Go Digit General Insurance Limited — Q3 FY26

Go Digit General Insurance Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=T1eyMpHkwCY Published: 3 months ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to Q3 and NM FI26 results conference call of Go Digit General 0:10 10 seconds Insurance Limited hosted by ICA Securities. As a reminder, all participant line will be in the listenon mode and there will be an opportunity 0:18 18 seconds for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchdown phone. 0:28 28 seconds I now hand the conference over to Mr. 0:30 30 seconds Anuman from ICS securities. Thank you and over to you sir. 0:36 36 seconds Uh good evening ladies and gentlemen and thanks Nish. Uh it's indeed an honor to uh host the senior management of god 0:44 44 seconds digit general insurance for their Q3 and 9 month fi26 results conference call. I now hand over the call to chairman Mr. 0:52 52 seconds Kamehsh. Over to you sir. 0:55 55 seconds Thanks Anaman and good evening everyone and thanks for joining. Uh let me just start by saying that uh in December we 1:03 1 minute, 3 seconds had done a very short call uh explaining the merger between the holding company God digit info works with the god digit 1:11 1 minute, 11 seconds general insurance company limited. Uh basically uh the shares which are held 1:17 1 minute, 17 seconds by god digit info works are being split into three shareholders which is urban 1:24 1 minute, 24 seconds ventures fal and in my individual name uh and uh in addition about uh 1 11 lakh 1:33 1 minute, 33 seconds 60 uh 1 lak 69,000 shares about roughly about 0.03% 03% of 1:39 1 minute, 39 seconds the shares are being issued at a price of about 375 rupees. The price uh at that time of uh digit share was 343. 1:51 1 minute, 51 seconds So this will increase promoter shareholding uh by 03%. Other than that there is no difference. 1:58 1 minute, 58 seconds Uh the management stays the same, board stays the same and the way the companies managed uh in terms of uh between the two promoters that also stays the same. 2:11 2 minutes, 11 seconds So I thought I'll just quickly cover that uh piece for benefit of people who uh did not join the call in December. 2:20 2 minutes, 20 seconds Now moving to the uh deck which has been uploaded. Coming to slide four as you 2:26 2 minutes, 26 seconds know this is our uh usual uh slide where we give gross return premium market 2:33 2 minutes, 33 seconds share in motor and total which is 3.4 4 and 6.5 how many products? So in retail now uh and even otherwise we have all 2:42 2 minutes, 42 seconds kinds of products uh 8.1 cr customers close to 80,000 partners 2:50 2 minutes, 50 seconds uh and AUM now exceed 22,000 cr for the first time at 22,59 2:57 2 minutes, 57 seconds crores and customer satisfaction survey or the NPS uh continues to be quite 3:05 3 minutes, 5 seconds healthy. Moving to the next slide and uh this is where uh I'll probably 3:12 3 minutes, 12 seconds spend a bit of a more time. Uh if you notice this is the first time we are actually declaring the combined ratio 3:20 3 minutes, 20 seconds under FRS basis. Uh when we say combined ratio under FRS basis what it means is 3:27 3 minutes, 27 seconds that it is on net earned premium basis not net return basis. 3:33 3 minutes, 33 seconds Everything else is the same. The only difference is that acquisition cost which is getting deferred here over the 3:41 3 minutes, 41 seconds policy premium earned period. Similarly, the reinsurance commission which is earned in Indian accounting that is also 3:50 3 minutes, 50 seconds upfront accounted for that is also getting deferred during the policy period. We have not taken any uh benefit 3:58 3 minutes, 58 seconds of discounting of reserves here in claims. So the claims ratio would exactly stay the same as IGAP because 4:06 4 minutes, 6 seconds both are on NEP basis. Only the expense ratio now moves to NEP basis with the 4:13 4 minutes, 13 seconds defer uh deferment of uh commission as well as uh uh income which is also in 4:21 4 minutes, 21 seconds reinsurance getting deferred. Now when we look at the premium income, the 4:28 4 minutes, 28 seconds premium income stood at uh 22500 uh in Q3 the premium is uh GDPI is about 4:38 4 minutes, 38 seconds 2557 compared to 2,115 crores uh which is a growth of 20.9 on a 4:46 4 minutes, 46 seconds gross return basis. The premium is 2909 cr compared to 2677 which is recording a growth of 8.7%. 4:55 4 minutes, 55 seconds Now the question is why on growth on the GDP uh GDP uh GWP basis is lower. So 5:04 5 minutes, 4 seconds here basically last year we had written a premium of roughly about 2 uh 50 5:11 5 minutes, 11 seconds crores. Um let me get the exact figure 254 crores last year which was a government health business which was uh 5:20 5 minutes, 20 seconds written on a inward faculty basis. This year this business uh is only 38 crores 5:27 5 minutes, 27 seconds because we did not accept the governmental business in this quarter. 5:33 5 minutes, 33 seconds the same business which we wrote last year because in our view the pricing uh was not adequate 5:42 5 minutes, 42 seconds uh on on this basis. So I think that is uh one point uh I wanted to speak on the 5:49 5 minutes, 49 seconds GWP and GDPI difference and uh we will cover this later. In GDPI we have seen 5:55 5 minutes, 55 seconds growth across all lines of business. The profit before tax has jumped to 37 cr to 6:03 6 minutes, 3 seconds 163 cr compared to 119 crores during previous quarter. Now the impact of new 6:09 6 minutes, 9 seconds wage code uh in this quarter is about 1 7 crores. So this also is impacting the IGAP by 0.3%. 6:21 6 minutes, 21 seconds uh if this was not there the profit would have actually increased to 170 crores compared to 119 crores. Uh profit 6:30 6 minutes, 30 seconds after tax uh now is 140 crores compared to 119 crores. I would like to uh 6:37 6 minutes, 37 seconds mention here that company has now no accumulated losses. The tax uh rate which we have been calculating from the 6:46 6 minutes, 46 seconds start of the financial year is roughly about 14%. And we expect even in the next quarter the tax rate to be 14%. And 6:54 6 minutes, 54 seconds then from next financial year the tax rate would move to 25%. 7:00 7 minutes Now I already explained what the combined ratio is. So if you look at the combined ratio in quarter 3 under IFRS 7:08 7 minutes, 8 seconds basis the combined ratio is 105 uh which last year in the same quarter was 106.2. 7:15 7 minutes, 15 seconds So there is an improvement of 1.2%. 7:18 7 minutes, 18 seconds And when we look at for 9 months against 10 106.9 we are at 105.6 which is again 7:26 7 minutes, 26 seconds [clears throat] an improvement of about 1.3%. 7:29 7 minutes, 29 seconds So uh that is uh something we we thought that uh last time we had declared the debt figures uh but uh we got feedback 7:38 7 minutes, 38 seconds that uh we should start now declaring combined ratio etc on that basis. So it gives uh people idea as to how the 7:48 7 minutes, 48 seconds profitability is under the 9 cr compared to 2677 which is recording a growth of 8.7%. 7:55 7 minutes, 55 seconds Now the question is why on growth on the GDP uh GDP uh GWP basis is lower. So 8:04 8 minutes, 4 seconds here basically last year we had written a premium of roughly about 2 uh 50 8:11 8 minutes, 11 seconds crores. Um let me get the exact figure 254 crores last year which was a government health business which was uh written on a inward facultative basis. 8:23 8 minutes, 23 seconds This year this business uh is only 38 crores because we did not accept the governmental business in this quarter. 8:33 8 minutes, 33 seconds The same business which we wrote last year because in our view the pricing uh was not adequate. 8:42 8 minutes, 42 seconds uh on on this basis. So I think that is uh one point uh I wanted to speak on the 8:49 8 minutes, 49 seconds GWP and GDPI difference and uh we will cover this later. In GDPI we have seen 8:55 8 minutes, 55 seconds growth across all lines of business. The profit before tax has jumped to 37 cr to 9:03 9 minutes, 3 seconds 163 cr compared to 119 crores during previous quarter. Now the impact of new 9:09 9 minutes, 9 seconds wage code uh in this quarter is about 1 7 crores. So this also is impacting the IGAP C by 0.3%. 9:20 9 minutes, 20 seconds Uh if this was not there the profit would have actually increased to 170 crores compared to 119 crores. Uh profit 9:30 9 minutes, 30 seconds after tax uh now is 140 crores compared to 119 crores. I would like to uh 9:37 9 minutes, 37 seconds mention here that company has now no accumulated losses. The tax uh rate which we have been calculating from the 9:46 9 minutes, 46 seconds start of the financial year is roughly about 14%. And we expect even in the next quarter the tax rate to be 14%. And 9:54 9 minutes, 54 seconds then from next financial year the tax rate would move to 25%. 10:00 10 minutes Now I already explained what the combined ratio is. So if you look at the combined ratio in quarter 3 under IFRS 10:08 10 minutes, 8 seconds basis the combined ratio is 105 uh which last year in the same quarter was 106.2 so there is an improvement of 1.2%. 10:18 10 minutes, 18 seconds And when we look at for 9 months against 10 106.9 we are at 105.6 which is again an improvement of about 1.3%. 