BBSEY (BBSEY) Q1 2026 Earnings Report, Transcript and Summary

Good morning. Welcome to our conference call to present the results of the first quarter of 2026. This event is being recorded and has simultaneous interpretation into English. [Operator Instructions] This event will be divided into two parts. In the first part, our CEO, Delano Valentim, and our CFO, Rafael Sperendio, will present the main deliveries of the quarter. The presentation in Portuguese or English can be downloaded from our Investor Relations website at the address www.bbseguridaderi.com.br. In the second part of this conference call, we are going to have a question-and-answer session when analysts and investors will be allowed to ask questions. I will come back after the presentation to give you the instructions to ask questions. Now I would like to give the floor to Delano, who is going to talk about the main highlights of the quarter. Delano, please, the floor is yours.

Thank you, Felipe. Good morning. Good morning, everyone who is here with us. It's a pleasure to be with you today to present the results of the first quarter of 2026 for BB Seguridade. First, I would like to thank everybody for being here, for your attendance, everyone on this live streaming. I would like to thank the investors and especially our customers for the trust that they place on BB Seguridade. This support is fundamental for our work. I would also like to extend my special thanks to all our employees and sales force of Banco do Brasil. You are the ones who make the difference in the day-to-day of our business. And once again, you rocked. We have had a very challenging beginning of the year. Still, despite the adverse macroeconomic scenario, we are able to stand out on several fronts. This has been only possible, thanks to the well-defined strategy and strong discipline in its execution, a work that began as early as November last year. Within this context, I would like especially to highlight our performance in pensions, a segment in which we have played a leading role in the first 3 months of the year, accounting for more than 50% of the market's positive net inflow. In the premium bonds, we have also had important advances. March was one of the best months in our history, possibly the best since our IPO. In the insurance vertical, we recorded relevant achievements with emphasis on the homeowners and farmer's golden life products. We are fully aware that the rest of the year will remain challenging. However, we are confident that the solutions we are delivering, which originally had the main objective of adding value to the business, but they have proven to be extremely important also to mitigate some of the effects of the current macroeconomic scenario. I am convinced that we will continue to constantly evolve and deliver consistent results, such as the ones we are going to present here today to you. Our managerial net income reached BRL 2.2 billion, a growth of more than 11% compared to the same period last year. The operating net income net of taxes grew 2.2%, mainly reflecting the growth of revenues with management fees and the improvement of Brasilprev's operational efficiency, the good performance of brokerage revenues and the reduction of the loss ratio in our insurance operations. In addition, we had a very relevant contribution from the investment income, which grew almost 60% compared to the previous year. In our assessment, these are robust numbers, especially considering the current environment of high uncertainty and volatility, once again, reinforcing the resilience of our business model. Going beyond the bottom line of our financial statements, I would like to highlight some operational indicators. In the insurance segment, total retained premium was BRL 3.6 billion in the period, remaining practically flat as compared to last year. This contrasts with a line of written premiums, which demonstrated a slow decrease. In view of the current moment of interest cycle, we have adopted measures with the objective of preserving premiums earned by the insurer, among which I would like to highlight. The increase of risk retention in agricultural insurance, which went to 25% and the expansion of the corporate credit portfolio eligible for lenders insurance, an initiative that I have been highlighting since last year and which in the first quarter alone, has contributed with BRL 182 million in written premiums. In pension reserves reached the balance of BRL 484 billion in March 2026, very close to the mark of BRL 0.5 trillion with a growth of more than 10% in 12 months. As I have mentioned before, we have had a very solid performance in Banco do Brasil's network in terms of collection of pension, which combined a significant reduction in outflows led to a net inflow of BRL 3.9 billion. It's worth remembering that in the same period of the previous year, we recorded a net outflow of approximately BRL 1.5 billion. This performance is the result of a commercial strategy designed with Banco do Brasil's network still in November 2025. Finally, in premium bonds, collection grew almost 8%, reaching BRL 1.8 billion. We have achieved leadership contributions and maintain the leadership in reserves. Also in this segment, we paid out BRL 24 million in lottery prizes in the quarter, a growth of almost 55% compared to the same period last year. With this, I end my presentation and give the floor to Rafael, who's going to give you details of -- more details about the results of each one of our business lines. Thank you very much.

