Sul America S.A. Net Income Increases 65.6% to R$118.3 Million in 1Q08

SAO PAULO, Brazil, May 12 /PRNewswire-FirstCall/ — Sul America S.A. (Bovespa: SULA11) announces its results for the first quarter of 2008 (1Q08). The Company’s operating and financial information, except where otherwise stated, is based on its financial statements and was prepared in Brazilian Reais (R$), in accordance with the CVM rules (including CVM rule No. 469, of May 2, 2008). Net income reached R$118.3 million in 1Q08, up 65.6% over 1Q07. ROAE was 23.5% in 1Q08.

Total insurance premiums reached R$1.8 billion in 1Q08, up 6.8% over 1Q07. Health insurance premiums (53.2% of total insurance premiums in 1Q08) increased 7.2% in 1Q08 over 1Q07. Group health insurance premiums (33.9% of total insurance premiums) increased 11.2%, including a 26.0% growth in the SME segment (6.0% of total insurance premiums).

Auto insurance premiums (29.6% of total insurance premiums in 1Q08) increased 16.3% in 1Q08 over 1Q07. The Company remains ranked #2 in 1Q08, with a market share of 15.6% and an insured fleet of 1.8 million vehicles.

Other property & casualty insurance premiums (which represented 11.5% of total insurance premiums in 1Q08) totaled R$209.6 million in 1Q08, a decrease of 19.8% over 1Q07. Excluding the impact of the reduction in DPVAT premiums, there was growth in premiums of 0.3% over the same period.

Life & personal accident insurance premiums (which represented 5.8% of total insurance premiums in 1Q08) reached R$105.4 million in 1Q08, up 35.9% over 1Q07. This increase is mainly due to the issuance of several large group life insurance policies and a 58.5% growth in VGBL premiums in 1Q08 (better than the market, which grew 31.3%, according to data from SUSEP), which included a 22.1% growth in the number of covered individuals and an increase in the average premium.

Loss ratio reached 69.8% in 1Q08, an improvement of 160 bps over 1Q07. Health insurance loss ratio improved 500 bps over 1Q07. And Auto insurance loss ratio reached 64.9% in 1Q08.

Combined ratio reached 95.3% in 1Q08, an improvement of 210 bps over 1Q07. The return on the investment portfolio reached R$149.0 million in 1Q08, corresponding to an average yield of 107.1% of CDI.

Recent events

On March 31, 2008, a Company Stock Options Plan was approved, becoming an important part of the compensation for the directors and officers of the Company. On April 25, 2008, the Company sold its indirect shareholding in Telemar Participacoes S.A., resulting in an after-tax gain of approximately R$34 million, accounted for in April 2008. On April 29, 2008, the Company was successful in a public tender offer to acquire the minority shares outstanding of its subsidiary Sul America Companhia Nacional de Seguros (“SALIC”), acquiring 31,899,909 ordinary shares at a price per share of R$1.02, corresponding to a total value of approximately R$33 million. These shares represented 1.6% of the capital stock of SALIC, increasing the Company’s ownership to 98.6%.

For more information: Dalsin/ Daniela Campos/ Solange Guimaraes55 (11) 3779.7615/ 5045/ 7614E-mail: [email protected]: Edelman -Guilherme Ravache55 (11) 3017-5306E-mail: [email protected]

Sul America S.A.

CONTACT: Sara Dalsin, +011-5511-3779-7615, or Daniela Campos, +011-5511-3779-5045, or Solange Guimaraes, +011-5511-3779-7614, all of Sul America,[email protected]; or Guilherme Ravache, Edelman,+011-5511-3017-5306, [email protected], for Sul America

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