XML 54 R29.htm IDEA: XBRL DOCUMENT v3.25.1
INSURANCE CONTRACTS
 12 Months Ended
Dec. 31, 2024
Notes and other explanatory information [abstract]  
INSURANCE CONTRACTS

21)         INSURANCE CONTRACTS

 

a)Insurance contract liabilities

 

           
  R$ thousands
On December 31, 2024 On December 31, 2023
PAA BBA/VFA Total PAA BBA/VFA Total
Liability for remaining coverage (LRC) 3,413,117 359,997,742 363,410,859 3,256,881 327,891,751 331,148,632
 - Present value of future estimated cash flows on Best Estimated Liability (BEL) -   333,588,968 333,588,968 -   301,644,946 301,644,946
 - Non-financial risk adjustment (RA) -   1,713,661 1,713,661 -   1,832,047 1,832,047
 - Contract Service Margin (CSM) -   24,695,113 24,695,113 -   24,414,758 24,414,758
 - Premium allocation approach (PAA) 3,413,117 -   3,413,117 3,256,881 -   3,256,881
Liability for incurred claims 13,527,747 1,854,214 15,381,961 12,268,731 1,374,859 13,643,590
 -  Present value of estimated future cash flows on Best Estimated Liability (BEL) 13,109,372 1,788,775 14,898,147 11,847,634 1,302,912 13,150,546
 - Non-financial risk adjustment (RA) 418,375 65,439 483,814 421,097 71,947 493,044
Total liabilities for insurance contracts 16,940,864 361,851,956 378,792,820 15,525,612 329,266,610 344,792,222

 

b)Remaining coverage for general model (BBA)/variable fee approach (VFA)

 

           
  R$ thousands
On December 31, 2024 On December 31, 2023
 Non-Onerous Contracts   Onerous Contracts  Total  Non-Onerous Contracts   Onerous Contracts  Total
Present value of estimated future cash outflows 415,934,920 32,862,946 448,797,866 388,031,144 36,009,806 424,040,950
- Acquisition costs 3,789,618 119,449 3,909,067 3,318,639 72,598 3,391,237
- Claims and other directly attributable expenses 412,145,302 32,743,497 444,888,799 384,712,505 35,937,208 420,649,713
Present value of estimated future cash inflows (109,275,236) (5,933,662) (115,208,898) (115,748,997) (6,647,007) (122,396,004)
Non-financial risk adjustment 926,022 787,639 1,713,661 994,571 837,476 1,832,047
Contract Service Margin 24,594,993 100,120 24,695,113 23,928,554 486,204 24,414,758
Total remaining coverage of the general model/variable rate model 332,180,699 27,817,043 359,997,742 297,205,272 30,686,479 327,891,751

 

c)Realization of contract service margin

 

               
  R$ thousands
Due within one year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years More than 5 years Total
Issued Insurance Contracts              
- Insurance Contract 2,450,329 2,180,759 1,840,336 1,603,463 1,410,985 15,209,241 24,695,113
General model/variable rate approach on December 31, 2024 2,450,329 2,180,759 1,840,336 1,603,463 1,410,985 15,209,241 24,695,113
               
Issued Insurance Contracts              
- Insurance Contract 2,489,957 2,423,170 1,883,419 1,624,982 1,405,499 14,587,731 24,414,758
General model/variable rate approach on December 31, 2023 2,489,957 2,423,170 1,883,419 1,624,982 1,405,499 14,587,731 24,414,758

 

 

d)Changes of the liability for remaining coverage (LCR) and claims incurred

 

