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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
[Audio Gap]
And all of a sudden, through video or telephones, to start renovating your house, not knowing whether their hydraulics are operating, whether everything was working, if the electrical systems were okay, if the linoleum was intact. So when we looked at the ambiguities, we had to show the market in less than 90 days everything, and at the same time, start an investigation to discuss the leak of false information to the market, and at the same time, hiring an accounting forensic consulting services.
On top of the findings we would get using our own experience to find information through internal sources, we were able then to show the authorities and the marketplace the new financial information and first quarter data. So due to the time it took and the difficulties of this unusual situation caused by the pandemic, in a nutshell, considering all these difficulties, I would like to say that we are able to pull it off. In 90 days, we were able to show the results we showed, be them about the investigation that took place and all the other financial reports throughout the year. So we were able to what SUSEP did.
So putting all this in context, we would like to first apologize. I would like to state that this current administration will be defined by being absolutely obsessed with transparency, taking into account the history of the company and taking into account every single investors, individuals, strategic investors, companies...
Ladies and gentlemen, please hold.
[Technical Difficulty]
I don't know where we were cut off. But anyway, I was talking about credibility. We all believe that credibility is a crown jewel as diamond, something that's extremely precious. If credibility is indeed that diamond, from those who believe for -- from the perspective of those who trust someone, we have to take into account that credibility is crystal, is delicate because of what happened in early February, all the way up to the beginning of March.
Ladies and gentlemen, please hold.
[Technical Difficulty]
I was talking about credibility, right? Credibility is like a diamond. At certain points in time, it becomes delicate as crystal. We have to take good care of that diamond as if it were as fragile as crystal. We have to be transparent, clear, true. And that is, in essence, the way we should treat this very important asset. In other words, we have to get the pieces of that crystal together so that we can bind together these broken pieces, paying close attention to our KPIs. And the share price is the output as a consequence of the work we do with our customers, our business partners, according to the law being very clear, transparent and professional, which is key to the insurance and reinsurance businesses.
Having said all of that, let me just talk about principles and let me talk about the findings. And I would like to summarize that in a sentence, there's no right way to do the wrong thing. Let me repeat that. There is no right way to do the wrong thing. You waste time, and it's wrong. And we cannot condone with what's wrong, period. As I was saying before, everything is related to doing the right thing.
And secondly, one of our basic principles is we shouldn't rush, but nonetheless, unrelenting effort in these 90 days. We worked round the clock, and at the same time, not rushing to conclusions because that would send the message to our stakeholders that we were jumping to conclusions and providing solutions that were not substantial, truthful and valuable to the corporation. In that framework, let me just say to all of you that from the commercial point of view and the activities we conduct with our customers, and I can even mention data from beyond the third -- the first quarter. And despite all these ambiguities, things that we could not announce to the market, the result is very satisfactory given the circumstances. We did not detect any major issue in our competitiveness. We remain competitive despite all these difficulties. We managed to renew to all. All contracts that would expire by the end of the month, major contracts are on track, both in terms of monthly payments. And we are in agreement with all partners that enabled this major achievement for this period. We truly believe that the work we're doing has good quality, and we should do so in providing that good service to our customers.
Ever since we took over, we took office, we instituted these principles. We should have the best standard in the industry and offering solutions and to preserve that competitive advantage the company has in markets where it operates, especially in Brazil, in terms of speed and quality of our underwriting. And we should clearly understand that this is a market full of opportunities. And that's not the focus of many of our competitors, and that's a market that can be explored consistently through the means of proportional contracts, supporting small and midsized partners so that they can enter new market niches. And by providing our technical capabilities, our robustness, our size will enable them just like we were doing ever since -- or since late last year. We can continue to be a differentiated player by resorting to strategic channels.
Well, having said that, both in terms of adapting the regulatory framework of the company and including the mid-term and long-term strategies for the company, this is our focus so we can have a clear understanding for the second half of the year. But we already have defined what the pillars are for that strategy. They are dependent upon our capacity to take those competitive advantages of the company and bring them to the front line, and at the same time, understanding the regulatory framework of this circumstances, and at the same time, attacked the structural problems of the company so that the company can develop itself with sustainability, with no peaks and valleys, taking into account the volatility that is inherent to this business. And this is what we have been doing since mid-April to issue the company's debt equity. And given the current market scenario, there is excessive liquidity. These prices can be very costly.
At the same time, we try to find statue -- or stature principles. These bylaws were approved in the past April 23 to give the company some authorized capital. We're now considering the possibility to leverage the company to meet these 2 pillars. This was announced yesterday to address the regulatory issues and to have the necessary conditions to take the company forward with security, with confidence. And when we take -- when we talk about taking the company into the future, it's to have a clear understanding of the regional footprint to reconsider the business portfolio of the company we have today. And when we look at those items in the portfolio where the results are not as expected, we can start a re-underwriting process so that the company can have results where they are. That's our core business. We are a very streamlined company. We look for operational efficiency. This is what we have been seeing in -- recently.
When I joined the company, I had no idea of how digitally prepared the company was. And when we move out of this pandemic, we have a new context. This is what we call working from home, and that's what we -- I call it smart or smartly working from home. And we can have a new configuration in place because we are digitally prepared. That gives us flexibility so that we can make changes in the workplace, a workplace that is more appropriate, better balanced to give our employees better working conditions. So taking into account customers, strategic business partners and also taking our employees into account, we can take good -- we can benefit from these competitive advantages and also create value. We can say that our number one goal is transparency; number two is to provide good quality services; and our third priority is to create value to the company that can be translated to our investors.
I'll turn the floor over to our IR running the show from now on.
I'm going to start with the slides. So the figures, the numbers are now on Page 2, where I'll be addressing the main highlights. This new -- the start of the new management, we started in the second half of March, you know that. We were going to have a strict [indiscernible] crisis. And the idea was to recover the company's [ reputation ] [indiscernible] company, well-known in the Brazilian market. And on behalf [indiscernible] we started to renew the company. The Board had the standard of [ incorporation ] under a format of [indiscernible] members. We already have 7 independent members, all of them very experienced in their respective [indiscernible] And they'll help us go through this period and help us [indiscernible] in terms of governance, reinsurance, [indiscernible] matters which will be held by the Board from now on.
We can now have a much better prepared governance. We started that investigation to understand how that kind of confidential information was announced to the market, and incorrect information, of course. We detected other issues that deserved our attention. We had material fact issued on Friday, and the Board actually authorized it. And because of those findings of that investigation, just like Cassio pointed out, we hired a forensic consulting firm, and we came to the conclusion that we had to again show our financial results that were important imperfections that had to be corrected and brought to the public. That's what we did. And at the same time, just like Cassio said, we had to fight the pandemic. So we found ways to protect employees, and at the same time, we supported remote services to our customers. That's something that is very dear to us. We had a special cabinet put in place to deal with the pandemic. And of course, there are some threats out there. And we had to put together a strategic plan to look for opportunities. So despite that housework that we're doing, so we also did not lose sight of the opportunities, getting in touch with our major customers and working together with them.
Let me again talk about the COVID issues later or shortly. And we had the SUSEP investigation team, and our CRO will be talking about that issue later in the presentation. That material fact that was announced, we put together a plan in place.
