By Brazil Stock Guide – Porto Seguro (PSSA3) executives told analysts on Thursday that the insurer is entering 2026 with a strategy centered on earnings predictability, early risk recognition and stricter capital discipline, as competition across insurance and financial services remains intense.
Chief Executive Officer Paulo Kakinoff said the group used its stronger-than-expected performance in 2025 to anticipate risks and smooth results ahead. “The results of 2025 allowed us to prepare part of the result of 2026,” Kakinoff said during the earnings call. “We made moves that bring more predictability to earnings while keeping returns at high levels.”
At Porto Bank, management said it increased provisions on a preventive basis, despite stable delinquency indicators. Executives said the additional buffers target a limited group of clients considered more exposed to a deterioration in the macroeconomic environment.
“This is a very small group within our total base,” Kakinoff said, estimating the exposure at around 12,000 clients out of nearly 3 million. “It’s a prophylactic and preventive measure aimed at avoiding volatility later on.”
Health insurance competition was one of the most frequent topics raised by analysts. Kakinoff said the competitive environment remains aggressive and is not expected to ease in 2026. “We don’t believe the competitive scenario will cool down,” he said. “What allows us to keep investing in defending our portfolio is that our economic result is above what we had planned.”
Management said guidance assuming broadly stable loss ratios in health reflects a deliberate choice to balance growth and profitability, rather than optimism about market conditions. Executives added that pushing margins further would be possible, but at the cost of slower expansion.
Analysts also questioned changes in Porto Bank’s reported revenue linked to consortium accounting and the reclassification of card-related expenses. Management said the impact is accounting-driven and does not affect underlying performance.
“If you exclude these effects, the operation is growing,” said Domingos Falavina, head of investor relations, adding that underlying bank revenue growth would be close to 20%, with minimal impact on net income due to parallel adjustments in commission expenses.
Capital allocation featured prominently in the Q&A. Porto confirmed plans to distribute 55% of 2025 earnings and said its share buyback program could be expanded to include purchases for cancellation if 2026 guidance is delivered.
Chief Financial Officer Celso Damadi said excess capital generated by diversification and operational consolidation underpins the strategy. “If everything evolves as planned, we should expand buybacks beyond employee remuneration programs,” Damadi said.
Executives also addressed interest-rate sensitivity, describing the 2026 financial-result guidance as conservative and aligned with market assumptions. Kakinoff warned that insurers relying primarily on financial income without strong operating profitability face structural pressure in a declining-rate environment.
“Models that depend on financial returns while running weak operating results are not sustainable over time,” the CEO said.
On regulation, Kakinoff welcomed tighter rules for vehicle protection associations (APVs), saying formalization has already reduced the number of operators and should curb competition from undercapitalized players, improving sector stability.
Porto concluded the call by reiterating that its priority for 2026 is disciplined growth, early risk mitigation and active capital management, rather than accelerating expansion in a highly competitive market.
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