SAO PAULO, May 7 (Reuters) - Brazilian insurance holding company BB Seguridade Participações SA beat first-quarter profit estimates on Thursday as claims in the life, rural and property segments fell and rising borrowing costs lifted investment income.
Brasilia-based BB Seguridade, which is majority owned by state-controlled Banco do Brasil SA, earned 949.1 million reais ($313 million) in recurring net income during the first three months of the year, way above the 842 million reais forecast in a Reuters poll.
Recurring net income, or profit before one-time items, rose 4.7 percent and 46.3 percent on a quarterly and an annual basis, the company said in a securities filing. Management plans to discuss results with investors later in the day.
Return on equity, a widely followed gauge of profitability in the financial industry, was 63.7 percent. Data for recurring ROE, as the indicator is known, was not made available.
The unit that comprises life, rural and property insurance as well as pension and savings posted income of 604 million reais, compared with 544 million reasi in the prior three months. While policy sales grew, the biggest impact came from a tumble in claims and expense controls, the filing added.
Investment income almost tripled in the quarter as the central bank raised interest rates. BB Seguridade took advantage of that by earnings more yield from fixed-income investments as well as by increasing the amount of interest-earnings assets in its portfolio, the filing added.
$1 = 3.0331 Brazilian reais Reporting by Guillermo Parra-Bernal; Editing by Chizu Nomiyama