10:29 10 minutes, 29 seconds So uh that is uh something we we thought that uh last time we had declared the debt figures uh but uh we got feedback 10:38 10 minutes, 38 seconds that uh we should start now declaring combined ratio etc on that basis. So it gives uh people idea as to how the 10:48 10 minutes, 48 seconds profitability is under the uh under the FRS basis. Now in IFRS uh basis we also 10:57 10 minutes, 57 seconds give deck we had started last time the pre-tax deck is about 243 crores. Uh 11:04 11 minutes, 4 seconds this will obviously benefit the IGAP books as we go forward because the future premium will get earned with the 11:11 11 minutes, 11 seconds zero acquisition cost. So this is also uh something we are again giving the number so that if people who want to 11:19 11 minutes, 19 seconds reconcile IG GAP uh to FRS results it becomes uh easier for them. Uh our 11:27 11 minutes, 27 seconds advanced premium as of December 31st 25 is about 2949 crores. Uh out of which 11:35 11 minutes, 35 seconds motor is 26 2605 cr and non-motor is 344 cr. So when we look at advanced premium 11:43 11 minutes, 43 seconds of motor which is 265 crores and we look at our motor premium 11:49 11 minutes, 49 seconds uh for 9 months uh on a YTD basis this is roughly about uh 7.9%. 11:58 11 minutes, 58 seconds And uh when we look at this number which is declared by other companies uh I think this is the highest advanced 12:06 12 minutes, 6 seconds premium in motor compared to the numbers which we have seen of companies which are declaring this. So this again u u 12:14 12 minutes, 14 seconds coming back to why this is happening in our case is about uh two wheeler portfolio primarily and I'll come to 12:22 12 minutes, 22 seconds that in lot more detail in a in a later slides. AUM as I said have already increased uh to 20,000 22,500 cr and 12:32 12 minutes, 32 seconds compared to 31st December 24 this is an increase of roughly 357 12:38 12 minutes, 38 seconds billion uh 6 3500 crores which is a growth of about 18.8% 12:46 12 minutes, 46 seconds 8% solvency is about 230% 12:52 12 minutes, 52 seconds against required of 150 which is good uh new business in two wheeler only in this 13:00 13 minutes quarter three and you will remember that GST was lower GST was introduced from 22nd September digit is a fairly large 13:08 13 minutes, 8 seconds pair on two wheeler business so our two-heer business only in Q3 grew by 47% 13:15 13 minutes, 15 seconds % where collected premium in this quarter was 668 cr against 456 cr of 13:23 13 minutes, 23 seconds last year and this increase of 212 cr in premium in two wheeler collected is 13:30 13 minutes, 30 seconds impacting the P&L under eye gap by 84 crores in the quarter and on the co the impact is about 3.9%. 13:40 13 minutes, 40 seconds Now this will actually give you an idea why there is a difference primarily just by two-heer between IGAP as well as on 13:49 13 minutes, 49 seconds the uh IFRS results. So this again is uh uh something uh I think we have been 13:58 13 minutes, 58 seconds speaking about the impact of two wheeler business on this but uh we thought we'll again give the exact numbers uh for that 14:06 14 minutes, 6 seconds quarter because two-heer sales in Q3 have been very very strong. 14:11 14 minutes, 11 seconds Now moving to the next slide. Now I think here again if you look back at GWP growth uh I had mentioned that uh our 14:21 14 minutes, 21 seconds growth in um in this quarter Q326 you can see in case of health travel NPA 14:28 14 minutes, 28 seconds is minus 31% on a quarterby quarter basis in motor TP fire others our growth 14:36 14 minutes, 36 seconds rate is uh uh significantly better than the industry but in case of health travel and A the uh industry grew by 28.7% while we dgrrew by about 31%. 14:51 14 minutes, 51 seconds Essentially because of this reason uh again just to repeat the number last year we had booked 38 crores in 14:59 14 minutes, 59 seconds government health in this quarter. uh previous year and this year it's only 38 crores and we um management decided not 15:06 15 minutes, 6 seconds to write uh renew this book in uh view of the pricing. 15:13 15 minutes, 13 seconds So uh if we had uh if we removed this government health business from last year's base then our growth on GWP basis also would be about 18.5%. 15:26 15 minutes, 26 seconds Now um I think we also had a discussion last time uh during um I think questionnaire about uh premium 15:34 15 minutes, 34 seconds retention. this year, this quarter, you will see that we have also seeded some motor business uh for the first time. Um 15:43 15 minutes, 43 seconds I think in the recent past and uh we had also discussed last time that the 15:49 15 minutes, 49 seconds exposure uh in some motor vehicles like for example two-heer electric vehicles 15:56 15 minutes, 56 seconds etc is quite a lot. So this time uh company decided to take some motor business uh reinsurance essentially for 16:05 16 minutes, 5 seconds protecting the tail risk. This does not impact the AUM because this reinsurance agreement is on a funds withheld basis. 16:14 16 minutes, 14 seconds So company is paying a fee for this uh in under the reinsurance arrangement and the funds stay. So there is no impact on 16:23 16 minutes, 23 seconds the investment income. And uh again just to repeat in uh IGAP the reinsurance 16:29 16 minutes, 29 seconds cost is upfront provided for while in uh reinsurance uh this would get also deferred along with the premium. 16:41 16 minutes, 41 seconds Uh we also did uh company also did a small uh reinsur uh reinsurance 16:48 16 minutes, 48 seconds session to a direct company on the health portfolio. So that also has uh in a way from a ROI perspective the 16:57 16 minutes, 57 seconds business is profitable but uh on the I gap combined ratio this is artificially 17:04 17 minutes, 4 seconds reducing the uh net return premium both under the motor treaty and also because 17:10 17 minutes, 10 seconds of this health. But uh I think if FRS gives a better idea because in both the insurance commission as well as um 17:19 17 minutes, 19 seconds commission paid both get uh deferred along with the premium which is getting deferred. In terms of overall business 17:28 17 minutes, 28 seconds mix uh I think this has been um quite a uh uh quarter for uh digit where in Q3 17:37 17 minutes, 37 seconds the motor business has touched 66% compared to 60% of last year uh while industries mix has remained same at 36% 17:46 17 minutes, 46 seconds each and the reason is uh that while two wheeler business grew a lot motor overall grew decently but because of 17:54 17 minutes, 54 seconds this uh 200 crores impact slightly more than 200 crore impact on the GWP also changed the 18:02 18 minutes, 2 seconds business mix within motor in this quarter uh now CV is an all-time low for 18:08 18 minutes, 8 seconds digit so out of 100% of the motor business private car now is 47% 18:16 18 minutes, 16 seconds two-wheeler is 34% which will be probably the highest uh um uh motor 18:24 18 minutes, 24 seconds component amongst all the large companies and CV is at all-time low of 19%. So I think again um maybe some of 18:33 18 minutes, 33 seconds you are familiar that uh about 5 years back CV used to be like 60% 65% of our 18:39 18 minutes, 39 seconds motor book. Uh now this is at 19%. And I think uh market dynamics and uh I think 18:46 18 minutes, 46 seconds our management team's ability then to steer the business in the right uh cohorts just shows uh how the mix can 18:55 18 minutes, 55 seconds substantially change uh in in just a few years. 19:01 19 minutes, 1 second Um so secondly I think uh we also have uh our team has also done some analysis 19:08 19 minutes, 8 seconds to say every increase of 1% in private car mix from two-heer will reduce the combined ratio of the company by 0.1%. 19:17 19 minutes, 17 seconds This is more again from IAP perspective, from a IFRS perspective. All these don't really make a difference. 19:28 19 minutes, 28 seconds Um I'm just trying to look at the slide and see if there are any additional uh points but if there are any additional 19:35 19 minutes, 35 seconds questions we'll we'll cover them. Now moving to the next slide in terms of combined ratio. Now here you can see 19:43 19 minutes, 43 seconds that the combined ratio mentioned is uh on the expense ratio and combined ratio 19:50 19 minutes, 50 seconds is mentioned separately and on the top we have the IRS combined ratio. Um and 19:58 19 minutes, 58 seconds as I already said the net return premium in this quarter is lower because of some 20:03 20 minutes, 3 seconds session in uh group health and uh some reinsurance arrangement in motor where 20:11 20 minutes, 11 seconds funds have been withheld. So no impact on investment income but the net return premium has reduced which is 20:18 20 minutes, 18 seconds artificially making the uh the combined ratio in IGAP look bad while IFRS the 20:26 20 minutes, 26 seconds combined ratio is improving. Now we have uh already crossed in 9 months last year's total profit uh and last year's 20:35 20 minutes, 35 seconds uh you would recall that uh we were not paying any taxes at all. So uh from that perspective I think uh this quarter has 20:44 20 minutes, 44 seconds been good at 163 cr of profit and with 7 crores onetime impact due to wage code this number would have been 170 crores. 