Corporate Presentation - PAR Corretora | Investor Relation

Corporate Presentation
May, 2016
CONFIDENTIAL
PRIVATE & CONFIDENTIAL
Agenda
About Par Corretora
Business model
Investment Case
Growth Perspectives
Par Corretora is the exclusive insurance broker of Caixa Seguradora,
the insurance company of CAIXA, the 2nd largest bank in Brazil
Financial highlights (R$mm)
Shareholders structure
Net sales
Outros
48,2%
51,7%
25,00%
28%
0,1%
+ Évora FIP
26,00%
CAGR
13,44%
FreeFloat
35,56%
136
154
214
274
2011
2012
2013
2014
363
2015
EBITDA
CAGR
76%
Caixa highlights
+3,400 branches
+ 82mm customers
+13,000 lotteries
20
2011
37
2012
90
2013
125
2014 1
189
2015 1
Net Income
CAGR
+ 14,000 Caixa Aqui correspondents
94%
1st largest bank in Brasil (# of customers)
2nd largest bank in Brazil (credit portfolio)
9
2011
3
24
2012
63
2013
Source: Company
Note: (1) Net income does not include non-recurring IPO expenses (FY14: 3.3million and FY15: R$ 30.4 million net of taxes - EBITDA impact of: FY14 R$ 5.0 million and FY15: 32.9 million)
88
2014 1
130
2015 1
Par Corretora has a successful operational and financial trackrecord, supported by key strategic partnerships
Changes in the management team resulted
in significant advances in governance
standards and stronger operating results
New shareholders and management
Caixa Seguradora and GP Investments
become new shareholders and agreed to
set-up an IPO process
Par Corretora - Net income evolution:
R$5mm (2007) – R$11mm (2011)
R$24mm (2012) – R$130mm (2015)
2012
2001
Foundation of SASSE
SASSE was the original
brand name of Caixa
Seguros
1967
1973
Foundation of Fenae
Corretora
Exclusive broker of Caixa
created to serve as a funding
alternative to Caixa Employees
Association (FENAE)
4
Source: Company
Entry of CNP in the shareholders
structure
CNP Assurance buys a 51% stake in
Caixa Seguradora
Caixa Seguradora - Net income evolution:
R$20mm (1996) – R$95mm (2000)
R$95mm (2000) – R$1,7bi (2015)
IPO
Par Corretora’s IPO
The Company
completed its IPO in
June 2015
2015
Record financial results
Par Corretora achieves
record financial results, with
net revenues of R$363mm
and EBITDA of R$189mm
A highly interdependent business model with defined incentives
and no conflict of interests within the partnership
Par Corretora: intrinsic part of a highly interdependent and case specific structure
2 Insurance product underwriting
1 Branch network management
•
•
•
•
Communicates sales targets and
priorities for the entire branch
network
Implements system changes to
automatize sales processes
Prioritize insurance sales associated
with bank transactions
Provides access to its bank
transactions database to increase
insurance sales penetration
•
•
•
•
Designs products aligned with its focus on
bancassurance and profitability
Monitors loss ratio per product and adjusts
product features (assistance, coverage,
pricing, etc.)
Funds incentives mechanisms such as
loyalty programs and seasonal
campaigns
Advertising campaigns to enhance
brand and product awareness
3 Sales & Marketing intelligence
•
•
•
•
5
Source: Company
Proprietary databases enables: (i)
performance tracking in $ and volumes;
(ii) prompt diagnosis of inefficiencies; (iii)
new sales opportunities; (iv) new sales
processes
1,200 sales assistants provide strong grip to
meet sales targets at the branch level;
enables fast strategy implementation
Alternative channels to sell insurance
products outside the branches, to
renewal polices and to retain customers
Back office for claims handling
Agenda
About Par Corretora
Insurance market
Investment Case
Growth Perspectives
Brazilian insurance market is underpenetrated
• Brazil’s insurance market is highly underpenetrated when compared with other countries
Brazilian insurance market evolution1
Bancassurance Players3
R$ billion
CAGR
12.2%
Life Insurance Premium (R$ billion)
Non-Life Insurance Premiums (R$
billion)
(% of GDP) 2
3,3%
3,3%
3,6%
3,4%
3,8%
21,7
25,5
29,4
2010
2011
2012
35,4
37,7
38,5
2013
2014
2015
28,3
29,6
31,6
2013
2014
2015
4,0%
Traditional insurance players2
CAGR
R$ billion
12.7%
CAGR
43,3
7
49,4
56,8
29,6
68,0
35,7
75,7
78,8
38,5
40,2
23,6
25,5
19,7
23,9
27,2
32,3
37,2
38,6
2010
