Qualitas Controladra Sab

Thank you for standing by. This is the conference operator. Good morning, and welcome to Qualitas' first quarter 2026 earnings results webcast. The conference will begin now. It is my pleasure to turn the call over to Jorge Perez, Qualitas' IRO.

Good morning, and thank you for joining Qualitas' first quarter 2026 earnings call. I'm Jorge Perez-Rivero, Qualitas' IRO. Joining me today are Bernardo Rizul, our CEO, as well as our CFO, Robert Torrago. As a reminder, please note that 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. With that, I will now turn the call over to Bernardo, our CEO, for his remarks.

Thank you, Jorge. And good morning, everyone. It is truly great to be with you all again. Let me start by saying that we are very pleased with the way we have started 2026. Our first quarter results reflect a strong start to the year with solid performance across both financial and operational key metrics, underscoring the consistency of our strategy, the strength of our business model, and the disciplined execution of our key initiatives in a dynamic environment. As we communicated to the market back in January, we expect 2026 to be a transition year as the company implements several initiatives to mitigate the impact of the VAT regulatory change. First quarter has confirmed what we are up against. Planes have increased as a result of VAT new dynamics. Competition has been aggressive. Suppliers are increasing costs due to minimum wage adjustment and duties from China and customer cash is limited. But at the same time, first quarter has confirmed that the multiple actions we have implemented have been successful to partially mitigate. So, and that our business model is resilient. Let me be clear. First quarter numbers are encouraging, but we recognize that challenges remain and 2026 will not be an easy year. On the top line, written premiums grew 15.3% and claims ratio came in within our technical range, recognizing the lower seasonal frequency during the quarter and leading to a combined ratio of 90.2% below of our long-term target. Furthermore, our investment portfolio continues to deliver financial income, ahead of references rates led by the timely duration extension. According to the latest AMIS figures, which were released in March during 2025, Qualitas held 33.9% written premiums market share and 36.2% in earned premiums in the Mexican auto insurance industry. Within this, Qualitas leadership stands out in the heavy equipment segment where we hold a 45.2% market share. More importantly, in terms of profitability, in a year affected by the resolution of the tax authorities regarding the VAT matter, which led to a fourth quarter one-time effect, Qualitas led the way, holding at 80.2% of the sector underwriting results, standing out as the only auto insurer among the top 13 to achieve a positive operating bottom line apart from bank assurance. Full year 2025 industry statistics, showed that Qualitas Mexico posted a combined ratio 171 basis points better than the top five companies and 510 basis points better than the total industry, excluding Qualitas. This confirms that despite price aggressiveness has been eased during this first quarter, profitability of the sector continues to be stressed. In this environment, we remain focused on the strategic priorities that have guided Qualitas in recent years. Our three-pillar strategy continues to provide a clear framework to strengthen the business, enhance our competitive position, and drive sustainable value creation over the medium and long term. Mexico remains at the core of our strategy, representing more than 95% of our underwriting. In our core market, we continue to focus on the elements that have consistently differentiated Qualitas. Service excellence, close relationships with our agents, Innovation across multiple fronts and disciplined pricing and underwriting. Together, these strengths continue to position us favorably in a competitive and evolving market. Winning in Mexico is at the top of the list. At the end of last year, after the confirmation of the VAT legal changes, we increased prices to partially offset the impact, while also starting specific efforts toward further cost reductions. Having a diversified portfolio in terms of business is a strength playing in our favor. At its first quarter, a softer performance in the individual and traditional fleet business were more than offset by some other new large accounts. We will continue to seek business retention, but not at all costs, expecting that, as we have seen in prior cycles, some of those accounts will return in the future behind our value proposition where we are doubling down on service, with first quarter delivering the best overall customer favorability in four years. In terms of Mexico's market dynamics, according to AMDA, industry figures remain relatively favorable overall, although with clear differences by segment. During the quarter, total new vehicle sales in Mexico increased 2.1% year-over-year, supported by a 3.7% increase in light vehicles, while heavy vehicle sales declined 28.0%. Looking ahead, AMDA estimates for 2026 continue to suggest modest growth in light vehicles and a more challenging environment for heavy units. Regarding our second pillar, to accelerate our subsidiary growth, I would like to emphasize the progress we continue to make since it is steadily gaining traction. To demonstrate so, LATAM subsidiaries grew 42% this quarter in US dollars. We remain focused on capturing these opportunities with discipline strengthening local capabilities, expanding our footprint by opening offices in main cities of each country, and above all, continuing to replicate Qualitas operating DNA in those markets where we see attractive long-term potential. In parallel, we continue to make progress on our vertical integration strategy, which we view as a relevant driver of long-term value creation. Our vertical businesses are contributing with operating efficiencies, that are gradually translating into a positive effect on our loss ratio. By capturing economies of scale, logistical efficiencies, customized risk prevention programs, and stronger coordination across the value chain, we are enhancing our claims management capabilities and improving overall cost efficiency. As we look ahead, we will strive to make 2026 another strong year, but never at the expense of doing what is right for the long term of the business. In that sense, we are all working against five main priorities. We have specific KPIs by each area and individual link to variable compensation. We are revamping our IT and innovation team to cope with business needs. Just as an example, we have over 100 projects that will improve service, reduce costs, or increase productivity. All these efforts are underpinned by our plan to strengthen Qualitas culture across all employees. Mexico's GDP outlook remains below ideal levels. Qualitas has shown in recent years that its growth trajectory has become less dependent on broader macroeconomic conditions, and this quarter is a great testimony of that. Before closing, I would like to take a moment to recognize our team. Their dedication, commitment and execution are what makes these results possible and what gives us confidence in our future. And with that, Let's move on to the financial details and take a deeper dive into the quarter results. Roberto, please.