784
,183
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92,0
86
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s �
(3,7
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43)
(178
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83,2
36)
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com
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�(2
,347
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023
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(74,
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3,12
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77)
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5,81
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6,22
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10,8
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�11
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12,4
7085
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4,95
7--
113,
845
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369)
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8,87
7)
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3721
5,71
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22,5
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129
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129
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455
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31,6
2431
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658
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ticip
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(1,3
42)
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(2,2
97)
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(3,6
68)
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19,3
3221
1,35
022
1,20
4(2
24,1
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221,
040
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881
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5,75
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552
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355,
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504,
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----
----
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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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(108
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4,89
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783
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(260
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22,6
56)
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,189
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cqui
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n �
(101
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9,94
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23,4
37)
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(854
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�(2
,611
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(227
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(229
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�9,
199
3,04
220
5,90
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--21
8,14
4
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21)
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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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�(2
7,95
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6,46
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45,2
29)
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90,7
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5,08
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98)
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10,9
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rest
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me
�16
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26,0
2114
0,62
526
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9,90
4
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rest
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,957
31,9
2819
2,20
227
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0,47
5
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577)
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(70,
571)
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110
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95,5
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8584
2,82
959
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401
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(4,2
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57,4
6156
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93,9
31)
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6,78
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7114
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197,
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1,31
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213
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4,65
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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
ibut
able
to o
ther
sto
ckho
lder
s�
12,1
8219
,360
4,02
874
9(9
6)35
,386
(36,
239)
35,3
70
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60
R$
tho
usa
nd
01.0
1 to
09.3
0.20
14
Alia
nça
do
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 55
1,47
71,
519,
285
3,99
6,79
657
5,39
0--
----
6,64
2,94
8
Ris
k co
ntrib
utio
n --
----
----
----
--
Tec
hnic
al p
rovi
sion
s va
riatio
n (4
1,96
4)(1
07,5
32)
(451
,221
)23
,064
----
--(5
77,6
53)
Ear
ned
pre
miu
ms
509,
513
1,41
1,75
33,
545,
575
598,
454
----
--6,
065,
295
Inco
me
insu
ranc
e 2,
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
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
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61
R$
tho
usa
nd
3rd
Qu
arte
r/20
13
Alia
nça
do
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
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62
R$
tho
usa
nd
01.0
1 to
09.3
0.20
13
Alia
nça
do
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 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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������������������������ ����������
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63
d.3
) In
sura
nce
, Pri
vat
e P
en
sio
n P
lan
s an
d C
apit
aliz
atio
n S
eg
men
t: R
ein
sura
nce
R$
tho
usa
nd
IRB
Bra
sil R
E S
/A
3rd
Qu
arte
r/20
1401
.01
to 0
9.3
0.20
14
3rd
Qu
arte
r/20
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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64
d.4
) In
sura
nce
, Pri
vat
e P
en
sio
n P
lan
s an
d C
apit
aliz
atio
n S
eg
men
t: C
ap
italiz
atio
n
R$
tho
usa
nd
Bra
silc
ap
Cap
ital
izaç
ão
S.A
. B
B C
ap
italiz
açã
o
Ad
just
men
ts/E
limin
ati
on
s
To
tal
�3r
d Q
uar
ter/
2014
3rd
Qu
arte
r/20
133r
d Q
uar
ter/
2014
3rd
Qu
arte
r/20
133r
d Q
uar
ter/
2014
3rd
Qu
arte
r/20
133r
d Q
uar
ter/
2014
3rd
Qu
arte
r/20
13
Elim
inaç
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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65
R$
tho
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nd
Bra
silc
ap
Cap
ital
izaç
ão
S.A
. B
B C
ap
italiz
açã
o
Ad
just
men
ts/E
limin
ati
on
s
To
tal
�01
.01
to 0
9.3
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
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
inaç
ão
Col
lect
ion
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
42--
----
--75
,462
44,4
42
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66
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sura
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, Pri
vat
e P
en
sio
n P
lan
s an
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aliz
atio
n S
eg
men
t: P
rivat
e P
en
sio
n P
lan
s
R$
tho
usa
nd
Bra
silp
rev
Seg
uro
s e
Pre
vid
ên
cia
S.A
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just
men
ts/E
limin
ati
on
sT
ota
l
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2014
01.0
1 to
09.3
0.20
14
3rd
Qu
arte
r/20
1401
.01
to 0
9.3
0.20
14
3rd
Qu
arte
r/20
1401
.01
to 0
9.3
0.20
14
� �Ret
aine
d co
ntrib
utio
n7,
152,
099
21,5
65,2
65--
--7,
152,
099
21,5
65,2
65B
enef
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
able
to o
ther
sto
ckho
lder
s46
,430
131,
423
122
524
46,5
5213
1,94
7
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67
R$
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nd
Bra
silp
rev
Seg
uro
s e
Pre
vid
ên
cia
S.A
.B
rasilp
rev
No
sso
Fu
turo
Seg
uro
s e
P
revi
dên
cia
S.A
. A
dju
stm
en
ts/E
limin
ati
on
s
To
tal
3rd
Qu
arte
r/20
1301
.01
to 0
9.3
0.20
13
3rd
Qu
arte
r/20
1301
.01
to 0
9.3
0.20
13
3rd
Qu
arte
r/20
1301
.01
to 0
9.3
0.20
13
3rd
Qu
arte
r/20
1301
.01
to 0
9.3
0.20
13
Ret
aine
d co
ntrib
utio
n3,
680,
420
15,5
83,5
3313
,925
43,5
48--
--3,
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
e/ex
pens
e(7
24)
(2,8
08)
----
----
(724
)(2
,808
)
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--
--1,
524
4,93
12,
380
7,14
0
Op
erati
ng
res
ult
s25
0,45
069
9,56
21,
425
3,63
91,
524
4,93
125
3,39
970
8,13
2
Non
-cur
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
ial C
ontr
ibut
ion
tax
(37,
880)
(104
,729
)(2
14)
(546
)--
--(3
8,09
4)(1
05,2
75)
Res
ults
par
ticip
atio
n(2
,707
)(7
,637
)--
----
--(2
,707
)(7
,637
)
Net
inco
me
150,
872
418,
334
855
2,20
71,
524
4,93
115
