By Brazil Stock Guide – IRB-Brasil Resseguros S.A. (B3: IRBR3) is facing a new arbitration claim seeking R$320 million in damages from 74 institutional investors who allege that the company violated its duty of disclosure during the 2020 governance crisis that shattered market confidence and erased billions in shareholder value. The proceeding (CAM n° 316/25) centers on events between February and March 2020, when contradictory information about a supposed stake by Berkshire Hathaway triggered extreme volatility in IRB’s shares.
The claimants argue they suffered losses due to the sharp drop in IRB’s stock after Berkshire publicly denied media reports suggesting it had tripled an existing position in the reinsurer. Investors are seeking compensation for damages allegedly linked to misinformation and failures in transparency during that period.
The dispute reopens one of the most turbulent chapters in Brazil’s capital markets. In March 2020, IRB shares plunged more than 40% in a single trading session after Berkshire categorically denied being a shareholder — contradicting earlier narratives that had buoyed the stock. The reversal erased billions in market capitalization, intensified regulatory scrutiny, and ultimately led to board changes, executive departures and a deep overhaul of governance practices.
The arbitration aggregates claims from major pension funds and asset managers, including vehicles linked to Bradesco, Santander, Western Asset, Vinci and Ibiuna, among others. The R$320 million figure reflects the preliminary value attributed to the case by the claimants.
The company did not detail its legal strategy and limited its disclosure to procedural information.
The case unfolds as the reinsurer reports operational stabilization. In 2025, IRB posted R$505 million in net income, up 35% from 2024, restoring dividend distribution after five consecutive years without payouts. Underwriting income reached R$741 million, while financial and investment results totaled R$723 million, supported by elevated domestic interest rates and improved pricing discipline.
Fourth-quarter momentum was also strong. In 4Q25, IRB reported net income of R$143 million, up 27% year over year. Underwriting income rose 65% to R$293 million, while financial and investment gains reached R$164 million. The combined ratio improved to 94.3%, compared with 98.8% in 4Q24, reflecting lower loss ratios and tighter acquisition costs.
Beyond profitability, balance-sheet indicators point to a more resilient company. Regulatory solvency reached 268% of minimum capital requirements at year-end 2025, supported by adjusted shareholders’ equity of R$2.6 billion and a capital surplus of roughly R$1.6 billion. The improved solvency cushion reduces immediate financial risk even as litigation remains a source of uncertainty.
Operationally, the company benefited from a 12.4 percentage point decline in the fourth-quarter loss ratio and a reduction in the commissioning ratio, reinforcing underwriting discipline after the portfolio clean-up carried out in prior years. While premium volumes contracted in certain lines — particularly Life and Rural — management has prioritized margin over scale, a shift that now shows up clearly in earnings quality.
The contrast is stark: a company that once lost market credibility in a matter of days is now rebuilding margins quarter by quarter — even as the legal consequences of its past disclosures move forward.
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