Thank you for standing by. This is the conference operator. Good morning and welcome to Quálitas' 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 González, Quálitas' IR Manager. Good morning and thank you for joining Quálitas' second quarter and first half 2024 earnings call. José Antonio Correa and Bernardo Risoul, 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'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. 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 Quálitas 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 GWP and premiums increased 31%. Quálitas México 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% 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 ratios stood at 87%, a significant 8 percentage points 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 rainy 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 is unsustainable in the medium and long term. Moving to our first six months' performance, we see 2024 as the year of two stories. A first half with a strong momentum in the Mexican economy benefited from pre-elections dynamism, in which Quálitas 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 U.S. 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% increase versus the same period of last year, June posting a slowdown in the pace with an 8% growth versus the same month of 2023. As of today, AMDA adjusted its annual growth estimates to around 10% 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 Russildi as Quálitas 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 Quálitas' initiatives and projects, bolstering our corporate governance. We welcome him and look forward to his many contributions as we scale and grow our businesses to new levels. 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. With that, I pass it over to Bernardo. Bernardo, please. Thank you, José Antonio, and good morning, everyone. First half of the year results confirmed that the actions taken to restore profitability, while never easy, are proving to be effective. The strong top line and combined ratio within our long-term range set the stage for us to continue executing on our three-pillar strategy while delivering ROE above 20%. Now, let me provide you some details about our performance. Written premiums were up 28% for the quarter and 32.7% for the first half of the year, with the traditional segment accounting for 67% of total written premiums. The path Quálitas has built with strong relationships with agents throughout its 30 years has been the cornerstone of successful underwriting. We ended the quarter with 5.6 million insured units, which represents 272,000 additional units during the first six months of the year. Around 50% of the top line growth was driven by tariff increases, reminding you all that it was during the July-December of last year when tariff adjustments were steeper. Thus, forward-looking, we should expect an ease on that pricing benefit. For the balance of the year, we will continue to adjust prices, but expect those ranges to be more in line with local and industry inflation, which at this point are mid-single digit. Having said that, we should keep in mind that tariff adjustments are done surgically and could vary significantly by brand, coverage, and ZIP code. As José Antonio alluded, we expect a gradual slowdown in new car sales that, coupled with the pricing behavior I just mentioned, leads us to moderate our expectations for the second half top line performance, but still pointing to another year of remarkable growth, especially considering the unprecedented 20% growth of last year. Year- to- date, written premiums from our international subsidiary represent around 5% of the total holding company underwriting. Latin America subsidiaries were up 24% in U.S. dollars, and in line with our strategy, the U.S. subsidiary is focusing on reshaping the mix, so premiums were down 7% during the period. While international subsidiaries are still on the path to become more relevant for the holding company, they are certainly moving in the right directions, with many things to celebrate. As a reference, during this AMJ quarter, Costa Rica subsidiaries paid, for the first time, a dividend to Quálitas Controladora while also inaugurating new offices, proving that the discipline and patience pay off. In Peru, we continue to expand our commercial model. We recently started operations in new service offices in Lima called San Miguel and are set to open in Trujillo and Chiclayo in the upcoming months. In the U.S., our new strategy implementation is on track, with its portfolio composition by year-end being only 9% domestic. The actions and the adjustments undertaken have resulted in satisfactory progress in closing litigation claims, which have decreased 56% since last year. This has not been an easy process, but we have seen evolution across all vectors. The new team is fully on board and determined to make daily progress. As we have mentioned before, we expect to reach break-even performance by 2026. Now, back to our financials. Earned premiums were up 29% for both the quarter and for the first half, reflecting our reserves constitutions driven by the continuously strong top line growth pace. During the second quarter, we constituted MXN 329 million reserves that represent MXN 31 million more than the second quarter of last year. We closed the first half with a constitution of MXN 2.8 billion reserves that represent MXN 1.6 billion more than the same period of last