3,25
142
5,47
2
Attr
ibut
able
to G
roup
BB
Seg
urid
ade
113,
146
313,
730
642
1,65
61,
143
3,69
711
4,93
131
9,08
3
Attr
ibut
able
to o
ther
sto
ckho
lder
s37
,726
104,
604
213
551
381
1,23
438
,320
106,
389
(1)
Com
pan
y B
rasi
lpre
v N
osso
Fut
uro
Seg
uros
e P
revi
dênc
ia S
.A. i
ncor
pora
ted
by
Bra
silp
rev
Seg
uros
e P
revi
dênc
ia S
.A. o
n N
ovem
ber
30, 2
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roke
rag
e S
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men
t
R$
tho
usa
nd
BB
Co
rreto
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e S
eg
uro
s e
Ad
min
istr
ado
ra d
e B
en
s
3rd
Qu
arte
r/20
1401
.01
to 0
9.3
0.20
14
3rd
Qu
arte
r/20
1301
.01
to 0
9.3
0.20
13
Op
erati
ng
in
co
me
56
2,55
9
1,6
60,
311
425,
497
1,23
0,05
2
Bro
kera
ge in
com
e 56
2,55
9
1
,660
,311
42
5,49
71,
230,
052
Oth
er in
com
e an
d e
xp
enses
(1
02,1
35)
(3
35,7
10)
(106
,913)
(316
,964)
Per
sonn
el e
xpen
ses
(1,8
29)
(329
,973
)(1
04,3
95)
(309
,313
)
adm
inis
trat
ive
expe
nses
(1
00,3
06)
(
5,73
7)(2
,518
)(7
,651
)
Op
erati
ng
in
co
me
46
0,42
4
1
,324
,601
318,
584
913,
088
Inte
rest
inco
me
22
,705
66,3
40
12,1
6634
,924
Inte
rest
inco
me
33,6
29
84,
300
19,1
2046
,263
Inte
rest
exp
ense
(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
able
to G
roup
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Seg
urid
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318,
866
91
7,54
8 21
7,81
662
4,71
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Pla
no
s O
do
nto
lóg
ico
s
3rd
Qu
arte
r/20
1401
.01
to 0
9.3
0.20
14
Op
erati
ng
in
co
me
5
5
Hea
lth d
enta
l pla
ns in
com
e 5
5
Oth
er in
com
e an
d e
xp
enses
(1
,739
)(1
,739
)
Per
sonn
el e
xpen
ses
(1,7
39)
(1,7
39)
adm
inis
trat
ive
expe
nses
--
--
Op
erati
ng
in
co
me
(1
,734
)(1
,734
)
Inte
rest
inco
me
18
018
0
Inte
rest
inco
me
206
206
Inte
rest
exp
ense
(2
6)(2
6)
Inco
me/(
loss)
befo
re t
axes
(1
,554
)(1
,554
)
Tax
es
----
Net
inco
me
(1,5
54)
(1,5
54)
Attr
ibut
able
to G
roup
BB
Seg
urid
ade
(1,1
65)
(1,1
65)
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able
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89)
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do
wn
of
Bal
ance
Sh
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by
Seg
men
t in
Acc
ord
ance
wit
h In
tern
atio
nal F
inan
cial
Rep
ort
Sta
nd
ard
s
e.1)
Insu
ran
ce,
Pri
vat
e P
en
sio
n P
lan
s an
d C
apit
aliz
atio
n S
eg
men
t: In
su
ran
ce
� L
ife,
Mo
rtg
age
Lif
e In
sura
nce
an
d R
ura
l
R$
tho
usa
nd
Sep
30,
2014
M
apfr
e V
ida S
.AV
ida
Seg
ura
do
raC
ia, d
e S
egu
ros
Alia
nça
do
Bra
sil
BB
Map
fre S
H1
Ad
just
men
ts/
Elim
inat
ion
sT
ota
l �A
sse
ts
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Cas
h an
d ba
nk d
epos
its
7,51
83,
207
340,
526
122
--35
1,37
3
Sec
uriti
es
437,
815
329,
356
4,32
9,76
929
,005
--5,
125,
945
Insu
ranc
e an
d co
insu
ranc
e op
erat
ions
12
0,04
551
,670
2,54
6,70
8--
--2,
718,
423
Rei
nsur
ance
ass
ets
� T
echn
ical
pro
visi
ons
9,16
61,
637
414,
225
----
425,
028
Sec
uriti
es
201,
158
69,5
251,
229,
007
3,69
7--
1,50
3,38
7
Oth
er
1,47
190
665
9--
--3,
036
Pre
paid
exp
ense
s 99
494
11,1
6516
--12
,269
Cos
ts o
f acq
uisi
tion
9,90
22,
356
1,14
7,18
8--
--1,
159,
446
Inve
stm
ents
4,
126
336
6,28
22,
586,
992
(1,9
39,7
75)
657,
961
Pro
pert
y an
d eq
uipm
ent
543
7,10
612
,944
----
20,5
93
Inta
ngib
le a
sset
s 14
,403
1,54
639
,355
662,
749
--71
8,05
3
To
tal
807,
141
467,
739
10,0
77,8
28
3,28
2,58
1(1
,939
,775)
12,6
95,5
14
Lia
bili
ties
Acc
ount
s pa
yabl
e41
,344
18,0
1340
9,51
829
4,83
9--
763,
714
Insu
ranc
e an
d co
insu
ranc
e op
erat
ions
71
,670
27,7
411,
531,
549
----
1,63
0,96
0
Insu
ranc
e te
chni
cal p
rovi
sion
s 32
8,39
726
0,03
75,
803,
038
----
6,39
1,47
2
Dep
osits
1,
197
783
340,
002
----
341,
982
Oth
er li
abili
ties
911
694
578,
039
----
579,
644
Eq
uit
y 36
3,62
216
0,47
11,
415,
682
2,98
7,74
2(1
,939
,775)
2,98
7,74
2
Attr
ibut
able
to G
roup
BB
Seg
urid
ade
272,
680
120,
337
1,06
1,62
02,
240,
508
(1,4
54,6
37)
2,24
0,50
8
Attr
ibut
able
to o
ther
sto
ckho
lder
s90
,942
40,1
3435
4,06
274
7,23
4(4
85,1
38)
747,
234
To
tal
807,
141
467,
739
10,0
77,8
28
3,28
2,58
1(1
,939
,775)
12,6
95,5
14
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71
R$
tho
usa
nd
Dec
31, 2
013
M
apfr
e V
ida S
.AV
ida
Seg
ura
do
raC
ia ,d
e S
egu
ros
Alia
nça
do
Bra
sil
BB
Map
fre S
H1
Ad
just
men
ts/
Elim
inat
ion
sT
ota
l
Asse
ts
��
��
��
Cas
h an
d ba
nk d
epos
its
162,
763
158,
238
818,
772
40,4
34--
1,18
0,20
7
Sec
uriti
es
254,
347
181,
676
2,90
2,12
016
,519
--3,
354,
662
Insu
ranc
e an
d co
insu
ranc
e op
erat
ions
10
7,98
046
,935
2,06
8,04
5--
--2,
222,
960
Rei
nsur
ance
ass
ets
� T
echn
ical
pro
visi
ons
18,3
863,
456
329,
919
--(1
1,76
6)33
9,99
5
Sec
uriti
es
230,
467
95,4
371,
