ICICI Prudential Life Insurance Company Limited — Q4 FY26

ICICI Prudential Life Insurance Company Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=8RuJuvmarOs Published: 4 weeks ago

0:01 1 second Ladies and gentlemen, good day and welcome to the ICA Credential Life Insurance Company Limited FY 2026 0:08 8 seconds earnings conference call. As a reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions 0:17 17 seconds after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on 0:24 24 seconds your touchtone phone. I now hand the conference over to Mr. Anuk Bakshi, MD and CEO of ICIC Predential Life 0:32 32 seconds Insurance Company Limited. Thank you and over to you sir. 0:36 36 seconds Thank you. Good afternoon and welcome to the results call of ICA Predential Life Insurance Company for the year ended March 31st, 2026. 0:46 46 seconds I have several of my senior colleagues with me on this call. Amit Pala, chief products and distribution officer. Jiren 0:53 53 seconds Salian, CFO, Jeie, chief service delivery. Manish chief investment officer, Slavic appointed actur and hir 1:02 1 minute, 2 seconds chief investor relations officer. We also joined today by Amish Banker. Amish started his career in branch operations and has a deep understanding of the 1:10 1 minute, 10 seconds customer life cycle and organization processes and systems. He's currently the chief operations officer and would be taken over will be taking over as 1:18 1 minute, 18 seconds chief distribution officer from Amit Pala. Amit as you would have noted in the exchange update is moving on from the company having spent more than two 1:26 1 minute, 26 seconds decades in the ICA group. We wish him all the very best for his future endeavors. 1:31 1 minute, 31 seconds Let me start with some key updates on the regulatory front. We welcome the idea transition to India which will align our financial reporting with 1:40 1 minute, 40 seconds global standards. This shift enhances transparency and market comparability ensuring that our financial statements reflect an improved picture of value accuracy. 1:50 1 minute, 50 seconds On the economic front, in FI 2026, the Indian economy displays resilience while navigating external turbulence due to 1:58 1 minute, 58 seconds trade tariffs and geopolitical conflicts. The stability was anchored by direct tax relief, GST reforms and RBS 2:06 2 minutes, 6 seconds supportive monetary policy stance aimed at stimulating the domestic consumption. 2:11 2 minutes, 11 seconds As a company, we also exhibited agility and resilience achieving a VNB of 26.29 29 billion with VNB growth of 10.9% in 2:20 2 minutes, 20 seconds FI 2026 and work to deliver long-term value to our shareholders. Our VNB margin stood at 24.7% as compared to 22.8% in FI 2025. 2:33 2 minutes, 33 seconds PAT grew strongly by 34.6% yearonear to 16 billion. 2:40 2 minutes, 40 seconds Life insurance products particularly the retail protection segment received a significant boost partly added by the 2:46 2 minutes, 46 seconds GST reform effective September 2025 the retail sum assured growth for the industry were higher by 2.5 times in the 2:54 2 minutes, 54 seconds post reform period as compared to the pre-reform period. 3:00 3 minutes In the current year, our retail new business summured reached 4.5 trillion led by 50.9% year-on-year growth in 3:07 3 minutes, 7 seconds retail protection in H2 2026, demonstrating our dominant position in this segment. In the savings category, 3:16 3 minutes, 16 seconds despite the external volatility of FI 2026, our AP remains steady and similar to the previous year. New business 3:24 3 minutes, 24 seconds premium registered a year-on-year growth of approximately 10% to 248.10 billion in FI 2026. 3:33 3 minutes, 33 seconds Our business growth has also been delivered on a foundation of risk and prudence and has exhibited in our resilient balance sheet. In FI 2026, we 3:42 3 minutes, 42 seconds maintain an industry-leading claim settlement ratio of 99.3% with an average turnaround time of 1.1 3:49 3 minutes, 49 seconds days. Our early claims ratio stood at 22% best-in-class in the industry, highlighting our focus on quality 3:56 3 minutes, 56 seconds business source over the years. Our 13-month persistency stood at 84.5%. 4:02 4 minutes, 2 seconds Our solveny ratio stood at 227.3% well capitalized and much ahead of the regulatory requirement of 150%. 4:10 4 minutes, 10 seconds We continue to maintain our track record of not having a single non-performing asset in our investment portfolio since inception of our company. 4:18 4 minutes, 18 seconds We remain committed to deliveries delivering superior value to our customers by leveraging economies of scale and aligning our cost structure closely with our evolving product mix. 4:28 4 minutes, 28 seconds Notably, technology and digital solutions have enabled us to increase efficiency resulting in a reduction of 4:35 4 minutes, 35 seconds 40 basis point to 12.1% in our savings cost to premium ratio during FI 2026. 4:42 4 minutes, 42 seconds Our AM stood at 3.14 trillion and our total infor some assured grew by 16.9% 4:49 4 minutes, 49 seconds yearonear to 46.11 trillion at March 31st 2026. In the same year our embedded 4:56 4 minutes, 56 seconds value grew by 10.5% yearonear to reach 529.89 billion. To summarize this year, as we 5:04 5 minutes, 4 seconds celebrate 25 years of service to our customers, we would like to reaffirm our commitment to deliver sustainable VN 5:11 5 minutes, 11 seconds growth by balancing business growth, profitability, and risk and prudence. 5:16 5 minutes, 16 seconds Toward this, we believe all the necessary levers continue to be available with us. Thank you. And I will now hand it over to Amit to take you through the business updates. 5:26 5 minutes, 26 seconds Thank you, Anup. Uh, good afternoon everyone. As Arup mentioned, the past year was defined by changing 5:33 5 minutes, 33 seconds macroeconomic landscape shaped by both global and domestic shifts. And additionally, we also had a relatively 5:41 5 minutes, 41 seconds high base of last year, particularly in H1. Quarter 3 onwards, the growth momentum returned with retail AP growth 5:48 5 minutes, 48 seconds of 10% year onair. This positive trajectory sustained throughout quarter 4 until renewed geopolitical disruptions emerged in March 2026. 6:00 6 minutes Despite these disruptions, we managed to deliver growth in quarter 4 with AP registering 9.54% 6:07 6 minutes, 7 seconds year-on-year growth. On a full year basis, AP grew by 2.2% yearonear to 106.41 billion. 6:16 6 minutes, 16 seconds Coming to Florida wise performance, our core focus area retail protection grew by 60.5% yearonear in quarter court uh resulting in a fullear growth of 32.3%. 6:29 6 minutes, 29 seconds With an estimated 13% of the addressable population currently being covered through retail protection, we believe 6:36 6 minutes, 36 seconds this segment offers a multi-dead growth opportunity. 6:41 6 minutes, 41 seconds Group protection which includes credit life and group term business grew by 7.1% yearon year in FI26. Within that 6:49 6 minutes, 49 seconds group term business grew by 14.6% year on year and credit life business grew by 1.8% yearon year. MFI segment which 6:58 6 minutes, 58 seconds witnessed challenges at start of the year has seen recovery from quarter 3 onwards. Link business AP grew by 1.6% 7:05 7 minutes, 5 seconds 6% yearonear in FI26 impacted by volatile equity markets. 2year CGR for link business AP stood at 14.2%. 7:16 7 minutes, 16 seconds We continue to focus on increasing the contribution from high assured ELIP in this segment. Such products are less 7:23 7 minutes, 23 seconds impacted by market volatility thereby providing stability to link category to a large extent. The non- link savings AP 7:32 7 minutes, 32 seconds grew at 15.4% 4% year on year for the first nine months. Last year in quarter 4 we launched a new product in the segment which had a very good response. 7:42 7 minutes, 42 seconds This year quarter 4 as business from that product normalized non-inking business has declined year on year in quarter 4. On fullear basis the business 7:52 7 minutes, 52 seconds and contribution from non-linking savings business is at similar level last year. Annuty business 4year caggr 7:59 7 minutes, 59 seconds stood at approximately 20%. This business has stabilized at around 7% of our retail mix. Group funds business 8:07 8 minutes, 7 seconds grew by 26% yearonear. Now let me talk about channel wise performance. Agency channel AP stood at 26.86 billion and 8:16 8 minutes, 16 seconds direct channel AP stood at 14.30 billion in FY 2026. Together these channels contributed 47.4% to overall retail AP. 8:27 8 minutes, 27 seconds These channels have declined this year primarily due to high base of linked and annoty businesses in the previous year. 8:34 8 minutes, 34 seconds In the agency channel, growth trajectory has shown consistent sequential improvement throughout this year. As a strategic priority, we have been 8:43 8 minutes, 43 seconds investing in the channel from a long-term perspective. Our road map centers on microarket brand strategy and 8:51 8 minutes, 51 seconds using technology and analytics as a productivity lever. By equipping agents with tools and analytics to automate 8:59 8 minutes, 59 seconds administrative task, they can pivot their focus towards high value revenue generating activities. In the direct 9:07 9 minutes, 7 seconds channel, focus will be to deepen NI segment through gift city and scale up online channel through differentiated offerings. Bank insurance channel grew 9:15 9 minutes, 15 seconds by 3.6% yearonear and contributed 29.8% to total AP. Partnership distribution 9:22 9 minutes, 22 seconds channel grew by 23.4% year on year and contributed 13.2% to AP mix in FI26. 9:30 9 minutes, 30 seconds In PA and partnership distribution channel our focus continues to be on adding new partnerships and improving the share of shop in each partnership. 9:40 9 minutes, 40 seconds Group distance grew by 14 and a.5% year on air and contributed 18.3% to the overall AP mix in FI 2026. 