Canara HSBC Life Insurance Company Limited — Q2 FY26

Canara HSBC Life Insurance Company Ltd Q2 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=kDWE_N2W7ks Published: 6 months ago

0:00 Ladies and gentlemen, good day and welcome to the Canra HSBC Life Insurance Limited Q2 FI26 earnings conference call 0:07 7 seconds hosted by Motila Losal. As a reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions 0:16 16 seconds after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero 0:24 24 seconds on your touchstone phone. Please note that this conference is being recorded. 0:30 30 seconds I now hand the conference over to Mr. P Jane from Motila Losal. Thank you and over to you sir. Uh thank you Sag. Uh 0:38 38 seconds good evening everyone and welcome to the Q2 FI26 earnings call of Canada life insurance. Uh today from the company we 0:46 46 seconds have with us Mr. Anojim Matur M and CEO, Mr. Tarun Rasagi CFO, Mr. Nin Agraal the appointed actuary and Mr. An chain who 0:55 55 seconds is the head IR. I would now hand over the call to Anush for his opening remarks which will be followed up by a Q&A session. Uh thank you and over to you Anj. 1:05 1 minute, 5 seconds Yeah thanks Parish and good evening everyone. A very warm welcome to the first earning call of Canra HSBC life insurance for the half year ended 30th 1:13 1 minute, 13 seconds of September 2025. Uh my apologies for bit delay in starting the conversation which was because of technical issue. uh 1:21 1 minute, 21 seconds but sincerely thank uh all of you for your time and uh thoughtful analysis of our results. U your continued engagement 1:28 1 minute, 28 seconds and insights are deeply valued. The financial results update is available on our website as well as on the websites of both the stock exchanges. We have 1:37 1 minute, 37 seconds also circulated deck containing key business highlights and happy to share some of them in this in this call. Uh as Paris mentioned I have got my colleagues uh from the uh top management team. 1:48 1 minute, 48 seconds They're here with me. In fact, I also have Si Thomas who is a chief distribution officer bank assurance in addition to Tarun Nitin and Amit. 1:56 1 minute, 56 seconds Let me begin by extending my best wishes for this festival season and a prosperous new year ahead. This half year marks a significant milestone in 2:04 2 minutes, 4 seconds our journey. Our listing on the Indian stock exchanges represent a pivotal moment signaling our transition into the next phase of growth, more transparency 2:12 2 minutes, 12 seconds and governance and long-term value creation. This listing is not the culmination of our journey journey but rather the foundation upon which we'll 2:21 2 minutes, 21 seconds build scale diversification and deeper customer penetration. 2:26 2 minutes, 26 seconds First I'll give you brief overview of the sector which will be followed by key highlights about the results. 2:32 2 minutes, 32 seconds The GST exemption on life insurance premium is a landmark reform that has arrived at a very crucial juncture for the industry. It addresses not only 2:41 2 minutes, 41 seconds affordability but also long-term customer behavior by improving persistency, deepening adoption, and expanding the base of first-time buyers. 2:50 2 minutes, 50 seconds In principle, it reinforces life insurance as a core savings and protection need rather than just a discretionary purchase. 2:59 2 minutes, 59 seconds We believe this reform will significantly extend the industry's growth trajectory over the coming years. 3:04 3 minutes, 4 seconds It also aligns well with the government's vision of insurance for all by 2047. 3:08 3 minutes, 8 seconds And also given our strong back insurance network, we are well positioned to capitalize on opportunities arising from GST rationalization and increased demand 3:18 3 minutes, 18 seconds which we are going to witness from tier 2 and tier three cities. On the macroeconomic front, the global environment remains volatile due to 3:25 3 minutes, 25 seconds ongoing tariff and trade uncertaintities and prolonged geopolitical tensions which pose some downward risk to global 3:33 3 minutes, 33 seconds growth. However, the Indian economy continues to demonstrate structural resilience reflected in stable GDP growth and a benign inflationary environment. 3:43 3 minutes, 43 seconds High frequency indicators suggest that domestic economic activity could remain robust. 3:49 3 minutes, 49 seconds Now I would like to discuss the highlights of the business performance for H1 FYI26. 3:54 3 minutes, 54 seconds Our individual weighted premium income WPI which is regular first year premium plus 10% of single premium grew at a 4:04 4 minutes, 4 seconds steady pace of 14% year-on-year growth driven by disciplined execution and a balanced product mix. We continue to 4:11 4 minutes, 11 seconds outperform both the overall private players growth of 8% and industry growth of 2% during this period. This performance is a continuation of our 4:19 4 minutes, 19 seconds outperformance on a threeyear, 5year and 10-year basis, CAGGR. Our market share in private life insurance space has also 4:27 4 minutes, 27 seconds improved by 20 basis points over previous year. And if I talk about private sector uh industry growth, our growth vis private sector, it is our market share is 2.6%. 4:38 4 minutes, 38 seconds And at overall industry level, our market share is 1.8%. 4:42 4 minutes, 42 seconds For the financial year 2025, total AP grew by 11% yearonear, 4:49 4 minutes, 49 seconds remaining rangebound. However, remain how renewable premium grew by a healthy 29% yearon year as a result of improved 4:57 4 minutes, 57 seconds persistency across most cohorts. Our 13th month and 61st month persistency has been improving consistently and 5:04 5 minutes, 4 seconds stands at 84.4% and 58.4% 4% as of 30th September 25 respectively. 5:13 5 minutes, 13 seconds We have seen a jump of 1.9% in 13 month persistency over financial year 25. We continue to see strong growth in our 5:21 5 minutes, 21 seconds credit life business which has grown by over 40% yearon year. 5:26 5 minutes, 26 seconds Now I'd like to touch upon the product mix. So our product mix is trending towards more of traditional mix compared to last year. The non-link business grew 5:34 5 minutes, 34 seconds at a healthy pace reflecting a gradual shift in customer preference towards non-par products in a benign interest rate environment. 