IRB Re shares rise on strong Q2 results amid Brazilian reinsurance tax reforms

IRB Re reported second-quarter 2026 results that exceeded market expectations, leading to a 5.32% rise in its share price. The company posted a net profit of R$ 158 million, a 55% increase from the previous quarter and approximately 10% higher than the same period in 2025. This performance surpassed estimates from Goldman Sachs, which projected profits 13% lower than actual results.

The improvement was driven by a decrease in the loss ratio to 41.8% from 58% in the first quarter, aided by a R$ 139 million reversal in IBNR reserves in Brazil. However, JPMorgan noted that much of this surprise stemmed from non-recurring reserve effects and cautioned that the lower loss ratio might not represent a permanent structural shift in profitability. Issued premiums fell 14% year-on-year to R$ 1.15 billion.

In related legislative developments, the Brazilian Chamber of Deputies approved a bill to reduce taxes for reinsurers. The proposal seeks to lower the Social Contribution on Net Profit (CSLL) from 15% to 9% starting in 2027 and eliminates the 10% corporate income tax (IRPJ) surcharge by 2030. The bill also expands rules for compensating accumulated losses, allowing reinsurers to bypass the standard 30% limit if losses are not fully offset within three years. The text now moves to the Senate.