IRB-Brasil Resseguros S.A. (IRBR3) Earnings Call Transcript & Summary

[Audio Gap] IRB RE Q1 earnings call. We do have simultaneous interpretation services available. [Operator Instructions] This earnings call is being recorded, will be made available at the company's IR website. The material is available at the website, too. You can download the presentation from the company's website. [Operator Instructions] The information made available at this presentation and any forward-looking statements are related to business projections, financial and operational estimates that are all based on the company's beliefs, as well as information currently available to the company. These forward-looking statements are no guarantee of performance because they involve risks, uncertainties and premises because they relate to future events. They depend on circumstances that may or may not occur. Investors should be aware that general economic conditions, market conditions as well as other operational factors may impact future performance that will lead to results that are materially different from those expressed in forward-looking statements. We have Mr. Marcos Falcao, CEO, and IR Director of the company; Mr. Daniel Castillo, VP of Reinsurance; Mr. Frederico Knapp, the Finance VP; Mr. Paulo Valle, Director of IB Asset; and Eduarda de La Rocque, Director of Internal Controls, Risks and Conformity. I'll turn over to Mr. Marcos Falcao, CEO of IRB-RE. You may proceed, sir.

Good morning, everyone. Thank you for attending yet again, another earnings call. We'll have Fred available, our CFO. I'll be making my opening remarks, closing remarks and the questions. A year ago, we were faced with a major challenge, the floods in Rio Grande do Sul. Those were tough times, albeit important because we came out of it stronger, but there was a protection gap, less 10% of the economic loss was insured. Let's now read the first R&D IRB report. We researched the floods, taking into account geology, weather-related events and all the losses. The report is available at our website. By sharing this type of information, the risk assessment can be perfected throughout the entire industry. Interest reached 14.75% last year, which contributed to our financial results. As time goes by, our profitability improves. Paulo will explain that. However, financial results won't prevent us from having discipline to have underwriting results. Castillo will address that. We remain focused on improving our efficiency, reducing expenses. We have reduced payroll. We are reviewing services contract to make the company even nimbler. We want to concentrate the data in a single place. We believe that these investments in technology and process review will speed up the decision-making process. Fred will address that topic later on. As to capital management, Duda will show you that we are above 200%. We had significant claims according to the press coverage. This is part of our business. It's a volatile industry after all. We draw your attention that the quarterly view can be myopic. We have to take into account the entire year. We'll emphasize life and non-life segments separately. They are very different businesses. And once we have cleaned out the life portfolio, we'll address this segment differently, focusing on profitability, but with a cautious approach because unlike the non-life segment, we have a long tail in this business. Over to Castillo.

Thank you, Falcao. These are indicators of the life and non-life indicators. On the top left, the quarter had BRL 135 million net income compared to the previous quarter that had BRL 74 million. In life, we had negative results. The cancellation of last year did not generate more premiums, but we still had to cover some claims. On the bottom left, the BRL 975 million of premiums is below the same period of last year. The combined ratio is due to 2 drivers: one, the movement of deadlines of the contracts. So this should be incurring throughout the year. And number 2, we expected better results in the agribusiness. On the top right, this is underwriting results below previous quarter. There was a major claim in a lubricant plant affecting material losses and lost time. We had over BRL 200 million. The net profit was BRL 119 million. On the bottom right, we had a combined ratio of 161%, in non-life, 98%. On to the next slide. This is the profile of our portfolio. As we said in the previous call, instead of having the previous call, we're now using the retained premiums, because of this, we changed the contract from the first to the second semester and the fact that we expected better results in every business. The premiums reduction was due to major cancellation that we did not renew since it's not profitable. Geographic distribution, 62% in Brazil of retained premiums. U.S. and Europe accounted for 29% of our portfolio. This distribution should change in the next 2 semesters because in Latin America, we had April, June and July renewal dates, and we're in the middle of renewals in Peru, Argentina and Mexico. Our portfolio is usually short tail at 52% in companies. Our strategy is to grow while maintaining profitability. If we cannot take up risk at the right price, we won't jeopardize results for that. On to the next slide. These are indicators in the past 12 months for both life and non-life. Look at net income growth that is consistent from BRL 185 million to BRL 412 million. Underwriting premiums, BRL 274 million to BRL 433 million. Retained premiums in the last 12 months is above non-life, a 10% increase from BRL 2.9 billion to BRL 3.3 billion with the life reduction as expected. The life segment accounted for 5% of total premiums in the quarter. Premiums in life segment is at the minimum level. We want to start a new business plan focusing on profitability. Finally, the combined ratio of 139% in life and 97% in non-life. Next slide. These are more granular indicators, non-life between domestic and international. Net income for non-life was originated for domestic portfolios. The international business that is non-life showed positive results starting Q4 of last year. The same thing happens in underwriting results. The combined ratio, non-life international is coming down at 102% today. Non-life domestic had a combined ratio of 95%, impacted by that major claim I've mentioned. Next slide, you have the breakdown between life and non-life based on 2 indicators: retained claims and commission ratio. When you look at the claims rate, non-life has been stable at the expected level at 61%. Life had a more volatile profile due to the cancellation of that contract I mentioned. The commission ratio remains constant for non-life and stable in life starting in Q3 of 2024. Over to Fred now.

