Company: BBD
Filing Date: 2025-03-31
Form Type: 20-F
Source: 0001292814-25-001244
Chunk: 424

Company: BANK BRADESCO
Filing Date: 2025-03-31
Form: 20-F
Item: Item 19
Chunk 424
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6.      Insurance/Underwriting risk  

Underwriting risk is the risk related
to a possible loss event that may occur in the future and for which there is uncertainty over the amount of damages that result from it.
The risk arises from an economic situation not matching the Company’s expectations at the time of issuing its underwriting policy
with regard to the uncertainties existing both in the definition of actuarial assumptions and in the measurement of compliance cash flows,
as well as for pricing and calculating premiums and contributions. In short, it refers to the risk of the frequency or severity of loss
events or benefits exceeding the Company’s estimates.

Historical experience shows that the larger
the group of contracts with similar risks, the lower the variability in cash flows. In that way, the risk management process seeks to
diversify insurance operations, aiming to excel at balancing the portfolio, and is based on the grouping of risks with similar characteristics
in order to reduce the impact of individual risks.

Risk underwriting management is carried
out by the Technical Superintendence and the policies of underwriting and acceptance of risks are periodically evaluated.

Uncertainties over estimated future
claim payments

Claims are due as they occur, and the
Group must compensate all covered claims that occur during the term of the contract. The estimated cost of claims includes the direct
expenses to be incurred in their settlement. Therefore, considering the uncertainties inherent to the process, the final settlement may
be different from that initially planned.

Asset and liability management (ALM)

The Company periodically analyzes future
cash flows on assets and liabilities held in portfolio ALM - Asset Liability Management. The method used for ALM analysis is to
observe the sufficiency or insufficiency of the present value of the cash flows arising from assets in relation to the present value of
the cash flows arising from liabilities, and the duration of assets in relation to that of liabilities. The aim is to verify that the
situation of the portfolio of assets and liabilities is balanced in order to honor the Company’s future commitments to its insured
persons.

In managements view, the actuarial assumptions
used to generate the flow of liabilities are in line with international actuarial practices and with the characteristics of the Company’s
product portfolio.

Risk management by product

The continuous monitoring the insurance
contract portfolio enables us to track and adjust premiums practiced, as well as to assess the need for alterations. Other monitoring
tools in use include: (i) sensitivity analysis, and (ii) algorithmic