203,
615
8,75
0--
1,53
8,26
9
Oth
ers
4,92
51,
573
8--
--6,
506
Pre
paid
exp
ense
s 78
715
84,
839
261
--6,
045
Cos
ts o
f acq
uisi
tion
11,2
223,
592
969,
861
----
984,
675
Inve
stm
ents
4,
133
466
5,93
02,
435,
603
(1,7
88,3
85)
657,
747
Pro
pert
y an
d eq
uipm
ent
772
8,05
89,
406
----
18,2
36
Inta
ngib
le a
sset
s 10
,386
740
30,4
4168
6,63
5--
728,
202
----
----
----
To
tal
806,
168
500,
329
8,34
2,95
63,
188,
202
(1,8
00,1
51)
11,0
37,5
04
Lia
bili
ties
Acc
ount
s pa
yabl
e46
,203
37,3
5927
5,61
931
0,37
414
,963
684,
518
Insu
ranc
e an
d co
insu
ranc
e op
erat
ions
81
,875
24,6
441,
247,
808
----
1,35
4,32
7
Insu
ranc
e te
chni
cal p
rovi
sion
s 29
3,58
524
9,03
54,
863,
029
--(4
9,17
4)5,
356,
475
Dep
osits
22
,177
3,01
914
3,19
5--
--16
8,39
1
Oth
er li
abili
ties
1,08
486
154
9,13
1--
--55
1,07
6
Eq
uit
y 36
1,24
418
5,41
11,
264,
174
2,87
7,82
8(1
,765
,940)
2,92
2,71
7
Attr
ibut
able
to G
roup
BB
Seg
urid
ade
270,
897
139,
040
948,
004
2,15
8,08
3(1
,324
,278
)2,
191,
746
Attr
ibut
able
to o
ther
sto
ckho
lder
s90
,347
46,3
7131
6,17
071
9,74
5(4
41,6
62)
730,
971
To
tal
806,
168
500,
329
8,34
2,95
63,
188,
202
(1,8
00,1
51)
11,0
37,5
04
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72
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vat
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lan
s an
d C
apit
aliz
atio
n S
eg
men
t: In
su
ran
ce
� P
rop
erty
an
d C
asu
alty
R$
tho
usa
nd
Sep
30,
2014
A
lian
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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
eA
ssi
stên
cia
Map
fre B
B S
H2
Ad
just
men
ts/
Elim
inat
ion
sT
ota
l
Asse
ts
�
Cas
h an
d ba
nk d
epos
its
110,
746
110,
098
60,7
606,
366
1,28
913
5,92
7--
425,
186
Sec
uriti
es
426,
406
1,01
9,27
01,
857,
706
383,
299
----
--3,
686,
681
Insu
ranc
e an
d co
insu
ranc
e op
erat
ions
46
4,38
569
3,71
22,
624,
513
200,
442
----
--3,
983,
052
Rei
nsur
ance
ass
ets
� T
echn
ical
pro
visi
ons
181,
335
--1,
519,
867
50--
----
1,70
1,25
2
Sec
uriti
es
64,1
1264
3,02
357
2,49
930
3,96
36,
137
1,72
5--
1,59
1,45
9
Oth
ers
187
169,
255
282,
389
280
----
--45
2,11
1
Pre
paid
exp
ense
s 7,
875
3,52
112
,661
169
--13
--24
,239
Cos
ts o
f acq
uisi
tion
84,7
1711
7,83
543
0,52
823
0,50
9--
----
863,
589
Inve
stm
ents
41
11,
784
458,
080
401
--2,
886,
367
(3,0
81,8
44)
265,
199
Pro
pert
y an
d eq
uipm
ent
1,55
04,
144
79,8
6362
----
--85
,619
Inta
ngib
le a
sset
s 5,
232
15,6
3420
8,30
48,
292
--60
,218
--29
7,68
0
To
tal
1,34
6,95
62,
778,
276
8,10
7,17
01,
133,
833
7,42
63,
084,
250
(3,0
81,8
44)
13,3
76,0
67
Lia
bili
ties
Acc
ount
s pa
yabl
e96
,366
142,
480
354,
620
30,1
425,
088
54,9
62--
683,
658
Insu
ranc
e an
d co
insu
ranc
e op
erat
ions
28
2,83
785
,076
1,10
5,11
887
,848
----
--1,
560,
879
Insu
ranc
e te
chni
cal p
rovi
sion
s 72
2,90
31,
499,
372
4,42
2,44
844
3,20
5--
----
7,08
7,92
8
Dep
osits
63
,248
104,
802
261,
507
6,40
6--
----
435,
963
Oth
er li
abili
ties
26,6
9241
7,70
916
,335
117,
614
----
--57
8,35
0
Eq
uit
y 15
4,91
052
8,83
71,
947,
142
448,
618
2,33
83,
029,
288
(3,0
81,8
44)
3,02
9,28
9
Attr
ibut
able
to G
roup
BB
Seg
urid
ade
77,4
5526
4,41
997
3,57
122
4,30
91,
169
1,51
4,64
4(1
,540
,922
)1,
514,
645
Attr
ibut
able
to o
ther
sto
ckho
lder
s77
,455
264,
418
973,
571
224,
309
1,16
91,
514,
644
(1,5
40,9
22)
1,51
4,64
4
To
tal
1,34
6,95
62,
778,
276
8,10
7,17
01,
133,
833
7,42
63,
084,
250
(3,0
81,8
44)
13,3
76,0
67
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73
R$
tho
usa
nd
Dec
31, 2
013
A
lian
ça
do
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 A
ssis
tên
cia
Map
fre B
B S
H2
Ad
just
men
ts/
Elim
inat
ion
sT
ota
l �A
sse
ts
��
��
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Cas
h an
d ba
nk d
epos
its
210,
948
221,
341
109,
757
160,
252
573
76--
702,
947
Sec
uriti
es
263,
616
801,
268
1,80
9,20
916
9,45
22,
006
1,00
3--
3,04
6,55
4
Insu
ranc
e an
d co
insu
ranc
e op
erat
ions
35
5,61
058
1,64
21,
928,
312
236,
512
----
--3,
102,
076
Rei
nsur
ance
ass
ets
� T
echn
ical
pro
visi
ons
142,
782
--1,
119,
376
3--
--(1
7,42
5)1,
244,
736
Sec
uriti
es
67,3
4374
9,27
664
2,56
032
4,26
53,
886
911
--1,
788,
241
Oth
ers
195
74,3
2217
7,65
42,
448
----
--25
4,61
9
Pre
paid
exp
ense
s 4,
972
164
4,85
712
----
--10
,005
Cos
ts o
f acq
uisi
tion
72,7
8310
5,55
241
8,82
125
2,45
6--
----
849,
612
Ris
k di
ferr
ed
----
----
----
----
Inve
stm
ents
33
21,
756
437,
494
306
--2,
782,
716
(2,9
57,4
28)
265,
176
Pro
pert
y an
d eq
uipm
ent
1,09
995
590
,622
305
----
--92
,981
Inta
ngib
le a
sset
s 3,
613
18,4
0217
5,84
02,
607
--64
,739
--26
5,20
1
Oth
er a
sset
s --
----
----
----
--
To
tal
1,12
3,29
32,
554,
678
6,91
4,50
21,
148,
618
6,46
52,
849,
445
(2,9
74,8
53)
11,6
22,1
48
Lia
bili
ties
Acc
ount
s pa
yabl
e94
,719
164,
919
374,
910
74,4
493,
989
55,9