Good morning, everyone. It's a pleasure to be here. My name is Fred Knapp. This is my first earnings call as the CFO. Taking over in the largest reinsurer in Brazil is a landmark in my professional career. I have the responsibility of carrying the torch of the solid work of Marcos Falcao. I'm also committed to adding strategic view focused on efficiency, transparency and value creation for shareholders. In Q1, my priority was to learn our operations processes and our team. A team that is excellent and is highly committed to the company's goals. As to the results, I would like to point out a few important landmarks. Just like Castillo said, the technical discipline in underwriting is our main pillar. This is a strategy that is robust and is focusing on profitability. We remain focused on operational efficiency. We have just started mapping out all processes. Our goal is to identify automation opportunities and process automations. The project Data Lake is focused on optimizing internal data. On to administrative expenses. Our challenge is to improve expenses. Part of it is related to depreciation and contingencies and depreciation does not impact cash. We've implemented changes to more precisely capture those changes. IT investments, more specifically, they used to be recorded as CapEx. As a way to analyze administrative expenses, our focus is to analyze the last 12 months. On the left, we have a 6% growth when we compare 12 months starting in December '24 and the accrued in March in 2025. But when we compare recurring expenses, excluding one-off impacts, expenses is almost flat, BRL 368 million. In the first quarter, we had 3 nonrecurring impacts. Number one, after employment benefits that includes benefits offered by IRB throughout the history, and they will continue after the employee is retired. The second item are related to 2 fines. One, the fine for not offering profit to a subsidiary abroad and the other one was for administrative processes. The third factor are related to the voluntary program. When you look at the bar chart on the right, when you see the recurring administrative expenses in the last 12 months, that index is at the 9% level throughout this period. The total expense that reached 11%. Breaking down these expenditures, we see 2 percentage points refer to expenses related to the legacy of the company, not related to earnings, premium. And otherwise, we would be at 9%. However, we don't consider this ratio ideal. Going back to my initial talk, we have the challenge of bringing efficiency and expenses and cost control. Now I turn the floor over to Valle, who will talk about financial results.

Looking at the next slide, we see that the financial results of the company. The portfolio is -- we have 56% of funds in Brazil and the remainder abroad. It's worth mentioning that BRL 9.1 billion of assets under management from the fourth quarter to BRL 8.9 billion is due to the appreciation of 7.27% of real in the first quarter, which impacted our positions in foreign currency. The results from investments was 174% or [ BRL 1 million ] in the quarter. Onshore, BRL 145 million due to the good performance of fixed income, 100% of CDI, and private credit or corporate credit. On offshore, the result was BRL 29 million, accounting for 87% of funds, Fed funds, and according to the profitability foreseen for our portfolio. When we look at the total finance income and share of profit of equity accounted investees, BRL 210 million. We started the portfolio with an asset position, and there was a result of a lawsuit that became final and was converted from dollars into reais, as commented in the last call. In the next slide, we break down the portfolio profitability by asset class. We see favorable in fixed income and corporate credit. In inflation, given the highest figures of February and March, we see a profitability of 104% in assets and 90% in legacy, broken down in the chart on the right, that talks 25%, 26%, and 28% that were made up until 2021 with less attractive rates. We have -- which was benefited from the closing of the rates in the quarter. In corporate credit, we have good performance of corporate bonds and CDs of emerging currencies with -- which we use for hedging of the company. As for legacy of Brazilian sovereign funds that was not so favorable in previous years, we are zeroing the position of Globe Brazil 2026, realizing the losses at market value and reinvesting in more favorable rates. We've done 45% of them, reducing the position of 6% to 4% of total assets, and the idea is to settle that position until the end of this year, as seen on explanatory note 6.2. This has impacted the results by BRL 17 million. In the lower right chart, we see the profitability and reinvestment rate. Onshore 102% of CDI with a return rate of 12.8% annualized. The onshore legacy funds account for 11% of total assets, and one is matured in 2 days and accounts for BRL 160 billion, 3% will mature in 2026 and 6% in 2028. The maturity of the 2025 will be on May 15. Now I turn the floor over to Eduarda de La Rocque.

