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.