Investor Update 3Q10

Transcription

1 Investor Update 3Q10

2 SULAMÉRICA AT A GLANCE Largest independent Brazilian insurance group Solid reputation and widely-recognized brandname Multiline insurance business supported by high-quality products and services Nationwide footprint and strong relationship with independent brokers Experienced and qualified management team 2

3 MULTILINE STRATEGY OFFERS MULTIPLE GROWTH OPPORTUNITIES Health insurance Portfolio of 2.0 million members, covered by a network of over 25 thousand medical services providers around the country Automobile insurance Insured fleet of 1.3 million vehicles, fast and efficient assistance services for claim support Insurance premiums Total R$6.2 billion (9M10) Health 62.6% Other P&C insurance Expertise in commercial and individual lines Life & Pension insurance R$2.6 billion in pension reserves, focused in independent institutions Asset Management R$ 18.5 billion in AUM, with strong presence in institutional portfolio Life & Pension 6.8% 5.7% Other property & casualty 24.9% Automobile 3 Latest update: June 2010

4 STRONG TRACK RECORD BUILT ON SUCCESSFUL PARTNERSHIPS AND INNOVATION Founded as a life insurance company Pioneering healthcare operation Joint venture with AETNA BRL 775MM IPO USD 200MM Eurobond Thomaz Menezes announced as the new CEO End of the partnership with Banco do Brasil st half nd half 2010 Portfolio increases and includes auto and P&C Partnership with Banco do Brasil in automobile and health ING buys Aetna s participation in SulAmérica New headoffices in Rio 4 4

5 WORLD-CLASS CORPORATE GOVERNANCE SULASA ING Other (1) 55% 45% SULASAPAR Free Float 8% 33% 21% 38% Sul América S.A. BM&F Bovespa: SULA11 Bloomberg: SULA11 EQUITY BZ <GO> 100% tag-along rights, exceeding minimum requirements of the L2 listing segment One-third of independent members in the Board of Directors Advisory committees to provide support on specialized matters Foreign contribution and local expertise to add quality to decision making process 5 Latest update: April 2010 (1) Management and Affiliated Shareholders

6 STRONG PERFORMANCE WITH ECONOMIC IMPROVEMENT % Total industry premiums R$ billion (P&C, Life and Health) CAGR 05-09: +14.0% % 15.7% 15.7% 11.5% M09 6M10 Premium volume +13.4% YoY growth Insurance premiums breakdown Total R$51.9 billion Other property & casualty Life risk 23% 16% 18% 30% 13% Automobile Life accumulation Health insurance Sources: SUSEP, FENASEG and ANS Sources: SUSEP and ANS 6

7 INSURANCE BUSINESS STILL UNDERPENETRATED Insurance penetration premiums as % of Brazilian GDP Insurance penetration premiums as % of GDP, 2009 CAGR 05-09: +3.1% 3.2% Taiwan Netherlands UK 16.2% 13.6% 12.9% #1 #2 #3 2.7% 2.8% 2.9% 3.0% South Africa Hong Kong USA Italy 12.9% 11.0% 8.0% #16 7.8% #18 #4 #5 Spain 5.7% #28 India 5.2% # Chile China 3.9% 3.4% #40 #44 Brazil 3.1% #47 Russia 2.3% #54 Source: SUSEP, ANS and IBGE Source: Sigma report #2/2010 (Swiss Re) 7

8 PRIVATE HEALTHCARE: ROOM FOR CONSOLIDATION Industry consolidation * Healthcare industry Total Brazilian population 190 million Regulated Private Healthcare 1 22% Self-insured government funded 2 13% Operators (thousand) Source: ANS * Excludes dental operators Membership (million) Universal Public System only 65% Source: ANS (1) Private healthcare excludes dental (2) Healthcare assistance for civil and military public servants 8

9 PRIVATE HEALTHCARE: CHALLENGING OPPORTUNITIES Total revenue R$33.6 billion (2Q10) Membership by type 44 million (2Q10)* HMO 30% 20% Insurance 77% Group Health 36% 14% Other (1) Individual Health 22% Cooperatives (2) Source: ANS 1) Other: ASO, self-managed plans, dental, non profit institutions 2) Medical and dental Cooperatives Source: ANS * Does not include 14 million members of dental only 9