2011
2012
2013
2014
2015
11.1%
18,7
20,5
23,8
2010
2011
2012
Source: SUSEP and ANS
Note: (1) Includes Auto DPVAT, but does not include health insurance, special risks, pension plans contribution and capitalization. ; (2) Includes Auto DPVAT and Health Insurance, but does not include pension plans
contribution and capitalization; (3) Does not include Auto DPVAT, health insurance, special risks, pension plans contribution and capitalization
Caixa has become the second largest bank in Brazil and has
increased its focus from banking to insurance in 2015
…however, its insurance operations show substantial growth potential
Insurance Premiums1 (2015)
Rankings (Dec-2015)
Customer
base
Deposits
1st
2nd
R$ billion
Credit
portfolio
Assets
16
2nd
3rd
5th
11
4th
1st
1st
1st
2nd
4th
4th
4th
3rd
3rd
3rd
2nd
5th
5th
5th
5th
9
5
Caixa continues to open over +500k2 bank accounts per month
Number of accounts (in millions)
58,2%
63,6%
67,3%
69,6%
6,8
6,7
6,4
6,7
2011
2012
2013
2014
3,3
2010
Account Openings
8
Market Presence 3
4
4
4
Fastest growing Insurance Company in Brazil4
+ 83mm clients (dec-15)
72,5%
4
Premiums
1Q16 vs. 1Q15
CAGR 2010-2015
9,2%
21,7%
7,3%
15,6%
3,8%
6,3%
-2,7%
18,8%
-11,7%
9,3%
76,8%
4,6
2015
Source: BACEN; Febraban; Companies
Note: (1) Does not include health insurance, pension plans contribution and capitalization (2) Figures for savings account and current accounts; (3) Caixa clients divided by the number of CPF´s
in Brazilian banking system, 2015 estimated (information provided by FEBRABAN); (4) Figures from SUSEP, only considers bancassurance products (life, credit life, mortgage, P&C and rural)
3
Unique investment opportunity
Caixa Seguros is the most profitable bancassurance operation in the market…
Total written premium1
Rank Company
1st
2nd
3rd
4th
5th
6th
7th
8th
9th
10th
BB SEGURIDADE
PORTO SEGURO
BRADESCO
ITAÚ
CAIXA SEGURADORA
SUL AMERICA
TOKIO MARINE
SANTANDER
HDI
ZURICH
Net income (RS million)2
Mkt. Share
18.3%
12.6%
9.9%
5.2%
5.1%
4.9%
4.2%
4.1%
3.6%
3.3%
Rank Company
1st
2nd
3rd
4th
5th
6th
7th
8th
9th
10th
BRADESCO
ITAÚ
BB SEGURIDADE
CAIXA SEGURADORA
PORTO SEGURO
SUL AMERICA
HSBC
ICATU
HDI
PRUDENTIAL
ROAE²
R$ mm
4,473
2,043
1,587
1,108
728
522
404
216
102
88
Rank Company
ROAE
1st
2nd
3rd
4th
5th
6th
7th
8th
9th
10th
57.4%
37.5%
29.3%
28.5%
26.3%
25.7%
23.2%
18.5%
14.4%
12.1%
CAIXA SEGURADORA
HSBC
ICATU
PRUDENTIAL
BRADESCO
BB SEGURIDADE
ITAÚ
PORTO SEGURO
SUL AMERICA
HDI
… with Par Corretora in a privileged positioning to extract value from the insurance market
Insurance
Bancassurance
Insurance broker
Pure bancassurance
broker
 High growth
 High margins
 High dividend payout
 No underwriting risk
 No capital requirements
9
Source: SUSEP
Note: (1) Figures for insurance operations only (excluding health insurance), 2015; (2) information provided by SUSEP, figures from 2014
Agenda
About Par Corretora
Business model
Investment case
Growth Perspectives
Par Corretora is uniquely positioned to explore the brokerage
insurance market in Brazil
A
Underpenetrated customer base
B
An unique approach to bancassurance
C
11
1
One of the world’s largest branch networks
D
Recurring revenues with no underwriting risk
E
High growth, high dividend pay-out
Source: Company
Par Corretora is uniquely positioned to explore the
brokerage insurance market in Brazil
A
Life
number of lives insured, as a
% of total customer base
7,2%
Credit
$
P&C
% of credit transactions
carrying credit insurance
Auto
number of items insured, as
a % of total customer base
7,3%
number of items insured, as
a % of total customer base
4,7%
1,8%
75%
1,1%
0,8%
3,0%
2,0%
0,2%
6,2
2,5
31%
4,5
0,7
Number of items
Mortgage
12
Source: Companies; BACEN
Note: (1) Considers estimated data
0,9
•
Potential to expand to
other credit transactions
and alternative
channels
•
0,2
1,7
1
Number of items
Penetration of credit
transactions
Penetration
Strong fit to
bancassurance sales
model
2,9
Market
average
1
•
1,5
Number of items
Penetration
Penetration
•
Market leader; creates long
term stream of revenues
(average duration: 18 years)
Cross-selling potential
with other insurance
products
•
$
t
Creates long term
relationships; strong