5:42 5 minutes, 42 seconds As a result, the share of traditional business stood at 50% improved by 3% from Fi25 mix. 5:50 5 minutes, 50 seconds Within traditional products, we continue to focus on the annuity segment which now constitutes roughly 16% of our overall business. 5:59 5 minutes, 59 seconds Despite volatility in equity markets, customer preference toward link products continues which is reflected in our share offering business remaining steady 6:07 6 minutes, 7 seconds at 50%. Though it has declined by 4% versus FY25. 6:13 6 minutes, 13 seconds Our ULIP products are not only ensuring wealth creation but as we have start started offering riders along with the ULIP products also providing policy 6:21 6 minutes, 21 seconds holders to have enhanced protection cover through various options. This is also helping us in enhancing our margins on ULIP products. 6:30 6 minutes, 30 seconds Share of protection is now at 8% versus 4% in FY25 with growth visible in both individual as well as the group credit life segment. 6:40 6 minutes, 40 seconds I will now move to channel-wise performance. Uh, Canra Bank channel continues to show robust growth supported by increased branch activation 6:48 6 minutes, 48 seconds and strategic efforts to penetrate deeper into tier three and tier four markets driven through customer segmentation and data analytics into high propensity customers. 7:00 7 minutes Our partnership with HSBC gives us access to niche customer segment where persistency is better than the overall persistency rates. We have also launched 7:09 7 minutes, 9 seconds agency business in this month and we have planned for gradual ramp up of agency channel. 7:15 7 minutes, 15 seconds I will now cover the financial and operating performance. 7:19 7 minutes, 19 seconds Our value of new business VNB for H1 stood at this is absolute VNB at rupees 214 crores which is a growth of 21% yearonear. 7:30 7 minutes, 30 seconds The new business margin or the VNB margin stood at 19.6% 6% reflecting 150 basis points improvement year on year 7:38 7 minutes, 38 seconds 1.5% improvement year on year. The margin expansion was combination of rising volumes with increased rider attachments. 7:47 7 minutes, 47 seconds However, this was partially offset by 50 basis points impact on account of GST. 7:52 7 minutes, 52 seconds Of this only 10 basis points impact pertains to policies written after September 25. 7:58 7 minutes, 58 seconds Basis this we expect an annualized impact of approximately 2.2 25% on our margins. This is without management 8:06 8 minutes, 6 seconds action and our endeavor will be to keep our margins similar to financial year 25 levels. 8:14 8 minutes, 14 seconds With the withdrawal of input tax credit under the new GST regime, we may see some short-term implications, but as a company, we are well prepared to 8:22 8 minutes, 22 seconds navigate this transition. We are actively implementing a series of measures to mitigate the impact. As part of our strategic review, we are 8:30 8 minutes, 30 seconds optimizing our product mix with a clear focus on enhancing product level profitability. 8:36 8 minutes, 36 seconds This will be driven by targeted initiatives aimed at improving margins across key offerings. Structurally, we believe the reform will strengthen the 8:45 8 minutes, 45 seconds industry over the long term and there are going to be real benefits for the industry from from long-term perspective. 8:52 8 minutes, 52 seconds Talking of operational efficiency, the expense ratio improved to 19% for the half year ended September 2025 versus 8:59 8 minutes, 59 seconds 20.5% for similar period last year. So there's a reduction of 1.5%. 9:04 9 minutes, 4 seconds Our embedded value EV grew by 17% yearonear reaching 6,543 9:11 9 minutes, 11 seconds crores with an operating ROV of 17.4% on a rolling 12 months basis. There is 9:18 9 minutes, 18 seconds going to be approximately 30 basis point impact on EV due to GST. 9:24 9 minutes, 24 seconds I'll also touch upon some other financial metrics. Uh our profit after tax for H1 stood at 64 crores rupees 64 9:32 9 minutes, 32 seconds crores which is an increase of 16% yearonear. Our assets under management stood at 44,000 roughly 44,000 crores growing 11% yearon year. 9:44 9 minutes, 44 seconds So just to conclude, we remain very confident in the long-term growth potential of the Indian life insurance sector and particularly our growth 9:51 9 minutes, 51 seconds trajectory and sound and improving financials. The recent GST reform is a step in the right direction and reflects the government's commitment to expand 10:00 10 minutes insurance coverage across the country and we are well poised to take full advantage of the same because of access to customers in tier 2, tier three, tier 10:08 10 minutes, 8 seconds four cities as well. We will continue to capitalize on our strong bankard distribution to deepen penetration driven by a team of seasoned 10:16 10 minutes, 16 seconds professionals. In parallel, we continue to invest in advanced digital and J AI capabilities to elevate customer 10:24 10 minutes, 24 seconds experience, expand our value proposition and drive operational efficiency. So, thanks a lot for your time and happy to 10:32 10 minutes, 32 seconds take questions. Over to you guys. Thank you. 10:35 10 minutes, 35 seconds Thank you very much. We will now begin with the question and answer session. 10:40 10 minutes, 40 seconds Anyone who wishes to ask a question may press star and then one on their touchstone phone. If you wish to remove yourself from the question queue, you may press star and two. 10:51 10 minutes, 51 seconds Participants are requested to use handsets while asking a question. 10:56 10 minutes, 56 seconds Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, please press star and then 11:04 11 minutes, 4 seconds one. Our first question comes from the line of Mohit Mangal from Sentum. Please go ahead. 11:14 11 minutes, 14 seconds Yeah. Uh thanks for the opportunity and congratulations on successful listing. 