Painel Abramed 2021 - O DNA do Diagnóstico - inglês

In this sense, a high degree of uncertainty frameworks in various sectors. This way, persists as to the pace of recovery of the it will be able to attract investments and country’s economy in the short term. resume the country’s potential growth. A faster progress is conditioned, especially, The uncertain political environment to the vaccination rate, which tends to boost and the lack of predictability about the the services, industry and consumption evolution of reforms and adjustments sectors of families and companies, needed to solve the country’s structural impacted by the social distancing measures problems can also directly influence and negative perspectives in face of the business decisions and the dynamism sanitary measures adopted to deal with of the economy during the year. the pandemic. Nevertheless, the country Considering these factors together, needs to advance in its reform agenda, the Gross Domestic Product (GDP) is prioritizing changes in the tax model projected to grow 4.8% to 5,0%10 in 2021, and the modernization of regulatory and 2.0% to 1.5%11 in 2022. TABLE GDP RATE VARIATIONS AND PROJECTIONS (BRAZIL – 2017/2022) 9 Source: IBGE - Diretoria de Pesquisas, Coordenação de Contas Nacionais. IPEA - Conjuncture letter 52. Adapted by Abramed. Note: Accumulated rate over the course of the year. NOTED PREDICTED 2017 2018 2019 2020 2021 2022 14,2 2 1,7 3,3 GDP 14,2 1,3 0,6 2 1,7 3,3 Agriculture and Livestock -0,5 -3,5 5,4 1,4 Industry 0,8 1,3 0,6 -4,5 4,8 2,1 Services 2,0 -5,5 4,1 2,2 Households Consumption -0,7 0,7 0,4 -4,7 1,8 2 Government Consumption -2,6 -0,8 10,9 3,5 Gross Fixed Capital Formation - GFCF 4,9 2,1 1,7 -1,8 7,7 3,9 Export 6,7 -10 11,4 5,3 Import 2,4 2,2 0,8 -0,4 5,2 3,4 4,1 -2,4 7,7 1,1 10 Banco Central do Brasil - Focus Bulletin | Market Average Estimates– September 9th, 2021 11 Banco Central do Brasil - Focus Bulletin | Market Average Estimates –September 9th, 2021. 51ECONOMIC ENVIRONMENT ABRAMED PANEL

In the international scenario, all the major on the duration of social isolation measures economies of the world suffered retraction and the pace of vaccination. Even so, it is in the level of economic activity, except likely that the recovery of the economy China. Estimates of GDP variation for the will be uneven, especially in developing next two years depend, among other factors, countries. TABLE GDP RATE VARIATIONS AND PROJECTIONS (SELECTED COUNTRIES – 2010/2022) 10 Source: International Monetary Fund-World Economic Outlook, July 2021 Update. IBGE-Diretoria de Pesquisas, Coordenação de Contas Nacionais. Adapted by Abramed. Note: Results noted for the year 2020 in each country, except for the groups involving several countries GDP VARIATION % AVE- AVE- 2019 2020 2021 2022 RAGE RAGE World 2001- 2011- 2,8 -4,4 6 4,9 Developed Countries 2010 2020 1,7 -5,8 5,6 4,4 Euro Zone 1,3 4,3 United Kingdom (UK) 3,9 2,7 1,5 4,8 United States (USA) 2,2 4,9 Japan 1,7 1,1 0,7 3 Emerging and Developing Countries 3,7 5,2 Asia - Emerging Countries 1,2 0,3 5,5 -8,3 4,6 6,4 China 6,1 -9,9 7 5,7 India 1,7 0,7 4,2 8,5 Latin America and Caribbean 0 3,2 Mexico 1,8 1,6 -0,3 -3,5 7 4,2 Brazil 1,4 1,9 Emerging and Developing Countries - Europe 0,7 0,3 2,1 -4,8 2,8 3,6 Russia 1,3 3,1 Middle East & Central Asia 6,2 4 1,4 -3,3 6,3 3,7 Sub-Saharan Africa 3,2 4,1 South Africa 8,5 5,9 0,2 -1,7 7,5 2,2 10,6 6,8 2,3 8,1 7,6 4,9 -10,3 9,5 3,3 0,6 -8,1 5,8 1,5 1,2 -8,5 6,3 3,7 0,3 -4,1 5,3 4,5 2,2 -4,6 4,9 4,9 1,1 -3,1 4,4 5,4 2,5 -4,1 4 5,8 3,2 -3 3,4 3,5 0,6 -7 4 52 ABRAMED PANEL ECONOMIC ENVIRONMENT

The economic indicators selected below show The recovery of results and expectations considering the effects economic activity of covid-19 in the country. The price increase will depend, among of international commodities has directly other factors, on impacted the prices of food and fuel, affecting the vaccination the inflation projection for the coming months. rate of the In this sense, it is expected a rise in the inflation population. rate above the target in the short term and the index should end 2021 at between 8.5% and 11.0%, according to the Banco Central’s Focus survey. With respect to the exchange rate, the dollar exchange rate reached record highs due to political instability and growing concerns about the consequences of the pandemic on economic activity. GRAPH IPCA AND INFLATION TARGET - VAR. % IN 12 MONTHS, OBSERVED, MARKET EXPECTATIONS (FOCUS) AND INFLATION TARGET (MAR.11/MAR.23) 14 Source: Banco Central do Brasil. Extracted on March 19th, 2021. Prepared by Abramed. 12 10 8 6 4 2 0 MAR JUL NOV MAR JUL NOV MAR JUL NOV MAR JUL NOV MAR JUL NOV MAR JUL NOV MAR JUL NOV MAR JUL NOV MAR JUL NOV MAR JUL NOV MAR JUL NOV MAR JUL NOV MAR 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Maximum Limit Most recent Focus Recorded IPCA Floor (Expanded Consumer Price Index) 53ECONOMIC ENVIRONMENT ABRAMED PANEL

GRAPH NOMINAL EXCHANGE RATE R$/US$ (MAR.2011/MAR.2051) 15 Source: Banco Central do Brasil. Extracted on March 19th, 2021. Prepared by Abramed. 6 5,50 5 4,50 4 3,50 3 2,50 2 1,50 1 MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Nominal Exchange Rate 54 ABRAMED PANEL ECONOMIC ENVIRONMENT

GRAPH SELIC TARGET RATE% A.A. (MAR.11/MAR.21) 16 Source: Banco Central do Brasil. Extracted on March 19th, 2021. Prepared by Abramed. 15 13 11 9 7 5 3 1 MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Selic Target Rate 55ECONOMIC ENVIRONMENT ABRAMED PANEL

GRAPH IBC-BR - ECONOMIC ACTIVITY INDEX - VAR. % IN 12 MONTHS (APR.11/JAN.21) 17 Source: Banco Central do Brasil. Extracted on March 19th, 2021. Prepared by Abramed. 8 6 4 2 0 -2 -4 -6 MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR | JUL | NOV MAR 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 IBC-Br 56 ABRAMED PANEL ECONOMIC ENVIRONMENT