7616
,529
785,
491
Insu
ranc
e an
d co
insu
ranc
e op
erat
ions
22
7,50
563
,256
766,
457
119,
679
----
--1,
176,
897
Insu
ranc
e te
chni
cal p
rovi
sion
s 56
5,11
51,
356,
299
3,84
2,75
339
4,32
2--
--(5
8,74
6)6,
099,
743
Dep
osits
22
,561
41,0
0399
,018
7,83
2--
----
170,
414
Oth
er li
abili
ties
25,0
3039
8,79
112
,784
109,
944
----
--54
6,54
9
Eq
uit
y 18
8,36
353
0,41
01,
818,
580
442,
392
2,47
62,
793,
469
(2,9
32,6
36)
2,84
3,05
4
Attr
ibut
able
to G
roup
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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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75
R$ thousand
Dec 31, 2013 Brasilcap Capitalização BB Capitalização Adjustments /Eliminations Total
Assets
Cash and bank deposits 191 -- -- 191
Securities 9,773,656 5,585 -- 9,779,241
Insurance and coinsurance operations 596,379 -- -- 596,379
Prepaid expenses 2,57 -- -- 2,57
Investments and goodwill 1,272 -- -- 1,272
Property and equipment 8,625 -- -- 8,625
Intangible assets 8,187 -- -- 8,187
Other assets 3,935 -- -- 3,935
Total 10,394,815 5,585 -- 10,400,400
Liabilities
Tax liabilities 105,82 65 -- 105,885
Capitalization technical provisions 2,385 -- -- 2,385
Provisions 9,488,698 -- -- 9,488,698
Other liabilities 528,364 10 -- 528,374
Equity 269,548 5,51 -- 275,058
Attributable to Group BB Seguridade 179,681 5,51 -- 185,191
Attributable to other stockholders 89,867 -- -- 89,867
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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76
R$ thousand
Dec 31, 2013 Brasilprev Seguros e Previdência S.A. Adjustments/Eliminations Total
Assets
Cash and bank deposits 181,550 -- 181,550
Securities 84,386,959 -- 84,386,959
Insurance and coinsurance operations 1,471 -- 1,471
Receivables 253,576 -- 253,576
Prepaid expenses 386 -- 386
Costs acquisitions 473,029 -- 473,029
Pension plan credits 4,181 -- 4,181
Property and equipment 17,251 -- 17,251
Intangible assets 160,607 -- 160,607
Total 85,479,010 -- 85,479,010
Liabilities
Accounts payable 285,039 -- 285,039
Insurance and reinsurance debts 2,880 -- 2,880
Pension plan debts 1,700 -- 1,700
Deposits 23,885 -- 23,885
Technical provisions 55,106,491 -- 55,106,491
Technical provisions - Pension plans 28,436,537 -- 28,436,537
Other liabilities 172,990 -- 172,990
Equity 1,449,488 -- 1,449,488
Attributable to Group BB Seguridade 1,086,971 -- 1,086,971
Attributable to other stockholders 362,517 -- 362,517
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 Group BB Seguridade 353,872 33,400
Attributable to other stockholders -- --
Total 1,793,073 1,745,887
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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
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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 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
Insurance business operations 129,391 72,312
Reinsurance business operations 498,877 290,759
(-) Credit risk impairment losses (81,013) (90,860)
Reinsurance 2,002,945 2,159,349
Premiums 1,744,938 1,768,527
Insurance business operations 460,173 495,461
(-) Credit risk impairment losses (202,166) (104,639)
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
Attributable to other stockholders 4,334,250 3,899,378
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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 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
Provision for unearned premiums 3,480,439 3,224,338
Provision for unsettled claims 1,307,579 1,198,121
Incurred but not reported reserve � IBNR 447,149 329,569
Other provisions 151,509 144,300
Reinsurance 3,926,397 3,868,325
Provision for unsettled claims 2,429,104 2,406,426
Provision for unearned premiums 935,417 1,026,780
Incurred but not reported reserve � IBNR 513,096 411,796
Other provisions 48,780 23,323
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
Incurred but not reported reserve � IBNR 10,223 11,152
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
Other provisions 87,719 82,517
Total 129,712,134 106,850,269
Attributable to the Group BB Seguridade 92,869,977 76,005,552
Attributable to other stockholders 36,842,157 30,844,717
(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
Insurance � Property and casualty (1) 5,386,676 4,896,328
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
Property/casualty 3,458,498 3,578,690
Dpvat -- 54,600
Private Pension Plans 30,672,887 28,436,537
Free benefit generating plan � PGBL 22,266,207 20,337,357
Traditional plans 8,406,680 8,099,180
Capitalization Plans 10,995,453 9,488,698
Total 129,712,134 106,850,269
Attributable to the Group BB Seguridade 92,869,977 76,005,552
Attributable to other stockholders 36,842,157 30,844,717
(1) Values are presented net of reinsurance.
