Q2 25/26

Oct 14, 2025

Ladies and gentlemen, good day and welcome to the ICICI Prudential Life Insurance Company Limited H1FY26 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 concludes. Should you need assistance during this conference call, please signal an operator by pressing STAR and then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anup Bagchi, MD and CEO of ICICI Prudential Life Insurance Company Limited. Thank you. Over to you, sir. Thank you. Good afternoon and welcome to the results call of ICICI Prudential Life Insurance Company Limited for the half year ended September 30, 2025. I have several of my senior colleagues with me on this call. Amit Palta, Chief Products and Distribution Officer, Dhiren Salian, CFO, Jitendra Arora, Human Resources and Operations, Deepak Kinger, Chief Risk and Governance Officer, Manish Kumar, Chief Investment Officer, Souvik Jash, Appointed Actuary, and Dheeraj Chugha, Chief Investor Relations Officer. Let me take you through the key developments during the quarter. We welcome the Government's landmark GST reforms aimed at making life insurance affordable and accessible. With GST exemption, customers enjoy substantial savings on premiums, making life insurance policy more accessible across income groups. The reform supports deeper insurance penetration, especially in the underserved markets, aligning with the ideal vision of insurance for all. As a significant insurance company in the country, we have ensured that the benefit of GST exemption is passed on to the customers. We believe these reforms will usher in growth and be value accretive for all the stakeholders including our customers, our distributors, and our company. We remain confident of leveraging this huge opportunity with our strong brand, product innovation, and well-diversified distribution with cost efficiencies to deliver sustainable business growth and aid our objective of growing the absolute VNB. On the regulatory front, Shri Ajay Seth has been appointed as the IRDAI Chairman with effect from 09-01-2025. We believe IRDAI and life insurance will continue to work towards increasing insurance penetration and achieving Government's goal of insurance for all by 2047 under his new leadership. We are pleased to inform you that Mr. Samit Upadhya and Mr. Navin Tiyajani have been appointed as Non-Executive Additional Directors representing ICICI Bank Limited and Prudential respectively with effect from September 13, 2025, subject to shareholders' approval. Both come with rich experience of serving in senior leadership positions in the insurance industry. We express our sincere gratitude to the earlier representatives, Mr. Anuj Bhargav from ICICI Bank Limited and Mr. Solmaz Altin from Prudential for the guidance received during their tenure. Now let me talk about H1 2026 Business Overview. Indian economy faced significant headwinds on account of intensifying geopolitical tensions, sanctions, and tariff policy in recent times. In spite of all the challenges, the Indian economy continues to show strength and move forward. Similarly, the life insurance sector was also impacted and grew at a slower pace of 2% RWRP growth as compared to 21% growth in the previous year. H1 the long-term growth outlook for the insurance industry, however, continues to remain intact. The key highlights of our H1 2026 performance are as follows. Total premium grew by 9.2% year on year to INR 212.51 billion. APE for H1 2026 was INR 42.86 billion and a decline of 4.1% year on year on a high base of 26.8% growth in the previous year. H1 the two-year APE CAGR stood at 10.3%. Detailed Protection APE grew by 10.8% year on year and detailed new business sum issued grew by 17.2% year on year. Total new business sum issued grew by 19.3% year on year. Our customer-centric approach is reflected in the strong 13-month persistency ratio of 85.3% and claim settlement ratio of 99.3% with an average turnaround time of 1.1 days on non-investigated individual death claims. Cost to premiums for H1 2026 reduced by 280 basis points to 19.2%. Cost of premiums for the savings line of business also reduced by 280 basis points to 12.7% in the same period. Profit after tax grew by 26% year on year. Revenue of INR 6.01 billion. VNB for the period was INR 10.49 billion and VNB margin stood at 24.5%. Embedded value grew by 9.7% year on year and stood at INR 505.01 billion as on September 30, 2025. AUM stood at INR 3.21 trillion as on September 30, 2025. With customer centricity at the core of everything we do, we continue to work on our strength that is product leadership, extensive distribution network, and operational efficiency. On the cost front, we have been undertaking various cost optimization initiatives to make our cost structures leaner and aligned to the product needs demanded by our customers. All these efforts, along with the conducive environment provided by the government and the regulator, make us well positioned to deliver sustainable business growth with profitability in the future. Thank you and I'll now hand it over to Amit to take you through the business updates. Thank you, Anu. Good afternoon everyone. Let me start with the product performance. The non-linked savings business grew by 11.9% year on year in quarter two FY 2026 and 15.6% in H1 FY26 as customers prefer to invest in non-par products to lock in high yields in the declining interest rate scenario. Linked business declined by 8.6% in quarter two and 10.7% year on year in H1 this year on a high base of 40% growth in Q2 and 54.5% growth in H1 last year. Two year CAGR for linked business stood at 13.1% in quarter two and 17.4% in H1 this year. Overall protection business was almost flat year on year in Q2 FY26 with INR 4.19 billion of APE done during the quarter. For H1 FY26 the overall protection business grew by 6.7% year on year. The retail protection business grew by 2.4% year on year in quarter two this year on a high base of 30.7% growth in Q2 previous year. For H1 FY26, retail protection grew at a healthy rate of 10.8% year on year. With the recent changes in the GST regime, the retail product will become more affordable and attractive for the customers. There exists a huge protection gap in our country and we believe this move will help the life insurance industry to narrow down the gap. The credit life business growth has been impacted primarily due to slowdown in the MFI industry. With reforms being undertaken to spur business growth, we expect credit life business to gradually recover over coming quarters. Group term business has grown year on year. We expect this business to continue to grow over long term and our strategy remains focused on selecting businesses which meet our defined risk reward expectations. Annuity business declined by 46.8% in quarter two and 50.1% year on year in H1 this year on a high base of 73% growth in quarter two and 99.5% growth in H1 previous year. Annuity CAGR for last four years stood at 11.9% in H1 FY26. Within annuity we continue to witness demand for single premium annuity products as fixed deposit rates declined. GroupPoint's business grew year on year by 87.5% in quarter two and 74.6% in H1 this year. While this business is typically lumpy in nature, it is value accretive to the company. Moving on to the channel wise growth and contribution, proprietary channels which include agency and direct declined by 18% year on year both in Q2 and H1 FY26. It contributed 39.2% to total and 47.7% to retail APE in H1 FY26. The decline was primarily due to the high unit-linked and annuity base of the previous year wherein the proprietary channels had grown by 40% in quarter two and 45.8% year on year in H1. Two year CAGR for the channel stood at 9.2% in H1 FY26. These channels have been agile enough to pick up and deliver strong growth year on year in non-linked products. This year the 5-year CAGR for. Our proprietary channel is 15.6% for H1FY26. This demonstrates the channel's ability to deliver continuous growth across various business cycles. We believe the decline in these channels is transitionary, and we will continue to invest in our proprietary channels to sustainably grow the business. Bancassurance business was almost flat in Q2 and H1 this year. The channel contributed 30% to APE in H1, and 2-year CAGR for the channel stood at 13.7% in H1FY26. Partnership distribution business grew year on year by 23% in Q2 and 14.9% in H1. This year, the channel contributed 12.7% to APE mix in H1FY26. Group business grew year on year by 20.7% in Q2 and 19.8% in H1. This year, the channel contributed 17.9% to APE mix in H1FY26. Our distribution reach is provided on slide 24. We strongly believe that well-diversified distribution is one of our biggest strengths. Today we have more than 245,000 agents spread across geographies, 50 bank partnerships with access to more than 24,000 bank branches, and 1,400 plus non-bank partnerships. To summarize, we will continue to offer the right product to the right customer and deliver it through the right channel. With GST reforms, we anticipate volumes to go up, the early signs of which are already visible as we have witnessed increased traction from our customers both in terms of leads and conversion of leads. As we deepen our distribution channel and penetrate further into micro markets to get more access to varied customer profiles, our ability to shift between product segments depending upon the prevailing economic environment should become even more pronounced and seamless. We believe this will help us deliver sustainable growth irrespective of the market environment. Over the long term. I will now hand it over to Dhiren to talk you through the financial update. Thank you, Amit. Good afternoon, everyone. Let me start with an update on subordinated debt. The credit