20:55 20 minutes, 55 seconds Um moving on this is our AUM slide and uh if you look 21:01 21 minutes, 1 second at AUM we have crossed 22,500 cr. our uh overall u yield on this is 21:09 21 minutes, 9 seconds about 1.9% for the quarter. So there are no major capital gains. Uh and uh even 21:18 21 minutes, 18 seconds if you look at last quarter our yield on fixed income was about 7.4 on an annualized basis and this it is coming 21:25 21 minutes, 25 seconds at 7.6 7.5 7.6 on a 1.9 on a quarter 21:32 21 minutes, 32 seconds basis. So investment income continues to be good and EUM also growing [clears throat] on a quarter byquarter 21:40 21 minutes, 40 seconds basis. Now uh if you can look at uh the bottom figures we have now as of 31st 21:47 21 minutes, 47 seconds December unrealized gains of 686 crores out of which equity portfolio have at 21:53 21 minutes, 53 seconds 100 43 while uh other than equity have unrealized gains of 283 22:02 22 minutes, 2 seconds cr. So in 9 months we have added close to about 27 uh 2,750 crores and uh about 22:10 22 minutes, 10 seconds 3,500 crores in the last 12 months. Moving on to the asset allocation side. 22:20 22 minutes, 20 seconds Um I've uh already said that our equity is about 7.4 4 I think it was 7.3 in the 22:27 22 minutes, 27 seconds last quarter and uh we continue to have decent 81 bonds and uh fixed income 22:34 22 minutes, 34 seconds portfolio continues to be good again uh as we have discussed in the past solveny 22:41 22 minutes, 41 seconds of the company is 230% equity allocation is 7.4 before and you would uh uh remember that in the last 12 22:49 22 minutes, 49 seconds months we have actually almost doubled those two doubled our equity allocation and we have still some unrealized gains. 22:59 22 minutes, 59 seconds So I think uh as and when market offers the opportunity our equity allocation will go up. If [clears throat] market uh 23:07 23 minutes, 7 seconds goes up substantially from here we still have 7.4% of uh equity allocation. So I 23:14 23 minutes, 14 seconds think uh on the asset allocation side I would say now we are in a spot where 23:23 23 minutes, 23 seconds [snorts] uh irrespective of how the market moves uh we will we'll see an opportunity to invest uh if it drops. 23:35 23 minutes, 35 seconds Now moving on u to loss ratios. Now when we look at the loss ratios um most of 23:43 23 minutes, 43 seconds the loss ratios are broadening line but one area where uh loss ratio has increased in is motor. Now if you look 23:52 23 minutes, 52 seconds at motor Q4 last year which is Jan to March 25 a loss ratio of 70.5 24:00 24 minutes and uh this quarter it has increased now to 75.6%. 24:06 24 minutes, 6 seconds you would have seen that uh this is happening across companies. Now there are two reasons uh why this has 24:13 24 minutes, 13 seconds happened. One reason is that uh there has been a drop in uh average ticket size in motor uh due to a bit of a price 24:22 24 minutes, 22 seconds competition which is impacting the loss ratio. Secondly, in our case because our renewal book is now substantial. Uh this 24:31 24 minutes, 31 seconds year uh in the last I would say from January till about September October we were also very focused on increasing the 24:38 24 minutes, 38 seconds renewal retention across channels. Our sense is uh in terms of when we exchange numbers with sew aggregators or OEMs or 24:47 24 minutes, 47 seconds even in agency I think our premium uh and policy renewal ratio is very good. 24:54 24 minutes, 54 seconds So just from a perspective that our renewal ratio with the book is substantial. We delayed a bit of a 25:00 25 minutes correction in the pricing uh some pricing correction already happened in October. some has happened in uh January 25:08 25 minutes, 8 seconds and this issue only pertains to private car two-heer and commercial vehicle uh own damage loss ratios continue to be 25:15 25 minutes, 15 seconds very stable and we feel that in the next two quarters this is also something which will stabilize with the actions 25:23 25 minutes, 23 seconds which are which have broadly been taken other than that I would say loss ratios 25:31 25 minutes, 31 seconds uh are more or less stable um in in case of uh all other lines of business. 25:41 25 minutes, 41 seconds Now going further uh and in loss ratios there will always 25:47 25 minutes, 47 seconds be some large claims etc. So the loss ratios in a quarter can look up but if you look at on a gross uh loss ratio 25:55 25 minutes, 55 seconds basis um our reinsurance treaties and our gross loss ratios continue to be very decent and then when we look at on 26:03 26 minutes, 3 seconds a overall combined ratio basis each of the commercial line of business are fairly profitable. 26:11 26 minutes, 11 seconds Uh now moving further now coming to the FRS earning. Now when we look at this 26:18 26 minutes, 18 seconds IFRS earning I also already explained that combined ratio doesn't take any benefit of the discounting of reserves. 26:27 26 minutes, 27 seconds Um and uh uh overall if you look at uh uh IFRS profit the way we look at 26:34 26 minutes, 34 seconds internally as I explained last time is to basically look at IGAP profit which is 459 crores plus deferred acquisition 26:43 26 minutes, 43 seconds cost which is 322 crores. So one reaches a number which is uh 781 crores and on 26:53 26 minutes, 53 seconds 781 crores if one takes a pro tax of 25%. 26:58 26 minutes, 58 seconds on a full fully debted basis. That will give you an indication what the profit of the company is uh without taking into 27:05 27 minutes, 5 seconds account any mark tomarket movements or any discounting on reserves because internally that is how uh we look at u 27:13 27 minutes, 13 seconds our profitability and that is how the FRS combined ratio has been calculated. 27:20 27 minutes, 20 seconds Um now um uh net worth obviously is lot more. You can see the net worth here is 7,800 27:28 27 minutes, 28 seconds crores while the net worth under uh Indian I gap is about 4,400 crores. So 27:34 27 minutes, 34 seconds we actually have u almost 80% 75% more capital in IFRS and that is the reason 27:42 27 minutes, 42 seconds why the roe on this base uh looks much lower but solveny is calculated on the 27:49 27 minutes, 49 seconds net worth of IGAP. So one the profit the way I explained 459 + 322 781 27:56 27 minutes, 56 seconds uh multiplied by 75 and then you have to divide this with the uh I gap uh net 28:03 28 minutes, 3 seconds worth uh and we should not confuse IFRS network with the risk based capital 28:11 28 minutes, 11 seconds because uh solveny as and when that risk based capital come that could actually be different than from IFRS we don't 28:19 28 minutes, 19 seconds expect uh IFRS network to actually become the basis for solvency. And if that happens, we'll actually have 4,000 28:27 28 minutes, 27 seconds cr of uh roughly uh 3,000 cr of uh additional capital 3,200 cr of 28:34 28 minutes, 34 seconds additional capital which will be good to have but we don't expect uh RBC uh to develop in that direction. 28:44 28 minutes, 44 seconds So that's really from me uh in the call. 28:49 28 minutes, 49 seconds We'll be now uh more than happy to answer any questions that you may have. 28:58 28 minutes, 58 seconds Thank you so much, sir. Ladies and gentlemen, we'll begin with the question and answer session. Anyone who wishes to ask a question may press star and one on 29:06 29 minutes, 6 seconds the touchstone telephone. If you wish to remove yourself from the question, you may press star and two. Participants are request to use handsets while asking a 29:14 29 minutes, 14 seconds question. Ladies and gentlemen, we'll wait for a moment while the question Q assembles. 29:23 29 minutes, 23 seconds Our first question come from the line of Sukrit departed from Eyesight Fin Trade Private Limited. Please go ahead. Uh good evening to the team. I have two 29:31 29 minutes, 31 seconds questions. Uh as Go Digit continues to expand its core uh retail and theme insurance offerings, how do you see the 29:41 29 minutes, 41 seconds product mix evolving over the next two to three years particularly in balancing traditional motor and health port health 29:49 29 minutes, 49 seconds portfolios with uh newer digital first products and what role will partnership and technology play in strengthening 29:57 29 minutes, 57 seconds customer acquisition and retention in this growth phase? That's my first question. I'll ask my second question after. 