v3.26.1
INSURANCE CONTRACTS
 12 Months Ended
Dec. 31, 2025
Notes and other explanatory information [abstract]  
INSURANCE CONTRACTS

 

21)INSURANCE CONTRACTS

 

a)Insurance contract liabilities

 

           
  R$ thousands
On December 31, 2025 On December 31, 2024
PAA BBA/VFA Total PAA BBA/VFA Total
Liability for remaining coverage (LRC)​​ 2,705,391 400,033,295 402,738,686 3,413,117 359,997,742 363,410,859
- Present value of future estimated cash flows on Best Estimated Liability (BEL) -   376,309,243 376,309,243 -   333,588,968 333,588,968
Non-financial risk adjustment (RA) -   1,419,950 1,419,950 -   1,713,661 1,713,661
- Contractual service margin (CSM) -   22,304,102 22,304,102 -   24,695,113 24,695,113
- Premium allocation approach (PAA) 2,705,391 -   2,705,391 3,413,117 -   3,413,117
Liability for incurred claims 15,034,052 1,942,738 16,976,790 13,527,747 1,854,214 15,381,961
- Present value of future estimated cash flows on Best Estimated Liability (BEL) 14,602,721 1,875,947 16,478,668 13,109,372 1,788,775 14,898,147
Non-financial risk adjustment (RA) 431,331 66,791 498,122 418,375 65,439 483,814
Total Insurance contract liabilities 17,739,443 401,976,033 419,715,476 16,940,864 361,851,956 378,792,820

 

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

 

           
  R$ thousands
On December 31, 2025 On December 31, 2024
 Non-Onerous Contracts   Onerous contracts  Total  Non-Onerous Contracts   Onerous contracts  Total
Present value of estimated future cash outflows 442,481,502 29,420,780 471,902,282 415,934,920 32,862,946 448,797,866
- Acquisition costs 4,114,779 94,408 4,209,187 3,789,618 119,449 3,909,067
- Claims and other directly attributable expenses 438,366,723 29,326,372 467,693,095 412,145,302 32,743,497 444,888,799
Present value of estimated future cash inflows (91,025,507) (4,567,532) (95,593,039) (109,275,236) (5,933,662) (115,208,898)
Non-financial risk adjustment 792,866 627,084 1,419,950 926,022 787,639 1,713,661
Contractual Service Margin 22,189,750 114,352 22,304,102 24,594,993 100,120 24,695,113
Total remaining coverage of the general model/variable rate model 374,438,611 25,594,684 400,033,295 332,180,699 27,817,043 359,997,742

 

c)Realization of contractual 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 3,096,388 2,627,326 2,196,746 1,874,844 1,905,095 10,603,703 22,304,102
General model/variable fee approach on December 31, 2025 3,096,388 2,627,326 2,196,746 1,874,844 1,905,095 10,603,703 22,304,102
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 fee 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

 

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

 

 

             
Recognized values ​​for coverage R$ thousands
BBA/VFA  PAA Total
Excluding Loss Component Loss Component TOTAL BBA/VFA -Premium allocation approach
BEL AR CSM BEL
Opening balances on January 1 326,129,277 1,713,661 24,695,113 7,459,691 359,997,742 3,413,117 363,410,859
Changes related to current period (Insurance revenue) (5,574,087) (183,388) (1,777,555) -   (7,535,030) (53,576,235) (61,111,265)
Total retrospective method contracts (558,471) (23,137) (554,386) -   (1,135,994) -   (1,135,994)
Fair value method contracts (3,925,741) (111,194) (470,583) -   (4,507,518) -   (4,507,518)
Issuance of contracts after transition (Other contracts) (1,071,914) (49,057) (752,586) -   (1,873,557) -   (1,873,557)
Appropriation related to best output estimate (17,961) -   -   -   (17,961) -   (17,961)
Appropriation relating to contracts premium allocation approach -   -   -   -   -   (53,576,235) (53,576,235)
Technical changes related to future periods 6,852,561 (258,151) (1,861,042) 2 4,733,370 (3,923,166) 810,204
Changes in estimates that adjust the contractual service margin 9,089,018 (396,880) (8,714,884) 2 (22,744) -   (22,744)
 Changes in estimates that do not adjust the contractual service margin (OCI) (1,417,395) (47,963) -   -   (1,465,358) -   (1,465,358)
Appropriation/constitution regarding best output estimate 5,488 -   903,627 -   909,115 -   909,115
Contracts initially recognized in the period (824,550) 186,692 5,950,215 -   5,312,357 (3,923,166) 1,389,191
Insurance expenses 254,253 -   -   247,134 501,387 4,454,622 4,956,009
Constitution of onerous contracts -   -   -   247,134 247,134 -   247,134
Acquisition cost 254,253 -   -   -   254,253 4,454,622 4,708,875
Financial expenses 45,340,000 147,828 1,247,586 61,345 46,796,759 -   46,796,759
Financial expenses of insurance contracts 45,340,000 147,828 1,247,586 61,345 46,796,759 -   46,796,759
Cash flows (4,460,933) -   -   -   (4,460,933) 52,337,053 47,876,120
Premiums received 43,647,318 -   -   -   43,647,318 56,622,055 100,269,373
Investment component (47,689,292) -   -   -   (47,689,292) -   (47,689,292)
Insurance acquisition costs cash flow (418,959) -   -   -   (418,959) (4,285,002) (4,703,961)
Balance on December 31, 2025 368,541,071 1,419,950 22,304,102 7,768,172 400,033,295 2,705,391 402,738,686