year. Moving now to our cost, loss ratios stood at 65.7% for the quarter and 64.9% year- to- date. As anticipated, this quarter increased modestly versus the prior one, but still proving the effectiveness of last year's price adjustment and the cost efficiency actions taken, as it represents 6.2 and 5.3 percentage points below the second quarter and first half of last year, respectively. Our Mexican subsidiary posted a quarterly 64.7% loss ratio, a 6.4 percentage points decrease versus the same period a year ago, and a 63.5% year-to-date ratio, meaning a 6.7 percentage points improvement. A few weeks back, rainy season in Mexico officially started, and while it has been higher than last year, it is still below historical averages. States like Nuevo León and Tamaulipas experienced Alberto storm, without major damages to the citizen nor to our policyholders, hence to our cost. We acknowledge natural seasonality of meteorological events have historically impacted the third quarter, as seen in early July when Hurricane Beryl developed with a number of claims attended as expected for this time of contingencies. At Quálitas, we have a specific weather-related events protocol in order to attend situations such as floods, hails, and hurricanes, prioritizing immediate attention and service to our policyholders through specialized inside claim officers, but also with amphibian filters at our call centers to channel applicable claims toward the use of our digital express adjustment tool. Additionally, the protocol aims to reduce fraudulent claims. As José Antonio mentioned, political and financial uncertainty, both domestic and international, have led to higher exchange rate volatility. Let me provide a broader visibility regarding FX and its impact in our claim cost. Around 20%-25% of our expenses are linked to U.S. currencies, especially spare part cost. While we should assume that any permanent change on FX would impact our cost, it is not immediate, nor is it always a direct correlation, as other factors come into play. For example, during the past two years in which we saw significant peso appreciation, spare parts prices did not reflect that due to scarcity of supply, commodity prices, and sea freight cost. Another factor related to claims are thefts. As we expected in an election year, robberies increased 3% for Quálitas and were practically neutral for the industry during the first half of the year. This was driven by our higher volume and a mixed queue to trucks, which incorporated higher theft risk, and secondly, an increase in insured motorcycles that moved statistically by the number of units, but with a much lower insured value. Nevertheless, our leading risk management and prevention focus has made Quálitas' recovery rate stand at 42.4%, outperforming the rest of the industry average by 2.3 percentage points. Moving to our acquisition ratio, it stood at 22.9% for the quarter and 22.1% for the first half, in line with our historical range. Commissions have remained unchanged, and variations incorporate mix of business lines and bonuses payouts. By June end, our portfolio composition was 82% annual and 18% multi-year policies. Operating ratio for the quarter stood at 4.8% and 4.4% for the first half. Year- to- date, employee profit sharing provision has more than doubled. Excluding its effect, operating ratio would stand at 3.4% for the quarter and 3.1% in cumulative terms. This would be in line with our target. We believe this ratio provides a more accurate picture of our operational expenses, given that as we keep on delivering strong performance and profitability, our employee profit sharing provisions will keep on growing. Operating costs also reflect our service offices' fees, which are linked to underwriting growth and claim cost. As we post significant improvement on claims, these fees have increased as well in around 50% versus half year of last year. All of the above resulted in a combined ratio of 93.5% for the quarter and 91.4% for the first half of the year, within our 92%-94% target. The profit improvement was broad-based and reflects successful execution of Quálitas' business strategy to ensure the right pricing and underwriting risk, cost control, and seeking a service that sets our value proposition well above our peers. Now, moving to the financial side of the business, we continue to prioritize fixed income with 87% of our total portfolio invested on these types of assets, with an average duration of 1.6 years and a 9.2% yield to maturity. In the case of our Mexican subsidiary, the yield to maturity stands at 10.1%. We continue executing our strategy towards increasing duration up to 1.8 years, balancing short-term opportunity cost with a long-term rate visibility on this high-rate cycle. We now have 12% of our portfolio invested in equities, which includes Fibras, some remaining Mexican stocks which are in the sale process, and around two-thirds of it placed on ETFs, which are mostly U.S.