9:49 9 minutes, 49 seconds Today we have the strength of 2.42 lakhs advisers, 53 bank partnerships with access to more than 26,400 bank branches 9:57 9 minutes, 57 seconds and 1500 plus non-bank partnerships. To summarize, our primary focus will be to drive business growth through our micro market strategy in proprietary channels. 10:07 10 minutes, 7 seconds By deepening our distribution, we shall gain access to a wider range of customer profiles, which enhances our ability to 10:14 10 minutes, 14 seconds seamlessly shift between product segments as per macro environment. We believe this will help us keep our 10:21 10 minutes, 21 seconds product and channel mix balanced and deliver sustainable growth irrespective of the market environment over the long term. I will now hand it over to Dhane 10:30 10 minutes, 30 seconds to talk you through the financial upgrade. Thank you Amit. Good afternoon everyone. 10:35 10 minutes, 35 seconds Let me start with some efficiency related aspects. As you're aware, we have undertaken various cost optimization initiatives in the past two 10:43 10 minutes, 43 seconds years to make our cost structure aligned to our prevailing product mix. One of them being the use of a IML which is 10:50 10 minutes, 50 seconds being embedded across the entire customer journey that is driving targeted demand generation, automated underwriting, improved renewal 10:59 10 minutes, 59 seconds retention, enhanced customer service and effective claims investigation. 11:04 11 minutes, 4 seconds Upsell programs and digital lead conversion both supported by machine learning models continue to contribute to growth while advanced fraud detection 11:12 11 minutes, 12 seconds and early claims identification help mitigate risk and improve profitability. 11:17 11 minutes, 17 seconds We have also deployed AIE face matching between KYC documents and customer images to reduce fraud risk. Genai based 11:24 11 minutes, 24 seconds categorization of incoming customer emails has significantly improved turnaround times and AIdriven medical summarization is enabling faster and more efficient underwriting decisions. 11:36 11 minutes, 36 seconds Further details on usage of a IML across our processes is shown on slide number 36 of the presentation. 11:42 11 minutes, 42 seconds As can be seen on slide 12, the various productivity enhancements have helped in reducing cost to premium ratios for our savings line of business by 40 basis 11:51 11 minutes, 51 seconds points to 12.1% in FI 2026. This cost reduction is after accounting for unavailability of input tax credit which 12:00 12 minutes is effective September 22nd, 2025. Our total cost to premium ratios for FI 2026 12:06 12 minutes, 6 seconds stood at 18.2% and remained stable at previous year's levels. 12:12 12 minutes, 12 seconds The company's profit after tax grew by 34.6% year-onear to rupees 16 billion in FI 2026 primarily driven by higher 12:21 12 minutes, 21 seconds investment income from shareholder funds. This includes a gain of rupees 1.14 billion realized from sale of 100% 12:28 12 minutes, 28 seconds equity shareholding in ICA pension fund management company which was earw called ICA potential pension funds management 12:34 12 minutes, 34 seconds company limited excluding the sale transaction that grew by 25% year-on-year in FI 2026 12:42 12 minutes, 42 seconds our solveny ratio continues to be strong at 227.3%. 12:48 12 minutes, 48 seconds The improvement in solveny is primarily due to increase in profit after tax and realization from sale of subsidy. Our assets under management stood at rupees 12:56 12 minutes, 56 seconds 3.13 trillion as of March 31st 2026. 13:02 13 minutes, 2 seconds Value of new business VNB grew by 10.9% yearonear to rupees 26.29 billion. As you're aware, our focus is on growing 13:10 13 minutes, 10 seconds the absolute BNB which we have been able to achieve through improvement in product mix and operational efficiencies even after accounting for the 13:18 13 minutes, 18 seconds unavailability of input tax credit. BNB margin expanded by 190 basis points yearon year to 24.7% 13:26 13 minutes, 26 seconds in the current year. Margin expansion has been led by improvements in new business profile and economic assumption changes. 13:34 13 minutes, 34 seconds Protection mix for the year has increased by 2.2% 2% year-on-year to 17.9%. 13:39 13 minutes, 39 seconds Additionally, we have also been working towards improving the profitability of each line of business through longer tenure policies, higher summershot 13:47 13 minutes, 47 seconds multiples, and increasing rider attachment. The policy term on the savings line of business has increased from 26 years in FI 2025 to 29 years in FI 2026. 13:58 13 minutes, 58 seconds Retail sums assured has grown by 35% yearonear in the current year. 14:03 14 minutes, 3 seconds The expansion was offset by operating assumption changes which is primarily due to unavailability of input tax related on individual businesses and 14:11 14 minutes, 11 seconds some updates to persistency. As shown in slide 16, our embedded value grew by 10.5% yearonear to rupees 529.89 billion at March 31st 2026. 14:25 14 minutes, 25 seconds Our embedded value operating profit stood at rupees 57.02 billion in FI 2026. The break break up of the EVO is 14:33 14 minutes, 33 seconds as follows. Unwind contribution for FI2026 is 7.4% of the opening EV. VNB of 14:40 14 minutes, 40 seconds 26.29 billion rupees is 5.5% of the opening EV. Unwind and VNB together constitutes 12.9% of the opening EV. 14:50 14 minutes, 50 seconds Operating assumption change is 0.5% of the opening EV negative and primary on account of unavailability of input tax credit and some updates to persistency. 14:59 14 minutes, 59 seconds As I mentioned earlier, both mortality and experience expense variance are positive for the year and broadly in line with our expectations. 15:08 15 minutes, 8 seconds Persistency variance is a negative 2.64 billion rupees which is largely on account of the 100% premium back annuity product where the persistency experience 15:16 15 minutes, 16 seconds fell short of long-term assumptions. As you are aware, it was an industry first product and coincided with regulatory discussions aimed at increasing 15:23 15 minutes, 23 seconds increasing surrender values for traditional savings products during the year. Given the market volatility and tight liquidity scenarios where market 15:31 15 minutes, 31 seconds returns were negative, we believe that customers use the amount for withdrawals in times of need. While we ensure that economic benefit was safeguarded from 15:38 15 minutes, 38 seconds our company's perspective, the future earnings which is part of CV was impacted due to the withdrawals. 15:44 15 minutes, 44 seconds Consequently, the ROE for financial year 2026 stands at 11.9%. 15:49 15 minutes, 49 seconds The total economic and investment variance is um negative 7.78 billion rupees due to a shift in the yield curve 15:57 15 minutes, 57 seconds and equity market movements. Our VNP and EV have been reviewed independently by mill advisors LLP and their opinion is available in the results pack submitted 16:05 16 minutes, 5 seconds to the exchanges. Further sensitivity details are available on slide 17. This concludes the financial performance. 16:13 16 minutes, 13 seconds I will now hand it over to Judjit to talk you through the ESG updates. 16:17 16 minutes, 17 seconds Thank you DN. I I will be sharing the salient aspects of our ESG journey. We continue to retain the highest ranking 16:24 16 minutes, 24 seconds in the Indian life insurance industry as per leading global and Indian ESG rating agencies. We're also delighted to share 16:32 16 minutes, 32 seconds that during Q42026, we received the platinum award for our ESG report for 2025 at the vision awards 16:40 16 minutes, 40 seconds organized by the League of American Communications Professionals. We were also recognized among India's top 60 16:48 16 minutes, 48 seconds most sustainable companies by business world. I will now share the key highlights under each of the ESG focus 16:54 16 minutes, 54 seconds areas. environment. We continue to look at ways and means of reducing our carbon footprint by erupting green energy across various branches in across India. 17:04 17 minutes, 4 seconds Apart from the lead platinum certificate which is a green building rating for the company's our headquarters here, we have also got the IGBC platinum green 17:13 17 minutes, 13 seconds building certification for four other branches. On responsible investing, we are signary to the UN principles for uh 17:21 17 minutes, 21 seconds responsible investment. We have completed our third annual reporting on responsible investing activities and we shall continue to remain committed to 17:28 17 minutes, 28 seconds promote ESG factors in our investment decisions. 17:33 17 minutes, 33 seconds U on the diversity front, our gender diversity is now at 30%. And we shall continue to strive to improve it from here. Uh as far as communities are 17:42 17 minutes, 42 seconds concerned, our goal has been to increase financial inclusion through specially designed micro insurance products targeting socially and economically 17:49 17 minutes, 49 seconds weaker sections and we have covered 53.8 million life as of March 31st 2026. 17:56 17 minutes, 56 seconds This year we settled more than three lakh retail and group claims with an overall claim settlement ratio of 99.8%. 18:04 18 minutes, 4 seconds On the CSR front through ICA foundation, we have established skiing labs at four locations to facilitate advanced 18:11 18 minutes, 11 seconds industry aligned skill training. While in the area of healthcare, we supported the Indian cancer society to conduct surgeries for those more than 90 18:19 18 minutes, 19 seconds patients governance. Our board has a majority of independent directors enabling the separation of the board's supervisory role from executive 18:27 18 minutes, 27 seconds management. I would like to reaffirm our commitment again to create a culture that embraces sustainability and goes beyond goals and targets. Thank you very 18:35 18 minutes, 35 seconds much. We're now happy to take any questions that you may have. 18:39 18 minutes, 39 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchdown telephone. 