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    Acquisition Costs
    Acquisition costs consist of commissions and other sales fees paid to independent brokers for insurance policies sold.

    Acquisition Costs Ratio
    The ratio of insurance acquisition costs divided by earned premiums.

    Administrative Expenses
    The principal components of administrative expenses are: personnel, overhead (includes mainly office and infrastructure expenses), third party services (includes costs of security, maintenance, temporary employees, external advisers and auditors, advertising.

    Administrative Expenses Ratio
    It is the quotient of administrative expenses plus taxes divided by retained premiums.

    The Brazilian Association of Investment Banks (Associação Nacional dos Bancos de Investimentos).

    The Brazilian National Association of Vehicle Manufacturers (Associação Nacional de Fabricantes de Veículos Automotores).

    The Brazilian private healthcare agency (Agência Nacional de Saúde Suplementar).

    ASO – administrative services only
    A contract between an insurance company and a self-funded plan under which the insurance company performs administrative services only and does not assume any risk. The services usually include claims processing, but may include other services as well, such as actuarial analysis and utilization review.

    Axa Corporate Solutions, a company controlled by Axa, a French insurance group.


    Banco Central or BACEN
    Central Bank of Brazil (BACEN).

    Banco do Brasil
    Banco do Brasil S.A.

    Brazilian Social and Economic Development Bank (Banco Nacional do Desenvolvimento Econômico e Social).

    Board of Directors
    The Company’s Board of Directors.

    Brasilsaúde Companhia de Seguros.

    Brasilveículos Companhia de Seguros.


    The Brazilian Settlement and Custodial Company (Companhia Brasileira de Liquidação e Custódia).

    Daily interbank rate (Certificado de Depósito Interbancário).

    The Brazilian Clearing House for the Custody and Financial Settlement of Securities (Câmara de Custódia e Liquidação).

    Brazilian Federal Accounting Council (Conselho Federal de Contabilidade).

    Brazilian National Monetary Council (Conselho Monetário Nacional).

    The National Council for Private Insurance (Conselho Nacional de Seguros Privados)

    The Contribution for the Financing of Social Security (Contribuição para o Financiamento da Seguridade Social).

    A cost sharing arrangement in which a plan member (covered person) pays a specified charge for a specified service, such as $10 for an office visit. The member is usually responsible for payment at the time the health care is rendered.

    Combined Ratio
    It equals the sum of the (i) loss ratio, (ii) the acquisition cost ratio, and (iii) the quotient obtained by adding other insurance operating income and expenses, administrative expenses and tax expenses and dividing such sum by retained premiums.

    Company, Parent Company, Issuer, SASA or SulAmérica
    Sul América S.A.

    The Brazilian Securities Commission (Comissão de Valores Mobiliários).


    The Official Gazette of the State of Rio de Janeiro (Diário Oficial do Estado do Rio de Janeiro).

    DPVAT (mandatory third-party liability for vehicles owners).


    The Company’s managers and other staff, deemed as such by the members of the Company’s and its subsidiaries’ Board of Directors and Board of Executive Officers, employed under an employment contract with the Company or its subsidiaries, who are fully exercising their respective duties or who are included in the respective payrolls on July 31, 2007.


    The National Federation of Motor Vehicle Distribution (Federação Nacional da Distribuição de Veículos Automotores).

    Capitalization and Private Pension Brokers and Brokerage Companies (Federação Nacional dos Corretores de Seguros Privados, de Capitalização, de Previdência Privada e das Empresas Corretoras de Seguros).

    The National Federation of Private Insurance and Capitalization Companies (Federação Nacional das Empresas de Seguros Privados e de Capitalização).

    Fundação Getulio Vargas.

    Financial Income Ratio
    It is the quotient of net financial income divided by earned premiums.

    Fiscal Council
    Company’s Fiscal Council.

    Foreign Institutional Investors
    Target-public of the efforts for placing Units abroad within the scope of the Institutional Offer, consisting, in the United States, of qualified institutional investors, as defined in Rule 144A, in operations exempt from registration pursuant to the Securities Act, and, in other countries, except for Brazil and the USA, institutional investors and other investors who will take part in the Offer, in accordance with the provisions in Regulation S, with due regard for the legislation in force in the country of domicile of each investor resident abroad and who invests in Brazil according to the foreign investment mechanism, pursuant to the Brazilian Monetary Council (CMN) Resolution 2,689 and to the Brazilian Securities and Exchange Commission (CVM) Instruction 325.

    The National Insurance School (Escola Nacional de Seguros).


    Gross margin ratio
    Gross margin divided by earned premiums.


    Health Management Organization – A group medical insurance system.


    Brazilian Institute of Corporate Governance (Instituto Brasileiro de Governança Corporativa).

    Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística).

    Provision for incurred but not enough reported insurance claims.

    Provision for incurred but not reported insurance claims.

    BOVESPA index, comprised by the higher liquidity shares traded on BOVESPA.

    State value-added tax (Imposto sobre Operações Relativas à Circulação de Mercadorias e sobre Prestações de Serviços de Transporte Interestadual e Intermunicipal e de Comunicação).

    International Finance Corporation.

    International Financing Report Accounting Standards.

    General market price index (Índice Geral de Preços do Mercado, released by FGV).

    The International Monetary Fund.

    Income Tax and Social Contribution
    The Company is subject to income tax and social contribution calculated as follows: (i) ordinary income tax, levied at a rate of 15.0%, (ii) an incremental percentage over ordinary income tax, applicable to the portion of taxable income that exceeds R$240,000 per annum, levied at a rate of 10.0%, and (iii) social contribution on net income levied at a rate of 9.0%. When calculating taxable income basis, Brazilian tax law permits the Company to deduct amounts distributed to shareholders as interest on shareholders´ equity (juros sobre o capital próprio). Interest on shareholders´ equity is interest paid or credited to shareholders at the TJLP rate and is subject to limits imposed by-law. Brazilian tax law also permits the Company to deduct from its taxable income basis tax loss carryforwards of up to a maximum of 30% of taxable net income. The remainder of the accrued losses may be deducted in the following years, also subject to a 30% ceiling, with no time limit.

    ING Insurance International B.V., controlled by ING Groep N.V.

    National Institute of Intellectual Property (Instituto Nacional da Propriedade Intelectual).

    Brazilian National Institute of Social Security (Instituto Nacional de Seguridade Social).

    Institutional Investors
    Local and Foreign Institutional Investors.

    Insurance Premiums
    SulAmérica´s insurance premiums derives principally from its operation in the health, auto, other property and casualty, and life insurance business lines.

    International Placement Agents
    Unibanco Securities Inc., UBS Securities LLC and occasionally other institutions.

    Consumer price index (Índice de Preços ao Consumidor Ampliado).

    Brasil Resseguros S.A.. Prior to January 15, 2007, IRB, a government-controlled mixed-capital corporation, was responsible, together with the CNSP and the SUSEP, for regulating reinsurance, coinsurance and retrocession operations, as well as promoting the development of the Brazilian reinsurance market. In January 2007, Complementary Law No. 126/07 was passed transferring these responsibilities to the CNSP and the SUSEP and terminating IRB´s regulatory jurisdiction over the Brazilian reinsurance market. However, the SUSEP will only be able to exercise these regulatory powers after it issues further regulations for the Brazilian reinsurance market, as required under Complimentary Law No. 126/07.


    Level 2 of Corporate Governance
    BOVESPA’s special segment for listing securities, ruled by the Level 2 Corporate Governance Rules (Nível 2 de Governança Corporativa).

    Leverage ratio
    The ratio of loans and financings divided by shareholders’ equity.

    Local Institutional Investors
    Target-public of the efforts for selling Units within the scope of the Institutional Offer, consisting of individual or corporate investors, resident, domiciled or headquartered in Brazil, whose amounts invested exceed the investment limit of R$300,000.00, investment funds, managed portfolios, pension funds, third-party fund managers registered at CVM, entities authorized to operate by the Brazilian Central Bank, condominiums aimed at investing in securities portfolios registered at CVM and/or at BOVESPA, insurance companies, private pension and capitalization companies, publicly-held and closely-held private pension companies, and individuals, corporations and investment clubs registered at BOVESPA regarding specific orders that exceed the maximum investment limit for non-institutional investors.

    Loss ratio
    It is the quotient of retained claims (and benefit expenses in the case of life insurance) plus benefit expenses, divided by earned premiums.


    Net Financial Income
    Net financial income includes principally (i) the financial result from investments, (ii) interest charged over premiums received in installments, (iii) the financial result of loans or swap agreements, (iv) Contribution on Transfers of Funds (Contribuição Provisória sobre a Movimentação ou Transmissão de Valores ou de Crédito e Direitos de Natureza Financeira), or CPMF, levied on payments the Company makes, and (iv) monetary variation of assets and liabilities.

    Net Income (Loss)
    Net income (loss) is income (loss) before taxes and profit sharing, less (i) income tax and social contribution, (ii) profit sharing, and (iii) minority interest.

    Non-Institutional Investors
    Target-public of the efforts for placing Units, within the scope of the Retail Offer, consisting of individual and corporate investors, resident and domiciled in Brazil, including investment clubs registered at BOVESPA who are not considered Institutional Investors, and also Employees and Accredited Brokers, who have made a reservation request, whose individual investment has respected the minimum and maximum limits of R$3,000.00 and R$300,000.00, respectively.