 

               
Recognized values ​​for coverage R$ thousands
BBA/VFA  PAA Total
Excluding Loss Component Loss Component TOTAL BBA/VFA -Premium allocation approach
BEL AR CSM BEL
Opening balances on January 1 295,007,749 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) (2,328,612) -   (7,794,990) (49,545,938) (57,340,928)
Total retrospective method contracts (596,582) (30,954) (947,502) -   (1,575,038) -   (1,575,038)
Fair value method contracts (3,979,828) (114,747) (858,995) -   (4,953,570) -   (4,953,570)
Issuance of contracts after transition (Other contracts) (678,657) (22,763) (522,115) -   (1,223,535) -   (1,223,535)
Appropriation related to best output estimate (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) 1,736,361 (512,188) (68,395) (618,023) (686,418)
Changes in estimates that adjust the contractual service margin 4,826,038 (128,048) (4,692,900) (512,188) (507,098) -   (507,098)
 Changes in estimates that do not adjust the contractual service margin (OCI) (3,443,788) (106,907) -   -   (3,550,695) -   (3,550,695)
Appropriation/constitution regarding best output estimate 3,219 -   1,620,038 -   1,623,257 -   1,623,257
Contracts initially recognized in the period (2,606,989) 163,907 4,809,223 -   2,366,141 (618,023) 1,748,118
Insurance expenses 224,162 -   -   1,334,682 1,558,844 3,838,715 5,397,559
Constitution of onerous contracts -   -   -   1,334,682 1,334,682 -   1,334,682
Acquisition cost 224,162 -   -   -   224,162 3,838,715 4,062,877
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 46,481,482 55,739,160
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) (3,838,715) (4,308,816)
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

 

e)Changes in liabiltiy for incurred claims (LIC)

             
  R$ thousands
 LIC - BBA e VFA    LIC - PAA   TOTAL LIC
 BEL  RA   Total liability for incurred claims - BBA and VFA  BEL  RA   Total liability for incurred - claims - PAA
Closing balance on December 31, 2023 1,302,911 71,949 1,374,860 11,847,652 421,079 12,268,731 13,643,591
Costs of providing insurance 5,017,325 (8,627) 5,008,698 35,831,413 (5,539) 35,825,874 40,834,572
Claims incurred and other insurance expenses 5,017,325 (8,627) 5,008,698 35,831,413 (5,539) 35,825,874 40,834,572
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 (4,649,020) -   (4,649,020) (35,056,836) -   (35,056,836) (39,705,856)
Claims and other insurance costs paid (4,649,020) -   (4,649,020) (35,056,836) -   (35,056,836) (39,705,856)
Closing balance on December 31, 2024 1,788,775 65,439 1,854,214 13,109,371 418,375 13,527,746 15,381,960
Costs of providing insurance 4,567,752 (7,945) 4,559,807 37,640,301 (32,150) 37,608,151 42,167,958
Claims incurred and other insurance expenses 4,567,752 (7,945) 4,559,807 37,640,301 (32,150) 37,608,151 42,167,958
Liability adjustments for incurred claims (116,836) -   (116,836) (2,253) -   (2,253) (119,089)
Financial expenses of insurance contracts 180,693 8,245 188,938 1,292,003 43,205 1,335,208 1,524,146
Changes recognized in other comprehensive income (4,997) 1,052 (3,945) (31,013) 1,901 (29,112) (33,057)
Estimated cash flows (4,539,440) -   (4,539,440) (37,405,688) -   (37,405,688) (41,945,128)
Claims and other insurance costs paid (4,539,440) -   (4,539,440) (37,405,688) -   (37,405,688) (41,945,128)
Closing balance on December 31, 2025 1,875,947 66,791 1,942,738 14,602,721 431,331 15,034,052 16,976,790

 

f)Contractual service margin

 

               
  R$ thousands
Year ended December 31
2025 2024
 Contracts measured at fair value in transition  Contracts measured the full retrospective method  Issuance of contracts after transition (Other contracts)  Total  Contracts measured at fair value in transition  Contracts measured the full retrospective method  Issuance of contracts after transition (Other contracts)  Total
Opening balances 7,921,046 9,192,926 7,581,141 24,695,113 11,313,062 8,591,633 4,510,063 24,414,758
Changes from the current period (470,583) (554,386) (752,586) (1,777,555) (858,995) (947,502) (522,115) (2,328,612)
- Contractual service margin recognized in the period (470,583) (554,386) (752,586) (1,777,555) (858,995) (947,502) (522,115) (2,328,612)
Changes in relation to future periods (1,843,864) (1,246,122) 1,228,944 (1,861,042) (2,586,246) 1,126,523 3,196,084 1,736,361
- Contracts initially recognized 255,242 134,585 5,560,388 5,950,215 136,643 53,780 4,618,800 4,809,223
- Changes in estimates that adjust the contractual service margin (2,099,106) (1,380,707) (4,331,444) (7,811,257) (2,722,889) 1,072,743 (1,422,716) (3,072,862)
Total technical changes (2,314,447) (1,800,508) 476,358 (3,638,597) (3,445,241) 179,021 2,673,969 (592,251)
Insurance finance income/(expense) 32,886 392,804 821,896 1,247,586 53,225 422,272 397,109 872,606
Balance on December 31 5,639,485 7,785,222 8,879,395 22,304,102 7,921,046 9,192,926 7,581,141 24,695,113

 

g)Changes in other comprehensive income

 

   
  R$ thousands
Year ended December 31
2025 2024
Opening balances 3,614,624 1,265,455
Changes in other comprehensive income 901,156 2,349,169
Income and expenses recognized in the period in Other comprehensive income 1,498,415 3,916,352
Deferred taxes (597,259) (1,567,183)
Balance on December 31 4,515,780 3,614,624

 

h)Insurance income

 

     
  R$ thousands
Year ended December 31
2025 2024 2023
Amounts related to changes in liabilities for remaining coverage (LRC) 61,111,265 57,340,928 51,252,827
Outputs related to general model contracts 5,574,087 5,296,714 4,806,022
Expected claims incurred and Expenses 5,301,873 5,029,705 4,701,972
- Recovery of Acquisition Cash Flow 254,253 224,162 116,814
- Experience Adjustments 17,961 42,847 (12,764)
Non-financial risk adjustment change 183,388 169,664 171,746
Contractual service margin recognized for general model and variable rate 1,777,555 2,328,612 1,656,674
Income related to contracts measured under premium allocation approach 53,576,235 49,545,938 44,618,385
Insurance Revenue 61,111,265 57,340,928 51,252,827

 

i)Insurance financial expense

 

     
  R$ thousands
Year ended December 31
2025 2024 2023
Changes in obligation to pay arising from return on investment (14,160,134) (8,459,749) 11,547,973
Interest on monetary adjustment of insurance liabilities (34,160,771) (21,681,764) 22,338,084
Amounts recognized in statements of income (48,320,905) (30,141,513) 33,886,057
Effect of changes in interest rates 1,498,415 3,916,352 1,871,540
Amounts recognized in other comprehensive income 1,498,415 3,916,352 1,871,540
Financial expenses of insurance contracts (46,822,490) (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 3,350,667 3,604,249 3,274,280 3,273,808 3,296,445 3,306,163 3,318,327 3,311,737 3,324,954 3,331,002
Year of occurrence 2 3,452,361 3,847,199 3,494,977 3,508,883 3,521,591 3,526,705 3,539,966 3,542,422 3,551,502 -  
Year of occurrence 3 3,181,843 3,499,560 3,174,162 3,184,224 3,205,116 3,207,657 3,222,305 3,234,388 -   -  
Year of occurrence 4 3,095,780 3,459,562 3,207,486 3,223,295 3,242,090 3,253,282 3,262,688 -   -   -  
Year of occurrence 5 3,082,673 3,487,210 3,078,953 3,071,630 3,091,574 3,115,309 -   -   -   -  
Year of occurrence 6 4,454,289 4,325,114 4,010,617 4,012,414 4,034,607 -   -   -   -   -  
Year of occurrence 7 4,566,465 5,038,121 4,812,415 4,857,834 -   -   -   -   -   -  
Year of occurrence 8 4,918,706 5,294,584 5,056,597 -   -   -   -   -   -   -  
Year of occurrence 9 5,364,165 5,696,584 -   -   -   -   -   -   -   -  
Year of occurrence 10 5,516,396 -   -   -   -   -   -   -   -   -  
Payments accumulated up to December 31, 2025 5,516,396 5,696,584 5,056,597 4,857,834 4,034,607 3,115,309 3,262,688 3,234,388 3,551,502 3,331,002
Estimate of claims on December 31, 2025 19,900,189 7,198,107 5,613,467 5,140,266 4,267,857 3,244,240 3,346,298 3,298,429 3,598,850 3,331,002
Estimated claims payable on December 31, 2025 14,383,793 1,501,523 556,870 282,432 233,250 128,931 83,610 64,041 47,348 -  

  

 
R$ thousands
Estimated claims payable 17,281,798
Adjustment to present value                      (1,288,563)
Adjustment for non-financial risk 238,737
Other estimates 744,818
Liabilities for claims incurred on December 31, 2025 16,976,790