Brazil Insurance - Multi-Line: Favoring Low Risk Names on a Risk Off Backdrop

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Brazil Insurance - Multi-Line: Favoring Low Risk Names on a Risk Off Backdrop

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22 Jun 2026 00:03:04 ET │ 26 pages

Brazil Insurance - Multi-Line

Favoring Low Risk Names on a Risk Off Backdrop

CITI'S TAKE

Gustavo Schroden AC

We favor insurance names in the short-term due to their defensive profile, +55-11-4009-5858

reflected in low betas, resilient cost of equity, and strong earnings visibility, gustavo.schroden@citi.com

which provide downside protection in volatile markets. The sector also

benefits from elevated interest rates, as insurers invest premiums in Selic- Arnon Shirazi, CFA AC

linked assets, helping financial income. Also, high ROEs supporting +55-11-4009-7906

attractive dividend yields, reaching double digits in some cases. arnon.shirazi@citi.com

Brian Flores, CFAIRB – TP of R$64 - Buy – Our unique Buy — We keep our 2026 earnings estimate

broadly unchanged at R$0.6bn (+16% y/y), with challenging premium growth offset +55-11-4009-2842

by a sub-100% combined ratio and stronger financial results from higher Selic. For luis.brian.flores@citi.com

2027, we raise estimates by 4% to R$0.7bn (+20% y/y), supported by gradual

premium recovery and higher financial income.

BBSE – Maintaining TP of R$36 – Neutral — We raised 2026 earnings by 1% to

R$8.6bn on stronger financial income from higher Selic, with non-interest results

seen down 2% y/y within guidance, though El Niño remains a risk for 2H26. For 2027,

we cut estimates by 3% to R$8.7bn due to weaker premiums expectations, implying

modest 1% annual growth.

Caixa Seguridade – Up to R$19/share – Neutral/ Adding Short-term Positive view

— We expect Caixa Seguridade to sustain solid operating trends, with mortgage

premiums growing at low-teens and stable claims, while higher Selic should provide