By Brazil Stock Guide – Qualicorp (QUAL3) told investors in its 3Q25 Q&A session that the wave of unilateral cancellations carried out in 2024 — many of them executed at the request of health insurers — was a mistake that should not be repeated. The episode occurred in a period marked by double- and occasional triple-digit price adjustments in 2023 and 2024, driven by higher post-pandemic medical utilization. Under sharp financial pressure, insurers asked Qualicorp to discontinue entire blocks of products.
CEO Maurício Lopes acknowledged that the decision adopted by insurers was flawed, stating that unilateral cancellations in the retail segment “are the worst possible decision; the decision is technically wrong.” He said the strategy failed to reduce costs, created instability for clients and triggered a wave of lawsuits that still affects the company — though the number of new cases has been falling quarter after quarter.
The disruption began in the post-pandemic period, when delayed surgeries and a sharp rebound in elective procedures pushed medical costs and loss ratios to atypical levels. As contracts became unbalanced, insurers reviewed their exposure and asked administrators like Qualicorp to shut down portfolios, causing temporary dislocation in customer behavior and additional pressure on retention channels.
One of the key themes of the Q&A was the clash between the SME segment (small- and medium-enterprise group plans) — which often include groups as small as one to five lives — and the affinity segment, Qualicorp’s core business, which serves professionals linked to associations and unions. The company said artificially low SME pricing in recent years lured customers who traditionally belonged to affinity plans, creating internal competition between products that were never meant to compete and distorting risk across insurers’ portfolios. This shift contributed to higher loss ratios and the extreme adjustments seen in the past two years.
As insurers began to correct these distortions, the affinity segment regained relevance. Qualicorp said this realignment explains the launch of 340 new products in 2025 — nearly triple the previous year — and the return of regional exclusivity agreements. This richer portfolio helped reduce volatility, restore competitiveness and support lower churn levels.
The company dedicated a long portion of the Q&A to churn, defined as the rate at which customers leave the portfolio each month. Churn reached one of its lowest levels ever for a third quarter, supported by better underwriting, broader product availability and data-driven migration strategies that help retain customers when price adjustments take effect. Qualicorp said lower churn is central to cash-flow durability and to reducing litigation.
CFO Eder Grande expanded on the company’s policy for CAC — customer acquisition cost — explaining that Qualicorp does not treat CAC as a fixed percentage of revenue. Instead, each investment is assessed individually based on product margin, risk profile, region and expected customer lifetime. Quarter-to-quarter CAC fluctuations, he said, are part of normal commercial dynamics and do not indicate any loss of discipline.
Lopes also said pricing has “returned to normal,” noting that the company “is now applying many single-digit adjustments,” something that had not happened in years. He attributed the normalization to more technical negotiations with insurers, more coherent product design and a portfolio less exposed to volatility after the commercial rebalancing.
The company also outlined its efficiency strategy, highlighting accelerated investments in automation and data-driven decision tools. Qualicorp said it is expanding its use of RPA — robotic process automation, which automates repetitive back-office tasks such as contract validation, data verification and administrative routines, freeing teams to focus on higher-value activities. The company is also broadening its use of AI in retention, billing and risk analysis.
Closing the Q&A, the company said the sector is heading into 2026 in a far more rational state than during the turbulent 2023–24 cycle. With loss ratios stabilizing, single-digit adjustments returning, SME distortions fading, churn at multi-year lows and the affinity portfolio recovering traction, Qualicorp said it is delivering its most consistent execution since the turnaround began.
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