Q2 19/20

Oct 25, 2019

Ladies and gentlemen, good day, and welcome to the Bajaj Finso Ltd. Q2 FY 'twenty Earnings Conference Call hosted by GM Financial Ltd. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Ms. Pani Baji from JM Financial Limited. Thank you, and over to you. Thank you. Good morning, everybody, and welcome to Bajaj Pinsir's earnings call to discuss the second quarter FY twenty results. To discuss the same, we have on the call mister Srinivasan, CFO Bajaj Pinsir mister Tapan Singhalis, CEO of Bajaj Allianz General Insurance mister Milan Chaudhary, CFO, Bajaj Allianz General Insurance mister Tarun Chug, CEO, Bajaj Allianz Life Insurance and mister Amandeep Singh Sahani, CFO, Bajaj Allianz Life Insurance. May I request mister Srinivasan to take us through the financial highlights, post which we can open the floor for q and a session. Over to you, sir. Good morning, everybody. It's our pleasure to have you for discussing the results of the GasLink Serve Limited, the consolidated results for the quarter ended thirtieth September twenty nineteen and the half year ended on the same date. Before we begin, let me wish all of you a very happy Diwali, and I wish everyone to have a year of health, prosperity and happiness. In this call, we will largely be concentrating on the consolidated results as well as the results of our insurance operations through the Brazilian General Insurance, the Brazilian Life Insurance Company, Baghazilian Baghazilian which is another major subsidiary of ours, has already had its conference call. However, if there are any high level questions, we'll be glad to take that as well. We will not be taking any questions on the status of Allianz's stake in our insurance company except to state that the status has remained the same as at the end of the previous quarter, and there is no change. Any statement that may look like forward looking statements are just estimates and do not constitute a recurrence or indication of any future performance result. As you may be aware, as required by regulation, VFS has adopted the Indian accounting standards for FY nineteen. And this quarter, our results consolidated as well as stand alone results have been published on the basis of a in compliance with Indian accounting standards and previous year figures are comparable. The insurance companies are not covered under India. They have prepared India's financials only for the purpose of consolidation. Accordingly, for valid and valid, the stand alone numbers reported below are based on non India's accounting standards as applicable to insurance companies. Now I will move on to give you an update on the performance. As you are aware, market conditions continue to be tight. The GDP growth for Q1 came in much lower than expected. Auto sales are falling, and liquidity conditions continue to be tight. Although the better rated companies are able to raise money. Under these circumstances, we believe we have performed extremely well with significant increases in consolidated revenue and profit after tax. Coming to the three companies, BFL, Magic and Valek, all three have reported strong growth in revenues and premiums. BFL continued its stellar performance. It has recorded highest ever quarterly consolidated profit once again, The last finance consolidated profit after tax was up 63% at INR1506 crores versus INR923 crores. And the general insurance profit after tax was up 62% at INR294 crores versus INR182 crores. The Life Insurance shareholders' profit after tax was INR $2.00 7 crores versus INR 152 crores, an increase of 57%. In the last previous calls, people had requested for an update on the investments, and we have provided in the investor presentation, which has been uploaded on the website on Wednesday, a summary of the downgraded investments. This means investment which has been downgraded by certain credit rating agencies since q two of FY 'nineteen. This will also include securities which still have a high investment grade rating because the qualified criteria that it should have been downgraded We will have monitoring and interaction with fixed income investors in the corporate bond segment. We have redefined the fixed income universe with fewer qualifying securities in respect of new investments. We have redefined exposure limits for each segment of all the other funds and shareholder funds separately. We have increased the frequency of review of asset allocation exposures and internal as well as external ratings. And we have a special weekly monitoring team across the group to set up to review all investments we have been downgraded since purchase. With these short comments, I would just like to add that we have uploaded these opening remarks on our website as well, so many of you may have gone through those. For those who haven't, you have access to that. I will now open the floor for questions and answers. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, you may press star and one on your touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking your questions. Ladies and gentlemen, we will wait for a moment while the question queue is assembled. A reminder, you may press star and 1 to ask questions. The first question is from the line of Hitesh Mulati from Hightong Securities. Please go ahead. Yeah. Sir, thank you for taking my question. I just have one question on the general insurance business. What is the quantum of advanced premium from long term motor policies for us as of September? William, would you like to take it or? Yeah. Yeah. I I have the exact figure. It is around 600 crores to be precise by 75 crores, which is by way of advance payment. Okay. And, sir, we have seen Right? Because from March to June, I think it moved from 300 to 400, and now I think it has sort of increased a little bit more. So any positive trends that you're seeing on more people opting for longer term OD as well, something like that? I think I would like to mention here that compared to last year, we have seen some changes as far as overall trends in, mean, people opting for either five by five or one by five and then three by three or one by three. Okay. So, we we are seeing a lower percentage of people who are opting for a complete five zero five or three by three, in both, cars as well as two wheelers. And, sir, just one split of motors, third party on car, CVs, two wheelers. Hello? Hello? Yeah. Yeah. Yes, sir. Yeah. Can you repeat the question, please? Yes, sir. My question is on the motor third party piece. What is the split between cars, two wheelers, and CVs? Some indicated numbers there. Okay. I think as far as the overall breakup is concerned, around 60% is coming from Voter TP, while around 40% is coming from Voter OD. Okay. And out of the overall TP component effect, More is coming from the CV portion. So almost, I would say 60% is coming through the TP the CVT, CV portion, and the rest is coming from four wheelers and, two wheelers. So so on the ODT system, it's similar because I think we what I recall is that I I think, you know, we're getting to the operational numbers. Broadly, not the question. Okay. So thank you. That's it from me. You. Thank you very much. Next question is from the line of Ravi Srivastava from Bay Capital. Please go ahead. Hi, sir. Congratulations on a great set of numbers. My question was also on Badgic. Why are we sort of pushing so much on the crop side? Last time when we spoke, you spoke about sort of maintaining your market share in crop. But this quarter and maybe in the last year, gone overboard and have written a lot more. So what are the sort of what's the sort of thinking there? Why are we seeing taking so much exposure in crop? Okay. Like, if you look at crop that we do have always been close to a market share. No? So when you make a statement that we have gone over, within a quarter, it's over good. Because then in the entire year, if you look at the total crop, they sold around 28,000 crores. You know? And 28,000 crores, if you write about about 2,000, it is close to a market share of greater than 10%. No. Where have we gone overboard? I was hoping that this is the largest quarter for this is the largest quarter for So it will come in in one quarter. No. You you you the crop is not like a retail business comes every month. So crop is spread over the years. So let's say we're right in this quarter, but the entire year, this is how it will get built up. No? For total portfolio of crop, this is the percentage. So it is it's going to more or less close to a market share and not overboard. Other thing, just wanted to get a heads around this that we are writing when we are writing crop insurance of such a significant size, we are also writing sort of combined ratios which are over 100% in that or higher claim ratios, sorry, claim ratios of over 100%. So why are we sort of taking that exposure? How do we make money out of it? Just trying to understand the segment. Yes. So if you look at crop business, the way you should look at it is pick up the crop business for, let's say, ten years time. You know? The batch would be pick up the total crop price segment wise business for ten years time. We want a significant number of years to make money. Some years, you lose money. So we look at our performance also in the past of the four or five years. We have made good money more in about thirty four years. Some years, you lose some money. So that is the nature of this