11:18 11 minutes, 18 seconds Uh my first question is basically the impact of GS you said that it's 5%. So if you can just bifocate between you 11:25 11 minutes, 25 seconds know what was the new business premium impact that is basically the business procured after 22nd September and the renewal premium and how do you see the 11:34 11 minutes, 34 seconds impact on overall I mean on annual basis will it be 0.5% or how do you kind of foresee this 11:42 11 minutes, 42 seconds right no thanks Mo for asking that question so I think I partially covered this uh in my earlier discussion uh 11:49 11 minutes, 49 seconds where I mentioned that uh for the full year and this is without taking any management action it will be about 2.25% 11:56 11 minutes, 56 seconds 25% but we have we have taken couple of measures and through that we are confident that we will be able to kind 12:03 12 minutes, 3 seconds of retain our current new business margins going forward there will be short-term impact but because of various initiatives which we have taken uh we 12:12 12 minutes, 12 seconds will be able to kind of go back to the numbers which we had earlier and we saw understood that's helpful uh my second 12:19 12 minutes, 19 seconds question is in on the product mix so Julip is you know still 50 odd% uh so do you think that we go to around 30 cent % 12:26 12 minutes, 26 seconds which was there in financial 24 or should we see ULIP at elevated levels? 12:31 12 minutes, 31 seconds See um I think uh it's basically the customer demand which is quite evident in the market. It was evident last year also and currently also we are seeing 12:39 12 minutes, 39 seconds that customer preference is actually particularly in metro cities is moving towards unit link and as such see 12:47 12 minutes, 47 seconds there's no problem with the unit link business as long as you can protect your margins and we have taken number of measures uh to kind of protect our VNB 12:55 12 minutes, 55 seconds margins. So first of all our cost is kind of cost base is very low. We are quite efficient that way in terms of our total cost ratio. You'll see that we are 13:02 13 minutes, 2 seconds in top quartile. So which helps us to optimize VNB margins. Number two through new products launches which we're going to do and various other measures 13:11 13 minutes, 11 seconds including further sustainable saves further opex savings we will be able to kind of protect. Also I would like to mention that as a along with the unit 13:20 13 minutes, 20 seconds link products now we are also attaching writers. So that's something which we have started about 3 months back and we are already seeing uh good amount of premium coming from riders attachment. 13:30 13 minutes, 30 seconds So that also helps in improving the VNB margins plus our focus on protection business. So that there also now we are 13:37 13 minutes, 37 seconds looking at both uh retail protection as well as the group credit life uh and as I already mentioned we have seen growth of more than 40% in our credit light 13:47 13 minutes, 47 seconds portfolio. So all these measures will help us to kind of recoup whatever loss is there on account of input credit. So 13:55 13 minutes, 55 seconds we are fairly confident that we will be able to maintain our VNB margins to the levels which I've already spoken about. 14:02 14 minutes, 2 seconds Right? Just just one clarification. So looking at your PPT uh basically the product mix on the basis of AP. So a 14:09 14 minutes, 9 seconds nonpar is basically the savings component which is 17%. Is is that understanding right? 14:15 14 minutes, 15 seconds Yes. 17% is nonpar savings traditional. 14:19 14 minutes, 19 seconds Okay. Okay. Uh I I'll join back in the queue. Thanks and wish you all the best. Thank you very much. 14:27 14 minutes, 27 seconds Thank you. 14:29 14 minutes, 29 seconds Our next question comes from the line of Sarnab Mukharji from BNK Securities. Please go ahead. 14:40 14 minutes, 40 seconds Yeah. Hi sir. Uh am I audible? 14:42 14 minutes, 42 seconds Yeah. Yeah, you're audible. Good evening. Yeah. 14:44 14 minutes, 44 seconds Good evening. Thank you for the opportunity. Uh so sir I think uh I mean my first question uh was in terms of 14:52 14 minutes, 52 seconds your uh cost ratio. So you have highlighted that uh you uh you you there is a 100 business points kind of 15:00 15 minutes improvement in the cost ratio. I wanted to understand sir that as we set up the our agency business what will be the 15:09 15 minutes, 9 seconds impact of on the cost ratios and subsequently on the margins because of that and if you could give us some uh 15:17 15 minutes, 17 seconds guidance related to the margins going forward because I think there these are the two key events one is basically your investment in the business primarily on 15:25 15 minutes, 25 seconds the agency side as well as the GSP impact which you were saying that you know you're trying to mitigate but if you could give some glide path on how do 15:33 15 minutes, 33 seconds you see factoring in these two uh these two events it would be very useful uh that is that is the first one yeah and 15:41 15 minutes, 41 seconds I'll I'll ask the other questions later sir right so first of all actually what we have seen in our expense ratio is 15:48 15 minutes, 48 seconds improvement of 1.5% so it was 20.5% last year it has improved to 19% as of now uh 15:55 15 minutes, 55 seconds as far as agency is concerned I mentioned that uh earlier also that we will go for phased 16:08 16 minutes, 8 seconds Hello ladies and gentlemen, we have lost the line for the management. Please stay connected while we reconnect the line to the management. 16:16 16 minutes, 16 seconds [Music] 18:57 18 minutes, 57 seconds Heat. Heat. N. 18:58 18 minutes, 58 seconds [Music] 20:15 20 minutes, 15 seconds Heat. Hey, Heat. 20:18 20 minutes, 18 seconds [Music] 21:20 21 minutes, 20 seconds Heat. Heat. 21:25 21 minutes, 25 seconds [Music] 22:27 22 minutes, 27 seconds Ladies and gentlemen, please stay connected. 22:30 22 minutes, 30 seconds We are trying to reconnect the management. 22:33 22 minutes, 33 seconds Participants, please stay connected. We are trying to reconnect the management. 22:37 22 minutes, 37 seconds [Music] 24:10 24 minutes, 10 seconds That's 24:21 24 minutes, 21 seconds [Music] 25:05 25 minutes, 5 seconds Ladies and gentlemen, we have the line for the management reconnected. Yes, please go ahead, sir. Yeah, first of all, apologies for this problem uh for 25:14 25 minutes, 14 seconds the disconnection and uh I don't know till what stage uh people were able to hear us. Uh uh sir, it was Mr. Swarnab 25:22 25 minutes, 22 seconds Mukharji who was answer asking the question. So Swarnab sir, uh may we request you uh repeat your question once again so that we can continue. 