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SAO PAULO, May 8 (Reuters) - BB Seguridade Participações SA beat first-quarter profit estimates on Monday as Brazil's largest listed insurance holding company underwrote more dental insurance premiums, helping offset lower investment income amid a harsh recession.
The insurance unit of state-controlled Banco do Brasil SA earned 992.8 million reais ($313 million) in net income excluding one-time items last quarter, above a consensus estimate of 959.260 million reais. Recurring profit, as the indicator is commonly known, fell 8 percent from the previous three months.
Revenue at BB Seguridade's business lines - underwriting and accumulation, distribution and investments - fell last quarter. Recurring return on equity hit the lowest level in almost four years as an aggressive interest-rate cutting cycle by the central bank trimmed average yields for BB Seguridade's bond holdings.
The numbers reflect Chief Executive Officer Jose Mauricio Coelho's challenge of increasing BB Seguridade's revenue as parent Banco do Brasil downsizes branches and other sales channels to cut costs. BB Seguridade's recurring net income grew 3.7 percent in the 12 months ended in March, within a 1 percent-to-5 percent target for this year.
Recurring ROE slipped to 47.3 percent last quarter from 52.2 percent in the fourth quarter and 55.2 percent a year earlier. The number missed a Reuters poll estimate of 49.4 percent.
A surge in dental insurance premium underwriting offset declining net life, mortgage and rural sales last quarter. Revenue at BB Seguridade's underwriting and distribution businesses rose less than analysts expected.
Management plans to discuss results later in the day.
$1 = 3.1744 reais Reporting by Guillermo Parra-Bernal; Editing by W Simon