Thank you, Delano. Good morning, everyone. So I'm going to start on Page #4. As Delano said in his presentation, the net income of BRL 2.2 billion with 11% growth year-on-year, quite significant contribution of net investment income. Now ever since we are listed, this is the third cycle of decreasing interest rates that we are going through. And as far as we know, this cycle of cuts is likely to be slightly more gradual and slower in terms of interest rates, which is positive for the company's bottom line and when we have more time to react. On the other hand, it's a slightly more difficult environment commercially speaking, especially in lines that depends slightly more on credit origination, especially in terms of credit life and reinsurance. So very good result, positive investment income, slightly more than BRL 180 million, contributing with almost 23% to the net income. Now breaking down the results for the two main components as I said, BRL 224 million growth in the net income with a significant contribution from the investment income, considering rates and excluding mark-to-mark, 75 -- mark-to-market, sorry, BRL 75 million. Here there's an effect of Selic and the cost of liability in addition to the update of deferred numbers at Brasilprev in considering IGP-M deflation. So there's a time mismatch remembering that the benefits are updated by inflation rates and liabilities with a lag of 1 month, I'm not going to place so much emphasis at BRL 180 million. And this ends up being 0. So this is a time mismatch. It's 1 month of lag because there was a negative -- it was negative in the first quarter last year, a positive first quarter this year, but it tends to be flat in the long term. And here also, it's slightly less negative this quarter, but the main highlight is Selic and the volume and rate charge ex mark-to-market. So the operating -- the change in operating result was BRL 37 million plus, especially because of credit life and rural insurance, those were the main drivers for the lower loss ratio were BRL 59 million in the bottom line. So BRL 25 million here for the growth of the net income was the growth of revenues from management fee at Brasilprev because an exceptional performance that we had in terms of net inflow as part -- in terms of net inflow, this contributed to the growth in brokerage revenues, adding BRL 11 million after taxes into our bottom line. Now going into operation by operation, broken down with more details, insurance, so 2% drop year-on-year, very much influenced by the products that are more credit-dependent and a better performance of the projects that are not dependent on credit duration, especially home insurance, corporate with a growth of 22% home insurance and corporate growing 4.5%. Life is the only product that is not related to credit origination, which ended up performing having a negative performance, minus 4.9%, but this is the portfolio we are working on with a fully revitalized line. In terms of retained premiums, it's kind of flat year-on-year, very much influenced by the breaking down of written premiums, a smaller contribution from crop insurance, it's only 25% of the risk for us considering the measures that we use to try and attenuate the downwards effect and especially here because of increase in risk retention in crop insurance that is now is 25%, if we consider the composition of the portfolio. So credit life, Delano, mentioned in his presentation, expansion of the addressable portfolio, we ended up having a good performance in the segment -- in the corporate segment, which kind of attenuated the drop and that we see some difficulties in the segment of individuals. With this composition, retained earned premiums, we grew year-on-year and in the buildup of the result we see a slight worsening of 20 bps in the combined ratio. And this worsening is because of commissions ratio explained by two factors. Number one and the main one is related to what I said before, the dynamics and especially crop insurance. So when more risk retention has led us to have a slower volume of revenue of premiums for reinsurance. Here when we talk about crop insurance in this line in reinsurance is a reducer of acquisition expenses and this has -- was the main driver, explaining this higher commission ratio. The second but slightly less important is the composition with a higher share of crop insurance with lower commissions. So if we look at the composition of written premiums leading to slightly commissions, which kind of fully offset the drop in loss ratio. And what we have here is an increase in G&A ratio affected by more expenses in software. So here, the investment income with an year-on-year up by 1%. And then the managerial net income with a Y-o-Y 1% compared to last year. Now moving to pension. This is an operation, that was the main highlight in this first quarter. As I said in the beginning, with contributions growing 9%, getting to BRL 15 billion, very good quality. So net inflow was BRL 3.9 billion, with net outflows of BRL 1.5 billion that we had in the first quarter last year, a significant drop in the rate of redemptions, which has been an important factor that led us towards 10% growth in our reserves of our pension reserves. So revenues from management fee grew 6% year-on-year because of the reduction in average management fee, which is related to this movement of concentration of allocation in lower-risk products that covers a lower management fee. And that's why we see this dilution on the average management fee that is built. And then a lower operational efficiency, a 2-point drop in average management fee, and then added to a substantial growth in the net investment income of BRL 270 million coming, especially from what I said of deflation of the IGP-M with a lag of 1 month added to the high in IPCA, almost 1 point above last -- first quarter last year. So you see the growth in revenues and net investment income driving the 51% growth in our managerial net income in the first quarter year-on-year. Now in our premium bonds, an 8% growth year-on-year in collections, a 4% growth in our premium bond reserves in 12 months. This is a result of the longer times for the bonds. So more lottery prices paid. We paid out BRL 24 million in the first quarter, 50% growth year-on-year, a considerable improvement in the net investment income, almost twice bigger than a net investment income in the first quarter last year, with 2.1 points. And it's worth remembering an important factor here, so from 2024 to 2025, we transitioned with pre-locked exposure because of volatility in the macroeconomic scenario in late 2024. And this curve closed very fast in January, and you're going to remember we had a negative adjustment of hedge that impacted the net investment income of Q1 2025. So this was a one-off effect, and then it normalized in the second quarter, but this kind of explains most of this quite significant growth in the net investment income year-on-year, which was the main driver here for the growth in the net income, so BRL 81 million, with 51% year-on-year growth. Finally, our brokerage businesses with a growth of 1% year-on-year. And as I said, because of collection in pension plans and -- so it went from 9.6% to 11.4% in the first quarter last year to first quarter this year. Net margin was 61.7%. This is a quite significant contribution in the investment income because of the integrality of BB Corretora financial income are allocated post fixed instruments. And that's why the net income had a growth that was higher than the revenue, 3% up year-on-year because of this better net income margin and better investment income. Lastly, our guidance. So considering the 3 indicators that we have, we performed within expected in terms of PGBL and VGBL pension plans reserves of Brasilprev. So it was 8% to 11% and we closed at the top. In terms of written premiums for Brasilseg, we are within the range, a drop of 3% -- 2.3%, and we ended with a drop of actual numbers of 2.3% in the first quarter. Noninterest operating result, so we expect for the year a drop of 7% -- between 7% and 3%, and we ended the first quarter with a growth of 1.3%. Very good performance. But for now, considering all the uncertainty that still remains, especially related to climate. So we are going to have a predominance of El Niño in the second half of the year. And yes, this may affect winter crops and the loss ratio in terms of home insurance and corporate insurance and 2025 is the weakest comparison basis that we have even though we exceeded, so we should be very cautious. And we -- there's nothing that will lead us to review this range. And so we'd rather wait and see what happens during the year to see whether there is an indication that will lead us to review this range even though the likelihood today needs to keep -- we are likely to remain on the top portion of this range. So this is my presentation. I'm going to join Delano for the questions-and-answer session.