             
  R$ thousands
BBA/VFA  PAA Total
Excluding Loss Component Loss Component TOTAL BBA/VFA -Premium allocation approach
BEL RA CSM BEL
Opening balances on January 1, 2024 295,007,749 1,832,047 24,414,758 6,637,197 327,891,751 3,256,881 331,148,632
Changes related to current period (Insurance revenue) (5,297,914) (168,464) (4,240,688) -   (9,707,066) (49,545,938) (59,253,004)
Total retrospective method contracts (596,582) (30,954) (1,725,516) -   (2,353,052) -   (2,353,052)
Fair value method contracts (3,979,828) (114,747) (1,564,336) -   (5,658,911) -   (5,658,911)
Issuance of contracts after transition (Other contracts) (678,657) (22,763) (950,836) -   (1,652,256) -   (1,652,256)
Experience adjustments (42,847) -   -   -   (42,847) -   (42,847)
Appropriation relating to contracts premium allocation approach -   -   -   -   -   (49,545,938) (49,545,938)
Technical changes related to future periods (1,221,520) (71,048) 3,648,437 (512,188) 1,843,681 (618,023) 1,225,658
Changes in estimates that adjust the contract service margin 4,826,038 (128,048) (4,692,900) (512,188) (507,098) -   (507,098)
Changes in estimates that do not adjust the contract service margin (OCI) (3,443,788) (106,907) -   -   (3,550,695) -   (3,550,695)
Experience adjustments 3,219 -   1,620,038 -   1,623,257 -   1,623,257
Contracts initially recognized in the period (2,606,989) 163,907 6,721,299 -   4,278,217 (618,023) 3,660,194
Insurance expenses 224,162 -   -   1,334,682 1,558,844 3,865,963 5,424,807
Constitution of onerous contracts -   -   -   1,334,682 1,334,682 -   1,334,682
Commission Expense 224,162 -   -   -   224,162 3,865,963 4,090,125
Financial expenses 28,159,122 121,126 872,606 -   29,152,854 -   29,152,854
Financial expenses of insurance contracts 28,159,122 121,126 872,606 -   29,152,854 -   29,152,854
Cash flows 9,257,678 -   -   -   9,257,678 46,454,234 55,711,912
Premiums received 51,516,743 -   -   -   51,516,743 50,320,197 101,836,940
Investment component (41,788,964) -   -   -   (41,788,964) -   (41,788,964)
Insurance acquisition costs cash flow (470,101) -   -   -   (470,101) (3,865,963) (4,336,064)
Balance on December 31, 2024 326,129,277 1,713,661 24,695,113 7,459,691 359,997,742 3,413,117 363,410,859
               
  R$ thousands
BBA/VFA  PAA Total
Excluding Loss Component Loss Component TOTAL BBA/VFA -Premium allocation approach
BEL RA CSM BEL
Opening balances on January 1, 2023 258,267,184 1,892,919 22,162,317 6,220,383 288,542,803 3,981,926 292,524,729
Changes related to current period (Insurance revenue) (3,601,931) (171,746) (3,116,918) -   (6,890,595) (44,362,232) (51,252,827)
Total retrospective method contracts (647,949) (42,010) (1,479,197) -   (2,169,156) 64 (2,169,092)
Fair value method contracts (2,683,054) (124,431) (1,045,106) -   (3,852,591) -   (3,852,591)
Issuance of contracts after transition (Other contracts) (283,692) (5,305) (592,615) -   (881,612) -   (881,612)
Experience adjustments 12,764 -   -   -   12,764 -   12,764
Appropriation relating to contracts premium allocation approach -   -   -   -   -   (44,362,296) (44,362,296)
Technical changes related to future periods 1,288,676 (41,170) 4,632,552 345,425 6,225,483 (2,485,082) 3,740,401
Changes in estimates that adjust the contract service margin 4,153,449 (274,166) (3,904,992) -   (25,709) -   (25,709)
Changes in estimates that do not adjust the contract service margin (ORA) 1,665,457 44,725 -   294 1,710,476 -   1,710,476
Experience adjustments -   -   348,556 345,131 693,687 -   693,687
Contracts initially recognized in the period (4,530,230) 188,271 8,188,988 -   3,847,029 (2,485,082) 1,361,947
Insurance expenses 116,814 -   -   69,302 186,116 3,399,756 3,585,872
Constitution of onerous contracts -   -   -   69,302 69,302 902 70,204
Commission Expense 116,814 -   -   -   116,814 3,398,854 3,515,668
Financial expenses 32,005,207 152,044 736,807 2,087 32,896,145 -   32,896,145
Financial expenses of insurance contracts 32,005,207 152,044 736,807 2,087 32,896,145 -   32,896,145
Cash flows 6,931,799 -   -   -   6,931,799 42,722,514 49,654,313
Premiums received 45,717,933 -   -   -   45,717,933 45,988,014 91,705,947
Investment component (38,534,315) -   -   -   (38,534,315) -   (38,534,315)
Insurance acquisition costs cash flow (251,819) -   -   -   (251,819) (3,265,500) (3,517,319)
Balance on December 31, 2023 295,007,749 1,832,047 24,414,758 6,637,197 327,891,751 3,256,881 331,148,632