18:50 18 minutes, 50 seconds If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. 18:59 18 minutes, 59 seconds Ladies and gentlemen, we will wait for a moment while the question queue assembles. 19:06 19 minutes, 6 seconds We'll take a first question from the line of Swarnab Mukharji from BNT Securities. Please go ahead. 19:13 19 minutes, 13 seconds Hi sir. Uh good afternoon. Uh and congrats on a good set of numbers. Um so I have three uh questions. First of all 19:21 19 minutes, 21 seconds just wanted to understand in terms of growth how should we think about uh in the upcoming year given that uh you know 19:29 19 minutes, 29 seconds the this particular year how the growth has uh trended u I mean gives us a very favorable base to grow uh so if I if you 19:38 19 minutes, 38 seconds could outline your strategy of how you are thinking about FI27 and uh given that uh you know last year 19:46 19 minutes, 46 seconds uh you know there was this launch of PAR product uh and you highlighted that which would have led to a slower growth in the non-link channel. Uh but uh you 19:55 19 minutes, 55 seconds know what are your thoughts on the non-per category? How do you see it? And parallelly also if you could provide us the mix for par nonpar for the quarter. 20:03 20 minutes, 3 seconds uh that's one and uh then sir on the VNB uh margin side if you could highlight uh you know have uh you know all the 20:12 20 minutes, 12 seconds persistency changes that you are seeing uh you're experiencing has that been taken into the assumptions or can 20:20 20 minutes, 20 seconds something incremental come or if you are observing anything due to the cylinder value regulation that you might want to highlight and in that case then you know 20:27 20 minutes, 27 seconds how should we think about the VNB margin uh numbers should we take the current clear numbers more a baseline uh if kind 20:35 20 minutes, 35 seconds of the product makes sustain uh so this is uh yeah I think sir this is broadly uh my queries if you could answer thanks 20:45 20 minutes, 45 seconds hi swarn this is dire here uh so let me pick up some of your questions uh in terms of growth for the next financial 20:53 20 minutes, 53 seconds year I think this is quite a volatile time at this stage u and I'm sure you would have seen the way the markets had behaved over the last month of the 21:02 21 minutes, 2 seconds financial year. Uh I think this is still going to be a bit of a wait and watch. 21:06 21 minutes, 6 seconds Uh you're right. Specifically for us, we do have a base that is uh good for us, but again, it'll depend upon how things 21:13 21 minutes, 13 seconds shape up uh in the environment. U so it's a little early for us to commit as to what the number should look like for the rest of the year. But rest assured 21:21 21 minutes, 21 seconds and the way that we're approaching the problem is that we would continue to go granular, continue to understand who are these customer segments that we should 21:28 21 minutes, 28 seconds be looking at, what are the product fits that we would need, work with our distribution channels to be able to deliver the right proposition for customers as well as shareholders. That 21:37 21 minutes, 37 seconds uh objective and that uh process continues. There's no unwavering on that front. 21:43 21 minutes, 43 seconds Coming to your second question in terms of what is the split between par and non-par for the year it's roughly 2 is 21:50 21 minutes, 50 seconds to1 ratio uh it's been broadly in that range some quarters a little higher some quarters a little lower but broadly in 21:57 21 minutes, 57 seconds the 2 is to1 range uh for the year uh coming to your question third question which is on uh the persistency 22:05 22 minutes, 5 seconds experience see our process around looking at assumptions and experiences is to look at what is temporary and what is permanent 22:13 22 minutes, 13 seconds So and we do this at every year uh towards the end of the year in terms of how these assumptions are shaping up. So whatever is known at this point uh we 22:23 22 minutes, 23 seconds will incorporate as part of our uh assumption setting. U if there are experiences that we see are temporary in 22:30 22 minutes, 30 seconds nature or they pertain to quarantine portfolios, we allow that to go through uh the variance. uh so at this point we 22:38 22 minutes, 38 seconds have factored what we know on terms of persistency in terms of mortality and terms of expenses as part of our uh margins. So this essentially becomes the baseline for us going forward. 22:49 22 minutes, 49 seconds Right. Very helpful. We can just couple of follow-ups on uh you know two aspects. One is on the growth as you mentioned. I understand that this is a 22:57 22 minutes, 57 seconds volatile year but like if I were to look at from the channel side also I mean this year's uh growth has been primarily 23:04 23 minutes, 4 seconds heavy lifted by our partnerships. So uh I mean what would be uh you know what uh how shall we think about say the other 23:11 23 minutes, 11 seconds channels for example agency this year has been tepid. So how uh how do you plan to activate uh or go about uh 23:19 23 minutes, 19 seconds driving that channel? I understand that banka given uh you know the base of uh ICC bank uh there may be a steadiness in 23:27 23 minutes, 27 seconds that number but particularly on the agency I wanted to query and also like on the on the persistency part in surrender value related regulations are 23:34 23 minutes, 34 seconds you seeing any delta uh apart from the annuity product that's what I wanted to understand thanks yeah so on the uh early experience of 23:43 23 minutes, 43 seconds surrender value products I we're not seeing anything too different but it's a little too early to call because we only got about five to six months of 23:51 23 minutes, 51 seconds experience and we had allowed the whole year to pan out for that in terms of growth here right agency has 23:58 23 minutes, 58 seconds not had a great year in that sense the growth has not been great so that extent it does form a a fairly uh good base for 24:07 24 minutes, 7 seconds us into the coming year but like I mentioned we'll continue to work at it granularly understand what are these micro segments that we need to go after 24:14 24 minutes, 14 seconds and uh work with that all right thank you thanks has been uh all the best for FI27. 24:23 24 minutes, 23 seconds Thank you. We'll take our next question from the line of Supra team duta from Jeffre. Please go ahead. 24:30 24 minutes, 30 seconds Um I thanks a lot for the opportunity. 24:32 24 minutes, 32 seconds Uh I have three questions. You know starting with the growth aspect. Uh could you help us understand how customer behavior has changed with 24:40 24 minutes, 40 seconds respect to products post the start of this Middle East war? Are you seeing any increase in demand for non-par policies in this current environment? 24:49 24 minutes, 49 seconds and you know how are you seeing the demand of Ullets um in late March and early April. If you could give us some color around the trends that would be 24:57 24 minutes, 57 seconds helpful because what I see is in March despite the lower base the agency channel has declined. Uh and this 25:06 25 minutes, 6 seconds channel should ideally have lower ULIP exposure. So you know trying to understand what's happening there. uh on the margin bit uh what I wanted to 25:14 25 minutes, 14 seconds understand is despite the rise in group funds in fourth quarter uh ICFA has witnessed a sequential rise in margins 25:22 25 minutes, 22 seconds uh is this a function of higher yields in some of the non-par products and you know potentially uh protection as well or is there some other driver here um 25:30 25 minutes, 30 seconds that we should look at and lastly coming to the Indas transition now with India rolling out from 1 of April wanted to understand would you be sharing the 25:39 25 minutes, 39 seconds Indas accounts from next quarter and How would the VIP compare with the CSM in force? If you could give us some color and you know how does this change your 25:47 25 minutes, 47 seconds capital position as well? U you know if you could give us some color on that that also will be very helpful. Thank you. 25:54 25 minutes, 54 seconds Hi Superim. Uh let me cover India first. 25:57 25 minutes, 57 seconds Uh so yes uh technically we are live we should be live with India. Uh but as approved by the board we will be seeking 26:05 26 minutes, 5 seconds forbearance for a year. uh one of the more fundamental points are that uh some of the uh decisions around how the uh 26:13 26 minutes, 13 seconds inputs could be provided for computing uh the CSM. I think we still await some clarity from the joint expert group. Uh 26:21 26 minutes, 21 seconds the other thing also is that uh this is too short a time for us to transition into NDAS given the fact that we are uh 26:28 26 minutes, 28 seconds typically live with our results by the first 15 days of the uh quarter. uh so we would need some time to be able to gear our systems up to be able to manage 26:36 26 minutes, 36 seconds the transition there. Uh in in terms of uh the capital position uh I believe the 26:43 26 minutes, 43 seconds regulator still wants us to use the wild solvency formulas. So until we wait to see how the RBC gets implemented uh we 26:52 26 minutes, 52 seconds would continue with our current solveny basis on which we're quite strong at 220%. 26:58 26 minutes, 58 seconds Uh coming to your second question that you had asked which is on margin. Uh the margin support has largely come in by the growth and protection that you can 27:05 27 minutes, 5 seconds see for the current quarter which has been quite strong. U in addition to of course all the improvements to profitability that we've been doing 27:12 27 minutes, 12 seconds across all other savings lines of business as I'd mentioned earlier. 27:18 27 minutes, 18 seconds Uh your first question was on what are the upcoming trends. Uh little too early to call uh supra then let it uh settle. 