02.1 Economic activity THE COVID-19 PANDEMIC HAS CONSIDERABLY IMPACTED EXPECTATIONS FOR ECONOMIC ACTIVITY IN BRAZIL OVER 2020 AND 2021. However, it is important to note that even This figure interrupted a sequence of positive before the onset of the health crisis, the results and consolidates the worst result economy was already showing signs of since the second quarter of 2016, a period stagnation and decline. The gross domestic characterized by a strong economic recession product grew 1.7% in the first quarter that affected the country between 2014 of 2018, 1.6% in the same period of the and 2017. During this period, the country following year and 1% in the first quarter was already suffering from the process of of 202012, i.e. it was already in decline deindustrialization, technological dependence before the pandemic unfolded in the and indebtedness of companies and families, country. Since then, successive declines among other structural flaws of the economic were observed in the following quarters model in place at the time and that still plague and the under the effect of the pandemic the performance of the Brazilian economy the economy shrank even more: 4.1% in due to the absence of a structuring and 2020. development agenda for the country. GRAPH GDP DEVELOPMENTS - ACCUMULATED RATE IN 4 QUARTERS (%) 1ST QUARTER 2010 TO 2ND QUARTER 2021 18 Source: IBGE - Diretoria de Pesquisas, Coordenação de Contas Nacionais. Prepared by Abramed. 8 6 4 2 0 -2 -4 -6 -4,5 -4,1 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 12 Cumulative rate in 4 quarters. 57ECONOMIC ENVIRONMENT ABRAMED PANEL

With the reduction of 4.1% in GDP, Brazil has Lowest average dropped out of the ranking of the 10 largest annual economic economies in the world and consolidates the growth in 120 decade ending in 2020 with the lowest average years annual growth in 120 years. In 2020, the country occupied the 7th position in the ranking and in 2020 it fell to the 12th position. It is regarded as a decade even more lost than the “lost decade”13 of 1980. On that occasion, the growth rate of the economy was 1.6%, while in the most recent period it was only 0.3% per year. TABLE TOP 15-WORLD’S LARGEST ECONOMIES (2010/2020) 11 Sources: World Bank national accounts data, and OECD National Accounts data files. Adapted by Abramed. Note: Countries ranked by current GDP-GDP (current US$). RNK COUNTRY 2010 RNK COUNTRY 2020 1st United States 15 1st United States 20,9 2nd China 6,1 2nd China 14,7 3rd Japan 5,7 3rd Japan 5,1 4th Germany 3,4 4th Germany 3,8 5th Franch 2,6 5th United Kingdom 2,7 6th United Kingdom 2,5 6th India 2,6 7th Brazil 2,2 7th Franch 2,6 8th Italy 2,1 8th Italy 1,9 9th India 1,7 9th Canada 1,6 10th Canada 1,6 10th South Korea 1,6 11th Russia 1,5 11th Russia 1,5 12th Spain 1,4 12th Brazil 1,4 13th Australia 1,1 13th Australia 1,3 14th South Korea 1,1 14th Spain 1,3 15th Mexico 1,1 15th Mexico 1,1 58 ABRAMED PANEL ECONOMIC ENVIRONMENT

GRAPH AVERAGE GDP VARIATION IN % PER DECADE (1900-2020) 19 Source: Ibre/FGV, based on Ipea data for the period 1901 to 1947. IBGE - Diretoria de Pesquisas, Coordenação de Contas Nacionais. Prepared by Abramed. 1901 - 1910 4,1 1911 - 1920 4,2 1921 - 1930 1931 - 1940 4,4 1941 - 1950 4,3 1951 - 1960 1961 - 1970 5,7 1971 - 1980 7,1 1981 - 1990 1991 - 2000 6,0 2001 - 2010 8,3 2011 - 2020 1,6 2,5 3,7 0,3 The poor result of the economic activity in 2020 negatively impacted the number of beneficiaries of health care plans, especially in the quarter ending in June 2020. At the time, the sector lost about 300,000 beneficiaries compared to the same period in 2019. However, unlike what was observed between 2016 and 2018, when the variation in the number of beneficiaries was slower than the pace of recovery of the economy, in the most recent period the opposite behavior was observed. 13 GDP: Pandemic worsens what would already be the worst decade of growth in Brazil in more than a century.https://www.bbc.com/portuguese/ brasil-56257245 59ECONOMIC ENVIRONMENT ABRAMED PANEL

Even in the face of the pandemic’s unfolding effects on economic activity and on the labor market, the number of beneficiaries grew again, and in September 2020 we already saw an increase of 0.5%, while GDP decreased by 3.4% in the same period. By the end of the year, a 1.2% increase in the number of beneficiaries was recorded, while GDP decreased by 4.1%, between 2019 and 2020. GRAPH GDP VARIATION AND THE NUMBER OF BENEFICIARIES OF HEALTH CARE PLANS (12-MONTH CUMULATIVE RATE – BRAZIL – DEC.10/DEC.20) 20 Sources: Sistema de informações de beneficiários - SIB/ANS/MS-Tabnet. Extracted on April 1 st, 2021. Quarterly national accounts: Indicadores de Volume and Current Values - IBGE. Prepared by Abramed. 8 6 3,3% 4 1,8% 2 0 -2 -4 -6 JUN | DEC | JUN | DEC | JUN | DEC | JUN | DEC | JUN | DEC | JUN | DEC | JUN | DEC | JUN | DEC | JUN | DEC | | JUN | DEC | JUN 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Healthcare Assistance GDP 60 ABRAMED PANEL ECONOMIC ENVIRONMENT

The number of beneficiaries increased again even during the pandemic. 61ECONOMIC ENVIRONMENT ABRAMED PANEL

02.2 Labor market THE UNEMPLOYMENT RATE WAS 14.1% AND REACHED AROUND 14.4 MILLION BRAZILIANS IN THE QUARTER ENDING JUNE 2021, ACCORDING TO DATA FROM THE NATIONAL SURVEY BY CONTINUOUS MONTHLY HOUSEHOLD SAMPLE (PNAD CONTINUA). This is the 3rd highest rate recorded since 2012 Twelve months after the start of the and demonstrates the negative impact of the pandemic, it reached the historic mark covid-19 pandemic on the labor market. of 14.7%, the highest since the beginning of the research. Despite the indicator’s Since the start of the pandemic, the improvement in the most recent period, unemployment rate has not stopped growing. the situation is worrying since the It went from 12.2% at the end of March, to pandemic caused thousands of workers to 13.3% at the end of June and reached 14.6% in stop looking for jobs in the official labor September 2020. market. GRAPH UNEMPLOYMENT RATE (%) AND NUMBER OF UNEMPLOYED PEOPLE AGED 14 YEARS OR MORE (THOUSAND) 1ST QUARTER/2012 TO 2ND QUARTER /2021 21 Source: IBGE - Diretoria de Pesquisas, Coordenação de Trabalho e Rendimento, Pesquisa Nacional por Amostra de Domicílios Contínua - April to June 2021. Prepared by Abramed. 16 14.444 16.000 12.791 14 12.923 12.766 14.000 12 12.000 10 10.000 8 8.000 6 6.000 4 4.000 12,4 12 13,3 14,1 2 2.000 0 0 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Unemployment rate People aged 14 or more 62 ABRAMED PANEL ECONOMIC ENVIRONMENT