Thank you, Paulo. Good morning, everyone. In this first slide, we'll talk about our regulatory solvency, which continues to grow. The sufficiency of tangible equity coverage regarding the regulatory -- the minimum required capital accounts today for BRL 1.115 billion as seen in the upper left chart, which is a sufficiency of 207%, an increase of 38 percentage points when compared to the first quarter of 2024. This is due, as you can see on the right top chart, a substantial increase in our tangible equity without any increase in the minimum required capital, which results in a substantial improvement of return adjusted to risk, both in the financial and underwriting areas. This is the result of a more efficient capital management. In the next slide, you can see the second regulatory indicator that assesses, according to SUSEP, the liquidity of our portfolio according to the amount of assets qualified as guarantees for our actuarial liabilities. This closed the first quarter with a sufficiency of BRL 728 million, equivalent to 10.9% of the need for coverage requirement, 1.2 percentage points to the figure in December 2024, and within the margin of volatility. This indicator is 5.1 percentage points above the amount recorded in the first quarter of 2024. In addition to monitoring the coverage of technical provisions, we also manage the cash and banks of the company dynamically, including hedging. In this slide, we show the several highlights in terms of initiatives we had in ESG. We have reviewed our ESG policy that had been prepared in 2022. It was outdated compared to the benchmark we made compared to important stakeholders. We did the same -- the first inventory of greenhouse effect and we wanted to be in compliance with the Paris charter. This material is available in our website. On this slide, I show the highlights of the sustainability report, starting with governance data. Given our history, this is even more important now. We are in the third and final day with the DOJ agreement with the Department of Justice of the U.S., and not only because of that, we are investing and developing our integrity program, which is detailed in our report. In the social aspect, this year, we were once again considered a Great Place to Work in the environmental area. We have recently published in our website, the first RRB research and development report with a detailed analysis of the floods in the Rio Grande do Sul that happened in April and May last year, and all the fires in the state of Sao Paulo last year. Now I turn the floor over to Fred.

Now we present 3 slides about our performance under IFRS 17. First, we showed the net income of BRL 134 million in the period compared to BRL 237 million in the first quarter of 2024. In this quarter, the results from services accounted for BRL 235 million, with a slight reduction when compared to the first quarter of 2024, when it was BRL 252 million. The main positive highlights were property and agriculture insurance, which contributed positively to income. On the other side, life reduced when compared to the first quarter of 2024, reflecting our strategy to focus on profitable life insurance contracts. On the next slide, we talk about the CSM. As we mentioned in previous calls, CSM accounts for the profit expected for reinsurance agreements that yet have not been recognized on the profit and loss, and that will be as we deliver the contracts. This is a key component and measures the future profitability of our portfolio. In this quarter, we saw a reduction of 13.6% in the amortization of CSM, which is the result of a higher amortization in life insurance, especially due to the less accounts with significant facts received in 2023. However, despite the nonrenewal of life contracts, the underwritten business grew by 21.1% in CSM when compared to the previous period, showing the quality of underwriting decisions made at RMV. In the third slide, the main factor that negatively impacted our results in the first quarter was the discount rates applied to assets and liabilities in retrocession and reinsurance agreements, resulting in a total expense of BRL 198 million. This reflects the financial impact of future rates projected used to update the cash flows of these contracts. In the previous period, the same effect had a positive contribution of BRL 6 million, boosted by a specific reassessment of cash flows of claims already incurred. This reflects a change in interest rates, especially in a scenario with significant changes in actuarial curves in the macroeconomic scenario, which influence the payment and receipts of operational payments. Now I turn over the floor to Falcao, who will make his final comments.