25:30 25 minutes, 30 seconds Yeah. Yeah, sure. Yeah, sir. I think uh you were responding to the question on agency uh setup. uh so that and the 25:38 25 minutes, 38 seconds first implications uh of that right so uh as I had mentioned that agency we are ramping up in a phase 25:47 25 minutes, 47 seconds manner and that will actually help us to kind of maintain our margins and maybe I'll request taruno to give exact 25:54 25 minutes, 54 seconds numbers yeah so uh as we are ramping up agency this year in a phase manner so we don't 26:02 26 minutes, 2 seconds expect any impact uh uh significant impact uh on u the various parameter one 26:08 26 minutes, 8 seconds is the cost second one is uh you know your uh BNB margin and other financial parameters and uh therefore uh and and 26:18 26 minutes, 18 seconds in the first you know generally what we have seen also the agency is expected to sell mostly thread so that will also maintain uh the margin and as we will 26:27 26 minutes, 27 seconds generate more and more cushion uh you know from the profitability u over uh next uh you know months few 26:36 26 minutes, 36 seconds months months uh we will start ramping up the agency accordingly. So we don't expect u significant impact coming from agency channel. 26:45 26 minutes, 45 seconds In fact just to add I think the agency model also over a period of time has got evolved and of late we are also seeing that the distributor payouts are also 26:53 26 minutes, 53 seconds kind of getting kind of freshized to some extent. So I think this new environment will help us to kind of uh uh continue with uh agency business but as I mentioned in a phased manner. 27:05 27 minutes, 5 seconds Understood sir and uh in terms of sir uh uh basically mitigating the impact of uh 27:12 27 minutes, 12 seconds GST on our margins. So just wanted to understand what all steps we are taking and if there is any negotiation going on 27:20 27 minutes, 20 seconds with our distributors uh what stages are we uh if you could uh basically say if you could highlight the levers that you 27:28 27 minutes, 28 seconds have at hand uh which gives you confidence that you'll be able to mitigate uh most of the impact. uh you know hack yeah that's that's a really 27:37 27 minutes, 37 seconds good question and uh so there are three uh things which we are doing uh with respect to minimizing the impact the 27:45 27 minutes, 45 seconds first one is uh uh you know rationalizing rationalization of our operating expenses we have been doing this and that's why we are able to 27:53 27 minutes, 53 seconds maintain our cost ratios uh you know at at a such a low percentage uh so we have identified uh various uh uh you know 28:03 28 minutes, 3 seconds levers uh and areas where we can further rationalize the cost uh which is operating cost. Uh so this is this has 28:10 28 minutes, 10 seconds already been actioned and we are confident that we will be able to cover u you know uh uh do complete those actions. The the second part is 28:19 28 minutes, 19 seconds basically uh the product uh mix uh you know shift uh basically as Anid 28:27 28 minutes, 27 seconds mentioned the group life is already doing uh very well. So that is helping us in terms of increasing the margin and 28:34 28 minutes, 34 seconds uh therefore uh some of these product mix shift is helping us to improve the margin and taking care of some of the impact of GST. And the third parameter 28:42 28 minutes, 42 seconds is basically uh is uh the commission rationalization. Uh now the commission rationalization is depending upon um the 28:50 28 minutes, 50 seconds various uh distribution tie up we are having and we are doing u assessing each and everyone uh as per uh you know the 28:57 28 minutes, 57 seconds kind of scale and the kind of commission rate uh which we pay. Uh so uh in terms of uh these actions uh we have already 29:06 29 minutes, 6 seconds discussed and unders uh negotiated I I will not use negotiated but we have already agreed to the agreement with 29:13 29 minutes, 13 seconds most of the distributors that uh uh the impact will be neutralized uh on the commission side. Yeah. And I would just 29:21 29 minutes, 21 seconds like to add that in our case particularly with our bank partners our commission rates are already lower than the industry. So we don't want to further cut in terms of the new 29:30 29 minutes, 30 seconds business. Uh but in terms of renewable business we are assessing if there is a need for adjustment but because our costs are low including commission rates 29:38 29 minutes, 38 seconds which are low uh the impact is going to be much lesser compared to the competition. 29:45 29 minutes, 45 seconds Right sir understood. So would it be fair to assume that as we move to the second half of the year we'll not see any uh major impact of this coming 29:54 29 minutes, 54 seconds through or will if you could quantify if you assess that some impact might come through in Q3 and then normalize. 30:01 30 minutes, 1 second Yeah. So uh like we mentioned that uh we would like uh uh we are targeting to maintain the BNB margin at the current 30:09 30 minutes, 9 seconds level after uh you know taking the impact in this second half. Second half is going to be you know in terms of the 30:18 30 minutes, 18 seconds business volume also is going to be higher than uh the first month only the month impact which you have seen but uh we will uh we are confident that we'll 30:27 30 minutes, 27 seconds be able to maintain uh this level of margin and uh uh you know uh show the growth over previous year and next year 30:35 30 minutes, 35 seconds onward which is FI2627 uh the impact will be uh almost uh minimized uh and there are many many 30:43 30 minutes, 43 seconds steps which we have already initiated uh some of them have already been actioned and agreed like I mentioned so it will continue to help us in terms of maintaining the healthy margin. 