[Operator Instructions] Our first question comes from Antonio Ruette from the Bank of America.

I have two questions. One about rural insurance and the investment income. In terms of rural insurance, as Sperendio said in the guidance that you don't think it's cautious to review the guidance for operating results. So I would like to understand that a little bit better. How do you see the risk until the middle of the year, especially for rural considering the El Niño. And how do you see this as a whole? And how did you see it thinking of the resumption of the growth in premiums in terms of rural insurance. So it's just a comment on that. And the second question is related to investment income. We have no guidance for investment income, but which are the prevailing trends after the first quarter for the rest of the year. I would love to hear that.

Antonio, now beginning with the first question and your question about rural insurance. So today, according to the most up-to-date predictions is related to the expectation of having El Niño in the second half, and this might affect the winter crop. So when we are cautious and that we say it's still premature to change the guidance for operating results, the main uncertainty is related to loss ratio, but we are not going to look just at crop insurance. So Brasilseg is much less sensitive to crop insurance compared to what it used to be 2, 3 years ago. But when we talk about El Niño, which all is important to consider the effect it may have. Just remembering in a very simplified way, El Niño, usually, we see a higher incidence of rainfall compared to the average in the center-south of the country and the center-north more draft -- or drought, better saying. So we are less sensitive to El Niño than to La Niña. Now when we look at the portfolio as a whole, we need to consider the effect of more rainfall in its effect on home insurance, mortgage insurance, corporate insurance compared to what we had 2 years ago in Rio Grande do Sul. So when we look at the prospects, the increase in likelihood related to intensity. So now we need to observe along the year, what happens along the year to understand the actual impact of a more severe El Niño in our bottom line and to see if what we delivered in the first quarter year-on-year in terms of operational results whether it's truly sustainable until the end of the business year. For the time being, this is not clear yet. As to your second question in terms of investment income, considering the results of Q4, we have a few sensitivities with the main variables of inpatient IGP-M, IPCA and interest rates. So ever since lot has changed. And if we observe, I'm not going to make any economic forecast considering the focus report published yesterday, considering the Selic rate that is implied today in the structure of interest rates. So according to what we see today, so we are going to have another 2 cuts of [ 0.25 bps ] along the year. So what we see is more positive, in fact, than what we were seeing for the Selic and a more negative impact on the side of inflation. And when we consider these 3 drivers, they kind of offset each other. So according to what we see, it's likely that we are going to have a neutral impact considering the most up-to-date projections for the investment income in 2026, a more beneficial scenario than what we were designing considering the information that we had available in February.

