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

Executive summary

• Achieved record 33.1% market share in auto insurance, leading industry profitability with 83% of underwriting and 44% of net results among peers.

• Written premiums grew 23.9% in Q3 and 29.6% year to date, with insured units reaching 5.7 million, up 6.1% from 3Q23.

• Maintained industry leadership through service quality, agent engagement, and vertical integration, including a new acquisition in glass and spare parts distribution.

• Combined ratio improved to 95.6% in Q3 and 92.9% year to date, within the 92%-94% target range.

• 12-month ROE reached 22.4%, with EPS at $12.2.

Financial highlights

• Net income reached MXN 1.1 billion for Q3 and MXN 3.7 billion year to date, with net margins of 7% and 7.8%.

• Written premiums reached 48,379 million pesos in 3Q24, up 23.9% year-over-year; earned premiums at 37,324 million pesos.

• Investment income grew 16% in Q3 and 18% year to date, with a portfolio yield to maturity of 9.3%.

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

• Technical reserves increased significantly, with MXN 3.6 billion constituted in the first nine months, MXN 2 billion more than last year.

Outlook and guidance

• Full-year written premium growth expected at 20%-25%, with 2025 growth returning to historical low tens percentage.

• Claims and combined ratios expected to normalize in Q4 after Q3 seasonality, maintaining targets.

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

• ROE target remains above 20%, supported by underwriting discipline and investment returns.

• Ongoing geographical expansion into Colombia, pending final legal authorization.