10 PRIVATE HEALTHCARE: ROOM FOR CONSOLIDATION 100% Membership concentration Total membership: 44 million 80% 202 operators 80% of the total 60% 40% 22 operators 40% of the total 20% 6 operators 20% of the total 0% ,000 1,100 1,200 10

11 AUTOMOBILE: LOW PENETRATION RESULTS IN STRONG GROWTH POTENTIAL New car sales (million) Inhabitants per vehicle CAGR 05-09: +16.3% % M09 9M Source: ANFAVEA Source: ANFAVEA (Brazilian Automotive Industry Yearbook 2010) 11

12 AUTOMOBILE: LOW PENETRATION RESULTS IN STRONG GROWTH POTENTIAL Auto Insurance Industry CAGR 04-09: +8.0% Covered vehicles Total fleet: 42.8 million in CAGR 04-09: +10.5% % 9.4 Insured fleet 29% 71% M09 6M10 Auto insurance premiums (R$ billion) Covered vehicles (million) Non insured fleet Source: Fenaseg and SUSEP Source: Fenaseg and seguradora líder 12

13 DIVERSIFIED DISTRIBUTION SUPPORTS STRATEGIC POSITIONING Nationwide operations More than 100 points of presence, including 14 branches in the main cities of the country 21 auto service centers (C.A.S.A.s), 3 new units implemented in 2010 Network of +30,000 independent insurance brokers Distribution partnerships with leading financial institutions Client potential: 26 million 16 thousand bank branches Main products distributed: automobile and residential 13 * Exclusive

14 MAIN EVENTS IN 3Q10 AND SUBSEQUENT EVENTS Brasilsaúde Stock split Award Abrasca of Value Creation Partnership with Credicard Best Corporate Governance practices S&P reaffirms "AMP-1" rating for SulAmérica Investimentos Opening of two Auto Super-Service Centers (C.A.S.A.s) Brasilveículos 14

15 GROWTH IN ALL OF MAJOR LINES Total insurance premiums R$ million Insurance premiums Total R$6.2 billion (9M10) 6,869 CAGR: +12.4% 7,723 8,680 5, % 6,157 Health 62.6% 2007* M09** 9M10* Other property & casualty 6.8% 5.7% Life & Pension 24.9% Automobile Recurring figures **Excluding figures from Brasilveículos Companhia de Seguros 15

16 GROWTH IN HEALTH DRIVEN BY GROUP POLICIES 3,758 Health insurance premiums R$ million CAGR:+9.6% 4,099 4,515 3, % 3,853 Covered individuals Total 2.0 million members (9M10) Individual ASO 2007* M09** 9M10* 13.3% 14.7% Health insurance members Thousand +11.8% 10.6% SME 1, , ,792 1, , Group 61.3% 926 1,109 1,248 1,203 1, M09 9M10 * Recurring figures 16 Group Individual ASO

17 PRICING POLICY: THE KEY FOR PROFIT Automobile insurance premiums R$ million Insured vehicles Vehicles in thousand 1,984 CAGR:+21.6% 2,346 2,933 1, % 1,531 CAGR:+6.6% 1,692 1,771 1,922 1, % 1, M09* 9M M09* 9M10 * Excluding figures from Brasilveículos Companhia de Seguros 17

18 UNDERWRITING POLICY TARGETS OPERATING GAINS Health loss ratio % Loss ratio % 76% 76% 81% 81% 81% 70% 71% 73% 76% 74% 2007* M09 9M10* Automobile loss ratio % 2007* M09** 9M10* 60% 64% 62% 63% 61% M09** 9M10 Recurring figures **Excluding figures from Brasilveículos Companhia de Seguros 18

19 INCREASED FOCUS ON OPERATING EFFICIENCY Administrative expenses R$ million Headcount (FTE)* 12.8% 12.8% % 9.8% 8.8% 12.50% 10.50% 0.2% -1.4% 5,582 5, % -3.8% 0.00% % % % 6.50% 5,112 5,142 4, % % 4.50% % % 2007* M09 9M10* Administrative expenses Administrative expenses ratio (% retained premiums) 2.50% M09 9M10 FTE YoY change * It does not include executives and interns % * Recurring figures 19