-based. These assets, following accounting guidelines, are classified as available for sale, so its performance, whether gain or losses, will be held on our balance sheet. Given this transition, as well as the growth in our international subsidiaries, by the end of June, around 20% of our total portfolio was invested in U.S. dollars and other currencies, which implied a lower yield, but also a natural hedge in terms of FX volatility. Just as a reference, for each peso movement, our portfolio has an impact of around MXN 580 million, entirely reflected in our balance sheet. All in all, we delivered a financial income of MXN 1.1 billion for the quarter and MXN 2.1 billion for the first half of the year, with an 8.8% and 8.9% ROE, respectively. This is in line with our expectations. If we were to consider the whole financial performance realized and unrealized, the first half of this year, ROI would have been 10.3%. Second quarter effective tax rate stood at 32% and 34% in cumulative terms, which is still higher than our prior year's average, but on the path to more normalized levels throughout the year. As many times mentioned before, the past two years, low tax rates were benefited by high inflation adjustment, so we're now expecting to be within the 28%-30% range by the year end. Moving to recent queries from our investors regarding fiscal audits, there has been no change in the status of the administrative resolution regarding VAT accreditation. As a reminder, in our industry, as in many others, being audited by the SAP or the SAT is common and a normal process we have seen in the past years, and we likely see it moving forward. Quálitas has four audits in progress, going from 2016 to 2019, each one of them in different stages and being addressed accordingly. As I have mentioned before, we use no tax haven countries, nor we use any tax planning structure, fully complying with fiscal regulations. Now, regarding the VAT accreditation topic, it is important to highlight that this is a matter being audited across most companies in the sector. We remain confident that the authorities will reach a resolution that confirms that the criteria that has been used for decades, that is fully supported by its nature, and that is true for the whole industry, it is the right one. At this point, there is no conclusive or final resolution. There are no provisions made, and this continues to have zero impact in our financials. All in, Quálitas posted MXN 1.4 billion net income for the quarter and MXN 2.6 billion net income for the first half of the year, with a 9% and 8% net margin, respectively. Our 12-month ROE stood at 23.5%, already within our long-term target. This reflects our strong momentum, sequentially improving in claim cost, and a well-positioned financial portfolio. Quálitas' DNA has made us capable to overcome different challenges, and as a 30-year-old company, we have also been able to achieve considerable growth along with sustainable profits and value creation. Our regulatory capital stood at MXN 13.9 billion, with a solvency margin of MXN 11.5 billion pesos, which is equivalent to a 377% solvency ratio. Recent capital allocation determines our 12-month earned premiums to capital ratio at 2.6x. Now, as an update from Quálitas' corporate development plan that outlines our long-term goals to achieve sustainable growth, there are two main things to share. First, we're at the last stage of the due diligence process for a full acquisition of a company that seeks to strengthen our vertical integration. This has taken a bit more than we expected, but I'm confident we will be locking the deal during the third quarter. Secondly, during early June, we officially received authorization from the Colombian Finance Regulator, the Superintendencia Financiera de Colombia, to constitute as an insurance company. With this key milestone, we're moving towards the operational approval process and expect to start operations before the end of the year or very early next one. Colombia will provide us access to more than 70 million units in a similar context as the Mexican market, where we see an opportunity to reapply and reinforce Quálitas' business model through specialization as a key competitive advantage, as there is no other specialized auto insurance in that region. Finally, and before we wrap it up, regarding our organization and aligned with our strategic goals and career development programs, I want to thank Santiago Monroy, who has been Quálitas' IRO for the past five years and who will now be taking new responsibilities within the commercial side of the business as he continues to evolve and prepare for higher roles in the company. Andrea Gonzalez, who has been our IR manager for the past three years, will now lead the IR team, confident that she will continue to do a great job. To conclude, I want to congratulate Quálitas' team for an outstanding first half of the year, which is also setting the base for the future. We are very well poised to realize the full potential of our business model and to deliver. Thank you. We will now begin the question and answer session. To join the question, you may press the raise your hand button on your screen, and we will open the mic for you, or you can also send it through the Q&A chat. To withdraw your question, please press the button again. We will pause for a moment as callers join the queue. Our first question comes from Jorge Echagüe from Morgan Stanley. Jorge, I believe you are on mute. You can now unmute yourself. Hello, good morning, everyone. Sorry for that. Good morning, Bernardo and team. I wanted to ask you a couple of questions. One, could you help us understand and quantify the jump in variable compensation this quarter? How many employees work in the service offices? How much was the compensation for these employees? And how much did that increase? And is this a one-time provision, or should we think about this level of compensation as recurring given the new increase in profitability? And my second question is related to