In the first months following the start of Despite the improvement observed in the the pandemic, the reduction in the number quarter ending in June 2021, in comparison of employees mainly affected the most with the same quarter of the previous year, labor-intensive sectors, except for the health only three activities returned to the level of sector, due to the demand for professionals the number of people employed in the pre- to deal with the pandemic. At the time, this -pandemic, particularly health services. reduction had reached eight of the ten main sectors of labor activity. TABLE NUMBER OF EMPLOYED PEOPLE AGED 14 AND OVER BY MAIN OCCUPATION (ESTIMATE IN THOUSANDS – 2019/2021) 12 Source: IBGE - Diretoria de Pesquisas, Coordenação de Trabalho e Rendimento, Pesquisa Nacional por Amostra de Domicílios Contínua - April to June 2021. Prepared by Abramed. MAIN OCCUPATION PRE- PAN- PAN- VARIATION VARIATION VARIATION VARIATION PAN- DEMIC DEMIC RATIO RATIO RATIO RATIO Employed people aged 14 DEMIC COMPARED COMPARED COMPARED COMPARED years and over APR APR TO THE SAME TO THE SAME TO THE SAME TO THE SAME Agriculture, livestock raising, forest OCT -JUN -JUN MOBILE MOBILE MOBILE MOBILE production, fishing and farming -DEC 2020 2021 QUARTER OF QUARTER OF QUARTER OF QUARTER OF General industry 2019 THE PREVIOUS THE PREVIOUS THE PREVIOUS THE PREVIOUS Construction YEAR ( YEAR ( %) YEAR ( YEAR ( %) Manufacturing, repairing of motor 94.552 ABSOLUTE) 2021/2020 ABSOLUTE) 2021/2019 vehicles and motorbikes 2021/2020 Transport, storage and logistics 2021/2019 83.347 87.791 4.444 5,3 -6.761 -7,2 8.333 7.976 8.920 944 11,8 587 7 12.166 10.727 11.035 308 2,9 -1.131 -9,3 6.820 5.323 6.365 1.042 19,6 -455 -6,7 18.009 15.244 15.951 707 4,6 -2.058 -11,4 4.896 4.341 4.489 148 3,4 -407 -8,3 Lodging and catering 5.663 4.006 4.315 309 7,7 -1.348 -23,8 10.570 10.064 10.797 733 7,3 227 2,1 Public information, communication and financial, real estate, professional 16.529 16,789 16.562 -227 -1,4 33 0,2 and administrative activities 5.152 4.117 4.124 7 0,2 -1.028 20 Public administration, defence, 6.391 4.746 5.171 425 9 -1.220 19,1 social security, education, public health and social services Other services Domestic services 63ECONOMIC ENVIRONMENT ABRAMED PANEL

Other negative consequences arising from the pandemic were the reduction in the number of people employed in the private sector with a signed labor contract and the decline in average real household income. The number of employees with a signed labor contract decreased by 11.2% (3.9 million), from 33.7 million in December 2019 to 29.9 million in the quarter ending December 2020, resulting in the lowest level in the historical series for the period. In the quarter ended June 2021, it totalled 30.2 million employed people with signed labor contracts, a result well below that observed in the pre-pandemic period. GRAPH PEOPLE AGED 14 OR OVER, EMPLOYED IN THE PRIVATE SECTOR WITH AND WITHOUT A SIGNED LABOUR CONTRACT (EXCEPT DOMESTIC WORKERS - IN 22 THOUSANDS) BRAZIL 1ST QUARTER/2012 TO 2ND QUARTER/2021 Source: IBGE - Pesquisa Nacional por Amostra de Domicílios Contínua Mensal - October to December 2020. Prepared by Abramed. 12.500 39.000 12.000 37.000 11.500 35.000 11.000 33.000 10.500 10.000 31.000 9.500 29.000 9.000 27.000 8.500 8.000 25.000 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 With no formal Contract With a formal Contract 64 ABRAMED PANEL ECONOMIC ENVIRONMENT

The average real income of the primary work The number of in the private sector with and without signed employees with labour contract registered a decline of 4% and signed labor 9.6%, respectively, between the last quarter contracts decreased ended in June 2021 and the same period of by 11.2%. the previous year. Generally, in periods of economic crisis, average income tends to decrease due to high unemployment rates. However, the increase in income observed during the pandemic period can be explained by the labour force composition effect, that is, workers with lower average income were excluded from the formal labour market, thus raising the overall average income. GRAPH REAL AVERAGE INCOME FROM PRIMARY WORK, MONTHLY, FOR PEOPLE AGED 14 YEARS OR OLDER (EXCEPT DOMESTIC WORKERS - IN R$) BRAZIL 1ST 23 QUARTER/2012 TO 2ND QUARTER/2021 Source: IBGE - Pesquisa Nacional por Amostra de Domicílios Contínua Mensal - October to December 2020. Prepared by Abramed. 2.500 2.000 1.500 1.000 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 03 | 04 01 | 02 | 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Private With NO formal Contract Private With a formal Contract 65ECONOMIC ENVIRONMENT ABRAMED PANEL

The effects of the pandemic on the job market were also made evident through data released by the General Registry for Employed and Unemployed (Caged). In the first months after the beginning of the pandemic, the balance14 of jobs was negative, especially in April. On that occasion, 951,000 jobs were closed. As of July, there was a gradual recovery associated with the reduction in the number of covid-19 cases and since then the monthly balance has been positive, except in December 2020. GRAPH CAGED EMPLOYMENT BALANCE (IN THOUSANDS – 2020/2021) 24 Source: new Caged and MTE/SPPE/DES/CGET monthly formal employment statistics. Available at: pdet.mte.gov. br. Extracted on September 20th, 2021. Prepared by Abramed. Note: Series with adjustments. Results from previous competencies can be adjusted later. 225 398 397 117 392 261 275 304 316 319 242 176 116 137 -111 -272 -367 -951 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL 2020 2021 14 Hirings minus layoffs. 66 ABRAMED PANEL ECONOMIC ENVIRONMENT

In 2020, about 142,000 new jobs were created. A positive The only worse result that this, was the balance of formal economic recession period between 2015 and employment in 2017. During the first months of 2021, the 2021 boosted balance14 of formal jobs was 1.8 million and the number of shows a tendency to recover, especially in the beneficiaries in areas most impacted by the pandemic: services, supplementary industry and commerce. health. GRAPH FORMAL EMPLOYMENT BALANCE (IN THOUSANDS - CUMULATIVE JANUARY TO JULY – 2020/2021) 25 Source: new Caged and MTE/SPPE/DES/CGET monthly formal employment statistics. Available at: pdet.mte.gov. br. Extracted on September 20th, 2021. Prepared by Abramed. Note: Series with adjustments. Results from previous competencies can be adjusted later. 1.944.560 1.848.304 1.301.842 529.554 644.079 1.117.171 142.690 396.993 -20.832 -1.321.994 +3.218.195 -1.542.371 -26.503 Positive employment balance Negative employment balance 2011 2012 2013 2014 2015 2016 2017 2018 2019 JAN-JUL 2020 2021 67ECONOMIC ENVIRONMENT ABRAMED PANEL