30:55 30 minutes, 55 seconds Sure sir. Very helpful. Just couple of uh quick uh data keeping kind of questions. One is uh on your uh 31:02 31 minutes, 2 seconds protection mix. So if you could split that up between uh individual uh products and credit life uh I think right now it is showing 8% uh on the 31:12 31 minutes, 12 seconds basis of AP. So what would be the mix between individual and group in that? 31:16 31 minutes, 16 seconds That is the first one. And secondly, if I look at your persistency disclosure, uh I mean on a half year to half year 31:23 31 minutes, 23 seconds basis, there is an improvement but if I look at the numbers basis say 3 months ended uh June and 3 months ended 31:31 31 minutes, 31 seconds September there seems to be a drop in the number. So I just wanted to understand how to read this. 31:38 31 minutes, 38 seconds So out of uh 8% uh the protection majority of the businesses uh 31:45 31 minutes, 45 seconds contribution is done by uh the group create life which is also very profitable uh and uh individual uh 31:54 31 minutes, 54 seconds protection business is now picking up because we have like we mentioned uh there is the demand which is coming up 32:01 32 minutes, 1 second now uh for uh basically asking for more and more protection business there's a direct 18% and saving which is happening 32:08 32 minutes, 8 seconds there. So as of now this is mainly coming from almost uh you know 75% is coming from um group protection uh which 32:17 32 minutes, 17 seconds is group create live s 32:22 32 minutes, 22 seconds and on the persistency uh query uh persistency sorry what is the 32:29 32 minutes, 29 seconds question can you repeat that Q2 versus Q1 so overall H2 H1 there is decent increase in 31 persistency but quarter 32:37 32 minutes, 37 seconds on quarter there's uh I think some decrees which they're talking about now. 32:44 32 minutes, 44 seconds Yeah. Right. Uh uh just let us come back on this particular point. Yeah. 32:50 32 minutes, 50 seconds We'll revert but just one thing I would like to mention that this change which happened in GST um many customers actually decided to kind of the 32:58 32 minutes, 58 seconds clarification also came there was deferment of uh premium payment by customers. So if you're taking if you're looking very very short term quarter on 33:06 33 minutes, 6 seconds quarter partly it could be on account of this clarity which came around GST for existing customers which came actually on the last day of the financial year. 33:15 33 minutes, 15 seconds No sorry last day of the um quarter. 33:19 33 minutes, 19 seconds Okay sir understood sir. Okay thank you so much sir. Thank you and all the best. Thank you. 33:26 33 minutes, 26 seconds Thank you. Before we take the next question, a reminder to all the participants. You may press star and then one to ask a question. Our next 33:34 33 minutes, 34 seconds question comes from the line of Nidesh from Investec. Please go ahead. 33:39 33 minutes, 39 seconds Uh so thanks for the opportunity. Uh the first question is on on product mix. The share of nut is pretty high for us 33:47 33 minutes, 47 seconds versus our listed peers. Uh so what is driving it and if you can share uh share some details about the product structure 33:54 33 minutes, 54 seconds within nut? how much is regular pay nut and how much is single premote and uh which specific channel is driving that 34:02 34 minutes, 2 seconds because that is a quite commendable share of nut that you have achieved right so I'm requesting our appointed actually uh Nitin to kind of provide 34:09 34 minutes, 9 seconds these details so hi u so for on the anity side so we have seen uh good uh we've seen a 34:19 34 minutes, 19 seconds potential of anity in terms of the market and there is good margin so I think annity again from a margin BNB margin perspective it provides margin 34:27 34 minutes, 27 seconds similar to our drug nonpart savings business uh which is the reason we've increased focus on annity and in terms of the split uh the most of our about 80 34:36 34 minutes, 36 seconds to 90% of the anity portfolio comes from actually the regular fee deferred annity 34:43 34 minutes, 43 seconds just adding you know there is a clear segmentation which we have uh and that's why you see a increase in the MUT 34:50 34 minutes, 50 seconds business uh in both in Canra in terms of customer segmentation and That's the work of uh uh outcome or a result of our 34:59 34 minutes, 59 seconds uh deeper analytics along with the you know these distributors that we are able to identify the need of customers who 35:07 35 minutes, 7 seconds are actually looking for NUT products both in Canva and HSBC especially in HSBC you can see that there is a clear segment customer segment which is 35:14 35 minutes, 14 seconds looking for it and uh therefore you see that this nut proportion is actually improving uh over a period of time and 35:22 35 minutes, 22 seconds as Nan mentioned mostly it is deferred nut which is uh you know profitable for us and just to add my long-term view is that this particular segment which is 35:30 35 minutes, 30 seconds retirement solutions pension products I think the we are seeing increased demand coming in uh that is because of the longevity of customers and all that and 35:40 35 minutes, 40 seconds we see this as a segment where I think there's good revenue opportunity which is there and we are going to capitalize on it. 35:49 35 minutes, 49 seconds Sure. So on nut what is the average deferment period and how are we hedging it? 35:56 35 minutes, 56 seconds So the average deferment period on nity is uh about 4 to 5 years. Um that is a 36:04 36 minutes, 4 seconds that is the maximum one which we sell while it goes up to up to 10 to 11 years as well. The maximum proportion that we are selling is up to 4 to 5 years. And uh uh what is the second question? 36:15 36 minutes, 15 seconds Sorry. How we are hedging? Uh we hedging. So we have we've also uh investing in uh derivatives for our annity book as well. So we are hedging 36:24 36 minutes, 24 seconds you know as we sell we hedging most of this book through uh forward agreements. 36:30 36 minutes, 30 seconds Sure. And secondly on distribution mix if you can share data on the distribution mix for H1 how much is KRA bank how much is HSBC and how much is 36:39 36 minutes, 39 seconds other channels uh of the on overall AP basis. 