rating firm ICRA has reaffirmed the rating of our existing INR 12 billion and INR 14 billion subordinated debt programs as ICRA AAA stable. Further, sub debt of INR 12 billion that we had raised five years back in November 2020 is due for the first call option in November 2025, and as approved by the Board, we will be exercising the call option. Our current solvency ratio is at 213.2%, and even after the exercise of the call option, our solvency ratio will remain well above the regulatory threshold of 150%. Additionally, we have approval from the Board to re-raise the INR 12 billion of the sub debt depending upon the business requirements and market environment. We will look at that subsequently. Now let me come to the changes in GST. Since input tax credit on individual business will no longer be available to life insurance companies, there will be some implications on the existing book and new business profitability of companies. On the existing book, as disclosed earlier, our estimated impact is at about 1% on embedded value. To mitigate the impact on new business profitability, we have multiple levers such as renegotiating commissions with distributors as well as continuing to optimize operating expenses. Here, you will note that we have been seeing reduction in cost ratios across the quarters. In H1 2026, we saw a reduction in cost-to-premium ratio by 280 basis points year on year to 19.2%. The cost-to-premium for savings line of business also reduced by 280 basis points to 12.7%. Overall, while GST input tax credit being disallowed might have some short-term impact on profitability, the opportunity arising from the same in terms of market expansion is quite large. Our focus has always been on growing the absolute VNB, and all our efforts will go towards the same. Now let me take you through the financial metrics. The VNB for H1 2026 stood at INR 10.49 billion, and the VNB margin stood at 24.5%. The relevant comparison for H1 margin is with the full year 2025 margin, which was at 22.8%, as that captures the impact of all assumption changes done at 3-31-2025. The positive movement in margin is primarily due to a higher mix of protection and non-par business, improvement in product level profitability through increasing sum assured multiples, longer tenure policies, and increasing right attachment. Some favorable movement in yield curve, which was partly offset by estimated impact of GST on both commissions and as well as operating expenses related to new business. Moving to other financial metrics, the company's profit after tax for H1 2026 stood at INR 6.01 billion, an increase of 26% year on year that is primarily driven by higher investment income from shareholder funds. Our embedded value grew by 9.7% year on year and stood at INR 505.01 billion at September 30, 2025. Within the embedded value, the value of inforce business grew by 18.1% year on year to INR 377.61 billion. Our AUM stood at INR 3.21 trillion as on 09-30-2025. Thank you, and we're now happy to take any questions that you may have. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press STAR and then one on their Touchstone phone. If you wish to remove yourself from the question queue, you may press STAR and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles again. To register for a question, please press STAR and then one. Our first question comes from the line of Shreya Shivani from Nomura. Please go ahead. Hi, yeah, good afternoon. Thank you for the opportunity. I have two questions. My first question is I'm just trying to understand how the GST announcement on the 15th of August and then eventual implementation by the 22nd of September impacted your business for the second quarter. Usually your September month tends to be about 30% to 40% of your second quarter APEs. Historically that's how it has been. If you can help us with some numbers to understand how much of a steady state volume of 2Q got impacted because of this GST announcement and then eventual implementation in terms of how much volumes got impacted, the entire 30% to 40% got impacted or after the 22nd of September you could, you know, a lot more got booked back so the impact was not that high. That's my first question. My second question is on your persistency 13-month, 61st-month trends. In the last quarter you had explained how certain products and channels have impacted the 13-month trends plus the March 2023 book was a very solid book. That's why YoY basis things look weaker on the persistency side. Can you help us understand the trends don't seem to be improving. Is there some sustained challenge which is going on? That's my second question. Also, there's another third question that I wanted to ask. It's on the agency channel and you just given an explanation on your distribution. If you can help us understand that apart from this transition away from unit-linked insurance plans and the annuity products that they sold a lot more, is there anything else that is troubling them and are these channels going to see further troubles or challenges as we start renegotiating our commission structures with our distributors going ahead? Those are my three questions. Thank you. Yeah. Hi Amit Palta. See on the impact. Of GST, to an extent, you. Can say that retail protection which was anticipated to have the impact on GST before it was eventually announced, we did experience a bit of a slowdown in quarter two up till the day it was announced in the month of September. Apart from that, from the day of announcement to 22nd you can say. There was a bit of a. Confusion in terms of customers willing to wait for a few more days to eventually come and express their interest. From the 22nd onwards, they would not lose much by waiting for seven days. We really can't quantify as to. How much the impact would have been. Because last seven, eight days after the GST rule came into play, business did pick up. It's very difficult to quantify as to how September got impacted adversely for us. It has been not as skewed as. You just mentioned, 40% of the Q2 in September is not the trend that we have witnessed at least. To that extent, it has been quite decent, reasonable sequential growth that we have experienced from July to August, August to September. From that perspective, I guess I have answered your question on persistency. There has been a notification on why FY2023 is probably the right time for us to compare our current levels of persistency. As you know, the persistency prior to that was last year. Persistency was impacted possibly because of a very high proportion of non-linked savings business which was done during tax scarcity days, and hence there was a positive bump in terms of persistency that you would have seen last year on the 13th of March. On that base, yes, the YoY. Looks a little bit of stress. However, if you were to compare. it with the year before, then it is almost in the same range. To that extent, we don't see much of a disturbance or much of a disequilibrium on a persistency perspective. It is just that it is now coming back to the normalized level on agency. Like what we said in our opening remarks, largely the impact of a very high base of annuity and the fact that markets were very supportive for our unit-linked business. You know that we've always done very well in a bind market with a very strong portfolio that we have in Europe, and we have a large number of our advisors who have a very strong customer ecosystem, and that ecosystem tends to wait while the markets are volatile. A large amount of upsell that happens by the advisor sales force does take a back seat at the time when markets are volatile. Not much to read beyond these two things, which is the impact of a very large base on a newly launched product of annuity last year and unit-linked product which was doing very well last year, and now it has kind. It slowed down from that perspective, but we are confident in the years. Gone by, we have seen agency as being very nimble to move from one category of products to other. It is just a transitionary phase, probably. H1 because of the base it reflected. More, I think, should settle as we go deep into the year. Just to follow up on that, as we do renegotiation on our commission structure, etc., should we expect the channels, particularly agency and even the other channels, to continue seeing some sort of disturbance in 3Q? It feels like a repeat of last year when we were renegotiating things due to surrender value regulation changes. Should we expect a little bit of turbulence to continue into 3Q? It's not a turbulence, it's just a discussion. Both our distributors are quite, it is an open domain that there is an increase in cost of doing insurance business because of input tax credit going away. At this stage we are in negotiations not just with advisors but with all our partners and we are trying. To find a middle path to see. How our absolute production goes up. We are still able to deliver absolute. Commission earnings for them. However, it is still a process right now, which is WIP, you can say. It will take some time before it settles. Right now, we are still in the discussion stage. Got it? Understood. This is very useful. Thank you and all the best. Thank you. Our next question comes from the line of MW Kim from J.P. Morgan. Please go ahead. Good afternoon and thank you for taking my question. I have two questions regarding the midterm, the industry outlook, and also the company product strategy. Firstly, when you observe the development of the insurance market across the emerging countries, it is clear that government and regulators aim to expand the insurance sector to provide a stronger safety net within the system. As a result, industry-friendly policies are often introduced. However, in recent years we have