30:06 30 minutes, 6 seconds So I think uh we have been saying in the past that uh we don't don't drive ourselves from a prospective or an ideal 30:14 30 minutes, 14 seconds product mix or a channel mix because we don't know uh what is good at that time and I already explained I think uh that 30:22 30 minutes, 22 seconds if you look at commercial vehicles our commercial vehicle percentage in motor portfolio would have actually become 30:29 30 minutes, 29 seconds half maybe in the last 2 years itself or maybe even less and if you go back to four years, 5 years, then it would now 30:36 30 minutes, 36 seconds be one/ird. So product mix can change very very fast. Again I think another example is in group health um the 30:45 30 minutes, 45 seconds company let go about 220 crores of premium which is roughly 7% of the total premium for the quarter 30:54 30 minutes, 54 seconds because they did not find the pricing right. So we actually feel that uh product mix in our case and channel mix 31:02 31 minutes, 2 seconds is determined more by the market uh dynamics where we feel there is an opportunity then we try and grow and 31:10 31 minutes, 10 seconds where we feel there is no opportunity then uh we don't grow there or we even let go market share assuming tomorrow 31:18 31 minutes, 18 seconds say from April onwards commercial vehicle business becomes uh less competitive then that component can 31:26 31 minutes, 26 seconds actually go up. So this is something uh we don't drive ourselves at all on that basis and because we don't know what the 31:34 31 minutes, 34 seconds market dynamics will be and if we don't know then we we don't assume that because it is good today it will remain good after 3 months or 6 months also. 31:45 31 minutes, 45 seconds Okay. My second question uh to finance again a forward-looking one with strong solveny margins and a growing customer 31:53 31 minutes, 53 seconds base. How are you planning to sustain profitability while managing claims volatility and funding cost? Uh and 32:02 32 minutes, 2 seconds looking ahead, how do you see digital efficiencies and disciplined capital allocation shaping ROE and long-term 32:10 32 minutes, 10 seconds resilience in the coming quarters? Thank you. 32:14 32 minutes, 14 seconds Well, I think um I would say this is relatively easy to answer. If you look at digitization and our business model, 32:21 32 minutes, 21 seconds the best uh example of that from the numbers is uh the management expenses as a percentage of GWP. 32:29 32 minutes, 29 seconds Uh I think our management expenses are 7% to GWP which is by far best-in-class. 32:36 32 minutes, 36 seconds I think the nearest competitor would be above 9.5%. 32:40 32 minutes, 40 seconds So the benefit of digitization and this is something which is continuing. I have said in the past that we are very conscious that uh this benefit has come 32:50 32 minutes, 50 seconds because the company has continuously invested in tech capabilities and digital capabilities and company 32:56 32 minutes, 56 seconds continues to to invest on that front. I think when we look at from a capital allocation perspective at uh 230% 33:05 33 minutes, 5 seconds solveny margin uh if we move for example to 12 a.5% of our aum in equity and you 33:12 33 minutes, 12 seconds would have a market drop of 20%. In the equity market our solvency and I'm giving a rough calculation I have not 33:20 33 minutes, 20 seconds calculated it would still be north of 180%. So there are two ways uh we will use this capital. One obviously is 33:29 33 minutes, 29 seconds towards uh a more balanced uh asset allocation because we are really uh 33:36 33 minutes, 36 seconds biased as of now towards fixed income and second is can we take more retention uh in risk where the profitability is 33:45 33 minutes, 45 seconds more. For example, uh in large property risk, the loss ratios are always lower 33:52 33 minutes, 52 seconds compared to the SNM risk. Now, can we retain more business here because solveny is stronger here. So, capital is 34:01 34 minutes, 1 second always allocated between either underwriting or on the investment side and uh that is how we see capital 34:08 34 minutes, 8 seconds allocation in a non-life company or especially in digit. 34:14 34 minutes, 14 seconds Okay. Thank you for the guidance and I wish the entire team best of luck for the next quarter. 34:19 34 minutes, 19 seconds So we don't know u what will happen the next quarter and u I think I'll say that uh since the time we have uh started 34:27 34 minutes, 27 seconds doing our uh road shows for the IPO we actually don't give any guidance because we don't know whether there will be an 34:34 34 minutes, 34 seconds earthquake or there will be a flood or uh suddenly in December we saw large 34:41 34 minutes, 41 seconds amount of claims uh especially due to fog which happened suddenly uh and we do some travel insurance business also we 34:50 34 minutes, 50 seconds saw a big uptick in uh in uh December and in November during the indigo crisis 34:57 34 minutes, 57 seconds during our claims. So it is very very difficult uh for us to guess this but uh we have covered this in the past that if 35:05 35 minutes, 5 seconds you go back to year 2023 if I remember when we had uh some madcat events and also some large losses even at that time 35:14 35 minutes, 14 seconds on the entire portfolio the volatility on the entire loss ratio was much much lower. So this volatile can volatility 35:22 35 minutes, 22 seconds can be there on a quarterto-quarter basis but uh with our sort of a MEP uh I think this is something uh which for the 35:31 35 minutes, 31 seconds year will be lot less volatile than it will be on a quarterto-quarter basis. Thank you very much. 35:38 35 minutes, 38 seconds Thank you. 35:41 35 minutes, 41 seconds Thank you sir. Our next question come from the line of Supritim Duta from Jeff. Please go ahead. 35:48 35 minutes, 48 seconds Right U thanks for the opportunity. My first question is you know on the retention now the retention has been 35:57 35 minutes, 57 seconds coming down and Kamish you were you know very helpful in explaining you know how some of the strategies have changed in particularly in motor and even on the 36:05 36 minutes, 5 seconds health side. Just wanted to understand you know what drove this strategic change wherein you thought that you know you should be seeding more on the motor 36:14 36 minutes, 14 seconds line particularly you know with respect to longtail risk given you know our understanding was that you know your underwriting is you know the best in 36:22 36 minutes, 22 seconds class or you know at least amongst the best. Hence retention and retaining more risk was the way forward. now that you 36:30 36 minutes, 30 seconds know you are reinsuring more just wanted to understand you know what's driving this shift you know that would be one you know secondly you know when I look 36:38 36 minutes, 38 seconds at the IFRS um you know accounts um you you called out around 80 crores impact um you know due to the two-wheeler uh 36:46 36 minutes, 46 seconds business and the growth in the two-heer business however when I look sequentially the deferred acquisition cost has only gone up by around 20 cr so 36:55 36 minutes, 55 seconds it's somewhere around 118 cr for this quarter so just wanted to understand is there any other difference you know when 37:03 37 minutes, 3 seconds we looking at the D it's not moving that much so what's resulting in this dichotomy just wanted to understand that 37:09 37 minutes, 9 seconds those were my two questions thank you 37:17 37 minutes, 17 seconds so uh super um I think uh can you hear me yeah yeah I can hear you now okay so I think when you look at 37:25 37 minutes, 25 seconds retention and risk you would remember that we always said that we want to retain more if our loss ratios are good 37:33 37 minutes, 33 seconds because this helps us in having more aum or higher leverage which actually drives the roe. Now when you look at motor 37:41 37 minutes, 41 seconds example because the premium is on a withheld basis it is not impacting our investment leverage at all and what has 37:49 37 minutes, 49 seconds changed in this is that in the last two floods which we have seen the recent one in one in Chennai and one in Kolkata. 37:57 37 minutes, 57 seconds What we have seen is that electric vehicles can actually have like very very high total lo of comparison 38:06 38 minutes, 6 seconds compared to the um I would say control uh two wheelers. So that is more like a 38:14 38 minutes, 14 seconds tail risk because as I already said that our market share in two wheeler is very high and in certain locations we 38:22 38 minutes, 22 seconds probably would be number one or number two player. So the two wheeler business is increasing a lot and in some 38:29 38 minutes, 29 seconds locations the number of uh two wheelers we are writing is very high. So I think management decided that we could 38:36 38 minutes, 36 seconds actually uh take some it's like a tail risk uh option we have got that in case 38:43 38 minutes, 43 seconds something goes really wrong that we have some protection. Now this is something which would change uh for example uh if 38:53 38 minutes, 53 seconds we wait for another 3 quarters because the monsoon season will typically start from July and we see slightly different 39:01 39 minutes, 1 second outcome or if more technology or better technology comes where electric vehicles can be better repaired as an example 39:09 39 minutes, 9 seconds this would change. So there is still a small cost uh which uh one has taken more from a tail risk protection. On the 39:18 39 minutes, 18 seconds uh deck side I think in third quarter a deck have increased by about 120 crores. 39:23 39 minutes, 23 seconds Uh and I think on the deck side if you have more detailed questions in terms of development you can always connect with us offline because uh I think every 39:32 39 minutes, 32 seconds quarter number we might not have uh immediately with us right now. uh if you take sure no problem. Uh Kamish you know just 39:41 39 minutes, 41 seconds one last question you know you said you know you have the CV proportion of the business has come down but you know some of my colleagues were doing some 39:49 39 minutes, 49 seconds analysis which highlighted that you know the CV proportion has or you know the growth in the CV segment has been you know pretty good in the last few months. 