IRB Brasil Resseguros SA

BOVESPA:IRBR3

Earnings Call Transcript 2023-Q2

[Operator]

Good morning, and thank you for standing by. Welcome to the video conference to disclose the results of Q2 2023 of IRB RE.

[Operator Instructions] We inform you that this video conference is being recorded and will be made available on the IR site of the company, where you will also find the complete material relating to this video conference. [Operator Instructions] The forward-looking statements contained in this presentation and any other statements that may be made during this video conference related to the company's business outlook, projections, operational and financial targets are based on beliefs and assumptions of the company's management and on information currently available.

Forward-looking statements are no guarantee of performance. They involve risks, uncertainties and premises and refer to events which may or may not occur and depend on circumstances that may or may not occur. Investors should understand that general economic conditions, market conditions and other operating factors may affect the future performance of IRB and conduct results which differ materially from those expressed in such forward-looking statements.

Today with us, are the following executives: Mr. Marcos Falcao, CEO, IRO; Mr. Daniel Castillo, VP of Reinsurance; Mr. Rodrigo Botti, VP of Finance, Actuarial and IT; Ms. Thais Peters, Director of Internal Controls, Risk and Compliance; and Mr. Paulo Valle, General Director of Asset.

I'll now turn the floor over to Mr. Falcao, CEO, to begin his presentation.

[Marcos Pessoa de Queiroz Falcao, executive]

Good morning to all. In the second quarter of 2023, we further accelerated the process we started last year. In 2023, we are doing what we said we would do in the beginning of the year. We continue to reshuffle our people department, we moved to a new headquarter. We sold the building of Marechal Camara, and we now have a new identity which is also embodied in our new offices, where teams have been working since June 1. This was all illustrated also with a new brand, more modern, younger and we feel this on our everyday activities.

As regards to people, after we completed the voluntary termination program, we announced a new direct to suit, which will -- which we will talk about later.

And then today, moving forward, we will also have to think about the debentures maturing in October. We issued BRL 250 million in debentures, and we have placed only BRL 100 million. And this is in preparation for the payment of debentures which should happen by October 15.

Here, we present the new directors of IRB. We have people who have been with us for a long time, such as [ Valle, Sierra and Arruda ], who have been in the company for a long time. They accepted the invite to share decisions and responsibilities in this new structure. Rodrigo Botti joined us a shorter time ago. He was Director of Technical and Operations and he will become the CFO of the company, and he will also be responsible for actuarial and IT. Then Paulo Valle, very experienced professional, has become the General Director of IRB asset. So he will be leading our financial activities and the management of our reserves.

He is very experienced, he acted as Secretary in the National Treasury, and we're very proud to have him at the company. I will continue as CEO, and I will also be the IRO. So little by little, I'm going to be passing on some activities that I had been in charge of to other people in the team. Daniel Castillo now will also be in charge of claims and losses, and he will be the VP of Reinsurance. The company will have 2 VPs, Daniel Castillo and Botti. I am going to be the CEO and there will be new people acting as Executive Directors. We have been holding meetings and we are seeing that decisions are being made in a faster manner. Since the beginning of July, we have been working with these directors in a more open way, and people are all very excited. This will allow us to deliver on the promises we made.

But let's talk about the numbers now. Just to summarize what happened in this quarter, we can say that we continue to get better results gradually in terms of underwriting and profitability. As we saw in the last few quarters, we nearly broke even in the last quarter of last year. We were slightly above breakeven in the first quarter of this year, we saw one-off expenses, of which I'm going to give you more detail later. And we had BRL 28 million in profit. The result of underwriting was good, BRL 4 million positive in Q1 and now BRL 35 million positive in Q2.

In the semester, BRL 39 million.

Little by little, we are getting to a normal or we are becoming weirdly normal, but normal is no longer weird for us. And with that, I turn the floor over to Castillo, who's going to talk about the strategy and our performance in the reinsurance area.

[Daniel Castillo, executive]

Good morning, Falcao. Good morning to all. Our underwriting strategy continues the same. In 2022, we decided to focus on Brazil and Latin America. In 84 years, we got to learn about Brazil, its risks, market needs, coverages, exposures and loss ratio. We have 5 major competitive advantages. We speak the clients' language, we know the culture of the country, we know the Brazilian legal system and we have the power to decide locally. And finally, we have the largest ability to underwrite in the market. We want to focus on Latin America, a market for which we have a dedicated team, which speaks fluent Spanish and knows the region, its risks and catastrophic exposures. We continue to study the global market but on a more ad hoc basis without taking on large catastrophic exposures so that we can better manage our portfolio.