68 ABRAMED PANEL

Supplementary Health Market in Brazil 03 69ABRAMED PANEL

03 BRAZILIAN SUPPLEMENTARY HEALTH MARKET THE HEALTH SYSTEM IN BRAZIL IS CHARACTERIZED BY A HYBRID SYSTEM IN WHICH THE PUBLIC AND PRIVATE SECTORS OFFER HEALTH PRODUCTS AND SERVICES. THE 1988 FEDERAL CONSTITUTION GUARANTEES ACCESS TO ALL MEDICAL SERVICES FOR THE POPULATION, WHICH IS A UNIVERSAL AND EQUAL RIGHT FOR ALL BRAZILIAN CITIZENS. HOWEVER, IT ALLOWS THE PUBLIC HEALTH SYSTEM TO COEXIST WITH THE PRIVATE SUPPLEMENTARY HEALTH SYSTEM, WHICH OFFERS HEALTH PLANS AND INSURANCE AND DISPOSES OF A BROAD NETWORK OF PROVIDERS. 70 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET

The health system in Brazil is characterized by a hybrid system in which the public and private sectors offer health products and services. In this scenario, there is a significant Therapy Support Services (SADT) facilities, participation of the supplementary health 94% are constituted by private legal nature, market through the offer of private health especially by private limited companies plans and insurance, particularly by companies (57%). These numbers show the significant and families. The dynamics of this market are participation of the private sector in offering essential in developing and complementing and providing health services the provision of health services, in addition to those offered by the public health system in the country. The participation of the private sector in the supply and provision of health services occurs in a very diversified manner in the country. Based on data from the Ministry of Health from June 2021, approximately 60% of the inpatient beds and 55% of the existing complementary beds are private. Considering the Diagnosis and BRAZILIAN SUPPLEMENTARY HEALTH MARKET 71ABRAMED PANEL

03.1 Operators THE OPERATORS OF HEALTH PLANS AND INSURANCE ARE ORGANIZED ACCORDING TO THEIR LEGAL STATUS AND DIFFER IN THE FORM OF ACCESS, THE PAYMENT SYSTEM AND THE BENEFITS OFFERED. According to data from the National one notices a significant participation of Agency for Supplementary Health (ANS), the medical cooperatives, with 276 active in July 2021, the supplementary health operators and a 39.1% share of the market, market comprised 705 medical-hospital followed by the group medical plans, with plan operators in activity and with 247 operators and 35% of the active total beneficiaries, and 255 exclusively dental with beneficiaries in the medical-hospital operators.15 In this group of operators, segment. TABLE DISTRIBUTION OF OPERATORS PER SIZE OF BENEFICIARIES, ACCORDING TO MANAGEMENT MODE (JUL.21) 13 Source: Sistema de Cadastro de Operadoras e Sistema de Informações de Beneficiários/ANS TABNET. Extracted on september 20, 2021. Prepared by Abramed. MODE With no Small-sized Medium-sized Large Total With Beneficiaries (up to 20.000) (20.000 to Enterprise Beneficiaries Self Managment 100.000) (over 100.000) Medical Cooperative 143 Philanthropic 10 100 33 10 Group Medicine Insurance Company Specialized in – 124 117 35 276 Healthcare Medical-Hospitals 2 18 11 2 31 Dental Cooperative 19 144 73 30 247 Group Odontology Exclusively Dental –2 1 58 Benefits Administrator Total 31 388 235 82 705 1 70 25 5 100 13 122 19 14 155 14 192 44 19 255 171 – – – – 216 580 279 101 960 72 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET

Since the introduction of the regulatory going from approximately 1,380 operators in mark upon the creation of ANS, in 2000, the December of 1999, to 705 in July 2021. In the number of active medical-hospital operators exclusively dental segment, the reduction was and with beneficiaries has been gradually less accentuated, going from 441 operators to decreasing until reaching the current level, 255 in the same period. GRAPH OPERATORS OF PRIVATE HEALTH PLANS IN ACTIVITY WITH BENEFICIARIES (DEC.99/DEC.20) 26 Source: Sistema de Cadastro de Operadoras, Sistema de Informações de Beneficiários/ANS TABNET and Con- solidated data on supplementary health (Updated on January 21, 2021). Extracted on February 9, 2021. Prepared by Abramed. UP TO DEC/1999 – 1.380 MEDICAL- HOSPITAL JUL/2021 – 705 UP TO DEC/1999 – 441 EXCLUSIVELY DENTAL JUL/21 – 255 15 The operators of health plans and insurance are constituted according to the resolution of the collegiate board of directors RDC nº 39, of October 2000, art. 10, which defines the segmentation and classification of health operators according to the modalities. BRAZILIAN SUPPLEMENTARY HEALTH MARKET 73ABRAMED PANEL

A systematic reduction of operators is noticed especially in the years following the creation of Law nº 9.656 and Law nº 9.961. The reduction in the number of medical- Despite the reduction and consolidation of hospital operators occurred systematically the number of operators, it is important to and more accentuated especially in the note that this market tends to be regionally years following the creation of Law nº concentrated, since it requires the existence 9,656, which disposes of private plans and of economy of scale and scope to meet the insurance of health care, and Law nº 9,961, set of regulatory requirements and maintain which created the ANS, in January of 2000. the economic and financial balance of Many companies registered themselves its activities. In this scenario, only well- at ANS and later evaluated their effective structured and efficient companies can permanence in the supplementary health remain in the market. This is a dynamic market. Since then, the number of market with enormous growth potential, cancelled registrations, either compulsory given the demographic challenges and the or voluntary, has been greater than the necessary transformations in healthcare number of new registrations. models. 74 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET

TABLE NUMBER OF NEW REGISTRATIONS AND TERMINATIONS ACCORDING TO CAUSE - MEDICAL-HOSPITAL PLAN OPERATORS (1998/2021) 14 Source: Registration data of active and terminated operators - CADOP/ANS Report Extracted on February 9, 2021. Prepared by Abramed. YEAR NEW TERMINATED COMPULSORY VOLUNTARY REGISTRATIONS 1998 572 – – – 1999 124 187 161 26 2000 24 151 7 144 2001 28 157 19 138 2002 4 319 62 257 2003 9 169 56 113 2004 9 129 21 108 2005 6 117 28 89 2006 8 76 36 40 2007 21 199 127 72 2008 13 198 130 68 2009 16 102 64 38 2010 35 143 96 47 2011 31 73 47 26 2012 21 100 67 33 2013 31 119 85 34 2014 26 87 51 36 2015 23 126 88 38 2016 28 70 50 20 2017 26 68 45 23 2018 28 69 36 33 2019 41 59 38 21 2020 39 70 48 22 2021 17 13 7 6 Total 1.180 2.801 1.369 1.432 BRAZILIAN SUPPLEMENTARY HEALTH MARKET 75ABRAMED PANEL

Reduction in elective procedures led to a reduction in care expenses and claims rate. 03.1.1 Economic & Financial Performance THE ECONOMIC AND FINANCIAL PERFORMANCE OF THE OPERATORS AND INSURERS PRESENTED ATYPICAL BEHAVIOR DUE TO THE UNFOLDING OF THE PANDEMIC IN THE SUPPLEMENTARY HEALTH MARKET, ESPECIALLY IN RELATION TO THE VARIATION OF CARE EXPENSES.16 76 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET

These expenses totaled R$ 165.8 billion and decreased 4% in 2020, compared to the previous year. This is the first negative variation in care expenses since the creation of ANS twenty years ago. This decline is associated with the reduction in the number of elective procedures, both in the hospital and in the diagnostic segment. Revenues from counter payments17 are R$ 223.4 billion in the supplementary health market. Of this total, R$ 217.5 billion corresponds to the medical-hospital operators, with an increase of 4.8% compared to the previous year. TABLE REVENUE, HEALTH CARE COSTS AND CLAIM RATES PER HEALTH CARE SEGMENTATION (R$ BILLION – 2016/2021*) 15 Source: Cadastro de Operadoras e Sistema de Informações de Beneficiários/ANS TABNET. Extracted on September 20, 2021. Prepared by Abramed. Note: * 2021 up to the second quarter. Medical-Hospitals 2016 2017 2018 2019 2020 2021 Effective Benefit 158,5 176 192,1 207,6 217,5 115,2 Events/Reimbursable Claims 135,6 149,1 159,8 172,8 165,8 96,9 Claim Rate (%) 85,6 84,7 83,2 83,2 76,2 84,1 Exclusively Dental Effective Benefit 3,1 3,3 3,5 3,8 3,6 1,7 Events/Reimbursable Claims 1,5 1,5 1,7 4,8 1,4 0,7 Claim Rate (%) 48,3 46,9 47,4 46,3 39,3 40,5 Benefits Administrator Effective Benefit 1,7 1,6 1,8 2,1 2,3 1,3 16 It is the total expenditure, expressed in Reals, with the events carried out by the beneficiaries with a contract with the operator outside the waiting period in the defined assistance items, discounting the disallowance values. 17 Revenue from payments of individual and collective monthly fees for medical-hospital plans, exclusively dental plans and benefit administrators, less the amounts of disallowances. BRAZILIAN SUPPLEMENTARY HEALTH MARKET 77ABRAMED PANEL

03.1.2 Claim Rate THE CLAIM RATECAN BE DEFINED AS THE RATIO BETWEEN ASSISTANCE EXPENSES, MEANING THE PAYMENTS MADE TO PROVIDERS (HOSPITALS, PHYSICIANS AND LABORATORIES, AMONG OTHERS), RESULTING FROM THE USE OF HEALTH SERVICES (CONSULTATIONS, EXAMINATIONS, THERAPIES AND SURGERIES) BY BENEFICIARIES; AND THE INCOME FROM PAYMENTS, OBTAINED THROUGH THE MONTHLY FEES PAID BY COMPANIES, FAMILIES AND INDIVIDUALS TO OPERATORS AND INSURERS OF HEALTH PLANS. It is one of the main indicators of the The halting of several elective supplementary health market, and is widely procedures directly affected the claims used, including in the calculation for the rate in the supplementary health adjustment of individual/family plans, market in 2020, leading to the lowest contracted after January 1st, 1999 or adapted rate ever recorded by medical-hospital to Law nº 9.656/98. operators: 76.2%. GRAPH CLAIM RATES FOR MEDICAL-HOSPITAL AND DENTAL-ONLY OPERATORS (IN % – 2016/2021*) 27 Source: Registry of Operators and Beneficiary Information System/ANS TABNET. Extracted on September 20, 2021. Prepared by Abramed. 48,3 46,9 47,4 46,3 84,1 85,6 83,2 83,2 39,3 84,7 40,5 2016 2017 2018 2019 76,2 2021 Exclusively dental 2020 Medical-hospital 78 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET

In the exclusively dental segment, the claim Among the types of medical-hospital operators, rate was 39.3%. For the most recent period, especially the specialised health insurers, medical considering data up to the second quarter cooperatives and group medicines, an average of 2021, it can be observed that the claim claim rate of 83.4% is recorded between 2016 and rate returned to pre-pandemic levels in both 2019, 76.8% in 2020 and 84.7% in the first half of segments. 2021. GRAPH MEDICAL-HOSPITAL OPERATOR CLAIM RATES (IN % – 2016/2021)* 28 Source: Registry of Operators and Beneficiary Information System/ANS TABNET. Extracted on September 20, 2021. Prepared by Abramed. Note: * 2021 up to the second quarter. SELF-MANAGEMENT 88,8 77,5 84,3 MEDICAL 82,9 COOPERATIVE 75 GROUP MEDICINE 82,4 INSURANCE 81,2 COMPANY 73,5 SPECIALIZED IN 82,7 HEALTHCARE 83,9 81,8 89,0 2016 2017 2018 2019 2020 2021 BRAZILIAN SUPPLEMENTARY HEALTH MARKET 79ABRAMED PANEL

The Average Payment Term to providers can reach more than 100 days. 03.1.3 Average payment term THE AVERAGE PAYMENT TERM INDICATES THE AVERAGE TIME TAKEN BY AN OPERATOR TO PAY PROVIDERS FOR EVENTS CARRIED OUT BY BENEFICIARIES OF MEDICAL AND DENTAL ASSISTANCE PLANS. 80 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET

This is an important economic indicator since It is observed in the modalities of medical this term has direct impacts on the cash flow assistance plans that the average payment of laboratory, hospital, and other providers. In term to providers can reach more than 100 general, longer terms indicate that operators are days, for the set of operators ranked with the financing part of their activities with resources highest billing (payment revenues) in the that should be destined to provider payments. supplementary health market in 2020. Naturally these terms vary according to each provider, since the indicator result reflects both laboratory and hospital. TABLE LONGER PAYMENT TERMS BY LEGAL TYPE (2020) 16 Source: Yearbook - Economic and Financial Aspects of Health Operators DIOPE/ANS - Extracted on June 13th, 2021. Prepared by Abramed. Note: Considers only operators with payment terms greater than 10 days and less than 160 days. Operators ranked in descending order considering the payment revenues according to the type of modality. TOP 10 OPERA- SELF- PHILANTHROPY MEDICAL GROUP MEDICINE INSURANCE TORS CONTRACT MANAGEMENT COOPERATIVE COMPANY REVENUE SPECIALIZED IN HEALTHCARE 1st 49,9 34,5 38,1 32,7 57,8 62,4 53,7 2nd 69,2 28,8 20,9 60,5 47,8 21,9 36,6 3rd 32,5 17,7 49,9 55,3 53,1 21,5 37,2 4th 58,1 53,6 41,1 30,6 24,3 22,1 41,3 5th 42,7 43,4 48,2 57,3 N.D. 69,7 N.D. 6th 37,6 31,3 25,9 7th 33,4 23,3 44,4 8th 30,8 24,5 42,4 9th 101,9 23,5 36,2 10th 44,7 137,0 23,1 BRAZILIAN SUPPLEMENTARY HEALTH MARKET 81ABRAMED PANEL