20 COMBINED RATIO EVIDENCES OPERATING EFFICIENCY 97.8% 98.4% 99.4% 100.7% 99.1% 1.7% 1.1% 1.3% 1.9% 3.1% 2.9% 2.4% 2.1% 1.7% 1.6% 10.8% 11.1% 11.3% 11.2% 11.8% 12.8% 12.8% 11.4% 9.8% 8.8% 69.6% 71.0% 73.3% 76.1% 73.8% 2007* M09 9M10* Loss ratio Administrative expenses Acquisition cost Tax expenses Other operating income (expenses) * Recurring figures 20

21 INVESTMENT POLICY DRIVEN BY ALM Investment strategy ex-pension and VGBL Total R$4.3 billion Investment allocation ex-pension and VGBL Total R$4.3 billion Selic/CDI 64% IPCA 27% Fixed income government securities 76% Corporate bonds and CDs 23% Equities 1% Other 3% Indexed 5% Investment strategy Total R$6.9 billion* Investment allocation Total R$6.9 billion* Equities and equity funds 1% IGPM 11% IPCA 17% Selic/CDI 62% Indexed Equities 3% Other 4% 3% Fixed income government securities 75% Corporate bonds and CDs 21% Equities and equity funds 4% 21 (*) Including pension and VGBL operations

22 PENSION RESERVES INCREASED 17.2% IN 9M10 Pension contributions R$ million Pension reserves R$ billion 17.2% % M09 9M M09 9M10 22

23 WEALTH MANAGEMENT LEVERAGES FROM CROSS SELLING Third party assets R$11.7 billion (9M10) Assets under management R$ billion 51.4% Institutional 94.5% 3.2% 2.3% External distribution Private M09 9M10 Proprietary Third-party Third party assets R$11.7 billion (9M10) Equities 3.9% 37.6% Multimarket Fixed Income 39.0% 19.5% Other 23

24 NET INCOME REACHES R$268 MILLION IN 9M10 Net income R$ million ROAE** % % bps 23.6% 18.0% 17.6% 14.5% 13.7% 2007* 2008* M09 9M10* 2007* 2008* M09 9M10* 24 * Recurring figures ** Return on Average Equity - annualized

25 DIVIDENDS Dividends R$ million 100.0% % 80.0% 70.0% % % 50.0% 40.0% 30.0% % 26.3% % 10.0% 0.0% Dividends Payout It was approved in the Shareholders Meeting a proposal for the distribution of results that includes the payment of R$199.1 million in dividends, which corresponds to 50% of adjusted net income in the fiscal year. 25

26 STOCK PERFORMANCE Ibovespa: 5.8% SULA11: -2.5% Aver. volume: R$5.9MM Ibovespa: -41.2% SULA11: -47.1% Aver. volume: R$2.7MM Ibovespa: +82.7% SULA11: % Aver. volume: R$5.3MM Ibovespa: +5.9% SULA11: +20.7% Aver. volume: R$7.0MM % 180 Price (October 4, 2007=100) % * until November 5, 2010 IBOVESPA SULA11

27 AVERAGE VOLUME - SULA11 ADTV LTM 10, , , Volume (R$ 1000) 7,000 6,000 5,000 4, ,000 2,000 1,000 - Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 $Volume #Trades 27 * until November 5, 2010

28 KEY MULTIPLES P/E 1yr fwd* P/B * P/E based on market consensus Note: until October 30,

29 RESEARCH COVERAGE Target Price Latest Revision Upside/ Downside* Recommendation R$ 25 Target price vs. Market price R$17.67 (end of 2010) 4/14/ % Hold R$ 20 R$18.89 R$20.91 R$20.70 (end of 2011) 6/4/ % Hold R$ 15 R$ 10 R$16.67 (end of 2010) 2/26/ % Hold R$ 5 R$14.06 (Dec 2010) 5/24/ % Sell R$ - R$18.27 (end of 2010) R$18.40 (end of 2010) R$21.90 (Aug of 2011) R$23.50 (end of 2011) 07/16/ % Hold 8/25/ % Hold 8/25/ % BUY 10/15/ % BUY Consenso Recommendation Sell 12% SULA11 Buy 25% Consensus R$ % - Hold 63% In relation to the stock price as of 11/5/2010=R$20.91 Source: sell side analysts 29