Let me show you on Slide 3. These are the changes we have in our Board. We have a new structure in place. During that assembly, we received authorization to change the size of the executive board. Governance is now in the hands of a few people. And we expanded the executive team so that we could segregate these activities so that we can be in accordance with international standards. Just like I said, the Board has been strengthened by bringing in reinforcements, if I may. We had a new Board member that will be announced shortly. That once again is in line with that intention to share information to have someone to bridge the gap between the company and the market, people from underwriting, technical people from the claims department. And we did not have that kind of exposure. And now as that statutory position, they'll play that role.
On to Slide 4, I will be talking about COVID-19. There are, if different, impacts depending on the industry. Pandemics is an excluded risk in our contracts. There's a bill being discussed to include that risk. Unemployment rates are on the rise, so we have fewer people employed. You can reduce premiums, but something that can go back to normal levels when things go back to normal. So there is a significantly smaller possibility of accidents, many -- or fewer people out in the streets. In terms of property, there's a decrease in asset values. It's only natural. So the trend was that of a rise in prices up until the pandemics. So asset values are directly impacted, and again, infrastructure, major engineering projects have been postponed.
There are impacts in our future results for this segment. Price adjustments in the property segment as the prices are going down, but renewal fees are on the rise at about 20%. That shows a change in that industry. There's a positive impact. The rural segment will have a bumper crop, about 245 million tons, a 4 million ton increase. It's a very important industry.
Oil and gas now. Of course, the impact is dramatic. Oil prices are down. We were expecting that segment to grow dramatically in Brazil up until the pandemics, of course, and that uptake in the business will be postponed. There are fewer investments in the area. Others include aviation and financial risks. There's a major impact in passenger traffic and financial risks with smaller investments and the need of less guarantees.
Worldwide, the reinsurance industry has been suffering dramatically with the exposure. There are 3 major risks: the one that deals with capitalization, travel and events, and those that are willing to take the risk of the pandemic. We are not operating in these 3 areas strategically. It does not affect us where reinsurance business is being affected.
Good afternoon, everyone. We're going to be talking about specific inspection done by the SUSEP. Before starting, just to make it clear that, that special inspection does not bring or does not mean any kind of interference. It is a more robust inspection, counting with additional resources on the regulatory part so that they can follow up on this transition that the company is going through right now. It was started because of the lack of assets to guarantee our technical provisions because of regulatory liquidity requirements on the part of the regulating agency.
When we analyze the main causes, we can break it down in 3 different factors. Number one, an increase in technical provisions which were realized because of this review of the adjustment of our financial statements. When we revisited those financial statements, the new estimates emerged and the technical provision issue emerged. So we needed to adjust to address that issue. Another important matter was that there were certain assets that were bringing those technical provisions down or were being offered to cover those technical provisions, which were not adequate, were not proper. So we also tackled that particular point. And lastly was the effect, the foreign exchange effect, which is quite important.
The regulatory liquidity issue, which was verified in this quarter, has been addressed by the company in a very active manner. We are going after mid and long-term solutions and also short-run solutions to be able to face that situation in a proper manner. We have work groups which are very much engaged in that process. Now we have conducted some divestments act. We are realizing assets, which are not enough to cover our technical reserves. And we are also working on raising third party resources, be it to reduce debt or to increase fundraising efforts. As it was mentioned before, we understand and we strongly believe that by September, we will be able to throw all those actions and measures. We will be able to address that situation very efficiently and resume some kind of normalcy vis-à-vis regulatory requirements. It's important to note that at no time, we had no effects on the company's operating efficiency and on our payment flow. The information we received yesterday from the Board of Directors in terms of hiring of banks to support us and restructuring our debt, and that's very important for us for this new phase, for this readjustment we're going to go through. In March, the lack of regulatory liquidity that is announced in our quarterly report is at around BRL 4.1 million. In December, it sat at BRL 1.4 million. And we haven't touched -- we have touched that issues, those issues throughout the presentation. You can check the explanatory notes as well in our quarterly report. It's all there.
Despite this provisional situation, the company remains quite solvent even after the recently announced adjustments, which are mentioned in one of the explanatory notes. We have the necessary equity, if I may. We are quite solvent at 1.8x the amount required, BRL 1.2 billion. In other words, the company remains solvent, robust and with a very significant capacity to correct or adjust this momentary liquidity issue.
So I now give the floor over to [indiscernible] for his part of the presentation.
Okay. Now on slide -- the next slide, I'll be talking about the main highlights. Net income, BRL 1.763 billion as it was mentioned, a negative impact of around BRL 550 million without the adjusted income. Adjusted to all the impacts mentioned before, it's down to BRL 1.2 billion. The main drivers for those impacts are also described in our financial statements, which were announced. And we can see there that the main items are claims, which grew significantly and were not accounted for. And written concessions of claims in that period, also explained in detail in our explanatory notes and in our quarterly report.
Just as an aside, in terms of performance analysis, we continue our work to improve this material. The company's numbers do include more numbers, more explanations, more details. Our focus is to become obsessed with transparency to be able to provide the best of information to you, gentlemen.
So on top of claims, we also had the real estate front of our financial statements. We have 2 fronts, as you know, and also the allocation of undue payments, which we've identified in the period. So that's an important snapshot of our net income and its respective impact. And I'm going to try to address all those questions. On top of that, of course, taxes that needed to be recalculated because of the lower level of income that we realized.
Now moving on to Page #7, if you will. We have -- it's the same topic, but from a different point of view now, from the point of view of SUSEP, the regulatory agency. And then we can see a bit more information and the respective impacts, which are the same that we experienced. But to the benefit of time, to explore in the Q&A session, more efficient, I'll just skip this slide because it says pretty much the same what the previous one did.
On Slide #8, we see capital gains as it relates to shopping malls, a clear picture of what happened in terms of revenues, costs and capital gains which we achieved. And that's broken down on property by property, reaching a final number of BRL 387 million in the year, which contributed to this year's profit income. And this is not the company's core, of course. I was just emphasizing this, highlighting this just for you to have a clear picture of our results in 2019.
On Slide 9, moving on to dividends and interest on equity as contemplated by the companies that have to put together a reserve for profit. But due to that insufficiency, that lack of regulatory liquidity, as mentioned before, after the deposit, as a bylaws, we allocated BRL 1 million to support business also as contemplating our bylaws. Just to reinforce, we need to address the regulatory solvency requirements. And also, we need to preserve and increase the company's operating capacity so that we can continue to move on in our path to offer our services and so on. And we also need to support investment and expenses, investments in technology, other important projects, acquisitions if the time is right. And so all of that needs to be taken into account when we do those calculations, when we try to figure out dividend payout to our shareholders, what kind of resources would make up that reserve as I put in our last shareholders meeting.
Now we can move on to page where we have -- 11, where we have the results for 2020. We are closing 2019 but not yet 2020. So the first half of the total volume in premiums or written premiums increased 13.2% vis-à-vis the first quarter of last year, reaching BRL 1.9 million (sic) [ BRL 1.9 billion ]. And the main business lines are there listed, especially property, accounting for 30% of that number, followed by life and agro. So the numbers are little there on this slide, but the numbers are there. And you can see the growth, especially under property, significant growth, reached [ BRL 1.5 million ].