39:57 39 minutes, 57 seconds Uh so just wanted to understand you know would with the growth coming back do you see the proportion of CVS again going up in your mix. 40:06 40 minutes, 6 seconds So super in our case just the underlying growth is not important it is also important how uh what is happening in the market. 40:16 40 minutes, 16 seconds So I think uh CV business uh everyone knows it has high OD loss ratio and uh 40:23 40 minutes, 23 seconds then the only lever is uh what the likely u TP loss ratio is. So when we are looking at a new vehicle u one has 40:32 40 minutes, 32 seconds to one has to see it uh from a perspective that uh overall it is actually making sense. So I think that 40:42 40 minutes, 42 seconds is something uh it is very difficult to predict suprin but uh we have been a very very large player in commercial 40:49 40 minutes, 49 seconds vehicles um maybe probably the largest and uh if you look at from that 40:56 40 minutes, 56 seconds perspective uh we know this business and uh though reaching 19% which is all-time 41:03 41 minutes, 3 seconds low uh proportion in Q3 CV is uh is even a I would say sort of a strange surprise 41:11 41 minutes, 11 seconds for us but as in market changes we are already in the we are always in the market we'll some sort of a correction 41:18 41 minutes, 18 seconds and we'll start seeing more conversion if this doesn't happen we anyway are growing quite well both in private car 41:26 41 minutes, 26 seconds and two-heer and I also said that our retention ratios in private car are good base is increasing we are now next year 41:33 41 minutes, 33 seconds moving into our fifth renewal for some customers so uh this obviously is something which gives us comfort Understood. Thank you. Thank you. 41:48 41 minutes, 48 seconds Thank you. 41:50 41 minutes, 50 seconds Our next question come from the line of Mahek from MK Global Finance. Please go ahead. 41:56 41 minutes, 56 seconds Yeah. Hi. Uh thank you for the opportunity. So firstly uh can you just help us with uh the status on the EUM compliance which was supposed to be done 42:04 42 minutes, 4 seconds by uh March 26. And uh secondly uh one question on the commission ratios. So 42:11 42 minutes, 11 seconds while we saw a reduction in the net retention ratios which you explained which was driven by health and motor segments. Uh can you help us understand 42:19 42 minutes, 19 seconds uh what is driving higher uh commission ratios like is it being led by higher gross commissions or is it being led by 42:27 42 minutes, 27 seconds lower uh commissions on the reinsurance business? Yeah that are my two questions. 42:33 42 minutes, 33 seconds So me I would say that if you are looking at I gap on the commission side then it is primarily driven by 42:40 42 minutes, 40 seconds two-wheeler business. I already said that if you look at just two wheeler impact the growth in two wheeler impact compared to previous quarter this is 42:48 42 minutes, 48 seconds impacting our uh profit by roughly about 80 crores. Now this 80 cr is essentially coming on the commission side. Secondly, 42:57 42 minutes, 57 seconds when you see commission on a net return basis, I also said that because of net premium reduced because of some 43:04 43 minutes, 4 seconds reinsurance we have given in case of uh health and some reinsurance we have taken in motor. Uh so it is artificially 43:12 43 minutes, 12 seconds looking low. The better way for commission trend would be to see it on a IFRS basis where you can actually see on 43:20 43 minutes, 20 seconds a quarterby quarter basis or a year or year basis how are total expenses moving because there both reinsurance 43:28 43 minutes, 28 seconds commission income also gets deferred and commission paid on the direct basis also gets deferred according to the policy 43:37 43 minutes, 37 seconds period. So one cannot manage I gap profit in uh in in IFRS. You can't manage the profit the way you can in 43:46 43 minutes, 46 seconds IFRS by booking reinsurance commission income up front. So that probably uh in 43:53 43 minutes, 53 seconds our view is a much better uh view of how the expense ratio is moving. Management expenses I already said at 7% no it's 44:02 44 minutes, 2 seconds the lowest we have on the EU side. uh I think this was also discussed in detail in board today. So even this quarter has 44:11 44 minutes, 11 seconds substantially increased essentially because of two-wheer business and secondly the company did not write the 44:20 44 minutes, 20 seconds 250 crores of 220 crores of the group health business since EUM is on on the 44:28 44 minutes, 28 seconds total premium basis and the total EUM at 30% plus some allowances up to one and a 44:35 44 minutes, 35 seconds half the gross return premium mix has substantially changed. 44:39 44 minutes, 39 seconds So it has moved more towards motor which is retail business and uh the proportion of group health or government health 44:47 44 minutes, 47 seconds which comes at a very very low EUM uh has actually reduced. What management did today is that they put in our 44:57 44 minutes, 57 seconds commissions, our EOM uh linewise into the mix of very large private player and 45:05 45 minutes, 5 seconds uh if we do that then suddenly you will see we notice that the com our EUM actually goes below 30. So basically our 45:15 45 minutes, 15 seconds EUM is not driven by higher commission or lower commission. it is driven more from a segment perspective and I think 45:23 45 minutes, 23 seconds that is also something which is now being debated more and more uh that uh IADA they came out with EUM with all the 45:32 45 minutes, 32 seconds right uh intention and uh what has happened in the last 2 years is that commissions have actually increased 45:40 45 minutes, 40 seconds because uh some companies increased their commission. Secondly, we also if you look at and uh uh some large 45:49 45 minutes, 49 seconds companies they are taking reinsurance commission and setting it off against 45:55 45 minutes, 55 seconds expenses and that is actually taking the benefit of that on the EU side. If digit 46:03 46 minutes, 3 seconds would have done that then just in motor business then our EUM would have improved by 1.4% 46:11 46 minutes, 11 seconds on a YTD basis. Now uh digit and one other large companies they have actually 46:18 46 minutes, 18 seconds uh taken the call that doing this would tent amount to GST uh I would say violation the way GST is 46:28 46 minutes, 28 seconds and one shouldn't do it. Secondly this is also against the spirit of the EM 46:34 46 minutes, 34 seconds regulation. So I think EUM uh I would say overall um very good intention to come. IDA would have seen the development now of close to 2 years. 46:45 46 minutes, 45 seconds They would have also seen how some of the unintended consequences of this has come and how some companies have become 46:54 46 minutes, 54 seconds uh a bit innovative uh in this area. So we feel that uh if uh come if overall 47:01 47 minutes, 1 second expenses have to go down then one will have to move towards segment wise and if that happens then we are already 47:08 47 minutes, 8 seconds compliant today irrespective of what our portfolio is. 47:16 47 minutes, 16 seconds Got it sir. Thank you so much. Thank you. 47:22 47 minutes, 22 seconds Thank you. Our next question come from the line of Sankit Ga from Evidence Park. Please go ahead. 47:29 47 minutes, 29 seconds Yeah. Uh thank thanks for the opportunity. Uh uh so a couple of questions. Uh if if you would have not done this reinsurance in the two wheeler 47:36 47 minutes, 36 seconds electric segment um how much our profit would have been lower or how much car would have been impacted mean just want 47:44 47 minutes, 44 seconds to understand on I gap basis the extent of benefit you got because of this uh uh reinsurance you did into wheels. 