    Non-Operating Income (Expenses)
    Non-operating income (expenses) consists mainly of (i) capital gains or losses on the sale or write-off of permanent assets, and (ii) revenues or expenses not related to operating activities.

    Notice to the Market
    Notice to the Market, pursuant to article 53 of CVM Instruction 400, published on September 17, 2007, and republished on September 24, 2007.


    Operating Ratio
    It is the sum of (i) the Loss Ratio, plus (ii) the Acquisition Costs Ratio, plus (iii) the Administrative Expenses Ratio, plus (iv) the Other Insurance Operating Income/Expenses, plus (v) the Net Operating Income Ratio.

    Other Insurance Operating Income (Expenses)
    Other insurance operating income consists principally of insurance policy issuance fees charged to clients and other operating income that are not recorded as insurance premiums. Other insurance operating expenses consist principally of miscellaneous expenses related to claims and benefits, sales expenses, and other operating expenses, such as insurance policy collection fees, that are not recorded as retained claims or acquisition costs.


    Free Benefit Generating Plan (Plano Gerador de Benefício Livre – PGBL). An income tax deductible, fixed contribution, private pension plan.


    Reinsurance Premiums Ceded
    The Company reinsures most of its exposure to insured risks with IRB. Reinsurance is ceded principally to mitigate the effect of a material loss deriving from a significant claim and increase its underwriting capacity. In addition, as required by Brazilian insurance laws and regulations, any liability amount in excess of the Company’s maximum retention limits must be reinsured or co-insured.

    Retained Claims and Benefit Expenses
    Retained claims consist of insurance operating expenses related to losses and loss adjustments expenses, net of reinsurance, salvage, and reimbursements. Benefit expenses consist of VGBL plan benefit expenses.

    Return on Equity
    It is the ratio of net income divided by shareholders’ equity at the beginning of the referred period. It is an annualized indicator for interim periods.


    Securities and Exchange Comission.

    Securities Act
    USA Securities Act of 1933, and further amendments.

    a periodic publication of Swiss Re, one of the world’s leading reinsurers.

    It is the process whereby an insurance or reinsurance company analyzes the proposals submitted for insurance or reinsurance coverage and determines whether it will provide the coverage requested, in full or in part, for a premium previously agreed upon.

    The Brazilian Federal Health System (Sistema Único de Saúde brasileiro).

    The Brazilian Superintendence of Private Insurance and Pension (Superintendência de Seguros Privados).

    Swiss Re
    Swiss Re Direct Investments Company Ltd.


    Tax Expenses
    Federal Contributions on Revenues – PIS and COFINS
    PIS and COFINS: Federal Contributions on Revenues – PIS and COFINS. The Contribution for the Social Integration Program (Contribuição para o Programa de Integração Social), or PIS, and the Contribution for the Financing of Social Security (Contribuição para o Financiamento da Seguridade Social), or COFINS, are assessed mainly on SulAmérica’s operating revenues, and may be charged on a cumulative or non-cumulative basis, according to the nature of the businesses in which the Company is engaged. Under the cumulative system, the PIS contribution is levied at a rate of 0.65% and the COFINS contribution is levied at a rate of 4%. The main sources of the PIS and COFINS taxable revenue basis are (i) the total amount of earned premiums, net of claims paid, (ii) the total amount of private pension contributions, net of changes in private pension reserves. Starting in 2004, SulAmérica adopted a practice under Brazilian GAAP that allows it to recognize PIS and COFINS tax credits in connection with (i) payable claims, which are those retained claims that have been reported but not yet paid, and (ii) the respective IBNR reserve constituted for such claims.
    Municipal Taxes on Services – ISS: Certain of SulAmérica’s subsidiaries, including Saepar Serviços e Participações S.A. and Sul América Serviços Médicos S.A., its ASO subsidiary, are subject to a municipal tax on services (Imposto sobre Serviços de Qualquer Natureza), or ISS, levied at a rate of 5.0% of their respective taxable revenue bases.
    State Value-added Taxes – ICMS: SulAmérica’s insurance operating subsidiaries are subject to a state value-added tax (Imposto sobre Operações Relativas à Circulação de Mercadorias e sobre Prestações de Serviços de Transporte Interestadual e Intermunicipal e de Comunicação), or ICMS, on the sale of salvage at a maximum rate of 19%. This rate varies according to the Brazilian state where the sale is made.


    Accounting principles generally accepted in the United States.


    Vida Gerador de Benefício Livre (Free Benefit Generating Plan) – a pension product whereby
    contributions are not tax-deductible and taxes are levied only on the capital gains and not on the total amount withdrawn.

    Last update: January 27, 2021