SulAmerica: Second Quarter Revenue Grows 9% and Reaches R$ 2 billion

SAO PAULO, Aug. 9 /PRNewswire-FirstCall/ -- Sul America S.A. (BM&FBovespa: SULA11) today announces its second quarter 2010 results. Revenue grew 9% this period compared to the same quarter 2009 and reached R$ 2 billion. During the semester, premiums totaled R$ 4 billion, a growth of 12% compared to the first semester 2009.

The second quarter sales performance was due to a 16% surge in health insurance, the company's main portfolio and which accounts for 63% of its total premiums. Auto insurance also had a positive impact on the company's performance, with a growth of 16% in the quarter. This portfolio represents 25% of SulAmerica's overall insurance premiums and comprises 1.2 million insured vehicles, with a 21% increase during the period. This semester, the company's auto premiums increased 19%, topping the 17% market increase, according to statistics issued by Susep - Superintendencia de Seguros Privados, a private insurance association.

"Insurance sales, mainly health insurance, benefited from renewed economic growth. There were inclusions of new beneficiaries to the group health insurance portfolio, as well as improved sales to small and medium businesses. Regarding auto insurance, in addition to continued high sales of new vehicles, the company has been successful in formatting its products and pricing policy. We have exceeded the market growth and vigorously increased our fleet of insured vehicles," stated Thomaz de Menezes, president of SulAmerica.

The company's total loss ratio --which is the percentage of policies used to cover the cost of claims--was 76.8% during the second quarter, a 1.9% improvement over the same period in 2009. The loss ratio for the semester was 74.3%, a 1.8% drop. In the auto portfolio, the company's improved loss ratio was even greater, with a drop of 5.4 percent totaling 57.9% the second quarter. The health portfolio registered a 0.6% increase in loss ratio, which totaled 85.8% during the same period.

"The drop in the auto loss ratio rate is due to improved subscription and claims regulation policies, allowing for better risk coverage and greater claim cost control," said Arthur Farme d'Amoed Neto, Corporate vice president and Investor Relations. "The health portfolio is in line with the seasonal increased use frequency, and higher medical services costs in the second quarter, which have impacted the loss ratio."

Net income for the second quarter was R$ 93.1 million, an increase of 12% compared to the second quarter 2009. This result includes the company's gains through the sale of real estate assets. In June, Fitch Ratings, the risk rating agency, raised SulAmerica's rating to BB+, confirming that the company's consistent performance, along with the expectation of maintained satisfactory efficiency indices, will tend to allow continued good profitability, despite a likely environment of increased competition.

SOURCE Sul America S.A.