36:44 36 minutes, 44 seconds Right. So I think this we covered in our RHP also. Uh so broadly 70% of the business comes from camera 36:53 36 minutes, 53 seconds and another 14 to 15% comes from HSBC and remaining is alternate channels and 36:59 36 minutes, 59 seconds as we grow agency we expect that in percentage terms uh the contribution from the banks may come down and overall 37:06 37 minutes, 6 seconds alternate channels will grow but that's a broad composition. It may vary month to month uh quarter to quarter but 37:13 37 minutes, 13 seconds broadly this is how the current mix is channel makers. Sure. And lastly is around VNB margin. 37:21 37 minutes, 21 seconds Uh are you guiding for 20 around 20% VNB margin for the full year? Is that the guidance despite GST impact? 37:28 37 minutes, 28 seconds Uh inching towards that we can say that. 37:32 37 minutes, 32 seconds Okay. Okay. Uh thank you sir. That's it from my side. Thank you. 37:38 37 minutes, 38 seconds Thank you participants. You may press star and then one to ask a question. Our next question comes from the line of 37:45 37 minutes, 45 seconds Vinod Rajani from Nirmal Bank. Please go ahead. 37:49 37 minutes, 49 seconds Uh thank you for taking my question. Uh just wanted uh some more details on this agency roll out. Uh uh you know if you 37:56 37 minutes, 56 seconds can provide some uh some kind of color on that. Uh that would be question number one. Uh number two would be question number two would be on how many 38:04 38 minutes, 4 seconds riders um what is the attachment ratio in terms of uh um the policies that you have and the riders that are attached. 38:12 38 minutes, 12 seconds How many policies currently have a rider attached and uh what is the aspiration in terms of the rider attachment ratio if so these are two questions that I 38:21 38 minutes, 21 seconds have agency yeah so I'll go first on the agency so as I'd mentioned we are going 38:28 38 minutes, 28 seconds to ramp up in a phased manner so um and we are going to use our current infrastructure we have 104 branches 38:35 38 minutes, 35 seconds which are there throughout India so we are increasing our agency presence in these locations first and there's ramp up plan uh as part of our long-term 38:44 38 minutes, 44 seconds strategy which has been agreed by the board and we will be gradually increasing uh but at the same time I would like to mention that we would not like to see any VNB compression on 38:53 38 minutes, 53 seconds account of agency so the agency ramp up will be uh gradual and diversification over a period of time we are in no rush 39:00 39 minutes actually to scale up agency to levels which can impact our margins so I hope that answers the question 39:07 39 minutes, 7 seconds uh yes sir that is very clear yeah on the rider attachments. So I just want to highlight that you know we've only introduced riders last year. So 39:16 39 minutes, 16 seconds it's been steadily yeah they've been steadily picking up and uh so in the recent business that we are selling this year it's about 65 to 39:23 39 minutes, 23 seconds 70% already and we are only looking to increase this further. 39:28 39 minutes, 28 seconds Okay. Yeah. Noted. Thanks so much. All the best. Thank you. Thank you. 39:39 39 minutes, 39 seconds Thank you. Our next question comes from the line of 39:46 39 minutes, 46 seconds Sukrit Patil. Sukarit de Patil from Eyesight Fint Trade Private Limited. Please go ahead. 39:52 39 minutes, 52 seconds Good evening to the team and uh congratulations on a successful quarter. 39:57 39 minutes, 57 seconds I have a specific question for Mr. Anoj uh a forward-looking question. You have briefly explained about the margins and all the books and everything. Uh just my 40:06 40 minutes, 6 seconds question is as customer uh expectations shift and digital adoption deepens uh 40:13 40 minutes, 13 seconds what long-term changes do you foresee in how Canada HLBC life insurance builds trust and relevance across different customer segments. 40:24 40 minutes, 24 seconds Yes, thank you. 40:24 40 minutes, 24 seconds Right. So very good question and I'm ask about the lockup strategy also as to how we are going to grow the business. uh so as I had mentioned earlier also see uh 40:33 40 minutes, 33 seconds the space we are in wherein we have very good bank assurance presence our penetration in current customer base which we have the captive customers we 40:42 40 minutes, 42 seconds have is less than 2%. So our focus will continue to be on the bank insurance business along with ramping up the agency. We are fully committed to agency 40:51 40 minutes, 51 seconds business and you will see ramp up happening over a period of time but banka will continue to kind of uh lead in terms of growth as I mentioned uh 41:00 41 minutes less than 2% penetration. Uh what we are also seeing and you touched upon the digitalization which is a very important aspect we are seeing that demand is 41:08 41 minutes, 8 seconds coming from tier three tier four cities also. So we are fully equipped and just uh to mention few numbers uh because as 41:15 41 minutes, 15 seconds a company we have always invested in technology and we have achieved very high level of digitization roughly 99% of our business we acquire digitally 41:23 41 minutes, 23 seconds when I say we acquire digitally even with banks we have got digital assets through which the customer is onboarded making sure that onboarding uh can 41:31 41 minutes, 31 seconds happen very very smoothly and location is not a constraint so I think that's something very positive about us that 99% of our business is digitally 41:40 41 minutes, 40 seconds onboarded Number two on servicing also roughly 85% of customer service requests are on DIY 41:47 41 minutes, 47 seconds journeys. So that way we have achieved very high level of digitization and these channels will grow. Uh they are underpenetrated right now. We are also 41:56 41 minutes, 56 seconds focusing in terms of growing our digital business. So that's also uh on the cards. Uh we are already having uh 42:02 42 minutes, 2 seconds decent uh I'll say u reasonable kind of business which is coming from digital only also. But yes, overall 42:09 42 minutes, 9 seconds digitalization we have a clear strategy to use that to our advantage both for banker business, agency business as well as alternate channels. 