Q4 20/21

Apr 26, 2021

Ladies and gentlemen, good day and welcome to the HDFC Life Insurance Company Limited Q4 FY 'twenty one Earnings Conference Call. 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 Please note that this conference is being recorded. I now hand the conference over to MD and CEO, Ms. Viva Badalkar. Thank you and over to you, ma'am. Thank you, Raymond. Good evening, everyone. Thank you for joining us for the discussion on our results for the 12 months ended March 31, 2021. Our results, including the investor presentation, press release and regulatory disclosures are already available on our website as well as that of the stock exchanges. I have with me Suresh Badami, Executive Director Niraj Shah, CFO Jainyuan and Parthasarthy are appointed actually and Kunal Jain from Investor Relations. I will run through the key highlights of our FY 'twenty one results and would be happy to take questions both back. In terms of the current situation, the second wave does appear to be steeper than the first one. We are hopeful that its impact on public health and the economy would be curtailed by a speedy vaccination drive and discipline observed by our fellow citizens. Once the 2nd wave subsides and significant parts of our country are vaccinated, we believe that pent up demand would lift economic and commercial activity. We are working closely with our partners and reinsurers to ensure prompt service and claims resolution. Over the course of the year, we have settled over 2.9 lakh debt claims, resulting in payouts in excess of INR 3,000 crores. Despite logistical challenges through the year, we insured close to 40,000,000 lives in FY 'twenty one. Moving on to our business performance. FY 'twenty one was a year in which we were able to showcase progressively stronger business performance each quarter, clocking an individual business growth of 40% in quarter 4. This has been delivered on the back of our proven strategy of adhering to a balanced product mix and Diversified Distribution, whilst leveraging our digital capabilities. We continued on our trajectory of delivering consistent and predictable performance in FY 'twenty one, while outpacing industry growth. We have recorded a growth 17% in terms of individual WRP during FY 2021 on a base of 19% growth in FY 2020. The private industry grew by 8% on a base of 5% growth in FY 2020. We issued 9.8 lakhs new individual policies, registering a Y o Y growth of 10%. Our market share in terms of individual WRP increased by 130 basis points from 14.2% in FY 2020 to 15.5% in FY 2021. Our product mix remains balanced with non car savings at 31%, participating products at 34% and ULEPS at 24%. In FY 'twenty one, we have once again exhibited our ability to run a calibrated product mix strategy without any single product segment dominating the product portfolio. Our individual and group annuity business saw strong growth of 46% with annuities contributing about 5% to our individual APE. With a calibrated approach in addressing the long term opportunity for protection, Our individual protection business grew by 4% during the year. While the heightened customer demand in H1 normalized in H2, we saw Customer inquiries improved towards the end of the year. We witnessed customers valuing brand comfort, onboarding experience and claims payment track record as much as, if not more than price. Supply side considerations such as difficulty in conducting physical medicals, Lack of a centralized medical database, underwriting challenges in Tier 2, 3 locations become more important as we deepen our reach beyond the top few cities and the salaried customer base. However, we remain confident about the medium to long term prospects of protection in India on the back of under penetration, higher awareness, rising affluence and increasing access to consumer credit. We are seeing encouraging trends in the Credit Protect business on the back of improvement in disbursements registering growth of 26% in quarter 4. Our renewal premium grew by 19% on the back of robust collections in our recently launched long term savings product with our 13 month persistency improving from 88% to 90%. While we saw improvement in persistency across various time cohorts In FY 2021, we remain focused on this metric in light of the evolving situation. Next, on COVID claims. While we have had an overall positive operating variance during the year, we experienced a negative mortality variance, primarily on the back of higher than expected COVID claims. This was largely absorbed by the COVID reserve created by us at the start of FY 'twenty one. Based on our actual experience in FY 'twenty one And after factoring in aspects such as latest mortality trends across business and customer segments, as well as geographical spread of COVID 2.0, We have provided for a COVID reserve of INR165 crores for FY 2022. We will continue to review the adequacy of this reserved through the course of FY 2022. With this approach, we remain confident of our ability to absorb the impact of shocks from one off events and deliver steady returns with minimal variances through a realistic and disciplined assumption setting approach. At the start of this year and against the backdrop of a pandemic, we have aspired to maintain our new business margins between FY 2019 and FY 2020 levels. We are very pleased to report that we have been able to surpass that goal on the back of growth across channels, calibrated product mix and extracting cost efficiencies. Our full year new business margin was 26.1% against 25.9% last year with the value of new business at INR 2,185 crores implying a growth of 14%. Our operating return on embedded value stands at 18.5% as against 18.1% in the previous year. Our profit after tax post the additional COVID reserve of INR 1.65 crores grew by 5% to INR 13.60 crores. Our solvency position remains healthy at 2 0 1%. We are pleased to announce that the Board has approved a dividend of INR2.02 per share in today's meeting. The payout of the dividend is subject to shareholder approval. Next, on channel and product performance. Almost all our channels witnessed each quarter of FY 'twenty one getting better with our bank insurance channel leading the pack with a growth of 29%. We saw a resurgence of growth in our proprietary channels in the latter half of the year with agency channel growing 49% and 6% in quarter 4 and full year, respectively. Towards the end of quarter 4, we started clocking business with our new bank insurance partners and are confident of gaining traction in the year ahead. We remain focused on tapping a new generation of customers through our online channel, whilst expanding our geographical presence across the country, especially in nonmetro. We have seen contribution of business from Tier 2 and 3 locations increased to over 50% of our online business. Our focus on driving a balanced product mix backed by our suite of innovative products is enabling us to effectively meet customer demand. There has been a concerted effort to enhance customer experience, refine pricing appropriately while continuing to responsibly underwrite new business. Coming to our pension subsidiary, HDFC Pension continues to be the largest pension fund manager in Retail and Corporate NPS segments with an asset under management of INR 16,384 crores, thereby clocking a growth of 98% over the previous year. With a base of over 7 lakh customers, HDFC Pension market share stands at 34.4% as of March 21. We see pension as the next big opportunity and envisage the business to grow further. Next on digital. Digital is the backbone of our growth story and we continue to invest in technology with a view to simplifying the buying journey, enhancing service experience for customers, whilst creating new product proposition. We have included a fairly detailed view on our digital approach in our investor deck for your reference. To conclude, given the resurgence of COVID and uncertainty looming around economic and market momentum, we will continue to maintain a cautiously optimistic stance for FY 2022 and evaluate our approach on a dynamic basis. We will strive to achieve sustainable new business growth and maintain an upward trajectory on new business margins, whilst adhering to a robust risk management approach. We remain sensitive about the health impact and loss of lives due to the current pandemic and continue to prioritize employee, customer and partner safety. The current pandemic has led to higher awareness around the need for protection and the inadequacy of current insurance coverage. Life insurance has surely emerged as a prominent team to protect one's family while securing long term financial goals. To this effect, we take cognizant of our responsibility as an insurer and we extend our sincere gratitude to all our employees, partners, shareholders and all of you who have stood with us in these tough times and helped us achieve our objective of being one of the most trusted insurers of choice. We also thank our regulator IRDAI for issuing several enabling notifications without which our business might have struggled. The detailed disclosure on our results is available in our investor presentation. We wish you and your family a safe and healthy time ahead. We're happy to take questions now. Thank you very much. We will now begin the question and answer session. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Suresh Ganpati from Macquarie. Please go ahead. Yes. Hi. Vipha, three questions I have got. The third one is an accounting question on COVID reserve. First is on the is it possible from a disclosure perspective for You guys to share the split of VNB into protection and savings because look your peers disclose it, Vibak. So For better transparency, it would be good that you guys also disclosed it. Hi, Suresh. I thought you had 3 questions. Should you want me to answer this one and then you go back? Yes, yes. I think we can go one at a time. That would be great. Yes. So Suresh, a lot of these expenses are allocated expenses as well as there are nuances in terms of A particular channel, so it's not only the segment, but there is a very overwhelming overlay of which channel Is selling what? So a particular channel that sells unit linked could have a very different outcome to some other channel selling unit linked. So it does get Fairly complicated, but certainly we'll take that into account. Okay. Thanks. The second thing is on the reinsurance part. I mean, are the reinsurance guys flexing muscles? Do you think there is another round of hike which can happen This year with respect to reinsurance rates. So as of now, there is no exclusive conversation Or no communication from them rather that they intend to do that. But if I were to look at rates in India, they are on the lower And even before the recent hikes that happened towards the start of FY 'twenty one, we were on the lower end Fair to and given that we are an emerging economy. So they will, I think, look at risk profile, emerging risks, New long COVID risks of people who have recovered from COVID and is mortality signature different and so on. So, it isn't entirely inconceivable that they might do that, but nothing concrete as of now. And finally on this COVID reserving, Avitva, you guys had some 3,000,000,000 reserving before this 1.65, right? We had 40 well, we had an incremental COVID reserve of 41. Do you want to take that, Neeraj? Yes. So, Sudesh, if you could just simplify this into, let's say, what happened in the PD and L and what will happen and what will appear on the balance sheet? Yes. So, we can go Yes. With that and then we can if you have any further questions or applications, we'll do that. So FY 'twenty, the hit to the P and L was INR 41 crores. Okay. FY 'twenty one, the dip to the P and L that we've taken is 1.20 plus crores. And the balance sheet number equivalent of that For FY 'twenty, it would be 41,000,000 and for FY 'twenty one, €1.65,000,000 After adjusting for, we'll have to take into account taxes and all But very simply put, if you want to just look at what the statements capture at these points in time, this is what you'll be. Okay. So the balance sheet number is INR165 crores and this is what is being reflected in the EV walk, right? That's right. Yes. Okay. There has been some kind of an underestimation, let me put it this way, because at that time, you guys thought INR 40 crores was enough. I, of course, understand that this is an extremely challenging Situation for everyone, are you really confident that this INR165 crores balance sheet number is fine or There can be some higher number and you're reasonably conservative with respect to this estimate. So, Suresh, Again, we can never be 100% sure of anything, especially in times like these. But what we can do is we can draw on what we've seen in the past and what level of prudence we want to keep here. So now COVID is as such, it's not necessarily only to do with COVID deaths. It's basically a phenomenon. That phenomenon will result in mortality experience, Right. And that's like Vubha mentioned, it will be pan out now and it will pan out over a period of time as well. So if you were to just put things in perspective, we settled around INR 3,000 crores of claims, As we mentioned earlier in her speech, through the year, right? And if you were to look at what was at an overall level, there were some on an overall basis, The claims that we would have settled in excess of what we had anticipated is a very, very small number of about INR 50 crores. And the reason for that is that While COVID claims would have been marginally higher than what we had anticipated, but at an overall level, the claims were lower. So What we have reflected in our operating variances, what you will see here, that overall adverse claim experiences to the extent that we've mentioned in our operating variances. What we've done to comfort ourselves and to all of sitting outside the business is that we have boost up this COVID reserve. And we've also, in anticipation of any sort of adverse mortality that could happen, we've also taken a stringent operating assumptions as well. So that's also reflected in the EV work. After that, of course, we will review it every quarter because we can't be 100% sure of anything, right? Thanks, Vipak. So Sudesh, can I just come in? Yes, sure. Actually, the expected claims, if you like, The year was INR 2,350 crores or so. Against that the total claims, I'm not splitting into COVID and non COVID because there is a little bit of a one is up and one is down. But if you look at the overall Payout of the claims was INR2,412 crores. Gains are expected of INR2,350 crores. There was a gap of 50 crores, 50 odd crores, which was paid for by the COVID-nineteen of 47 crores. So, by and large, our estimate was not too far out of line with what actually panned out in practice. So, these are not very off, maybe by a single if you single digit close, maybe 4, 5 close is what the difference was between what we provided for and what actually happened. But in terms of future, like Nir has outlined, we have various provisions that are set up for under COVID-nineteen of INR 1.65 crores, plus you strengthen the mortality assumption also to the tune of INR 1.30 crores. Thank you. Thank you so much. Yes. Thanks, Kish. Thank you. The next question is from the line of Udit Kariwala from Ambit Capital. Please go ahead. Yes. Thank you so much. I had two questions. First is, on Slide number 37, if you could explain the point around fixed Cost absorption, so that was my first question. And the second question is that the solvency today looks fine at 201%, But then we saw last year that when the markets go down very fast, the solvency could decline. Considering the kind of growth HDFC Life has demonstrated, and I think this is also reflecting the bond which you had issued earlier. What is your expectation around a capital raise? So these are my two questions. Yes, Odesh. Yes. So Odesh, what you See on the VNB walk on Slide 37 is basically the impact of each of these elements both on the VNB as well as on the margin. The negative number that you see here of 47 Crores and negative 0.6 percent is primarily on account of lower volumes on CP. We've had 16%, 17% growth on the individual business, but we've had a 20% degrowth on CP. So there is some sort of investment that continues in the business, which So we're not fully being able to recubulate it in this year. As we see the trends through the year, we bought about 25%, twenty Growth in quarter 4 in CP, so we are fairly hopeful that as the year pans out, we will be able changed this phenomenon, but this is what happened in this period. So Neeraj, just one point, I mean, maybe just to Understand it a little better. A CP product predominantly would be I mean, it's sold by the banks or the NBFCs, right? So it's like a variable cost, right? So what I mean, if you could give more color around this, that will be helpful. Right. This is not like an agency business where you need to maintain the agency force where there will be a high amount of fixed cost, right? So it will not be as high as agency, you're right, But it's not that there is no fixed cost at all because we have, as you are aware, in excess of 300 odd partnerships across banks, MFI, Small Finance Banks as well as NBFCs. So across each of these, we need to obviously have a setup which will ensure that there is smooth processes that happen at the end of the partner. For that, there are investments that need to be made, investments in people, investments All of those things get defrayed over a period of time because it's not something that can get completely recovered in a particular point of time. So it's an ongoing exercise. And because we had a volume impact this year, you're seeing this number in this period. Through this period prior to this, we've had growth in this segment. So you would not have seen this prior to this. Okay. And on the solvency? So on solvency, okay, now there are a couple of elements there. You're aware that solvency