INSTITUTIONAL PRESENTATION - 1S2020 - Austral holding
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INSTITUTIONAL PRESENTATION 1S2020
OWNERSHIP STRUCTURE
STRONG SHAREHOLDER BASE
Vinci Partners is one of Brazil’s leading IFC, a member of the World Bank Group, Plural (formerly Brasil Plural) is a
alternative investments platforms, is the largest global development complete multiple bank which focuses
specialized in asset management. Vinci’s institution focused on the private sector on structured financing operations,
extensive knowledge of the Brazilian in developing countries. financial advisory and asset
economy, complementary backgrounds management.
and wide-ranging relationship network
distinguish the expertise of its more IFC has a global presence in more than
than 200 professionals. 100 developing countries and for over 60 Plural has over 600 professionals with
years has helped companies by excellent relationships with Brazilian
providing debt and equity investments. companies and financial institutions.
The business platform, product offerings
and close collaboration have fueled an
increase in assets under management IFC’s Aaa rating (Moody’s) is underpinned With the backing of its full-service bank,
from USD2.3 billion at inception to more by its strong capital position, abundant the group has a strong ability to
than USD6 billion. liquidity, diversified portfolio and highly distribute products from multiple areas
rated shareholder base. of work between retail and wholesale.
In September 2014, IFC invested R$ 80
million in Austral.
FROM THE WORLD’S LARGEST RATING AGENCIES
B++ AAAbr
Positive outlook Highest Local
Global Investment Rating
Grade
WELL-ESTABLISHED CORPORATE GOVERNANCE INITIATIVES
AUSTRAL HOLDING
Board Members Committees
10 5 Main Objective: Decide on compensation and
HR & benefits policy guidelines, talent retention &
Compensation succession plans and people management policies
Members: Board, Officers and CHRO
Bruno Zaremba
(Board Chairman)
Annette Merz
(Former)
Main Objective: Support the Board of Directors in
carrying out its responsibilities related to the
1 Risk Company's risk and capital management
1 Members: Board, Officers and CRO
Gabriel Felzenszwalb
(Vice-chairman) Main Objective: Review financial statements and
Margo Black
evaluate the effectiveness of internal and external
(Former) Audit audits
Independent Member Members: Leonardo de Assis Portugal, Paulo Pereira
2 Ferreira and Paulo Roberto Batista
1
Antonio Gouvea Main Objective: Establish investment strategies and
guidelines, as well as analyze portfolio results
Investments Members: 1 member of the asset, 1 member of the
board and CFO
1 Sergio Goldenstein
(Former)
Independent Member Main Objective: Evaluate conducts in disagreement
with ethical standards and develop actions to
Michael Cukierman
disseminate ethical behavior and monitors conducts
Years at Austral Board Ethics related to anti-corruption, anti-money laundering
and financing of terrorism
Members: CEO, HR and Compliance professionals
RETURNS
AUSTRAL HOLDING
Net Profit (R$ mm)
62
54 51
35
20
10 8
5
2013 2014 2015 2016 2017 2018 2019 1S20 LTM
• Austral Holding retained earnings and investment income have ensured a growth in surplus every year since inception, a
388% increase in shareholders’ equity since 2011
CAPITALIZATION
AUSTRAL HOLDING
Shareholders’ Equity (R$ mm)
600
450
300
150
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1S20
Austral Re Terra Brasis Austral Seg IFC
• In 2014, IFC invested R$ 80 million in Austral Holding
• In 2019, Austral Re merged with Terra Brasis, becoming
Brazil’s second largest reinsurance firm
GWP
AUSTRAL HOLDING
GWP Historical Evolution (R$ mm)
2.221
1.333
783 859 879
630 737
465
2013 2014 2015 2016 2017 2018 2019 1S20 LTM
• Austral Holding has a compound annual growth rate (CAGR) of 37.27% over the past three years (2017 – 1S20 LTM)
EQUITY AND SOLVENCY MARGIN
AUSTRAL HOLDING