42:20 42 minutes, 20 seconds Great. And overall we continue to outgrow uh the industry performance. If you see our growth rate in the past has been much superior compared to the 42:27 42 minutes, 27 seconds industry. If you take any time frame 3 years, 4, 5 years, 10 years, we have always overachieved uh the industry growth and we are very confident that in 42:36 42 minutes, 36 seconds years to come also because of our superior business model which we have and a strong support we will continue to deliver good numbers. 42:44 42 minutes, 44 seconds Thank you. My final question is to Mr. 42:46 42 minutes, 46 seconds uh uh Ragi. uh looking looking ahead uh what kind of internal 42:54 42 minutes, 54 seconds levers or uh any strategic choices do you see as uh most important for balancing growth 43:03 43 minutes, 3 seconds with disciplined risk and say capital efficiency. 43:08 43 minutes, 8 seconds So one is uh the product mix play a very important role uh in terms of uh you know the capital requirement and also 43:17 43 minutes, 17 seconds risk uh and if you actually see we have been able to manage the balanced product mix obviously uh we are trying to uh 43:27 43 minutes, 27 seconds shift the product mix and uh expect that product mix will move as per the customer demand towards more uh traditional business and for that we have a very robust uh hedging strategy. 43:38 43 minutes, 38 seconds uh which uh is able to help us in terms of protecting the interest rate risk. 43:44 43 minutes, 44 seconds Apart from that, you know, the cost management is another lever which uh we are constantly working and able to u rationalize or maintain our cost ratios. 43:54 43 minutes, 54 seconds are not only operating expenses but uh also you know basis the arrangement or agreement which we are having with with 44:01 44 minutes, 1 second our distribution uh uh partners uh we are able to maintain the cost ratios uh very well. Uh also another thing which 44:10 44 minutes, 10 seconds is uh which you can clearly see in terms of outcome is our consistency which is basically a right sale need-based sale 44:17 44 minutes, 17 seconds and uh need-based sale is resulting into higher persistent uh customer and a satisfied customer which is helping us 44:25 44 minutes, 25 seconds to improve the persistency renewal book which is further helping us improving the VNB margin and uh embedded value. So these three things are very very 44:34 44 minutes, 34 seconds critical. Uh and keeping in mind uh keeping all these three uh we will continue to outperform industry. This is 44:41 44 minutes, 41 seconds the uh the distribution model which we are having the reach which we are having. So this all these things are helping us in terms of uh outperforming 44:49 44 minutes, 49 seconds industry on all the financial parameters including topline and cost efficiency is the US piece. uh we are at competitive 44:57 44 minutes, 57 seconds edge there with our cost ratios both offex as well as commission ratio being very very reasonable. 45:03 45 minutes, 3 seconds I think that is a very detailed guidance on your part and I wish the entire team best of luck for the Q3. Thank you. 45:12 45 minutes, 12 seconds Thank you. Our next question comes from the line of Mr. Pen. Please go ahead. 45:29 45 minutes, 29 seconds Hi. Uh we are not able to hear. 45:34 45 minutes, 34 seconds Uh pre your line is unmuted. Please proceed. 45:37 45 minutes, 37 seconds Sorry. Yeah. So I'm just looking at the interest rate sensitivity. uh what we disclosed in the in the in the RP and uh 45:46 45 minutes, 46 seconds uh uh the presentation that we've disclosed the sensitivities have gone down and so what's what's kind of driven that and do we see further improvement 45:54 45 minutes, 54 seconds there or how how should we think about this that would be my first question hi thanks for this question so we have been 46:02 46 minutes, 2 seconds constantly working on this so I think uh two two of the main reasons how we managed to get our interest sensibly down is obviously through increased 46:10 46 minutes, 10 seconds hedging uh we've been constantly increasing our hedging uh you know to more new business we write on traditional as well as we have been hedging that business and 46:19 46 minutes, 19 seconds secondly we've also been constantly working on the duration of our assets so increasing the duration of our assets so 46:26 46 minutes, 26 seconds these are the two reasons how we managed to reduce and we've been seeing this constant and yes we should uh expect to 46:33 46 minutes, 33 seconds see a further reduction in this in the coming months what percentage of nonpar uh uh book will be hedged. 46:45 46 minutes, 45 seconds What percentage of nonpar is about about 70%. 46:49 46 minutes, 49 seconds 70%. Okay. And do you expect this to go to about 85 90% when that is the intention? That is that is the intention. 46:57 46 minutes, 57 seconds Got that. Got that. Go upwards up to 80%. Right. Okay. 47:02 47 minutes, 2 seconds We also look at just to add uh we also have you know agile agile repricing framework. So we are also looking to uh 47:11 47 minutes, 11 seconds you know keep repricing as per the interest rate movements to ensure that the VM margins are maintained so they are not adversely impacted by the interest rate movements. 47:22 47 minutes, 22 seconds Got that got that. Uh second question is on the uh on the efficiency in the 47:29 47 minutes, 29 seconds Canada bank channel u and uh what is what are the medium-term plans to kind of increase the efficiency uh there in 47:39 47 minutes, 39 seconds order to kind of you know drive more growth there. 47:43 47 minutes, 43 seconds So in terms of efficiency what I I am understanding is you're talking about the productivity right in the canvas channel. Yeah. Yeah. Yeah. Productivity. 47:51 47 minutes, 51 seconds Okay. uh uh uh can I request uh Solomon our co uh to just uh provide a response? 47:58 47 minutes, 58 seconds So if uh if we look at uh we have almost 6,000 touch points entire two entire three and that's one of the strategy 48:05 48 minutes, 5 seconds which in uh distribution leveraging our distribution expansion and currently we are having just less than two less than 2% penetration. So we will keep on 48:14 48 minutes, 14 seconds focusing on these t and t three uh cities where we have more than 6,000 touch points to increase our productivity. 