business. Crop business is not like a retail motor business in which you would know know the margins as it produces on a on a quarter to quarter basis. In the business of crop, if you enter into crop, there are years in which you'll make a good profit, the years in which you will not make good profit. But if you look at a ten year period, the more year in which you make profit compared to years in which you don't make profit. That is all the crop business is seeing. Right. Just, again, asking you, alluding to it more. It seems like some years where you make profit or some years which you don't, it seems like it's sort of a coin toss in a way. Why do we want to coin toss, basically. It has it is given largely by reinsurers. So if you look at no. Under the GIC is the major reinsurer here. And that is when you have let's say, this, you have to have good reinsurance support. Okay. And so because then what happens is you even out losses. So let us say what companies do is they take an excess of loss cover. So let's say a loss exceeds, let's say, 120%, one thirty. Then the company don't pay the loss. It goes to an initial again. Okay? Then they have a quota share in which, let us say, now the company has a loss, certain amount of losses taken by the insurer also. Okay. So across the world, when you write, like, businesses like this, if you look at a PNC company, you know, and if you read about it, let us say, in US, you have these hurricanes coming in, you have, you know, cyclones coming in. So there are years in which there are new cyclones and with the public laws going up. The years in which there are no cyclones, there are no public laws. Right. It's around PNC businesses. When you are big company, you're exposed to catastrophic losses. You're exposed to the different kind of losses. This is what otherwise, why will we take cover? So let us say, if you could don't have a even out a monsoon every year, why you take a cover? Even the economic process, the government also, once it is a monsoons, no. There are good monsoons. There are bad monsoons. Right. So if you if you look at it, that's the nature of P and C business. It is not a business in which, know, you can predict every quarter how it goes. That's why the issues are playing into play. That's why we do large segments. Know? So does it answer your question? Does it give you a clarity on how to look at this? Yes. So so I'm understanding this that sorry to harp on this again is that my only thing is that even though so so when we speak to reinsurers, they are sort of also firming up their rates on this. Yeah. The on the other side, the live here, the main major payment comes from government, which is you know, tends to be, so sometimes it may have paid on the time. Sometimes they delay the payment. Now if you look at good. So ask as much question you wanna crop because I think, you know, it should be very clear to you. I'm I'm very happy to ask you this. So let's look at the the crop, the government delaying thing. Now as the nature of the contract by awarded by government, it says that when you receive premium, you don't pay claims. Okay. Okay. Now let's say the government delays the premium. The claim does not get paid for that. No. So it is not that you are paying claims and you're not receiving money. Yeah. The contractual nature of crop insurance defined by government is such that till the government pays money, you can pay claims. But how do you generate float then? No. But crop see, float is not to be generated on the business. Right? Crop, float is generated. Typically, we can actually look at float of the Indian insurance business. Most float is limited by the motor third party business, which is their insurance company. Right? Because of the nature of claims settlement, it takes no years to settle a claim because of the way it is constructed today. Now if you look at the the coming motor vehicle act, in which there's been six months in the claims, most of the flows from g GI business will disappear. No? So flow generation of creation happens only in business like motor third party. Yes. Yes. Long term businesses. A a float will not get in less than GMC. A float will not get generated less than a crop. No? A float so fundamentally, the sand float also, you have to look at long term businesses to get that. So crop is not the very place where you generate fruit. No? So so basically, here, what we are thinking is that there is a good chance that in some years, we'll have 120%, and there's a very good chance that some years, we'll have 80% claim ratio. Yes. And then that is why you have reinsurers. Reinsurance? Reinsurers are hardening the rate. Does not mean that, no, they are not covering. So most companies would have good reinsurers covered, which would be, you know, the quota share of a good or 85% of it. And then there's top less cover over on top of it. So, fundamentally, the vagaries of nature can be, you know, controlled by this thing, and that's the nature of PNC business. This for most business in let's say, property also. If you look at all the floods happening, the property losses would have no mood for industry. No? Are there there are years that we should have floods. The years that we should have floods. So the year that the property loss ratio will lower, there'll be years in this point, loss ratio will be higher. We're gonna look at crop. If you look at the car loss ratios also, automobile loss ratios. The places where you have floods, automobile loss ratios are moved up. The places you don't have floods, auto and loss ratio is down. So this impact is there for all lines of businesses. When we study it more at a minute level, we find that it is it is not it is it moves up and down depending how the nature is that. That is why people insure. If you had 100% guarantee of no losses throughout, why would you insure? Got it. That is very, very useful, sir. Thank you. Thank you. Thank you very much for the question. Yes. One more question on the Life side. This is regarding the recent news and not on the quarter is that there was a trade that was done on Valek between for it on the India Bulls loan with Deutsche. What is the what really happened there? And why is Take that question. We are not commenting on any individual security or any individual investments. We have given an update as of thirtieth September of all our investments. Just think that they have dragged us into court, so that's the only reason I'm asking. No. As of the as of this date, we have no further information to communicate on that. Got it. Okay. Alright. Thank you. Thank you very much. Next question is from the line of Primal Kothari from Unique Investment Corporation. Please go ahead. Hi. Thank thanks for the opportunity, sir. Sir, as a minister, long term minister, I wanted to understand this falling interest rate scenario. We've been insurance company over general and life. Basically, we also make money on float and long term, that is also very sustainable good, which is sustainable and regular. So in this scenario, how you how normally insurance company deals? What are your thought process for Infinix? Which during last three, five years, interest rate has also fallen. So how it affects our overall I mean, basically, if you can little bit in a simple language, you can explain. I will do that. Firstly, our investment income comes from two sources. One is how much of AUM you have, how much growth you generate, which will add to the AUM, and the yield you get on those investments. Right. Clearly, as interest rates are cyclical, so there are times where interest rates will be low. There are times where it will be higher as well. In terms of the type of asset classes. There's a minimum amount to be invested in government, in housing, in infrastructure, and the certain amount is allowed to be invested outside of all these. So even on these constraints, it will be our endeavor to work on both fronts. Firstly, to have a business which generates growth. Historically, in Magic, we now hold approximately INR 19,000 crores of float, and we have invested only INR $2.80 crores of share capital, and we have a net worth of about INR 5,700 crores. We have almost INR 13,000 crores of crores we have entered in the business. The growth continues to grow, and we will continue to focus on growing the denominator. Clearly, our insurance business is full of risks. There are risks related to underwriting. There are risks related to reinsurance. Therefore, we consciously monitor the sources of profit, what is sustainable, what is recurring, and there will always be opportunities for you to take onetime gains. So that mix is something we track globally. And historically, we have been there. Our investment leverage, which we have mentioned in our investor presentation, is 3.2 times. That means for only 100 rupees of network, we still continue to hold $3.20 rupees of investment float. Obviously, it is a bit lower. The investment income will be lower, but we have other levers. We have our underwriting business. We have our product mix. We have our expense management. And all these put together, we hope we will continue to deliver a superior ROE. Is that right? Okay. I understand. Yes. Thanks a lot. Thank you, Nidhat. Thank you very much. Next question is from the line of Madhu Karalanda from HDFC Securities. Again, on the agribusiness, can you explain a little bit about how you're hedging that business in term