Thank you, Fred. I would like to share with you how excited I am in the new people hired for our team. Fred has been with us since January, and he's been adding a lot of value. [ Viviani Marin, ] who is now the Claims Officer. She has more than 20 years of experience in the market. She helps Castillo and manages the area that shows a benefit for our customers to buy reinsurance. We have improved the quality of our services. It's very good to see IRB attracting the best talent in our market because this is the best place to work, I'm sure, in all businesses. It's all about people. We once again got the seal of the Great Place to Work, which reflects the energy and good work environment of our company. In the last Annual Meeting of Shareholders, 3 Board members were elected, Louise Barsi, who is a value investor, and Victoria Bejarano from Colombia, with a great international experience in a strategic view of the reinsurance market. Pedro Englert, a very successful entrepreneur with a vision from start-ups and technology. And finally, Otavio Damaso, who, after finishing the quarantine, will join the Board in July, bringing his experience as many years as an officer at the Central Bank. In the fiscal committee, Ricardo Baldin will become the Chairman, bringing extensive experience with Price PwC consulting company and attending several boards, including Itau Bank. We are strong and energized to face the challenges of growing with profitability, moved by the opportunity to reduce the protection gap and increase penetration of insurance in our society. We are ready for the renewal of July 1 in Latin America, closer to customers and with capital and capacity to be competitive. I lead a business plan that will be deeply discussed in our planning process, that will start in the second half of this year. We're quite confident in our underwriting discipline. It may be a harder path to follow. But as I said before, if we have to make mistakes, the mistakes will be being excessively careful with underwriting criteria. But the idea is to grow in the long run and serve shareholders. We work to bring long-term, consistent results to our shareholders. I see several opportunities in insurance and reinsurance businesses, and I believe that IRB can lead the opening of several areas that have not been explored. And I count on you, investors in this journey. Now let's move on to the Q&A session.

[Operator Instructions] Eduardo Nishio from Genial Investimentos asks the first question.

I have 2 questions of the mismatch. Despite the worse technical rate, you had an income growth quarter-on-quarter, year-on-year. Can you break down as to that rate throughout the year 2025? Do you believe you're going to reach less than 100%? Can you break that down between claims, commissions, and admin, and the tax rate that has gone up a lot this quarter? And my second question is about your growth. You had some numbers coming down 13% on the quarter, year-over-year. Life Brazil, almost a 62% drop. I understand you're more selective in choosing the premiums. However, that may jeopardize future growth. Can you elaborate on the perspective of premiums throughout the year? And if you could address the domestic market, you've been having hard time growing there, too.

This is Daniel Castillo. This is the $1 million dollar question, the combined ratio. Choosing risk is the #1 challenge in underwriting. But choosing risk with profitability, the risk is even higher, or the challenge is even higher. You have to have 80% of science, 20% art. That's why we have so many professionals working with us to make the right calculations to make sure we are profitable. Our business is priced at 95% combined ratio. But it will be a mistake to look at just 1 quarter. We might as well look at the last 12 months. A quarter can give you a snapshot, but 12 months give you a picture or a movie, to be exact. The life combined ratio is at 129%. It may come down as we clean the portfolio. In life, we canceled a major contract last year. The premium is not there, but the claims keep coming in since the life business has a longer tail. Non-life business is at 97%. When you break that down between domestic and international, international came down from 125% to 102%. In other words, we're having much better results in the international. Domestic is at 95% according to expectations. We believe this number should remain stable and improving, the international coming closer to the domestic. But the combined ratio is a composition of several numbers. SG&A are also important, as we reduce SG&A, the combined ratio improves. Don't forget that SG&A is a percentage of that premium. As we increase premiums, SG&A comes down. Going back to that $1 million question, our challenge is in which science should come first. It's not 50-50. Science, 80%; art, 20%. We're threading the pathway, and we are confident we'll keep on improving international business and reducing the combined ratio for the life segment. I don't know whether I answered your question or not.

Yes. As to premiums, what's the outlook for 2025?

Well, we had a premiums reduction in Q1 because we had to move the time frame of relevant contracts from the first to the second quarter. That premium will be generated throughout the year. On the other hand, agribusiness is very important to us. And we haven't been able to achieve the production we expected because of market conditions. So we were let down by agribusiness. We were expecting to produce even more. On the other hand, we have renewals in Latin America that are taking place as we speak, concentrated both in June and July, and we have high hopes of improving those businesses while maintaining profitability.

We believe there will be growth for the premiums for the rest of the year? Our focus is on the retained, Eduardo. This is the most important aspect. We believe it's going to grow, but we have to make that calculation. This is Falcao speaking. Well, the life portfolio, once we cancel that contract, is about BRL 250 million annualized. When compared to last year, it won't happen. For non-life, we had good premium growth, but life is coming down because of that cancellation.

Let me just piggyback on that answer. When you cancel BRL 250 million in life, we can recover many of the results, right? It's a good premium to be canceled. We are very pleased, we canceled it.