30 30 Appendix

31 BRAND REPOSITIONING Mission: Assure financial protection and tranquility to our customers, in a unique experience of agility, confidence and transparency. Strategic vision: Up to 2012, be the preferred company to customers and brokers, in the main markets in which it acts, being among the most profitable. Values: We always focus on the best results We carry out what we promise We are accessible and dynamic Vocation for serving We value employees and teamwork We are committed to sustainability 31

32 MANAGERIAL STRUCTURE CEO Health Auto and other P&C Life and pension Asset management Corporate & IR Finance, legal IT & contact centers HR and administration Sales and marketing Industry relations 32

33 CORPORATE STRUCTURE Saepar Serviços e Participações Holding Sul América Companhia Nacional de Seguros Auto & Other P&C insurance Sul América Companhia de Seguro Saúde Individual health insurance Sul América Companhia de Seguros Gerais Other P&C insurance Sul América Seguro Saúde S.A. Group health insurance Sul América Investimentos DTVM S.A. Asset Management Sul América Seguros de Pessoas e Previdência S.A. Life, PA and Pension Brasilsaúde Companhia de Seguros Health insurance Sul América Serviços de Saúde S.A. ASO 33 Only operational companies

34 SULAMÉRICA: EARNINGS HIGHLIGHTS 3Q10 3Q10/3Q09 9M10 9M10/9M09 Insurance premiums (R$ billion) R$ % R$ % Combined ratio 95.5% -6,1 bps 99.1% -170 bps Return on investments (expension and VGBL) (R$ million) Average yield (ex-pension and VGBL) (% of the CDI) Net income (R$ million) R$ % R$ % 99.4% bps 112.0% 1950 bps R$ % R$ % ROAE 20.0% 660 pbs 13.7% -90 bps 34 Recurring figures when applicable

35 OPERATIONAL RESULTS Insurance premiums R$ million 3Q10¹ 3Q09² % 2Q10 % 9M10³ 9M09² % Health insurance 1, , % 1, % 3, , % Health insurance (adjusted) 1, , % 1, % 3, , % Group health insurance % % 2, , % Group health insurance (adjusted) % % 2, , % Individual health insurance % % 1, , % Individual health insurance (adjusted) % % 1, , % Auto insurance % % 1, , % Other property & casualty insurance % % % Life & personal accident insurance % % % Total 2, , % 1, % 6, , % Total adjusted 2, , % 1, % 6, , % 35 ¹ In 3Q10, adjustments were made to the provisioning methodology of Brasilsaúde, which generated non-recurring effects in the lines premiums, retained claims, acquisition costs, other operating income and expenses, administrative expenses and provision for income tax and social contribution. ² Pro-forma information, excluding Brasilveículos Companhia de Seguros from the consolidated financial statements. ³ In 9M10, adjustments were made related to the exclusion of Brasilveículos from the consolidated financial statements as of January 1, 2010, to the effects from the issue of R$60.6 million in complementary individual health insurance premiums to policyholders in the state of Bahia in 1Q10, which impacted the lines revenues, claims (due to the comparison basis), other insurance operating income and expenses (bad debt provision of R$16.8 million), tax expenses, income tax and social contribution and all ratios based on premiums or net income, and to the adjustments in the provisioning methodology of Brasilsaúde mentioned in Note 1.