Our next question comes from Marcelo Mizrahi from Bradesco.

About the operational dynamics, it got my attention, the thing about pension. I think that there is some uncertainty in terms of the prospects for the year. I would like you to explain how do you justify such a strong performance in the beginning of the year in terms of inflows, also admin rates. This is it.

Thank you very much, Marcelo. I'm going to start and Rafael is going to complement. Well, for pension last year, we had a bottom line that fell short from what we would like to have in terms of outflows, we had significant outflow. And we suffered in the third quarter. And we started designing our commercial strategy last year. Together with the bank and Brasilprev, we understood what would be the best commercial strategy. And we had a quite significant success. And for the rest of the year, which should remain cautious but performance, not just in absolute numbers, but also considering the scope and the new customers that we have and the new allocations, this makes us confident, but for the rest of the year, we are kind of cautious because our outflow rate was well below what we were forecasting and this combined with record allocations that we have had, there was a significant and a relevant share of the market, more than 50% of net inflow. So we are happy with the actions that we implemented. We are steady on the implementation of our strategy, our commercial efforts with the results that have a quite positive effect of the sales force of Banco do Brasil. We were aware of that strength, but we have had quite a pleasant surprise when we saw that what were designed and what we expected was even better. So for the rest of the year, we remain cautious so that in future quarters we can continue delivering quite positive results. As to the fee, and Rafael can get into more detail. It was better in the first quarter. And we hope that for the rest of the year, it will remain flat. There are many studies going on to see the performance of how the performance of our funds has been performing, and this is very good but we want to remain at the same levels for the rest of the year.

Well, Mizrahi, there is the economic scenario. So with a more gradual and slower. So it favors us having less volatility. So there is -- the incentivized bonds are less appealing, so to speak, and also the internal movement that we have implemented of reduction. We have taken a risk from the funds, and this helps reducing the volatility in terms of return. So considering we have a low exposure to credit risk than what we have seen in terms of our default exposure was minimal or none in some cases and combined with everything with a very just -- a very low share. So the possibility of return has contributed to a lower outflow and a better inflow volume. And combining everything, there is an issue of the -- a more favorable overall environment.

Just in conclusion, has there been any change in your commercial practices, any special promotions in terms of cash back or some way of paying your customers of taking out the impact of the tax for inflows and the concern first quarter that was very significant, and we remain relevant.

Our commercial strategy involves multiple aspects we have had since last year, a few promotions for the transferring, we have continued just like what the market has been doing. We have improved our commercial strategies. And together with Brasilprev, we are closer and with all these movements, we were able to get to a result that we have mentioned. There are some external factors, as Rafael mentioned. We do not believe there was in advance, but we also believe that occupying the space of BRL 600,000, not to pay the IOF, the tax on financial operations. So for the rest of the year, I'm not sure it would be our forecast, but we want to keep positive results, that's for sure, to reinforce commercial actions to make sure that for the rest of the year we're not going to have a stronger deterioration and to keep the level of reserves and outflows flat as we are seeing today.

Our next question comes from Ricardo Buchpiguel of BTG.

What should we expect from acquisition costs and brokerage revenues at Brazil considering growth contributions because we have noted the stability in terms of acquisition costs, whereas contributions have grown along. And then they've been growing in the brokerage. So considering that other acquisition costs may be [ affected ].

Just clarifying, it depends a lot on the composition. So if it's slightly more concentrated on sporadic events, it's about 1.5% in the gross collections. It's more in periodical kinds of products, it will be closer to 2%. And so what we're seeing in the first quarter is slightly -- is exactly that. So good contribution from periodical payment. And also with periodical products, I said sporadic, but more contribution in the volume of sporadic contributions and in periodical payments. Another factor that has helped in the composition and we made quite robust growth in brokerage revenues at the BB Brokerage House, there is a reduction in the expansion with a return of commissions in plants that are canceled in less than 12 months. So redemptions has a reflection with a movement of outflow, an overall outflow movement that is a lot less intense than what we saw in the first quarter of last year and also web products or allocations that were canceled where the brokerage needs to refund commission to Brasilprev. So on the side of the Brokerage House, we should consider the cancellations.