observed a series of regulatory tightening based on my observation. The tension perhaps would be looking ahead over the next five years and projecting toward 2047. What do you see as the key government policies that could drive strong revival in the industry growth? Secondly, regarding the product margin outlook, the company already mentioned several issues and things, but broadly I believe that the insurance companies are essentially the manufacturer and now I believe that several product strategies might be under consideration and also the management mentioned in the previous question. Could you please share a bit more detailed management insight on the product design and margin outlook in the context of the ongoing regulatory changes and managing the macro development? Thank you. Hi Kim, this is Dhiren. Thank you for your questions. I think the first question that you put up is how do we see the government and the regulator look at developing the insurance market in India? If you look at what's been happening over the last few years, there have been a series of regulatory measures which have opened up the market in terms of ease of doing business. By and large, you've seen the regulator move more towards a principle-based regime and therefore giving companies a lot of flexibility to be able to respond to market in different ways depending upon their strengths and the positions that they hold. I believe that is the position that the government will also continue to take as well as with the new regulatory leadership, the Chairman of the new regulator in place, I think that is a direction that they would continue to push on. Very specifically, when you look at the most recent change which is on GST, very clearly that's a positive. Of course, there is a short-term impact as I mentioned earlier on the manufacturers, but I think net net this is going to be a much bigger positive than most other actions that have been taken in the past. Because very clearly at one level with 0% GST, this elevates insurance, life insurance and health insurance from being just any other service to that of an essential. Clearly, in the government's mind this is a very important step that has happened and I think it's up to us to manufacture as well as ecosystem to get together to be able to take advantage of the growth that should come our way. As Amit also mentioned, we have seen some green shoots come through since the time the new regime has come about in terms of GST and it's up to us to be able to capitalize on that opportunity. Whatever little impact that we have to take at this point, these are short term in nature and I think we should be able to override this. That of course comes to your second question as to how do you think we can override these? Very clearly there are set of levers that are available. One very clearly is a conversation with distribution on how we could look at sharing some of the cost. Very clearly, as Amit also pointed out, the hit is very real and we have to be in a position to be able to come to some understanding with our distribution. The second element is around operating expenses where there will be some element of GST increase due to the ineligibility of the input tax credit. In that light, you will also note that we have been working very hard on managing our cost ratios. You've seen the results come through this quarter also as well, 280 basis point improvement. This is an effort that we will continue in. Of course there may be some short term increase as we go through the rest of the quarters purely because of the GST ineligibility coming through. I believe the work that we've been doing on improving cost ratios will help us as we go into the coming quarters as well. Product mix for us is, I mean, we've said this before, product mix for us is a function of where the customer demand is. We have seen that earlier as well. When unit-linked did very well, we did not stop it. When the markets were turbulent and there were certain geopolitical challenges that had come about, guaranteed products did very well. We were able to offer products on the guaranteed side as well. Our perspective on product mix is that we continue to be agnostic of that product mix. Therefore, the next point is that how will you manage your profitability? That comes about by ensuring that your cost ratios as well as your costs are in line with the kind of product that you sell. Given that a large component of our business is savings business and the core profitability driver of savings business is managing costs, that is an area that we will continue to keep working on. That's very clear. Thank you so much. Thanks. Thank you. Our next question comes from the line of Avinash Singh from MK Global. Please go ahead. Yeah, hi, good afternoon. Thanks for the opportunity. Couple of questions I asked. First one, again, continuing on the cost reduction part. I mean, just wanted to understand if these cost reduction measures are sustainable, particularly in the backdrop of whatever sustainable growth we aspire. I mean, will this kind of cost reduction have no bearing on that growth? If you can help with some sort of numbers, is this kind of a cost reduction also coming because of a rationalization of headcount? If you can provide the YoY sort. Of headcount changes. That is my first question. The second one is more on understanding this EV move. Particularly when I'm looking at the A and W, there is a kind of, on slide 15 you have this. If I were to look at the March, September, March and now again September, there is a huge volatility in terms of where A and W is moving. Like last March to September, there's a huge jump, then September, March, broadly stable, and then again from this March to September this is going down. If I were to look again from the gap network through A and W typically adjustment, the reasonable amount of MTM generally. Is it, I mean, these movements happening because of the yield movement or some equity related, and is there some kind of, if at all, any impact of this GST related impact ongoing in this A and W here? If you can also confirm that the 1% kind of EV impact on EV from GST, you have taken in this H1 number. Thanks. Thanks, Avnish. Okay, let me address your A and W question. You're right, a large portion of this is a yield curve movement, and that's fairly significant in the period. Coming to your other question on cost ratio movement, frankly, this is work that has been going on. You can't turn around cost ratios in a day because if you were to do that, then you would have probably gotten into an emergency situation. The key point is that you have to be able to support the business with the relevant cost as well as the initiatives that you have to take and the investments that you make towards it. It is not something that you can turn around on a dime. This is a piece of work that we've been doing across multiple quarters now, and you're starting to see the benefits of that come through clearly. One of the ways that you can look at it is in terms of identifying very, very closely what are your discretionary spends, and you put in a very, very sharp focus on identifying which of these are really relevant for today and which ones you can actually kick forward to. The other bit in terms of people is very clearly, rather than focus on headcount, it is reallocation of our employee and our people force into the areas which have got the biggest bang for the buck. That is something that we had done earlier in the year as well as in the previous quarters. This gives us the best value out because you are looking at not getting rid of people. We made clear about that. It's about reallocating people to where they are able to generate the maximum value for the company. The third component, which is not very well spoken of, is actually on the core operating expenses, which is operations where you're looking at creating capacity, increasing digitalization. This becomes a very big winner along the way. If you look at our path towards the later pages, you will see a variety of initiatives that we have taken which help you give a perspective of how we've been able to improve operating efficiency. Last and not the least, brand awareness is important. While most of our focus in terms of brand cost has been more below the line and digital in nature, this is something that helps cement the position of the company in customers' minds. It is not one activity, it's a variety of activities, things you have to do continuously to be able to deliver value on this. Having said that, like I mentioned earlier in response to Kim's question, as we get into the new era, given that we've got GST input tax unavailability, it will from an optics perspective create a short-term bump up in cost ratios as we get into the next quarter. That's something that we have to be aware of. Like I said, the element that we have in terms of looking granularly at all of the elements of operating expenses, we have been paying very close attention to this and determining which are the ones that we need to carry through into the coming quarters such that they're able to sustainably deliver top line as well as VNB. Yeah, go ahead please. Sorry to interrupt, so just again because you know, touching cost now if I were to look at H2. In H1, of course the GST hit has come for a very limited time and also the favorable bond yield have helped but at the same time you did not have enough time to sort of take measure elections. Looking into H2, when I mean you can take managerial action but the GST input tax credit impact is going forward the entire time period both, I mean offsetting for the GST impact and you taking actions. Is it fair to assume you will be able to sort of nullify the impact of margins if the product mix were