Moving on to Page 12, you can see our written premiums in Brazil and the breakdown. So for written premiums in Brazil, we had BRL 880 million in the first quarter, which represents a drop when compared to last year, a drop of 8%, driven mainly by a lower amount of premiums issued in the period, especially in other sectors, oil and gas and agro. For property, the main reason was that we had a drop of 27% in Brazil, which was driven mainly by the anticipated renewals of premiums issued last December. And IRB continues to invest in innovation to increase the issuance of payments in this segment, which is quite important to us. As Cassio also mentioned in his remarks, that's one of the most relevant fronts for the company and should remain so in the future. In case of special risk, we saw a sharper drop, as you can see, when compared to last year, because of, again, anticipated renewal of oil and gas contracts. And in the case of agro, we saw an increase, a sharp increase actually, 65%, due to the growth of the agri business sector, which grew by approximately 10% in the quarter. Agri business as a whole in Brazil saw a growth of [ 67% ]. As for written premiums, abroad reached BRL 1.1 billion here on the right-hand side of the slide on the first quarter, a growth of something close to 40% when compared to the first half last year. And the main contribution, in this case, coming from the positive foreign exchange effect in the period. When you look at the premiums in BRLs, we see that sharp growth and also due to an increase in renewals of contracts in the first quarter. So we continue to have our business up and running. And that, of course, reflects in these numbers an increase in stake in the property front, especially in the U.S. and in Europe. And because of the foreign exchange rate, we see a relative growth which moved from 45% in the first quarter of last year to something close to 56% in the first quarter of 2020.
Now moving on to the next slide, Slide #13. We have the main aspects concerning claims in the first quarter, BRL 1.1 million (sic) [ BRL 1.1 billion ], a growth of something close to 20% vis-à-vis the first quarter of '19 as readjusted. And remember, we had an increase of 20% in claims. Claims index saw a drop of 50 -- no, 5% when compared to the same quarter of last year. From 77 -- [indiscernible] [ 67% ], the main variation in the quarter in terms of property, sharp increase in retained claims in that segment. An increase in the quarter, a review of claims which was conducted, an increase in the estimate related to unfavorable court decisions.
Also noteworthy in the first quarter, we repositioned the company as to this view of being more diligent and more of a long-run company to be always on time making payments, adopting best market practices in terms of the claim process as a whole. The idea at end of the day is to provide a better service to clients, to have a more satisfied client.
Now moving on to the life segment, an increase of 43.3%, which refers to the accounts which were due or overdue in that segment where we had a very high level of clients.
Special risks, we saw a worsening overall because of an increase in claims coming from the oil and gas front. In terms of underwriting, we saw a growth close to 74%. The numbers improved from BRL 27 million to BRL 47 million. And the underwriting result was affected by the claims figures, as I just mentioned. And as I said, both -- as I said, we are being more diligent, and also more conservative, if I may, as we are preparing to go through this period of uncertainty because of the coronavirus situation. So we need to be more conservative. So we're increasing the reserve for those kinds of claims, COVID-related claims, especially under the life segment. It's a smaller contribution, as I said, but we're getting ready for it anyway.
As Cassio mentioned, the pandemic risks are in our radar. And preemptively, we made some provisions for possible regulatory requirements, again, getting ready for what may come ahead. So in light of the current scenario, underwriting went up something close to 74%, as we said, in the first quarter when compared to the first quarter of last year. And Cassio, you might have something to say.
Yes, it's important to emphasize the following. Provided the behavior we should display as an insurance company in terms of technical approaches, of having higher technical reserves and so on. Despite the fact that we saw in this quarter an abnormal behavior of certain claims, we were more cautious in terms of addressing them in the right way. And despite all this dynamic which affected our portfolio throughout this period, as it was mentioned, we had several moves of anticipation of payment or the renewal of contracts. With all of that, we saw a significant improvement despite all of that, an improvement of 74% for underwriting. As I said early on, one of our competitive advantages in the moment where we need to get the company ready for this new situation to take this company to a safe place, we can do it as an insurance company would do. In other words, even though we're trying to find a safe place for our boat, if you will, the boat needs to be at sea, not docked at the port. So we are docking the ship at the port, but we are also sure that our business, our objective, our mission, our raison d'être is to be out at sea, managing, of course, the volatility of the waves, if I may, and getting ready -- and be ready not to be surprised by the storm.
So moving on to the presentation. We are getting close to the end.
Slide 15 now, we have a breakdown of our financial results. In the first quarter, BRL 121 million, as you can see. That's both though for the financial and real estate fronts. There's a negative on the one side and a positive number on the right. The other one, as for the real estate front, as I mentioned early on, for 2019 when I talked about capital gains, the selling of all those shopping mall properties, we see the number here. That's what I mean when I say real estate result, sale of shopping mall properties in the first quarter. So one offsets the other, and then again they have a positive number. As for the financial front, the main impact was the foreign exchange issue as I had mentioned before.
Lastly, on Slide #16, we have the company's net income for the quarter, net income of BRL 14 million. We compare it to the first quarter of last year where net income sat at BRL 178 million.
With that, we have covered what we have to share with you in terms of numbers and figures, and we can now move to the Q&A. Thank you, everyone, for participating.
[Operator Instructions] Our first question comes from Mr. Felipe Salomao from Citibank.
I have 2 questions, actually. Number one refers to the company's profitability and return on net equity. In 2018, we saw a level of 30%. In 2019, it was close to 30% but if you remove the divesting of assets, we're going to be close to 20% in 2019. So we saw a drop from 2018 to 2019, and my question, is the profitability of premiums issued [ abrupt ] are affecting that? And what would be a sustainable level in terms of net income moving forward?
And also a second point concerning the caveat by the auditors for the first quarter 2020. They said in writing that the reach of the review is significantly less or falls short of that which by a proper audit process. So we have not had access to all meaningful, important fact documents that would be reviewed in a proper audit to the auditors. That's a margin there, if I may, so I'd like to hear from you, what does that message mean? What fell short? What was missing to make the auditors fully satisfied?
Felipe, this is Werner. I'll invert the order because your second question is very important. That caveat on the auditors, that's a standard sentence to that kind of review. Usually, that review goes through a different screening process than yearly reviews. Quarterly reviews are different than yearly reviews, and that's why we have that. As a rule, there is a limitation for those expert opinions as they refer to only the quarter, not a year. If you look at different quarters in the past, you'll see in the market as a whole in the industry, that's a standard way of expressing that. That's not anything out of the ordinary. It's not company-specific. That's a standard practice for quarterly reviews or quarterly audits. That's the first thing.
Number two, as for the profitability issue you raised, after that adjustment we made, it dropped from 30% in 2019. And then we had an impact in 2019. We had an important impact coming from claims in the agro area that affected the company's results significantly. So when you exclude those points, and we used them considerably, the return on investment for the whole operation will have a high impact when you have such an important entry for the company, which is agro, with such a high level of claims, historically high. So that has also significantly affected the company's result.
This is not what we expect for the next cycle, as you know. We have expectations of a better growth over the next cycle of growth. But as you know, those issues might happen in years where we have El Niño and the agri business suffers more than in other cycles.