36 OPERATIONAL RESULTS Earned premiums R$ million 3Q10¹ 3Q09² % 2Q10 % 9M10³ 9M09² % Health insurance 1, , % 1, % 3, , % Health insurance (adjusted) 1, , % 1, % 3, , % Group health insurance % % 2, , % Group health insurance (adjusted) % % 2, , % Individual health insurance % % 1, , % Individual health insurance (adjusted) % % 1, , % Auto insurance % % 1, , % Other property & casualty insurance % % % Life & personal accident insurance % % % Total 2, , % 1, % 5, , % Total adjusted 2, , % 1, % 5, , % 36 ¹ In 3Q10, adjustments were made to the provisioning methodology of Brasilsaúde, which generated non-recurring effects in the lines premiums, retained claims, acquisition costs, other operating income and expenses, administrative expenses and provision for income tax and social contribution. ² Pro-forma information, excluding Brasilveículos Companhia de Seguros from the consolidated financial statements. ³ In 9M10, adjustments were made related to the exclusion of Brasilveículos from the consolidated financial statements as of January 1, 2010, to the effects from the issue of R$60.6 million in complementary individual health insurance premiums to policyholders in the state of Bahia in 1Q10, which impacted the lines revenues, claims (due to the comparison basis), other insurance operating income and expenses (bad debt provision of R$16.8 million), tax expenses, income tax and social contribution and all ratios based on premiums or net income, and to the adjustments in the provisioning methodology of Brasilsaúde mentioned in Note 1.

37 OPERATIONAL RESULTS Loss ratio % 3Q10¹ 3Q09² (bps) 2Q10 (bps) 9M10³ 9M09² (bps) Health insurance 76.6% 80.4% % % 81.4% -170 Health insurance (adjusted) 76.3% 80.4% % % 81.4% -60 Group health insurance 74.6% 76.7% % % 78.6% -20 Group health insurance (adjusted) 74.1% 76.7% % % 78.6% -30 Individual health insurance 82.1% 89.0% % -1, % 87.6% -480 Individual health insurance (adjusted) 82.1% 89.0% % -1, % 87.6% -20 Auto insurance 62.1% 63.0% % % 62.7% -150 Other property & casualty insurance 56.9% 103.8% -4, % % 77.4% -1,860 Life & personal accident insurance 48.7% 52.5% % -1, % 60.7% -710 Total 70.9% 76.0% % % 76.1% -290 Total adjusted 70.7% 76.0% % % 76.1% ¹ In 3Q10, adjustments were made to the provisioning methodology of Brasilsaúde, which generated non-recurring effects in the lines premiums, retained claims, acquisition costs, other operating income and expenses, administrative expenses and provision for income tax and social contribution. ² Pro-forma information, excluding Brasilveículos Companhia de Seguros from the consolidated financial statements. ³ In 9M10, adjustments were made related to the exclusion of Brasilveículos from the consolidated financial statements as of January 1, 2010, to the effects from the issue of R$60.6 million in complementary individual health insurance premiums to policyholders in the state of Bahia in 1Q10, which impacted the lines revenues, claims (due to the comparison basis), other insurance operating income and expenses (bad debt provision of R$16.8 million), tax expenses, income tax and social contribution and all ratios based on premiums or net income, and to the adjustments in the provisioning methodology of Brasilsaúde mentioned in Note 1.

38 OPERATIONAL RESULTS Acquisition cost ratio % 3Q10¹ 3Q09² (bps) 2Q10 (bps) 9M10³ 9M09² (bps) Health insurance 6.5% 6.0% % % 5.8% 50 Health insurance (adjusted) 6.4% 6.0% % 0 6.3% 5.8% 50 Group health insurance 8.7% 8.2% % % 8.0% 50 Group health insurance (adjusted) 8.4% 8.2% % % 8.0% 40 Individual health insurance 0.9% 0.9% 0 0.9% 0 0.8% 1.0% -10 Individual health insurance (adjusted) 0.9% 0.9% 0 0.9% 0 0.9% 1.0% -10 Auto insurance 22.8% 23.1% % % 23.2% -10 Other property & casualty insurance 21.8% 22.8% % % 20.9% -20 Life & personal accident insurance 26.2% 24.4% % % 22.8% 160 Total 12.0% 11.5% % % 11.2% 60 Total adjusted 11.9% 11.5% % % 11.2% ¹ In 3Q10, adjustments were made to the provisioning methodology of Brasilsaúde, which generated non-recurring effects in the lines premiums, retained claims, acquisition costs, other operating income and expenses, administrative expenses and provision for income tax and social contribution. ² Pro-forma information, excluding Brasilveículos Companhia de Seguros from the consolidated financial statements. ³ In 9M10, adjustments were made related to the exclusion of Brasilveículos from the consolidated financial statements as of January 1, 2010, to the effects from the issue of R$60.6 million in complementary individual health insurance premiums to policyholders in the state of Bahia in 1Q10, which impacted the lines revenues, claims (due to the comparison basis), other insurance operating income and expenses (bad debt provision of R$16.8 million), tax expenses, income tax and social contribution and all ratios based on premiums or net income, and to the adjustments in the provisioning methodology of Brasilsaúde mentioned in Note 1.

