Qualitas Controladra Sab

Good morning and welcome to Qualitas' second quarter 2025 earning results webcast. The conference will begin now. It is my pleasure to turn the call over to Raquel Itoi, Qualitas' IR.

Good morning and thank you for joining Qualitas' second quarter and six months 2025 earnings call. I'm Raquel Itoi, Qualitas' IR coordinator. Our CEO and chairman of the board is joining us today, Jose Antonio Correa, as well as our CFO, Roberto Araujo. As a reminder, information discussed on today's call may include forward-looking statements. These statements are based on management's 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. Qualitas undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise. Let's give it over to José Antonio, our CEO, for his remarks.

Thank you, Raquel, and good morning, everyone. It's great to be with you once again. We are pleased to share strong second quarter and first half of the year results, setting a strong base for the remainder of the year and supporting the execution of our strategy. Top line growth was within our expectations at 12.9%, with a sustainable loss ratio resulting in 92.8% combined ratio for the quarter, right on our long-term target, and a 90.5% combined ratio when considering the first six months of the year. On the investment side, we posted a strong financial income, even as interest rates began easing at the faster than expected pace. Thus, Qualitas delivered a 36% net income growth for the first half of the year, with a 12-month ROE of 26.5% above our long-term target. Additionally, a key highlight for this quarter is that we surpassed the 6 million insured units mark. And reaching this milestone took us only half of the time it took to go from 4 to 5 million, a clear reflection of the quality of our service and our unwavering commitment to our customers. According to the latest industry AMIS figures, in terms of written premiums, Qualitas holds 31.7% of the total market, and 41.9 in the heavy equipment segment. In terms of earned premiums, we maintain a 35.8 percent market share. Additionally, our combined ratio in Mexico is 224 basis points better than the rest of the industry, excluding Qualitas, and we represent about 46 percent of the entire sector on the writing result. These indicators reaffirm our market leadership in both scale and profitability, even when facing a challenging market environment. Before Roberto dives into the financial results, I would like to address some of the current dynamics and challenges in the market, including pricing downward pressures, macroeconomic volatility, early rain seasonality, as well as regulatory changes. These factors are reshaping the industry and pushing all players to adapt. At Qualitas, we are well positioned to respond through our excellence in customer service, innovation, underwriting discipline, and a clear strategy focused on sustainable value creation to our stakeholders. Customer service remains at the heart of what we do. In the first half of the year, we received 1.6 million calls at our contact center with an average response time of five seconds, what means one second faster than the same period last year. This improvement reflects our commitment to delivering best-in-class service when it matters the most. Our satisfaction rate of 96% confirms that we are striking the right balance between speed and quality. Our business model is evolving alongside technology and customer expectations, and it is stronger than ever. Today, approximately 20% of our customer calls are handled throughout artificial intelligence, and about 40% of our clients are managed through robotic process automation. Additionally, 33% of claims are handled remotely using digital technology, reaching a satisfaction rate of 95%. These changes have led to operational efficiencies that allow us to serve more customers while optimizing costs. Looking ahead, we remain cautiously optimistic for the rest of 2025. We are conscious that Mexico's economic slowdown will continue affecting new car sales and disposable income. But we have navigated through these cycles and we know what we need to do. As we enter the second half, typically characterized by higher claims volumes, we are committed to executing our defined strategic priorities, continuing to invest in key areas, and proactively adjusting our operations to remain agile and ready to respond. Let me now get into our three pillar strategy. We continue to strive in winning in our core business, Mexico auto insurance, which continues to be the main driver of our growth, making it our foremost focus. We firmly believe that Mexico is our key growth engine, and in these volatile times, it is essential to continue strengthening our leadership position. The Mexican insurance industry is currently experiencing an intense price competition. particularly in the auto segment due to the insurers aggressively going after volume to maintain or increase market share, a strategy that is proving to be unsustainable as claims severity increases. This is driven by the country's low insurance penetration, macroeconomic pressures, and growing competition. Factors such as inflation, currency volatility, and rising repair and medical costs have squeezed profit margins. At Qualitas, we remain focused on sustainable growth and profitability without compromising competitiveness and long-term financial health. From a market standpoint, new vehicle sales, including light vehicles and heavy equipment, have declined 2.8 percent year-to-date. Notably, heavy equipment sales for vehicles over 3.5 tons dropped by 37.4%, consistent with broader economic trends and anticipated consumption slowdowns. This reflects the persistent volatility that has marked recent periods. As we turn to our subsidiaries, strong performance and progress across Latin America, including our recent entry into Colombia, has been more than offset by our U.S. business, where prior year claims development continue to impact. As Roberto will elaborate, progress made on the runoff of domestic business and in building a new book of healthier by national product is not yet seen in our financials due to litigations coming to closure at a much higher and perhaps unreasonable amounts, confirming that our exit of those businesses was the right decision. Despite this challenging environment, we remain confident in Qualitas' ability to manage these headwinds effectively while pursuing sustainable and balanced growth. We reaffirm our expectation for full-year top-line growth in the high single digits to low teens, and we expect our key performance indicators to remain within target levels. In summary, the first half of the year showed robust commercial momentum. We saw strong ingredient premiums, continued expansion in insured units, and a sustainable loss ratio still below our target range. Financial income has remained solid, and perhaps most importantly, we have achieved meaningful progress across all service metrics. Our organization is structurally prepared for a healthy growth and remains agile and resilient as we move forward. And with that, I'll pass it to Roberto for a deeper dive into our quarter and year-to-date performance. Roberto, please.