Daniel Vaz from Safra asks the next question. The mic is unmuted now.

Congratulations on the positive results. My question is about something you mentioned during the presentation. You're going back to focus on life, and you mentioned that it's a long tail. It requires a different strategy. We've heard you've canceled the contract. A couple of things have to be adjusted. And what would be the time frame for that adjustment so that life can contribute both in premiums, guaranteed and retained? What would be that time frame? If you could elaborate on that? The second question, how do you break that down between international and domestic for that appetite? Where does the major opportunity lie for life, so we can adjust our models.

The life business has reached a minimum premium level. We don't believe it's going to come down because we already cleaned a portfolio. We're now preparing a business plan to develop life businesses that will bring in results in the next 24 months. We believe there are opportunities in Brazil and LatAm, but we have to carefully consider them because we had some negative surprises in the past. We want to look at the life business, but focusing on the scientific part way more than we did in the past. We remain optimistic. Therefore, that the opportunities we are considering can come through in the next 24 months.

If I may ask another question. My question is about cash generation. The regulatory capital is at a good level. We're looking at this indicator, and it's getting better and better, right? Can you hear me?

Yes, we can hear you. Go ahead.

So the question is to learn more about your approach in the next 12 months now that you have good insolvency numbers.

Well, this question helps us understand that our cash generation is not based on those projections for net profit, but also tax credits. We compare tax credits as if it were miles. You save the money and you pay that with miles. So we generate more cash than our net profit, in other words. Of course, we had debentures that have to be paid out at year's end. We're going to use part of that to generate cash. We have about BRL 600 million in debt, BRL 300 million to be paid out this year, a little less and BRL 300 million for next year. And we're going to use part of that cash to get rid of that debt. A debt that's above the interest rate. We don't want it, and it's not welcome. That debt, so it's in the money. It's okay to carry that. That's why we did not pay that in advance. We've been carrying at its term. But if we were to issue debt, if you wanted to roll it out, it would be way more expensive than the interest rate, and it's not interesting. We pay the debt. When you have the accrued loss that is at BRL 300 million based on our projections. If everything happens according to plan, based on analysts' projections, our net profit will be above that number. And by doing so, we'll be paying out dividends 25% according to the bylaws. It's going to be approved by the assembly, by the Board, but we'll be able to pay that dividend this year. Did I answer your question?

100%.

The next question comes from Arnon Shirazi from Citi.

My question is related to your administrative expenses. It's clear on the slide you showed that the ratio is around 11%. And then you mentioned that there's a 9% of ratio would be ideal. So I would like to understand what is the level you consider ideal? And with initiatives you had, how they should the voluntary dismissal program, how that will result in good results in the second quarter?

Okay. Thank you for the question. When we look at the expense ratio, we think it's still high. Even the 9% could be a bit more effective for the combined ratio. Of course, we're looking for an efficiency. There is a denominator that we need is just the growth in premiums. As Castillo mentioned, the higher the premiums, the more able we are to dilute administrative expenses. So always seeking operational efficiency. There are 2 examples, data lake and mapping of processes that will be beneficial to the company. We're still a bit restless with this figure. We want to seek growth in premiums and a more adequate expense level. We are renegotiating several contracts with all our suppliers, and we've created a project area to identify opportunities in items that we're not using and that could be more efficient in their use. We also did the voluntary dismissal program, as mentioned in the earnings conference call. And all that should provide benefits in the medium term to the company.

That's very clear. And congratulations on the research and development report. That's quite interesting.

The next question comes from Guilherme Grespan from JPMorgan.

Congratulation on your earnings. And people talk a lot about operations and your message for the strategy is very clear. So I'll ask about the financial part. Maybe I missed something in the presentation, but there were BRL 45 million in foreign exchange variance gain. I would like to understand what generated this gain. And what we calculate BRL 210 million, and it was marked to market for BRL 17 million and also BRL 230 million for financial gain results in the [indiscernible]. So what generated this BRL 45 million and if it's sustainable from now on? And 2 quick clarifications. I think it was said that you expect a negative impact of BRL 52 million in the portfolio. I would like to understand if this includes what has been done already, so BRL 37 million and a bit more, BRL 52 million is addition -- in addition? Or does it include the past? And the impact from the lube oil plant, has it been accounted for in this quarter as a whole?