39 OPERATIONAL RESULTS Gross margin % 3Q10¹ 3Q09² (bps) 2Q10 (bps) 9M10³ 9M09² (bps) Health insurance 16.8% 13.6% % % 12.8% 130 Health insurance (adjusted) 17.3% 13.6% % % 12.8% 10 Group health insurance 16.8% 15.1% % % 13.4% -30 Group health insurance (adjusted) 17.5% 15.1% % % 13.4% 0 Individual health insurance 17.0% 10.0% % 1, % 11.5% 500 Individual health insurance (adjusted) 17.0% 10.0% % 1, % 11.5% 20 Auto insurance 15.1% 13.9% % % 14.1% 160 Other property & casualty insurance 21.4% -26.6% 4, % % 1.6% 1,880 Life & personal accident insurance 25.1% 23.1% % 1, % 16.5% 550 Total 17.1% 12.6% % % 12.7% 240 Total adjusted 17.4% 12.6% % % 12.7% 160 Combined ratio % 3Q10¹ 3Q09³ (bps) 2Q10 (bps) 9M10² 9M09³ (bps) Combined ratio 95.9% 101.6% % % 100.7% -220 Combined ratio (adjusted) 95.5% 101.6% % % 100.7% ¹ In 3Q10, adjustments were made to the provisioning methodology of Brasilsaúde, which generated non-recurring effects in the lines premiums, retained claims, acquisition costs, other operating income and expenses, administrative expenses and provision for income tax and social contribution. ² Pro-forma information, excluding Brasilveículos Companhia de Seguros from the consolidated financial statements. ³ In 9M10, adjustments were made related to the exclusion of Brasilveículos from the consolidated financial statements as of January 1, 2010, to the effects from the issue of R$60.6 million in complementary individual health insurance premiums to policyholders in the state of Bahia in 1Q10, which impacted the lines revenues, claims (due to the comparison basis), other insurance operating income and expenses (bad debt provision of R$16.8 million), tax expenses, income tax and social contribution and all ratios based on premiums or net income, and to the adjustments in the provisioning methodology of Brasilsaúde mentioned in Note 1.

40 NET INCOME AND RETURN ON AVERAGE EQUITY (ROAE) R$ million 3Q10¹ 3Q09 2Q10² 9M10³ 9M09 Net income % % % Net income adjusted % % % ROAE 19.1% 13.4% 570bps 14.5% 460 bps 16.7% 14.5% 210 bps ROAE adjusted 20.0% 13.4% 660bps 8.1% 1,180 bps 13.7% 14.5% -90 bps Earnings per share (R$)* % % % Earnings per share adjusted (R$)* % % % Earnings per unit (R$)* % % % Earnings per unit adjusted (R$)* % % % * Parent company 40 ¹ In 3Q10, adjustments were made to the provisioning methodology of Brasilsaúde, which generated non-recurring effects in the lines premiums, retained claims, acquisition costs, other operating income and expenses, administrative expenses and provision for income tax and social contribution. ² In 2Q10, the effects from the sale of the real estate property in São Paulo where the company s head offices are located were eliminated. The gain from this transaction was R$130.0 million, generating net proceeds of R$41.1 million. ³ In 9M10, adjustments were made related to the exclusion of Brasilveículos from the consolidated financial statements as of January 1, 2010, to the effects from the issue of R$60.6 million in complementary individual health insurance premiums to policyholders in the state of Bahia in 1Q10, which impacted the lines revenues, claims (due to the comparison basis), other insurance operating income and expenses (bad debt provision of R$16.8 million), tax expenses, income tax and social contribution and all ratios based on premiums or net income, to the adjustments in the provisioning methodology of Brasilsaúde mentioned in Note 1, and to the effects from the sale of the property located in São Paulo mentioned in Note 2.