the implementation of the ERP at Flekk. I want to understand why is it running before schedule, what's going on, and what should we expect going forward, and how does this impact the Flekk revenues? Thank you. Thank you, Jorge, and good morning, everyone. So going to your first question, variable compensation is embedded as part of our DNA in Quálitas. I would say probably 90%-95% of employees have a fixed compensation that is lower, and then a variable compensation that links to KPIs, one of them being claim cost and combined ratio. So I think in general, we should expect that as we reach the long-term targets of combined ratio being 92%-94%, we should continue to see variable compensation going up. Now, I think you also point out something related to employee profit sharing, but they went in Spanish. And that one is reflected due to accounting principles in our operating expenses. So let me back and reiterate some of the figures that I highlight during the call. First, as you see it posted, operating expenses for the year- to-d ate are 4.4%. But if we were to exclude this employee profit sharing, it would be 3.1%. From now on, we will always highlight including and excluding earning employee profit sharing. Now, let me give you as well some exact figures because I think it's important to dimensionalize this component because our intention is to continue driving profitability. As we do so, employee profit sharing will continue to increase as well. During the first six months, we constituted over MXN 400 million for PTU, and this is more than twice what we had year- to- date of last year. Actually, if you see the absolute number, it would be quite in line to the absolute number of 2023. What's going to happen is this number will continue to rise, but during the third quarter, we will do a true up or true down because employee profit sharing also has some new regulations as of two years ago, which are capped, something that we are all familiar now. We will again adjust, and we anticipate that it's not going to increase permanently in the same stiff matter, but it's going to stabilize during Q4 due to it being capped. But again, I think it's also important to highlight that our long-term operating cost of 3%-4% is excluding profit sharing. Now, let me go to the second part of your question that relates to Flekk, our vertical integration operation, and the ERP that was executed during late last year and early this year. As you recall, Flekk comes and is born due to a combination of companies. We had three standalone companies that for many years did not peak to the level that we knew on this potential. As part of the consolidation and management changes, we also needed a system that would allow us to operate efficiently and also to make sure that we reported automatically. It is never an easy pace, and we always know it comes with certain hurdles. No matter how much we planned it, it has been challenging. We met with the team 2 days ago as part of the quarterly board, and we know it's making significant progress, and we should expect that in the next 3-5 months, we conclude and stabilize the system. We expect that this new ERP implementation will lead to better service and cost, but again, I think 2024 will be a transition year for Flekk in terms of financials, and we have been impacted both in the top and bottom line due to this front. So, Jorge, let me go back to you and see if both questions were properly answered. Thank you. So if you don't mind, let me double-click on the first question because the PTU is well understood. It came exactly in line with what I expected. But when I look at the expenses, excluding the PTU, excluding the revenue from Flekk and other verticals, those expenses related mostly to compensation of employees accelerated much more than what they accelerated in the first quarter. So there is a combination between employees growing at a faster pace in 2Q than 1Q, but also I'm still not sure if there was a provision for those expenses this quarter, or it was not, and it's just recurring. There is just one provision, and it's not related to employees, but offices. You remember that we have a model of commercial that we have over 550 offices across the country. These offices get compensated by a fixed amount on a smaller fixed amount equal to employees and a bonus on claim costs. This claim cost bonus is annual. So from now on, we expect and we project how do you see the year end, and we make certain provisions that are adjusted along the year. That one, as a standalone item, has increased also significantly as the result of more than 600 basis points reduction on claim costs. So, Jorge, you clearly did your homework on digging into the details, and that is also the one item driving the operating cost going up, but it has a huge correlation with claim cost evolution and reduction. Perfect. That's very clear. So we should expect that happening until next year again, not in the next two quarters, if it's happening. Yes. But the important thing, Jorge, this is José Antonio, is simply to say that we are targeting, obviously, we have the individual components, but overall, we are targeting to our overall combined ratio as a measure to the long-term health of our business. Understood. I appreciate it. Thank you very much for the detailed response, and congratulations on the results. Thank you. Our next question comes from Guilherme Grespan from J.P. Morgan. Hello, José Antonio, Bernardo. Thank you for the call and opening