to stay as it is. That will be our endeavor, Avnish. Like I also mentioned, there are multiple levers that we will have to pull. One is of course renegotiating commissions. Two is going to be OPEX optimization. Having done all of that, I don't think they will all come to a close in the coming quarter because as Amit also mentioned, these are ongoing discussions and also in response to what Shihad pointed out earlier, like the surrender value changes that had happened last time. These sometimes get protracted over a period of time. I think the core focus for us as a company has been on absolute VNB. I'm not looking at margins. We have always been looking at absolute VNB delivery that we can get done in the period. What we are attempting to do is to take advantage of the positive news that we have got on GST to be able to drive higher volume. That should be in a position to help us make good any potential short-term loss that we have on margins. Thank you. Thank you. Thank you. Our next question comes from the line of Swarnath Mukherjee from BNK Securities. Please go ahead. Thank you for the opportunity. I have three questions. First, to understand the VNB development this quarter or maybe in terms of absolute VNB or in terms of margin, whichever you would like to give some idea on. I just wanted to understand that this particular quarter, if I look at the product mix vis-à-vis the product mix of first quarter, assuming that the product design should be broadly similar between the quarters, I can see that the mix has moved in the direction of products where VNB acquisition or the margin acquisition might be lower, towards lean to group fund. The segments where we have seen maybe ramp up is retail protection. I just wanted to understand our ability to keep the VNB more or less stable despite such larger categories coming off. Is this only on the back of retail protection and non-par or is there anything else to read into that? Has there been any major change in the product designs which have led to that? That would be the first question or in a different way if I were to look at the market between the quarter remaining flattish. How does the product mix explain that? Also, if you could highlight the par non-par mix during the quarter so that we can understand how much non-par is quantified. Also, is there an impact of the GST input tax credit we could not take for the sales of the last eight days? What is the impact of that in this margin profile? If you could also highlight that, that would be very useful. Second, in terms of the persistency efficiency drop that is there going forward and for this current quarter, is there any change of persistency assumptions expected in our VNB calculations? Is that already baked in in the margins or should we expect at some point going forward? If you could help understanding the same. Lastly, I did not understand the reason that you highlighted in terms of income movement leading to the change in VNB, so if you could explain why the impact of that would be different. While from March 2025, while A and W went down, we saw a very strong growth in a period where our new business growth was not that strong. If you could highlight why there is this different direction within the impact or is there any other factor to look into, those will be my questions. Sure. Let me pick up in the reverse order. The A W point fundamentally is around the MTM on the debt and the duration of the debt that we hold in our part of A, so a large portion of it is explained just because of the MTM of debt. That's one. The second thing is on persistency as Amit also. Sorry to interrupt. If you could also highlight the reason for strong growth in brief, that would be also very good. Strong growth in this will come about in terms of the, that is, sorry, with growth if you want to explain, is largely explained by way of unwind as well as VNB additions, and some bit will come because of some economic variance. Those are the three large components that come as part of it. Sure understood. Now persistency. Amit also explained this when I think the right threshold to look at two years back because it doesn't have the period of March 23rd. Having said that, there are a variety of product and channel combinations that we need to be able to take certain additional action on and that is in progress. As now when you look at it across, when you look at from what numbers that we had disclosed at last quarter to now, we've been broadly stable, but the efforts are on all the teams to improve upon persistency and we hope to be able to recover whatever loss that we have through the year as well in most cohorts. You had a question on the VNB and I explained that earlier as well. The positive movement in margin is largely due to one of these four factors. One is the higher mix of protection. If I look at what the full year protection mix was to where it is now, there is a significant movement up. The second bit is in terms of the share of non-par business. Given the fact that we had launched a product in January last this year, January 2025, that has started to become a larger portion of the traditional book. Even at this point it stands at about 50:50 roughly in terms of the par, non-par, whereas earlier it used to be the ratio of two is to one for the par to non-par share of that traditional business. The second thing is in terms of underlying product level profitability and this is something that we have been speaking about multiple quarters where we're looking at increasing sum assured multiples, longer tenure policies and of course increasing rider attachments. This factor has started to play out now and that's helping us improve underlying product profitability. Third is in terms of the favorable movement of the yield curve across this period. That's helped a bit. The last is another offsetting impact that we have. What we have done is in terms of GST, we have taken an estimated impact of the GST disallowance on both commissions as well as operating expenses. Whatever is relevant for this half year, we have taken that hit onto the new business that we have reported for this period as well. Right. Would it be possible to give some quantification of how much was that impact for this quarter? Yeah, see the problem is that may not be relevant for the quarters going forward. Hence I've refrained from getting into that exact quantification there. We have to whatever extent that we could see the impact of GST, we have taken that on board at this point for the business. Okay, okay, understood. This is very helpful. Thank you so much. Thank you. Our next question comes from the line of Vinod Rajamani from Nirmal Bank. Please go ahead. Thank you for the opportunity. I had a question related to GST. Two questions actually related to GST. Given the reduction on individual life policies, how will you treat the impact within the embedded value framework? Specifically, will the benefit flow through the expense variance or the operating assumption change line in the EV waterfall? That's the first question on GST. The other is that since group products remain taxable with input credit eligibility, is there a plan to kind of balance the trade-off between retail and group? Because you know on group business you will get that input tax credit eligibility. How do you see the interplay between group and retail playing in the future? These are the two questions. Hi Vinod, thanks for those questions. On the first one, that will be an assumption change. It will not be a variance, it will be an assumption change which we will disclose at the end of the year. Essentially, whatever expenses are directly attributed to retail business, you can't really set that up directly against us because group business, theoretically it might make sense to say that I will play one against the other. Practically it's not possible because those two business lines are different. The distribution lines are different, the products are different. You can't really play one against that. Theoretically on Excel sheet it does make sense, but practically it becomes quite difficult. At the end of the year, in any case, depending upon the total quantum, we show that as part of our assumption change and that's the right place to put it because that is going to be an impact of the impact of this GST change onto the way the business model will carry on into the future. Thank you. Thank you. Our next question comes from Neeraj Kumar from HDFC Life Insurance. Please go ahead. Hello, sorry to interrupt. Neeraj, sir, your voice is sounding muffled. If you are using the speakerphone, may we request you to use the handset please? Okay, sir, just give me. Is it better now? It's slightly better, sir. Hello. Okay, so my question is this. We are getting and it will increase the cost. How are we discussing the commission structure, and with the discussion, is it also with the education, you see, also where we will reduce the commission for agents as well? Sorry, Mirage, I couldn't catch your question very well. If your question is that are we discussing or renegotiating commissions with our distribution, yes, we are in the process of renegotiating commissions with all of our distribution. This conversation is on at this point. Okay. Neeraj, does that answer your question? Thank you. Thank you so much. Next question comes from the line of Neeraj Toshniwal from UBS Securities. Please go ahead. Hi everyone. On my first question, I think on 13-month persistency we are still yet to, you know, understand why it is contracted. It can help with that. The second question is on the input tax credit, I think you've mentioned. That one you're not quantifying at this. Point, but on year-end basis are we looking to have some impact on our book, or it will be