27:26 27 minutes, 26 seconds I do believe that the the war in West Asia has to some extent impacted new business sales in the month of uh March. 27:35 27 minutes, 35 seconds Uh difficult to guess how much it would be but uh clearly there has been some impact. 27:42 27 minutes, 42 seconds U thanks a lot for this color. So just wanted to understand has the impact been more on ULIP or has it been across the 27:49 27 minutes, 49 seconds board uh slowdown in demand than late March? 27:54 27 minutes, 54 seconds Uh it's been across the board except for protection. Okay. Got it. Understood. Thank you. 28:01 28 minutes, 1 second Thank you. Next question is from the line of Shrea Shivani from Namora. Please go ahead. 28:09 28 minutes, 9 seconds Yeah. Hi. Uh good afternoon. Thank you for the opportunity and uh congratulations on a uh good set of uh 28:15 28 minutes, 15 seconds numbers. Uh I have two questions. Um both on the EV walk. Uh first is uh the 28:23 28 minutes, 23 seconds operating assumption changes that we've taken is it only the uh persistency operating assumption or there are certain changes you've done with assumptions in mortality or expense etc. 28:35 28 minutes, 35 seconds And second is I mean it's the roe it's at 11.9 now I mean even if I had assumed 28:42 28 minutes, 42 seconds a zero value for operating assumption changes and a zero for uh persistency variance instead of negative number I 28:49 28 minutes, 49 seconds would still be at a 12.9 or so. So what is genuinely our uh steadystate ROEs 28:56 28 minutes, 56 seconds that we should assume um because we are we are already under the cost of equity in FI26 and how should I think about it for for for that matter? Yeah. 29:08 29 minutes, 8 seconds Hi Sha. Uh so commit your question on operating assumption changes in EV as I mentioned on my opening remarks. It's 29:16 29 minutes, 16 seconds primarily on account of unavailability of input tax credit and then some updates to persistency. Now this entire if you recall this conversation has 29:23 29 minutes, 23 seconds started in September as to the impact of the unavailability of input tax related due to GST reforms that has been the bigger component out of uh this operating assumption change. 29:34 29 minutes, 34 seconds Okay. Right. 29:35 29 minutes, 35 seconds Right now uh coming to ROE uh yes this uh without the assumption changes and variance we're at the 13% range. Now 29:43 29 minutes, 43 seconds technically on a longerterm basis we should still be at the 13 to 14% range depending of course on how the uh yield 29:51 29 minutes, 51 seconds curve shapes up depending of course on how we're able to grow VNB and that becomes the two primary drivers of how you determine ROV but from that sense 30:01 30 minutes, 1 second that India should be live uh actually is live this year and uh if you get the four bers then we will go live on that 30:08 30 minutes, 8 seconds next year uh looking at returns on uh earning things will become much easier when you look at the indas numbers the 30:16 30 minutes, 16 seconds ROV will have less significance going forward. 30:19 30 minutes, 19 seconds Got it. Got it. So, so uh with ind it does not impact the roe whatsoever but probably we'll not be looking at the roe 30:28 30 minutes, 28 seconds going ahead is what your point of view is right. Yeah, my sense is most commentators and analysts would end up 30:35 30 minutes, 35 seconds looking at ROEs because then that would be at least comparable to how the rest of the market is or outside of 30:42 30 minutes, 42 seconds insurance. uh comparison becomes much easier then u for want of any other metric we are in this roe world at this 30:50 30 minutes, 50 seconds point right and there is no impact whatsoever of IFRS on the EV walk right u nothing from the even if say a risk based 30:58 30 minutes, 58 seconds solveny comes through nothing gets changed in in this metrics right no risk based solveny only determine 31:06 31 minutes, 6 seconds your capital position correct okay nothing happens here yeah all right Okay, do you have any questions? Thank you. 31:16 31 minutes, 16 seconds Thank you. We'll take our next question from the line of P Jen from Otila Los. Please go ahead. 31:23 31 minutes, 23 seconds Yeah. Hi. Couple of questions. First on if I look at the production business premium growth exceeds the assured 31:31 31 minutes, 31 seconds growth. uh how how should we read that whether you know uh it's um you know more uh uh you know return of premium 31:40 31 minutes, 40 seconds products that has come in or now how how should we kind of read that that's one and second is more of a structural 31:47 31 minutes, 47 seconds question on the embedded value where you know in FI24 we had a mortality variance then in FI25 we had a assumption change 31:56 31 minutes, 56 seconds and now we have a persistency impact uh both on variance as well as assumption change uh you know this has been 32:03 32 minutes, 3 seconds constantly negative for us over the past three fiscals. Uh how should we kind of think about this going ahead and whether you know you all have stress tested the 32:12 32 minutes, 12 seconds EV now uh to the extent that you know the assumptions are more moderate or more conservative uh and we could uh 32:19 32 minutes, 19 seconds start looking at more positive variance or assumption changes going right yeah just just some color on that so that would be helpful. 32:32 32 minutes, 32 seconds So uh pressure right when you look at the protection sort growth that's been at uh about uh 48% uh some assured on uh 32:41 32 minutes, 41 seconds so the growth on retail protection has been at higher at about 60%. Uh the retail new business actually consists of 32:49 32 minutes, 49 seconds both protection and uh savings. So you will have to offset the two together. So the retail summation is not purely uh 32:56 32 minutes, 56 seconds protection because see by by the fundamental construct of products in India savings products in India you end up providing 10x cover for most of our 33:05 33 minutes, 5 seconds products right so that itself forms a shot that comes on board right uh coming to your question on embedded value and how we 33:13 33 minutes, 13 seconds look at how our assumptions are being set frankly we run a very diversified portfolio and our approach to setting assumptions is to understand whether 33:21 33 minutes, 21 seconds these uh potential differences between an assumption that you have set and the resulting experience that we see at this point uh 33:29 33 minutes, 29 seconds is that temporary or permanent. Now the way you always look at the businesses that come in is you group them into 33:37 33 minutes, 37 seconds cohorts and as you look at each cohort you are trying to identify whether cohorts look alike or do you need to separate these cohorts and again given 33:45 33 minutes, 45 seconds the underlying variability of the underlying uh diversity diversity of our business you have to start looking at each of these cohorts as they gain 33:53 33 minutes, 53 seconds meaningful size uh as there's separation you start to see assumption uh changes if I had a homogeneous portfolio Then 34:01 34 minutes, 1 second ideally you should not see any uh assumption changes at all or even variances but given the diversity of the underlying uh business that we bring you 34:09 34 minutes, 9 seconds have to look at cohorts and you have to then start segregating coord as they start to gain uh size and significance. 34:15 34 minutes, 15 seconds So in any case as you look at the overall experience and assumption changes these are marginal uh there have been points in time when we had positive 34:23 34 minutes, 23 seconds assumption changes as well. uh but overall you see that uh the business is being uh uh ensured that the underlying 34:30 34 minutes, 30 seconds assumptions that go in are reflective of what we see today. 34:35 34 minutes, 35 seconds Got that. Uh and the economic assumption changes. Could you split that between equity and debt? It's largely debt. It's largely debt. 34:43 34 minutes, 43 seconds Almost all of it. Got that. Thank you so much. 34:48 34 minutes, 48 seconds Thank you. We'll take our next question from the line of Madukar Lada from JP Morgan. Please go ahead. 34:56 34 minutes, 56 seconds Uh hi, good afternoon. Uh thank you for taking my question. First uh you know um see in the beginning of uh last year we 35:05 35 minutes, 5 seconds were sort of targeting uh above or at least at par with private life insurance 35:11 35 minutes, 11 seconds uh uh you know retail uh AP growth. Uh my I mean we've significantly sort of 35:18 35 minutes, 18 seconds underperformed that level. Uh now going into uh sort of FI27 and onwards 35:26 35 minutes, 26 seconds um what do you think should should you know be your target and uh how do you think you will achieve that target like 35:35 35 minutes, 35 seconds if if you can sort of quantify uh you know any sort of meaningful changes uh that that you are doing uh that will you 35:44 35 minutes, 44 seconds know uh lead us to uh believe that uh that we will be able to sort of you know achieve uh higher uh retail uh retail AP 35:54 35 minutes, 54 seconds sort of growth right uh so that's my first question um and and second uh also 36:02 36 minutes, 2 seconds if I look at persistency uh we seeing a decline for the 161st month 13th month and and also I think 25th month so 36:11 36 minutes, 11 seconds what's happening uh over there u third you with significant um I mean you 36:20 36 minutes, 20 seconds interest rates have gone up, bond yields have sort of gone up. Uh that should 36:27 36 minutes, 27 seconds help our uh margins. Um what what will enable us to sell more nonpar 36:36 36 minutes, 36 seconds or or uh you know as as a company what's what what uh as a management uh how can 36:44 36 minutes, 44 seconds you sell more non-par uh would be my my question. Yeah, these would be my three questions and also if you can split your 36:52 36 minutes, 52 seconds uh economic variance between debt and equity. Yeah, thanks. 