Just to hedge our performance a little bit, we have started the practice of providing more information for you. We're going to try and be more transparent as we move forward to the next quarters. Even for this quarter, we want to have a more robust version, more robust than the common practice in terms of communication, the numbers presentations, so that you, you are all experienced analysts, but also our other public and who's also interested in our shares. And I mean individuals who buy our shares, not only companies and analysts like yourselves. So we want to be clear and robust in terms of communications to all those constituencies.
Just a follow-up, if I may. What can we expect for that level? 20%, 30%?
Well, Felipe. As you said, we have removed the market guidance. We are not reintroducing that guidance. We have just reported our earnings. Adjusting to the standard, we have just reissued -- or redisclosed our numbers. This is a very -- we're at the very beginning of the new management. We're going to address and analyze the guidance. The COVID situation also leads us to be more cautious. Other companies have removed their guidance as well. We intend in the future to discuss that and bring new estimates for the future, of course. And we're going to be basing that on operating indicators and also on market indicators. So this should be the focus in terms of estimates as we resume work in this market. But for now, we won't break that number down or even disclose guidance numbers now going forward, okay?
Our next question comes from Bank of America.
My question is a bit strategic. You adjusted for fraud, accounting adjustments. But what kind of change are you going to be conducting as far as the business goes? I would imagine that you'd be willing to run fewer risks now going forward, so if you could explore that a little bit under 2 points. How do you expect the business to evolve since you had a negative underwriting margin last year? And I know this is a segment that you see as a profitable one, and you need to, of course, grow on that front. And then how can we think about retrocession? Does it make sense to ramp your risks in the future? How do you see that? And how do you see -- how do you expect to see that line going forward?
Thank you for the question. Let me start by answering your question. We are in the business of taking risks. Having said that, we'll keep on doing so. Our basic principle, which is the principle of any business, especially those in the reinsurance business, so we have to take good-quality risks.
When we say we are going to re-underwrite our portfolio, what does that mean? We are looking at that part of the portfolio that is not producing reasonable results to the company. And we'll try to improve such contracts, adapt them maybe. And in extreme cases, we're not here to take on businesses that will not bring good results for the company. So it's up to us as managers to strive to have good-quality underwriting assets.
There is, more or less, a volatility. We should look at the past 3 months, maybe a 2-year or a 3-year time frame. There are new contracts that we have to keep on analyzing. So our goal is to, as managers, is to try to be as profitable as possible so that we can provide that professional management service as we are supposed to do.
Giovanna, let me just try to answer the question, too. Let me just say that during the pandemic, we should look at the portfolio as a whole, and we are repositioning the global traders. So the entire world had to adapt to the pandemic scenario. We've been discussing all these issues. We have a strengthened governance structure in place, bringing in reinforcements. We're trying to better understand how to grow in the future and what are the risks involved. Other global reinsurers are focusing elsewhere. That provides opportunities here, but we have to be very careful in analyzing these opportunities. We have to take into account sustainability issues based on the industry's indicators. We have to have operational margins in the long run so that we can allocate capital that can yield appropriate returns. That's our focus.
Let me just address another issue you raised, whether we should take any measures to address the regulatory problems. We started conducting a study that we are planning to implement alternative strategies to restructure our capital. We have been in touch with investment banks, and we also believe that will help us. We will then first address the regulatory issues, and at the same time, helping us growing -- helping us to grow with quality as of 2020 as soon as things go back to normal later down the year.
Yes. Let me just make sure I understood. You were addressing the regulatory issues as a priority, and contracts will be annualized individually to make sure they make sense. And you are going to grow internationally as you were going to do so. Is that correct?
Let me address the first part of your question. A new administration that takes office has to look at the portfolio. In the past 30 years of my professional career when I was very young, I've been working in turnarounds and start-ups. And that's our intention, to detect what's adding value and what's not. It does not mean that the company will grow or will not grow. What it means is we want to grow profitably to keep on adding value to shareholders. The major difference and major challenge at the same time is to generate value through our core business, not through runoffs. That's key.
Once we are done with the investigations, once we turn that page, we should look at the future. First, we have to bring that ship to a safe harbor. That's what we're doing now. We're assessing the portfolio. And then -- and only then, how we are going to set sail again, so that we can start our journey.
We have to look at the geographic footprint of the company. Once again, is it worth to keep on underwriting in China, India or Canada? If the answer is affirmative, fine, let's expand. If the answer is negative, how can we do things differently to make that business better? If there's no proper answer because of volumes or volatility, again, we should focus, especially where the value is. And it's up to senior management and as an individual myself, where should I put my solvency elements given to me by shareholders, by organization; where can I extract more value, knowing that it's a competitive market, taking into account our competitive advantages.
We are a low-cost company when we compare IRB with its peers. We may very well be one of the best companies in that segment. You're going to go up 0.5 point or go down 0.5 point. I'm more concerned about how much value that team can generate from that existing portfolio and then the portfolio that is available in the market. And we're going to compete with the competitors.
In crises like this, every agent, every player falls back to their key markets. That's where they'll protect their cash cows. The Swiss will focus on their key markets, the Germans likewise, the Chinese. And as Brazilians, we shouldn't reinvent the wheel. Our business view is we are going to take care of our backyard, so to speak, Latin America. And whatever is beyond that backyard, maybe a lake or a nice river, these are the more volatile markets with way more competition. So again, at this point in time, we should be aware that we are sailing that ship I referred to a while ago. We should do what is supposed -- what we're supposed to do, using that technical expertise we have in underwriting, and this is just out of the ordinary.
We had a decrease on premiums on a year-by-year basis. We are leaders in several contracts and #1 reinsurer, just like Cassio said. The market is readjusting itself. Past indicators may change, will probably change. And we do not have any benchmark or any reference. But premiums may go down in Brazil, just like Cassio said.
It does not necessarily translate into risks to our portfolio. We should consider exchange rate risks, and these new conditions may not be as beneficial as we expected, or it's only natural that it would stabilize our portfolio whenever there is -- whenever there is opportunity.
Ms. Mariana Taddeo from UBS has the next question.
In the first quarter for the local market, there was an 8% drop. You said that you updated renewals. How much would that growth be if those renewals took place now? In Q1, there were no impacts with insurers because of the credibility crisis of the previous management team. And finally, given the renewals you were referring to, what's the expected premium increase for the year?
I did not quite understand the question. Can you repeat the other part of the question?
First, how much would that growth be in the local markets if those renewals had taken place in Q1, not late last year? Commercial relations with insurers, was there any impact whatsoever there? And renewals that took place after the COVID-19 effects, what's the expected premium increase?
I'll address the second question. Werner will address the first and the third one. As to the business relations with insurers, has to do with how we acted in when we have the first crisis. And the second issue was the special investigations because our stakeholders had to understand what was going on.
Let me address the commercial relationship, the Berkshire issue, or customers and trade partners, there was no impact whatsoever because that was a problem connected or about one stakeholder and one regulator. Now when I talk about the second issue, once you have a special investigation, and the management understanding how the situation was to come to the forefront and be transparent and explain 4 things:
Number one, the company's solvency. This is an absolutely solvent company. By showing that, there should be some fear as an insurer. I, of course, should be speaking the same language. Solvency is one of the best in the world. It's -- our solvency rate is 190%.
Number two, short-term liquidity. What's that? 48 months, up to 48 months. Now up to 36 months. This is short term for an insurer, short-term liquidity. There are no problems whatsoever to maintain our payments and pay out claims, business partners to honor our payroll. How do we behave in such a situation? That's completely business as usual.