you you mentioned that you have an excess of loss cover, and you'll have some knockouts. So so what can be the maximum kind of loss in this business, if you can give some color on that? Before I pass it on to Tapanu, if you see in the last four years, majority of the last catastrophic losses have not come from a reinsurance. They have come from J and K floods, they have come from Kerala floods, they have come from cyclones like Fukus and Fani, they have come from floods in Chennai, Bombay. So therefore, insurance is about managing the catastrophic risk. There are multiple layers of excess of loss cover for different lines of business. Every business is a unique business because it is short term. It is for one season. The claims do get determined quite fast. Weather is one of the important factors which determines claim ratio because it's yield based insurance. It may not be because of weather. The farmers are not required to prove why the yield was lower. And in addition to that, we have got some excess of lost cover and 150% loss ratio. Milan, can you confirm that? Yeah. 20% is the retention. Percent retention, and a 130 is our stop loss. Yes. Right. Correct. Premium. Obviously, that gets charged to our property end. Understood. Understood. And, sir, on the motor business, what are the early trends on the new motor vehicle act? Are we seeing how is our, you know, PP renewal looking like? Are people coming up and renewing or or buying PP only policies? And, also, it's been a year since we sold one plus three and five and one plus five policy. So how is the renewal of the OD only portion on those policies. Would you like to take it or? You want to Okay. Okay. Yeah. So if you look at the the when the fines became steep initially, I think the premium for motor two wheeler went up, typically, significantly for industry. Now the point here, if you look at the most uninsured, the regular road is two wheeler. There are 30% uninsured. While the four wheeler is about 20% uninsured, and the commercial vehicle is about 30% uninsured. And this is funded by the IIB data and the actual data by matching it together. That is how the numbers comes through. So, obviously, when the fines were announced, there was steep increase in the 2,000,000 insurance premiums, especially to the third party part of it, which is which happened. But then I think slowly the state governments diluted the stand on that, and then there's a dip. But still higher compared to what it was. It was fifteen, twenty days, it moved up, you know, in the last month or so, but the fines were lost. But my personal feeling has been, which I've said in lot of forums, because if Steve finds a good there's huge change of driving behavior on the road. And most of the road accidents happen because of irrational or, you know, speed driving or no. Not, I think, causing jumping red lights. So that's good for the citizens. I think quite a few forums also took it up and they mentioned that. But fair enough. I think as it goes forward, I think I would be seeing a significant increase the third party. So that would definitely happen. Pool, I think, is less uninsured too. In fact, not be much. On the removal of Spirituality, it is much lower compared to one. It's having full because those are the letters allowed. It in the terms terms of mentioned, if you can take note of government separately, and they allowed that regulations now. And you have to mention the TP of the previous commission is there. But I would say it's too early to give this comment. I think when you have the next quarter, if you want, then you can give a more conclusive numbers because, you know, it looks also have a play of a month also happening. It's not very it's very early to say that, you know, how will it play out. Right. So, also, your health line, we're seeing a very steep growth in retail health. What are we doing different now, or what's the philosophy of that? Well, actually, if you look at retail health growth, no, it has always been on more or the number that you see today. No? It's a bit over, a bit down below this. But as you build up distribution, the retail health will keep on going. So this in retail distribution, the two or three major lines of process gets sold. One is motor. Second is retail. Third would be the smaller SMEs and a mid mid package. So if you see, because of our growth in distribution, it's a natural increase in the business also. Alright. And and, sir, finally, any any comments on, you know, on the pricing of t p? Because it you know, given the motor vehicle act should result in lower claims over a period of time. Do we see how do we see pricing to move? Do you think Yeah. Right now, more the PP is governed by idea. It is they are called, but at a personal level, I'll always ask for free pricing. So I'll just give you the market to determine the price. That's my personal level. But there there is something that I'll be able to decide. I think this question has been there for many years now. I think the first time we raised it, especially I raised it about four to five years back if I remember when I asked for pre pricing of PP and everything in this free price. So it took four to five years till we don't have any conclusion. So I cannot give a future date in which it can happen. But, personally, my personal feeling is that when we have a free market, I think the price should be free for all lines of business. That's my personal feeling, which I have mentioned in a lot of places. Alright. I'll I'll join back with you. Yes. Thank you. Thank you very much. Next question is from the line of Ajax Henry from BNK Securities. Please go ahead. Hello, sir. Thank you for the opportunity. So my question is with respect to the life insurance, particularly on the Axis Bank tie up. What proportion of business comes through Bank of for us now? And what is our outlook on this new relationship we have with Axis Bank? Ramad, would you like to take that? Yeah. Maybe I'll just settle on that. See, our third party and bank assurance business till last year, first half, was about just about 18%. Okay. And this year, it has gone up to 33%. Okay. And this is without Axle because Axle has not started yet. And, like, what what is the outlook there? Like, I mean, on the bank, are we targeting something close to 45% with taxes on it? I don't think I can make a forward looking statement on that as to how much we will be targeting, but I think it's a LD increase in individual union. This year, we've had a a good run, good start with Bamkhan. Okay. And we are now working with Axis and working on various pilots with them and and putting together a business line with them. And hopefully, it should be good for us in the coming years. If I can just add to what Arun says, if you look at the last four, five years, we have done a lot of work on individual distribution channels. We have rebuilt our agency. We have grown a lot of traction there. We have seen improvement in ticket size and persistency. We have also started building our proprietary sales force channels. And we have reorganized our institutional business. We have a very skewed exposure to the RRP and MFI. But by getting some new relationships such as Bunz and Bank and IPPB, and IPPB has already started, but we have a lot of SSDs. We have started rebuilding the bank card channel. One of the drawbacks that we had in our distribution, one of the gaps, I should say, was the fact that we will have a very large pan India commercial bank other than London, which is a new age bank. Access will help us fill that gap. As we work with IoT, we will figure out how much of their buy we can get. It's a fairly large size they have. We are their third partner. But we think we have a fair shot at building a good quality individual rated premium business through access, which will be hopefully positive for us for growth as well as our ND. And do you have different exposure on the retail term side as of now? Because we don't have a bank or partner. Is that affecting us in any way? Actually, we've we sent last few years to, you know, make our claims of that because we are quite strong in the group term side. And that's given us a lot of experience on handling term claims and in term processes. We will be launching our and I've said that in the last call itself. So we will be launching our term plan retail term plan this quarter, which should help us take that up. But the way I would do it is I would take it up gradually as one always hears, particularly investor calls, a lot of positives on retail plan plan, and it is good. But if you do not have strong control mechanisms and support of analytics, it can also track that. So this is why we are starting off this quarter now with the retail. Perfect, sir. Thank you. Thank you very much for your time, sir. Thank you. Next question is from the line of Mayur Parkaria from Wealth Management India Private Limited. Please go ahead. Good morning, and thank you for taking my questions. Hello? Yeah. Yeah. Good morning. Yeah. So just on the retail side, on the Balik side, Insty and other channels are contributing quite well on the growth side. Can you just add some color on so is it is it because of this Vandan x Vandan tie ups and other which you just mentioned? Before I pass it on, I think one of the major pillars of our transformation, which we started three, four years ago, was to change the focus of our institutional business from an