potential to increment
product offer
B
An unique approach to bancassurance…
Customers |
 Insurance sales happen in the
same moment a bank transaction
takes place. This is a simple
concept but it has taken time to
diagnose it and implement it as
the core of our strategy'
Substitutive products
 They serve as an alternative to
bank products. Take longer to sell
and require a more customer
centered sales process
13
Fonte: Company
KEY DRIVER
+
BANK
TRANSACTIONS
+
+
Insurance
Insurance sales
Substitutive
 What drives sales? In practical
terms, customers of Caixa seek
bank products and not Insurance
products, with the exception of
Auto, Health and Special risks
Transaction
Bank transactions
BOUGHT
SOLD
+
OFFERED
B
An unique approach to bancassurance…
% of Par Corretora´s revenues 14%
% of Par Corretora´s revenues
4%
‘
82%
Substitute products
‘
% of Par Corretora´s revenues
Traditional insurance sales
‘
Bancassurance sales
• Life
• P&C (auto)
• Pension Plans vs investment funds
• Credit insurance
• Health insurance
• Consortium vs. mortgage
• Property (applicable to Caixa
Seguradora only)
• Other P&C
• Premium bond vs savings accounts
• Mortgage
• Property (Other Banks)
Substitute products as a percentage
of Caixa Seguradora’s net income
39%
Sales Channel driven
Product driven
...
2008
SOLD to the customer
Rank
Company
1st
BB SEGURIDADE
2nd
Rank
Company
5,721
1st
PORTO SEGURO
ITAÚ
3,626
2nd
3rd
BRADESCO
3,350
4th
SANTANDER
5th
CAIXA SEGURADORA
14
Source: Company and SUSEP
Premium
Auto and P&C (R$MM - FY15)
2014
COMPETE with banks products
BOUGHT by the customer
Life and Credit Insurance (R$MM - FY15)
25%
Pension Plans (R$MM - FY15)
Premium
Rank
Company
9,776
1st
Contribution
BB SEGURIDADE
37,519
BB SEGURIDADE
5,457
2nd
BRADESCO
28,485
3rd
BRADESCO
4,353
3rd
ITAÚ
17,779
2,983
4th
SULAMERICA
3,452
4th
CAIXA SEGURADORA
5,411
1,804
14th
CAIXA SEGURADORA
596
5th
SANTANDER
4,147
C
One of the world’s largest branch networks
Company with over 150 years of existence
Insurance broker of the 2nd largest bank in Brazil
Products offered by Par
Corretora are backed by the
1980 - 1997
1861 -1889
Since 2005
strength of Caixa, one of the
leading banks In Brazil
1970 - 1976
Highly recognized brand with a solid
perception of reliability, essential
for insurance business
15
Recognized as the
middle class bank
Manages over R$ 400 bi
of the workers deposit
fund
The mortgage credit
bank, with around
70% market-share
58 million savings
accounts, one of the
world´s largest portfolio
Source: Company and SUSEP
D
Recurring revenues with no underwriting risk
Par Corretora’s product portfolio enables consistent accumulation of
revenues to its future stream of cash flows
Gross revenue
1Q15
2Q15
3Q15
4Q15
1Q16
% Total
Revenue1
1Q16 x 1Q15
Life
20,1
21,0
20,7
22,0
22,3
73,8%
11,2%
Mortgage
15,5
17,5
17,4
18,7
21,0
80,9%
35,6%
Residential
1,2
1,6
2,1
2,1
2,0
39,4%
64,8%
Corporate MR
1,7
2,0
2,2
1,8
1,9
51,5%
9,5%
Auto
3,1
3,4
3,5
3,3
3,4
78,3%
12,5%
Special risks
2,3
1,9
2,2
2,7
2,6
35,4%
10,1%
Health
2,0
1,6
1,6
1,4
2,4
70,7%
18,7%
45,9
49,0
49,7
52,0
55,6
58,0%
21,1%
Revenue (R$ million)
Revenue Stock
16
Source: Company
Note: (1) the breakdown of revenue stock is not an audited financial information and it was structured based on Par Corretora´s internal reports and databases. considering the commission flow. It does
not considers the “Other Products” segment due to its smaller relevance.
Strong operational and financial results with high dividend
pay-out
E
Expressive growth, combined with high profitability increase
EBITDA and EBITDA margin
Net income and net margin
R$ millions; %
R$ millions; %
CAGR
+76.3%
CAGR
+93.9%
51,9%
42,2%
45,4%
189,0
29,4%
19,6
2011
15,5%
90,3
88,3
62,9
6,8%
36,6
23,9
9,2
2012
EBITDA
2013
2014
2015
2011
EBITDA margin
2012
2013
Net income
Asset light business model with dividend pay-out of 100%
17
35,8%
130,1
124,7
23,8%
14,3%
32,2%
Source: Company
Note: (1) Net income does not include non-recurring IPO expenses (FY14: 3.0million - 9M15: R$32.3million - 9M14: R$1.5million)
1
2014
Net margin
2015
Par Corretora portfolio presents great opportunities for the
Company’s growth
Opportunity growth
Performance by Product
Life