for questions. Two on my side. The first one is on the US operations. We saw a 20% ballpark decline on premiums, and the message has been very consistent on the turnaround in this part of the business. Just wanted to pick your brain to look into the next two years. You mentioned breakeven likely is going to be a target to be achieved in 2026. If you can provide a little bit more details how you're thinking about this turnaround, if it's going to be a shrinkage in the size of the operations, which basically implies that this operation is going to have premiums shrinking on a meaningful basis until 2026, or the idea of the turnaround here in the U.S. is to basically improve part of the costs, maybe some optimization on the operational side. In the end of the day, I'm just trying to get a better sense if we should model written premiums going forward for U.S. shrinking on a meaningful basis or not. And then the second question is just a clarification. You mentioned the tax rate range for the year is between 28%-30%. Just want to confirm this range is for the full year, which given the first half levels would imply mid-20s for the second half. Thank you. Okay. Thank you, Guilherme, for being in the conference. I'll let Bernardo answer the US question, but just let me say before he makes his comments that we have implemented a strategy change back at the beginning of last year, and the change is working as intended. So having said that, we are saying that clearly we are reducing the domestic part that was part of our strategy. We changed the CEO at the beginning of the year, and we are right in line with the strategy that we have set. And the mix of products that we have made in the US are precisely making progress to what we had anticipated. Bernardo, please give me some money. So, Guilherme, if you were to make this question three years ago, I would have said that the U.S. was very promising and we had a line of sight to $250 million-$300 million. That is no longer the strategy. If you look at 2023 figures, our written premiums were at $105 million, and we should expect this year to see a reduction more in the $90 million-$95 million. If you fast forward at least until 2026, I would expect the top line to be flattish at $100 million +/- $10 million. So again, it's not going to be a driver of growth. Once we stabilize the business and once we find those pockets of business that have where Quálitas sees right to win and we have the potential to create value for all those stakeholders, then we will probably return to growth strategy. But back to your specific question, I think for your models, you should assume to be flattish versus 2023 figures of around $105 million in premiums. And now, just very quickly on your tax rate. Yes, what I mentioned is for the full year projection, 28%-30%, it's something that we should expect. Now, there are many factors that will play along, but we should expect the second half, as we saw this quarter, to progressively reduce to get to that target. We're currently standing at 32%. I think as we realize and pay some of those provisions that have been built, we're going to be able to make it deductible, and that's going to be the main driver of that reduction that we expect. But happy to discuss further on the third quarter as we see those actuals coming in. Bernardo, just a quick follow-up, if I may, on the U.S. yet and José Antonio. The strategy, I think the main earnings driver there has been the domestic operations, right? We try to look here at the losses in the U.S. We get into ranges of $30 million-$40 million. The cross-border segment, which seems the one more promising here, is it fair to say it's already profitable? It's already at breakeven, or the cross-border niche is also at a loss? No, the cross-border is a profitable business. We can tell that from our own perspective. And also, there are two other standalone companies, insurance companies, that focus on cross-border. They post standalone financials, and for the past three to five years, they've always been profitable. So I would say that the market on its own, the cross-border, is profitable. And if we isolate our business, we believe that on a technical base, it is profitable as well. It has lower risk of litigation. The maximum liability is $750,000, in many cases $500,000 versus the $1 million that is required in domestic. And we also have the border crossing as a checkpoint that reduces some of the items driving accidents in the domestic. So I think, as José Antonio mentioned, our strategy is focused. We're confident that it's going to pay out, but the journey of getting to that point is not easy, nor is it as fast as we would hope for. That's clear. Thank you. Thank you. Our next question comes from Ernesto Gabilondo at Bank of America. Hi. Good morning, Ernesto Gabilondo from Bank of America. Hi. Good morning, José Antonio and Bernardo. Thanks for the opportunity to ask questions. I have three from my side. The first one will be on your premiums growth expectations for the second half of the year. As you were mentioning at the beginning of your speech, you're expecting a more cautious consumer outlook during the second half. So how should we expect this evolution of the premiums growth for Quálitas during the second half? I don't know if you can give us some color on how should we break down that expectation throughout the subsidiaries, and how are you seeing competition on these growth expectations? My second question will be on