as of now is 2 0 1%. We had a market impact in March of last year, which resulted in our solvency dipping by about 12% what percent. We saw that last time. Keeping that in mind, we did raise some debt earlier in the year, as you're aware, which helped us create that further cushion of 0 0%. So Vipaf, Vipaf also mentioned we've declared the Board has approved dividend which will get approved by the shareholders recommended dividend which will get approved by the shareholders in the AGL. We've taken account of that as well while looking at the dividend rate. So the solvency would still be upwards of 190%. And any sort of equity impact is something that we can look at in that context. So it makes in all the elements that We've seen in the past and the sub debt raise was actually on account of that. And what sorry, just one last thing. What is the quantum of incremental sub debt that you can issue? I'm not talking from the approval point of view, but from the regulatory point of view. It's actually the same thing really. Now we've like we mentioned last time, we maxed out based on the formula that's available in terms of for net worth and capital. So we've raised 25% of that. Now only when the equity capital starts While the network starts growing in a meaningful manner, can we get to a size which makes sense to raise, which will probably happen only a few years down the line. So Okay. Thanks. Thank you. Before we take the next question, we'd like to inform participants that in order that the management is able to address questions from all participants at the conference, please limit your questions to 2 per participant. Should you have a follow-up question, we request you to rejoin the queue. We take the next question from the line of Araf Sanghay from VTB Capital. Please go ahead. Hi, ma'am. Hope all well at your end and thanks for taking my question. So I have two questions. My first question is on Slide 27, there is a slight increase in sensitivity of VNB margin in nonpar products. So Is that is there any kind of pressure in selling nonpar business or is there any kind of margin impact in this business given a lot of players have gotten aggressive in this area? That's the first question. And second question is a broader question on protection. So we have been hearing that India is very underpenetrated from a protection point of view and this lever is Kind of an inflection point from a protection point of view again. So first, have we did see robust growth in protection? And second, have we kind of weaved off a lot? Obviously, there were some pent up demand. But the broader question remains that even after pandemic year, if we see across peers on the individual protection basis, ignoring the CP, There is not much of a change in the sort of like component of protection from 1 year or 2 years. So Do you think like the kind of fast protection penetration we anticipated in India, That might not happen because after 6 months only, the kind of slowdown we witnessed in individual protection, that was a lot. So Any clarification or any guidance on the protection front? How should we think about it going well? Thank you. So I'll answer your second question first and then leave it to Neeraj. I'll hand it over to him. So on the protection, even when we grew by 50% in Q1, You will recall us saying that this is unusual. For us, anything growing by suddenly 50% and very, very sharp rates, apart from Something like annuity, which we understand the overall opportunity and why it is growing. And so, we do believe that the opportunity is significant with all the data points put together. However, it will be calibrated. And reason here is it's a little bit more complex than something like annuity because there are also supply side constraints. There are also constraints in terms of Very heavy underwriting, both medical and financial. And as we move to different age groups, different geographical customer base and so on. The underwriting requirements are level of a good sense as to What does it mean when a certain document is given and so on is evolving and largely nascent. That doesn't take away the overall opportunity, but it does slow down growth because as insurers, we also need to understand the risk that we take on our balance And also what the risk that reinsurers take on their balance sheet. And so it will be a more calibrated growth, but I do believe that in the medium term, it will be faster than overall company growth. Niraj, do you want to address the first part? Yes. On your first question, if you look at the VNB sensitivity, which has increased marginally. That's nothing much to do really with the pricing. It's we have we continue to be fairly calibrated in the way we price our products. It's just to do with the excess assets that are sitting in the book at the beginning of the period where the first premium the first few premiums that come in are not really matched by the liabilities and asset. So to do a full cash flow match, there is excess sensitivity that is happening at the beginning of the period because of the excess assets. That is what is As such, from any sort of interest rate movements which are beyond just the parallel shift, Whether it is convexity or slope change, any of those, for that, cash flow matching is something that continues to be done. And that's the reason what's causing this excess sensitivity. And to give you comfort, typically in any guaranteed nonpar product, you would worry about what happens when interest rates are going down. And if you look at the table here, you'll find that the value only enhances when interest rates go down. That just basically tells you that the book is And there is no risk really coming from a downward rate downward movement in interstate. And also the excess sensitivity is something that we can Easily take care of by putting the excess cash just in overnight paper rather than investing in bonds. But the yield, we do not believe there is any reason to grow up that yield that we can get by Investing in assets in bonds rather than putting it in treasury. So that's basically the reason for this. Nothing much to do with pricing And just a follow-up question on the protection. So, last quarter, we had introduced a kind of a ROP product in the protection. So do you think that insurance becomes a little expensive in India because obviously we have less data compared to a lot of other nations. So this Share of ROV products will like naturally increase in India across time and like we might see going ahead this becoming a more dominant portion of the protection So we believe in really selling policies that customers want, What is pull of the market and whether we are able to satisfy that pull? I don't think we want to take a purist approach to say that, I will only sell What I think you should be buying, because any kind of insurance is better than no insurance. So if it is ROP, so be it, but at least that individual will get a fairly significant amount, anything up to 200x cover. So that's our philosophy. And this year, it's still relatively lesser, which is sub about 1 fourth of our business. But Could we see this increasing? Perhaps we could. It's again that classic argument about one should unbundle an Insurance savings product and buy terms separately and put your savings into fixed deposits or mutual funds and so on. And that's where our philosophy comes in to say that if someone is looking for a bundled solution or someone will not buy anything unless you give him money back, Then at least he has this. So yes, I think hopefully I've answered your question. Great, ma'am. Thank you so much, Anurag, I guess. Thank you. Thank you. The next question is from the line of Sanket Gouda from Spark Capital. Please go ahead. Yes. Thanks for the opportunity. So my question is on the margins. So in 9 months, FY 'twenty one, when we reported margin of 25.6 percent, when we look at the VNB walk, The product mix change contributed 10 bps to the margin expansion. But now if I look at FY 'twenty one, the But if I look at the overall product mix, it has Significantly not changed compared to 9 months FY 'twenty one and FY 'twenty one, maybe except for the fact that group protection has gone up and individual protection has come down. So just wanted to understand what led to what have changed almost like a 50 basis point sequential improvement in the BNB margin. Is it safe to assume right now that individual protection because of reinsurance rate hardening, group protection business has Become much more profitable than individual protection and therefore, therefore, the margins are more positive. Srini, you want to take that? Yes, sure. So, Sanke, you are right. There is Shift towards group protection in the last quarter because primarily on account of disbursements, The NBFCs and other financial issues are coming back. So that led to growth in the group protection in the last quarter. In fact, it grew by 26% on the standalone Q4 quarter. So that is certainly sort of a profitable business