Minimum Capital Required Excess capital Solvency Margin
700 R$ mm 361%
270% 274% 288%
600 215%
247% 256%
137%
500
Equity
400
300
200
100
0
2013 2014 2015 2016 2017 2018 2019 1S20
Note: Solvency Margin = Excess Capital / Minimum Capital RequiredCASH AND FINANCIAL RESULT
AUSTRAL HOLDING
Cash and Investments Cash and Investments/ Equity
175%
Equity
investment
162% 171%
155% 153%
139% 142% 144%
Cash
Offshore Others
2% 7%
893 970
Real Estate
603 605 707
402 488 Funds
280
3%
Private Credit
2013 2014 2015 2016 2017 2018 2019 1S20 LTM
Bonds
R$ 970 mm
8%
Portfolio
Financial Result (R$ mm) Portfolio yield/ Brazilian risk free rate 335%
240%
Bonds Offshore
18%
138%
104% 107% 91%
69% 84% Public Local
126 Bonds
97 62%
71 57
53 53
37
15
2013 2014 2015 2016 2017 2018 2019 1S20 LTMTABLE OF RETURNS
AUSTRAL HOLDING
2017 2018 2019 1S20 LTM
Loss Ratio 72,6% 61,4% 89,6% 93,6%
Expense Ratio 21,6% 43,5% 27,9% 22,4%
Combined Ratio 94,2% 104,9% 117,5% 116,0%
Amplified Combined
Ratio
82,5% 89,8% 95,8% 96,6%
ROE 12,9% 4,8% 1,1% 1,8%STRATEGIC VISION TO CREATE THE 2 nd PLAYER IN BRAZIL
AUSTRAL RE
Merger with Terra
Brasis, creating the
second largest local
Started expansion to other reinsurer in Brazil
countries in Latin America1
Founded by Vinci Partners
Regulatory approval
reinsurance business 2020
Beginning of operations with Entry in the Energy segment,
a multiline segments becoming one of the most relevant
approach players in the sector
2019
2018 Austral Holding
receives positive
outlook
2015
2014
2011
Equity Austral Holding rating
investment from IFC upgrade to brAAA
Source: Company
Note:
1. Austral Re has operating licenses in all countries in LatAm except for Chile, Uruguay and VenezuelaBUSINESS IN LATIN AMERICA
AUSTRAL RE
• Wide operation across Latin
America, except for Venezuela
and Puerto Rico.MARKET SHARE EVOLUTION
AUSTRAL RE + TERRA BRASIS
Property Life & Health Cargo
6,4% 12,0%
5,9% 10,7% 11,2%
8,8% 8,9% 8,5%
3,4% 3,0% 3,6% 6,4%
2,4% 4,3%
3,6%
2,1%
0,1% 0,5%
2015 2019 2015 2019 2015 2019
Aviation Energy & Marine Motor
27,2% 27,6%
16,1% 16,2% 24,9%
22,7%
17,5%
12,9%
4,0% 4,3%
4,6%
2,3% 1,4% 0,1% 1,5%
0,3% 0,1% 0,4%
2015 2019 2015 2019 2015 2019
Note: Brazilian marketGEOGRAPHIC EXPANSION - COMBINED BUSINESS
AUSTRAL RE + TERRA BRASIS
7% 7%
10%
15%
2019 Gross 38%
Written
Premiums
62%
84% 78%
9% 12%
16%
2019 Net 38% 16%
Written
Premiums
62%
75% 72%STRONG MANAGEMENT TEAM
AUSTRAL RE
Bruno Freire
CEO
Paulo Hayakawa Maria Victoria Ribeiro Hernan Moreno
Sales Director Underwriting Director LatAm Director
Elias Silva Arthur Farme Rodolfo Rodriguez
Underwriting Director CFO CRORISK APPETITE
Underwriting Risk Financial Risk Image Risk
• Search for technical results above • Retain invested capital • Transparency in results
market average • Guarantee adequate liquidity level • Company’s culture embedded
• Focus on contracts resulting in ROE for current obligations • Integrity
above cost of capital • Seek risk-adjusted returns above
Interbank Rate
Credit Risk Operational Risk Strategy Risk
• Relate to diversified and well rated • Monitor and control risk factors • Geographic, client and distribution
companies regarding fraud, failures, or channel diversification
• Hold long-term relationships with inefficiencies in the process, • Adequate portfolio mix
retrocessionaires system, or activities to seek the
lowest level of operational lossesENVIRONMENTAL PROGRAMS Austral supports and promotes actions in environmental programs ESMS Official Austral has an officer responsible for Discontinue the use of disposables within the the management and supervision of the company Environmental and Social Management System Main Objective Control environmental, reputational and Through the Organic Cycle Project, the company social risks in line with ESMS policy. The will adopt the composting of its organic waste Company observes an exclusion list in order to maintain a low risk level New Environmental Policies The Company currently adopts ways to reduce the use of paper, always giving Adoption of partial Work from Home Policy preference to digital files