overweight group business perspective to individual rated premiums. So many of our This, we believe, will add to our MBB and create a sustainable model. And that, to now, is playing out in some way. Bandhan is obviously contributing to that. Tarun? Tarun? Suneet's the the one strong pillar right there. And just to add to that add to that, last year, same time same time, we used to have 73% business coming from agency, 18% coming from seasonal clients and on on the retail side, and about 9% coming from the proprietary sales force. This is it's simply moved quite well quite well. So well, agency has been quite steady quite steady, but has come down in market share because banker and third party business actually picked up well picked up well. So agency is now under 60, institutional business is 33% now. It has been it has been the strategy has worked. We are not just trying to do only retail through to LRG. Now currently, we do have a task with Syndicate Bank. Of course, we have to see what happens with Syndicate post the merger. We have London Bank. We have we have the biggest players in terms of number of partners in the asset remodel model. In the payment banks, have India post payment bank, and that should start pulling up some numbers from next quarter. Hopefully, there's a there's a lot of work on tech integration happening there. And now with access, do have a large commercial bank commercial bank, which has a Pan India presence and the right kind of customer segments for this one. Sir, while the premium growth is looking impressive, will it also mean that and since our presence on the life insurance has been on the retail side a little late in that terms to say so, will it also mean that it will be a while before we see profitability coming on this and the new business stream will be much larger here for some more for for a lot of time? If it's very good question. Very good question. If you look at the agency channel, is fundamentally a higher cost channel anyways. Because there are a lot of fixed cost that goes in there. We have, like, the largest branch branch presence among the, you know, the big companies big companies. And we have sometimes presence in areas where even the license doesn't have a presence. So that has been our forte, but has therefore, also had a cost for the on the fifth. When you tie up with bank assurance, your variable cost variable cost may go up. You do, of course, make investments in tech and there is analytics, a lot of work happening on there, product development which has to be done. So net net, ultimately, NBV will only benefit benefit, and that is that is only been positive for us because overall, it is a less less fixed cost trend cost trend. Okay. Okay. Sir, while at a conceptual level, this is right, but has the improved operational performance started flowing on the VNB and EV? Yes. We have operational EV once a year. We are seeing the margins are moving. Last year, for the first time, we have also, after a few years, reported positive margins after overruns. Our overruns because partly because of growth and partly because of operational efficiencies, We have been able to control our overruns. And as we go forward, we hope to continue this trajectory. I can't give you a number what will happen in the future because a lot of it is also different on volume and the external market conditions. Having said that, when you get something large, like the bank tires, there will be some new business strain on the reported path. So if you are measuring NBV, clearly, we will do business which we believe is NBV positive and will help us out the overruptions. But definitely, there could be some impact on the reported statutory profit, but the quality of the business and the long term sustainability of the business is what drives us. But, sir, given the base business which we have, now that is since that is turning a little positive, so we should build in this year on the last year where we left little marginal profits, right? We're already doing that. You see our growth has been in the first half higher in the last quarter, much higher than the market. We have brought in product mix change, which we believe is a differentiator for us. Now our traditional to unit mix is higher. And as Arun pointed out, we did not have a competitive enough individual term like product that will soon be launched as soon as the approvals and the internal processes are through. Once we have that, we will start to improve on improving the share of protection on our business mix, hopefully. And we think this fine act of balancing the product mix will deliver to us what we want. On the channel side, we have now a fairly deep and broad distribution network. We'll continue to build on that. So last question from my side is on the investment side on both Vagic and Vallik, is there anything impairment which you wrote back, but if you can give some color on, is there any exception or should one look at as to more nonrecurring or the more lumpy numbers, anything which we have booked on this side? Obviously, because the yields are lower, there is an element of capital gains. Over a cycle, capital gains are part of your yield. That is why you invest. You can't make all the money on interest income alone. We have reported something higher this quarter than last year. Apart from that, we have that reversal on one provision we made in Q1 because we received part of of the the money. Money. We still continue to hold 100% provision on our exposure to IL and FS and 60% on the Day one Housing and Finance Corporation on our outstanding amount. We believe we are reasonably conservative in both as we know that there are many other companies who have invested from their public disclosures. And we are reasonably satisfied with the level of provisioning we have. We have given the details of all other downgraded investments in terms of what is performing and nonperforming, and you can see that our provisioning coverage ratio is fairly high. Thank you very much. Next question is from the line of Avinash A from SBI Camp Securities. Please go ahead. Yeah. Hi. Two questions. One is for Badik and Badik. On Badik, again, crop, you rightly said that, okay, crop business, you have to look towards a science cycle and also in the figure of trade diversified. So if you can just help me understand currently from current season, in which effects you were there. And on that, I mean, do you see I mean, particularly the post thirtieth September is still, you know, the odd season rain related losses, and that would have caused so, I mean, are your current reserve on for a case review the quarter taking into account of this sort of unfortunate or you see the chances of this claims ratio going up? And on pricing side, if I look the from the annual data from last 2018 to 2019, we have seen kind of a premium direct premium to show that your ratio going up and kind of a indicating some 8% price hike this year. So what has been your pricing experience? So these are the questions of balance. And then balance again continue on your new tire with active. And considering it's a pretty big tire and definitely plug in the holes that you had in your business model, having a large retail bank as a distribution partner. But it will also entail, you know, excess accelerated investment for some time. So how do you see actual post over on margins for x 20 and going forward directionally? It's not exact number. Mean, it's it's going to sort of bring further some pressure on margins this year and then accelerating on next year? Or you see that, okay, gradual improvement in margin continuing? So these are my two questions. Thank you. Let me take the value question first. As I mentioned before, with such a large tie up like this, it is our intention to drive the right kind of product mix combined with revenue, and we should be NBV positive, excluding the overlap. Yes, Over the next twelve months, we will have to make significant investments because the volumes are not going to come overnight. Therefore, there will be a bit of strain, but we will also understand that we are sitting on almost 800% solvency. And therefore, we have the capacity to invest that money in a relationship we believe is long term, sustainable, and margin positive. Obviously, you cannot say no to that relationship. And all Yeah. So I I think, Jenny, you've addressed it. You've you've gone with us well. Very clearly, we are, intending to get our product mix right from day one with access. And profitability is is surely something we are on its top of our agenda. But having said that, there will be investment and productivities. Both will be will be something we'll have to work on because we will start making investments in in in tech. We already started a mutual company. And even training architecture, getting the right, and putting in the what's the mechanism and the people that access. All that will, of course, have an impact particularly in the fact. The way I'm looking at NBV, let's say we have to become a meaningful size first. I mean, we can get to the so I'm looking at margin with one point net margins, but I have to make these investments upfront. I I would rather first look at, you know, meaningful size. I've already made the statement, but ultimately, is Help. Variable cost. So it's lower cost than agency in any case. So that works well for the company. Also, I as the number of policies increase, I