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
Property and Casualty
Private Pension Plans
Capitalization Plans
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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81
R$ thousand
Dec 31, 2013
Life, Mortgage life Rural, life
insurance with survivor coverage
Property and Casualty
Private Pension Plans
Capitalization Plans
Reinsurance Total
Shares in investment funds (VGBL e PGBL) 49,431,825 -- 25,508,246 -- -- 74,940,071
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
Attributable to the Group BB Seguridade 46,295,656 2,657,469 21,584,798 6,515,119 793,880 77,846,922
Attributable to other stockholders 15,440,117 2,657,469 7,196,852 3,258,538 3,076,818 31,629,794
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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82
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
Opening balance Constitution Reversals Updates Closing balance
Technical provisions � Reinsurance 5,482,468 16,808,021 (16,221,094) (16,506) 6,052,889
Provision for unsettled claims 3,218,792 13,271,684 (12,978,915) (28,166) 3,483,395
Provision for unearned premiums 1,783,390 2,907,076 (2,738,839) 4,690 1,956,317
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
Other provisions 23,323 116,547 (86,695) 90 53,265
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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83
R$ thousand
2013
Opening balance Constitution Reversals Updates Closing balance
Technical Provisions � Insurance and life insurance with survivor coverage 53,028,014 35,131,755 (19,178,136) 1,557,321 70,538,954
Mathematical provision for future benefits 40,635,578 12,769,034 -- 1,481,436 54,886,048
Provision for unearned premiums 6,235,792 14,144,527 (12,211,603) 13,938 8,182,654
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
Provision for premium insufficiency 254,398 47,560 -- -- 301,958
Provision for redemption and other amounts to be regularized 61,432 198,899 (154,616) 128 105,843
Mathematical provision for vested benefits 30,329 188,869 (170,184) 3,469 52,483
Other provisions 130,129 255,860 (44,796) -- 341,193
Technical Provisions � Supplementary Pension 26,209,378 2,086,829 (893,945) 1,034,274 28,436,536
Mathematical provision for future benefits 23,426,007 1,310,354 (95,206) 847,968 25,489,123
Mathematical provision for vested benefits 1,130,245 404,966 (352,329) 141,758 1,324,640
Provision for unsettled claims 24,818 7,615 (5,350) 1,122 28,205
Provision for claims incurred but not reported 20,818 120,558 (130,224) -- 11,152
Provision for unearned premiums 8,130 102,225 (100,415) -- 9,940
Provision for unexpired risks 7,881 -- (7,881) -- --
Other provisions 1,591,479 141,111 (202,540) 43,426 1,573,476
Total Technical Provisions 79,237,392 37,218,584 (20,072,081) 2,591,595 98,975,490
Attributable to the Group BB Seguridade 56,247,656 23,943,732 (11,522,947) 1,906,837 70,575,278
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 unsettled claims 2,346,423 2,075,357 (1,445,856) 54,329 3,030,253
Provision for unearned premiums 1,436,894 2,137,879 (1,805,322) 13,938 1,783,389
Provision for claims incurred but not reported 473,731 159,332 (147,253) -- 485,810
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
Attributable to other stockholders 3,178,125 2,485,455 (1,923,005) 53,441 3,794,016
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84
l) Income from Operations with Insurance and Complementary Social Security of Equity Investments Valued by Equity Method
R$ thousand
3rd Quarter/2014 3rd Quarter/2013
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
Insurance Pension plan Total Insurance Pension plan Total
Retained premiums and contributions 13,552,908 103,653 13,656,561 11,862,516 107,086 11,969,602
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)
Expenses with benefits and redemptions (40,291) (12,671) (52,962) (12,524) (24,206) (36,730)
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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85
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
Estimated amount for claims
During the occurrence 2,537,104 2,857,743 3,361,328 3,968,802 3,957,191 5,093,936 4,020,721 25,796,825
A period of the occurrence 2,533,247 2,905,206 3,414,601 4,090,601 4,079,443 4,688,792 -- 21,711,890
Two periods after the occurrence 2,553,292 2,955,083 3,458,994 4,153,108 4,005,471 -- -- 17,125,948
Three periods after the occurrence 2,574,841 2,974,504 3,513,413 4,116,623 -- -- -- 13,179,381
Four periods after the occurrence 2,597,767 3,011,120 3,495,729 -- -- -- -- 9,104,616
Five periods after the occurrence 2,625,628 2,994,488 -- -- -- -- -- 5,620,116
Six periods after the occurrence 2,629,440 -- -- -- -- -- -- 2,629,440
Estimates based on claims data (Sep 30, 2014) 2,629,440 2,994,488 3,495,729 4,116,623 4,005,471 4,688,792 4,020,721 25,951,264
Payments of claims 2,553,996 2,929,226 3,421,185 4,009,174 3,840,551 4,383,059 2,748,067 23,885,258
Liability recognized in the Balance Sheet 75,444 65,262 74,544 107,449 164,920 305,733 1,272,654 2,066,006
Liability in respect of periods prior to Dec 31,2007 -- -- -- -- -- -- -- 984,991
Total liabilities -- -- -- -- -- -- -- 3,050,997
Attributable to the Group BB Seguridade -- -- -- -- -- -- -- 1,908,525
Attributable to other stockholders -- -- -- -- -- -- -- 1,142,472
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86
R$ thousand
Year of Occurrence of the Sinister
2008 2009 2010 2011 2012 2013Sep 30, 2014 Total