your claims cost. We have seen the peso depreciation after the election. It has recently come back and is staying for the moment below 18. However, thinking about the medium term and a potential depreciation of the peso, can you repeat again what percentage of your claims costs are related to FX or spare parts costs denominated in dollars? And what will be your sensitivity for every change of a peso sustained in 12 months in your claims costs? And finally, my last question will be on profitability. Just wondering where are you seeing the ROE for this and next year, and then what will be Quálitas' sustainable ROE in the long term? Thank you. Good morning, Ernesto. Thanks for being with us today. Let me take the first one regarding the growth. Let me remind the audience that when we started the year back in January, we had anticipated that our estimates for growth for the year were about, let's say, in the high teens, low 20s. Actually, we said around internally, we said around 21% or so. Clearly, we also anticipated that due to the increase in tariffs and pricing to recoup claims costs, we took high increases during the second half of 2023. And also, we had anticipated as these increases come into play that we would be slowing the price increases to a level more aligned with the inflation, with the cost inflation of the industry here. So clearly, we said, and I indicated that in my initial remarks, indicating that it was a tale of two different segments of the year 2024. So yes, we think that the underwriting will slow down to a more normal long-term growth that we are going to be having. So all in all, at this stage, we believe that being in the 30s and in the 30s that we have seen is really an outlier at this point in time. So we should be going back to around 20%-25% for the year. That's what we see. And this has to do clearly with the economy. As you probably are aware, there were a lot of expenditures by the government in the first half of the year due to the elections, actually the late 2023 and in 2024, at the beginning of 2024. Obviously, that government spending has been reduced, and we will see that going forward in the second half of 2024. So also, part of the big increase that we had last year was due to the fact that the car sales in Mexico were close to 25% growth versus the prior year. And now, as you know, the car sales have increased around 11%-12%, and that's what the AMDA, the Industry Association of Car Sales, indicates that it's going to be around 10%. So all in all, considering the economy, considering the cool off a little bit of the Mexican economy, we are going to be seeing, as we had anticipated, this lower growth in the second half. And regarding before giving the second question to Bernardo, just let me say that we continue to see that our target for ROE continues to be in the low 20s, and I'm glad that we have already achieved a little bit ahead of 23% ROE for the last 12 months. But I think that this is our long-term target to be along those ways. But let me ask Bernardo to answer the part of the claims cost details. Bernardo. Yeah, I'll get to the claim cost. Just to round up the question on ROE, as José Antonio mentioned, we're not changing our long-term goal of ROE being close or at the 20%. We're certainly happy to see our June ROE past 12 months of 23.5%, something that we had worked for the past two years. Now, regarding your second question on claim cost, as I mentioned, let me give you a little bit of broader perspective. If we look at our full loss cost, around 50% of it is related to material damages coverage. So anything that gets to be repaired or requires spare parts, including labor. Within that 50%, around 20%-25% is exposed to exchange rate variations. Items or spare parts are imported, and therefore, while we pay them in peso, they're always following a direct correlation with the U.S. currency. This is not an immediate impact. There are a lot of inventories along the supply chain. But if it were to be a permanent change on the exchange rate, we should expect that to translate into an impact, and therefore, we would follow on that to see if we could cover through cost controls and cost savings projects, or we would have to reflect that through pricing. So I'm hoping that gives you a better visibility. Well, yes, thank you very much, José Antonio and Bernardo. Follow-up in terms of the premiums growth. Any color or any expectation among the subsidiaries just to have the full picture of how do you think about the premiums growth for the second half will be very helpful. Ernesto, let me say, and as we mentioned on the presentation, very pleased on how the evolution of the Latin America subsidiaries. They're all growing above 20%. They're all gaining market share. They're all in the path of being profitable. Most importantly, I would say they're following the DNA of Quálitas that has made this company what it is by being the specialized company, by being close to our agents, and always humbled to see what we have to improve in terms of service. So I think expectations moving forward is that those international subsidiaries will continue to grow at a 20%-25% ratio, and therefore, becoming more relevant for the parent company down the road and in the next years. Perfect. Thank you very much. Thank you. Our next question comes from Andrés Soto at Santander. Hi, good morning. Thank you for the presentation, and congratulations to all, to Roberto, to Santiago, and to Andrea in their new responsibilities. My