And there's more. We have noticed there were payment issues. We had to give some room, some freedom to our business partners.
First, solvencies, no issue, that's a nonissue at all. Two, Operational liquidity, no issue. And the third issue was the hedging for the budget or our balance sheet for every liability we have in U.S. dollars and one for the asset. So our balance sheet is hedged.
And number four, we have the regulatory problem. Yes, we do. And for regulators, I would be doing the same thing. If it's a 40% market share company, a company that has that track record with all the problems we have in late February and March and then it's not according to the statute. Despite the fact the solvency is protected, again, we should be -- as a regulatory agent, it's only natural that they do that. It was clear when we explained to all stakeholders because we're speaking the same language, after all. And then that has been confirmed by what we do on a daily basis.
Again, our operational indicators are all on the rise. The relationship with our business partners are okay, and we're connected to our top partners on a personal level, and all our business partners, both in Brazil and abroad. So there was some tension involved before we explained it. Once we explained it, there are no questions at all.
And Werner, and the coronavirus impacts for the growth projection?
Mariana, let me talk about the anticipated. We cannot normalize the premium now. Once again, let me address the good performance results. We do that on Page 12. We break that down by industry, and we're going to improve -- we're going to break that down even further to be more -- to be easier to understand that. And it's important to convey the message to the marketplace.
What's clear to us is those industries that had problems with the premium. When we talk about revenue, the impact is much smaller. In absolute volumes, it's down 27%. And special risks, especially oil and gas, it's down by 62%. This should go back to normal.
As I said when you compare the primes (sic) [ premiums ] would affect our revenues on a monthly basis. We had that effect in Brazil, but that wouldn't give us long-term impacts. What happened in written premiums for both Brazil and abroad? That was, given the FX effect, we had a lot of pressure on the dollar value, and that give us a 5% impact. This is the market share, the international market share. This was due to the exchange rate. We expect that Brazil will contribute further and Latin America will follow suit because we do have the competitive advantage in that segment in that area. And I think it's important to say that.
And the second question is about future premium increases for the year and beyond, for the 2020 and beyond. We do not have any guidance for growth, and we are not going to announce what's expected growth. But we do believe we're growing because we'll be focusing on Brazil even further. We're going to work in that direction, but we cannot announce any numbers, any projections. We'll do so as soon as we have more information about it.
Mario Pierry from Bank of America has the next question.
[Audio Gap]
In fact, the real has devalued even further. Looking at your data from SUSEP, there was an accumulated loss of over BRL 100 million. Then we see a gain of BRL 14 million in the quarter. That means in March, the company profited BRL 125 million. That's the math I'm doing. Was there any nonrecurring effect in March? And what can you tell us about the performance of the company from March on? We're almost in July now. So for May -- April, May and June, anything you can tell us?
I'll address the first 2 questions about the results and the comparison between figures. But the very end of the question you asked was not possible to understand. So just to be clear, if you could please repeat the questions. The sound was kind of choppy, and I lost some of what you said. So if you could please repeat, especially the last question you made.
No problems, Werner. The first is about the regulatory liquidity. The level seems to have changed as reported in March. And taking into account the fact that the BRL, the Brazilian real devalued significantly, was there any other significant change in that value if we update the number for today's numbers, foreign exchange?
And number two, about the data from SUSEP, for January and February, we see that the company had a loss of BRL 112 million. That means that in March, you had a gain of BRL 125 million based on the numbers. My question is, was there any nonrecurring event in March? And also, if you could update us on numbers for April, May? We are on the verge of July. If you could update us on the numbers to date. Those are the questions.
Thank you, Mario. I only lost the April-May bit of the question. The rest, I got.
As for the liquidity level, BRL 2.7 billion and BRL 2.1 billion as you highlighted in the quarter, we did have an appreciation of the U.S. dollar back then. And now, with that, the number was a lot lower than what we saw last year, November, December, BRL 0.20 compared to a growth of from BRL 4 to BRL 5.20, BRL 1.20 for the dollar in appreciation. So the effect of that appreciation is significantly lower from March onwards when compared to what we have now. Of course, that does have an impact, but it has been factored in.
And we're trying to raise capital and find instruments to improve and strengthen the company's capital structure. And we are, of course, looking ahead and we are not counting only on that tool. We have other alternatives under appreciation, which is asking to bring more guarantees in terms of assets to make sure we have enough to cover. That's the first topic.
The second issue you mentioned, concerning the numbers we reported in January and February compared to the result of the quarter, we have some effects. One of the effects that's mentioned during the presentation was the sale of our shopping mall properties. I was talking about the [ Partheon ], specifically, that property, that happened in 2020. And that represented an important market gain for the company, something close to BRL 10 million, and that positively affected the numbers for the first quarter.
But we also had, in the same period, to reposition, as I mentioned, the company, and a natural resource for the moment where the company's provisions vis-à-vis the COVID situation and so on and so forth. We did mention the provisions we had in place. Even though we didn't have a pandemic clause or provision, we repositioned the company to face potential impacts in the period. But we did have an important effect in terms of capital gains, as I mentioned, the sale of property.
As for April and May, we won't disclose those numbers. We have no guidance. But maybe Cassio would like to add.
It's important for us to emphasize the number on March 31. As I said early on, we are committed to transparency and committed to the truth. When we re-announced the numbers just now, last year's numbers revisited, readjusted, what was the view we had relative to the market, relative to the regulating agency, relative to ourselves? The idea was to show in a very clear manner all the findings we raised, we achieved through forensics auditing that we had around our financial numbers. It was a very deep dive in those numbers. And we concluded that the main adjustments were to be addressed at the claims entry.
And when we look at 2019 and do that in 2019, we automatically accounted for the company. And there is a mirror effect of that on technical provisions for the company that became what should have been the technical provisions. In that respect, we are quite comfortable in that we did the right thing. And we are managing the company, as I said early on in my opening remarks, towards addressing regulatory issues in a very proactive manner within market conditions and now abiding to statutory conditions, which were delegated by the general shareholders meeting which took place on the 23rd, so that we could make a final decision in terms of going after a solution that might -- that is powerful, forceful and enough to solve that regulatory issue. At the same time, we follow on with our projects and working with free assets and potential assets that can potentially be offered rather.
So well, thank you for the question, first of all, because that gives us the chance to make that clear.
Mario, just one more thing. You mentioned the SUSEP numbers. When we presented our new numbers just now, we also visited -- or revisited previous months that have impact on the current months, correlated event. So this will happen for all the months that we will be reloading, if I may, when we talk about SUSEP-related data.
Okay. In the press release, you mentioned that the sale of the property in Brasilia took place on February 20, the shopping mall. So I thought that gain would have been reflected in February for SUSEP's sake, just to be sure. So that variation we saw, BRL 111 million in February, January to a gain of BRL 14 million, I'd like to have more color on that. The company is generating BRL 120 million per month. Is that a level we could expect to see going forward? Or is there any nonrecurring event once again?
And number two, you talked about this lack of liquidity. Do you think that could lead to a change in dividend payout policy going forward?
Mario, thank you. Just to be clear, the shopping mall properties, let's address that. You are correct. That's why I mentioned the reloading of the FID. This was -- this happened in February, you are correct. So it was brought to the right -- the accrual month. So it's February, so that generated an impact in 2019. That's why you do not see it. And it's SUSEP's data. Just to be clear, it was an accrual basis issue, right?
Mario, just to be sure, do you have a second question?
Yes. Yes. The second question has to do with the dividend payout policy. What can we expect in terms of dividend payout policy going forward?
Yes. The company's dividend payout, just to bring things into perspective, we are going through a moment where we're trying to take the company to a different higher level. We have issued a material fact about that. We need to be expedited. We expect, as I said during the presentation, to have this up and running by September. So the payout that we intend to have in this first period is obviously impacted, right? To be able to regroup the company, we need to address and study the adequate level of payout for the future. And as soon as we have a number -- we do not have a guidance, but when we have an idea, that's when we'll bring that to market. But right now, our main concern in terms of funding is to -- in the short run, to be very cautious in terms of payout.
Again, if we look ahead, going forward in the long run, naturally, we'll have a new configuration, as I said, have a long-term view of a reinsurer. We'll have a robustness which is important for the industry. But we'll study what kind of payout level will be the more adequate, and we'll communicate that to the market.
Our next question comes from Mr. [ Otávio Nelli ] (sic) [ Otávio Tanganelli ] from Crédit Suisse.
When we look at the claims triangle, we see that 72% level. Can we consider that a normal level for a claims level?
And the second question is, looking at the tax statement for 2019, we saw an activation of 76 million for the London tax credit. I'd like to understand the recurrence of that. As I see it, it was supposed to last for 10 years, a decade, but it was not clear for how long that will last.
Well, I'll address the claim triangle -- or claims triangle issue. And then I'll move the floor to [ BN ].
So as for the claims issue, as you said, we reached an average of 72%. We -- it's difficult to look forward or to have a forward-looking number for that. We're being very cautious around that number. As we've said, our job is to go after growth with margins. In other words, to find contracts with good margins and a claims level that makes sense for the company, of course. But it's difficult to forecast a new level of claims going forward. So we are keeping a close eye on it. We'll communicate with you. We'll give you all the information we have in hand by segment with the highest level of transparency possible. And in fact, we're going to enforce that. So that's important for us to be clear and transparent.
But unfortunately, right now, it's difficult to forecast a new claims level, not at this point. Of course, we are repositioning our portfolio, and that might have an impact going forward. And we also have a new moment, a post-pandemic moment. So it's difficult to make any forecast at this point, just to make it clear.
For claims, we have exogenous and endogenous reasons or factors, as Werner said. What will happen with the world after the COVID-19 situation? What will happen in this new world order? What kind of economic effects will we have. As insurance and reinsurance, our activities, which are a function of GDP, of course, whatever impact on the national income will reflect immediately on insurance and reinsurance companies. So the exogenous factors, we have no control over. We might try to estimate, but nobody will take that chance now to make a forecast, unless or except for large international survey companies.
But as for the endogenous factors, the ones that depend on us, we've covered before here, right? It is only a day's work. It is part of our industry. And we'll look at our portfolio. If we need to do a re-underwriting, we'll do it.
In other words, when we talk about an assessment of the portfolio, we're talking about -- from 2 different fronts. What kind of appetite the company has a risk and in what and where, in which geographies? And number two, what kind of quality am I willing to take for risk for each of the portfolios? And how can I improve that? And how can I adjust that vis-à-vis the risk level? And expecting if that risk is not generating any value and an impact in solvency, I'll do something else if it's pressuring our margins or our technical reserves and provisions. In short, that's a very complex analysis with one single objective, which is value generation.
And claims. Within all that, claims might work as a tool to solve. But we always look it from the value generation standpoint, look at claims, and we'll do that looking at the different segments where we work. To talk about an average claims level is too generic. We need to look at from business line from business line standpoint. Some business lines have more recurrence. Others have fewer recurrences. So we need to look at it in a very close-up way. And the trade-off will come in terms of volatility. So looking at the claims in this as an average trend at a certain moment could lead to the conclusion. In fact, we'll be managing a company one way -- well, the way you expected, other words with ups and downs, high volatility. So to avoid that, the assessment of the portfolio and the balance of the portfolio, balance including risks or higher risks or lower risks, will be very important in that assessment. And that will provide us with more reassurance, more comfort in terms of high risk, high volatility business.
I just remembered something very important. We are very anxious to know about the new regulatory framework which is being put together by the Brazilian government, by the regulatory agency, which might present -- as far as I know, might bring some relief in terms of infrastructure projects in Brazil. And it might also bring a mandatory aspect to it that will have our underwriting business. So there's a sea of opportunities out there, and we are focused on analyzing all that.
And something which was in the news recently and -- which has become bigger in the second half because it's of interest not only to economic agents but also to the government, and I'm talking about the unlocking of judicial guarantees by insurance guarantees. That will generate a new market, a whole new market where right now, local reinsurers are not operating or if they are, they are operating at a much lower scale than they could when we look at their balance sheets, so when you look at the quality of the underwriting these companies have and the level of solvency those companies have. Thank you.
Mario (sic) [ Otávio ], this is Toneto. Just to complement your question about credit -- tax credits you mentioned, you are correct. There was a complement of the tax credit, which had been put together on the previous years at the London office. So we're talking about a possible compensation taking place in Brazil. In 2018, we made an initial provision based on numbers coming from London. Then we reviewed that provision to adjust it to Brazilian regulation. The administration, the management is assessing that business plan to either confirm or not going forward. If we have any news, we'll share that with you going forward. This is a complement. This is not an effect which is going to happen every quarter. It's not recurring. It's a one-off, nonrecurring effect, okay? Nonrecurring, yes, correct.
Just to give you a better idea of how we need to take this seriously. We need to look at the business model to know if we can use those credits in an efficient way, centralizing operations in London as if London were a true subsidiary of the Brazilian reinsurance company. So it includes all of that reassessment and checking the feasibility of costs, right? It needs to be cost-effective. Thank you, everyone.
I think you're doing the right thing to address the issues. But my question has to do with the quantitative side. I have a couple of questions. Giovanna's question, I don't think it was clear whether risks are going down. I would like to address the same questions. When you look at your portfolio today -- and why do I ask the question? We're trying to find out how much you would have to adjust prices abroad. We would like to better understand that number. We would like to understand the quality of that portfolio.
My third question. I think Isabel left the company in October, and now she's back in the company. What happened in that case, given the recent problems the company had to go through?
What you said is very important. Of course, you need as much information. That's our goal. We want to be more transparent. And it is a process you cannot put in place in just 3 months. We're doing our homework, which is to say we're trying to present appropriate numbers, effective data so that you can better analyze the company. That was the first thing. And then we're going to improve the quality of the supporting documents. We're going to provide historical records or data as much as possible, but I would like to ask you to be patient because that's part of a process. We'll do -- have more complete information to make that available to all of you. We are working hard to improve in that direction.
Premiums will become more relevant because of the exchange rate. Strategically, we're more focused on Brazil and Latin America. These are, again, the most important regions to us within the pandemic framework. That's where we'll be driving our growth. I cannot give you any projections as to the growth in Brazil and Latin America. That growth came from abroad given the exchange rate, but again, the most important thing is to focus in our core regions. As to the duration of our portfolio, the portfolio abroad has a greater impact on the life segment. When you realign those portfolios, that portfolio from abroad tends to go down in terms of duration if we make that decision. This is the re-underwriting process, as Cassio put it.