41 INCOME STATEMENT SUMMARY (PRO-FORMA*) R$ million 3Q10 3Q09 % 2Q10 % 9M10 9M09 % Insurance premiums 2, , % 1, % 6, , % Premiums ceded to reinsurance, retrocession, consortiums and funds (38.7) (84.2) -54.1% (41.1) -5.9% (130.3) (306.8) -57.5% Retained premiums 2, , % 1, % 6, , % Changes in insurance and retained technical reserves (186.9) (100.9) 85.3% (73.3) 155.1% (303.8) (266.4) 14.0% Earned premiums 2, , % 1, % 5, , % Retained claims and benefits expenses (1,438.0) (1,277.8) 12.5% (1,444.9) -0.5% (4,224.4) (3,679.0) 14.8% Acquisitions costs (241.9) (192.7) 25.6% (223.1) 8.4% (677.0) (541.4) 25.0% Gross margin % % % Other insurance operating income (expenses) (68.8) (16.7) n/a (42.4) 62.0% (183.6) 4.8 n/a Net operating income from private pension business % % % Net operating income from ASO business % % % Net operating income from asset management business % % % Administrative expenses (180.4) (203.6) -11.4% (184.5) -2.2% (532.9) (590.4) -9.7% Tax expenses (36.7) (32.8) 12.1% (22.6) 62.4% (93.0) (101.8) -8.6% Net financial income % % % Equity income from nonconsolidated subsidiaries n/a % n/a Income before income tax, social contribution and profit Sharing % % % Income tax and social contribution (88.8) (27.9) 218.0% (35.2) 152.4% (148.7) (94.3) 57.7% Profit sharing (12.3) (2.3) 436.5% (9.7) 27.1% (29.8) (17.5) 70.4% Minority interest 0.9 (0.0) n/a % % Net income % % % * Excluding figures from Brasilveículos Companhia de Seguros 41

42 BALANCE SHEET SUMMARY Assets R$ million 9M % Current assets 7, , % Cash, cash equivalents and marketable securities 5, , % Receivables from insurance and reinsurance operations 1, , % Reinsurance and retrocession expenses % Deferred acquisition costs % Other current assets % Long-term assets 3, , % Marketable securities 1, , % Judicial and fiscal deposits 1, , % Deferred acquisition costs % Other long-term assets % Permanent assets % Total assets 11, , % 42

43 BALANCE SHEET SUMMARY Liabilities R$ million 9M % Current liabilities 4, , % Loans and financing % Other payable obligations % Insurance, reinsurance and private pension debts % Technical reserves insurance and reinsurance 3, , % Technical reserves private pension % Accrued liabilities for contingencies % Non-current liabilities 4, , % Accounts payable , % Loans and financing % Other accounts payable % Technical reserves insurance and reinsurance % Technical reserves private pension 1, , % Accrued liabilities for contingencies % Minority interest % Shareholder s equity 2, , % Total liabilities 11, , % 43

44 RESEARCH COVERAGE Target revision Apr 14, 2010 Jun 08, 2010 Fev 26, 2010 May 24, 2010 Jul 16, 2010 Aug 25, 2010 Aug 25, 2010 Oct 15, 2010 Contact Eduardo Nishio +55 (21) Henrique Navarro +55 (11) Filipe Acioli +55 (21) Iago Whately +55 (11) Javier Martinez de Olcoz Cerdan +1 (212) Carlos Firetti +55 (11) Carlos Macedo +55 (11) Henrique Caldeira +55 (11)

45 DISCLAIMER This material is a presentation of general background information about Sul América S.A. ("SulAmérica") as of the date of the presentation or as otherwise indicated. It is information in summary form and does not purport to be complete. It is not intended to be relied upon as advice to potential investors and does not form the basis for an informed investment decision. This presentation is strictly confidential and may not be disclosed to any other person. No representation or warranty, express or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of the information presented herein. This presentation may contain statements that are forward-looking. Such forward-looking statements are only predictions and are not guarantees of future performance. Investors are cautioned that any such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of SulAmérica and its subsidiaries that may cause the actual results of the companies to be materially different from any future results expressed or implied in such forward-looking statements. No person has any responsibility to update any such information. This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment. 45

46 InvestorUpdate_ENG_3Q10_V1_ Sul América S.A. Investor Relations Department +55 (21)