47:52 47 minutes, 52 seconds So sank uh this is more a expense item rather than a income item because as I said we have taken this this year as of 48:01 48 minutes, 1 second now there is no uh claims recovery in the treaty yet. So we have paid a cost for the option. The auction is not in the money yet. 48:12 48 minutes, 12 seconds [laughter] 48:12 48 minutes, 12 seconds Okay. Okay. 48:15 48 minutes, 15 seconds Q3 rather than it it's reducing the profit rather than increasing the profit. And I hope it stays that way 48:23 48 minutes, 23 seconds because when you protect tail risk, you don't expect it to play in the next 6 months, 12 months, 18 months. This is 48:30 48 minutes, 30 seconds more like a as I said we want to see maybe one or two more floods and then decide uh whether know the option cost 48:39 48 minutes, 39 seconds has to go down or we don't need the option at all. 48:44 48 minutes, 44 seconds Understood. Understood. And and second, maybe from a data keeping point of view, uh if you can tell me out of the total two wheelers you do, how much is 48:52 48 minutes, 52 seconds electric? Uh uh whether it is significantly higher compared to overall industry sales. Uh uh and and second 49:00 49 minutes suppose the overall trend in the industry is mo moving more and more electrics. But then then is it fair to say that maybe assuming no significant 49:09 49 minutes, 9 seconds change in technology is it fair to assume that uh you you will keep on uh doing reinsurance uh uh in in in in this 49:16 49 minutes, 16 seconds segment and therefore the retentions in the motor business will keep on coming down not really. So if you look at uh overall 49:24 49 minutes, 24 seconds our market share in EV would be similar to petrol. Uh the share of EV in two wheeler is increasing for the industry 49:32 49 minutes, 32 seconds as a whole. If you look at two-heer data published by the uh automobile association, you will see the proportion 49:41 49 minutes, 41 seconds increasing. Now, two things which are very interesting in the EV segment. One, if you look at uh in China where most of 49:50 49 minutes, 50 seconds the batteries are imported, the prices of batteries have actually come down uh this year compared to the last year. So 49:58 49 minutes, 58 seconds there is no real inflation which is happening on the on the battery side. 50:03 50 minutes, 3 seconds Secondly, in case of one manufacturer, we have already seen about um and during the Chennai floods that they could 50:11 50 minutes, 11 seconds actually repair uh batteries even after the flood claim. So our sense is that 50:19 50 minutes, 19 seconds due to the over capacity in the electric vehicle area and all of us know that whether it is Europe or it is US uh 50:27 50 minutes, 27 seconds electric vehicles are not in really increasing in proportion and there is massive over supply of battery manufacturing. Secondly, we have already 50:36 50 minutes, 36 seconds started seeing uh one manufacturer actually uh do really well on the vehicle repair and as a very established 50:45 50 minutes, 45 seconds two-heer players have started coming in who are big in patrol two wheelers uh we feel that this is something which will 50:53 50 minutes, 53 seconds actually improve. Now the question obviously is in case of two wheelers uh is that when there is this sudden rain 51:01 51 minutes, 1 second which you saw in Kolkata or in Chennai lot of two wheelers can suddenly go underwater and uh god forbid if you are 51:10 51 minutes, 10 seconds insuring lot of two wheelers then you could technically get into that sort of a loss 51:17 51 minutes, 17 seconds scenario but we are not doing any correction per se to say we don't want to increase our two wheeler proportion Obviously on the pricing side we have 51:26 51 minutes, 26 seconds started now making changes between uh ice uh two wheelers and electric two wheelers. 51:34 51 minutes, 34 seconds Understood. So so Kabesh I mean out of the 100 rupees of two wheelers what proportion will be electric now for us. 51:42 51 minutes, 42 seconds So as I said we would be very similar to what the industry is. I don't have the figure off hand but it's not it's not that we are 51:51 51 minutes, 51 seconds over or underweight on electric two-heer we are consciously not going for it consciously we are not avoiding it. So 51:59 51 minutes, 59 seconds this is more a market development and as I explained the last time and the and the TP claims also we have to really see 52:07 52 minutes, 7 seconds how they will play in the electric two-heer because the acceleration the pickup it starts going down specifically 52:15 52 minutes, 15 seconds after year three and we will have five year insurance. So to elected two wheelers I think both OD and TP I 52:24 52 minutes, 24 seconds personally I would wait for 2 years before one would reach a conclusion that it is good or bad because if TP it plays 52:31 52 minutes, 31 seconds out the way one expects then the TP loss experience might actually be better. 52:37 52 minutes, 37 seconds So if it plays out in the way you believe then then whether there will be a big release in TP. No, no. I am saying because uh as the battery capacity goes 52:46 52 minutes, 46 seconds down, as people get used to electric two-heer acceleration across the world, one has seen that loss experience in TP 52:54 52 minutes, 54 seconds improves over a period of time because people get more used to it and the pickup of the battery the acceleration also starts going down after year three, 53:02 53 minutes, 2 seconds year four. So understood. 53:06 53 minutes, 6 seconds Yeah. So now uh that is the reason I'm saying that we are comfortable where we are uh but at the same time we cannot be 53:15 53 minutes, 15 seconds 100% sure that uh this will be uh bad but one thing we feel we're looking at 53:22 53 minutes, 22 seconds our data is without floods we don't expect electric two wheelers to be worse than petrol two wheelers that I would 53:30 53 minutes, 30 seconds say we can make a statement on that basis without floods uh Understood. Understood. Kamish. And 53:37 53 minutes, 37 seconds and lastly on on on the overall motor compared ratio which which you told in your initial remarks that it's more cars 53:44 53 minutes, 44 seconds driven rather than uh other segments driven. uh but still still um uh given given you clearly told that two wheeler 53:53 53 minutes, 53 seconds contribution went up in in our view uh a motor OD in two wheelers is meaningfully very low uh compared to cast then then 54:00 54 minutes if the mix is going two wheeler favor ideally the motor loss ratios should have improved uh is it fair to say that 54:07 54 minutes, 7 seconds uh the advanced premium float advantage which you get in two wheeler you are okay to compromise on motor loss is because from overall roe perspective it 54:16 54 minutes, 16 seconds might be still still positive So sank I think the contribution of two wheeler in overall OD premium is much 54:24 54 minutes, 24 seconds lesser and uh if you look at uh uh in private [clears throat] cars new vehicles have 54:33 54 minutes, 33 seconds uh lesser own damage uh loss ratio compared to older vehicles. 54:39 54 minutes, 39 seconds Now if you look at quarter three our mix is less in new vehicles in quarter three in private car it is more towards 54:47 54 minutes, 47 seconds renewal than others. So as we have always said some case that in our case we look at loss ratio plus acquisition 54:56 54 minutes, 56 seconds cost together to look at whether the business is profitable or not profitable or what the underlying ROE is. So uh I 55:06 55 minutes, 6 seconds would again say that looking at any of this in isolation from a loss ratio perspective would give a conflicting 55:13 55 minutes, 13 seconds picture and we you know that we don't try and uh manage the IDA combined ratio the as far I gap accounting combined 55:22 55 minutes, 22 seconds ratio because we have gone on record last year and we demonstrated it in our February analyst meet that this is 55:29 55 minutes, 29 seconds illogical combined ratio is high but profit is improving even without capital gain. 55:35 55 minutes, 35 seconds But if you see our FRS combined ratio which I think I've tried to explain in a bit of detail, you can see that the improvement is happening. So we don't 55:44 55 minutes, 44 seconds want to artificially drive ourselves with a KPI which we fundamentally believe and we have shown demonstrated that it is wrong. You would also recall 55:53 55 minutes, 53 seconds Shankit that at that time we showed you how some companies are managing IID combined ratio by upfronting the 56:00 56 minutes insurance commission. Now that also you can't do in IFRS. So uh we would not 56:07 56 minutes, 7 seconds look at ID combined ratio a KPI which we believe is wrong. We have demonstrated it is wrong and but we will drive 56:14 56 minutes, 14 seconds ourselves to manage it from optics perspective. We will not do that. We have always said we drive ourselves on FRS basis. We have been audited a 56:23 56 minutes, 23 seconds getting our FRS results audited. Now we have declared everything and what one would do under FRS basis. We'll be more 56:31 56 minutes, 31 seconds than happy if other companies also declared this then we will be happy to do a comparison on IFRS combined issue. 56:38 56 minutes, 38 seconds You know this better than I do and a lot of other people like you that if you look at our capital gains as a percentage of investment profit which is 56:47 56 minutes, 47 seconds such a big component that also would be amongst the lowest if not the lowest in the last quarter in the last 9 months in 56:55 56 minutes, 55 seconds the last 27 months and uh when the markets are at a bit shaky to sit at 230% 57:03 57 minutes, 3 seconds solveny ratio to be at 7.4% 4% equity allocation. We are in a sweet spot in the last 15 months or so. We have more 57:12 57 minutes, 12 seconds than doubled our equity allocation on a very high AUM and we still have some unrealized gains. So I'm not saying all 57:20 57 minutes, 20 seconds this shows that in future also we will do well in investments but you can see what we do in fixed income what we have done in equity in the last 15 months 57:29 57 minutes, 29 seconds once we said that now we'll be increasing equity. So we follow a very strict sort of a discipline uh sit in 57:37 57 minutes, 37 seconds this and uh you know that we don't waver from what we are doing uh just because we have to manage some KPI because 57:45 57 minutes, 45 seconds somebody's tracking it we don't do this and I hope uh management team and I'm 57:52 57 minutes, 52 seconds saying this to them that uh after me they also don't do this otherwise I'll have to come back. 58:01 58 minutes, 1 second [laughter] 58:01 58 minutes, 1 second Yeah, understood com and lastly the probability of EOM going segmental way again in your view uh any any any 58:09 58 minutes, 9 seconds opinion Dave so I would say uh and I think let's see um let's go by the facts I don't think 58:17 58 minutes, 17 seconds we should go by uh views here so as I have said repeatedly for IDA to contain 58:26 58 minutes, 26 seconds and reduce the cost of uh insurance for end customer is something which everyone has to agree there cannot be any disagreement. 