36:58 36 minutes, 58 seconds Hi Maduk, I just answered the question on P. Uh the economic variance is largely debt. 37:04 37 minutes, 4 seconds Uh okay, in your first question where you mentioned about growth, u actually when you look at the 2-year CAGR, we're still 37:11 37 minutes, 11 seconds in the range of 78%. Yes, it is not in line with the market but then we continue to see uh work continue to work 37:18 37 minutes, 18 seconds at at a granular level to see what are those customer segments that are available to us uh through our distribution and where can we generate growth from. So we are not uh divorced 37:28 37 minutes, 28 seconds from the market very clearly we're looking at uh working at least at the market and then look to work beyond that. Uh largely when you look at the 37:35 37 minutes, 35 seconds market the 2-year growth seems to be in the range of 10 to 11%. Uh we are in the range of about 8 7 to 8%. So some work left but we're not too far off. 37:45 37 minutes, 45 seconds uh you asked another question on to sort of interrupt on on that but you know if you look at two-year category 37:51 37 minutes, 51 seconds that may be the case but uh but if you come to more recent time then uh last 37:58 37 minutes, 58 seconds year's uh number or 526 would suggest that uh we are losing some more ground 38:05 38 minutes, 5 seconds uh right so so in that sense uh there'd be more to catch up moving into FI2728 38:14 38 minutes, 14 seconds Yeah. So, Madika, we've discussed this earlier also. I think the focus for our company is to be able to grow VNB in a sustainable fashion, right? The large 38:22 38 minutes, 22 seconds component of VNB does absolutely come from uh AP. Uh so, as you rightly pointed out, yes, two years slightly lower than market, but when I look at 38:30 38 minutes, 30 seconds this year's numbers in terms of AP at 2% growth, BNB is at 11% growth. And you can see there's consistency in the 38:37 38 minutes, 37 seconds margin that has held up all through the year. So I think we're working at it sustainably to work at it granularly to see how we can deliver growth in a sustainable format. 38:47 38 minutes, 47 seconds Your second question was on uh persistency. 61st month we discussed this earlier. This has been due to a 38:54 38 minutes, 54 seconds regulatory definition change. Uh 25th month uh is a new phenomena. Yes, I think some of the uh spillover from the 39:03 39 minutes, 3 seconds 13th month is coming through to the 25th month at this point. 39:08 39 minutes, 8 seconds You had another question in terms of how can we sustainably grow nonpar. I think one of the challenges that we run up as an industry is that uh our product uh 39:18 39 minutes, 18 seconds does get compared to what bank FD rates are uh in the current environment when bank FD rates continue to be fairly 39:24 39 minutes, 24 seconds steep. uh the product that we price the product that we offer does not look as attractive because very clearly the way 39:31 39 minutes, 31 seconds that we set up our products is to price off the GC uh and so the return over the longer term has to be built off the GC 39:40 39 minutes, 40 seconds uh there may be other considerations that banks may be using to set up their deposit rates uh but whenever there is a dichotomy between the deposit rates and 39:49 39 minutes, 49 seconds the non-par IRS uh then you will see customers swing from one to I hope that answer your question. 39:59 39 minutes, 59 seconds Yeah, that's that's helpful. Uh thanks a lot and all the best. 40:04 40 minutes, 4 seconds Thank you. Next question is from the line of Oman Sha from Banyan Tree Advisor PMS. Please go ahead. 40:15 40 minutes, 15 seconds Mr. Oman Sha, your line is unmuted. Please go ahead with your question. 40:22 40 minutes, 22 seconds Hello. Am I Yes, please go ahead. 40:27 40 minutes, 27 seconds Yeah, thank you for the opportunity. Uh sir, uh one question was uh till FI 24 we were giving VNB breakup uh among the 40:35 40 minutes, 35 seconds various segments. Uh if you can give that number for FI26 and FI25 that would be great. 40:44 40 minutes, 44 seconds Uh they align with the market on this front. 40:48 40 minutes, 48 seconds Okay. Okay. Sure. Sure. That is very good. I mean that used to be quite helpful. Uh but sure understand. Uh the second question was the uh persistency 40:57 40 minutes, 57 seconds decline in 13th month code. Um has it got does it have a large part of annuity product or it's across across segments? 41:09 41 minutes, 9 seconds A large part driven by annuity. Uh there are of course some segments that you have seen some product channel cohorts that have not performed on par. 41:17 41 minutes, 17 seconds Okay. Okay. And sir when we have a persistency which is worse than what you are expecting uh does it benefit the VND 41:25 41 minutes, 25 seconds or does it uh not benefit the VND um it doesn't benefit uh so the way we 41:34 41 minutes, 34 seconds look at our assumption setting is that we evaluate it at the end of the year we take a view as to which of these are 41:41 41 minutes, 41 seconds permanent impairments in that sense uh for those we take an assumption change uh those that we believe are temporary we allow that to answer the variance. 41:50 41 minutes, 50 seconds Okay. Okay. Sure, sir. And sir, uh FY uh so u no I think that that's all. I think I'm covered. I'll get back in the case. 41:58 41 minutes, 58 seconds Thank you. Thanks. 42:00 42 minutes Thank you. We'll take our next question from the line of Vinod Rajamani from Nirmal Bank. Please go ahead. 42:07 42 minutes, 7 seconds Yeah. Uh thank you for taking my question. So I just uh most of my questions were answered. I just had one question. Now what happens to the 42:16 42 minutes, 16 seconds negotiations that uh that were going on with uh the distributors on commission and so on? Uh should we expect that uh 42:25 42 minutes, 25 seconds they are mostly done and if so then uh you know um could we see agency doing uh uh all all channels but especially 42:34 42 minutes, 34 seconds agency doing uh better uh in FY27 that that was the only question I had. Thank you. 42:40 42 minutes, 40 seconds Uh so you know the negotiations and conversations with distribution be it agency or otherwise is always on. Uh we 42:49 42 minutes, 49 seconds we look to offer the remuneration that is appropriate in line with the product and the pricing that we have uh built uh 42:57 42 minutes, 57 seconds that is accredited to both shareholders as well. So at all points in time this is a continuous conversation. There is never a start or a stop to this. Uh it 43:05 43 minutes, 5 seconds will continue. It has continued. it will continue and just uh keep going forward as well. So it is a continuous exercise as we bring out new products and new 43:13 43 minutes, 13 seconds propositions uh we will continue to work with our distribution to see how we could deliver these products to the relevant customer bases in a efficient format. 43:22 43 minutes, 22 seconds Okay. So uh so no conclusion so far I mean uh this was uh this was ongoing for some time. So um and there's been no u 43:31 43 minutes, 31 seconds what do you say uh there has been no agreement of something reached. uh how should we look at it? 43:38 43 minutes, 38 seconds No, agreements have been reached uh with all our distribution. Uh we are where we are and you are seeing the 24.7% of the MV margin. 43:46 43 minutes, 46 seconds Understood. Thanks so much. Yeah. 43:50 43 minutes, 50 seconds Thank you. We'll take our next question from the line of Sankit Koda from Aendas Park. Please go ahead. 43:57 43 minutes, 57 seconds Uh thank you. I have a few questions just to start with. uh the uptick in the margin in in the fourth quarter around 25.2 44:05 44 minutes, 5 seconds uh can be attribute predominantly to to the favorable yield curve at least in the month of March and and and and 44:12 44 minutes, 12 seconds related to that uh in in the VNB walk what we see as 250 basis point addition to the VMBB margin uh due to economic 44:20 44 minutes, 20 seconds variance is is it largely because of the yield c benefit which which which played in the current year uh to to to bump up 44:27 44 minutes, 27 seconds the margins Sankit uh when you look at the yield curve and specifically in the 44:35 44 minutes, 35 seconds perspective of non uh non-par products and uh which also includes protection uh one has to look at what the pricing is 44:44 44 minutes, 44 seconds and what the yield curve is and what is the expected margin that one wants out of it. So as yield curves move depending upon your underlying costs and of course 44:53 44 minutes, 53 seconds you know this year there has been an impact of GST pricing has uh swung in that direction. So if we have got a benefit of the yield curve, we would not 45:02 45 minutes, 2 seconds have changed we didn't change the pricing uh in that fashion. 45:08 45 minutes, 8 seconds Yeah. Then what you are trying to say that uh you did not uh change the IR of the end consumer to the end consumer despite the benefit and and probably 45:17 45 minutes, 17 seconds because of that still the GST impact to some extent got negated is yeah so if you look at the VNB work 45:25 45 minutes, 25 seconds right what we have called out is the uh movement across from 22.7 to uh 25 to 24.7 now here the product repricing 45:34 45 minutes, 34 seconds whatever that we have done is all sitting as part of the new business profile right and all The yield curve changes are now part of the economic consumption 45:41 45 minutes, 41 seconds change. So if I'm making any pricing changes the new products that have come on board 45:48 45 minutes, 48 seconds understood. So no my point was that you got double benefit right your product mix also changed and and on top of it you got an positive economic variance 45:57 45 minutes, 57 seconds number uh but naturally GST impact of minus 3.9 would be there in the VNB. So, so just wanted to assume that the product mix more favorably and and also 46:06 46 minutes, 6 seconds you took the benefit of economic variance to largely negate the impact of uh other changes which might be largely related to GST. 46:13 46 minutes, 13 seconds You take everything together San we have been working very hard at cost efficiencies across the years which I spoke of earlier. So the benefit of the 46:21 46 minutes, 21 seconds cost efficiency is something that we have taken on board as we've got done our pricing. Uh because I'm getting cost efficiencies I can continue to hold the price as it is. Now this is heterospus. 