first question regarding the competitive environment. How do you guys expect, or how are you seeing your competitors reacting to the current environment in Mexico? Do you see them increasing prices, or they are going to hold them off? And if you can remind us, give us any sense of what is the current gap between Quálitas prices and those of your competitors. Hi, Andrés. Good morning. How are you? This is José Antonio again. Let me tell you that the competitive landscape, it's very interesting because the industry moves in cycles. And I'm glad to see that the cycle that we are getting now, and we are seeing clearly that there was an inflection point back around the second and third quarter of last year due to the actions that we're having in terms of controlling costs and the increasing tariffs to recoup claims costs. Typically, we move in cycles of 6 to 8 years. Now, this has been a little bit different due to the pandemic. But clearly, what happens is that when all competitors and the industry is having combined ratios above 100%, which, by the way, let me tell you that we continue to have the best loss ratio of the industry, I mean, of the top five on the average of the industry. It is important to say that typically, our competitors all are stimulated, so to speak, to have the right pricing. As soon as we start getting into profitability, then there is also this they want really to gain market share, some of those companies, and then they start somewhat reducing prices. Now, this is not going to be any different from what has been in the past three cycles of that. So when is that going to start? Clearly, the market is always very, very competitive. We are always very detailed and in different stages of the market. I mean, it's different for heavy equipment versus cars versus the ZIP codes, etc. So we are very specific on how we go to price increases. Now, yes, we do expect that to continue, but it's not going to be any different from what has been in the past. For the time being, it seems like we are going to be, as an industry, we are going to be seeing the benefit of these increasing tariffs across the last probably 18 months or so, and we should continue to see that reflected. And yes, we will have; it's absolutely normal to, I mean, in fleets, for instance, we always—I mean, there is a steep competition there. And clearly, the important thing is that the service part, and we are one of the companies with the best service. Actually, we are told by our agents and our customers that our service is the reason why we have, and they accept the premiums that we have. Now, it's very difficult to provide what is the percentage of premiums because it varies well. It's very different by region. We have some regions in which there is a significant claims cost index and where we have larger prices, and clearly, we are going to be much higher than competition. But that's normal. That is to price for the risk that we take. So all in all, we will continue to see this competitive environment, but we are ready to do that. And so far, we are going to be getting, I guess, for the rest of the year, a good environment on that regard. Bernardo, no sé si tú quieres hablar de la otra. Thank you, José Antonio. And then when you look at your own portfolio, how does the average portfolio pricing compare to the new policies that you are underwriting? The point that I'm trying to get here is how much of the portfolio is yet to be repriced at the current level? Andrés, I would say that the vast majority has already been priced, and it was back in the July, December quarter semester of last year when we did so. Throughout this year, and as José Antonio mentioned, we have our pricing ongoing model. We adjust every month some certain lines or ZIP codes. But I would say that at this point, we're more pricing for the local inflation, more in the mid-single digit than on the double digit or even 20% that we had to do last year. Now, having said that, those are prices for policies that would be effective July. If you look still on the second quarter, some of the prices were 30% or more, and that was, I would say, the most challenging period as we see that new level of pricing stabilizes. Andrés, my sort of second question is regarding the comment that you made, Bernardo, before on your operating ratio. You say that now you're looking at your operating ratio, excluding your bonuses, the employee bonuses. What I would like to understand is if the combined ratio that you are still targeting, which is between 92% and 94%, does that include bonuses or is it excluding bonuses? That's going to include all bonuses. That's going to include the 92%-94%. That's going to be including everything. All inclusive. All All inclusive. Just let me point out, Andrés, when we say bonuses, it's only related to employee profit sharing, so the PTU, because there are many bonuses to our office, to the employees, to management. The one thing that's going to be called out separately, it's PTU. That's very clear. And my last question is regarding the tax litigation. Obviously, there are many uncertainties here. I would like just to get a sense of when we can have some additional news in this regard. Given the stage that we are on the 2016 audit, which is the one we communicated that we had gotten into a first closure on a specific step, we are now entering another stage that is likely to take anywhere between 3 months and 12 months. So between 3 months, if we take the midpoint, it's