that has added to the I know, increased in the margin in the last quarter. So maybe if I look at some 4th quarter perspective, then the group protection margins Maybe seems to be better than the individual protection because the boron protection remains broadly same, still margins expanded. So that's an easy it may be a Normal conclusion to make? Actually, the 4th quarter individual protection margin So it's slightly higher because as you would know, the reinsurance transition took place in the Q1 of the fiscal. So the Q1 business is a little bit a blend of the old regime and the new regime. So it was a little bit transitionary phase. So therefore, the 9 months And when you compare with the 9 months figure of individual protection standalone versus standalone for Q4, I think individual Protection also has a slightly higher margin than what we saw in the 9 month individual protection. Okay, got it. So I have one more question, maybe 2 rather. So one is on the EV work. So you As you've seen this, you said that it's INR 1.80 crores. So out of which INR 124 incremental what you provided towards COVID, How explain that partially the part, but what residual 60 or 55, 56 hot coal is due to what reason? That's the one question I had. And second question is with respect to COVID death claim. You said that around I was looking at the data in FY 2020. We see we believe we Looking at the data in FY 2020, we paid almost 2.8 lags per debt claim last year, which was 2,300 crores of payout. In the current year, we made 2.9 lags per claim and then the payout is around 3,000 crores and the difference is around 700 So given probably we were more group heavy last year compared to what we are now, the moderate So just wanted to understand that this INR 700 crores Growth in the despite number of claims remaining broadly constant, the growth in tremendous growth of death claims is largely due to COVID. And probably you can see in the 2nd surge when the numbers reported would be higher, we can see a significant negative number coming in About INR 165 crores, asking repeating myself, INR 165 crores for incremental INR124 crores could be good enough to absorb it. So, I think I didn't quite catch your first question on The EV walk, are you talking about that operating variance there or are you talking about the assumptions change? Assumption change, which is 1.80 crores, minus 1.80 crores in the EV walk. So out of which assumption change of incremental INR 124 crores is explained by additional COVID provisions. So just wanted to understand minus INR 56 crores is due to what? That's the first question I had. In the Page 10 or Slide 10, if I see INR 180 crores, INR 1,800,000,000 So the negative operating assumption change and implemented the last year we provided INR 41 crores, now we provided INR 1.65 crores. So the balance INR 56 crores sorry, INR124 crores is Because of COVID, what is the rest amount of around INR 56 crores coming from? This is the positive variance due to expenses and persistency. No, no, I'm not speaking about operating variance, sir. I was speaking about change in operating assumptions, which is red color minus INR180 crores. So, Shri, that is more in terms of You have a COVID result sitting there. We also have strengthening of assumptions, mortality assumptions as well. So there is a positive operating Assumption change for expenses and persistency based on the favorable experience. On the mortality, in addition to the COVID results, Ankit, is also strengthening of assumptions on mortality at an overall level as well. Okay. So basically you can simply say that Specific to COVID, you provided incrementally INR124 crores, but additionally, you have even strengthened your mortality experience, so it is INR 180 crores. That's right. We have yes, that's right. So last year, if you recollect, we had strengthened the persistency assumptions. And in expectation of mortality adverse becoming adverse, we have made some Assumption changed on centering on the mortality as well. But overall, the assumption change was positive because of the expense variance. This time around, we have a positive in persistency and expense, but on mortality, in addition to the COVID reserve, there is additional sensing of mortality assumption as Which we had done last year as well. Okay. Just a quick one small thing, what are the experience of INR 50 crores in that Point 8 operating variance number. So should we believe that protection margins, which we were anticipating in historical years, How got little bit impacted because your experience is coming little different from what you have initial victim by calculating EV or BNB of previous years? To the extent of the negative operating variance that we have just disclosed, yes. To the extent of that, yes. That's the reason why we have actually strengthened our assumptions further so that we factor that into a prospective NBP as we write new business. So, sir, 26.1 considers that additional mortality may get experienced here, right? Of course. Okay. And finally, if you can clarify on the debt claims because I was just looking into public disclosure, I realized that we paid almost 2.8 lakhs claims last year And he paid debt claims of INR 23100 crores. Today, this year, we have paid INR 2.9 lakh claims and we have paid around INR 3,000 crores. And actually product mix have moved in favor of individual rather than group from incremental business point of view. So just wanted to understand This additional 700 crores seems to be a little higher. Is it are we experiencing relatively higher debt? Our mortality experience could be higher than what you are actually anticipating. So, Sanket, the INR 700 crores you are comparing with what last year numbers, is it or? Last year, public disclosure numbers, if I see, where you gave a statement of debt claims paid, so I can see that in FY 'twenty, you paid a claim of around INR 23100 crores For 2.1 lakh crane. Now that number is INR 3,000 crores for INR 2.9 lakh crane. So average CFS has already gone up And also the number, absolute number seems to be very high. Yes. So the book has also grown, right? So it's not like the same book. The book, since we Keep writing new business every year. The overall book size also keeps growing. As a result, the number of claims that you expect And that cohort also keeps growing. But if you really look at the expected claim, what we need to look at is how much did we provide for setting claims Versus how much actually turned out in practice. So if you look at the expected claims in rupees gross, all claims put together, it's COVID or non COVID. Net of reinsurance, our number says 2,350 odd crores is what the total expected, including I mean all claims, including COVID as well. Now, compared to that 2,350 crores of expected claims, the actual claims including COVID is about 2,412 crores. There was a gap of about INR 50 crores. And within this INR 50 crores, I mean, this INR 50 crores is also funded by the 41 course of COVID results that we set up at the start of the year. So there was hardly like a single digit Figure of gross extra claims is what actually occurred in the last fiscal. Okay. Yes, yes. The answer is largely my answer. Thanks. Okay. Thanks. Thank you. The next question is from the line of Prakash Kapadia from Unibail Portfolio Managers. Please go ahead. Yes, thanks for the opportunity. I have two questions. If I look at UCLIF, why is it that UCLIF, Despite capital markets doing well, it's actually not growing on a growth rate and by the fact the absolute value of utilities has been And being down, it's like if I compare that versus 3 years ago, it's been lower. That's the first question. And second, as we step into FY 'twenty two, obviously, the second wave has Taken most of us as a year off. So what are we seeing? Since last year, we had a very low base. So what kind of momentum are we Sudesh, do you want to go on this? Yes. Yes. So the first one, I'll Take on the UL, Pankaj was like we have always mentioned that we've always believed in a very balanced product mix strategy. I think the idea is not to skew our overall product mix either to a nonpar or to a par or to a human. Term and entity will remain Focus as long and term we write good quality business. So it's actually been a fairly conscious strategy for us to be able to drive the product mix the way we wanted. We want like we had mentioned earlier, the idea was to ensure that every channel of ours is profitable. We fully understand what you're saying that the markets are large. There is a huge opportunity on your long term on path. But what we are trying to make sure is to say that look, first, we look at what the customer is One thing, if let's say, we also look at the quality of the business and what is it that we are looking at in UELS because in some of the products of UELS, it is important that we drive high Like in all other products. So we have been selective in terms of what kind of product mix should we be driving through each of the channels Because it wants at a channel level a certain profitability, ensuring the customer meets the requirement and we sell our rights, so that overall over a period of time, its persistency is also very good. So I don't think it is the fact that we are not driving U. S. And like I said, as compared to some of the other products, U. S. Profitability is Slightly lower. So to ensure that we maintain a good mix between margins, top line growth, quality of business, all of that is what we have been Kind of for trading and that gets reviewed across our product committees, across our channel efficiencies, across customer level CSAT, all of that. So I don't see really too much of a concern to say UL is coming on. Yes, if you want, we can grow UL higher. But then again, we want to make sure that our overall MDMs remain The way we wanted, we want the channels to remain profitable and as well as persistency. So that's broadly our strategy on the I was trying to understand, because there is some We call base effects and it's been few years. So is there some channel resistance or bank channel or some other channel? No, not really. Actually, it's what we have been looking at from a customer perspective. It's also looking at where we will open up. Frankly, it's also a question of how we train our people, which product we want them to go into the market with. Again, it depends like our strategy from partner to Prantha. There are certain Bank of partners who are more comfortable doing a product strategy which is more skewed towards traditional product. There are some customers who are okay with the UL Because they believe they don't want to run the customer issues in tomorrow if the market becomes a little volatile. So we work very closely with HDFC Bank, all the other banker partners To ensure that, look, we fix our strategy on UL accordingly. In agency also, I think there's a very select set of agents we work through on UL where we say that, okay, fine, we are willing to work with you because we have seen good quality business and where the customer also understands the product better because we just don't want to sell well to Customers who can't take the risk down the line. So that's broadly the U. S. Strategy. So it's not that group there is a resistance. We can grow. Frankly, At our end, annuity is the largest market like how we had mentioned, simple product, no missell, everybody understands we can grow it. Term also, it's been a very calibrated approach. Thank you. You don't want to go into term in a manner where tomorrow either you're getting to higher mortality or you're getting into segments that are taking higher risk. So that is something that we have been watching. So I don't see a concern. I think it's up to us to decide how the overall mix should remain. And frankly, right now, we are operating at a very comfort level of 25 to 30 on UL, 30 to 35 on par, 30 to 35 on non par and term. Term, yes, if it can increase without us taking higher risk, it would be Sorry, could not hear you very well. Yes. As we are stepping in FY 'twenty to last, You are at a very low base. So what are the ground reality, especially in non metro cities? And what challenges are we facing because of the pandemic? So, Yes, I'll go ahead. So, see, frankly, it's not that it's a lower base. I think we've done fairly well even in terms of a year on year growth. I know the industry has had a low base. But if you look at our 2 year CAGR, we have done fairly well on and the market share has increased. So last year saw a good base. And even by the time we have entered On the individual EPI, we've grown fairly well, right. So I do think that as compared to the rest of the industry, we don't really we have more of a base effect where we are higher on the base. Having said that, we believe our opportunity is higher and will continue to grow. On the specific questions on how do we go back and expand into some of the other markets, Look, we are watching the situation very closely both across metro as well as some of these smaller locations. We are looking at what is happening in terms of trends in certain states and certain geographies. And we will take a call in terms of how aggressive or how conservative we want to be in each of these markets. Our approach to actually reaching out to these smaller geographies has been multiple. 1, primarily we are looking at banker partners who are Reaching out to different geographies. So while some large partners like HDFC Bank are anyway doing a rural expansion in our Tier 3, Tier 4 study, we are happy to ride with them. Similarly, what we have done is we have gone back and partnered with a lot of other partners like Ujjivan, Equitas, Utkarsh, Bandhan, We are respectively very strong in some of the Tier 2, Tier 3 markets. Our agency and direct are limited to certain larger cities, but there again we are looking at how do we go into these markets. So the way we look at it, look, these markets are also growing decently fast. There's a lot of under penetration which is there in terms of insurance, both on protection as well as savings. So as long as we have a good partner to work with, we are able to write the right quality of business, we will be happy to grow even in these markets. Understood. Thank you. Thank you. The next question is from the line of Deepika Munra from JPMorgan. Please go ahead. Ms. Deepika Munra from JPMorgan. You may go ahead with the question. Hi. Yes. Thank you. Good evening, everyone. So I just had a couple of questions. First, See, on the VND walk, in the 4th quarter, expense transition also seems to be negative Despite the bounce back in CP as well as in overall APE, So anything related to commissions or anything on the distribution side where expenses are essentially going up? My second question is on the savings business. I mean, last couple of years have been great for the company. So just I understand if this lockdown or partial lockdown in states is impacting the momentum to a certain extent. And between the traditional businesses between Par and Non Par, do you see any particular tailwinds again In either of those two lines, between any of those two lines going into next year? Thanks. So Deepika, on your first question, I'm not sure if I got it right. But for the full year, yes, there is an expense impact negative, which we did mention a little while back That's because of lower CP volumes for the year. So and also I think Srini covered earlier as well in terms of Q4 versus Q4, largely it was on account of product mix, while it was covered in terms of overall protection remains the same, retail being lower, group So that was more in terms of Q4 to Q4. But on a year on year basis, the expense negative impact was only on account of lower CV volumes. I don't know if I missed any part of the question. Yes. So just to clarify specifically for 4th quarter, For instance, if I take it by difference of FY 'twenty one versus 9 months, for Q4 also The expense impact is a tad negative, and it was it had basically turned around in 3Q because of the pickup in the business. So I just want to understand that why is expense again negative? Yes. So last year, we Last year, it was definitely the partial lockdown situation that we had, and that was basically the result of that. This year, like we said, it is on account of CP for the full year. For Q4 this year, there is no negative expense impact on NBM, if that's what you're saying. Okay. All right. Okay. Q4 to Q4, the margins have expanded from 24.3% to 27%, right? Yes. So Deepika, we're not sure where you're picking up the expense negative in quarter 4. That's right. The rupee value obviously will be higher because of this growth. But actually there has been a better expense defraying in quarter 4 and thereby resulting in much higher margins of 27% for the standalone quarter Okay. So maybe just some rounding off from my end. Okay. Yes. On the second question in terms of the partial lockdown and what kind of tailwinds you're seeing in savings, our point is that, look, It's too early in the year to look at the April, but we get a sense from the ground in terms of what's happening. Frankly, in some states and some markets like you can read across, There is a fair amount of concern in terms of the number of cases which are there. So again, from our side, frankly, the advisory is very clearly in terms of Safety in terms of partner safety and our financial consultant safety. So we have again gone back to say that look, we're totally on remote. Our strength is on technology. Our In terms of being able to manage the entire sales process end to end, you saw that in Q1, Q2, Q3 of last year, where we were able to grow much Faster than the industry, while we also degrew in Q1, but our ability to come back in terms of growth was fairly fast. We do sense a little bit of The intention on the front line sales as I see given what is happening in the market and rightly so. So you will really get the full impact on the We are watching it quarter on quarter. Frankly, we would like to do the same as what we did last year. While there is clearly an There are a few of our branches we've had to shut down because of being in geographies where There are high number of cases or some of our ops guys have got affected, and we monitor that on a daily basis through our task force. And those are operational calls where we can clearly see some business impacted. There is a little bit of a slowdown in the last few days and we will we are okay with that because look, it's a long term business anyway. In terms of tailwinds on certain products, yes, look, frankly, all said and done, it also depends on the customer 1 on the term as well on the series. Last year, when we went into this, people were really not sure whether they had their jobs intact or their businesses will get affected. There is still a little bit of a worry, but probably not the same level of concern now that the vaccines are there in place. So you will find that people will migrate to insurance Because the awareness is there and the ability to pay is slightly better. And I think now that the second wave is It's fairly serious. A lot of people who were on the borderline of taking a decision will come back. So, we'll see higher awareness and higher Inclination to buy these products. So I don't think the slowdown will be like the way we saw in Q1 and Q2 of previous years. But operationally, yes, You'll see a little bit of a slowdown because people will not go for medicals, our sales force will probably have to work only on remote. And that is not as fully effective as what could have been earlier. But by I would say H1 would probably be marginally better, very difficult to predict. We'll have to wait and watch for the next 1 or 2 months. Savings products will, I think, clearly do well Because, look, people do realize that they need to invest in insurance for a long period of time. There are some fantastic products from our side on the nonpar andpar side, which are competing with many other asset classes given what kind of rates are in the market. So I would say savings products will continue to do well given the kind of The customer has to put the money somewhere and they will migrate it into insurance as my people. Okay. Thank you so much. Thank you. The next question is from the line of Hitesh Gulati from Haitong. Please go ahead. Good evening, everyone. Thank you for giving me the opportunity. Also congratulations on a very good set of numbers. So my question is what would be the quantum of COVID death claims Piyush, go ahead. You want to take your hand? Yes. So, Hitesh, the COVID net claims paid were about INR 145 On a net basis, gross basis was INR 231 crores and number of claims were We'd like to inform participants to please limit your questions to 1 per participant. We take the next question from the line of Madhu Garlotta from Elara Capital. Please go ahead. Hi, good evening, everyone. Thank you for taking my questions Congratulations on a great set of numbers. Most of my questions have been answered. I just wanted to get a comment on what sort of Persistencies are you seeing in the guaranteed nonpar segment? Are they Above what we have budgeted or below and some sense on what those numbers are? Yes, we are seeing a very good uptick. It is 93%. We have put out the numbers here. Of course, the numbers here are the entire traditional book, but yes, non par book also has positively surprised us. We were expecting robust, but it's trending extremely well. So, Yes. And as a consequence, we are also quite happy that down the line in terms of All the future cohorts also should continue to stay robust. So very much in line with our assumption. Thank you. The next question is from the line of Nishant Chawade from Kotak Securities. Please go ahead. Yes, hi. Am I audible? Yes, Nishu, go ahead. Hi. Just trying to understand, If I look at the effective unwinding rate, that seems to have gone up in FY 'twenty one versus FY 'twenty. So just trying to understand, is there a specific reason for the same? Vinny, you want to answer that? Yes. So last quarter I'm sorry, last Here, in FY 2020, since the markets were falling, we were a little bit So cautious since the pandemic started or at least the lockdown started mid March, late March. And we were a little bit worried about the economic impact. And as a result, we To be extra conservative, we reduced our expected return assumptions or the unwind assumptions. But since at the start of this year, we saw markets rallying sharply. We had re calibrated the expected return assumptions to 8.4%. That is our mine rate, which we have kept constant all through the year. So you'll see that this 8.4% this year has not been one off, but it's been there for the last 4 quarters. Thank you. The next question is from the line of Mayank Mukherjeevada from Franklin Templeton. Please go ahead. Hi, Vedat. Thanks for taking my question. I have three questions, all based on your distribution channels. First one is on the bank, very strong growth this year. How much of that growth is from HDFC Bank? And in a pandemic year like this, what's really driving such a strong growth on the banker channel? 2nd, the direct business, which is doing So well for the last 4, 5 years, seems shared weaker compared to other channels this year. So any color on why that has happened on the direct channel this particular year? And last on the agency channel, what is your sense of The incremental growth that you can deliver on the agency channel versus the incremental investment you have to put into the pyramid, as in For the same fixed cost on agency right now, how much more growth can we do so over there? So I have these three questions. So I'll quickly answer on the bank first. Yes, This year has been good on the bank assurance across all our partners. We have seen a fairly decent growth Y on Y, especially from HDFC Bank. I think they have Primarily done very well. 2 key reasons. 1, I do believe that they have done very good work in terms of their distribution Expansion in terms of the specified persons who are there. There is a full fledged understanding, training, and they picked up at the right time. Since it was an essential services, the banks were open even in the initial 6 months. Asset businesses were a little low, I guess. And in any case, all these specified persons were at the branches. So all the customers who reached out were converted both on savings as well as for the term product. So we didn't really see a slowdown both on the savings as well as on the term. HDFC Bank has done very well for us. So have some of the other banks who are expanding. People like IDFC has also grown Y on Y. So even though we had multi share multi tie coming in at some of our partners this year, our overall Y on Y growth from all Bangalore partners Has been fairly good. I would say, 1, because of the fact that, look, they continued through the entire pandemic period in some form because of essential services So a lot of relationship with the customer level were leveraged in terms of being able to sell insurance because the customers were more aware. We had a lot of effort by our team in terms of mapping each of the branches and there has been a lot of effort that we have done in terms of strengthening our whole bank insurance proposition with our partners on the product as well as on the support in terms of what we can do on conversion. So, I think all of it came together and frankly this year bank insurance performed. On the direct business, your point is valid. We did see a muted performance. We kind of expected this also. Direct business is primarily our sales force who's on the And there are 2, 3 verticals through which we typically do this business. The primary large business line that we do it is through the, what we call the DCS or the branch sales model for us, which is through our HDFC Life branches. Now given that, look, while We are only servicing our customers for critical needs on claims and maturities that are happening at the branches. The footfalls are lower. And it is not like a high banking transaction kind of a branch. So when the footfalls are lower, that particular channel for the first half of the year Slow down in terms of its numbers. Similarly, a lot of the other frontline were working on customers that they worked with directly in the market. They were also advised to stay at home and not go out. So for the 1st 6 months, our direct channel saw a slowdown. But As you see, as things opened up in Q3 and Q4, our quarter wise growth was quite sequential even in direct And they ended flat. So while there was a huge degrowth given the fact that the direct business was just not available in H1, H2 was fairly decent and we do believe that depending on the situation, we will again come back in terms of the various revenues of direct business that we are looking at. But the year was affected in that. On your first question on agency, in terms of what kind of incremental growth we can By putting in the same amount of money as compared something else. Look, the way we look at agency is slightly different. It is we are one of the few most profitable agencies in the industry. Secondly, the quality of our agency business is very, very good. It has one of the highest persistencies in the market. And over the last few years, we have been growing that Fairly fast. We do see an advantage in an agency business in some sense because it's proprietary to us. There's a huge amount of effort that we can put in terms of Recruiting new financial consultants, there is a very clear strategy in recruiting active and high quality consultants. There is also a Fact that we can train them better. And 3, they are much more loyal to us for a very, very long period of time, given for many of them, it's a primary So as long as they associate with a brand like HDFC, they stay with us for multiple years. Some of us maybe have been here for 7, 8 years, but there are financial consultants who have been with us since for 20 years. So, we are investing in that business more at a strategic call. We do get fairly good returns also. It is not that the agency productivity is lower. We have to manage the cost of acquisition in Agency Channel to make it profitable. But frankly, the term business and the product mix that the Agency Channel is able to deliver for us Makes it fast growing as well as profitable. So we are heavily invested into the agency channel. I want to make a couple of more Point and add to what Suresh has just said. Mayank, if you look at our Slide 18 of our presentation and direct channel, you will notice that our annuity business has gone up very significantly, At least being sold to direct channel. An annuity, as you know, is a single premium. And so we are turning the wheels in our direct channel, wherein they can directly sell annuities And focus on that. And so they need to do a lot of running to deliver the same level of EPI. But yes, it will take a year or so for us to turn the wheels there. And so optically, it will look like the API has is flat, but a lot more profitable. That is point 1 as far as the direct also you'll notice that the Unit Linked business has been curtailed quite significantly By 400 basis points. So that too, in a way, their wings have been clipped. If they were allowed to do and pretty much sell whatever they can sell or want to sell, perhaps that growth would have been more than what we ended up with. So we are going through a bit of a change management in the direct channel. As far as the agency is concerned, we remain extremely bullish, all the reasons that Suresh mentioned. And also to add that if you look at term on the post online channels, it is the highest in terms of the term share at Trending anything between 11%, 12 percent odd. So we do see a lot of potential for us to continue to do that. And also in some of the other emerging markets, You do find that agency channel is very well placed to sell more and more of protection because of their deep and continued relationships at a family level. And so that gives us the leverage to the more protection that they sell, it gives us the leverage to plow it back into the agency channel and start becoming a Self fulfilling prophecy, the like of being able to fund their own group. So, you know, agency grew on a fairly high base. So, even though we had a fairly good growth last year, even then we managed to do a fail. So, You have to look at it from that perspective. In the COVID year, they've grown despite a very high base. Even on Banka, for instance, while our growth primarily came from HDFC Bank, some of our new partners like Bandhan Delivered very well for us. And now we have Yes Bank, we have SPICAPS, quite a few of these new partners who are looking at where we can see Similar growth which can come in and be followed here. Yes. To that point and maybe the final point, if you look at a 2 year CAGR of agency channel, it's been about 19%. And a 2 year CAGR of our bank insurance channel has been about 15%. So 1 year because of some COVID specifics of not being able to meet in person, it looks a little bit muted at about 6%. But If you look at a slightly longer horizon of 24 months, they've done exceptionally well. Thank you. The next question is from the line of Ajax Frederick from BNP Securities. Please go ahead. Thanks for the opportunity. Sir, you have strengthened the mortality variance. Have you strengthened your base assumption itself? And if you have done so, are you factoring in words of impact In the general population of India because of COVID? Yes. So, I'll take this question. So, we don't know what is the medium term or long term impact of COVID going to be. So just to be running on the side of caution, we thought we'll take more sort of a shift in the trend level mortality as well, in addition to the one off results that we talked about earlier. So, I mean, just to get this right, Probably, if you are having better experience, you will reverse this base essentially in future, let's say, 2 years down the line, probably. Yes. If you do yes, If we get a better experience, we will do this gradually, yes. But we don't know because there is something called long COVID and we don't know how the actual is going to pan out over And you have increased Yes, Yara is for Sanjay Plus. And we are, I mean, slightly above the comparable range, probably 35% or below. It's 40% and it's still comparable for us and non profit. Hari, IRR, can you repeat? Your voice was not very audible to me. During the quarter, we have seen the return of Sanjay Plus products going up. And our mix also is pretty close to 40% on non par side. Are we comfortable with the 40% Or do we expect the mix to be reigned in the 25% or non par? Non par was So 30%, if I'm not wrong, it's I don't think it was 40%, it was 31% for the full year. Are they audible? Yes, yes, yes, yes. I can hear you. On for sale to be just 36% And unless you're including annuities in it? The overall nonpar. Yes. Because annuity is a significant portion, right? That's about 5%, 6 Nonpar is just about 30% to 30%. That's the range we'll be targeting, right? We will be in that range, 30% to 30%. 30% to 35% is what we're comfortable with. And of course, it depends on how the environment is in customer preference, but broadly that range, Got it, sir. Thank you. Thank you for those answers. Thank you. The next question is from the line of Praveesh Jain from Yext Securities. Please go ahead. Hi, thank you for the opportunity. Just one question is on your VNB margin trajectory. Shiba, you mentioned that in your comments that Improvement in margins in the so this will be driven by premium growth. Obviously, we'll be raising our premium growth. I'd like to share more on profitability of individual segments, based on that the protection margins are likely to improve from what we have seen in last Sir, mainly because of the fact that Q1 was a low margin quarter. So, yes, there could be some push from there. But what about other products? You had mentioned during the year about part profitability improving because of the larger And so what is the sense on what will drive the VND margin expansion in the next year? So we have a philosophy wherein every channel Is company level profitable in the long term as well as like Suresh alluded to agency channel being in fact more profitable, as well as every segment. So it is a mix and combination of all of these, which help in giving that margin accretion. So it is not just one factor like protection Or non par, but that's the point I must have made on the last call. And so to you, if I were to understand your question, yes, par very much contribute towards the margin accretion and we'll continue to do that. And also judicious product mix at a channel and sub channel also plays an important aspect, plus product innovation hitting the market. There are so many products that We've been the originator of those products, whether it's a deferred annuity or whether it is in the non part space wherein Sanjay Plus has almost become Synonymous with the category. And now Sanjay for Advantage. So all of them do their best in helping with the margin accretion. Thank you. The next question is from the line of Nawaz from Talal and Brocha. Please go ahead. Namaz from Dalla and Brochu. You may go ahead with your question. There seems to be no response. So we'll move to the next question. The next question is from the line of Nitesh Jain from Investec. Please go ahead. Thanks for the opportunity. So, I was wondering the BNB BOC, we see assumption Change negative impact of 70 basis points. It is entirely because of mortality or are there any other assumption change which has impacted this? Srini, you want to Only mortality. So the expenses and persistency were both positive. And we set up this INR165 crores of COVID reserves and net of taxes already is also part of this assumptions change. Additionally, we also strengthened the mortality assumption also, which is to the tune of INR 120 crores. So the negative items from the assumptions changes are only due to