46:31 46 minutes, 31 seconds My some of my cost efficiency was negated due to the GST impact. So technically I should have changed my pricing but then I also had the uh 46:38 46 minutes, 38 seconds improving yield curve which allowed me to hold on to prices at that point. 46:42 46 minutes, 42 seconds Actually if you look at the entire period there have been very marginal price changes that too in certain cohorts not across the board and I believe we had answers answered the 46:50 46 minutes, 50 seconds question earlier as well. One does one did not expect onmass price changes to happen and that has not happened. 46:58 46 minutes, 58 seconds Uh okay. So given the reason I was asking this question is that given given growth is becoming soft a bit now and uh 47:06 47 minutes, 6 seconds probably field curve becomes much more steeper which which was very visible in the month of March. Uh is it fair to say that to to Philip the growth you you 47:13 47 minutes, 13 seconds will pass on some benefit to the consumers and and and maybe maybe that could play a role for for the growth and and related to that point only that 47:21 47 minutes, 21 seconds given given we largely did only single premium annuity in the current year. Um given given FRA lockins will be better or bond forward lockins will be better. 47:30 47 minutes, 30 seconds uh will will you go back to deferred amity in a different format to to to uh to to flip that the growth uh given given the economics are in your favor or or in your industry favor right now. 47:42 47 minutes, 42 seconds So uh let me give you a hypothetical. If the yield curve moves downward I will repric right. Uh your second point was around 47:51 47 minutes, 51 seconds regular pay annut we do have regular pay annuities and we continue to sell those as well. 47:57 47 minutes, 57 seconds Yes it swung a little more towards single pay. Uh but we built our regular pay business as well and we'll continue to sell that. 48:07 48 minutes, 7 seconds Understood. Understood. And and uh and two two more questions. One question is that uh given given it's almost uh uh 6 48:15 48 minutes, 15 seconds months closer to 6 months that GST impact was taken on the protection uh uh have we started repricing or industry 48:24 48 minutes, 24 seconds has started repricing the individual protection business uh to to uh to uh to to the extent of input credit not 48:31 48 minutes, 31 seconds available or or we still are on the old pricing uh nature only and and and related to that is that given given we had a very strong third quarter now 48:39 48 minutes, 39 seconds fourth quarter growth is still there but but it is toning down a bit. So, so, so the the the impact of GST which was there in third quarter is it fair to say 48:47 48 minutes, 47 seconds that now now it is coming back to normal demand uh 48:55 48 minutes, 55 seconds you saw the 60% growth in retail protection in the quarter right so I think what we've been doing is working at this granularly to make sure that 49:03 49 minutes, 3 seconds protection growth continues uh in terms of your question on how we would look at pricing and have people taken uh step 49:12 49 minutes, 12 seconds changes I believe by and large the industry has not taken step changes. You might have one or two players who have taken some minor increases in uh prices 49:20 49 minutes, 20 seconds onmass price changes that to again uh to a degree of 1 to 3% across the board. 49:25 49 minutes, 25 seconds Most we have stayed away from uh doing onmass price changes we have taken cohorts and worked at those cohorts where we need to make updates to 49:33 49 minutes, 33 seconds pricing. That has been our perspective how we could uh manage this entire transition of GST and you've seen the 49:41 49 minutes, 41 seconds numbers come through in terms of the 60% growth. 49:44 49 minutes, 44 seconds Sorry, I saw a wrong number. My bad. Uh actually I saw only total protection growth numbers. So so my bad 60 is a very solid number. 49:50 49 minutes, 50 seconds Yeah. And and lastly didn't then uh then if you if you are okay to give uh the mix of ULIP which has uh higher sum 49:59 49 minutes, 59 seconds assured and and largely uh just to confirm it back again uh when in your PPT you gave persistency 13 month persistency product wise that is linked 50:07 50 minutes, 7 seconds non- linked and naturally the non-lin part fell from 86.8 to 17 73.2 so so I'm assuming this is predominantly due to to the uh zero cylinder deferity plan. 50:20 50 minutes, 20 seconds Yeah. Yeah. So the non non-link person drop is due to the uh annuality plan there. Uh and no we've not called out the split of the high summer. 50:30 50 minutes, 30 seconds Okay. Uh thanks. That's it for me. Thank you. Thanks. 50:34 50 minutes, 34 seconds Thank you. We'll take our next question from the line of Nidesh Jen from Invest. Please go ahead. 50:41 50 minutes, 41 seconds Uh thanks for the opportunity. Uh first question is on EV split. So if I look at B 25 EV split between W and network uh 50:49 50 minutes, 49 seconds for this uh in this presentation is different from the last year presentation. So is there any change uh in W and EV and network methodology? 51:01 51 minutes, 1 second Yeah. So Nidesh sir you can refer to slide 63. Uh we've called that out and given you a walk from 22 till 26. The 51:09 51 minutes, 9 seconds key change is that the shareholder share of the MTN that's on the assets and derivatives in the policy or the fund that's been reclassified to whiff from 51:16 51 minutes, 16 seconds the A&W. That is absolutely no impact on the EV just a reclassification between VIF and VIF and NW 51:24 51 minutes, 24 seconds and this is consistent with how the market is in yes the MTM derivatives and assets and derivatives of the policy holders has been classified in the VI. 51:34 51 minutes, 34 seconds Okay. Okay. Sure. Secondary that's the reason for the change. Yeah. 51:39 51 minutes, 39 seconds Yeah. Second question is that if I look at agency business, last year Q4 it declined 20%, this year again it has declined on a lower base. So what is 51:47 51 minutes, 47 seconds exactly happening in this channel? Uh uh why we are lagging in terms of growth in the agency channel specifically 51:58 51 minutes, 58 seconds uh in a large part due to the higher base that we had of annutity in the previous year that has held the uh base that we have to work against. uh again 52:07 52 minutes, 7 seconds if you look at from a longer time frame we still have a fairly decent uh growth on agency but yes at the shorter term it has been a bit of a challenge but like as I mentioned earlier we are looking at 52:16 52 minutes, 16 seconds working granularly at agency looking at these micro segments uh building uh efficiency within the agency distribution itself 52:25 52 minutes, 25 seconds and similarly channel is also lag lagged in terms of growth this year last year also I think Q4 it 52:32 52 minutes, 32 seconds was weak yes that's right there was the base effect of the with direct as well. 52:41 52 minutes, 41 seconds So in terms of expansion of these channels, are we planning to add more agents, open more offices or box? Uh I'm just trying to understand how are we 52:48 52 minutes, 48 seconds trying to let's say deliver growth in these channels in FI27 and how are we planning today for that growth. 52:56 52 minutes, 56 seconds So as I mentioned uh earlier we are looking at these uh growth centers on a datadriven platform especially with the microarket branch strategy that we have 53:05 53 minutes, 5 seconds again using technology analytics as productivity levers. Uh so we will continue to work at it granularly uh detect 53:12 53 minutes, 12 seconds that the growth numbers have not been strong uh we'll work at improving these as we go down granularly into each of these uh segments. 53:22 53 minutes, 22 seconds Sure. First question is on nonpar business. Since the yield curve has been quite favorable uh why don't we offer 53:29 53 minutes, 29 seconds better IRAs to the customers versus fixed deposits have some cut on margins but deliver better AP growth why we are 53:36 53 minutes, 36 seconds not doing that see one of the things that they should understand is that we get priced off the 53:43 53 minutes, 43 seconds GC uh I think by and large uh insurers in India have been quite uh disciplined and approached to actually work off the 53:51 53 minutes, 51 seconds GC uh which may not have been the case in geographies outside of India. 53:57 53 minutes, 57 seconds The pricing of deposits does not really follow the GC uh threshold. Um so to that extent at certain points in time 54:06 54 minutes, 6 seconds when deposit gets priced extremely well uh relative to non-par products which are anyway built from a longerterm 54:13 54 minutes, 13 seconds perspective uh customers can swing from one to another. Uh so if you were to actually start to cut uh margins to be 54:21 54 minutes, 21 seconds able to deliver on growth on nonpar uh it it may not be uh accurative to shareholders. 54:30 54 minutes, 30 seconds The whole perspective that we carry Nidesh is that again look at absolute BNB. It's not a question of trying to push one particular product versus 54:38 54 minutes, 38 seconds another. It's to identify what are these opportunities that exist at this point. 54:42 54 minutes, 42 seconds And you're right in the sense that the nonpar offers you a great opportunity in sense that the yield curve is great is is steep and is able to give you a good 54:50 54 minutes, 50 seconds IRRa. Uh but the competition that also comes about at least from a sticker price comparison is FDS which are still 54:58 54 minutes, 58 seconds running a fairly steep rate. Uh so to that extent uh nonpar does get uh subdued. 55:06 55 minutes, 6 seconds Sure. And lastly, you can share the uh break up of group protection between term protection group term and credit life. 55:14 55 minutes, 14 seconds Yeah, that's been part of my Yeah, that's in part of my lectures uh of this pack. Uh sure. Uh that's on slide 56. 