totally transient? What's our view? If you can also guide and help with possible product mix, we will. Be focusing here on new launches. We will be having to drive the. Growth and outlook on annuity, because that has been a bit of a laggard till now. That will be helpful. Thank you. Sure. The 61st month persistency, I think we've discussed earlier as well, that due to a definition change which allows for policies to be on the book, even though for both unit-linked as well as traditional, they're required to continue on the book even if they're not premium paying. That's a technical definition that has come, caused the drop in persistency there. Now, the second question that you mentioned is on the impact of the GST on the embedded value. That will be an assumption change that we will put up at the end of the year. We had given you an indicative number as part of our disclosures that was for the FY2025 embedded value, and we had given the indicated number. Of course, depending upon how much, when this comes about, how we're able to manage this impact, the full impact of that will be disclosed at the end. End of the year. In terms of product, I think our philosophy has been to make sure that all products, the entire product suite is available. We keep them refreshed at all points in time, be they on the unit-linked platform, be it on the par as well as the non-par platform, as well as the protection platform and annuity platform. Everything is live and in tune with the market. We continue to make new introductions. We carry a set of pages as part of our pack also, which talk about what are the new introductions that we have during the period. You'll continue to see us work at providing different propositions for customers. I think it'll be a little premature for me to talk about all the products that we will bring out over the next six months, but we've had a couple of product launches in this quarter itself already and in terms of. Given we have a benign base now. How should one think about having industry growth in line with industry. How do you think towards the. Second half one should think about. Difficult to put the number on this, but very clearly as you rightly pointed out, H2 is more benign than H1 for us. Given that we've put in a lot of underlying, the underpinnings of the business are far stronger, much more robust, I believe we should be able to deliver some decent growth into the coming half year. Additionally, given that the GST notifications have also come about, reforms I believe are expected to spur growth. Like I mentioned, we are starting to see some initial pickup, early signs are visible. We're seeing that both in terms of our website traffic, which suggests that there is demand, customers as well as some degree of conversion also has improved. I believe we should be able to take advantage of the reform that the government has put out to be able to deliver growth not just for us, but I believe the industry should be able to take advantage of this as well. Thank you. Thank you. Our next question comes from Kushagra Goel from CLSA. Please go ahead. Hi. Thank you for taking my question. Most of the questions are already answered. I just have one data rolling question. Can you let us know what is the mix of ICICI Bank channel and the total banker? Secondly, while you answer expecting some improvement in growth in the second half, my question is if we are not able to, let's say, achieve the growth which we had expected in the starting of the year, will that impact our VNB margin as well? Because it's based on our expected cost absorption. Just those two questions. Thank you. On your first question, ICICI Bank has been stable at the INR 100 crore per month range. It broadly stays there. That's not so much of a change in the share of ICICI Bank as part of our retail mix. The way that we have architected the business, I think we're quite confident to be able to deliver on growth. As I mentioned earlier in response to Neeraj's question, the H2 base is quite benign. We do have a favorable bump up that's coming out of the GST reform as well. I believe we should be able to deliver on growth in the second half. Sure. Got it. Thank you. Thank you. Our next question comes from Sanket Goda from Avendus Park. Please go ahead. Yeah, thank you for the opportunity. The INR 505 billion embedded value, what we have reported, it doesn't have that 1% negative impact in the numbers, right, or it is already incorporated in that INR 505 billion report, billion rupees, what we reported in 1H. Sanket, we have taken an impact. Broadly, with the impact of this GST on the existing book to the extent that we know, has been factored in as part of the declared VNB. The full work, we'll do that at the end of the year. Got it? Understood. Understood. Second thing, Viren, is that when we report our margins, we report it on estimated cost. The 24.5% we are reporting is still based on that estimated cost. Have we already incorporated the GST input credit negative impact already in the 24.5% we reported? No. Yeah, we have taken in what we know of GST into the 24.5%. Got it, got it. Maybe one more thing. Just wanted to understand that GST typically in my view will impact largely two products, individual protection and unit. Individual protection, till the time you don't take a price hike, it will have an implication. ULIP seems to be a permanent damage. When you speak about renegotiating commissions, it is predominantly a ULIP phenomenon or you will do across the products, and whether you have headroom in RIY to take that impact of ITC to still maintain the margins on ULIP. Just wanted to understand this renegotiation bit along with the product level negotiations you are trying to have. Okay, Sanket, let me put some facts on the table. The impact of GST input tax credit disallowance is felt most on non-partner. If I'm looking at the savings line of business and I look at the severity on the margin impact, it will be highest on the non-par. It will then come through to unit-linked, which will be of small impact, and then par, of course, is a very, very small impact because it cycles through the fund and at the end of the day will go back and impact customer bonuses and shareholder portion of the bonus. This is the order of priority. The reason why the entire industry is renegotiating commissions with distribution is primarily because of the varied impact that it has based on the mix that they carry. Protection is another element. Of course, it has an impact on protection, no doubt about it. Protection in that sense will behave like a non-par because it will carry through completely to the shareholder any impact that you're not able to manage with the distribution. Your order in terms of severity is going to be around non-par and protection, then to a very small degree on unit-linked, and very, very small degree on participating. In non-par, probably you can change the IRR if you want to renegotiate that. I mean, it's to mitigate the impact. Is it fair to say that if you want to take away customer benefit, that's a different position? Okay, got it, got it. Lastly, this bancassurance slowdown, what we are seeing in the first half, though the base was not meaningfully very high last year, is it largely because of the interesting bank channel where probably Hinduja has taken a little line market share, or is it in general weak demand in the banker channels? Bank assurance is 30% of our business. Last year growth was close to 30% and this year is flattish. ICICI is half of 30 which is 15% and remaining 15% is fairly distributed. You took an example of IndusInd Bank, but we have other bank partnerships as well. It is a fact that in. A multi-banker partnerships, you will have different ecosystem challenges with different partnerships at various points in time because of the cycles or unique challenges with some partnerships. That is part of the game. That's how things operate in a multi-distribution network. To that extent I can't single. out any one unique issue contributing to overall bancassurance flattish performance. All I can say is 30% growth last year was quite significant. On that front, 50% of that distance remains flattish now. On a two-year CAGR basis, it is still 13.5%, 14% of growth that we have seen. We need to also be cognizant of the fact that some of our banker partnerships like ICICI Bank Limited have predominantly focused on protection and unit-linked business. Typically, unit-linked business does well in a buying market to that extent. That also had an impact. That's what I have to say. Okay, understood. Maybe just can you tell on that array by headroom which I asked you whether we are at the threshold on most of the products what we sell or we have still headroom to maybe if you want we can navigate that ITC issue. No, we have a metro. Sorry, you said you have the headroom, right? Okay. Perfect. Thanks. Thanks. Thank you. Our next question comes from the line of Priyash Jain from Motilal Oswal. Please go ahead. Yeah. Hi everyone. First question. You know, from a persistency perspective, is it in line with your assumptions or it's kind of working again, is lower than your assumption. So Praj, there are certain pockets that are lower than assumptions. That is what my endeavor will be, to keep them back up, bring them back up towards the end of the year so that it does not hit a period. Okay, got that. Second, whatever is residual, we will take that as part of the function change at the end of the year. Got that? Secondly, you mentioned that on DNB front you have in your estimated cost workings, you've already taken the GST hit that whatever kind of comes through, right. The input tax credit not being available. In that sense, in case the product mix and everything remains stable, is it