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Insurance, Pension Plans and Savings Bond


Insurance, pensions and saving bonds are segments of the market that indicate good prospects in the Country and for Banco do Brasil over the next few years. In order to improve efficiency and strengthen the competitiveness of BB in this market, the Bank has developed strategic partnerships and has restructured its insurance companies, giving priority to increasing the share of earnings from these products in BB's profits, as shown in the table below:

Insurance Ratio (R$ thousands) 2009 2010
Insurance Result (A) 992,199 1,354,179
BB Recurring Income (B) 8,506,013 10,664,218
Total Insurance Index % (A/B) 11.7 12.7


Below we show the main results of Banco do Brasil's insurance companies.


Aliança do Brasil


Companhia de Seguros Aliança do Brasil was created in June 1997, with Banco do Brasil as a shareholder through its wholly-owned subsidiary BB Aliança Participações S.A. Based in the city of São Paulo (SP), the company operates throughout Brazil and has a workforce of approximately a thousand people, including employees, student trainees, minor apprentices and outsourced employees.

With a diversified product portfolio, consisting of more than 40 types of insurance covering personal and property risk, Aliança do Brasil offers solutions which meet the needs of private individuals and companies, in all segments, including agribusiness. Its portfolio of personal risk insurance and other areas currently covers more than 10 million customers.

Since September 1st, 2010, the damage insurance portfolio of Companhia de Seguros Aliança do Brasil has been managed by Aliança do Brasil Seguros S.A., a company that is part of the Banco do Brasil conglomerate.

Over the last year, the client base has grown by more than 14%. In the first three months of 2010 alone, the company won more than half a million customers. The event which most contributed to the expansion of its client base was the launch of the product BB Proteção (BB protection), personal accident insurance offered in modules of R$ 4.99 per month, in accordance with the client's profile.

In the area of life insurance, Aliança do Brasil ended the year with 3.9 million lives insured, up 34.5% over the last 12 months. This improvement resulted in a 0.7 percentage point gain in market share, maintaining Aliança as the 3rd largest insurer in the market, in terms of insurance premium, with a market share of 11.5% (source: Susep-Dec/10). The company reported net earnings of R$ 451.5 million and maintained its leadership position in the rural insurance segment, with a market share of 45.7%, almost four times the company ranked in second place.


Brasilveículos


An insurance company of Banco do Brasil, Brasilveículos in 2010 adopted a policy of strong growth and to make this possible, maintained an aggressive pricing strategy. The impact of this policy was a 19.9% growth in premiums issued, and an increase of 18.6% in premium retained. The fleet retained increased by 5.9%, amounting to 1.028 million vehicles.

However, this expansion ended up having a negative impact on the cancellation rate, which rose from 12.2% to 12.9%, with the claims rate increasing from 63.8% to 69.3%. With this, claims retained amounted to R$1.0 billion, up 37.2%, but even with the increase in the level of claims, the operational result rose by 64.5%, totalling R$150.7 million.

The growth in the investment portfolio of the insurer and the increase in interest rates led its financial result to rise by 14.1%, to R$94.1 million. The expansion strategy, combined with good financial performance, allowed the company to report net earnings of R$87.6 million, up 66.3% compared to the previous year. Based on the ranking figures from Susep, Brasilveículos maintained its position as the 5th largest vehicle insurer in the market.


Brasilcap


A savings bond company, founded on July 31, 1995 , Brasilcap has been the market leader for 14 years. According to ranking figures from Susep (private insurance superintendency), it is number one in terms of amount collected, as well as technical reserves, and in 2010 was the company that produced the best return for its clients.

In terms of collection ranking, it has a market share of 23.3%, with revenue of R$ 2.73 billion. It celebrated three new sequential records, with the setting of a new monthly record, in March, of R$ 237.4 million; in May, with R$ 239.0 million, and in August with R$ 259.1 million. These factors led the company to register a growth of 21.0% compared to 2009, while in the technical reserve ranking, the company had a market share of 24.3%, with provisions of approximately R$ 4.19 billion, which when compared to last year, represents an increase of 15.8%.

Brasilcap periodically carries out research on customer satisfaction among existing and former clients. It introduces innovative new products and provides solutions for partial redemption, postponement and advance payment of instalments, securities with variable remuneration, with a guarantee of return that offers discounts to clients on medicines. This strategy of product diversification and innovation allows the company to achieve penetration at all income levels.


Brasilprev


Brasilprev is one of the largest private open pension companies in Brazil, with more than 1.29 million clients and assets under management of more than R$ 37.2 billion, up 38% compared to the previous year. The result of an association between Banco do Brasil and the Principal Financial Group, it has the mission of providing clients with financial security solutions and services of a high-quality in order to enable them to achieve their life projects.

The excellent results accumulated by the company are the result of the expertise, solidity and tradition of its shareholders, the excellency of its products and services offered, as well as the extensive and competence sales force of Banco do Brasil. With its operations based on an ethical and transparent approach, Brasilprev has guaranteed the generation of value for its businesses, and for all the public audiences with which it relates.

In 2010, the company maintained its leadership position in terms of net private retirement funds captured in the Brazilian market, first achieved in November 2008. Net funds captured is the indicator which best reflects the rate in quality and gain in scale, because it represents all the funds raised by the company, less the redemption is made in the period, in other words the funds that effectively remain with the company.