55:22 55 minutes, 22 seconds Yeah, 56. Okay, I will take it from Thank you. Thank you. 55:27 55 minutes, 27 seconds Thank you. Next question is from the line of Ewan Ka from Shanel Strategic Advisors. Please go ahead. 55:38 55 minutes, 38 seconds Hi. Uh yes, please go ahead. 55:41 55 minutes, 41 seconds Yes. Yeah. Yeah. Thanks so much for the opportunity. Uh just want to have uh couple of 55:49 55 minutes, 49 seconds I'm sorry to interrupt. Sir, can you use your handset mode please? Uh yes, there's light disturbance. 55:59 55 minutes, 59 seconds Yeah, go ahead. Go ahead. 56:03 56 minutes, 3 seconds Yeah. on slide 64 the EV work uh just want to understand under the persistency 56:09 56 minutes, 9 seconds and the other variance the 2.64 billion how much is pertinent to BMD written 56:16 56 minutes, 16 seconds here 26 sorry can you repeat the question again 56:25 56 minutes, 25 seconds yeah so we have a 2.64 64 billion uh persistency and other variance in the EV work right. I just want to understand 56:33 56 minutes, 33 seconds how much of that is uh due attributed to uh BMB or AP return policies return 56:43 56 minutes, 43 seconds almost none this is for the past 56:50 56 minutes, 50 seconds yeah yeah thank you so much 56:58 56 minutes, 58 seconds thank you next question is from the line of manus Agraal from Bernstein please go ahead. 57:06 57 minutes, 6 seconds Hi uh my question relates to potential regulations on commissions. A do we have any understanding of what is happening 57:14 57 minutes, 14 seconds and when is it expected to happen and B if there are like various levels of cuts to commissions how would your margins 57:23 57 minutes, 23 seconds and your growth assumptions change? 57:28 57 minutes, 28 seconds uh manus we are not aware of discussions we do uh we do acknowledge that the regulator asked for data which we have provided but we have not heard anything 57:36 57 minutes, 36 seconds beyond that okay and second question let's say the regulator does something u what would be 57:44 57 minutes, 44 seconds the sensitivity to growth and margins on that front um I don't know what the regulator's thinking on that at this front so it'll 57:52 57 minutes, 52 seconds be difficult to comment understood thank Thank you. 58:00 58 minutes We'll take our next question from the line of Shobit Sharma from HDFC Securities. Please go ahead. 58:07 58 minutes, 7 seconds Yeah. Hi sir. Thank you for the opportunity. I have a question for Anub sir. Anub sir. If I look at our retail business growth over last 2 three years 58:14 58 minutes, 14 seconds have not been that strong. If you can help us understand what are the key challenges which is impacting our growth. Does our cost optimization 58:22 58 minutes, 22 seconds initiative which we have taken over the last two three years are impacting our growth trajectory and given market remains like this for the entire year 58:30 58 minutes, 30 seconds and as we remain uni focused how do you internally plan growth and do you think we can uh grow in line with the private players and secondly we have been very 58:39 58 minutes, 39 seconds very very we have a very granular distribution and agency plays a very important role the share of agency channel has been coming down over the 58:46 58 minutes, 46 seconds last two years if you look at so is it because we have seen larger there agents moving to the competition or if there is or there are any other challenges which is impacting the growth of this channel. 59:01 59 minutes, 1 second So I think from a growth perspective I think it might be useful to look a slightly longer period and do a CG of 59:08 59 minutes, 8 seconds growth and take volatility and base effects into consideration. Uh I don't think that cost optimization comes in 59:16 59 minutes, 16 seconds the way of growth at all. In fact in our industry I would say that uh since we run largely two kinds of businesses one 59:23 59 minutes, 23 seconds is protectionled businesses which are risk based businesses completely and second is savings oriented business which essentially either get priced off the equity returns or get priced off GC. 59:36 59 minutes, 36 seconds In both cases what you can give to the customer is less the margins and less uh the commission cost. 59:44 59 minutes, 44 seconds So with that in context, I think like in all asset management businesses, one has to keep working on cost structures uh 59:53 59 minutes, 53 seconds both on your fixed cost as well as optimizing on the commission cost and distribution cost at least in areas 1:00:02 1 hour, 2 seconds where it is not adding value but it is giving topline. So there are always pockets in large distributions where you will see that there are largest payouts 1:00:11 1 hour, 11 seconds and it is not given commensurate margins or commensurate profits or profit pools. So that is a constant area 1:00:17 1 hour, 17 seconds of optimization that one has to do and then on the protection side one has to be focused on the risk uh which is early 1:00:25 1 hour, 25 seconds claims and and make sure that your underwriting is proper and your pricing is better. uh so I don't think there is anything sort of you know coming in the 1:00:34 1 hour, 34 seconds way of growth we have to go more granular and we have to get back growth there are base effect and which is why I'm saying and like Vir had earlier said 1:00:42 1 hour, 42 seconds if you look at you know 2 years 3 years uh CAGR even if you look at two years CAGR we are slightly behind but we do 1:00:50 1 hour, 50 seconds have to catch up I understand uh the sentiment in the group uh that uh we have to do more growth but our focus 1:00:57 1 hour, 57 seconds like we have always said is absolute VNB And uh in absolute VNB, there are other levers in addition to the AP. AP is a 1:01:04 1 hour, 1 minute, 4 seconds very important lever. Uh not to say that it is not but there are other levers also which needs to be flexed uh to get the VNB and make the whole business model more robust. 1:01:15 1 hour, 1 minute, 15 seconds So there is nothing sort of you know at this point of time we don't see cost optimization or things like that comes in the way of growth at all. 1:01:25 1 hour, 1 minute, 25 seconds And secondly sir on the agency channel how we plan to revive that channel. 1:01:31 1 hour, 1 minute, 31 seconds I think agency channel we have had some uh large base effect uh you know two years back and if you look at CGR a few 1:01:39 1 hour, 1 minute, 39 seconds years it is running at 12 13%. And as the base effect goes I think it will come back and we are also certainly 1:01:45 1 hour, 1 minute, 45 seconds looking at micro market uh agency. So hopefully it will come back uh sooner than than we think. 1:01:54 1 hour, 1 minute, 54 seconds Okay, thank you and all the best. 1:01:58 1 hour, 1 minute, 58 seconds Thank you. Next question is from the line of Retika Dua from Bandan AMC. Please go ahead. 1:02:06 1 hour, 2 minutes, 6 seconds Yeah, thank you. Two questions on the uh sorry Rika your voice is sounding muffled. Can you use your handset mode please? 1:02:19 1 hour, 2 minutes, 19 seconds Uh can you repeat the question? Yeah, I'm just saying that there's two questions. One is that on the Nidesh was on the reclassification 1:02:28 1 hour, 2 minutes, 28 seconds on the EV side. So while D you clarified that it doesn't have a impact on the EV but just uh could you just explain what 1:02:35 1 hour, 2 minutes, 35 seconds we have done and the objective of the same to do it today that's one question and the second question is that uh while 1:02:42 1 hour, 2 minutes, 42 seconds I know we are very early days of IFRS but um uh just may hear your initial thoughts as to how the KPIs would be 1:02:51 1 hour, 2 minutes, 51 seconds maybe you know in a IFRS world. So those are the two questions. Thank you. 1:02:57 1 hour, 2 minutes, 57 seconds Hi Rita IFRS let's wait until it gets implemented uh as we see forbearance uh the current year will be on the existing 1:03:05 1 hour, 3 minutes, 5 seconds IAP uh Indas will form financial information which will be subsidiary finan uh alternate financials so let's 1:03:12 1 hour, 3 minutes, 12 seconds wait until uh that settles because we'll have to recreate the OBS and then look at the quarterly financial asset being generated 1:03:20 1 hour, 3 minutes, 20 seconds uh coming to your first question on this uh reclassification this is just alignment with what we're seeing the market at uh nothing more than that. So 1:03:28 1 hour, 3 minutes, 28 seconds total EV does not change uh it's just alignment and there's no specific guidance on where this particular MTM is 1:03:36 1 hour, 3 minutes, 36 seconds to sit. We realize that uh it's better to align with the way the market is presenting it so that you have comparability 1:03:45 1 hour, 3 minutes, 45 seconds and if you don't mind D could you just explain the uh change again? I'll obviously go through the presentation but if if you don't mind could just explain the change again. 1:03:53 1 hour, 3 minutes, 53 seconds Right. This is the marker market on the assets and derivatives uh of the policy holder funds. Uh that is the component that has been reclassified. 1:04:04 1 hour, 4 minutes, 4 seconds It's just the marker market on the assets and derivatives. 1:04:07 1 hour, 4 minutes, 7 seconds Sure. Thanks so much. Thank you. I'm done. Thank you. 1:04:09 1 hour, 4 minutes, 9 seconds Thank you. Next question is from the line of Deepan Kosh from city. Please go ahead. 