03.1.4 Health promotion and risk & disease prevention LAST YEAR R$718.8 MILLION WAS SPENT ON THE FUNDING OF HEALTH PROMOTION AND RISK & DISEASE PREVENTION PROGRAMMES IN SUPPLEMENTARY HEALTH, WITH A REDUCTION OF 10.9% COMPARED TO 2019. Promotional and preventive actions are Despite regulatory incentives through the essential to change the health care model in the reduction of the solvency margin requirement, private sector, in order to improve the health the amount destined to health promotion condition of beneficiaries and reduce costs programs still represents a modest participation related to the treatment of diseases. when compared to the total collected through health insurance monthly fees. These expenses represent 0.3% of total outgoing payment revenues and on average the amount represents R$15.2 per beneficiary. TABLE EXPENSES WITH PROMOPREV IN SUPPLEMENTARY HEALTH (2016/2020 – R$ MILLION) 17 Source: Periodic information document from health assistance plan operators - DIOPS/ ANS - Extracted in September 20th, 2021. Preparedby Abramed. 2016 2017 2018 2019 2020 Number of Registered Programs 1.414 1.1.559 1.1.743 1.868 1.880 Expenses with PROMOPREV2º 377,4 532,0 16,32 806,8 718,8 Not aproved by DIPRO 64,5 78,4 92,7 114,3 61,7 Aproved by DIPRO 165,7 1,46 375,1 428,5 361,5 Contraception Revenue 158.507,3 176.041,9 192.070,0 207.583,1 217.477,0 Share of Revenue over expenses 0,2% 0,3% 0,3% 0,4% 0,3% with PROMOPREV 82 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET

03.1.5 Expenses with complementary exams THE VARIATION IN SUPPLEMENTARY HEALTH CARE EXPENSES PRESENTED ATYPICAL BEHAVIOR DUE TO THE IMPACTS OF THE PANDEMIC IN THE SECTOR. From the viewpoint of complementary exams in supplementary health (clinical analyses and imaging exams), the assistance expense totaled R$ 32.1 billion in 2020 and decreased 10.8% in comparison with 2019. The share on the total assistance expenses also decreased, going from 20.8% in 2019, to 19.4% in 2020. In the period between 2016 and 2020, the growth rate of expenses with exams has been 2.6% per year, while the sector’s assistance expenses grew 4.1% per year, highlighting the variation of expenses with hospitalizations of 5.2% and 10% with therapies, on average, per year. BRAZILIAN SUPPLEMENTARY HEALTH MARKET 83ABRAMED PANEL

GRAPH HEALTHCARE AND COMPLEMENTARY EXAM EXPENSES IN SUPPLEMENTARY HEALTH (2016/2020 - BILLION R$) 29 Sources: ANS - Mapa Assistencial da SaúdeSuplementar 2016 a 2020 and TabNet (DIOPS/ANS/MS). Accessed on July 13th, 2021. Prepared by Abramed. Total Health Care Expenditure 172,8 (except dental) 36,0 135,6 149,1 159,8 136,8 165,8 28,2 30,1 33,6 32,1 107,4 119,0 126,2 133,7 2016 2017 2018 2019 2020 Complementary Exams Expenses Medical Care Expenses (CONSULTATIONS, THERAPY, HOSPITALIZATIONS, ETC.) Hospitalization expenses represent the The variation largest portion of assistance expenses in the in healthcare supplementary health sector, equivalent expenses to 45.8% of the total, and totaled R$ 75.6 was strongly billion in 2020, with a reduction of 5.9% influenced by the in comparison with 2019. The procedures effects of the performed in hospitals generally demand pandemic. more resources and, for this reason, have a significant participation in the composition of healthcare expenses. 84 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET

GRAPH DISTRIBUTION OF HEALTH CARE SPENDING IN SUPPLEMENTARY HEALTH - EXCEPT DENTAL CARE (2020) 30 Source: ANS - Mapa Assistencial da Saúde Suplementar 2021. Prepared by Abramed. Hospitalizations Exams Medical Consultations 45,8% 19,5% 12,5% Therapies Other Outpatient 8,8% Services 8,6% Other expenses 4,8% medical-hospital The increase in medical-hospital expenses is one of the main challenges for the sustainability of the health market in Brazil and worldwide. Generally, this increase is due, among other factors, to an increase in the frequency of use of health care services, the prices of procedures, materials and supplies, as well as fraud, waste and judicialization of health care. This escalation burdens mainly those who contract health insurance: companies, individuals and families. The variation in healthcare expenses was strongly influenced by the effects of the pandemic and, for the first time since the beginning of the historical series, some healthcare items showed a negative variation BRAZILIAN SUPPLEMENTARY HEALTH MARKET 85ABRAMED PANEL

in a 12-month period, according to data The increase in from the Institute for Supplementary Health medical-hospital Studies (IESS).18 Consultations showed a expenses is negative variation of -27.9% and among one of the main the tests it was -17%. Hospitalizations and challenges for therapies showed a positive variation of the sustainability 0.8% and 7.6%, respectively6, over the last of the health 12 months completed in December 2020, market. compared to the immediately preceding 12 months. In the same period, the average IPCA was 4.5%.19 The variation in healthcare expenditure results from a combination of the frequency of use of healthcare services and the price of the products and services provided, characterizing it as an expenditure index, for this reason it should not be compared with the IPCA. The use of the IPCA only serves as a parameter to demonstrate the variation rhythm of the economy’s prices in general. 18 The Variation in the Hospital Medical Cost - VCMH/IESS - considers a group of 870.2 thousand individual plan beneficiaries. The calculation is made for a set of individual plans (new and existing) of operators with national coverage. 19 Considering the change in the index number in the last twelve months ended March 2020 compared to the immediately preceding twelve months. 86 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET

GRAPH MONTHLY VARIATION OF MEDICAL-HOSPITAL COSTS PER ITEM OF HEALTH CARE COSTS AND IPCA (ACCUMULATED RATE IN 12 MONTHS – DEC.18/DEC.20) 31 Source: Variation of Medical Hospital Costs - VCMH/IESS. Adapted by Abramed. Note: Variation for the 12 months ended December 2020 relative to the 12 months ended December 2019. The Variation in Medical-Hospital Costs - VCMH/IESS - for a group of 783.7 thousand beneficiaries of individual plans. DEC/2018 Consultations -28 DEC/2020 DEC/2018 Exams -17 DEC/2020 DEC/2018 Hospitalizations 0,8 DEC/2020 DEC/2018 Therapies 7,6 DEC/2020 DEC/2018 IPCA 4,5 DEC/2020 BRAZILIAN SUPPLEMENTARY HEALTH MARKET 87ABRAMED PANEL

03.2 Beneficiaries IN JUNE 2021, THE SUPPLEMENTARY HEALTH MARKET REACHED 76 MILLION BENEFICIARIES AND GREW 5.6%, COMPARED TO JUNE 2020. 48.2 million beneficiaries were enrolled in pandemic in the country, the sector quickly lost healthcare plans, with an increase of 3.3%. The more than 1 million beneficiaries between the exclusively dental plans totaled 27.8 million months of April and June. However, starting and grew 9.9%, based on the same comparison. in July, the number began to grow again, and These results demonstrate the resilience of the 4.2 million beneficiaries were incorporated supplementary health market, since the initial into supplementary health in the 12 months estimates pointed to a sharp reduction in the ending July 2021. number of beneficiaries due to the impacts of the pandemic on the formal job market and It is interesting to notice that the number of economic activity. beneficiaries of medical assistance plans has In the months following the beginning of the remained practically stable, at the level of 47 88 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET

GRAPH BENEFICIARIES OF PRIVATE HEALTHCARE PLANS BY TYPE OF CARE (DEC.19/JUL.21) 32 Source: ANS Situation Room. Notebook 2.0 - Extracted on March 1st, 2021 and September 20th, 2021. Prepared by Abramed. Registration of -1.036.700 Increase of 4.175.838 in beneficiaries of healthcare plans beneficiaries of healthcare plans (-388 thousand) and exclusively (+1.611.959) and exclusively dental plans (+2.563.879) dental plans (-649 thousand) 49,0 28,5 48,5 28,0 27,5 48,0 27,0 47,5 26,5 47,0 26,0 25,5 46,5 25,0 46,0 24,5 45,5 24,0 DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL 2019 2020 2021 Healthcare Plans Exclusively dental million beneficiaries between 2017 and 2019, Even in the face of this recovery, the annual in line with the growth rate of economic variation rate remains null in the period activity. This is a modest number compared between June 2016 and June 2021, registering to the one observed at the end of 2014, when growth of 1.1% per year,20 between June 2011 the sector recorded 50.5 million beneficiaries and 2016. In the dental only plans, the annual in healthcare plans. Since then, this market lost growth rate was more intense in the last five approximately 3.8 million beneficiaries at the years. This is a health care segmentation that end of June 2020 compared to December 2014, offers products that are more financially and began its recovery journey as of July 2020. accessible when compared to healthcare plans. 20 CAGR - Compound Annual Growth Rate. BRAZILIAN SUPPLEMENTARY HEALTH MARKET 89ABRAMED PANEL

In June 2021, the supplementary health market totaled 76.0 million beneficiaries and grew 5.6% compared to June 2020. TABLE BENEFICIARIES OF PRIVATE HEALTHCARE PLANS BY TYPE OF CARE (JUN.11/ JUN.21) 18 Source: Beneficiary Information System - SIB/ANS/MS-Tabnet - Extracted on September 20th, 2021. Prepared by Abramed. REFERENCE HEALTHCARE EXCLUSIVELY TOTAL DENTAL JUN 2021 48,2 27,8 76,0 JUN 2020 46,7 25,3 72,0 JUN 2019 47,0 24,6 71,6 JUN 2018 47,1 23,4 70,5 JUN 2017 47,3 21,7 69,0 JUN 2016 48,3 20,7 68,9 JUN 2015 50,1 20,5 70,6 JUN 2014 50,0 19,6 69,7 JUN 2013 48,5 18,5 66,9 JUN 2012 47,0 17,7 64,7 JUN 2011 45,7 15,8 61,5 VARIATION (%) JUN 2020 TO JUN 2021 3,3 9,9 5,6 JUN 2016 TO JUN 2021 -0,1 34,4 10,3 CAGR JUN 2020 TO JUN 2021 0,0 6,1 2,0 JUN 2016 TO JUN 2021 1,1 5,5 2,3 90 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET

BRAZILIAN SUPPLEMENTARY HEALTH MARKET 91ABRAMED PANEL

The trajectory of the sector in the last ten 0.4% in March 2020 compared to March years can be essentially divided into two 2019. This was the first positive change in periods. The first is characterised by positive 12 months since the quarter ended in June variations in the number of beneficiaries, 2015. However, the number of beneficiaries between December 2010 and June 2015. In fell again by 0.6% between June 2020 and the second, successive negative variations, June 2019, as a result of the consequences of between September 2015 and December the covid-19 pandemic and from July 2020 2019. After 18 consecutive quarters of decline, it resumed its growth rate in step with the the sector showed a reaction and grew by recovery of the labor market. GRAPH BENEFICIARIES OF HEALTHCARE AND DENTAL ONLY PLANS - VARIATION OVER 12 MONTHS IN % (JUN.11/JUN.21) 33 Source: Beneficiary Information System - SIB/ANS/MS-Tabnet - Extracted on September 20th, 2021. Prepared by Abramed. 21 16 11 9,9 6 5,6 3,3 1 -4 JUN OCT FEB JUN OCT FEB JUN OCT FEB JUN OCT FEB JUN OCT FEB JUN OCT FEB JUN OCT FEB JUN OCT FEB JUN OCT FEB JUN OCT FEB JUN 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Healthcare Plans Exclusively dental Total The recovery in the number of beneficiaries care models and, especially as protection will still depend essentially on the behavior for employees during the pandemic period. of the formal labor market and economic activity. The consequences of covid-19 will In this sense, there is a positive variation bring a series of challenges to the health in the three types of contracts, especially sector, since growth conditions are directly in the corporate group plans, with a 4.7% conditioned to these factors. Another increase between June 2020 and June 2021, relevant point is that health plans have and maintaining the annual growth rate at become more attractive to companies with 0.6% per year between June 2016 and June the offer of new products based on primary 2021. The individual or family plans have 92 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET

maintained the number of beneficiaries The resumption and have shown a decline of 1.4% per year of the number of over the last five years. Lastly, the collective beneficiaries will membership plans grew 1.3% in one year and still essentially reduced 0.6% per year, on the same basis of depend on the comparison. behavior of the formal labor market and economic activity. TABLE BENEFICIARIES OF HEALTHCARE PLANS BY TYPE OF CONTRACT – (JUN.11/JUN.21) 19 Source: Beneficiary Information System - SIB/ANS/MS-Tabnet - Extracted on September 20th, 2021. Prepared by Abramed. REFERENCE INDIVIDUAL OR CORPORATE GROUP FAMILY COLLECTIVE MEMBERSHIP JUN 2021 8,9 32,9 6,3 JUN 2020 8,9 31,5 6,2 JUN 2019 9,0 31,7 6,2 JUN 2018 9,2 31,6 6,2 JUN 2017 9,3 31,5 6,3 JUN 2016 9,6 32,0 6,5 JUN 2015 9,9 33,3 6,7 JUN 2014 9,9 33,1 6,7 JUN 2013 9,7 31,7 6,5 JUN 2012 9,6 30,1 6,6 JUN 2011 9,5 28,3 6,7 VARIATION (%) JUN 2020 TO JUN 2021 0,1 4,7 1,3 JUN 2016 TO JUN 2021 -6,6 -1,9 -3,0 CAGR JUN 2020 TO JUN 2021 -1,4 0,6 -0,6 JUN 2016 TO JUN 2021 0,1 2,5 -0,7 BRAZILIAN SUPPLEMENTARY HEALTH MARKET 93ABRAMED PANEL

Positive variation in the three types of contract, especially in corporate collectives. GRAPH BENEFICIARIES OF HEALTH CARE PLANS BY TYPE OF CONTRACT - VA- RIATION OVER 12 MONTHS IN % (JUN.11/JUN.21) 34 Source: Beneficiary Information System - SIB/ANS/MS-Tabnet - Extracted on September 20th, 2021. Prepared by Abramed. 10 5 4,7 0,1 1,3 0 -5 JUN 2011/ JUN 2012/ JUN 2013/ JUN 2014/ JUN 2015/ JUN 2016/ JUN 2017/ JUN 2018/ JUN 2019/ JUN 2020/ JUN 2012 JUN 2013 JUN 2014 JUN 2015 JUN 2016 JUN 2017 JUN 2018 JUN 2019 JUN 2020 JUN 2021 Individual or Family Corporate Collective Group Membership 94 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET

03.2.1 Distribution per region and population size THE SUPPLY AND AVAILABILITY OF HEALTH SERVICES OCCURS MAINLY IN MUNICIPALITIES WITH A POPULATION ABOVE 100,000 INHABITANTS. In these more populated and economically The distribution of the number of beneficiaries developed places, there is a greater supply of and resources in the health sector literally hospital services, diagnostic test processing obey this basic principle. In June 2021, the units,imagingequipmentandhumanresources, Southeast region registered nearly 29.3 million such as doctors, nurses and other health beneficiaries of healthcare plans, which professionals. The existence of economies of represents 60.8% of the total. At the same time, scale is essential to enable the establishment of it stands out for its population size, with 89.6 a health care network in a sustainable manner million inhabitants, about 42% of the total, and and with the provision of high quality health for the high coverage rate of 32.7% in healthcare services. plans. BRAZILIAN SUPPLEMENTARY HEALTH MARKET 95ABRAMED PANEL

The number of beneficiaries has grown mainly in the Centre- -West, Northeast and North of the country in the last ten years. TABLE BENEFICIARIES OF HEALTH CARE PLANS, POPULATION (IN MILLION), MUNICIPALITIES AND COVERAGE RATE BY REGION AND POPULATION SIZE 20 (JUN.21) Sources: Beneficiary information system - SIB/ANS/MS-Tabnet - Extracted on September 1st, 2021. IBGE. Diretoria de Pesquisas - DPE - Coordenação de População e Indicadores Sociais - COPIS. Prepared by Abramed. Notes: ¹Beneficiaries of healthcare plans. Does not include beneficiaries registered in ignored municipalities or abroad. ²Estimates of the resident population in Brazilian municipalities with reference date on July 1st 2021. Region Beneficiaries1 % Population2 % Municipalities % Coverage Rate Centre-West Northeast 3,4 7,0 6,3 7,8 467 8,4 20,2 North 6,7 13,9 6,2 Southeast 1,8 3,7 6,2 27,0 1.794 32,2 11,6 South 29,3 60,8 6,2 7,0 14,5 6,3 8,9 450 8,1 9,5 42,0 1.668 29,9 32,7 14,3 1.191 21,4 23,0 Up to 5.000 inhabitants 0,3 0,6 4,2 2,0 1.250 22,4 6,4 From 5.001 to 10.000 From 10.001 to 20.000 0,6 1,2 8,6 4,0 1.201 21,6 6,5 From 20.001 to 50.000 From 50.001 to 100.000 1,2 2,5 18,9 8,8 1.319 23,7 6,4 From 100.001 to 500.000 More than 500.000 3,2 6,6 34,2 16,0 1.120 20,1 9,3 Total 3,5 7,3 24,5 11,5 354 6,4 14,3 13,9 28,9 55,0 25,8 277 5,0 25,4 25,5 52,9 68,0 31,9 49 0,9 37,5 48,2 100 213,3 100 5.570 100 22,6 96 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET

The number of beneficiaries grew mainly in the Centre-West (45.4%), Northeast (13.6%) and North (11.1%) of the country. In these regions, 2 million beneficiaries were incorporated between June 2011 and June 2021. In other regions growth was lower: in the South (6.1%) and Southeast (0.3%), with 399 thousand and 90 thousand new members, respectively, in the same period. It is noteworthy that the pace of growth in the number of beneficiaries of health care plans was driven by the contracting of corporate collective plans, in all regions. GRAPH ACCUMULATED VARIATION OF BENEFICIARIES OF HEALTH CARE PLANS BY REGION (INDEX BASE NUMBER 100 – JUN.11/JUN.21) 35 Source: Beneficiary Information System - SIB/ANS/MS-Tabnet - Extracted on September 20th, 2021. Prepared by Abramed. 150 Centre- West 140 45,4% 130 120 Northeast 13,6% 110 North 11,1% South 6,1% 100 Southeast 0,3% 90 JUN OCT FEB JUN OCT FEB JUN OCT FEB JUN OCT FEB JUN OCT FEB JUN OCT FEB JUN OCT FEB JUN OCT FEB JUN OCT FEB JUN OCT FEB JUN 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 BRAZILIAN SUPPLEMENTARY HEALTH MARKET 97ABRAMED PANEL

24.9% of the population have a healthcare plan in Brazil. 03.2.2 Coverage rate THE COVERAGE RATE21 OF THE HEALTHCARE PLANS WAS 24.9% AND REPRESENTS 48.2 MILLION BENEFICIARIES AT THE END OF JULY 2021. In the state capitals, the coverage rate varies considerably among the regions of the country, reaching up to 50.6% of the population in the Southeast and 49.4% in the South. The coverage rate of the healthcare plans is directly related to socioeconomic aspects and the offer of healthcare services, as mentioned above. For this reason, a greater proportion of the population covered by health plans is found in capital cities and metropolitan regions. 21 Ratio, expressed in %, between the number of beneficiaries and the population in a specific area. 98 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET

GRAPH COVERAGE RATE OF HEALTHCARE PLANS BY LOCATION (JUL.21) 36 Source: Beneficiary Information System - SIB/ANS/MS-Tabnet. Extracted on September 20th, 2021. Prepared by Abramed. Brazil 24,9 41,8 North 19,6 36,6 Northeast Southeast 11,0 24,6 South 5,0 23,8 Centre-West 12,5 33,8 State 6,6 27,6 Capital city 36,1 50,6 43,5 31,2 25,2 49,4 34,3 21,5 22,7 36,3 29,4 15,0 Capital Metropolitan Region Countryside BRAZILIAN SUPPLEMENTARY HEALTH MARKET 99ABRAMED PANEL

The evolution of the coverage rate of The coverage rate healthcare plans maintained the pace of has grown again growth between 2003 and 2014, when it in the last year. reached about 25.8% of the population. Since then, the proportion of people covered by health plans has remained at an average of 24.3% over the last five years and grew again in July 2021, with 24.9% coverage. It is interesting to note that the coverage rate grew 4.8 percentage points (p.p.) between 2001 and 2010. While the increase was only 1.2 p.p. in the last ten years. In dental plans only, the coverage rate was 14.4% in 2021 and maintains the fastest growth rate since 2000. GRAPH COVERAGE RATE OF HEALTHCARE AND DENTAL ONLY PLANS IN % (DEC.11/JUL.21) 37 Source: Beneficiary Information System - SIB/ANS/MS-Tabnet. Extracted on September 20th, 2021. Prepared by Abramed. 30 23,0 24,9 25 14,4 20 18,2 15 10 7,1 5 1,4 0 DEC DEC DEC DEC DEC DEC DEC DEC DEC DEC DEC DEC DEC DEC DEC DEC DEC DEC DEC DEC DEC JUL 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Healthcare Plans Exclusively dental 100 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET