Insurance - Brazil: Mind your bearishness, in the short-term

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Insurance - Brazil: Mind your bearishness, in the short-term

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Insurance - Brazil

Mind your bearishness, in the short-term

Price Objective Change

Insurers reported solid set of results in 1Q26… 12 May 2026

Insurance companies reported solid results in 1Q26. Claims frequency remained low, Equity

supporting strong underwriting results, while financial income continued to benefit from Brazil

elevated interest rates. We do not expect these trends to reverse in the short term and Insurance - Multi-line

therefore maintain our relatively positive view of the sector. Mario Pierry

Research Analyst

…but we see risks to medium-term earnings BofAS+1 646 743 0047

We continue to see risks to medium-term earnings growth. Despite benign weather mario.pierry@bofa.com

conditions in ‘26, we see risks related to a severe El Niño between late ‘26 and ’27; it Antonio Ruette >>

typically leads to heavy rainfall, increasing exposure in rural, residential, and auto ResearchMerrill LynchAnalyst(Brazil)

insurance—key lines for the three covered insurers. We estimate 1–2% negative impact +55 11 2188 4225 antonio.ruette@bofa.com

on ‘27 earnings for each 100bp increase in insurers’ loss ratios. Furthermore, weak

Augusto Uehara >>

credit origination (particularly rural and payroll loans) and fiercer competition (specially Research Analyst

in auto & health insurance) should continue to constrain written premiums – and Merrill Lynch (Brazil) augusto.uehara@bofa.com

earnings growth ahead.

Ernesto Gabilondo >>

Merrill Lynch (Mexico)BBSE: earnings should continue to decline in ‘27 +52 55 5201 3428

We raise our ‘26E NI estimate for BBSE by 2%, driven by stronger pension plan results ernesto.gabilondo@bofa.com

and financial income.