By Brazil Stock Guide — SulAmérica, the Brazilian health insurer controlled by hospital operator Rede D’Or (B3: RDOR3), acknowledged on Friday (November 13) a rise in lawsuits involving health insurance coverage, a trend it attributed to the expansion of its retail customer base over the past three years. At the same time, the company is expanding plans with different levels of reimbursement for out-of-network care, seeking to contain medical costs while keeping premiums competitive.
During Rede D’Or’s third-quarter earnings call, SulAmérica CEO Raquel Reis said the insurer’s growing exposure to individual consumers and smaller corporate clients had led to more legal disputes, particularly over premium increases and coverage for medical procedures.
“We are seeing a higher volume of lawsuits across the industry, and over the past two and a half to three years, we have significantly expanded our retail business,” Reis said. She added that a larger customer base naturally brings an increase in the number of legal claims.
The company said it had not changed its criteria for recognizing legal provisions during the quarter. Rede D’Or Chief Financial Officer Otávio Lazcano explained that the group adopted a more conservative approach in 2025, recognizing provisions for certain civil claims at earlier stages of litigation. Since the second quarter of that year, provisions have been increasing faster than actual legal settlements and payments.
Health plans with limited reimbursement
Alongside the rise in litigation, SulAmérica has been reshaping its product portfolio. The company ended September with more than 1.15 million members enrolled in modular health plans, which offer different levels of reimbursement depending on the coverage tier selected.
Under its more affordable plans, reimbursement for care obtained outside the insurer’s accredited provider network may be limited to emergency consultations, with no reimbursement for diagnostic tests or therapies performed outside the network. According to Reis, this structure allows the company to offer differentiated pricing while relying on its contracted network of hospitals, clinics and other healthcare providers to deliver covered services.
“Entry-level plans essentially offer reimbursement only for emergency consultations, not for therapies or diagnostic tests, for example, because members have access to an extensive provider network,” Reis explained.
Higher-tier products offer progressively broader reimbursement options. According to Reis, the approach helps reduce average medical claims costs per member and allows premiums to better reflect the healthcare needs and utilization patterns of different customer groups.
SulAmérica also attributes its efficiency gains to greater use of cost-sharing arrangements, adjustments to provider networks, contract renegotiations, fraud prevention measures and region-specific health insurance products.
The insurer’s medical loss ratio fell to 77.7% in the third quarter, an improvement of 2.4 percentage points from the same period in 2025. The metric measures the proportion of premium revenue spent on medical claims and healthcare services and is a key indicator of profitability in the health insurance industry.
The improvement came alongside continued membership growth. SulAmérica ended September with 6.2 million health and dental plan members, an 8.9% increase over 12 months. Excluding administrative-services-only arrangements, its health insurance business added a net 182,000 members over the same period.
Premium adjustments and investment
Reis said SulAmérica aims to pass on part of its efficiency gains to customers through more competitive pricing, both when attracting new policyholders and renewing existing contracts.
As an example, she cited an 11.8% premium adjustment for the insurer’s pooled portfolio of small-group contracts covering up to 29 members, for the May 2026 to April 2027 period. According to Reis, this was the lowest increase among SulAmérica and the four major competitors included in the company’s own comparison.
The insurer also reported an increase in administrative expenses, which rose to 4.9% of revenue from 4.3% a year earlier. The increase was primarily driven by investments in technology infrastructure and cybersecurity, including efforts to align its systems with Rede D’Or’s security standards.
Reis said these expenses would not be confined to the third quarter but instead reflected a medium-term investment cycle aimed at modernizing the business and supporting further retail expansion.
Against the possibility of slower economic growth and rising unemployment in Brazil in 2027, SulAmérica’s priority will be to retain corporate clients even if they temporarily reduce the number of employees covered by their health plans. According to Reis, the strategy is to preserve customer relationships and remain positioned to benefit when employment and demand for private health insurance recover.
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