58:36 58 minutes, 36 seconds Secondly, despite this the expenses have actually gone up and why they have gone 58:43 58 minutes, 43 seconds up is because some companies who write low EOM business they went and increase 58:50 58 minutes, 50 seconds the uh commissions or uh expenses in the retail business which increased the overall EU. You have also seen if you 58:59 58 minutes, 59 seconds look at uh from different uh companies on the loss ratio and I'll just quickly finish we'll have three four more people 59:08 59 minutes, 8 seconds to questions if need be we will uh extend it by 10 minutes and sorry for that if we see it from a EU management perspective you'll see that lot of 59:16 59 minutes, 16 seconds companies have written lot of government health and group health business to manage and this is impacting their this 59:24 59 minutes, 24 seconds is impacting their loss ratio in our case management decided to let go 220 crores per premium because 59:33 59 minutes, 33 seconds they felt this would be bad from a profitability perspective otherwise you can imagine 7% premium which comes 59:41 59 minutes, 41 seconds almost at a zero cost of uh EOM this would have changed the substantially so my sense is that regulator is very 59:49 59 minutes, 49 seconds conscious insurance act has also now talks about managing the cost of uh total expenses from a customer's perspective if I look at RBI report on 59:58 59 minutes, 58 seconds financial stability for the first time uh they have covered this aspect very very clearly in fact they have 1:00:05 1 hour, 5 seconds identified it as a stress in the insurance uh ecosystem so right from 1:00:12 1 hour, 12 seconds parliament which makes the insurance act from the honorable finance minister from governor of RBI from chairman of IDA uh 1:00:21 1 hour, 21 seconds who has uh recently joined in in fact one of his early statement was to increase the penetration of insurance by 1:00:28 1 hour, 28 seconds reducing the expenses. I personally feel that uh something has to be done and uh the way to do this is reduce it to move. 1:00:37 1 hour, 37 seconds One of the ways is to do is to move towards segment wise and on segment wise we have actually and I would urge request all of you to do the same. Look 1:00:46 1 hour, 46 seconds at our uh segment line of business wise EOM put it in any company you think is very good in EUM in private company 1:00:54 1 hour, 54 seconds compare us with the best and you will see we'll meet the uh EOM criteria. So 1:01:01 1 hour, 1 minute, 1 second something has to give way if I has to achieve their objective wider financial sector and also now parliament's objective something has to change. 1:01:11 1 hour, 1 minute, 11 seconds Justine is saying enough on EO and so I'll have to stop now. 1:01:17 1 hour, 1 minute, 17 seconds Yeah. Well understood Kamish. Thank thanks for your answers. That's it. Thanks a lot. 1:01:26 1 hour, 1 minute, 26 seconds Thank you. Our next question comes from the line of Nidesh from Invest. Please go ahead. Uh thanks for the opportunity. So two 1:01:34 1 hour, 1 minute, 34 seconds questions. One is on ROE. Uh so when we plan business, what is the target ROE that we we we take for pricing these 1:01:42 1 hour, 1 minute, 42 seconds policies uh without taking into consideration under losses and uh what the levers for us to reach that 1:01:51 1 hour, 1 minute, 51 seconds particular RV over let's say PDM on if basis. Uh secondly uh when do we see going retail health insurance? 1:02:02 1 hour, 2 minutes, 2 seconds These are the two questions. Sorry uh your voice is not very clear. Nesh IFRS I understood on ROE but I have not 1:02:09 1 hour, 2 minutes, 9 seconds understood the uh your other question. What is it growing? 1:02:15 1 hour, 2 minutes, 15 seconds Growing in the retain health insurance okay so IFRS I think I'm just again repeating myself. Uh you can look at 1:02:24 1 hour, 2 minutes, 24 seconds slide number 13 uh profit uh say for 9 months 459 crores which is IGAP add 322 1:02:34 1 hour, 2 minutes, 34 seconds crores of uh deck you hit a figure of 781 crores you take 25% out of it which 1:02:43 1 hour, 2 minutes, 43 seconds roughly is 190 crores maybe you can take uh this to about uh 590 crores or so or 1:02:51 1 hour, 2 minutes, 51 seconds maybe 600 crores So from 600 crores on the uh our net worth is about 4,400 crores. So 600 1:03:01 1 hour, 3 minutes, 1 second crores to the 4400 crores gives you roughly about 14%. 1:03:07 1 hour, 3 minutes, 7 seconds Uh I'm doing now this arithmetic. You should do this properly with the calculator sheet and this will be for 9 months. Then you can actually annualize it. 1:03:18 1 hour, 3 minutes, 18 seconds So that is how we see if FRS roe the debt number we have declared we already said that uh all this under I gap has 1:03:26 1 hour, 3 minutes, 26 seconds been accounted for in future it will get earned at 0% cost so this gives you a very good idea of 1:03:35 1 hour, 3 minutes, 35 seconds what the roe is unfortunately most companies are not declaring it on this basis and that is where the comparison 1:03:43 1 hour, 3 minutes, 43 seconds becomes tough uh for My question is 1:03:51 1 hour, 3 minutes, 51 seconds retail health again I would say and I think I don't want to repeat too much on this is that we feel that uh we said 1:03:59 1 hour, 3 minutes, 59 seconds this already last year we feel that one should start exploring this and we have started exploring this when exactly will 1:04:06 1 hour, 4 minutes, 6 seconds it grow and how much will it grow by right now I don't think we are in a situation to do that but I think on a 1:04:13 1 hour, 4 minutes, 13 seconds quarterby quarter basis is once it's uh if uh and once it becomes uh something which is like a trend then that is 1:04:22 1 hour, 4 minutes, 22 seconds something we can speak about at that time. 1:04:26 1 hour, 4 minutes, 26 seconds Sure. Thank you sir. That is from my side. Thank you. Thank you. 1:04:35 1 hour, 4 minutes, 35 seconds Thank you. Our next question come from the lineup. So Sharma from SDFC Securities Limited. Please go ahead. 1:04:43 1 hour, 4 minutes, 43 seconds Yeah. Hi sir. Thanks for the opportunity. So my question is on the growth. So on the GDPs side, we have seen a very strong uh growth over the 1:04:51 1 hour, 4 minutes, 51 seconds last 9 months. So how should we think about it given uh we will have a stronger base for next year and another thing is this growth seems to be 1:04:59 1 hour, 4 minutes, 59 seconds primarily driven by the broker channel on the motor side. So can you give us some color around the market share gains which we have on the OEM partnerships around that? Yeah. 1:05:10 1 hour, 5 minutes, 10 seconds So uh I would say I think we have said this in the past that uh in a market where pricing is low our growth rate we 1:05:18 1 hour, 5 minutes, 18 seconds still expect to we our ambition is to grow more than the market where the premium rates we feel are good then we 1:05:26 1 hour, 5 minutes, 26 seconds expect to substantially grow than the market. I think one area which you can look at in the last nine months is fire segment where the premium rates 1:05:35 1 hour, 5 minutes, 35 seconds strengthened and we have market grew but we grew substantially more than the market. Now what will happen in future 1:05:42 1 hour, 5 minutes, 42 seconds uh we honestly don't know and if you ask me beyond a point we don't really care because uh we feel that we have to look 1:05:51 1 hour, 5 minutes, 51 seconds at the market realities and shift courses. We are present across areas uh 1:05:57 1 hour, 5 minutes, 57 seconds and channels and geography and uh this is something which we feel that we can move the portfolio quite a lot. You saw 1:06:04 1 hour, 6 minutes, 4 seconds in fire a substantially increasing market share. You saw us uh becoming if you look at in motor we now have highest 1:06:13 1 hour, 6 minutes, 13 seconds ever market share in motor even in OD uh and now the difference between OD and TP in the overall market share is also 1:06:20 1 hour, 6 minutes, 20 seconds reducing uh because the new vehicle sales has been particularly been decent uh this year uh know compared to the 1:06:28 1 hour, 6 minutes, 28 seconds past. So what will happen in future is something which is very difficult to say but look at the past and see what has 1:06:36 1 hour, 6 minutes, 36 seconds been happening on GDPI during COVID years then uh during bad fire years when no TP increase and you can reach a 1:06:45 1 hour, 6 minutes, 45 seconds conclusion as to what the performance has been and now when you come to brokers so brokers we have to keep in mind obviously OEM brokers are very big 1:06:54 1 hour, 6 minutes, 54 seconds uh but you also have retail brokers and you also have some very large or what uh some people call them as prime brokers 1:07:02 1 hour, 7 minutes, 2 seconds maybe the top seven eight aggregators of this PHP channel. Now when when we look at this uh this year two out of the 1:07:10 1 hour, 7 minutes, 10 seconds three type of brokers we would have increased market share one out of the three we would have actually lost a bit of a market share but uh overall I think 1:07:19 1 hour, 7 minutes, 19 seconds on the OEM side etc. in two wheeler we are growing our market share also in overall in the private car we are increasing our market share as of now. 1:07:30 1 hour, 7 minutes, 30 seconds Okay sir uh thanks for this and I have two uh question on the OD loss issue. 