Next question from Daniel Vaz from Safra.

I would like to look at rural insurance premiums, I think someone else has already asked this question. But what is the push that you have in terms of originations in Banco do Brasil? So even though the portfolio is virtually stable, and so they gave up BRL 35 billion in [ NP ], it's a longer portfolio with some waiting time. So if you look in terms of origination, so it's more selective, requiring more collaterals and considering the risk framework that they are designing there. With discounting the impact of the war that will have an impact in the second half of this origination, considering a very tighter or narrower margin. Now looking at that and considering your insurance business, I would like to understand whether this worsens your scenario for '26, '27 in terms of rural insurance, both in terms of renegotiations because insurance in this scenario is going to be smaller. And in smaller originations, considering all the context, was this expected in your guidance for 2026. So my first reaction is more negative, and it would be nice to hear from you. And does this have any effect?

Daniel, thank you very much for your question. Well, it's not an easy question to answer. There are many variables. When we look at the longer time line, it's even more difficult to predict the correlation between them. I'm going to try and summarize and to focus more on the short term and to see what we can have in terms of influence considering the portfolio that you mentioned, it's not a portfolio. And obviously, it is addressable for cross-sell of crop insurance, and crop insurance covers climate events. So there is a longer operation by itself. I cannot cross-sell crop insurance because the risk that is subscribed is over. So the harvest has taken place. The produce has been sold. So we have the farmer's golden Life insurance. So the bank has been working intensely with the models, as you said, in terms of being more selective in terms of the risk. This is part of the process of adapting to the new reality. And in itself this is really notable. And there is an impact in terms of the crop insurance. What we have been doing here is to try and find alternatives in other lines, in investments and that we can somehow cross-sell with other products and portfolio with the farmers insurance and in terms of climate event in the livestock insurance, which is more sensitive to what you said. So in the first quarter, as Delano has just said in his presentation, in the farmer's golden life insurance, which kind of offset the problem with rural insurance. When we look in the long term, looking into 2027, slightly more difficult to predict and this is related to what I said in the first question of Antonio in terms of El Niño. So what is the scenario now? We look at the summer crop being harvested especially with grains where there is more exposure, soybean and corn, it's record crop for the country as a whole, and we look at El Niño, when I talk about margins and supplies, we need to look at the main competitors of Brazil, the U.S. and China, Argentina, for the production of the grains that I have mentioned that they have good yield. And this implies a surplus and lower prices. At the end of the day, this might lead to a pressure on margins. When we look at the longer term to 2027, I mentioned the effect of El Niño and the impact it may have in the winter crop extending to the summer crop. But once again, to understand the impact of margin and how this is going to affect Brazil, the U.S. for this kind of grain. So for those competitors with a higher impact and more severe, we are going to have a reduction in offer, and this might lead to a positive impact and better margin for farmers and more income -- and then farmers will have more income to buy other products. So there are many factors and major volatility for each one of those variables, and it's very difficult for us to project such a long time span. So in terms of designing a scenario, so this might have a negative impact and at first, so higher frequencies of El Niño effects which might become positive considering how this event affects other regions. And here, we have the list of the main competitors with more sensitivity to the underwriting of these products.

I have a question from Pedro Leduc from Itaú BBA.

So are you considering any type of reformulation on new format for the products, so that it is -- so that it has better penetration. Do you have any vision or any comments to share with us?

Considering the program that was announced yesterday for the renegotiation of debt, I'm not sure whether includes credit life, and there will be a considerable effect on the margins for civil servants and for social security members. It's not just for rural for all our insurance lines. These dynamics are reviewing and adapting to the new reality. It is present. So there is an important point at the issue of credit life insurance. So we are working to make our products more flexible. We are aware of the theme and impact of high interest rates on the margins that customers have and when the margin needs to be available for them to buy insurance, it's even more difficult. And we've been working with alternatives that will make it possible for our customers and our branch network to include insurance and negotiations to protect credit, and we've been working with credit life insurance, there is some novelty out in the market that has more flexibility. When we do not have margin flexibility to cover everything. Now, we have other coverages that are smaller for the portfolio whenever necessary. And I believe that this will bring a significant return to us considering the situations that we could not place the insurance and with the changes and everything becoming more flexible. We found a way to be able to meet the needs of our customers even when the margins does not allow us to cover the entire period of the operation. And we believe that this may bring positive results in the short term for us.