48:23 48 minutes, 23 seconds Yeah. This is uh in addition to the uh the tech u usage uh like you you are you 48:30 48 minutes, 30 seconds all are covering the bank which you're talking about and uh the kind of uh enhancement and advancement they are 48:38 48 minutes, 38 seconds doing on the technology side which is analytics uh plus also uh the segmentation is another thing they are 48:45 48 minutes, 45 seconds also working very hard and very positively and very effectively on the digit digitization of their uh one is 48:52 48 minutes, 52 seconds process and also the touch point from the customer like app is there uh you know website is there. So all these things are going to help us uh in terms 49:02 49 minutes, 2 seconds of reaching to the last uh customer uh the the you know each and every customer of the Canada bank which is going to 49:10 49 minutes, 10 seconds help us in terms of improving the productivity and uh uh in each of the branches and uh also enhance the sales in uh this channel. 49:20 49 minutes, 20 seconds Got that? uh uh the the other question was uh on the on the commission discussion that you are having you you 49:27 49 minutes, 27 seconds mentioned that you you are looking to cut commissions uh so is it also in the discussions are on with both Canada and 49:35 49 minutes, 35 seconds HSBC as partners or is just about the remaining 15% is where you would look to cut down commissions 49:42 49 minutes, 42 seconds uh I think we covered that in case of Canada and HSBC we are already having a very reasonable commission rate first day commission rate uh what we are 49:50 49 minutes, 50 seconds discussing is mainly on the renewal which is uh having a basically a longer impact on u u you know in terms of the 49:58 49 minutes, 58 seconds other financial parameters. So that discussion is going in a positive direction. Uh for balance 15% uh is 50:06 50 minutes, 6 seconds definitely is on the both front. That discussion is also going in a positive direction. 50:12 50 minutes, 12 seconds Got that. Got it. Yeah. That's all from my side. Thanks. Thank you. 50:21 50 minutes, 21 seconds Our next question comes from the line of Hershel Ma from HMS. Please go ahead. 50:27 50 minutes, 27 seconds U thank you for the opportunity and congress on successful listing. Just have two questions. Uh first in terms of agency channel so like given that we are 50:36 50 minutes, 36 seconds now expecting a phase ramp up of the channel. Uh so if you can give some current in terms of numbers like what type of number of agents agency AP their 50:43 50 minutes, 43 seconds productivity and how we see agency AP share moving over the next few years. So uh and uh the new initiatives we are taking in the channel. So that will be 50:51 50 minutes, 51 seconds helpful and uh secondly in terms of our product wise lapse in surrender rates what we assume so how to read those in line with the persistency for each 51:00 51 minutes products and if you can give some comfort on assume laps of sar rates that will be my second question right so I'll answer your first question 51:08 51 minutes, 8 seconds which is on the agency and then I'll request our appointed actually to talk about the laps and surrender rates so uh see in terms of agency as I mentioned uh 51:16 51 minutes, 16 seconds we are going to ramp up in a phased manner I will not like to give any forward-looking kind In terms of numbers, I'll not like to give any statement but yes over a period of time 51:24 51 minutes, 24 seconds you'll see the growth there and in agency also see at times there are benefits of starting late. Uh so now when we are starting agency we are also 51:32 51 minutes, 32 seconds evaluating various models within agency which will help us in terms of cost optimization and also generating more 51:39 51 minutes, 39 seconds business with maybe not very high not not very high number of agents. So that's what we are looking at that we will look for hybrid kind of model 51:48 51 minutes, 48 seconds different models which are existing which is variable agency model tide agency model and we will try to achieve a balance mix between the two and we we 51:57 51 minutes, 57 seconds are going to grow this channel over a period of time I will not like to make any statement in terms of number of agents and all that but as long as we 52:04 52 minutes, 4 seconds are protecting the VNB margin and kind of diversifying I think you guys should be all okay. 52:13 52 minutes, 13 seconds Yeah. So on the laps and surrender rates. So as you're aware that uh you know the laps and surrender rates vary by products. So there's not a sing. So 52:21 52 minutes, 21 seconds each products depending on the channel depending on uh the features it does vary. So there's not one single rate 52:28 52 minutes, 28 seconds which will apply to all products. But yes our what we are seeing is we are seeing a continuous improvement in our uh laps and surrender rates. And uh 52:37 52 minutes, 37 seconds typically our persistency on the unit link side is slightly better which is even better from the overall profitability perspective. Uh but we are 52:46 52 minutes, 46 seconds seeing an improvement we are seeing a further improvement both on unit link as well as the traditional business side on laps renderings. 52:54 52 minutes, 54 seconds Thank you sir and all the best. Thank you. Thank you. Thank you. Are we done or there are more questions? 53:04 53 minutes, 4 seconds Uh so there are no questions at the moment. Participants you may press star and one to ask a question. 53:17 53 minutes, 17 seconds As there are no further questions, I now hand the conference over to the management for closing comments. 53:22 53 minutes, 22 seconds Yeah. So first of all, thanks a lot to all the participants for joining in for this late evening discussion but very insightful and very interesting one. And 53:31 53 minutes, 31 seconds uh now since we are listed I'm looking forward to this engagement on regular basis. Every quarter we'll be uh publishing our results and look forward 53:39 53 minutes, 39 seconds to kind of uh inputs coming from all of you and please feel free to ask questions as we move forward in this journey. So thanks once again. Thanks a lot. 53:50 53 minutes, 50 seconds Thank you on behalf of Motila Losal that concludes this conference. Thank you all for joining us and human now disconnected.