As to the other issue you raised, Cassio will be addressing the issue of Isabel. I did not quite understand your question about Isabel so that I can give you a proper answer.
I did not understand the answer about the duration. Can you give us an order of magnitude of that portfolio?
I'm not giving you that number. We do not have that number. It's not being announced now. We, of course, operate with numbers that are announced to the market. Once we have that number in our MD&A, we'll be breaking that down by portfolio, by Brazil and abroad. Of course, there is strategic information because competitors may benefit from that information. We will give you proper information not hurting the strategic goals of the company. We're following international standards used by the international reinsurance. Once we start canceling and if it's relevant, of course, we have to announce that to the marketplace. Once we come to the conclusion that we can grow that portfolio 20%, when we do so, we announce that. If we're reducing that 20% because there's only garbage in there, we have to announce that, too. We're not doing anything other than that to come to the market and say, "We made a strategic decision. We're going to operate. We're leaving that market. We're starting to do business here or there." You can count on our transparent attitude. This transparency record will improve. We'll be starting assessment, re-underwriting risks in the near future, in the following weeks and as we come to objective conclusions that can help in valuing the company. And of course, we are going to share that with you. You can count on our total transparency. Thank you.
Can you give us some more detail about what happened to that employee, Isabel? That's our homework.
Isabel is an asset to the company. She's back. She is now the VP of Reinsurance. I am honored to have such a person in our Executive Committee, a young woman, an executive. We are a company committed to diversity and inclusion. We're going to be very strict along those lines. We'll be making an assessment with the -- Isabel's team. She's a specialist in retrocession. And I'll provide you with an appropriate answer.
That's what we're trying to understand.
Mr. Eduardo Nishio from the Plural Bank.
I have a couple of follow-up questions. What's your take on the ROI? Almost BRL 1 billion was not used in 2019. What happened? How come this number did not show up in our financial statements. Could you elaborate on what the process behind it was? What are you doing to mitigate that? I would like to understand the disconnect between these BRL 2 billion from efficiencies and liquidity and a 1.8x solvency rate. Is that because of poor regulation? Is it temporary? But that impacts dividends payouts. Should the capital be more robust as of now? Are you going to issue debt, equity?
And finally, your foreign portfolio, what's the breakdown for the portfolio abroad? Could you please explain what the portfolio looks like?
I'll just give you some information and then I'll turn over to Werner. As to the investigation, the audits and the consulting services, we should not forget the fact that we have 3 executives in the company that have worked in the financial industry. And then Werner went on to IR; Toneto from general management of a major insurer; and I from the financial industry. And I ended up in turnarounds, specializing in strategy and marketing. The 3 of us have that financial background, in a nutshell. That is the first aspect of that process. So I have to right -- or to ask the right questions. What's important is not the answer, rather is to ask the right questions that will lead us to what we want to find there. So within that framework, we know that, that financial background, controllership, accounting experience and the answer is not as sound, we know there's something that is not consistent.
The second step is to listen closely what everyone has to say. From the bottom of the pyramid, every employee knows what's going on because it has to do with Italian school of business. I had an Italian boss that said, "Listen to those workers. You extract information that you need." We had that fantastic school in Banco do Brasil.
Having that as a backdrop, some data and asking the right questions, we made the right decisions trying to address the most important issues. And then before I turn the question -- the microphone over, you talked about regulatory liquidity to the poor regulation infrastructure. The regulation -- or the regulatory agency is one of the most conservative in the world. And why is that? Just like I said, in the '60s, in the '70s, we're growing, then hyperinflation, and then the next problem -- one problem after the next. So the regulation that starts in 1966, Brazil is one of the few countries in the world in which a manager is liable by providing their assets as a pledge. It does not happen anywhere else in the world. So when you have that mismatched assets that are offered to cover reserves, vis-à-vis the TRA assets, the Brazilian regulatory agency knows that because they've gone through hyperinflation, impeachments. Brazilian regulatory agencies are keen on demanding liquidity. Real assets or real estate cannot be used to cover reserves. And other operational assets are not good either because people criticize regulatory agencies. But in this specific case, and I learned that back in 2008, why is it that Brazilian companies are not as exposed to bankruptcy? Look at how many insurers went bankrupt in the past 30 years. Compare that to any country, any other country in the world. That is the cause -- that is the result of having a very conservative regulatory agency. But again, when you look at a growing market like ours, it's only natural. We have to give credit where credit is due. Regulator after regulator play a key role in maintaining the Brazilian market protected from the major problems we had around the world.
Let me talk about the investigation process. We started out with the Berkshire event and we had that forensic investigation to find out where the problems were. When we took office, we instituted a Management Committee for that investigation and we had reports internally and externally. And this has to do with other investigations, and we had to assess the entire process. This was conducted independently. A separate group took care of it with external consultants, lawyers supporting the process, and then we hired an auditor. And this is reflected in the presentation we made today. Of course, it's not easy. It's not pleasant. That was not our goal, but we had to take care of those issues. We had to face them head-on and we had to conduct the entire process to the best of our abilities. That process has been concluded. There's nothing else to be investigated. We provided those results to regulators and to the public ministry to take that investigation on.
As to what we are going to do, when you look at item 29.2, there is some indication of what we want to do: corporate governance, people management, benefits to executives, external controls and also accounting aspects. And those actions that we are planning to take are described there.
Those BRL 989 million were paid out but not booked in our financial statements, is that right?
That adjustments we made, the company was paying out those claims but not booking those records. Results were affected due to several factors. Payment is one of them, the provision of payments, the projections once you have a claim. Okay, there's a hurricane in the Caribbean. You have an initial projection, can be more conservative, less conservative, and then you adjust it down the road. When you say about affecting results, this is based on projections that were made not properly enough. And then part of it because records that were postponed, technical accounts that were held, that's what affected those financial statements, not related to payments specifically. And again, you had a problem in payments as well that were not properly booked in previous financial statements. That's why we made those announcements. Everything has been audited and double-checked and confirmed.
Let me clarify something and put it very simply. Whenever there is an evidence of one amount related to one event, a claim namely, the partnership, insurer and reinsurer, have to book based on accounting principles, generally accepted accounting principles, that amount. Any postponement, especially when it moves or it carries over to the next fiscal year -- when a question was asked to Werner whether it's something that was sold in February, you have to book it in March, it should be booked in the previous period. That's the appropriate kind of question because if it falls within that period based on accounting principles in Brazil, you have to book that within the same fiscal year. For example, if you have a claim and you received a report that there's a projection, let's say that claim happened in 2017, the projection came in 2019, how should you book that claim in 2019? And why? Because the time period between 2017 and 2019 is covered by a reserve that's called claims that did happen but were not informed. Any postponement, any change, any alterations should be subjected to doubt.
So let me put it very clearly. It's not reinventing the wheel. This is a pure, simple accounting principle, and they are audited by the Brazilian accounting institute and accounting authorities and auditors and regulators, very simple. It's not that the payment was made and not booked. It was -- the payment was not made and was not booked, just like you said in your example. That was not booked once we heard of the amount that was potentially paid.