1:07:35 1 hour, 7 minutes, 35 seconds I'm sorry I'm hopping again back on this. You mentioned that because of the higher share of the old old vehicle in your in the overall mix. So can you help 1:07:42 1 hour, 7 minutes, 42 seconds us understand how much the movement has been is there a very drastic movement like you were at 70 80% kind of a node old vehicle mix is that has that gone up 1:07:51 1 hour, 7 minutes, 51 seconds significantly which is impacting the loss ratio. Secondly is the loss ratio also impacted by the lower ID and the lower premiums resultantly. So can you 1:07:59 1 hour, 7 minutes, 59 seconds can you help us understand that impact as well? 1:08:02 1 hour, 8 minutes, 2 seconds Sure. [clears throat] So I'll say that no overall odil loss ratio has increased. I also said that it is essentially in private car. The impact 1:08:09 1 hour, 8 minutes, 9 seconds is lot uh impact the CV and two wheeler is more or less stable. Obviously in the last quarter there has been impact of uh 1:08:18 1 hour, 8 minutes, 18 seconds reduction in IDV because uh for new vehicles etc the lesser premium came compared to what we would have got just 1:08:26 1 hour, 8 minutes, 26 seconds prior to the GST cut. So all this has impacted. I also explained that there was uh reduction in the average ticket 1:08:33 1 hour, 8 minutes, 33 seconds size in the market and also we consciously tried to um stick our 1:08:39 1 hour, 8 minutes, 39 seconds renewal base a bit better. Um I would say that corrective actions have been taken two months back. Some have 1:08:47 1 hour, 8 minutes, 47 seconds happened in uh January in a very substantial way and some more will go online in the month of February. Uh some 1:08:55 1 hour, 8 minutes, 55 seconds by January end and some in the month of February. So as of now we feel that uh this is not something which is out of 1:09:03 1 hour, 9 minutes, 3 seconds control uh from our perspective we are conscious of this and we have taken corrective action uh on this so it's a 1:09:12 1 hour, 9 minutes, 12 seconds combination of lot of things uh and uh I would say that uh I already said this if 1:09:18 1 hour, 9 minutes, 18 seconds you look at last quarter Q4 of 2425 we exited that year at 70.5 1:09:25 1 hour, 9 minutes, 25 seconds that quarter so this has been that trend if you go back and see loss ratios of say uh two of the biggest private 1:09:33 1 hour, 9 minutes, 33 seconds companies their OD loss ratios used to be in the early 50s uh and now I think if you look at our OD loss ratio when all the companies 1:09:41 1 hour, 9 minutes, 41 seconds results are declared my senses we would be still be in the best three so uh this is something which we feel uh 1:09:51 1 hour, 9 minutes, 51 seconds um will get into control and we are fairly conscious of it both of the regions and what the corrective actions one need to take. 1:10:01 1 hour, 10 minutes, 1 second Okay, just a small follow up on this because the pricing action which we have taken the month of January, have you seen any kind of negative business 1:10:09 1 hour, 10 minutes, 9 seconds impact on the volume side? And just a small question on the motor TP reserve releases. So have we taken comparatively higher reserve releases as compared to 1:10:17 1 hour, 10 minutes, 17 seconds last year? If you can comment on that part as well. Thank you. So uh I would say that no it's too early for us to look at uh trends in January uh because 1:10:26 1 hour, 10 minutes, 26 seconds we would want to see the trend of unfolding over two months. Secondly if I am saying if our loss ratio o will be 1:10:34 1 hour, 10 minutes, 34 seconds should be in the top three then every other company is bleeding much much more so we expect everyone to take corrective 1:10:41 1 hour, 10 minutes, 41 seconds action. I think in GST all of us know that after the GST idea was not to increase the premium rates but I think 1:10:48 1 hour, 10 minutes, 48 seconds everyone will start taking corrective action on the overall portfolio basis on TP. I think if you look at uh last year 1:10:57 1 hour, 10 minutes, 57 seconds also quarter 3 has the highest TP release uh out of four quarters. This 1:11:04 1 hour, 11 minutes, 4 seconds year uh assessment is this year again quarter 3 would have the highest release. So this is something which is a 1:11:11 1 hour, 11 minutes, 11 seconds bit more seasonal and I think when we end the year as a percentage of NEP on the TP side we don't expect it to be 1:11:20 1 hour, 11 minutes, 20 seconds substantially higher. It might be uh plus minus uh.5.6 up but we don't expect it to be 1:11:28 1 hour, 11 minutes, 28 seconds substantially higher but quarter 3 last year and this year the reserve release is in amount terms the highest. 1:11:38 1 hour, 11 minutes, 38 seconds Okay sir, got it. Thank you sir and all the best. Thank you so much. 1:11:44 1 hour, 11 minutes, 44 seconds Thank you. As there are no question from the participant, I would like to hand the conference over to management for the closing comments. Thank you and over to you. 1:11:52 1 hour, 11 minutes, 52 seconds So first of all, thanks everyone for joining. Just quickly capturing uh three broad points. Uh the merger has no 1:11:59 1 hour, 11 minutes, 59 seconds impact in the way the company is run or board is managed or man management. uh the shareholders uh intend to buy 43 1:12:06 1 hour, 12 minutes, 6 seconds crores of shares at a price of 375 the promoters. So you can actually see the 1:12:14 1 hour, 12 minutes, 14 seconds confidence of the promoters uh when they're actually putting money at a substantially higher price uh than the market price at that time of 345. 1:12:23 1 hour, 12 minutes, 23 seconds uh overall uh we only look at IFRS. We have already said this on a combined ratio basis from a profitability 1:12:31 1 hour, 12 minutes, 31 seconds perspective because uh I gap combined ratio can be managed by booking reinsurance income upfront uh and also 1:12:41 1 hour, 12 minutes, 41 seconds by uh the way you are managing your net retention. In case of IFRS both would 1:12:47 1 hour, 12 minutes, 47 seconds not move the needle. uh and we always look at loss ratio plus expenses or commission of that line together and not 1:12:55 1 hour, 12 minutes, 55 seconds in isolation. And then the third point is uh that expense of management uh is a very good initiative of IDA. The 1:13:04 1 hour, 13 minutes, 4 seconds unintended consequences of for two years I'm sure are being watched by them. uh they also know how through reinsurance 1:13:13 1 hour, 13 minutes, 13 seconds commission and reimbursement some companies are trying to manage the EUM and this also in addition has GST risk. 1:13:21 1 hour, 13 minutes, 21 seconds Uh since uh um I think you guys speak to all companies companies which are doing this you should ask them what is their assessment on the GST exposure. 1:13:31 1 hour, 13 minutes, 31 seconds uh looking at the EOM uh on the segment wise please put our EOM segment wise in whatever company you think is 1:13:38 1 hour, 13 minutes, 38 seconds bestin-class on EOM we would meet the guidelines our management expenses continue to be best in class and finally 1:13:47 1 hour, 13 minutes, 47 seconds at uh 230% solveny sitting at 7.4% 4% of equity. Our fixed income yield is uh 1:13:56 1 hour, 13 minutes, 56 seconds best in class. Uh we feel even on a asset allocation perspective we are at a very very good sweet spot and uh we have 1:14:04 1 hour, 14 minutes, 4 seconds shown that in the last 12 to 15 months on an increasing uh well growing aum base we have 1:14:11 1 hour, 14 minutes, 11 seconds actually doubled close to doubled our equity allocation. So we are now uh also 1:14:18 1 hour, 14 minutes, 18 seconds watching the stock markets and we have predefined uh buying levels and all of that uh in place and uh I think we look 1:14:28 1 hour, 14 minutes, 28 seconds at the coming months with lot of hope and enthusiasm. Thanks everyone for joining and sorry for uh extending the 1:14:36 1 hour, 14 minutes, 36 seconds call by 10 minutes. If any of you have any questions, please connect with our team um offline and we hope uh to see 1:14:44 1 hour, 14 minutes, 44 seconds some next month. Thank you very much and good night. Thank you so much, sir. Thank you, sir. 1:14:50 1 hour, 14 minutes, 50 seconds On behalf of ICS Securities, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.