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SulAmérica made great conquests in 2006, celebrating extraordinary growth as well as generating net income of R$ 219 million for the year. Improved efficiency in operations raised the profitability of the company through successful implementation of cost-cutting measures throughout recent last years. Such effort resulted in a reduction of the combined ratio to 98.9 percent. The principal business units turned in an optimal performance and attained important achievements in their areas of responsibility.

In 2006, the Company reviewed and updated its strategic plan for the next five years, reaffirming its Mission, Values and Vision. An extensive communications campaign with the entire staff of nearly 6,000 people involved them in the exercise guaranteeing alignment of the personnel with the company’s strategic planning.

New action plans, aimed at taking advantage of growth opportunities and maximizing profitability, will be implemented in 2007. With the new strategy and actions plans, SulAmérica believes that its operational performance and leadership position in its markets will allow the company to operate more efficiently in an increasingly competitive market.

Taking advantage of the favorable economic scenario in the domestic market and internationally, the holding company, Sul América S.A., made a highly successful Eurobond issue of US$ 200 million, attracting investors from Asia, Europe and the United States. The placement required that the group be rated by international credit rating agencies which made note of the solvency of SulAmérica and the quality of its operations. The resources captured with this bond issue will be used to allow the holding company to promote a more suitable capital structure for the company’s future development.

The domestic insurance market grew more than 10 percent in 2006. As an important player in this market, SulAmérica stood out throughout the year by launching products and services tailored to meet the needs of its corporate clients.

The Health Insurance unit made important contributions to SulAmérica results last year. The Company reduced the rate and amount of claims filed and strengthened its leadership position in the segment by launching differentiated products aimed at the business market which allow them to control their expenses with health insurance.

The prospects for 2007 are promising. Initiatives to strengthen SulAmérica in important markets were successfully launched. For example, in partnership with Grupo Bandeirantes de Comunicação, the company started Rádio SulAmérica Trânsito, a pioneering radio program in Latin America that will expand market share in São Paulo. Costing R$ 30 million, the program helps improve the quality of life of city residents by broadcasting information on traffic conditions.

The asset management unit, which administers third-party resources, also turned in a fine performance in 2006, when it celebrated 10 years of existence. The unit achieved strong growth in the volume of assets under management due to the good performance of its funds.

Revenues from SulAmérica premiums reached R$ 6,5 billion, a growth of 2.3 percent compared to 2005. Technical provisions to guarantee insurance and pension operations of the Company reached R$ 4 billion in 2006, a 10.3-percent increase over the balance in 2005.

In the area of Industrial and Commercial Risks, SulAmérica consummated a business partnership with Axa Corporate Solutions and won important clients.

The partnerships with Banco do Brasil in Brasilveículos e Brasilsaúde once again made a significant contribution to the year’s results.

In reality, we have a major challenge ahead and a wide range of possibilities and opportunities in the markets for insurance, private pensions and asset management. This shows that SulAmérica will continue on the path of increasing profitability in all segments where it operates: always sure of our Mission, acting in accordance with our six Values and bound toward the future goals expressed.

Patrick de Larragoiti Lucas