going to be likely early 2025 that we get some news. Unlikely to see anything happening still this year. Yeah. Let me tell you on that one that we are working very closely with the industry. This is an industry situation, clearly. As a sector, we really trust that the government and the corresponding government instances will reach a reasonable and proper resolution. There is, at this point in time, not anything conclusive, but that's something that we are working with the whole industry in addition to the specific things that we are having as it relates to Quálitas. As you know, there are a number of it which is public. Some of the insurers, Mexican insurers, are already in litigation with the government. We are not yet in that stage. Perfect. When you guys say you are in the next stage, that means the Mexican tax tribunal, and that's the one that is going to take between three months to one year? Yes. Well, not even on the tribunal. It's el recurso de revocación. So independent from the Mexican tax tribunal? Yes. Okay. But the Mexican tax tribunal should make a ruling before that, right? No, not in our case. For some other companies that are slightly ahead in the process, we should hear from the tribunal somewhere in the next quarters. That's very clear. Thank you so much. And congratulations on the results. Thank you. Thank you, Andrés. Thank you all. We have time for one last question today from Jitendra Singh at HSBC. Hi. Thank you for taking my question. Congrats on the impressive results. Firstly, I would like to extend our best wishes to Roberto for his new role as CFO, and also good luck to Santiago and Andrea with their new responsibilities. My first question is on equity. So we saw equity decline of around 7% sequentially. Was this mostly due to the dividend payment, or was there any impact of mark-to-market of securities portfolio? And can you remind us how much was the dividend payment in the first half? Second, I just wanted to check on Quálitas Salud. I mean, it's been almost more than a year when you started testing this product. So how has been your initial response? How is it different from your auto business? And are you still testing in Mexico City, or have you moved to different geographies or different cities? Thank you. Jitendra, how are you? Good morning. Let me take the first question regarding our equities. I think you pointed out something that I highlight, but I want to make sure that everyone walks away with the full picture. Everything that we have on ETFs, whether it's the U.S. or global, due to its nature, are classified as available for sale. That means the performance of those equities is held at the balance sheet, and it's not flushing into the P&L until we realize those gains or losses. For you to have some color, year- to- date, we have around MXN 500 million on equity gains that are held on the balance sheet. We have nothing except for the remaining Mexican stock, mark-to-market, which are not necessarily moving, nor it would be something relevant. That was in terms of the equities question. And for the Quálitas Salud, do you want to give some color? Yeah. I mean, yeah. Hi, Jitendra. Let me just talk a bit about Quálitas Salud. And as we have said, Quálitas Salud is intended for Quálitas growth longer term. We have always said that this is a new sector. We continue learning in this operation, which, by the way, we are learning a lot in the very early stages. But we are moving at a pace which is not very, very high. In the first couple of three years, probably, we are not going to be seeing any significant growth in the operations. We are about probably a little bit less than half of the offices in Mexico, which have been now working with Quálitas Salud. And I expect that it will start picking up probably next year a little bit more. remind you that we are targeting differently from other competitors in Mexico, which we are targeting the C and C-minus income level. And that is very important. So at this point in time, we are seeing early signs that we are going in we are having good progress in this project. But as we always anticipated, it was going to be slowly picking up pace in the first several years. So yes, we are doing right in the progression of our program. Yeah. I would say, Jitendra, to add on José Antonio, during these last months, as part of this journey to continue building on the Quálitas Salud, we incorporated one new product, which is Accidentes Personales, personal accidents, which is a more traditional business that we see opportunities to gain traction at a profitable level. So I think that's one step further on building a proposal for our consumers. Without this, it doesn't mean that we're changing its nature. We're not going into traditional health insurance. I think that's something that we will stick to our strategy and our intention to be different. Thank you. Thank you. Just to follow up on tax-related cases. So you said you have not made any provisions. So I just wanted to check. Do you plan to make any provision, maybe in the second half or maybe in next year? No. No. That is in line with our external auditors. Actually, the Big Four audit companies are somehow involved with all specific insurance companies. So given the solid case that we have, given its nature, we are not, and we will not build a provision for this legal case. Great. Thank you. Thank you all for joining. This concludes today's conference call. Thank you for participating, and have a pleasant day.