This is Werner. These adjustments are all in the 1 4 1 for 2019 numbers and also in 2020, problems that occurred in early 2019, everything in our ITR.
Let me address the other part of your question, the ROI portion. It's -- is it a recurring ROI? And what kind of level should we expect? In previous years, you had financial statements that would positively affect financial results of all companies, insurers and reinsurance alike. And this is not going to happen in the next years. Our goal is not to put pressure in our assets so they'll not be as profitable, but the operational result, so our intention is to improve the company's operational results. So there will be more technical margins that are sustainable. That's what we're looking for. I cannot give you another ROI level, but something that will address that issue, which is sustainable results with a smaller insurance base according to international standards, that's our results -- that's the goal for our results. As soon as we have an estimate, we'll be announcing that.
And let me address the capital issue now. Toneto, address that question?
You talked about breaking down the portfolio abroad and in Brazil. We do not have that breakdown in reinsurance. That's one of our commitments, to bring that information to our MD&A. And let me remind you that there is some information that we're not going to announce due to strategic [ regions ]. Those that we already do for the Brazilian market, we can do that, too, for the international area as well.
Our next question comes from Mr. Azevedo of Banco Safra.
Still on the sustainable results on the company. I'd like to understand a bit about the financial result. You just mentioned a portfolio where we saw the financials going down. I'd like to understand the foreign exchange guarantee. How does that work? Exchange rate goes up, and we have worse financials but better operational. That is one thing offset the other. That's my first question, to have a better understanding of that dynamics of the financial results.
And then the second question, about taxes. When we adjust 2019 results, when we look at the tax credit operation in London, we might arrive at an ROI below 20%. And the tax rate was usually low. What can we expect going forward in terms of taxes? And looking at the schedule that you've -- you disclosed in terms of expectations for tax credits, I understand you expect to recover results and reach a more recurring point at around 2020. Is that how you see it?
About estimates, expectations and so on, I'll pass the floor. But about the accounting mechanism, just to be clear, as I said before, because we're headed in foreign exchange, foreign currency, if you have a premium to receive -- of USD 10 and the U.S. dollar has appreciated, when I get paid, I'll get paid in the equivalent amount of BRLs. But suppose the U.S. dollar appreciated 10%, when I receive that premium, that premium will be worth 10% more, 10%, 11%. It will be under the premium account. That disclosure is not made according to our accounting principles because the correction of the provision of claims to be settled is another effect. I have a claim, for example, worth 10, 10 under my liabilities. It's 10 under claims payable. When you revalue that claim, what do we have? We adjust the value of that liability. It is an outstanding liability to be paid. And the counterpart, the debit or credit, will go straight to revenue.
So we have a specific entry in the financial statements which will capture the foreign exchange variation, but what -- in what respect to premium, it will go direct to a different account. So that's why that's not clearly visible in balance sheets. When you have a foreign-exchange packed index, it will not be disclosed clearly. It will be indirectly shown. But as we're going through a process of continuous improvement, we want, in the future, to have a clear reference to foreign exchange currency revenue or balance sheet movements, not for the next one, but maybe the third quarter. Perhaps we have other priorities now. But in any event, we can give you a little more color around that. Thank you very much for the question. I give the floor over to Werner now for him to complement your questions.
The ROI is something we're very -- we'll be very careful about in terms of making estimates. As soon as we can, we will bring this to market. As I said, when we remove that part of the result that Cassio has just explained, we have a lower return in the coming quarters. Of course, that's expected. But the remainder of the operation is -- in terms of operating results, the tendency is to reach a higher margin. To offset that loss in the financial front, that's our objective, that's what we're working for, right? That's why we are looking at where we stand geographically. That's why we're making all those alterations also because of the COVID situation. So in the long run, we expect IRB's results to show and reflect that. So as for estimates for ROI, we'll come to that when the timing is right, when we have the size, reliable assets to provide. And I'll bring that to market, I can assure you. And I'll do it as soon as we have a new guidance in place.
We now close the Q&A session. I'd like to turn the floor back over to Mr. Cassio for his final remarks. You have the floor, sir.
Picking up where the last question left off, you were talking about the financial results. This is not specific for Brazil. It's valid around the world. We're actually slightly better than the rest of the world. There is only one way to offset financial results which are going down. Think about a company that works with life insurance. But specifically for a company like ours where we analyze different risks in areas and large risks, there's only one way for us to offset and compensate that. How? Underwriting and -- through underwriting and conducting a fee assessment of our pipeline. For us to be able to shrink those business which are not faring that well to the benefit of other businesses, other geographies which are faring better, that's where our challenge lies. And other analysts can see that clearly, be it in relation to other players in other markets, other industries both here and abroad.
In any event, value creation is something which should come first, and we have the clear advantage. Irrespective of the reallocation of claims, as was mentioned, we have a combined ratio which is fantastic. So our combined ratio is an indicator we should have in our radar, in our minds all the time. So on top of that, the efficiency ratio for the company as well, the expense ratio, operating expenses, the company's SG&A, all of that will provide a combined indication that will remain clear for you guys and analysts in terms of value creation that the company is delivering. A reinsurance company profile is based around consistent results in the long run, and it's important to have that in mind. That's the first.
Now in closing, we are committed to being transparent. We're going through a continuous improvement process. So every step we take at -- in every time we talk with you, we want to do better. And that is a commitment that we have taken on to be better, be more transparent, to be able to deliver the best, more precise information so that you can really assess the company's value.
As a main remark, my closing remark actually, our conversation today, would have been the quick one if we haven't had very clear in our minds the idea that we do have a funding strategy for the company. That's the key point of today's conversation. That's a landmark that will help, as I said, anchor the ship in safe harbor. So that -- as I said before, a ship, a boat, even if we want to anchor it in difficult times, anchor it at a safe harbor, a ship's mission, a ship's raison d'être is to be out at sea to do what they were meant to do. And we need to have good people at the helm, good people on deck to serve clients, to serve the company and the whole chain. So we need to have more than a plan, and that plan should be linked to the truth, to facts, to the regulation. And going back to the principles, the basic principle that guides us all, there's no right way to do the wrong thing. And how fast are we going to move? To summarize the speed of that -- of this management is no rush but no pause. Values that characterize this company's management today is that we cannot neglect. We need to work ceaselessly but with a single concern in mind, that is to do the right thing in a reasonable amount of time.
So based on all those clear principles I've just laid out, I'd like to remind you that the focus of this management is to focus on the company's indicators. And the output of those insurance companies needs to be the operating KPIs so that they can generate value that will reflect on the share value at the end of the day, the share value. We need to become increasingly attractive to capital markets. We need to fight for our shareholders' money. They could be buying any share, but we need to be attractive and make them believe we are the better option, that we offer the better and the best assets for those interested in investing.
So with that, we are in the service, available to our shareholders, trying to provide quality service to our clients through well-constructed contracts and working in an environment that acknowledges our associates. This is the only way, I believe, we can operate consistently once again to sales safely.
Thank you very much. This will be the company's style going forward. We're going to be talking to everyone, small clients, big clients. So there's going to be a certain change in style when compared to previous managements. Okay. Thank you again. Have a nice weekend, and be safe.
IRB's conference call for shareholders, investors and analysts is now over. Thank you all for participating. Have a nice day, and thank you for using Chorus Call.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]