 

e)Changes in liabiltiy for incurred claims (LIC)

 

             
  R$ thousands
 LIC - BBA e VFA    LIC - PAA   TOTAL LIC
 PV FCF   RA   Total liability for incurred claims - BBA and VFA  BEL  RA   Total liability for incurred claims - PAA
Opening balances on January 1 2,043,558 52,341 2,095,899 9,885,830 249,507 10,135,337 12,231,236
Costs of providing insurance 3,849,897 14,279 3,864,176 35,483,400 144,237 35,627,637 39,491,813
Claims incurred and other insurance expenses 3,849,897 14,279 3,864,176 35,483,400 144,237 35,627,637 39,491,813
Liability adjustments for incurred claims (62,024)   (62,024) (127,219) -   (127,219) (189,243)
Financial expenses of insurance contracts 132,910 4,024 136,934 830,999 21,979 852,978 989,912
Changes recognized in other comprehensive income 20,379 1,303 21,682 134,008 5,374 139,382 161,064
Estimated cash flows (4,681,808) -   (4,681,808) (34,359,384) -   (34,359,384) (39,041,192)
Claims and other insurance costs paid (4,681,808) -   (4,681,808) (34,359,384) -   (34,359,384) (39,041,192)
Balance on December 31, 2023 1,302,912 71,947 1,374,859 11,847,634 421,097 12,268,731 13,643,590
Costs of providing insurance 5,017,325 (8,625) 5,008,700 35,831,413 (5,557) 35,825,856 40,834,556
Claims incurred and other insurance expenses* 5,017,325 (8,625) 5,008,700 35,831,413 (5,557) 35,825,856 40,834,556
Liability adjustments for incurred claims 47,381 -   47,381 (60,730) -   (60,730) (13,349)
Financial expenses of insurance contracts 113,966 6,708 120,674 837,611 30,374 867,985 988,659
Changes recognized in other comprehensive income (43,788) (4,591) (48,379) (289,739) (27,539) (317,278) (365,657)
Estimated cash flows (4,649,021) -   (4,649,021) (35,056,817) -   (35,056,817) (39,705,838)
Claims and other insurance costs paid (4,649,021) -   (4,649,021) (35,056,398) -   (35,056,398) (39,705,419)
Transfer of portfolio -   -   -   (419) -   (419) (419)
Balance on December 31, 2024 1,788,775 65,439 1,854,214 13,109,372 418,375 13,527,747 15,381,961

 

f)Contractual service margin

 

               
  R$ thousands
On December 31, 2024 On December 31, 2023
 Contracts measured at fair value on transition  Contracts evaluated by the full retrospective method   Contracts issued after transition (Other contracts)  Total  Contracts measured at fair value on transition  Contracts evaluated by the full retrospective method   Contracts issued after transition (Other contracts)  Total
Opening balance on January 1 11,313,064 8,591,633 4,510,063 24,414,760 11,188,719 10,063,799 909,801 22,162,319
Changes from the current period (1,564,336) (1,725,516) (950,836) (4,240,688) (1,045,106) (1,479,197) (592,615) (3,116,918)
- Contract service margin recognized in the period (1,564,336) (1,725,516) (950,836) (4,240,688) (1,045,106) (1,479,197) (592,615) (3,116,918)
Changes in relation to future periods (2,586,246) 1,126,523 5,108,160 3,648,437 1,129,600 (442,767) 3,945,719 4,632,552
- Contracts initially recognized 136,643 53,780 6,530,876 6,721,299 158,165 54,940 7,975,883 8,188,988
- Changes in estimates that adjust the contract service margin (2,722,889) 1,072,743 (1,422,716) (3,072,862) 971,435 (497,707) (4,030,164) (3,556,436)
Total technical changes (4,150,582) (598,993) 4,157,324 (592,251) 84,494 (1,921,964) 3,353,104 1,515,634
Financial expenses of insurance contracts 53,225 422,272 397,109 872,606 39,851 449,798 247,158 736,807
Closing balance on December 31 7,215,705 8,414,912 9,064,496 24,695,113 11,313,064 8,591,633 4,510,063 24,414,760