As to the Desenrola Rural program, it's still too early. We're working intensely, we do not have an idea of the impact of this credit renegotiation product or program in our portfolios. In general, considering our individual segment, any measures to reduce leverage and to give them more room when we have a longer time with higher interest rates. This is positive, but this is more positive in the midterm. It doesn't have such a positive impact in the short term. We should see evidence that deleverage is happening and that credit is increasing and offsetting the pressure somehow of having a higher interest rate for a longer period. The rural segment, just complementing, as I said before, there is a review in the agenda of the government in terms of providing some subvention for the rural segment in terms of protecting agricultural production. So this should be translated in products and claims regulation is much cheaper than the regulation that is done today in products with broader coverage. So we do believe that there is huge potential. It's a very good product and very popular in Brazil. It's been developed for grazing areas here in Brazil, and we are trying to adapt it to the cover grains to, but it's a very promising product, and we are seeing it globally, but Brazil still taking its first steps.

Now there is a question from Guilherme Grespan from JPMorgan.

I have two questions. The first one is just a follow-up and just apologize if I am being repetitive. It's for farmers life insurance, a very strong performance is something that we didn't see before. Was there impact of the NP is the only addressable insurance for the NP would be live, but most importantly is the performance of the first quarter sustainable into the second quarter? Are the drivers going to remain positive or not? The second thing about life insurance, most of your portfolio is related to renewals, not too many new sales, and most of the adjustment is tagged to the IGP-M. Is there any renewal for the product along the year, and I want to assume whether the higher IGP-M in the second half, which was quite relevant would affect written premiums in the second half of the year or not?

Thank you very much, Grespan. Thank you for your question. I'm going to start with the first one, with farmers life insurance. Of course, there was a contribution from the renegotiated portfolio. It was not isolated from the rural portfolio, we never negotiated portfolio. What we can have today is the golden life for farmers and maybe in the case of rural lien, and there might be something that we can do to some upselling, but it's not a significant movement. At the same time there has been the movement to review the commercial incentivizing the network. There's a mechanism of following up the commercial performance and also for renewals, and this was quite helpful in terms of increasing renewals in the first quarter. As to the performance from now towards the end of the year, we are expecting a quite positive performance, not as big as what we saw in the first quarter year-on-year considering the basic comparison basis, which is slightly more difficult. But I'm going to summarize these as the main drivers for farmer's golden life insurance. So there is a renewal of -- so when the 12-month IGP-M, we don't do price adjustments. It's 0 adjustment, with the adjustment of the IGP-M in terms of price adjustment and coverage for the portfolios, we just need to be very careful in terms of the signs, how much can the IGP-M weigh considering the size and it may lead to, and as I mentioned in the answer about financial results, is there an acceleration of IGP-M? And if I'm not mistaken, focus is expecting something like 5%. It's not really a material, it's more positive than negative in terms of price adjustment.

Now we have a question from Tiago Binsfeld from Goldman Sachs.

My question is quite fast. As part of a credit life, can you talk about SME and Pronampe? How do you see these considering the origination at Banco do Brazil and also including the payroll loan?

Thank you very much for your question. As to credit life, what we have been observing very good performance, and there is a lot of influence of the increase in the addressable portfolio in terms of corporations. In terms of the corporate segment, it's accounting in terms of origination and expansion of lines. In the context of credit life insurance, it's much better than what we have been seeing in a segment of individuals. If we compare year-on-year in the segment of corporates, there was a threefolds growth as compared to last year. So very, very good performance in corporate insurance that was very positive for the overall performance. So there is some difficulty of including this product for individuals considering interest rates, there is not so much room for the installments to fit into -- they can't really afford it. So the environment to cross-sell the credit life insurance in terms of credit origination of renewal of the operations. But for corporations, it has been having very good performance favored by the new lines that are addressable. And as we said, we can format while interest rates are at this level. And this is a product adopting a more customized approach in terms of coverage, we can make it cheaper so that it can be affordable despite the adverse interest rate scenario. And we hope that this is going to be available for the bank's distribution network in the second half of the year, and it should escalate in the second half of the year.