Reinsurance Segment
Gross Retrocession Claims
Estimated amount for 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
Five periods after the occurrence 2,043,347 1,449,505 -- -- -- -- -- 3,492,852
Six periods after the occurrence 2,067,003 -- -- -- -- -- -- 2,067,003
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
Liability recognized in the Balance Sheet 273,488 189,377 66,428 344,351 588,968 836,471 1,030,701 3,329,784
Liability in respect of periods prior to Dec 31,2007 -- -- -- -- -- -- -- 1,368,252
Total liabilities -- -- -- -- -- -- -- 4,698,036
Attributable to the Group BB Seguridade -- -- -- -- -- -- -- 963,600,
Attributable to other stockholders -- -- -- -- -- -- -- 3,734,436
Net Retrocession claims
Estimated amount for 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
Three periods after the occurrence 1,237,117 1,052,361 471,303 321,648 -- -- -- 3,082,430
Four periods after the occurrence 1,380,918 1,011,430 452,293 -- -- -- -- 2,844,641
Five periods after the occurrence 1,378,820 1,012,606 -- -- -- -- -- 2,391,426
Six periods after the occurrence 1,340,630 -- -- -- -- -- -- 1,340,630
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
Liability in respect of periods prior to Dec 31,2007 -- -- -- -- -- -- -- 438,727
Total liabilities -- -- -- -- -- -- -- 2,264,778
Attributable to the Group BB Seguridade -- -- -- -- -- -- -- 464,522
Attributable to other stockholders -- -- -- -- -- -- -- 1,800,256
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87
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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88
R$ thousand
Dec 31, 2013 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 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 --
Quotas in Investment Funds � DPVAT 468,083 -- -- -- 468,083 468,083 --
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 --
Private Securities 15,464,646 2,127,240 1,249,021 16,109,489 34,950,396 35,218,479 (268,083)
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
Shares in Investment Funds 281,857 -- -- -- 281,857 281,857 --
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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89
R$ thousand
�Dec 31, 2013 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 -- 327,030 821,313 1,840,968 2,989,311 2,997,053 (7,742)
Financial Treasure Bills -- 324,220 795,812 1,113,078 2,233,110 2,233,189 (79)
National Treasury Notes (NTN-B) -- -- 23,214 438,720 461,934 469,181 (7,247)
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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90
R$ thousand
Dec 31, 2013 1 to 30 31 to 180 181 to 360 More than 360 Book valueValue
Curve
Asset Held to Maturity
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 Bills 71,200 195,313 805,829 1,781,635 2,853,977 2,751,157
National Treasury Notes (NTN-F) 548,828 -- -- 921,231 1,470,059 1,507,562
Financial Treasure Bills -- -- -- 17,522 17,522 17,522
National Treasury Notes (NTN-C) -- -- -- 14,872 14,872 15,879
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
Attributable to the Group BB Seguridade 600,960 170,104 830,275 9,973,785 11,575,124 12,617,607
Attributable to other stockholders 670,621 226,066 459,059 4,296,070 5,651,816 5,995,761
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91
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
Attributable to other stockholders 13,492,549 20,327,682 33,820,231 13,604,182 12,471,207 26,075,389
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92
R$ thousand
Sep 30, 2014 Dec 31, 2013
Level 1 Level 2 Total Level 1 Level 2 Total
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
Attributable to other stockholders 2,791,481 443,375 3,234,856 2,061,800 363,488 2,425,288
R$ thousand
Sep 30, 2014 Dec 31, 2013
Level 1 Level 2 Total Level 1 Level 2 Total
Financial Assets Available for Sale
Certificate of Deposits (CDB) -- 701,932 701,932 -- 938,829 938,829
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
Attributable to the Group BB Seguridade 8,325,871 2,861,978 11,187,849 8,490,358 3,121,714 11,612,072
Attributable to other stockholders 3,367,736 1,785,223 5,152,959 3,535,792 2,097,440 5,633,232
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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93
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.
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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 ��� � �� ��� ����
������������������������ ����������
���������������
94
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 -- -- ������ ������
������������������������ ����������
���������������
95
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 �� ���
Total charges of IR (25%) and CSLL (9%) (787,585) ����� �� (950,617) �� �����
Equity in earnings of subsidiaries and associates 795,692 ����� 480,191 ������
Other amounts (8,107) ������ (9,081) ���� �
Income tax and social contribution -- -- (479,507) ����
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.
������������������������ ����������
���������������
96
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�.
������������������������ ����������
���������������
97
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
Initial balance -- -- 5,870 4,473
Addition -- -- 7,249 3,179
Reversal of the provision -- -- (1,864) (1,782)
Closing balance -- -- 11,255 5,870
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
Civil lawsuits -- -- 7,134 6,328
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.
