Fitch: New JV with Healthways is Neutral To Sul America's Ratings

RIO DE JANEIRO--(BUSINESS WIRE)--

SASA's recently announced JV with the U.S. based healthcare and wellness provider, Healthways, Inc. (Healthways), is neutral to Sul America S.A.'s (SASA, Long-term local currency IDR 'BBB-'/Stable Outlook) ratings, according to Fitch Ratings.

On March 12, 2015, SASA announced that it had signed an agreement with Healthways, whereby its indirect subsidiary and health plan operator Sul America Servicos de Saude S.A. (Sulamed), will hold 49% in Healthways Brasil Servicos de Consultoria Ltda. (Healthways Brazil), an existing healthcare service and solutions provider. The rest of the shares will be held by Healthways.

The equity injection in the new company by SASA will not have a material effect on SASA's cashflow and profitability metrics in the short term. The company expects the partnership to benefit the loss ratios in the health segment in the medium term through the implementation of new products and services.

Fitch expects SASA's credit metrics to remain broadly stable in 2015, despite the challenging economic environment that is likely to pressure premium growth at the sector level. As of end-2014, SASA's total premiums and contributions (including pension and savings bonds contributions) reached BRL16.1 billion. Its non-insurance revenues, which mainly originate from administrative services within the health and dental segments, were BRL0.8 billion. In 2014, SASA's technical results were broadly stable in comparison to 2013 and the company posted a solid ROA of 3.1% (3.0% in 2013).

Additional information available at 'www.fitchratings.com' or 'www.fitchratings.com.br'.

Applicable Criteria and Related Research:

--'Insurance Rating Methodology' (Sept. 4, 2014);

--'National Scale Ratings Criteria' (Oct. 30, 2013).

Applicable Criteria and Related Research:

Insurance Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=756650

National Scale Ratings Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=720082

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Fitch Ratings
Primary Analyst
Esin Celasun, +55-21-4503-2626
Director
Fitch Ratings Brasil Ltda.
Praca XV de Novembro, 20 - 401 B
Rio de Janeiro, RJ, Brazil
or
Secondary Analyst
Rodrigo Salas, +56-2-2499-3309
Senior Director
or
Media Relations, New York
Elizabeth Fogerty, +1-212-908-0526
[email protected]

Source: Fitch Ratings

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