can defray the cost over a larger base of customers. We normally write between between the half life policies and that should go up. That should help us, you know, get more availabilities. But, yes, a lot of this will happen in new course, and it's not it will start popping up in terms of significant MBB margin increase. But on a scale, this is actually in sense that the MBB, because we're riding only in net NBP positive products, will tend to go up. Good access. I see. Quickly, if I can just follow-up on, like, first one. You are looking at active bank that has got 4,000 plus branches, almost 80% or maybe more branch area having potential to deal with your business. So what kind of a manpower addition you were doing just to manage I mean, over the next twelve to twenty four months to manage this active channel? And also, for instance, if somehow, we had an improvement over years, but we are still not below the top tier. So how do you see again this improving further or, like, we are facing sort of a feeling? Yeah. I know. Think that's a very good point you where you want to do. On the first one, let me just say that at this point, it's difficult to say how many people need put because we are currently starting off pilots with at this point in time, there's one going on in Mumbai already. And these pilots will tell us how many people we're gonna be putting and where we're gonna be putting to support. Having said that, Axis itself has a very large base, one of the largest base bases of SPs. These are the specified persons who themselves sell insurance and understand insurance very well. They're some of the largest in the country. That should help. Actually, it's helping if I would just account for access to its top line, it would be the top six life insurance plan already. So that that, you know, makes us more keen to therefore make the investments. So whatever is required to be done, from our side, it will be done. On your question of persistency, again, it's already insightful point you raised. So there is one thing that you need to understand a little bit about bank management. The fact is that we've not had bank assurance as a big channel with us. The fact is that we have been largely we're now moving to mass affluent. The movement is underway. You know, so those those things don't improve overnight. If I take both these factors, the the one bit impacts persistently, thirteen months particularly, if I take this thirteen month and I do not take second premium, the thirteen month is that people are paying on the twelve and the thirteen month itself, the contactability has to be very strong. You have to have multiple address addresses sometimes, communication addresses. So usually, if you have a bank assurance partner, it's a lot easier to get. The payment modes can be direct debit. So in our case, it's a little bit more harder that we have to do to reach out to the customer to pay the second premium. As a result, what happens is when you just look at a hardcore 13 to month or something, that is 20, we will be a time below the, you know, the top quartile. But if you start looking at the fifteenth month and the seventeenth month and therefore the second premium so if I look at the last year second premium, we're already close to 82%. If the money doesn't come on the thirteenth month because of the contactability being low, and and therefore, it tends to drag on during the fourteen, fifteen, seventeen months. And by the seventeenth month, we start hitting the the cost, which is closer to 81, 82%. And I think at this point in time, given our product mix, 81, 82 is is is a good one to go with. And and as we get more bank assurance partners coming in the payment mechanisms, of course, India is doing quite well as payment banks coming in as well. This should help us increase our thirteenth month itself. And then that's where the persistence will be due. We'll move substantially. Because, you know, in the post payment bank, in the mass market, we'll see we'll have better because there are there are a set the best debit mechanism that one can put, and the last mile is pretty strong. So we are very mindful when we when we are tying up with any relationship that the persistency doesn't suffer. Initially, RRB used to be a big part of it, now RRB, as a percentage, has dropped a lot. So that is that is also now helping us a lot, and you'll see this directionally. It will only be in the in the in the top quartile among life insurance companies. The line for the participant got disconnected. Do you move on to the next participant? The next question is from the line of Kaval Gara from BST Mutual Fund. Please go ahead. Hi, Srini. Few questions. Firstly, for Tapan, four questions. Could you please remind on the philosophy that we have adopted on the motor business? Do we look at OD profitability and TP profitability separately? Or we look at customer profitability? And in relation to that question is, could you comment a little bit about motor OD pricing environment and the outlook that you see at this point for within the next nine, twelve months on that? That's the first question. The second I had was on the retail health business. Just wanted your thoughts, you know, how how do you see the ramp up of this business over the last twelve, eighteen months? I mean, your thoughts, I I think it's a little slower than what we anticipated, but just wanted to hear your thoughts on that. And the third question I had was on the VSO bit. I think the ramp up has been quite substantial over the last three years. Now it comes to 10% of premium. Just wanted to understand quantitative benefits of having this channel, and how does the dynamics change if this number were to go to 20%? And that was the third question. Yes. So let me start Yeah. Sorry. You're saying that, No. No. I'm just asking you to respond. Okay. So let me start first with the motor. I think motor health and the VSOs. Three other sub questions that you have. So first on motor. Once you look at motor in the P and C business, one should look at individual profitability overall for any business. Trying to subsidize from the other, does not play out in the long run, which would be there. And in that, also, are a lot of subsections. So some subsections, TP actually plays out good. For some section, TP is bad, no, and OD plays out well. So to make a general comment on how, you know, it it is done, it would not be appropriate because motor is a very broad classification. You have so many sub transmission motor, and each have a different play altogether how it gets done. But predominantly, the philosophy, we'd like to look at probability on an individual basis, o d separately and d p separately. And depending on how it, you know, plays out, there would be some places in which if you have good model in d p, there would be some subsidy happening. But that is one of or, you a small segment of the business. But whatever the philosophy, we'd like to look at it separately. Does it answer your question on motor? Yeah. And just your thoughts on pricing given I mean, since you look at it separately in most subsegments, I mean, the environment and how do you see that sort of changing over the next one year or so? If you look at the pricing for that, you should look at how the industry is behaving, and that will give you an answer on the pricing part. We look at, you know, the I think well done companies would be a very small segment of the overall industry. You know? That's where the combined ratio industry is being closed on in 20% for quite a long period of time. It's actually running fifteen, percent for a long period of time, which means that overall industry's pricing is not up to the level where it should be. No? Right. It is not it is not been good. That's why most most players have a combined ratio which is way above 100 now. And that shows the pricing is not at the right place as it should be, and that that's a fact. But there are companies that are well done also, and if you look at the combined ratios, they're very close to a 100 now. So they would be doing pricing, which would be appropriate, and they will be sending, which should be appropriate. And that is why the combined ratio is the one. Overall, the market pricing is not where it should be. And and do you think it will remain around these levels for the next foreseeable future? But if you look at historically, this is the longest run any country has had. Free pricing happened year 02/2007. This is nineteen twelve years, you know, the market pricing is not corrected. Even, let's say, if you look at an example like Korea and all, in seven years' time, they corrected the pricing. It will in fact, it was much better than when the pre pricing started. You know? And India did not happen. And that is why you see the stress of most companies in the generation business because it has been, know, for a very long time. So very difficult to predict as to when would get done, but I think the question is that, you if we can have more companies are well done in terms of they're getting the pricing right to where it should be, it will be a very welcome move. But I I can't predict other company's behaviors, you know, as it moves. But, sir, there is a interest at Boeing. You see, motor insurance is the most visible and the the one which any new company will start attracting. Therefore, there are times in the market when there is excessive or what I would