113,3
2014
13,7%
Mortgage

64,7
2014
54,6%
100
2015
Credit
Insurance
2014


25,1
2014
55,5


43,6
21,1%
Other
2015
52,8
2014
49,8
Source: Company
55,3


11%
2015
18

121,2%
2015
P&C

128,8
2015

Revenue stock has consistently increased in relevance
over the last years
Negócios.Caixa has a strong potential to leverage
commercial efficiency through CAIXA´s transactions
The decrease in origination levels of SBPE (savings
accounts funded mortgage) represents a challenge
On the other hand, origination with FGTS resources has
increased.
Opportunity to address new transactions
Increase penetration levels over payroll credit
transactions originated at CAIXA´s branches (we have
reached higher levels in 2015)
Structure the sale of credit insurance on corporate credit
Increase sales productivity levels with the support of the
Tem Mais Caixa platform
Increase renewal rates of property and casualty
products (individuals and corporate)
Reach new levels of Agro insurance penetration
supported by the Tem Mais Caixa platform
Develop new warranty products in the Special Risks
segment
Agenda
About Par Corretora
Business model
Investment case
Growth Perspectives
Customer penetration is a consequence of bank transaction
penetration and commercial efficiency
A roadmap to measure, standardize and increase insurance sales
Par Corretora selected the bank transactions that are
more prone to bundle insurance products
30 transactions
Focus on closing the gap in penetration and increasing operations in
the most representative layer of Caixa’s business segment
23 transactions
1st Wave
Payroll
Credit
Individual
account
openings
Construcard
Trasnfers
Investments
Working
Capital
Corporate
account
openings
Mortgage
Agribusiness
20
Source: Company
Average: 6.4%
Auto
Debt
Renegotiation
Effectiveness
Penetration
Relevance
2nd Wave
500
1.000
% Penetration in transactions
1.500
2.000
Brazilian average
2.500
3.400
Branches
Tem Mais Caixa has already produced significant penetration results
in 2015
A roadmap to measure, standardize and increase insurance sales
Lar+/Residential in
Mortgages
Credit Insurance in
Payroll Credit
Penetration rates
Financial penetration rates
3x
55%
2015
the program through the
National Mortgage
Program MCMV (levels II
and III)
Source: Company
31%
2x
6%
Ι Opportunity to expand
21
Penetration rates
21%
18%
2014
1.5x
Life in
Account Opening
2014
2015
Ι Opportunity to expand the
program through the
correspondents and the
payroll credit renewals
2014
12%
2015
Ι Opportunity to automatize
the sales process in the
account openings and
expand the program through
the savings accounts
Strategies to enhance insurance operations in Caixa’s
environment
A roadmap to measure, standardize and increase insurance sales
2016 onwards...
Average ticket
Improve the commercial strategies
to increase sales average ticket
2016 onwards...
In 2016
New channels
Addressable Market
Increase operations in Caixa’s
correspondent banks
Increase the set of transactions to be
implemented in the Tem Mais Caixa program
In 2016
Penetration
Increase sales in transactions already
implemented in the Tem Mais CAIXA program
22
Source: Company
Thank you!
Investor Relations
Website: www.parcorretora.com.br/ri
Email: [email protected]
Phone: +55 (61) 3426-9654