Quálitas Controladora S.A.B (Q) Q3 2024 earnings summary

Executive summary

• Celebrated 30th anniversary with 18 years of market leadership, holding a 33.1% market share in written premiums and 83% of industry underwriting results.

• Achieved 30% year-to-date and 24% quarterly growth in written premiums, surpassing expectations.

• Net income for 3Q24 reached MXN 1.1 billion, up 12% year-over-year; YTD net income at MXN 3.7 billion.

• Maintained strong agent relationships, with 22,000+ agents contributing two-thirds of YTD written premiums.

• Operations remained uninterrupted despite a cybersecurity incident, with no material impact.

Financial highlights

• Written premiums up 23.9% for the quarter and 29.6% YTD; earned premiums rose 20.1% for the quarter and 25.6% YTD.

• Net income for 3Q24 grew 15.6% year-over-year to MXN 1,183 million; financial income for 3Q24 increased 17.9%.

• Fleet business saw 25.7% quarterly and 41% YTD growth; financial institutions segment grew 27% for both periods.

• International subsidiaries contributed 5.4% of total underwriting; LatAm up 25.5% YTD, US premiums down 9.3% YTD as portfolio shifts to profitability.

• Assets grew 23.5% to MXN 100,723 million; stockholders' equity up 16.6% to MXN 23,393 million.

Outlook and guidance

• Full-year written premium growth expected at 20%-25%, with 2025 growth projected to normalize to low tens percent.

• Combined ratio and claims ratio expected to return to target levels as weather-related seasonality subsides.

• ROE target remains above 20%, in line with long-term objectives; 12-month ROE reached 22.4%.

• Investment income expected to remain strong in 2025, with potential decline in 2026 depending on interest rates.

• Capital allocation will focus on strengthening leadership in Mexico, accelerating subsidiary growth, and expanding into new insurance lines.