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By Guillermo Parra-Bernal and Aluísio Alves
SAO PAULO, May 7 (Reuters) - BB Seguridade Participações SA may consider raising operational targets for this year should expectations of a robust second quarter materialize and spare the state-controlled insurer from Brazil's economic woes, Chief Financial Officer Werner Suffert said on Thursday.
The company, which is controlled by Banco do Brasil SA , will wait for "another two months of data" to verify whether upward policy underwriting trends in life, property and rural insurance gain traction and claims continue, Suffert said in an interview.
Brasilia-based BB Seguridade beat first-quarter profit estimates on Thursday as claims in the segment known as SH1 fell and rising borrowing costs fueled investment income. The company earned 949.1 million reais ($313 million) in recurring profit in the quarter, well 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. Currently, BB Seguridade expects recurring income to grow between 12 percent and 21 percent this year.
Shares hit the highest level in a year on the stronger earnings. As of 10 a.m. ET, BB Seguridade was up 1.8 percent at 36.52 reais, after hitting a 52-week high of 36.87 reais earlier in the day.
Policy underwriting in the SH1 unit, which comprises life, rural and property insurance as well as pension and savings and represents 75 percent of BB Seguridade's revenue, posted income of 604 million reais, compared with 544 million reais in the prior three months. While policy sales grew, the biggest impact came from a tumble in claims and expense controls.
"There is a recurring nature to it, and we expect that to continue for the quarters to come," Suffert said, referring to claims at SH1. The increase in claims at the SH2 unit was specific and will likely be reversed in coming months, he added.
Recurring return on equity, a widely followed gauge of profitability among financial firms, rose to 63.7 percent in the quarter.
Investment income almost tripled in the quarter as the central bank raised interest rates. BB Seguridade took advantage of that by earning more yield from fixed-income investments and by increasing the amount of interest-earning assets in its portfolio, the filing added.
$1 = 3.0331 Brazilian reais Editing by Chizu Nomiyama and Meredith Mazzilli