Guilherme, this is Paulo Valle speaking. Thank you for the question. Okay. First, the foreign exchange variance. In BRL 210 million in results, BRL 40 million comes from that. We ended last year, as mentioned in the conference call for the first quarter of 2024, we ended with a net position in positive due to receivables from lawsuits, which used to be an asset in dollars that was changed by courts into real. So that we started with a positive position in reals, and in the beginning of the year, we had an appreciation of BRL 5.85 and BRL 7.37 in the quarter. So this appreciation in the real had to -- had a positive effect of BRL 45 million. As the Globe 25-26 effect on the explanatory note for the fourth quarter of '24, we mentioned that there was a liability mark-to-market of BRL 77 million that -- we had realized losses in December, and then we started with BRL 77 million. We're making these adjustments on a monthly basis. This first quarter, BRL 17 million impact, and this expected loss went from BRL 77 million to BRL 51.7 million. Our intent is to zero that in this year, and if we divide this amount in 8 installments, there will be an impact of BRL 6 million to BRL 7 million per month. In addition, there was a good performance on corporate bonds, and there was an impact of inflation in February and March, and we have an active management in terms of coverage to try to find the best results possible.

The next question comes from Thiago Paura from BTG Pactual.

Just a follow-up on premiums growth. You provided a good disclosure about the major portion of the renewals that were made in the first quarter regarding the domestic portfolio, with the combined ratio even lower than what you have guided the market to. And now we are in the midst of the renewals for LatAm. So what do you envisage in terms of price dynamics for this portfolio specifically? And if we could expect, because Castillo mentioned that there may be a change in the geographic breakdown going forward, because it used to have a larger portfolio in Brazil, and that those 80% Brazil and 20% the rest remains the same comparing to what you're seeing in renewals for LatAm right now? And finally, what do you see as competitive advantages for RMB in this portfolio because Castillo and Falcao have also talked about the advantages in underwriting for the local portfolio, and it's clear, it's important for us as Brazilian citizens to see these advantages. But looking abroad, especially to LatAm, what are the most significant items that make you so competitive in that portfolio as well?

I apologize, Thiago. I'll answer your question shortly about Latin America. But I think the previous question was about claims, and there was a loss, a claim for a large lube oil plant in Rio de Janeiro, which accounted for a value of BRL 252 million, but net of retrocession, it should be BRL 130 million, BRL 140 million, which is a loss of profits and material damages. I'm sorry for not having answered that earlier, Guilherme. Now, Thiago, let's talk about Latin America. In Latin America, the main competitive advantage we have is services, not only prices. Prices is a matter of science and art. We are now using a lot more science in our LatAm business, but today, we have a large team of very -- of people who are fluent in Spanish, who are visiting this market frequently. I am visiting the market with another 3 colleagues next month, and last week, there were 18 customers from Latin America in Rio, Mexico, Colombia, Peru, and Argentina visiting us. We had an insurance game, which is one of the best marketing tools we have, which is the simulation of a company that's doing very poorly, and we ran different scenarios, and there were 18 people taking part in this game, and a presentation that lasted for 8 hours, all in Spanish. So we believe that this is our competitive advantage. We will be present with the in Latin America, bringing all the experience we have in Brazil and speaking Spanish, and the project is to remain 70% of the business within Brazil and 30% within Latin America. The LatAm market is not hard now. I would say it's soft, but we must do a risk selection and using more science than art.

The Q&A session has now ended. Now let's go -- return the floor to Mr. Marcos Falcao for his final remarks.

Thank you all for attending the call, and we have great expectations for the next call. The call for the second quarter for us is good because we have a greater visibility of the year. It's good to share with you so that we can look at IRB as 2 different businesses, life and non-life, and not looking at the quarter only, but as a film of the last 12 months. I would just like to touch on one point. There were some questions that were not specifically answered, and the main one is why did we cancel our treasury stock? This -- it's a regulatory answer. We need to cancel the treasury stock due to a regulatory requirement, okay? And with that, I close this call, and I thank you all for attending. Let's continue working on our challenges to grow premiums with profitability, as Castillo always says. Fred is now dealing with expenses, and I hope Castillo improves premiums so that Fred will work on a better ratio, and he will also work to reduce expenses. And now we're starting again this 3-year business plan project to focus on growth. In the beginning of the year, we declared the end of turnaround. So we are looking forward, very excited with this team we have, so that we can achieve consistent returns in a perennial company. Thank you all, and have a good day.

The video conference call for the earnings release of the first quarter of 2025 of IRB RE has now ended. The Investor Relations department is available to answer any questions you may have. Thank you all for attending, and have a good afternoon. [Statements in English on this transcript were spoken by an interpreter present on the live call.]