fair to assume that your profitability on VNB margins will not take a hit going ahead because of GST? We have taken the hit for H1 business. If towards the later half of the year, which is all through quarter three and quarter four, we are unable to adjust based on those levers that I spoke of, that particular H2 portion of the business will have an impact. Like I said, from our perspective, we believe these are short term impacts. Whatever we see on margin, we hope to be able to cover that up by way of additional demand and absolute VNB we should be in a position to therefore garner. That's the way we're looking at it because we think that this is really going to be a big driver for business into the future. Okay, and another clarification, you mentioned that in the EV you've taken the hit only on the VNB which is on the new business or whatever you've written so far in the first half on the GST cut. On the back book the impact is yet to come on the EV that you have reported, right? Is that the fair assumption? No, we have taken the impact on the EV as well. Like I said earlier, whatever we know we have taken an impact onto the EV as well. The EV walk that we will disclose at the end of the year. Okay, and last question, any changes to the IRRs that you have done on the non-par side just to mitigate or just to kind of adjust to the yield curve, whatever has happened in the last three months? No, we haven't made any updates to the IRR of our non-linked products. Got that, that's helpful. Thank you so much. Thank you. Our next question comes from Nitesh Jain from Investec. Please go ahead. Thanks for the opportunity. First question again is on GST. Based on your experience of previous such and your discussion with distributor, how much impact do you think you will be able to pass on to the distributor in the near term? Will it be 50%, 80% or 100% will be passed on to the distributor? Thanks. It's a difficult call for us. I think what I can point you towards is the last set of such large-scale conversation that happened a year back in terms of surrender value where we've been able to effectively move to a win-win situation for all parties involved: the distributor, the company, and most importantly the customer as well. That is the length in which we will continue to operate, that customer gets a fair deal. We are in a position to find a mid-ground between the distributor and us in the short term. Very difficult to call because these are ongoing negotiations at this point. I believe the entire industry is in this set of conversations. When it comes to conclusion, we'll be in a position to talk about how much finally comes through, but the key position that we have been making to our distributors is that these increased volumes that we expect should be clearly value accretive to distributors because at the end of the day the commission percentage is not really the number people focus on. I'm sure every individual distributor, whether they are individuals or corporate, are really interested in the absolute revenue that they're able to garner on their P&L. We believe that if the industry comes together along with the ecosystem, we should be able to make a big success out of these reforms that the government has put to increase volume on protection is anticipated. On savings business, because the impact is not very significant and quite invisible, do you see increased volumes in the savings business also? Yes, we see it on the savings business as well because within the unit-linked, if you look at the benefit illustration, you should start to see an uptick in terms of the returns that you make at the standard fund growth values. Very specifically, you will see this in terms of both traditional businesses, which is par and non-par, you will see uptake in IRR because very clearly what the customer should ideally be looking at is the total amount of money that goes out of their pocket, which is the base price plus GST. Now that the GST is no longer applicable, the base price itself is going to give you a better return. Sure. Second question is on retail protection. There also we are seeing that the growth has slowed down specifically in quarter two. Anything specific to highlight in this quarter? Good, you made that point. I think quarter two for us last year was a fairly strong base and we had grown at 31% in Q2 last year. Against that base, this minor growth number clearly is something that, you know, I think we should be able to go past into the coming quarters. Very clearly I think the underlyings are quite strong. In terms of absolute number that we've been generating quarter on quarter, that's been on the uptick. We saw a very strong growth in quarter one as well, 20+% growth in quarter one. Given that last year quarter two we had a very, very strong growth number, I think against that this falls a little short. This does not in any way mean that we're seeing a shortage in demand. Very clearly as I pointed out earlier, also we're seeing a lot of demand come through on our website, which is largely protection oriented. We're seeing a lot of customers come to and ask about retail protection. Now with the GST cut being applicable, protection suddenly is 18% cheaper. Also Nilesh, since this GST thing came into play from 22nd, we actually saw a bit of a surge towards the end of the month, and as you know, protection is typically a longer process for issuance as it involves for medical. Logins at the back end of the month also had an impact on the issuance numbers. Plus, like it was even before the discussion, before the announcement was made, it was expected to have a GST waiver for protection. Range of products savings was announced subsequently. I can't rule out though of. course I can't authenticate that. There could be a slowdown a little bit in quarter two in anticipation of change in price or change in benefit from 22nd onwards. These are two reasons I would just like to add apart from the base effect that Dhiren spoke about. Sure. Last question is a slightly longer term question. What we have seen is that whenever we have seen a growth slowdown we have tried to tackle it through cost focus, focus on cost, etc. In that process, I don't know how are we thinking about long term investments because if we are curtailing cost and have a lot of focus on cost control at some point in time your focus on investment for longer term will get impacted when you are cutting your discretionary cost, etc. The focus from the management team will be more on controlling cost rather than investing from a longer term perspective. Why are we worried too much about near term profitability, one year margins, and why don't we try to sacrifice near term margins and build investment which will give you much more sustainable growth from a three to five year perspective? Yeah, it's a fair question, Nitesh. I think your point is, if I want to summarize, is that are you cutting into the muscle? I think the answer to that is clearly no. What they've been doing is ensuring that there is further alignment of our resources to where we are able to drive value now. Be that in terms of reallocation of our organization structure, reallocation of our people into more productive areas. Along with that we have looked at greater degree of digitalization and as I mentioned in response to a question earlier, there is a set of pages at the back which talk about how we've been able to improve productivity across all parts of the business, more notably in operations and now more in terms of the sales as well. The idea is that if you're in a position to deliver on the underpinnings and make them stronger and stronger and very clearly one of the things that we have continued to invest in and you can see that as part of our disclosures as well. We have not stopped investing in technology that continues. I think that will become a game changer as you look at the coming quarters and the years ahead. I hope that answers your question. I just wanted to, on a lighter note, share with you that investment at times is being construed as only the cost incurred on people, on branches, on physical infrastructure. I would also like to give you a new dimension, a different dimension of investment, which is on the complete strategic outlook. The outlook for us has now gone micro market, understanding local markets. With the same resource, you can actually deploy in high opportunity markets, understand the customer fabric, deploy your distribution which has access to those customer segments, and it has been an approach which is very, very different. It doesn't call for a cost or an investment from a rupee perspective, but has a lot of mind investment when it comes to investing for future. We have not fallen short on any such investment in terms of our lateral thinking on strategy. At the same time, when it. Comes to some of the outcomes. You see, on digitalization, that number itself will reflect that on technology we have not fallen short on investment over a period of the last few years. This is just something that I would like to add to what they mentioned. Sure. Thank you. Thank you. That's it for my side. Thanks. Thank you. Our next question comes from Madhukar Lada from Nuama Wealth. Please go ahead. Thank you for taking my question. See, most of my questions have been answered. Just again coming back on top line growth, so far we've had the high base impact. Going into the second half, do you think growth will be much stronger? We've been down about 8% on individual APE. What sort of a number should we. Be looking at, you know, from a full year perspective. Given that now you know you are more confident of growth coming in with the GST cuts also, some sense around that will be helpful. Also, on the VNB margin will be helpful. I think