call irrationality in the market. It all depends on the availability of capital. If that capital gap gets shut out for the smaller competitors, then you would find that prices will harden because they would find it difficult to continuously report losses on a segment by cutting prices. So eventually, our company has been one of the most solvent. We have sufficient network and capital. Smaller companies will find it difficult to get into lines like operate, which requires significant reinsurance support And reinsurance, again, is a function of capital. Therefore, we believe in times like this, people who hold their prudence do the right balance between growth and profitability and focus on various segments, as Tapan mentioned, within the Motor segment, are profit pools, there are loss pools, and they keep changing depending on the pricing. And as long as we have a dynamic system of monitoring it, we think we should be ahead of the pack. Overall, we have disclosed our loss ratios. As you see, they're pretty good. Even after all this price correction, in motor OD, it is still about 64%, 65%. And in TP also, we have a significantly good loss ratio. So we will try to be better than the market, significantly better than the market if we can, and then we will see how it goes. But at some point, it has to correct. Whether it's going from one year or three years, it would be difficult to say. Alright. Yeah. Thank you. Yeah. So the next question you had was on health Yeah. With Yeah. Retail health. You're saying that the growth is not up to a level where it should be. Now let's look at the retail health history to understand how this moves. So if you look at, I think the first health policy, if I remember right, was issued in the 1956, which was know? And from there, think there were 02/1956, there was hardly any shift in the retail portfolio or a little bit of industry. 2,006 or '5 or '6, we were not picking up, and I think the advent of standard health companies also gave it a good boost along with the health care expenditure, which is happening now in the country. It has also moved up significantly. Now to get treated in a good hospital is really costing some good money. And in combination of this awareness level, disposable income, several companies give a boost to retail health segment as such, and it did pick up very well. And now government intervention has come also in terms of what you see is the national scheme, which has come in, not covering quite a bit of the population. The ratification of rates, hospitals. So I think the health portfolio is moving in a scenario where you have this early good group, but interest of all stakeholders is very high. And I think that's how we're moving up. It will, yeah, even out at some time and then keep on moving as it progresses. So if you look at the way it is moving, it is I would say it's in the right direction. There's nothing in which you can tell a trend that it is not going lower or much higher. The initial support of growth has happened because that is where the market really opened up to help ensure that you see in the government intervention, if you look at the hospitals, we have come out and the private channel companies also. So all that gave a good boost of the of the public at large. So help would continue in my view for the next, at least, minimum ten, fifteen years. There would be a little bit double digit growth happening. And I think the government also would have a lot of team members in general looking at help for the overall public at large. Do you think you can see 20% plus compounded growth for this ten, fifteen year period in No. Not 20. Double double digit. It will come down. It will not be 20. Comes down at the highest, like, seventeen, sixteen, 17%, 18%. That is where it will come in the list. Sure. Yeah. The third was on VSO. So if you look at VSO as such, it is just a distribution mechanism in tier two, tier three terms. No? So if you look at the VSO typically for us, it does it will be it does motor dealer, it does it's like a small office setup, which we actually set up and we are the pioneers in this. We were the first to set this up. Now I think a lot of our competitors are doing this. It's a good sign because in previous penetration for the country and it's good for the customer at large. The idea was that how can you set up offices at low cost without setting up physical offices instead of distribution using technology and the network connectivity there and how we service the customer at the doorstop. That was the recent concept. And we did set it up pretty well. We spread all across the two tier three cities. And we have to do so they're doing all lines of businesses, and then looking at all channels of businesses. So it's like any normal office. So the growth from that segment is a good good to have. You know, we're bringing penetration and we're moving to smaller locations. And that time progresses, I will see more business office team will keep on expanding and looking at more expansionist groups. So I didn't get to quite get a question on volume. We we just like a no. It's a good segment to penetrate insurance and area which are not very penetrated area. Question was actually, what is the quantitative benefit of the channel? Let's say, today, there's 10%. If it goes to 20%, I mean, is there a cost benefit or a sort of renewal recurring? What's So the economic benefit that was? Yeah. Okay. So if you look at it, no, we actually typically take an office. So as you open offices all across, no, and we actually do not have a physical office. That's the only difference. I think there's no other difference. So it is just like any opportunity. Know? Exactly. I will just keep on opening office depending on the opportunity. And and to look at India also, let's say we take India twenty years back. You know, the information of wealth in the urban tier one, tier two was much more compared to tier three, four or lower below. Today, if you look at the purchasing behavior, look at the commission as well, it's just getting distributed across. So that is how I think we are seeing a very good move from the companies to get into places, which they were not present earlier. Basically, VSO is only way to expand the footprint. The product they sell are facing or as you sell more, they'll sell property, personal lines more because the market is I mean, the type of people who live in these locations are from rural and rural backgrounds. But otherwise, it is only an expansion of footprint and diversification of geographicalness. Understood, Harsh. Just one more question for Tarun this time. So just on product innovation, I just want to understand what is the sort of experience on return of mortality charges product that we had launched last year and sort of the size of that product? And the second question I had was on the propriety sales force that we sort of have built. I I think one of the sort of objective was to upsell to the customer base database that we have within the groups. So just any metric around where we have sort of reached from in in that journey. So those are the two questions. Thanks. I'm really happy with the quality of questions, honestly. So, obviously, ROMC, the segment has been the lead segment for the online limited plans, particularly. So if you if you just go back in history and look at the the online unit and plan, there is a company that has to have three years back, a full year five years back introduced low charges or zero charges rather than fund management charges as a as a means of getting innovation. And that's when the sector grew. If I remember the numbers about 22% on the online space. And since we brought in the ROMC concept, we find that customers are far lot easier to buy products online. A, because they're come from that mortality charges are, you know, not going to be you know, they're difficult to understand, mortality charges. So something that they find difficult to understand and then we return back to them. So there is insurance life insurance typically gets this stigma that we have a lot of, you know, what should I say, non transparent charges. So this becomes increases the level of transfer. Since then, the online space has gone up by a CAGR of, you know, 40% for the for the for the sector. And it will drop from there. It could be higher than that, but if you remember the numbers broadly, that's for the 40% CAGR for the last two and a half years since we've got. So that market has now become more like a 200, 300 core market for the sector. And this is near zero. We're part of the fastest growing segments. And ROMC, what I find in our assembly, we put other companies, have also come up with ROMC products. So what we've done is we've since then, widened our product space. We've come up come up with a product lifelong goals, which is a it product segment for the pension pensioners as well. As as you realize that somebody above 40, 45, which start worrying about underwriting charges, and underwriting charges are always below that age are meaningless too small. So it's why the unit market was losing that customer segment to the mutual fund space. Now what we've done is that we introduced this product online. We return modality charges on the pensioners every ten years. So we got a twenty year policy every ten years, we return the mortality charge. So that feature is also unique one. We focus on early retirement as a space that