�
������������������������ ����������
���������������
98
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
��#���� � ��&� ���
��"�(����)��*�) ����� � � ��
��� !�"����#� ������ ������
�� ������������#� ������ �����
Additional proposed dividend -- ��� ��
������������������������ ����������
���������������
99
c) Dividends
R$ thousand
Parent and Consolidated
! ��"��!!� � ! ��"��!!�
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
$�� ��� !���#���������%�� ���� ��� �� � ��� �� �
Judicial deposits income -- -- �� � ���
Valuation of exclusive fund shares -- -- � � ��
Financial assets at fair value through profit or loss -- -- �� ��
Other interest income -- -- -- ���
Total ���� ���� ���� �����
������������������������ ����������
���������������
100
R$ 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
$�� ��� !���#���������%�� ���� ���� ��� ��� �� �� �
Judicial deposits income -- -- ��� ���
Valuation of exclusive fund shares -- -- �� �
Financial assets at fair value through profit or loss -- -- �� ��
Other interest income -- -- -- ���
Total ��� � �� � ����� �����
21 � PERSONNEL EXPENSES
a) Personnel Expenses
R$ 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)
������������������������ ����������
���������������
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
$�����%������ ���� (����������
�������%������ ��� (����������
)*����%������ ��� (����������
$����*�%������ ��� (����������
."��/ �����
The costs per share were as follows:
Date of purchase �,'0���"��)�"&1) �&2,(��%�
(��,�(�)Cost of purchase
in R$
+ ������� �� ����
+ ������� � �����
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)
������������������������ ����������
���������������
102
R$ thousand
������ Consolidated
! ��"��!!� � ! ��"��!!� ! ��"��!!� � ! ��"��!!�
Operational support -- -- (92,556) (94,772)
Administrative cost of products -- -- (72,738) (52,069)
Data processing (7) -- (36,083) (51,788)
Condominium fee (2,919) -- (2,919) --
Communication expenses (1,370) -- (1,888) (602)
Specialized technical services (630) -- (633) --
Outsourced services (599) -- (618) (430)
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
! ��"��!!� �
! ��"��!!�
! ��"��!!� �
! ��"��!!�
Restatement of assets 36,939 �� 55,545 ����
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 �������
������������������������ ����������
���������������
103
R$ thousand
������ Consolidated
! ��"��!!� � ! ��"��!!� ! ��"��!!� � ! ��"��!!�
&&�+ %'����.� -- -- 890,201 ������
Brasilprev -- -- 269,908 ������
Mapfre BB SH2 -- -- 244,811 �� ���
Brasilcap -- -- 250,959 �����
Other companies -- -- 4,432 ���
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
Other liabilities 33,370 -- 33,370
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)
Until 1 year After 1 year Total
Assets
Cash and cash equivalents 1,785,284 -- 1,785,284
Financial assets at fair value through profit or loss 2,966 -- 2,966
Financial assets available for sale 80 -- 80
Equity method investments -- 6,221,050 6,221,050
Dividends receivable 35,356 -- 35,356
Current tax assets 88,120 -- 88,120
Deferred tax assets -- 6,377 6,377
Commissions receivable 509,216 -- 509,216
Other assets 122 136,907 137,029
Total 2,421,144 6,364,334 8,785,478
Liabilities
Dividends payable 344,719 -- 344,719
Provisions for labor, tax and civil claims 8,637 -- 8,637
Current tax liabilities 152,910 -- 152,910
Deferred tax liabilities -- 273,977 273,977
Unearned commissions 526,085 495,868 1,021,953
Other liabilities 42,009 -- 42,009
Equity -- 6,941,273 6,941,273
Total 1,074,360 7,711,118 8,785,478
(1) Consolidated position.
������������������������ ����������
���������������
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 financial instruments 123,076 -- -- -- 123,076
Income from commission -- -- 1,660,311 -- 1,660,311
Expense of portfolio management -- -- -- (51,682) (51,682)
Personnel expenses (28,348) -- -- -- (28,348)
Administrative expenses (5) (209,961) -- -- -- (209,961)
Monetary liabilities changes (94,739) -- -- -- (94,739)
������������������������ ����������
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106
R$ thousand
Dec 31, 2013
Parent(1) Subsidiaries(2) Associates(3) Total
Assets
Cash and cash equivalents 1,785,284 -- -- 1,785,284
Commissions to be received -- -- 509,216 509,216
Dividends to be received -- 1,077,382 35,356 1,112,738
Liabilities
Dividends payable 228,376 -- -- 228,376
Obligations with related parties 29,301 -- -- 29,301
Unearned Commissions -- -- 1,021,953 1,021,953
R$ thousand
3rd Quarter/2013
Parent(1) Subsidiaries(2) Associates(3) Other related parties (4) Total
Income
Income from financial instruments 33,838 113 -- -- 33,951
Income from commission -- -- 425,497 -- 425,497
Expense of portfolio management -- -- -- (16,102) (16,102)
Personnel expenses (6,636) -- -- -- (6,636)
Administrative expenses (5) (65,439) -- -- -- (65,439)
Monetary liabilities changes (7,439) -- -- -- (7,439)
R$ thousand
01.01 to 09.30.2013
Parent(1) Subsidiaries(2) Associates(3) Other related parties (4) Total
Income
Income from financial instruments 85,663 300 -- -- 85,963
Income from commission -- -- 1,230,052 -- 1,230,052
Expense of portfolio management -- -- -- (42,459) (42,459)
Personnel expenses (15,550) -- -- -- (15,550)
Administrative expenses (5) (200,071) -- -- -- (200,071)
Monetary liabilities changes (22,356) -- -- -- (22,356)
(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
Marcelo Augusto Dutra Labuto
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
Premiums Written Growth - P&C - Mapfre BB SH2 14.8 19 - 26 12 - 15
Contribution Growth - Pension Plans 38.0 33 - 47 Maintained
Collection Growth - Premium Bonds 5.0 10 - 15 3 - 6
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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. �
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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
Based on our review, we are not aware of any fact that could lead us to believe that the
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