this question was asked earlier also. In terms of how much. Of the impact, ITC impact, will we be able to pass on to the distributors or to the other sort of cost centers, other partners? How long do you think will it take for the margins to sort of normalize for you as a company? Those would be my two questions. Thanks. Madhukar, in response to your question on growth, I rightly pointed out that we do have a much more benign base into H2 of the year that was relatively normal. We had about 8% growth in H2, whereas H1 was 25% plus last year. You're right, we expect to be. Able to build on this growth into. The second half of this year. You'll also notice that our APE in September was flattish, despite most of the business all coming in towards the later part of the month post the GST implementation and also in the month of September. What I can let you know is that the unit-linked business has now started to come back to growth. This is at one level what you're seeing on the underlying business. We discussed GST and the impact, and we clearly believe that there is a lot of demand that can come through this. Again, in response to multiple questions that we have discussed where we expect demand to come through in the short term as well as over the longer term. Early signs are visible. Like I said, the website traffic has increased, and we're starting to see some improvement in conversions as well. Now coming to your second question in terms of the impact onto VNB and when we should see some normalization. This is 14 days into this quarter, early to call. I think through the quarter we will get some sense how the entire ecosystem comes together. I think it's fairly important to be able to keep the customer benefit on top. I think that's one of the clear reasons why customers buy our products and believe in the products that we offer. It's for the rest of the ecosystem, which is the manufacturers as well as the distributors, to find common ground to be able to deliver value to both. Baura, just one follow up. See, it's been less than a month also, you know, with the GST cards. So. In this sort of three, three and a half week period, how much of the impact have we been able to pass on? I mean, I know it's a difficult thing to ask and for you to answer as well, but some sense of what has happened over the last three and a half weeks. How much of the ITC that you estimate have you been able to cut? How much of the thing have we been able to pass on to the distributors? Yeah, no, nothing has been passed on to distributors yet. As Amit also mentioned, this is set up renegotiations that are on at this point. Nothing has come to close. Okay, so. Right now like the old terms. Stand and then whatever you decide, you'll take a retrospective change then. Is that the way to think about it? These are multiple conversations. As and when they close, we will be able to take that impact. Understood. Thank you. Same playbook that we had when we had the surrender value regulations last time. Got it. Okay. Thank you. Our next question comes from the line of Ms. Chin Chavate from Kotak. Please go ahead. Hi. Thanks for taking my question. Just on the MTM loss, I believe that you said. There is some investment variance in the EV world, but if I look at the 10-year G-Sec, there's hardly any movement. During the last six months, I'm just curious what would be. The reason for that? That's just a reference point, Nishin, that we provide. Again, this depends upon the tenure of your underlying liabilities. If you note that it's been quite steep into the later part of the curve, these play out differently depending upon the average tenure of each of your liabilities. Sure. Maybe this is a little more. Academic question, but you know I was. Looking at your P&L statement and I. Was just curious if there. Is going to be, you know, some. ITC loss, which line items should it affect? I know there's practically no impact in this quarter, but which line items it would affect or it would have already affected? The way we represent this input tax reversal, which we continue to have for the last few quarters and few years as well, is that we reflect across each and every element of our Schedule 3 expenses. This should have some kind of an impact on change in actual liability, which is point number 16, to the extent that the GST reversal, input tax reversal comes through. If you're looking at your PNL, then each of these Schedule 3 items will be inflated going forward to that extent that we get the reversals. I'm just trying to say that the actuarial liability that you have reported. Kind of assumes that, you know, adjust the reserves for ITC losses, I believe. It is what it is. That probably gets reversed as you. Probably have some discussions with distributor. You probably assume that, look, there is no discussion with distributors or you. Know, whatever, other stakeholders, and there is an ITC loss, and that is adjusted in the change in actual liability. That probably gets reversed over the period. Next quarters as you negotiate. Is that a fair reading or would it kind of just flex, maybe for the. Point, I mean, for the renewal book, right? I'm talking about the renewal book. Yeah. To the extent that we know, we have factored that as part of the results. Have you assumed any renegotiation in this? Have you assumed that because. Okay. If anything, there could be some reserve release only in the later quarters. I mean, assuming that you probably have a middle path with the distributors right now, you assume that there's nothing. This is the P&L. Yes, if I look at it optically, the. Earnings are not distorted. There's no significant impact on earnings because of this. That's a fair reading. Or maybe there was some and that got set off. Okay, sure. Thank you very much. Thanks. Thank you. The next question comes from Dipanjan Ghosh from Citi. Please go ahead. Hello. Good evening. Just two questions from my side. One is when you're having this incremental discussion with the distribution fraternity in terms of realigning the commission structures, just wanted to get some sense of across different channels. What is sort of accumulative stance being taken by different cohorts? For example, between proprietary or partnership distribution or bancassurance. Which channel partners do you think would be more accommodative in these discussions? Second, just a data queuing question. If you can give your credit protect growth for the quarter on an APE basis. So Deepanjan, the conversation with our distribution is on. At this point, I think it'll be premature for me to put some view of that. It is going to be difficult to say anything at this point. Let it come to a closure, then I think we'll be in a position to talk about it. In terms of credit life, we still continue to see declines in the MFI portion. What I can tell you is that the sort of declines that we've seen in the earlier periods, that has started to reduce. We are hopeful that as the MFI industry at large starts to pick up on growth, we should be able to capitalize on that as well. Just one small follow up in line with the product mix, would it be fair to assume that non-par for the first half of June had more than 50%, 60%? Given that the mix has changed from two-thirds to almost equal weightages. Yeah. I'm not hinging on the number that you're specifying, but it has seen very decent growth for the full year. I think it was roughly about 2:1 on the par to non-par. We are now broadly at 60:50 on the par, non. You can compute. Got it. Thank you. All the best. Thanks. Thank you. Our next question comes from the line of Mohit from Centrum. Please go ahead. Yeah, yeah. Thanks for the opportunity. My first question is on the retail protection. How has been your mortality experience and have you done any repricing for the same? I think we monitor the mortality experience quite continuously. Repricing of contracts or other policies happens at all points in time depending upon the kind of advantage that we see in the market and the kind of benchmarking that we do on a continuous basis. Business as usual, right? Nothing major. Yes, you will continue to see some changes across pockets, but nothing massive or something that has to be done for the entire book at one shot. In fact, if you pay attention to our early claims, look at the ratio of early claims that has started to improve quarter after quarter across these quarters. We now enter about 22% share of claims as early claims. That gives you a sense of what we've been able to do in terms of improving the underlying mortality of the book. Understood, Understood. The second question is towards the bancassurance channel. I was just looking at your PPT. Basically, we added two new banker partners in H1 and now we have overall 50 banks as our bancassurance partners. If I look at the numbers, numbers look pretty flattish at the end of H1. Do we have any roadmap for the bancassurance growth? Yeah. In terms of bancassurance, there are no large banks that are currently available that we could partner. We're open to a partnership, but of course it depends upon whether the bank themselves wants to partner with us. Our objective in all of this is to make sure that we're able to spread as much as possible. Any bancassurance opportunity that comes with these, we're able to add and onboard as quickly as we can. You rightly noted that we added banks, two banks in this current period. Of course, these are small banks, but we've been working with each of our banks, bringing them up to speed and working on improving the throughput as well as in terms of quality. You'll also note that as part of our pack we've got a section that talks about how we would like to integrate with our partners. Our position is that through the ICICI Pru stack, we'd