SOURCE: SulAmerica S.A.
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February 28, 2008 17:46 ET
SulAmérica's Net Income Increased 109% to a Record Level of R$ 321 Million in 2007
SÃO PAULO, BRAZIL--(Marketwire - February 28, 2008) - SulAmérica S.A. (BOVESPA: SULA11)
announces today its results for the fourth quarter of 2007 and for the
twelve months ending December 31, 2007. In a year which saw the successful
Initial Public Offering (IPO) of the Company, net income increased 108.5%
to a record level of R$ 321 million (increased 120.2% to R$ 339 million,
excluding non-recurring items), while the return on average equity (ROAE)
was 22.3% (23.6%, excluding non-recurring items). Total insurance premiums
reached R$ 7 billion, up 5.9% over 2006 (3.9%, excluding non-recurring
items) and up 10.6% in the fourth quarter of 2007 over the same period of
the prior year.
The operating performance of the main business lines improved in 2007,
continuing the trend of improvement of recent years. The health insurance
business, which represented 55.6% of total insurance premiums of the
Company in 2007, saw premium growth of 12.8% in 2007 (8.8%, excluding
non-recurring items). Group health insurance, which represented 33.3% of
total premiums and which has been the strategic focus of the Company in
this segment, grew 13.1% in 2007, led by the small and medium sized
enterprise (SME) segment, which grew 42.4% and represented 5.5% of total
premiums.
The auto insurance business, the second largest business line with 28.3% of
total premiums, returned to growth in the fourth quarter of 2007, with
premium growth of 9.8% over the same quarter of 2006, compared to a 7.3%
growth of the market, according to data from SUSEP (the insurance
regulator). In São Paulo, which has been the focus of strategic initiatives
by the Company in 2007, including the Rádio SulAmérica Trânsito, premium
growth was 17.3% in the fourth quarter of 2007, better than the market
which grew 5.1% in this region. SulAmérica ended the year as the #2 auto
insurer in Brazil, with a market share of 14.7% and an insured fleet of 1.6
million vehicles.
The Company's overall loss ratio improved 310 bps to 68.4% in 2007
(improved 160 bps to 69.8%, excluding non-recurring items). The health
insurance loss ratio continued the trend of improvement since 2004 with an
improvement of 570 bps to 73.2% in 2007 (improved 300 bps to 75.9%,
excluding non-recurring items), including an improvement of 380 bps to
81.7% (excluding non-recurring items) for the more highly regulated
individual health portfolio. These improvements are due to the refinement
of the pricing and underwriting policies of the Company, an efficient
claims handling process and effective management of the third-party
provider network to control costs.
The auto insurance loss ratio was 60.1%, 350 bps better than the average of
the market. This improvement is due to further refinement of the claims
handling process, including actions aimed at fraud prevention,
renegotiation of service contracts with auto repair shops and the roll-out
of the C.A.S.A. centers (Centro Automotivo de Super Atendimento -- an
innovative concierge service center which offers superior service quality,
comfort and security to clients at the moment of a claim, while affording
the Company more control over the claims handling process), among others.
Administrative expenses increased 12.4% in 2007, corresponding to 13.0% of
retained premiums for the year. This increase is mainly due to the impact
of R$ 42.2 million of non-recurring expenses related to the IPO and the
increase in advertising and marketing expenses related to Rádio SulAmérica
Trânsito in São Paulo. Excluding the impact of the IPO expenses,
administrative expenses increased 6.9% in 2007, corresponding to 12.6% of
retained premiums for the year.
The Company's overall combined ratio improved 140 bps to 97% in 2007
(improved 50 bps to 97.9%, excluding non-recurring items).
The return on the investment portfolio reached R$ 600.3 million in 2007, up
33.1% over 2006 and corresponding to an average yield of 123.8% of CDI
(inter-bank interest rate).
Investor Conference Call
On Monday, March 3, Arthur Farme d'Amoed Neto, Investor Relations Officer,
Kevin Martins da Silva, Chief Financial Officer and Laênio Pereira dos
Santos, Chief Accounting Officer, will hold a conference call with
investors and analysts to discuss the Company's 2007 results and current
developments.
Portuguese:
Telephone: +55 (11) 2188-0188 - code: SulAmérica
Time: 10.00 a.m. (BR) | 8.00 a.m. US EST
Replay for 7 days: +55 (11) 2188-0188
English:
Telephone: +1 (973) 935-8893 - code: 31335379
12.00 p.m. (BR) | 10.00 a.m. US EST
Replay for 7 days: +1 (706) 645-9291
The conference call will be available live via webcast at
www.sulamerica.com.br/ri.