mortality. Sure. And In our protection sales, so what will be the share of our online channel and web aggregators respectively? And how do we see the increasing influence of that aggregators specifically on the protection sales? On the second part of your question, web aggregators actually started off largely selling protection. But now, at least for us, we are diversifying very well and really the customers of web aggregators pretty much by the entire suite of products. And that is really the maturing of any channel. And You will see on Slide 18, this is of course combined online channel, but you will see how, say, non par was 0 in FY 'eighteen and that's trended upwards from 18% last year to 29% in FY 'twenty one. So, and that is, like I said, the maturing of a channel and we are quite happy with that kind of an outcome. Niraj, do you want to give some of the split details? Yes. So aggregators, it's around 4% to 5% of our whole business, Nish. And like Dhruva mentioned, the Remaining within the aggregator space, it's about after diversification, it's about 35% to 40% would be protection, the rest So that's a significant shift over the last few years. Also in terms of geography, the shift has been fairly significant. Tier 2, Tier 3 contributes It's a fair bit of the business there, upwards of 50%. Apart from that, the online business would be people coming to our website directly and also some of our traditional distribution partners having a full end to end online journey. So that would be our overall The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Just to say, Continuing on this online one, I recollect you put it under direct channel, right? And that number was 50% of direct was online. Would that number be right? That's right. Yes. So just looking at the growth, then direct has not grown. So I remember you told the challenges around direct from an employee perspective, 1st 2 quarters. But online should have ideally grown, right? So is it surprising that, that percentage has not increased vis a vis fiscal 'twenty? Yes. So if you so Sudesh spoke about the offline channel. On the online side, we've had if you recollect in The one we had that was really the only channel that grew online because of this whole lockdown situation, face to face not being possible while we had the tools. We still had to get everything in place in terms of getting the customer ready to speak to us. And online was the only channel really which the customer kind of sought us out or working through aggregators and some of the other distribution channels. But as the time progressed, we saw that The face to face model started coming back. A hybrid model of distribution started coming back. And online by itself, we saw if you look at the Trends in Google Search, they started normalizing through the year because initially everything was driven by this whole fear psychosis and the need for protection, which we saw growth of 50% in quarter 1, which started normalizing through the rest And that coincided with that effect as well for online. And if you were to look at relatively how Within the online searches on Google, what has been the case with HDFC Life, it has been at the top of the charts in terms of what people are really searching for when looking at a specific brand. But in terms of how things have panned Along the way, it has been more a hybrid model using a combination of digital as well as face to face to give people comfort and around some of these aspects of business. And we also mentioned the change in mix, right, Initially, which was only protection a few years back, it's now a combination of savings and protection. So within the two segments, there is a difference. Savings has definitely grown. It's just that protection, which is something that has slowed down in second half of the year. So overall, that is basically the impact. And our market share within aggregators is it's protected very similar to where we were same time last year. Thank you. We have one last question in queue. We take the last question from the line of Rishijunjanwala from IIFL. Please go ahead. Yes. Thanks for the opportunity. Just one question. You split out your online business. Just wanted to understand, can you break down how much of your business today you can do completely digitally, right, and spread across distribution channels, given that the regulations and Other things have been eased off in the past few years because of COVID in terms of EKIC and all. And secondly, in the online And why is it that we are either not able to or not selling power at all? Yes. Suresh, just to add, I think, look, If you were to leave aside the customer going for the medical, the way we have invested in building our processes, we can do all our business digitally, Whether it's through the agency channel, whether it's through the booking channel, of course, of the online net banking, clearly, but I believe we can do the end to end without actually meeting the customer front. We We spoke about Vyze as a platform last time. Our entire application submission process, payment process, FR submission, medical appointment setup, everything can be done digitally, right, which is why if you see the online contribution overall through net banking of Bank of Partners as well as our own online website, It's significantly high. And a lot of customers are now looking at so the way we always look at it is there's an assisted online and unassisted online. Unassisted online is still very small. But technically, everything can be done digitally. And I think we have invested fairly high on that. So this is exactly what we are telling our teams even now to say that, look, you don't really need to go out and meet a customer. Yes, there are obviously there are some products that the customer would like to meet face to face. So follow all the safety protocols in me, but as far as possible, you can actually sit and do this end to end from your branch or your home or wherever it is required. So that's where we are in terms of the digital journey. In terms of power being sold through the online product, so there are certain products which come in Easier in terms of explanation, ease of conversion as well as the customer adopting on certain types, our nonpar product population on Sanjay Plus was very, very strong. So the way we look at the entire online journey is customers who are able to decide end to end by themselves and are able to search and who have some assistance. And on and Term was obviously the 1st primary product we can come in. But given that nonpar proposition is quite strong and people are able to explain this product proposition, That has also got built up. Power, in some sense, will still take some time for customers to adapt to going online and figure out because there are a lot more questions that they probably want to ask. But as we go, 1, with more digital tools and second, when customers start buying the 2nd power product, the first power product maybe of face to face as they go And look at the products they have already bought earlier, you will see a little bit of migration happening even on power. Got it. And just to wrap up, Can you remind me once again about the reason for increase in sensitivity to interest rate? Yes. So the sensitivity increase is mainly due to the excess assets or The expected profits that will come when you write a policy. So what happens is, every policy has got an inbuilt profit loading in it. So that profit, as you hedge all the liability cash flows, what you're left with that is unhedged is the profit cash flows. And as you grow as the scale grows, that surplus or the excess assets that we have, which is not required to meet any liability cash flows, but excess assets keep growing. And that is like a shareholder fund, if you like, which doesn't have a matching liability cash flow. So this excess cash flow will be sensitive. And if you look at the sensitivity signs, It is actually counter to what you might expect. So in non par particularly, the risk is actually interest rates falling. Since these excess assets are there without any matching liability cash flows, when interest rates go down, it actually the EVF goes up And vice versa, and interest rates go up. So it is really not a risk of interest rates falling. So it behaves more like any other fund which doesn't have a matching liability cash flow. So that's why as the business grows in size, excess assets Also growing size and as a result, the sensibility also will keep going up. I hope that answers the question. Yes. Thank you so much. Thank you very much. That was the last question in queue. I would now like to hand the conference back to Ms. Vibhavadalka for closing comments. Thank you. The detailed disclosure on our results is available in our investor presentation. We would like to thank all of you for participating in our results call. Stay safe. Good evening. Thank you very much. On behalf of HDFC Life Insurance Company Limited. That concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.