We are ending a year of many challenges at Liberty and we have ended 2016 on the same level in comparison with the previous year. We outperformed the market, which experienced an estimated decline in the period of 2% (bearing in mind the same mix at Liberty). Our profitability continued to perform well: pre-tax income is in line with the plan, indicating that we have a health and sustainable business. Thus, we have aligned our three objectives: to conduct ethical business, be profitable and grow, in that order of importance.
There are many achievements we can celebrate, as well as several lesson on which to reflect. This is because we cannot talk about our results in 2016 without taking into account the difficult scenario Brazil is facing. For the year, the country was down by 3.5%, and our business is sensitive to economic instabilities. New car sales, for example, were down by 19.8% over 2015, and by 45.3% since the record of 2012. This scenario has directly affected our Auto portfolio. In the same way, the increase in unemployment, from 8.5% to 11.5%, adversely affected sales in the Affinity and Group Life channels. Furthermore, the number of customers unable to pay their policies doubled in 2016.
Nevertheless, our results – and not just our financial results – indicate that we are on the right path. In 2016, we were featured in nine awards – most of them focused on exceptional service. And among the important projects for 2016 there are five new products – Transporte Fácil, Liberty Apartamento, Liberty Home Office, Auto Essencial and Liberty Festas – and three niches for Commerce and Services. Diversification is a fundamental aspect of our strategy, since having a portfolio that is the most up-to-date and appropriate for the different consumer profiles affords us competitive advantages. We are well aligned with our target, which is to improve our mix, increase the share of non-Auto products and attain a ratio of 76%/24% for Auto and Other Products.
We are always in search of continuous improvement and innovation. In December 2016, our telemetry project (Direção em Conta) earned the Award for Innovation in Insurance, sponsored by the National Confederation of Insurance Companies (CNseg).
We are striving to increasingly incorporate the culture of innovation, and the best way is through LMS – our management system. In 2016, we identified 7,898 improvements, of which we adopted 4,814; we carried out 8,288 Vá Ver (Take a Look); and we concluded 161 Problem-Solving Sessions which has helped us to boost our results, even against the challenging scenario. The best initiatives were recognized and shared in the Applause Program.
And what would become of Liberty if we didn’t provide the care everyone deserves? In 2016, the climate survey produced a result that showed we are making progress on this issue. The index jumped from 75% to 82% in just 18 months. This indicates we are on the right path.
The year 2017 will be a very challenging period. Nevertheless, our strategy and our objectives will not change: we will continue investing in new systems and products, enhancing processes so as to offer our customers and channels an exceptional service, while looking after our key resource: people. I have no doubt that we will continue on this path, because we have at our disposal an elite and engaged team, two characteristics that ensure success.
Thank you for the year we had and, together, let’s build an excellent 2017!