like to be the most partnerable company in the ecosystem. In fact, now from an onboarding perspective, we are able to onboard distribution partners in less than two weeks and get them productive. Okay, makes sense. The last question is on the agents. I was looking at your agent addition. We added around 18,000 agents on net basis from April to September. If I compare that to the private sector, that's around 15% of the total private sector addition. Now there are talks, you're talking about rationalization of distributor commission and I mean I think we did at the time of surrender value as such. Do you think the agent would be kind of little more demotivated or as an industry maybe, agent may not be like wanting to come henceforth. What are your views on that? Yeah, yeah. Yes, go ahead please. No, no, first of all, you know. We have made this event a little bigger. We should keep on looking at the optimism that comes with this decision on increasing the overall demand and absolute productivity going up. Easier said than done because on an instant basis you will look at commissions getting impacted. Over a medium to long term basis we do look at absolute productivity. Compensating for any change in the commission structure that may happen. Nevertheless, at this point in time, like what Dhiren mentioned, decision on commissions are still under discussion, and it will progress and get probably a logical closure over. The next couple of months. is too early to comment on that. That's how it is. I do believe that the kind of visibility that life insurance has got ever since this announcement has come is quite positive. It's never been like this before. Earlier it was seen during the time when there was a tax scarcity. This is a big event and we are quite optimistic that it will support overall demand and absolute productivity should take care of the incremental cost both for us as well as for the distribution. Because like I mentioned earlier, Mohit, I think every distributor is looking at the absolute amount of revenue. I don't think people stress so much about the %. If the environment is such that it's able to drive demand and they're able to generate a lot more revenue, then it is very clearly value accretive for them. Understood. No, no, makes sense. Thanks and wish you all the best. Thank you. Thank you. Our next question comes from the line of Raghvesh from JAM Financial. Please go ahead. Hi sir. Thanks for the opportunity. I have a couple of questions. At what speed do we start to essentially hit customer benefits? I mean, do we have something in mind that this will be the VNB margin outcome due to the ITC? Or maybe if the growth is not picking up maybe two or three quarters down the line, we can consider hitting customer benefits. Ranivesh, in response to a question earlier I mentioned that it's important for us to be able to keep the customer at the center of everything that we do. The rest of the ecosystem, which is the distributor and manufacturer, have to be able to manage this and ensure that whatever is best for the customer can be provided has to be provided. We also have to be cognizant of the fact that this is not the only avenue for savings in the market. There are other products as well and we clearly have to keep our products competitive in that context. Of course, in the context of these being long-term savings. I don't think the right approach is to cut customer competition, customer benefits. I think we have to find a middle ground between the ecosystem participants to be able to find an outcome. Clearly our position on the VNB is to look at the growth in absolute VNB and believe that with the demand that is potentially going to be spurred because of the GST reform, that should enable us to meet our growth numbers. On VNB and on the renewal book, on the policies written in previous years, do we have any levers to change the commission structure on the book which was written say in FY2024? Can we change the renewal premiums now on that book? On the renewal premiums or renewal commissions? The renewal commissions. That is part of the conversation that we're having with distribution as well. We have no ability to change renewal premiums. In terms of renewal commissions, this is also on the table in terms of the set of items for conversation. The other bit, like I mentioned earlier, is to be able to manage cost and you're seeing the improvement in our cost ratios through a variety of activities that we spoke of in response to earlier questions as well that I believe should hold us in good stead as we go through the quarters. The last question you mentioned, the EFT cuts are good for assets as well as the industry. Are we looking at going beyond the industry even at the end this year or is that not the focus remains on. I don't want to make a forward-looking statement on this. I think we will do our best to be able to take advantage of the opportunities. Thanks for the answer. Thanks. Thank you. Our next question comes from Gaurav from MLP. Please go ahead. Yeah. Hi, good evening. Thanks for taking my question. Just to put into context the severity of the impact that we are speaking about, let's assume that without attributing anything passed on to the distributor, what would be the gross impact of this in any way? If you can call out and with better operating leverage playing out in the second half, how much do you expect to offset this organically without assuming anything passed on to the distributor, given that that is under consideration and not yet finalized? Just to understand or just to put into context the severity of the impact on VNB. Gaurav, yes, the question that you're asking me is cetera paribus, what is the impact? My challenge in answering this question is nothing is ever cetera paribus. The entire environment moves, the ecosystem moves. We are not the only participant in the ecosystem. Very clearly, as I mentioned in response to a question earlier, it's important that the ecosystem of both the distributor and the manufacturer get together to be able to ensure that customers get a fair deal. How this gets split up, I don't think I'm in a position to answer it at this point because there are a couple of levers that are at play at this point. One is the question on commissions and how will the commissions themselves change. The second bit is in terms of operating expenses and the impact of GST reversal onto those operating expenses, that itself has to play out. The larger demand that we expect to see in the coming quarters and the coming years, that itself should be able to offset any particular impact that comes through. I don't believe it's a cetera paribus situation. I think the environment will shift. We had this similar set of conversations when we had the introduction of the surrender value regulations. You have seen how the industry and the manufacturer and the distributed ecosystem have evolved in that period and you've seen the growth in the industry come through as well. I don't believe it is a situation that is as dire that gets painted out in terms of how the margin outlooks are. Very clearly, one has to focus on how much of absolute VNB that we can bring onto the table and ensure that the growth of the sector comes. Through on a sustainable fast. Fair enough. Just the second question on this, since you mentioned the focus will be on absolute VNB and given the tailwind of the GST cut in the second half and also a favorable base, what kind of absolute VNB growth are we looking at for, let's say, this financial year? You can give a range with improved outcomes, outlook on growth in the second half or maybe in the second half. What kind of absolute VNB growth should we be looking at? No, it's a little difficult to call at this point, Gaurav, but very clearly we believe there will be a spot in demand that should help us. Okay, sure. Thank you. Next question comes from the line of Harshal from AMSEC. Please go ahead. Thank you for the opportunity, sir. Just had two questions. First is in case equity market continue to remain range bound and eastern from here on, could we see further divergence in growth between A and W&VF? That was the first, and secondly, just in terms of trade-off between growth and input impact on margins, if you can give some color on what sort of additional growth do we require to offset the impact on margins, that will be quite helpful. Thank you. Harshal. I don't know how the final impact will come through because it's not just the equity market, it's the question of the debt market also, and difficult to call how that plays out in the end of our portfolio. We do have equity and debt, so difficult to see how that pans out at this point. The second question in terms of offset, I think we're not looking at an impact on margin from that perspective. This was in response to a previous question as well. I think our focus will be on growing the absolute VNB, taking advantage of the environment that offers to us. Very clearly, this is a conversation that is live with our distribution as well because clearly the pitch to them is that if you're able to take advantage of the demand spot that we see, then they should be able to make higher revenues even if there is a shave off in commission. Very clearly, like I mentioned earlier, the focus is to make sure that the ecosystem gets together, which is the distributor as well as the manufacturer, to ensure that customers do get a fair deal. Shorter things. Thank you. Thank you, ladies and gentlemen. As there are no further questions, I now hand the conference over to the management for closing comments. Thank you all for joining. Thank you. Have a good evening. Thank you. On behalf of ICICI Prudential Life Insurance Company Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.