We have another question from Arnon Shirazi from Citibank.

Congratulations on your performance. For the second half of last year, you decided to improve efficiency. How has this been evolving? What can be done? What are you doing?

Arnon, thank you very much for your question. The pursuit for operational efficiency is a constant in our day to day. We are seeing some positive results, and we have just installed a project office to look after our strategic projects for the year, especially in terms of integration of the operations and we can capture a lot of efficiencies, and we have been seeing some positive results. So we have some quite relevant numbers. We have been invested on changing the customer churning, reviewing processes. And this has also provided quite significant efficiencies. And as I said before, we are accelerating the delivery of solutions, complementing our portfolio and these changes were planned to add value to the company, but they're being very important to cover a few gaps. And I believe that when we go through a new cycle, of reducing interest rates and the credit cycle is good. Again, these solutions and changes that we are implementing and trying to make more efficiency. They are going to be very important to leverage our results. So far, we are happy with everything that we've been doing for operational efficiency. We still have a lot to do. There's lots of efficiencies to capture. But so far we are very happy what we have achieved. Anything else?

This is very much in line with what you have mentioned in terms of mapping, redundancies than what we see in the companies of a conglomerate so we can have more synergies and the activities that we can somehow work together, combining the companies of the group. And we've been assessing this and there is a significant potential for a gain, but it's not for the short term. It's more for the midterm.

Now we have a question by Kaio Da Prato from UBS.

It's a very quick follow-up about credit life. Can you explain a little bit Sperendio's answer about penetration of credit life in the payroll loan. And for workers' credit, there has been a recent change with the limitation of the total effective cost of those operations. So do you understand this has some impact the possible addressable market? But if you could -- what is the level of growth that you imagine and that the company can deliver?

Considering all the changes that we've been discussing along the call like the new payroll rule, the new credit negotiation program of the federal government -- well, trying to summarize everything. When we look at the scenario as a whole, so any measure to reduce leverage and to give more room for credit is positive. The thing is that this impact is not in the short term. We are going to see the benefits in the company's bottom line in the medium term or in 2, 3 years. Overall, as I said shortly ago, there is an environment with a cycle of cut interest rate that is very beneficial for the bottom line, but there is an undeniable impact on the operational aspect. Considering the scenario that we used to have when we published the guidance earlier this year, the overall expectation of guidance and even the interest rate curve was a cut of 1 point. But as I said before, when we look at the rates and the structure, and you see the cut implied is more 2 cuts of [ 0.25 bps ] -- even though the Selic will end the year at [ 13 bps ] with 2 other cuts of [ 25 bps ], which would provide stability in the average Selic rate as compared to actual rates of 2025. And rates at that level is very, very restrictive and it impacts our credit regeneration, especially for individuals. And as I said before, we've been feeling that when you break down corporate and individuals, we feel more in individuals than with companies. So the addressable lines, there is less room for corporations to expand the portfolio. We've been working internally, and this is related to what you asked. We are trying to find alternative ways for the product to become cheaper so that it can fit into the credit installment, which is the most effective way for us to place this product out in the market. Now considering everything that has been going on, even for standard products, we are not seeing a relevant impact for credit life. So it's very cheap compared to the cap that has been imposed. So we are not expecting to see any impact. So overall, and trying to summarize, and I'm not sure, I forgot something, but if I did, please remind me, but this is the context that we are seeing for credit life, and this has been one of the main factors that changed from what we announced the guidance -- first published a guidance in February and ever since.

Well, I think that we have no more questions on the line. And in this manner, we are ending our virtual meeting for the first quarter of 2026. Delano, do you have any closing remarks?

Thank you very much, Felipe. First of all, I would like to thank your attendance, everyone watching us live, especially the trust of our investors and customers. And as I said before, the year remains challenging, Rafael has mentioned a few specific topics. El Niño means a warning sign for the rest of the year, but with the discipline in implementing our strategy, we will be able to produce good results considering the expectations that we have launched at the beginning of the year. I believe that these solutions and the changes in processes and improvements in terms of defining parameters for the products, new lines for corporate insurance, I think that all of this will bring for the rest of the year stronger results, but we need to work with caution to be very careful and work to deliver the results that our company deserves that our investors expect. Thank you very much for attendance. A special thanks to our employees. Thank you very much, you rocked again with very robust results. Thank you very much, Felipe and Rafael. So we'll see again next quarter. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]