has been able to open that space for us. And I think more and more, in short of getting in and money that we put into the space should help us take the pensioner space also into into consideration. And these are very long term contracts. The pensioner contracts are right now, we're talking thirty to forty year contract including amortization. So that really works very very well for us. The professional team goes ROMC contracts are gonna be better as well. So, hopefully, we're quite happy with that strategy. It's it's it's going quite well. On this data, it is already contributing upwards of 10% of our business. I think that's that's the metric to look at. Conversion ratios are good. I yet on how we can use the group data that we have. These are currently underway. And and usually, these pilots require a lot of profiling, analytics, understanding of what to pitch where because it's not that we sell a lot of policies Unlike, I've been in some company retail, just policy in luck. Right? So so therefore, even if I was able to do this, you know, 10,000 policies through, you know, through the group, I'm kind of happy because these are very high ticket size, usually. So so that is underway. The channel is although we have expanded the number of cities we are present in, and this is only going to increase as we go. Understood. Just sorry. One data point that I needed was on the group protection premium of about $4.27 crores that we have. The split between the GPI and Credit Protect, and related question is on BaaS share now that we have versus maybe what we had last year. I'll the tell H1 numbers. We have INR826 crores of group credit protection all input together, of which about INR450 crores is from the MFI space and the balance is from banks and NBFCs. Of this, about INR170 odd crores is from the debt finance. And what was this last year? So all the segments are growing at about 33%, 35 growth rate. So it's an equal amount of growth in all the segments. So whether it's MFI or banks and NBFC, they all are growing at a similar pace. Sure. Thanks for all this. Thank you very much. Next question is from the line of Uttarva Agarwal from Investec Capital. Please go ahead. Thanks for the opportunity, sir. Sir, as you mentioned at the start of the call, the under agency, the share of fixed is high, and under bank, the share share of variable is high. I just want to understand what is the incremental investments needed in both this channel, number one. And number two, if, say, for example, syndicate banks moves out, you know, due to merger or any other reason, what what will be the impact on the persistency and the cost because of any particular channel? Yeah. No. Very good question. Let me take the second one first, and then I will come back to the first one. So the the last year had a similar situation where the bank merged into Bank of Baroda. And at that time, the decision taken with Bank of Baroda had its own facility to just work with one partner. Now here, there are two banks merging with Canada. So Syndicate is one of them. So we are we are, of course, being cautious in terms of them. That's what the amount of investments we're making in this channel. And and we'll do a set of numbers which is gonna be not very significant. It's the names that the moment the merger goes through, people get so busy in, you know, their internal debts that came in the in the pockets of the banks that the the the momentum gets lost. We've been really cautious in making investments in Standard Bank. So we will, of course, await to hear more about what Canada's plan is going to be. Does that open a channel for us or not? Sometimes, therefore, we are getting a bit. And having more experience with data now, we are a little bit better placed. We know we did make continuous investments, and it's only the March we really got to know what the bank of the rollout decision was. So here, having gone through this, we are a little better placed in our decision. In terms of investments to be made in access, I think this question is coming earlier as well. So the answer doesn't change really because we are doing a lot of pilots still and some initiating, some yet to be initiating. And it's a very interesting space for us now to get in because it is give us that footprint. Now what is that going to be is a little early to say. But needless to say that we will we keep a hot side on the MBB. Having turned MBB positive last year, We are ensuring that all channels remain and get to NBV positive. And as far as that is concerned, we separately are gonna ensure that access is gonna remain NBV positive. Of course, there could be a hit on path. Sriniv already mentioned that for the future, but I I think the metric to look at for life insurance is not in the least, and that we will only grow in state. Sir, and how would the persistency impact if any channel like Syndicate or any of the channels moves out? How that Not much, really. Not much. So these are again, it's good that we're monitoring all this. It's almost like helping us, you know, that we have people who are monitoring draft externally. But having said that it was we're not gonna be significant implication, but then also happened last year. And we started the channel only in September, October. Similarly, same thing for Syndicate. So we are these are not very large, you know, that our size is pretty huge. Of course, given the size of their bank assurance channels, communication address is is in place and so becomes a little bit easier to contact the customer. And with Dana, we had assured them and similarly with syndicate. No matter what happens later, we have assured them that we will continue reaching out and servicing these customers. And banks have been quite supportive on this. Overall, given the fact that we've got experience of working on noncontactable databases, which is what has been our strength for a long time because like I said, we've been our bank. These are only better placed because of contactabilities of KYC with, you know, updated stuff is a lot easily available. Sure. Sir, just a couple of questions on the Jetta Insurance side. If you look at the loss ratios under the fire segment, that has been a little volatile. And there has been price increase recently in the fire and other, you know, corporate segments. How do you see the loss ratios move up for the full year? And second question is with respect to the growth. As you mentioned at the start, crop is the business. But on a full year basis, how do you see the full year growth and which all segments you to drive it because motor already, you know, the sales are weaker. So just want to understand, you know, these two pieces. See, I will just take the question initially, saying that we never predict loss ratios in the GI business. We are in the business of insuring other people's risk, so we never know, especially catastrophe and property and things like that. You never know. So obviously, there are fees and now there's a monsoon season. In Pune, where we are, now the monsoon has not stopped since July. It's still raining like that. We are in October. So that is something we'd like to see how it goes. Only thing is we have underwriting history. We have a track record of underwriting. We have a strong underwriting team. We have reinsurance arrangements in place. We have capital to support the business, and we are generating growth from a variety of businesses. Does that answer your question? Sure. And how how would the guidance for growth this year? Okay. Growth, but those Our bank insurance, we have a large number of relationships. They have all started producing results, and we have strong growth from that channel. Obviously, bank insurance also brings you more exposure to midsize catastrophe type of widespread losses. But in the long run, it is a profit and growth engine. So it is actually a combination of multiple levers. There is an external market. There is a certain amount of asset creation Thank you very much. Next question is from the line of Nishin Chatalmi from Kolak Securities Limited. Please go ahead. Mister, the line is on top of line. Please go ahead with your question. Hello? Yeah. Hi. Hi. This is mister. Just one clarification. Most of the questions are done from my side. You know, you've given the breakup of your investment book. This is on September 30. Any material change that we should be thinking about, you know, in terms of addition of any more stressed loans or anything that you would have sold off between then and now? As of now, there is nothing that we would think. They are not, I mean, they're not having a strict assets. They are called performing and nonperforming assets. On the nonperforming asset, DHFL, as you know, there is a resolution plan which is yet to be signed. If the resolution plan goes ahead, we think our provision is more than adequate. I'll refer you we not know because we are holding issue. I'll We are not adding to any more stress asset. As I have mentioned in my opening remarks that we have shorter list of approved fixed income investments that we will be going with. And we have increased our credit appraisal internally. We also have an internal stress forum where we discuss any stress in the market. It will be mainly for information for people to take the property. And anything that you would have sold from this? That would have happened in the normal course of business. I do not have the data as