1:04:17 1 hour, 4 minutes, 17 seconds Hi. Uh good evening everyone. Uh so few questions from my side. um you know first KN you mentioned uh on how you really go about looking at assumption 1:04:26 1 hour, 4 minutes, 26 seconds changes and variances um on the persistency and backbook uh now specifically mentioned that once a select cohort kind of becomes uh becomes 1:04:34 1 hour, 4 minutes, 34 seconds meaningful from a size and scale uh that's when you know uh you know the the variability can come out to be a meaningful number from a EV perspective 1:04:43 1 hour, 4 minutes, 43 seconds in case there are some uh differences between assumptions and uh realities of life. Now on that backdrop you also 1:04:50 1 hour, 4 minutes, 50 seconds mentioned that uh you know uh bearing the annuity product also there are certain other products and cohorts where uh you have witnessed uh some challenges 1:04:59 1 hour, 4 minutes, 59 seconds uh so I wanted to get some color on what this uh products or cohorts would be and is it uh any particular uh mass market 1:05:06 1 hour, 5 minutes, 6 seconds strategy or any particular product uh which is really driving this. Uh just wanted to get some sense of how how these things can shape up let's say from 1:05:14 1 hour, 5 minutes, 14 seconds the next two to three years also. uh if you know if your product or customer strategies kind of were to remain the same. Uh the second question uh was on 1:05:23 1 hour, 5 minutes, 23 seconds the banking channel. Um uh in your opening remarks you mentioned that uh you want to in focus on increasing your counter share. So X of ICC bank uh you 1:05:32 1 hour, 5 minutes, 32 seconds know now that some of the um banker partnerships X IC bank have kind of uh increased in vintage uh could it give 1:05:40 1 hour, 5 minutes, 40 seconds some quantitative color on your counter share or or at least the movement in counter share over the last few years or maybe this year. Uh and finally third 1:05:48 1 hour, 5 minutes, 48 seconds question uh is on the ULIP side. Uh it seems that your ULIP margins have been moving up over the last two years uh due to the efforts that you have undertaken 1:05:56 1 hour, 5 minutes, 56 seconds be it in terms of riders or highs. Uh so how much headroom uh would you believe that you have in this category uh to 1:06:04 1 hour, 6 minutes, 4 seconds kind of further scale up the margin profile? And just one small data keeping question if you used to break up the unwinding into uh reference rate and 1:06:12 1 hour, 6 minutes, 12 seconds real world returns. Uh if you can kind of quantify that number. 1:06:18 1 hour, 6 minutes, 18 seconds Yes. So there again that's alignment with how the market is presenting it. Uh we not breaking the unwind up at this point. uh in terms of persistency see 1:06:27 1 hour, 6 minutes, 27 seconds there are always going to be some products that are doing better than the expected uh uh persistency and some that are doing worse. Uh the way that we have 1:06:36 1 hour, 6 minutes, 36 seconds seen this evolve is that there are certain product and channel cohorts where we need to do some work where the persistency has not been in line and uh 1:06:43 1 hour, 6 minutes, 43 seconds that is the reason why we said we will keep continue to watch these and see how we could keep the how we could improve these persistencies uh in the years 1:06:51 1 hour, 6 minutes, 51 seconds going forward. uh as Anup also pointed out uh we continuously look at our distribution and seeing what adds value. 1:06:58 1 hour, 6 minutes, 58 seconds Now very clearly if there are cohorts that are not adding value then we look to step away from those cohorts uh and uh if you're not able to fix them uh so 1:07:07 1 hour, 7 minutes, 7 seconds to that extent there is a continuous region of our distribution uh of what customer segments that we'd want to onboard through specific distribution uh 1:07:15 1 hour, 7 minutes, 15 seconds and corrective actions get taken along with our distribution teams on the ground. uh so I don't want to call out any specific uh channel or any uh 1:07:23 1 hour, 7 minutes, 23 seconds product but there are some small cohorts here and there that we need to fix and that will continue to work at uh in the years as well. 1:07:31 1 hour, 7 minutes, 31 seconds Uh within the nonICC bank uh we did mention that we've had an increase in market share by and large uh again a lot 1:07:39 1 hour, 7 minutes, 39 seconds of the work has gone in across all of these partnerships to be able to uh drive our share. Uh but again it's it 1:07:47 1 hour, 7 minutes, 47 seconds depends upon each particular shop what our share is in that particular shop. Uh but by and large uh we've been seeing a positive trend in terms of increasing share in most places. 1:08:00 1 hour, 8 minutes Uh coming to a question on unit length uh and its margin. Yes. Uh you're right. 1:08:06 1 hour, 8 minutes, 6 seconds Over the years we've been able to improve the margin of our unit linked by addition of high assured by elongating 1:08:13 1 hour, 8 minutes, 13 seconds terms. Uh but I think the way to look at the unit link product is it is a very transparent product. Uh if 1:08:21 1 hour, 8 minutes, 21 seconds you're able to add sufficient protection to it, it makes it far more meaningful. 1:08:26 1 hour, 8 minutes, 26 seconds Uh it is not a mutual fund product. I think that has to be very well understood. uh by making sure that you're adding protection and uh 1:08:34 1 hour, 8 minutes, 34 seconds propositions specifically you're able to cater to various needs of customers and fulfill whatever needs that they set out. So that's been our approach to uh 1:08:43 1 hour, 8 minutes, 43 seconds product development and uh proposition uh setup for our customers and we'll continue to keep working at this and uncovering newer uh segments that we'd want to expand this into. 1:08:54 1 hour, 8 minutes, 54 seconds All right. Uh thank you D. Just one small uh clarification. I mean in the posty question you mentioned that uh you'll be working through this uh 1:09:02 1 hour, 9 minutes, 2 seconds products and customer cohorts uh uh incrementally throughout the year and going ahead also right I mean is that the right understanding that's right it's it's a continuous 1:09:10 1 hour, 9 minutes, 10 seconds exercise it's a continuous exercise like as Anuk also pointed out there are always going to be some segments that are not up to par uh the point is uh you 1:09:18 1 hour, 9 minutes, 18 seconds try to fix it because you start with the underlying proposition that is being provided to customers uh and the sales 1:09:25 1 hour, 9 minutes, 25 seconds process uh if uh it doesn't work then uh you stop selling. 1:09:32 1 hour, 9 minutes, 32 seconds Got it. Uh thank you and uh all the best. Thanks. 1:09:36 1 hour, 9 minutes, 36 seconds Thank you. Next question is from the line of Nishin Savate from Kotak. Please go ahead. 1:09:46 1 hour, 9 minutes, 46 seconds Nishant your line is unmuted. Please go ahead with your question. 1:09:49 1 hour, 9 minutes, 49 seconds Yeah thanks for taking my uh my question. uh you know just on the protection side on the on the retail the 1:09:56 1 hour, 9 minutes, 56 seconds retain term side we have seen a lot of tailwinds this GST and uh you know hopefully you know we can see this this 1:10:03 1 hour, 10 minutes, 3 seconds continuing as a is because there is a natural offic or or has the industry or 1:10:11 1 hour, 10 minutes, 11 seconds specifically you kind of you know tailored certain products or looked at certain segments or probably you know made made investments to grow this 1:10:18 1 hour, 10 minutes, 18 seconds segment and in that sense probably if you could some chunk of you know how long can this can can this continue. 1:10:29 1 hour, 10 minutes, 29 seconds So nation is if the question is will have we created new products and innovated on products answer is yes we 1:10:36 1 hour, 10 minutes, 36 seconds have done that through the year uh by providing new and newer propositions along the way but I think one of the biggest tailwinds that we have got as an 1:10:44 1 hour, 10 minutes, 44 seconds industry has been the GST reform and that is felt most in protection in retail protection because that's where 1:10:51 1 hour, 10 minutes, 51 seconds you see the 18% go off so to the customer you're seeing this improved benefit uh come through immediately. In 1:11:00 1 hour, 11 minutes fact, this is not just for new customers. Uh it's also available for uh existing customers because as they pay the renewals, the renewals are that much cheaper. 1:11:09 1 hour, 11 minutes, 9 seconds So the way I'm looking at it is that it has actually helped uh create positive word of mouth on retail protection 1:11:17 1 hour, 11 minutes, 17 seconds because very clearly I think this is one of the essences of our industry. Uh selling protection has to become one of the ces of what this industry does. In 1:11:27 1 hour, 11 minutes, 27 seconds fact, we called it out also in the earlier part of our commentary. You know, the retail summer growth for the industry actually was two and a half 1:11:34 1 hour, 11 minutes, 34 seconds times post the reform than what it was free reform through this financial year. So very clearly I think everyone uh it's not 1:11:43 1 hour, 11 minutes, 43 seconds just us everyone has latched on to this particular uh move and uh it's up to the industry to make this a success 1:11:52 1 hour, 11 minutes, 52 seconds which it has for the half year that we've seen. Got it. Uh just now on you know I I believe Credential is setting 1:12:00 1 hour, 12 minutes up a health business. So you know is there a partnership or any synergies between uh you know between you and and potential or is it run completely separately? 1:12:12 1 hour, 12 minutes, 12 seconds No I believe that's a separate company. 1:12:14 1 hour, 12 minutes, 14 seconds Sure. And uh if if I mean hypothetically if the wants to move from health to life do they need an energy from you? 1:12:26 1 hour, 12 minutes, 26 seconds Again these are shareholder matters. I think we could uh restrict the conversation to financial results. 1:12:33 1 hour, 12 minutes, 33 seconds Sure. Sure. Those are my questions. Thank you very much. Thank you. 1:12:37 1 hour, 12 minutes, 37 seconds Thank you ladies and gentlemen. That was the last question for today. I would now like to hand the conference back to Mr. 1:12:43 1 hour, 12 minutes, 43 seconds Anum Bakshi MD and CEO for closing comments. Over to you sir. Thank you. Thank you very much everyone. Have a good day. 1:12:52 1 hour, 12 minutes, 52 seconds Thank you on behalf of ICAC Predential Life Insurance Company Limited. That concludes this conference. Thank you for joining us and you may now disconnect 1:13:00 1 hour, 13 minutes your