 

g)Changes in other comprehensive income

 

   
  R$ thousands
Year ended December 31
2024 2023
Initial balances 1,265,455 2,385,912
Changes in other comprehensive income 2,349,169 (1,120,457)
Income and expenses recognized in the period in Other comprehensive income 3,916,352 (1,871,540)
Deferred taxes (1,567,183) 751,083
Closing balance on December 31 3,614,624 1,265,455

 

h)Insurance income

 

   
  R$ thousands
Year ended December 31
2024 2023
Amounts related to changes in liabilities for remaining coverage (LRC)    
Outputs related to general model contracts 5,296,714 4,806,022
- Expected claims incurred and Expenses 5,029,705 4,701,972
- Recovery of Acquisition Cash Flow 224,162 116,814
- Experience Adjustments 42,847 (12,764)
Non-financial risk adjustment change 169,664 171,746
Contract service margin recognized for general model and variable rate 4,240,688 1,656,674
Income related to contracts measured under premium allocation approach 49,545,938 44,618,385
Insurance Revenue 59,253,004 51,252,827

 

i)Insurance financial expense

 

   
  R$ thousands
Year ended December 31
2024 2023
Changes in obligation to pay arising from return on investment 8,459,749 11,547,973
Interest on monetary adjustment of insurance liabilities 21,681,764 22,338,084
Amounts recognized in income 30,141,513 33,886,057
Effect of changes in interest rates (3,916,352) 1,871,540
Amounts recognized in other comprehensive income (3,916,352) 1,871,540
Financial expenses of insurance contracts 26,225,161 35,757,597

 

j)Claims development

 

The claims development table is intended to illustrate the inherent insurance risk, comparing claims paid with their respective provisions, starting from the year in which the claim was reported. The upper part of the table shows the variation in the provision over the years. The provision varies as more accurate information regarding the frequency and severity of claims is obtained. The lower part of the table demonstrates the reconciliation of the amounts with the account balances.

                   
Occurrence/Payment R$ thousands
Payment year 1 Payment year 2 Payment year 3 Payment year 4 Payment year 5 Payment year 6 Payment year 7 Payment year 8 Payment year 9 Payment year 10
Year of occurrence 1 3,147,090 3,527,701 3,229,917 3,241,950 3,268,150 3,282,321 3,291,007 3,298,296 3,304,334 3,319,658
Year of occurrence 2 3,325,412 3,587,690 3,272,884 3,273,854 3,296,538 3,306,411 3,316,805 3,311,986 3,324,966 -  
Year of occurrence 3 3,425,283 3,827,487 3,494,627 3,508,782 3,518,145 3,526,704 3,539,966 3,542,393 -   -  
Year of occurrence 4 3,165,598 3,492,486 3,174,129 3,183,827 3,205,111 3,207,657 3,222,304 -   -   -  
Year of occurrence 5 3,079,842 3,453,209 3,205,311 3,222,927 3,241,856 3,253,344 -   -   -   -  
Year of occurrence 6 3,068,543 3,469,287 3,077,599 3,070,984 3,091,474 -   -   -   -   -  
Year of occurrence 7 4,419,675 4,315,384 4,009,581 4,011,871 -   -   -   -   -   -  
Year of occurrence 8 4,561,467 5,034,738 4,809,757 -   -   -   -   -   -   -  
Year of occurrence 9 4,907,587 5,285,128 -   -   -   -   -   -   -   -  
Year of occurrence 10 5,341,281 -   -   -   -   -   -   -   -   -  
Payments accumulated up to December 31, 2023 5,341,281 5,285,128 4,809,757 4,011,871 3,091,474 3,253,344 3,222,304 3,542,393 3,324,966 3,319,658
Estimate of claims on December 31, 2023 18,384,490 6,654,756 5,356,694 4,341,056 3,270,208 3,372,873 3,312,236 3,614,463 3,375,871 3,319,658
Estimated claims payable on December 31, 2023 13,043,209 1,369,628 546,937 329,185 178,734 119,529 89,932 72,070 50,905 -  

 

   
R$ thousands  
Estimated claims payable                      15,800,129  
Adjustment to present value                      (1,422,224)  
Adjustment for non-financial risk 269,958  
Other estimates                           734,098  
Liabilities for claims incurred on December 31, 2024 15,381,961