Qualitas Controladra Sab

Thank you for standing by. This is the conference operator. Good morning and welcome to Qualitas' second quarter and first half 2024 earnings results webcast. The conference will begin now. It is my pleasure to turn the call over to Andrea Gonzalez, Qualitas' IR manager.

Good morning and thank you for joining Qualitas' second quarter and first half 2024 earnings call. José Antonio Correa and Bernardo Rizou, our CEO and Deputy CEO, are joining us today. As a reminder, discussions in this event may include forward-looking statements. These statements are based on management current expectations and are subject to many risks and uncertainties that could cause actual events and results to differ materially from those discussed during today's call. Let's turn it over to José Antonio, our CEO, for his remarks.

Thank you, Andrea. Good morning, everyone, and great to be with you again. I would like to start providing our perspective since Qualitas started operations back in 1994, a first and complicated year during which we dealt with one of the most complicated periods economically, politically, and socially in Mexico. Since then, and throughout 30 years, we have managed to navigate through different macroeconomic challenges, political landscapes, and volatility, proving the resilience of our unique business model while focusing on things that we can control. We recognize we are currently in times of relevant political changes in Mexico, in the U.S., and globally. I also would like to stress that while we always stay close to understand implications, the organization remains focused on delivering value to our agents and policyholders and recognizing there are still plenty of opportunities within our own operation and within the auto insurance industry, which is vastly underpenetrated. Importantly, and I want to stress that again, we remain focused on what we can control. Now, going to our recent performance, and according to the latest Mexico industry figures, during the first quarter of 2024, automobile insurance grid and premiums increased 31%. Qualitas Mexico outperformed the industry with a 39% growth. Our leadership comes along with one of the lowest loss ratios within the industry at 62%, compared to the 69 percent average from the rest of the industry. Our operational result was even higher than the total auto industry insurance result, and in terms of profitability, our combined ratio stood at 87 percent, a significant percentage point below the rest of the industry. We continue to face external pressures, such as spare parts cost and limited availability, which is now coupled with the beginning of the raining and hurricane season. We will continue to assess and price accordingly, recognizing the competitive landscape has also adjusted tariffs in most cases, while we should always assume some players will seek to gain volume at the expense of insufficient premiums, a strategy that we believe unsustainable in the medium and long term. Moving to our first six months performance, we see 2024 as the year of two stories. The first half with a strong momentum in the Mexican economy benefited from pre-elections dynamism, in which quality as holding written premiums grew 32.7%. And a second half where we expect a more cautious consumer behavior, given the economy cycle of an election year, plus the uncertainty of the US voting outcome. Recognizing you all seek some color on what to expect, I would like to say that we should land the year in the low to mid-20s growth, higher than what we expected back in January, and confirming another year ahead of the industry. With that in mind, six months' new car sales posted a 12 percent increase versus the same period of last year, June posting a slowdown in the pace with an 8 percent growth versus the same month of 2023. As of today, AMDA adjusted its annual growth estimates to around 10 percent growth. I am quite pleased with the results for the first half of the year, posting a stellar premium growth and consistent increase in number of insured units. We also reached the inflection point in loss ratio towards our long-term target. Our financial income continues to be a tailwind and is poised to benefit from the extended high rate cycle. And perhaps most importantly, we have made important improvements across all service indicators, right-sizing the organization to support the volume growth and setting the base for a sustainable future. Moving to a non-financial topic and in line with our commitment to continue strengthening and developing our organization, I am pleased to announce that the Board of Directors has approved the appointment of Mr. Roberto Araujo as Qualitas Controladora Chief Financial Officer, effective July 16th. Let me remind you that we conducted an extensive search, seeking for the right fit for the position, and I am pleased to have Roberto as part of the team. His breadth of experiences in different industries, including insurance, his leadership style and values will be instrumental in supporting many of Qualitas' initiatives and projects, roasting our corporate governance. We welcome him and look forward to his many contributions as we scale and grow our businesses to new levels. And before handing it over to Bernardo and diving into our quarterly financials, I would like to express a heartfelt appreciation to our agents and policyholders around the geographies where we operate, as well as to our shareholders, our team and suppliers who support us. As we start the second half of the year, I feel stronger than ever that our strategy, our people, values and DNA are absolutely the right ones to keep on delivering a strong performance. And with that, I pass it over to Bernardo. Bernardo, please.