Within our strategy to focus on Brazil, we can see on the following slide, that on Q2 2021, '22 and '23, we saw a reduction in the international business from 30% to 18% and then finally, 16% in Q2 2023. At the same time, in the same period, business in Brazil increased from 57% in terms of market share to 71%.

We continue to concentrate 80% of our business in Brazil, 15% in Latin America and 5% for the other international exposures. You can see the total premium from Q2 2022 to Q2 2023. This has to do with the cleanup of the portfolio, which was accelerated in Q2 2023. When we renewed contracts, although we have accepted new deals, we declined something that were not profitable. We have reduced our share in other deals with a view to having a better balanced portfolio with greater quality and profitability. We were able to renew 80% of the contracts we had interest in.

On the following slide, you will see the breakout of deals and business in 2023 and 2022. And you see that our property business accounts for 39% of the portfolio. In rural, although premiums have decreased by 2% in absolute values, the share has increased in percentage terms in view of the shrinking of the portfolio as a whole. Our portfolio is diversified, includes 9 business lines in 3 geographies: Brazil, Latin America and International.

On the following slide, on the upper part, you see the changes in premiums, in retained premiums. We are retaining more premiums. As we underwrite more risks of better quality and we have some lower thresholds, we have been able to retain more and retrocede less. We want to acquire retrocessions, which are more appropriate to our exposure. On the lower part of the same slide, you see the reduction in earned premiums in Q2 2023, abroad and in Brazil. This reduction is a result of our strategy to clean up portfolio in the renewals so that we have a better quality with less exposure portfolio. The reunderwriting has given rise to a reduction in premium in 2023. And in 2024, after the cleanup of the portfolio, we expect to grow again.

On the next slide, we will see the history of loss ratio. Here you can see that we were impacted by the agri catastrophe in Brazil. Without a doubt, incidents is the most relevant topic in helping us reach our desired goals. In this slide, you can see the loss ratio history. 74% of our 2023 Q2 results. These are the lowest levels in the time series we present. It's worth remembering that incidents for a reinsurer represent contracts signed in previous terms. And these represent the analysis of the risk presented at the time.

On the top right, you can see the premium reduction from comparing the same period in '22 and '23, the first half of the year. We can see that the incident ratio dropped from 104% to 76%. And in this sense, it gives us more than BRL 800 million. We believe that the initiative we mentioned previously were reducing costs and adjusting them or reducing our participation in various contracts, in addition to the alignment in other business, should contribute to this improved trend line gradually in this term.

Now with regards to agro, I think it's worth mentioning the impact of El Niño in our portfolio. This climatic event always has an impact. And we should mention that in agro contract renewals we always consider the potential impact of El Niño in productivity, prices and in terms of geographics. Now I'd like to pass the floor to Rodrigo Botti.

[Rodrigo Botti, executive]

Thank you, Castillo. Good morning, everyone. It's a pleasure to be here sharing with you the information and numbers for the second quarter of '23 for the IRB.

In this slide, we see some of the technical reserves and their changes. On top, we see that the provision for unearned premiums has been dropping. This is due, especially due to the information presented by Castillo. Provisions for premiums have also been dropping. This is also a result of our developing business. We have robust technical research that we do, and this has a direct impact on our portfolio and our business.

Here on this slide, we see the acquisition cost and their development. In the second quarter of '23, this came out to BRL 233 million which is a drop of 23% compared to the same period in '22. As a result of lower premiums, cost of acquisition is higher in the second quarter than the first. However, we completed the first quarter of '23. And when comparing that with the first -- sorry, the first half. And when comparing that, we see much better numbers.

On the bottom half of the slide, we see administrative expenses. In the second quarter of '23, these expenses totaled BRL 87 million which include expenses with the voluntary resignation program carried out in this quarter, which added up to 8 million in the personnel line. In the first half, if we remove the expense with the DOJ agreement and expenses pertaining to the voluntary resignation program, we have a total of BRL 142 million in the first 6 months of '23 compared to 150 million in the first half of '22.

Now on this slide, we have a summary of the quarterly results for a combined index. We see that the loss ratio line is the most significant item in the combined results and the one that shows great advances. If we remove the effect of the loss portfolio transfer, we see that we are posting 74% compared to [ 124 ] in the previous year. These numbers have been relatively stable. And so the combined index reached 108%, which is not yet ideal, but already demonstrates that we are on the right path. For instance, in comparing to the 154% that was in the second semester of 2022.

Now here on this slide, we see that in line with our predictions, the company had a cash consumption of BRL 1.1 billion in the last 12 months, which is an improvement compared to previous term. With our portfolio cleaning strategy, and therefore, a reduction in premiums received and still honoring large claim, according to contracts signed in previous periods, we see that there is this consumption of cash. In the future, we should reduce premiums and improve their results for us. We also consider the regulatory scenario.

Now I'll pass the mic on to Paulo Valle to talk about asset management.

[Paulo Valle, executive]

Good morning, Botti. Good morning, everyone. It's a pleasure to be here with you for the first time presenting our results. As we mentioned, I started in July as the General Director for assets. As you can see on the top graph, we see the evolution of financial investments and our financial and equity results. Note that the portfolio posted BRL 8.5 billion in Q2 '23, which is a reduction in approximately BRL 100 million compared to the first quarter of '23. This change results from the different cash flows, as mentioned previously, and to the debentures that came due.

As for our financial and property results, we closed this quarter with a positive result at BRL 96 million. this had an impact, especially due to foreign exchange variation and our transfer to an offshore portfolio. Now it should be mentioned that this impact to our asset is compensated for by a reduction in operating expenses. It's worth remembering that as far as guarantees, 40% of our cash availability is in other currencies. And therefore, these yields are not linked to the Brazilian CDI index, as we can see on the bottom part of this graph -- of this slide. We project that the movement to reduce these businesses abroad should allow our assets invested in other geographies to migrate to Brazil.

Now I'll pass the floor to Thais.

[Thais Peters, executive]

Thank you, Paulo. Well, on this slide and the next, we will talk about regulatory ratios. SUSEP monitors 2 indicators that must be checked by the company. The first concerns are adjusted equity in relation to the minimum capital required. The second assesses the coverage of these technical provisions, that is, it compares the need for coverage with guaranteeing assets.

The first regulatory indicator closed out Q2 with a surplus of BRL 323 million. That is [ 22% ] more than the necessary capital. This is the best result since September [ 21 ]. And this represents a hit of improvements that the company has been engaging in. Our profit and loss ratio has been growing positively. And this also represents a better risk profile and a drop in premium as Castillo mentioned. It should be mentioned that the impact for this period only represents financial costs and our minimum capital. The positive impact of this indicator LPT could occur in July. This means that the indicator's improvement is reflecting the best results for this administration and the company's actions.

Now on this slide, we see the second indicator, which, as mentioned, evaluates the amount of assets qualified by SUSEP to meet the actuarial commitment of the IRB. We ended the quarter with a sufficient amount at BRL 519 million, which is the highest amount in the entire period since '21. It could be noted that this reduces the need for coverage but even if we did consider LPT, the number would totally BRL 344 million, which is still the best result in the past 12 months and again, reflects improved operations at the company.

Now breaking down this sufficiency, if we look at the bottom graph, we see BRL 13.1 billion in technical provision and subtracting the retrosection assets, credit rights and assets abroad, we have a result of BRL 6.6 billion in required coverage. If we compare this to BRL 7.1 billion in guaranteed assets, we see that there is a surplus, which is exactly our sufficiency, which, as mentioned, reached BRL 519 million. Therefore, the IRB, the [ RB ] completes this semester with more comfortable levels and is a reflection of the company's improved operations.

Now I'll pass the floor on to Falcao for his final remarks.

[Marcos Pessoa de Queiroz Falcao, executive]

Thank you, Thais. This year, we are going to have one more impact on our people. We are putting together our people. We have 60 people who are going to do a training program now and all this for the second semester should bring us to 2024 with a much better prepared company. As I mentioned in the previous results call. This will allow us to start the next year with targets that are very well aligned for 2024.

In 2023, this year, we intend to deliver with the improved profitability ratings and begin '24 with excellent results for our shareholders. And now, let's move on to our Q&A session.

[Operator]

We will now begin the Q&A session. [Operator Instructions]. Let's move on to our first question from Caio De Pratto, sell-side analyst for UBS. Caio, we will activate your microphone. Caio, please go ahead.

[Unknown Analyst]

Hi, Falcao, hi, everyone. I have 2 questions. I will ask the first and then the second. The first is with regard to the LPT that you mentioned. You had another trade, another operation in this quarter. I'd like to ask you why you executed this operation here? Was it something very specific? Without it, would the indices be too high? Can you explain a little bit about that. And what is the premium situation looking like? Do you expect to see any similar situations in the future?

[Marcos Pessoa de Queiroz Falcao, executive]

Hi, Caio. This is Falcao. Well, about the LPT program, we are getting ready to pay out the debentures in October, and we can pull money from our cash or we can pull money from our operations. Pulling money from operations is often less expensive. So that's a way for us to leave some more space for us to pay out their debenture. And we also had a small issue. We put in $100 million. This is just the trajectory for paying these debentures. Now as for the premium payments, and the impact that we had there, the results of this quarter are already included. They already include the LPT. I will pass the floor on to Rodrigo Botti, who will explain better.

[Rodrigo Botti, executive]

Hi, Caio. Without LPT, our loss ratio would be 16.2%. And with LPT, it's 74.8%.

[Unknown Analyst]

Okay, Botti. That was clear. And now my second question is about the portfolio, your portfolio. There was a drop. And you said that it's partly due to the ForEx. Could you explain a little bit more about that? And as for the investment portfolio itself, we see that [ 8.6% ] and now 8.4% in this quarter. I'd like to ask you what -- to what extent this negative variation is linked to ForEx? And to what extent it's linked to the size of the company itself. Could you explain a little bit about that, please? In the next quarter, what is your forecast? Should the premium continue to drop this year and the next?

[Rodrigo Botti, executive]

Well, Caio, the for starters, the foreign exchange variation -- actually, could you repeat the beginning of your question about foreign exchange?

[Unknown Analyst]

I'd just like some more detail about the impact on the results. I see that it's partly actually mostly due to the portfolio. So I'd like to see what the size of the portfolio has an impact on.

[Rodrigo Botti, executive]

Well, as we know, our reserves are pretty considerable, our reserves abroad. And so when the foreign exchange rate stabilizes, we free up some reserves on one end, and on the other, our financial results are negative. So I'd like to -- I will ask Natasha to send you a more detailed explanation because otherwise, this will take up too much of our time here, but you will receive an answer. And what was the second part?

[Unknown Analyst]

The second is about the portfolio.

[Rodrigo Botti, executive]

We had this drop in the last few quarters. So with the drop in premium, well, I will take the opportunity to talk about the reduction in cash. When we budgeted for the year, we expected premiums to drop because our portfolio is going to be cleaned out. But when you have a smaller company and you are paying premiums for a smaller company, you receive your premiums and pay losses on past contracts. So that results in a negative result. I'll send you the fine details later, but in a sense, when we pass through this cost, you will see that you're going to have a reverse slingshot effect. You're going to have premiums that are much higher than the losses payable on cash. So since this is an adjustment, this is already accounted for.

[Operator]

Now let's move on to our next question. This comes from Guilherme Grespan, sell-side analyst at JPMorgan. Guilherme, we're going to turn on your microphone. Guilherme, please go ahead.

[Guilherme Grespan, analyst]

I have a bit of a more technical question. Within other operating expenses and revenues, there's a line that's approximately BRL 30 million in the negative and almost zeroed out. You mentioned this near the [ BDP ] information, and what else goes into this category in other operating expenses near the BDP. Is this near 0? Probably what we're going to look at for the future or the BRL 30 million number that we saw previously.

[Marcos Pessoa de Queiroz Falcao, executive]

Well, Guilherme, I will pass the floor to Rodrigo Botti.

[Rodrigo Botti, executive]

Hi, Guilherme, it's a pleasure. To answer your question, first, there were no nonrecurring results. Within these results, there are a number of different items, the most significant was the bad debt provision, BDP and also accepted contracts, profit from those. In the second quarter, the variance in bad debt provision was BRL 4.7 million positive. And in the first quarter, we had a negative BDP and a PAT of minus BRL 10 million. So that is what explains this variance. This is an entry in our books that explain the variance. Always keeping this at 0 is not very sustainable in the long run, but it is healthy.

[Guilherme Grespan, analyst]

Okay. But just to understand the drivers, generally speaking, when you look at a long-term view, this should be linked to the issued premiums, right?

[Rodrigo Botti, executive]

Yes. Yes, without a doubt, this is linked to our production as well on premium volumes. So now as we are in a phase where we're reducing premiums, this line is naturally going to be a little volatile in the next few quarters.

[Unknown Executive]

Just to tell you, there was nothing outside what we expected. Everything is under control.

[Operator]

Our next question comes from Mr. Paola, analyst sell-side from BTG Pactual. You may turn on your microphone.

[Unknown Analyst]

Congratulations for the results. Good morning to the IRB team. I have 2 questions. First, I would like to follow up on the financial results. we know that it's very difficult to predict yields. But Valle is here. So what do you see going forward, Valle, in terms of the portfolio invested in Brazil and also the offshore portfolio, which accounts for half of the share really.

[Paulo Valle, executive]

Thank you for the question. This is Paulo speaking. Relative to investments onshore we are going to look at the interest rate trend. They have been going down gradually, but the interest rate in Brazil is still very high. In the next few years, we are going to see a gradual reduction, but the actual interest rate is in excess of 5%. Offshore, we look at the benchmark in main markets. We invest in 7 currencies, and we look at the benchmark in different markets. We believe that the yield will be at a good level in the next few years. But the reduction in interest rate also improves the economy as a whole, which in turn improves our activities and our performance.

[Unknown Analyst]

And may I ask a second question maybe to Castillo. Just to follow up on the contracts that were signed in previous periods. You are still being punished on your loss ratio because of that, right? What is the expectation for this legacy, which weighs on you? When will you see that disappear, so to speak, or how much impact do you see in your portfolio? Can you quantify that and give us a time frame and when we can expect that impact to vane.

[Daniel Castillo, executive]

Thank you for your question. As the months go by, there is less legacy and more new contracts. In 2024, 80% of our results should be coming from our new contracts. That should be just the tail end of 20% of legacy contracts.

[Operator]

Our next question comes from Mr. Amaral from sell-side [ EB ]. You may now turn your microphone on.

[Matheus Generoso do Amaral, analyst]

Good morning. Congratulations for the results. I have 2 questions. The first has to do with the written premiums, what can we expect in terms of your underwriting strategy? And when will we see less impact on the premiums, on the written premiums? When is that inflection going to come? And then what segments are you going to focus on to ensure growth? Then the second question is about the financial results. There was a reduction on your exposure to foreign investments, or rather, a reduction in your exposure in terms of written premium abroad and the investments abroad.

[Marcos Pessoa de Queiroz Falcao, executive]

Thank you for your question. Castillo is going to take the first part of the question, and I'll take the second -- and Botti's going to take the second part of your question.

[Daniel Castillo, executive]

Thank you, Matheus. We have cleaned up the portfolio, we have renewed contracts in January and April, then June in Latin America. And we still have some contracts which should be renewed in October. Our strategy has been 3D strategy, discipline, discipline and discipline. And this is how we intend to move forward. We want to have good quality contracts, good quality deals that give us profitability.

In terms of growth, by the end of this year, we should finish the cleaning up of the portfolio, and we should see growth in 2024 when we will be able to grow those deals that we already have. We are focusing on Brazil, 80%, then 15% in Latin America and 5% internationally.

[Rodrigo Botti, executive]

This is Botti speaking. I'm going to take the second part of your question. In terms of our exposure abroad, this is going to reduce, but it's a bit more slowly. The exposure relative to premiums has to do with claims that will be communicated and have not -- have been communicated, but not liquidated. So this exposure takes longer to change, so to speak.

[Matheus Generoso do Amaral, analyst]

And then if I could add something to the first question, are you focusing any sectors, any segments in Brazil and abroad in terms of seeing premium growth?

[Rodrigo Botti, executive]

No, we will continue to focus on all areas whenever we can price a deal and understand what the exposure is.

[Operator]

We now move on to the next question, which is from Gabriel Gusan sell-side analyst at Citi.

[Gabriel Gusan, analyst]

He says, I'd like to learn some more about the likely trajectory in the capital increase which had a consistently -- contributed to the quarter's results. Do you expect or anticipate a continued drop in capital requirements? And in a recent interview, the offer -- the public offer of IRB shares was mentioned. Could you talk a little bit about that?

[Unknown Executive]

Gabriel, thanks for your question. I'll start with the second one. To be honest, I didn't mention an offer, a public offer per se. I responded to a journalist from Brazil Journal asking if we foresaw any capital offers in the future. And what I answered was that the offer of shares to cover our reserves and to resolve past issues is entirely out of the question. But to increase the size of the IRB and to generate returns for shareholders, now that is something that we will discuss in the future with our shareholders.

And with the stock that we understand that we're in the business [ for ] beginning now in September, we foresee a good result, a great result. And only after that, can we even talk about another offer over there. But now to answer your first question, as long as premiums are dropping, the minimum requested capital also drops. And so that gives us more sufficiency. I'll let Thais answer with more detail.

[Thais Peters, executive]

Thanks, Gabriel, for your question. Well, the minimum capital requirement has 4 shares, and the most relevant is the underwritten risk capital. This indicator is calculated based on the loss ratio for the past 12 months. So as we see the last year's loss ratio leaving this [indiscernible]. And a much more favorable loss ratio coming into the equation. So in fact, the capital requirement, the minimum capital requirement drops.

[Operator]

[Operator Instructions] I'd like to pass the floor on to Marcos Falcao to continue the Q&A segment.

[Marcos Pessoa de Queiroz Falcao, executive]

We received some questions in writing. And without naming names, I will try to answer some of these questions. There are many about similar topics. We'll try to answer as many people as possible, while also keeping within our allotted time. So we saw loss ratio and a normalization. I see that people are asking about that. We are -- we have many more indices than just the loss ratio. And we've been improving. We're now at 108%, and we foresee it dropping as low as 97%. That should be the next step. And into the future, these numbers should improve even more.

Now as for cash consumption, I think I've mentioned, I've answered a bit about that. But just to reiterate, everything is within expected, we are paying for past losses and that consumes [ cash ], but a payment of a loss for a lower premium will result in a lower payment. Now as I joined -- when I joined the company, I started looking at these Cisco credits. And unfortunately, we exhausted all of our -- all of the credits, the incentives and legislation in London, this -- it seems like Brazil, it's very complicated to use these fiscal credit incentives. And unfortunately, there's not much we can do about it.

And you also mentioned the Argentina -- and the IRB in Argentina. Well, look, our Argentina portfolio is fully invested. Our reserves in Argentina are all in U.S. dollar, and so there's no impact on the Argentinian peso. And it's a small portion of the IRB as a whole. So there isn't a huge impact there.

Utilization of fiscal credits. Well, we have been using Brazilian credits according to the Brazilian legislation, and we have been using them. Here in the first quarter, we used a considerable volume. These are all detailed in our filings. I don't recall the exact number offhand.

And the last question that I see here about retrospectives. I think Daniel mentioned is the retro, and as we underwrite the -- with more quality, we can retain more risk. And so we are likely to buy numbers for the retrocession. And I think in our next earnings call, we can give you a little bit more detail.

Natasha, any more questions here?

[Unknown Executive]

No, I think we can move on to your final remarks.

[Marcos Pessoa de Queiroz Falcao, executive]

Great. Okay. Any news? Or can I wrap this up?

[Operator]

The Q&A session is now concluded. I'd like to pass the floor for -- to give our final remarks.

[Marcos Pessoa de Queiroz Falcao, executive]

Well, I'd like to thank all of you for your time and attention and your generous questions and comments and criticism. We have hard work ahead of us but we are really engaged and we do all we can to bring the best possible results to all of our shareholders looking forward. In this trajectory, which we believe is something, we are really investing lots of responsibility, lots of discipline, lots of depth in our underwriting. And I believe, we will continue to work in a very consistent manner. This is what we strive for, consistency. Our team is strong. Everyone is working together. Everyone is excited, bring the best possible results. I think we're going to wrap the year with the company neatly organized. Everything, all our ducks in a row, and so I think we're going to start the year '24 with very optimistic results.

On August 30, I think I should mention, Natasha just reminded me, we're going to have an Investor Day here at IRB. And feel free to get in touch with our IR department or with Natasha, specifically. We're going to have a full morning of session, and we'll explain how the IRB works. It's easy to understand how a factory works, but a reinsurer is not so intuitive. So we'll ask our team here to replicate a reinsurance factory.

What happens when a request comes in on one hand, underwriting, calculating reserves, applying them, all of our calculations, regulatory indices. We're going to simulate a reinsurance operation in a single morning. This is going to be a challenge for the team for sure. And you're all definitely invited. It's going to be a pleasure to have you. And so with that, I'd like to thank all of you, and I hope to see you again in our next call. Have a great day.