Bajaj Finserv — Q1 FY24
Bajaj Finserv reported a strong Q1 FY24 with consolidated PAT up 48% YoY to INR 1,943 crore and total income up 47% to INR 23,280 crore.
bullish
high
✓ Verified against BSE filing
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
64%Questions answered1Evaded / deflected11Questions auditedContradictedNumbers vs filing
Partial answer
High priority
What drives motor growth, EoM impact, and BALIC unwind rates?
Asked by Prakash Kapadia, Anived Portfolio Managers Private Limited
Answered motor growth and unwind rate specifics, but deferred EoM impact to next quarter.
no specific EoM impact quantifieddeferred EoM impact to next quarter
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Question
Motor has been doing well for us. You know, is it some OEM market share gains, what we've done? Is it some new geographies... What is driving this growth? ... on expenses on management, what impact does it have on the industry... On BALIC, what is the unwind rates we should look at, given the current interest rate cycle?
S. Sreenivasan (CFO, Bajaj Finserv) and Ramandeep Singh Sahni (CFO, Bajaj Finserv)
In BAGIC... we have been investing quite a lot in expanding our distribution outside of even the OEMs... I think that has started falling in place... On the two-wheeler... growth on two-wheeler has been upwards of 50%... On EoM... it's too early to say that... On unwind rate... it has been between 8% to 8.5%, and I think it'll be hovering around there only.
Answered
Medium priority
How did BAGIC improve loss ratio despite reinsurance hardening?
Asked by Supratim Datta, Ambit Capital
Explained improvement due to absence of large claims and low net impact from cyclone.
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Question
The loss ratios on the commercial lines have improved this quarter, despite the reinsurance hardening and the fire pricing... Just wanted to understand, you know, how have you achieved this improvement in loss ratio despite these headwinds?
Tarun Chugh (Managing Director and CEO, Bajaj Life Insurance)
Last year... there were some large claims which were reported in quarter 1... Fortunately, that's not the case in this quarter... we've seen only a return from net of INR 10 crore... This quarter has been better compared to last year, where we had some bulky claims reported in quarter one.
Evasive
Medium priority
What is the impact of North Indian floods on claims?
Asked by Supratim Datta, Ambit Capital
Acknowledged claims but provided no quantification, deferred to next quarter.
no specific numbers givendeferred to next quarter
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Question
My second question was on the North Indian floods. Wanted to understand what kind of claims trends are?
Tarun Chugh (Managing Director and CEO, Bajaj Life Insurance)
As of now, nothing material has been reported... on the motor side, there are many claims which have got reported... Maybe a quarter 2 call is when we will really be able to give the right picture.
Answered
High priority
Quantify interest rate impact on VNB margin and hedging strategy.
Asked by Supratim Datta, Ambit Capital
Provided specific hedging percentage and quantified margin impact components.
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Question
If you could quantify what was the impact of the interest rate move on the VNB margin, that would be very helpful. I just wanted to understand what is the hedging strategy when it comes to Non-PAR products?
Bharat Kalsi (CFO, Bajaj Allianz Life Insurance)
On our Non-PAR book... is being effectively hedged through FRA, path-dependent option... comfort is about a 90%-95% for the book is hedged... As far as your question on the margin... that could number be around 1.5% or so compared to previous year... margin has dropped around 3.5%, maybe give and take 2% is because of the product mixing, 1%, 1.5% because of the yield curve change.
Answered
High priority
Why is VNB margin decline not seen in other insurers?
Asked by Speaker 12, Investec
Explained margin decline as timing lag and product mix, with corrective actions taken.
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Question
The question on VNB again, because we are not seeing such margin trend for other insurance companies. Is it primarily because that we have we not repriced our guarantee product when interest rates have changed? That is the main reason for margin decline.
Bharat Kalsi (CFO, Bajaj Allianz Life Insurance)
It's just because of the time lag of two, three weeks or a month, is what is reflecting in the Non-PAR side... ULIP going up as well as PAR going down, has a double impact in terms of the margin... we have already corrected it... we have dropped the IRR of our key products... our product mix is already back to what we were last year.
Partial answer
High priority
How is BAGIC gaining motor OD market share despite intense competition?
Asked by Speaker 12, Investec
Explained market share gain drivers but did not address profitability or combined ratio.
no combined ratio specifics given
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Question
On the BAGIC, we have seen a sharp improvement in market share on the motor OD side, but we keep on hearing that the company intensity in that segment is quite intense... how are we able to gain market share? How should we look at the profitability, from a combined ratio perspective?
Tarun Chugh (Managing Director and CEO, Bajaj Life Insurance)
From a risk selection perspective, nothing has really changed at all. It's only about getting deeper into the markets... It's the result of the expansion and the penetration which we focused on... we've done some amount of expansion on manpower, on geographies... and added many more agents.
