Sul America Seeks Acquisitions as Demand for Insurance in Brazil Increases

Sul America SA (SULA3), the Brazilian insurer 36 percent-owned by ING Groep NV (INGA), may buy companies to expand in its home market as a rising middle class spurs demand for coverage.

“We’re looking for acquisitions that are accretive to our portfolio that are aligned within our business segments, meaning health, dental, auto and distribution channels for our mass- marketing products,” Thomaz Cabral de Menezes, chief executive officer of Rio de Janeiro-based Sul America, said yesterday in an interview at Bloomberg headquarters in New York. “For the time being, the focus is 100 percent in Brazil.”

Sul America is weighing acquisitions against investments in existing businesses after the Brazilian economy grew 7.5 percent in 2010. Net income climbed to 426.6 million reais ($268.9 million) last year, or 3.2 percent, from 413.5 million reais in 2009 as premiums rose, according to a statement on the company’s website.

“The expansion of the middle class, plus the new consumers coming in, you’re talking between 50 to 100 million people that eventually are going to be looking for insurance,” said Cabral de Menezes.

The insurer said in December that it would buy Dental Plan Ltda. to gain customers in the north and northeast regions of Brazil. Sul America acquired a 49.92 percent stake in health insurer Brasilsaude Companhia de Seguros in July.