Driven by the sale of VGBL products, the funds captured by Brasilprev totalled R$ 9.7 billion for its net contribution income, an increase of 57.6% compared to 2009, enabling the company to maintain its 2nd ranking position, according to figures from Fenaprevi.


Brasilsaúde


In July 2010, BB Seguros formalized the sale of all the shares of BB Seguros (49.92% of the total paid-up capital) in Brasilsaúde to Sul América Seguro Saúde, for the total value of R$ 29.2 million.


Products with Socio-environmental Characteristics

Banco do Brasil offers various alternatives for insurance and savings bond, with socio-environmental attributes, with the majority of these insurance products transferring part of their revenue to the Banco do Brasil Foundation. In 2010, more than R$ 1 million was passed on to projects of the Banco do Brasil Foundation, an increase of 47.8% compared to 2009.


Product or Service Socio-environmental Responsibility
Characteristic
Amount
Traded in 2010
(R$ thousand)(1)
Share of the
Product Considering the Total Traded % (R$ thousand)
Characteristics of Products
Environmental  Social
Insurance
Ouro Vida Transfers 50% of its revenue to the Banco do Brasil Foundation with the stipulation that it be applied to the social programs of that entity. 310,491 17.53    x
Ouro Vida Empresa Transfers 100% of its revenue to the Banco do Brasil Foundation with the stipulation that it be applied to the social programs of that entity 4,175 0.24   x
Ouro Vida Estilo Transfers 50% of its revenue to the Banco do Brasil foundation to be applied to the social programs of that entity–preferably to programs involving water resources. 1,115 0.06  x x
BB Seguro Vida Mulher Transfers 50% of its revenue to the Banco do Brasil Foundation with the stipulation that it be applied to the social programs of this entity. 143,589 8.11   x
BB Seguro Agricultura Familiar This product makes it possible and attractive to purchase moneylending insurance for clients with rural credit operations destined to family farming (Pronaf). 47,634 2.69    
Ouro Residencial and Residential Estilo Transfers 100% of its revenue to the Banco do Brasil Foundation with the stipulation that it be applied to the social programs of that entity 52,530 25.68 x  
Ouro Máquinas and Máquinas Novo – ALS Transfers 100% of its revenue to the Banco do Brasil Foundation with the stipulation that it be applied to the social programs of that entity 7,241 3.54    
Ouro Máquinas and Empresarial Novo – ALS Transfers 100% of its revenue to the Banco do Brasil Foundation with the stipulation that it be applied to the social programs of that entity 64,007 31.29    
BB Seguro Auto Estilo Directs part of revenue to the Banco do Brasil Foundation, to benefit projects with a socio-environmental angle – water resources project. The value of the pass on is R$ 0.30 per policy. The value for 2009 refers to the months of October, November and December. 22,663 1.49 x  
Savings Bond
Ourocap Estilo Prêmio (PU 36S) Water products – transfers to Banco do Brasil the proportion of 0.5% of the total funds collected in payment by subscribers to savings bondproducts PU36 S (“Ourocap Estilo Prêmio”), sold through the Banco do Brasil branch network. 174,980 6.41 x  
Ourocap Estilo Flex (PP 93E) Water products – transfers to Banco do Brasil the proportion of 0.5% of the total funds collected in payment by subscribers to 48 monthly instalments of the savings bond PP 93 E (“Ourocap Estilo Flex”), sold through Banco do Brasil branch networks. 20,683 0.76 x  
Ourocap Multichance
(PM 48 M)
BB Educar – transfers to the Banco do Brasil Foundation 0.5% of the total amount paid by subscribers, and 0.5% of the second and third monthly instalments of the saving bondsproduct PM 48 M (Ourocap Multichance), sold through the Banco do Brasil branch network. 201,004 7.36   x
Ourocap 200 years
(PM PP 60 M)
BB Educar – transfers to the Banco do Brasil Foundation 0.5% of the total amount paid by subscribers, and 0.5% of the second and third monthly instalments of the savings bond product PP 60 M (“Ourocap 200 Anos PM”), sold through the Banco do Brasil branch network. 156,876 5.74   x
Ourocap 200 years PM
(PP 60 C)
BB Educar – transfers to the Banco do Brasil Foundation 0.5% of the total amount paid by subscribers, and 0.5% of the second and third monthly instalments of the savings bond product PP 60 C (“Ourocap 200 Anos PM”), sold through the Banco do Brasil branch network. 22,395 0.82   x
Ourocap Estilo Prêmio Cartão de Crédito (PU 36G) Water products – transfers to Banco do Brasil the proportion of 0.5% of the total funds collected in payment by subscribers, of the sole instalment of PU36 G (“Ourocap Estilo Prêmio Cartão de Crédito ”), sold through the Banco do Brasil branch network. 1,538 0.06 x  
Ourocap 200 years Cartão (PP60A) BB Educar – transfers to the Banco do Brasil Foundation 0.5% of the total amount paid by subscribers, and 0.5% of the second and third monthly instalments of the savings bond product PP 60 A (“Ourocap 200 Years Card”), sold through the Brasilcap Call Center. 247 0.01   x

(1) Amount traded in 2010. It do not consider the balance of transactions

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