Answered
Medium priority
What are advance premium and disbursement numbers?
Asked by Speaker 12, Investec
Provided specific numbers for advance premium, disbursements, and credit cards.
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Question
What is the advance premium for Bajaj? Secondly, the disbursement number... for the quarter and then credit cards originated for the quarter.
S. Sreenivasan (CFO, Bajaj Finserv) and Tarun Chugh (Managing Director and CEO, Bajaj Life Insurance)
The disbursement number... in the Q1 was INR 1,447 crore, and we sold 74,000 cards... The advance premium side... from June 30 is about INR 1,678 crores, which is moved up by almost 44% from INR 1,168 crores on June 30th last year.
Partial answer
Medium priority
Why has BAGIC's retention strategy changed meaningfully?
Asked by Sanketh Godha, Avendus Spark
Explained retention variability but did not quantify or give clear logic for change.
no specific retention numbers givenvague explanation
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Question
Our retention strategy seems to have changed meaningfully compared to what we were two years back. Even in the retail lines like motor, we seems to be retaining less... Just wanted to understand the entire logic of having a strategy very different from what we were two years back on retention across the board segments.
S. Sreenivasan (CFO, Bajaj Finserv) and Tarun Chugh (Managing Director and CEO, Bajaj Life Insurance)
On the reinsurer... we have a base treaty, we have a catastrophic treaty... we have proportional treaties for majority of the lines... we do have several sub-treaties specifically for certain products... That is how the retentions can vary across years... some parts of motor... have been under stress. That's one of the strategies we are trying to manage by managing our retentions.
Partial answer
High priority
Is EoM impacting crop insurance pricing and profitability?
Asked by Sanketh Godha, Avendus Spark
Acknowledged stress and pricing impact but did not quantify or give specific outlook.
no specific pricing impact quantifieddeferred to next year
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Question
Given you have already in mind of bidders for Kharif, I just wanted to understand what you are picking up at the ground level, whether OEM is impacting the pricing or anything on crop, where we are always market leader, it has been a profitable product for us.
Tarun Chugh (Managing Director and CEO, Bajaj Life Insurance)
We are seeing a lot of stress on the crop business... The level of activity has indeed gone up significantly, and it has a bearing on the pricing... from our perspective, I think while this year may pass with similar level of numbers... but year on, I think it is going to be a circular situation... there is likely to be stress, even on our numbers, from a traffic perspective.
Partial answer
High priority
Will BALIC's growth slow due to margin focus and Axis base?
Asked by Sanketh Godha, Avendus Spark
Reassured growth but did not provide quantitative guidance or address margin-growth trade-off.
no specific growth guidance givenqualitative reassurance only
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Question
Margin compress... If you are taking a cut in IRR and given incrementally, Axis Bank will be a bigger base... the growth what we have delivered in last few years, could come down, is the point we wanted to check. What exactly you are thinking on growth and how it will be delivered?
Tarun Chugh (Managing Director and CEO, Bajaj Life Insurance)
I would not worry about growth... we'll be easily growing more than double of the private sector... The intent this quarter really was to widen our product offerings... we launched, like, 4 offerings... Axis has grown by about 8%. Our contribution to our business is down from 25 to 23... our base is getting higher, so don't expect the growth like last year...
Partial answer
Medium priority
What is driving health loss ratio worsening in Q1?
Asked by Swarnabha Mukherjee, B&K Securities
Explained causes qualitatively but did not provide segment-wise loss ratio numbers.
no specific loss ratio numbers givenno split by segment
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Question
Your loss ratio number for the health insurance segment has worsened compared to last year. Just wanted to understand, you know, what is causing that... If you could also split out how the experience has been in detail and improve.
Tarun Chugh (Managing Director and CEO, Bajaj Life Insurance)
The loss ratios have actually made that in few accounts from the GMC side... we've seen some hardening of rates happening there... Retail... loss ratios have not changed too much, but they are on the higher side... we have seen demands have increased significantly in quarter 1... we are hopeful that some amount of fraud... should start coming down.
Answered
Low priority
What proportion of group health is credit vs employer-employee?
Asked by Swarnabha Mukherjee, B&K Securities
Provided a specific ratio despite initial reluctance.
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Question
What proportion of group health would be credit and what would be employer-employee?
Tarun Chugh (Managing Director and CEO, Bajaj Life Insurance)
I won't share too much of data, Nishant, but the ratio would be 2 is to 1 to dealing with DMS. That would be the number.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| Motor two-wheeler growth upwards of 50% | 50% | 47% | Overstated vs filing |
| Disbursements INR 1,447 crore | ₹1,447 cr | ₹23,280 cr | Understated vs filing |
| Advance premium INR 1,678 crore, up 44% YoY | ₹1,678 cr | ₹23,280 cr | Understated vs filing |
| Rolling 12-month VNB grew 24% | 24% | 48% | Understated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.