of now. No. No problem. Okay. Thank you very much. Thank you very much. Next question is from the line of Adarsh from Nomura. Please go ahead. Your line is in top mode. Please go ahead. Thank you. No response. You move on to the next participant. The next question is from the line of Avinash Singh from SBI Cap Securities. Please go ahead. Yeah. Hi. So considering I got disconnected, so my question on crop particularly. So what kind of a a price increase you have you have your portfolio has been from $5.20 18 to 05/2019? And secondly, with regards to this late season rain that you just mentioned, do you see a sort of upside risk to what you have built into your crops claims ratio reverse? So these are my two questions. First and foremost, if you look at overall the underwriting mentioned price increase will happen for that. And that's point I should say earlier on also. See, the way GI business operates is, you know, as the loss ratio moves, the price correction keeps on happening. And that's I think as you listen to call, quite a few have mentioned there's a correction in the fire price, the correction, the crop, the price. So which is a fact. So as the price issue happens, it happens for us also because we are part of the larger segment. It is not that long. Will be very differently from the market to that. Secondly, if you look at the crop cover mostly yield based. Yield based means that if the crop comes up, it is good. Now you also read somewhere that quite a few times where mentioned that the monsoon has been good for the crop at lot of places you should get. A delayed rain necessarily not mean to loss of yield. A a flood compared to a drought is better for crops. You know? That is how it is. Until the flood is so significant that somebody destroyed the crop, but that you have to see how a pattern moves on going forward. So we still have to wait for results because it's on the crop cutting that you decide on that basis. But to give you a flavor of it, I think the drought is worse, our flood is better in the crop business. Yeah. Yeah. So just follow-up, I mean, how geographically you were distributed in this current 2019? Again, if you look at the crop business, to think that we can do just a small business in crop will not play off because Definitely. Then it's the then it is gambling. If you just pick up one state and do a small thing of crop, then you can get gambling because then it's rather good of that. To do crop like any other business in in GI, you have to be widespread. So we also widespread. We have a presence in the North. We have presence Central and Mid in the South. So that is how we have spread our risks. No? I think, like, all business will do that, and that is why you have to have certain scale to do crop business. You just can't pick up a a one tier and, you and I think that you can do this. Okay. And how are you experiencing this as far as the government procedure comes in, particularly state? Have you received a procedure from all the state governments for the 3029 to 2019? I I think I answered this question earlier. I think the way the crop business is constructed is that until we receive the premium, we don't pay claims. That's how the current contract is from the government itself. So I think that is not the sorry? That's That's okay. Yeah. So when it comes, we we pay that claim. I think that is that is something how it it is constructed. Okay. Thanks. Thank you. Thank you very much. The next question is from the line of Dabal Gala from DSP Mutual Fund. Please go ahead. Yes. Sorry, just, Dabal, missed one question. I just want to understand the experience and the traction that you're seeing on the small ticket insurance products that you had innovated and come out. And so what's the traction and experience like? And the second was on fintech partnerships. Again, you know, just what what's the sort of experience out there? Thanks. Yeah. So, again, again, a very interesting question. I can broadly give you how it will move, you at the industry, the between this. So if you look at it, no, I think the fintechs or the small ticket sizes, the as you call it, are a new permission coming in, which has filled up the speed in the past one year or because the distribution of fintech or ecommerce would be like this. Think I answered previously also to look at traditional businesses being distributed on platforms like ecommerce or fintech would not happen because, you know, they'll be more complex in nature. You have simple, such as this product gets sold. So let us say if I look at something like a new invoice. So now we are doing lot of business with the IRCTC. There, we again have a very simple product getting sold. Or you could look at, let's say, the mobile insurance or the ecommerce platforms that we have a large segment of business, which also gets sold to the ecommerce, know, such a base to collect and simple cover and easy to pay claims. My personal feeling is that in times to come, this would become a good chunk of business. Right now, is at very early stage. But speaking of, people are seeing the value in these products. People are seeing the value in this partnership. Any any number that you have in mind? I mean, five years from now, what kind of size absolute size that this channel or the product or give you exact numbers right now, but this channel will pick up and will create a new segment for itself. See, the point of what I'm trying to say here is that to claim that the activation lines of business will get sold on these lines significantly, I don't think that is going to happen. This segment is going to create its own product for itself. It will create its own niche customer and service parameters. Your nature of business, see, the ecommerce business is something which is sold over our platform. No? It's something which is sold over the net. You won't have distribution networks or physical office or across. No? So, obviously, a distribution like this will create different products and different customer segment, and this will also build as well because customers are showing traction for these products. They are showing, you know, and they're getting claims and they're getting service well. In fact, in the NPS score of one of the ecommerce partners, the NPS score is over 90%. Customer really is super delighted with the services that we're getting offered in this kind of platform. So as these starts moving, as customers are seeing value, the traction should happen good is what I feel. Okay. Sounds good. Thanks. All the best. Thank you. Thank you. Thank you very much. Anyone who wishes to ask question, you may press star and one. The next question is from the line of Mayur Pakaria from Wealth Management India Private Limited. Please go ahead. So thank you for taking my question again. Just one understanding on the crop side. You said we have 130% loss. How does this work? Like, so we have written 1,700 crores worth of premium. So is it, like, to say that the maximum loss would be around $23.20 2,300? Is it like does it work like that? Oh, there is a quota share agreement. We retain about 20%. 80% is under the quota share, and this one thirty will apply on the net retention. One thirty will be applied on the 80% of the On 20%. Oh, yeah. Okay. Yeah. No. That's correct. Yeah. No. That's correct. Okay. Okay. Fine, sir. That is just what I wanted to understand. Thank you. Next question is from the line of Prateek Pordar from Nippon India Mutual Fund. Please go ahead. Sir, just one question on Axis Bank. Could you just talk about when do we move from pilot stage to commercial stage? What is the timeline for the movement, and what are your market share aspirations? See, as of now, we have just signed up our agency agreement. Typically, in any large relationship like this, there is a period of one twenty to one eighty days of discussion on business plans on the way forward. They already have existing partners. So we will be discussing all these issues as to what it is. There is a large element of deploying manpower as well as technology, which will also come out of this business plan. So at this stage, we would not obviously, it will should increase our market share because the absolute size of, Max's premium is very significant. And even if we get, as a third partner, a reasonable shareholder of that, it should improve our market share. That is all we can say at this stage. Any time line for the maturity, like, generally, it's such a big relationship for you and such a significant one. What's the time line generally? Should we look at three years, four years then? In the past in, for example, for the last nineteen years, that some of them, have very recently or till now, maybe not even had with the second partners. So the way you nurture and handle it is what we think we have enough firepower and management bandwidth to be able to continue to meet the expectations of our partners. Thank you so much, sir, and all the best. Thank very much. At least I will just stop now. As there are no further questions, I will now hand the conference over to miss Banibanchi for closing comments. Miss Bakshi, your line is on top of list. Right? On behalf of JM Financial, I would like to thank mister Srinivasan and the senior management team and all the participants joining us on the call today. Thank you. Thank you. Thank you very much. On behalf of JM Financial Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.