SOCIAL PROGRAMS
Austral supports and promotes actions in 9 development programs with their
partners with the purpose of making social impact
Fundação Doria
Instituto Reação Roda de Palhaço
Nowill para Cegos
NGO that promotes human development and Dedicated to the social inclusion of people with Promotes interventions in children’s hospital
social integration through sport and education visual impairments in São Paulo for over 70 years seeking to entertain them
Projeto Solar Estúdio Escola
Projeto LEV
Meninos de Luz de Animação
Promotes the socio-cultural participation of Founded by Lar Paulo de Tarso, in Rio de Janeiro, Empowers young people from the public school
the elderly and people who face social it promotes integral education, culture, sports, system in Rio de Janeiro (RJ) in the language of
exclusion, aiming to stimulate the support for professionalization, basic health care animation, whether as an audience, form of
and social assistance to community families with expression or professional field
integration and the sense of belonging of
a higher level of disruption
these people
Projetos Novos Projeto Tomates
ONG Novo Mundo
Acordes Verdes Fritos
Promoted by the Palácio Itaboraí Chamber Non-profit institution whose main objective Digital reading club, aimed at men and women
Orchestra, the initiative focuses on orchestral, is to transform the lives of children and over 60 and formed by 8 to 12 people, who meet
humanistic and professional training of students in São Paulo once a week to read and talk about
adolescents through education and culture
from public schools, idealized and maintained by the same book
the Fiocruz unit in Petrópolis (RJ)
in Rio de Janeiro (RJ)RESERVE ANALYSIS
(R$mm)
29 34
17 7
-41
-75
531
486
448 446
382
339 327
292 303
266
233
205
127
105
91 87
54 63
44 38 43
30
13
-8
2015 2016 2017 2018 2019 1S20 LTM
Note: The values consider the historical basis of Terra BrasisRESERVE ANALYSIS
(R$mm)
143
144
118
84
75 314
65 266
205
148
110 113
2015 2016 2017 2018 2019 1S20
Note: The values consider the historical basis of Terra BrasisRESERVE ANALYSIS
(R$mm)
68% 69% 85%
36% 48% 39%
473
438
412
383
364 372
333
285
247
182
161
138
2015 2016 2017 2018 2019 1S20 LTM
Note: The values consider the historical basis of Terra BrasisRESERVE ANALYSIS
Outstanding / Earned Premium IBNR / Earned Premium Reserves / Earned Premium
2015 98% 2015 19% 2015 117%
2016 78% 2016 25% 2016 103%
2017 104% 2017 26% 2017 130%
2018 80% 2018 43% 2018 123%
2019 80% 2019 42% 2019 122%
1S20 LTM 85% 1S20 LTM 41% 1S20 LTM 126%
Note: values excluding SUSEP groups 5, 9 and 12. The values consider the historical basis of Terra Brasis.RESERVE ANALYSIS
(R$mm)
552 544
532
501
345
319
288 268
247 235
178
144
104
2015 2016 2017 2018 2019 1S20 LTM Total
Note:
*Reported Losses: losses reported by Brazilian Cedants by reinsurer partner and line of business
*Booked Losses: losses accounted by Local Reinsurers excluding international business
The values consider the historical basis of Terra BrasisRESERVE ANALYSIS
(R$mm)
77% 81% 78%
74% 73% 74%
286
222 223
212
181
173
162
140 146
123
104
95
2015 2016 2017 2018 2019 1S20
Note: The values consider the historical basis of Terra BrasisRESERVE ANALYSIS
(R$mm)
656
607
578
541
522
482
229
159
136 140
93 110 95
82 80
55 65 69 47 64 61
19
-4 120
2015 2016 2017 2018 2019 1S20
Note: The values consider the historical basis of Terra BrasisThank you! RIO DE JANEIRO
T +55 21 3125 5500
Av. Bartolomeu Mitre, 336 3º andar
Leblon Rio de Janeiro RJ Brasil
22431-002
SÃO PAULO
T +55 11 3572-2400
Alameda Santos, 787 Conj. 52 5º andar
Jardim Paulista 01419-001
São Paulo SP Brasil
BOGOTÁ
T +571 7440 992
Av. Carrera 9 No. 113 – 52
Oficina 1207 Torres Unidas 2
/ australre.com Bogotá ColombiaYou can also read
