A very warm welcome to PB Fintech Limited earnings call Q3, financial year 2024-2025. Today we have with us Mr. Yashish Dahiya, Chairman and CEO of PB Fintech; Mr. Alok Bansal, Executive Vice Chairman of PB Fintech; Mr. Sarbvir Singh, Joint Group CEO of PB Fintech; Mr. Naveen Kukreja, Co-founder and CEO of Paisabazaar; Mr. Mandeep Mehta, Group CFO of PB Fintech; and I am Rasleen. I now request Yashish to make the introductory address.
It is on. Thank you very much for your patience. I apologize for this delay. We'll try to make sure it doesn't happen again. Sorry about that. So, as we share our performance update for the quarter ended December 31, 2024, we are very pleased that our health and life insurance business, which are, as I always say, a bulk of our long-term value, witnessed a combined growth of 47% year -on -year in new premium for Q3 for the quarter. In this, health is just shy of 60%. And I think if I was to give you a color for the quarter, our savings business grew a tad slower than we anticipated. And thus, w e had built up our capacity expecting a higher growth in savings, but that did not happen.
Just to take away the thing, health grew really well, term grew quite well, and savings grew a little slower. The good news is motor and two-wheeler actually came back. So, it is a pretty balanced growth this time across the board. Our total insurance premium for the quarter was INR 6,135 crores, up 44% YOY. Core insurance premium grew 42% in Q3, with the core insurance revenue growing 45%. Credit-linked revenue was INR 119 crores for the quarter. New initiatives grew at 87%, and now are at a 3% positive contribution margin. Our revenue for Q3 grew 48%. That phase (this is another thing that I wanted to signal here) that phase where our premium growth was higher than our revenue growth is hopefully behind us because that was because we were moving from the traditional products to the unit products to the savings side.
That part seems to be now behind us. We are. It's been more than a year of that change, so the revenue has grown at 48% to INR 1,292 crores, and the PAT grew to INR 92 crores. 92% YOY to INR 72 crores, sorry. Our trail revenue is now at an ARR of INR 665 crores, up from INR 454 crores last year, and just to complete that story, this same number was INR 287 crores exactly two years ago, so what that means is much more than doubling every two years, and a growth of 46% YOY.
As we all know, this is a key driver for our long-term profit growth, so this is quite secure. We continue to improve our customer onboarding and claims support services, and the insurance CSAT is now, for the first time, above 90% and 90.2%, up from last quarter. The credit business has been down. It's about 20% down.
The core credit business is about 20% down YOY. And this is actually the first quarter where we've seen a significant reduction compared to the previous. So, it's even on quarter -on -quarter, it's about 13% down in terms of disbursals in the online side of the business. However, the good news there is secured is building up very fast. Secured is now much bigger than unsecured in terms of total disbursals. It's actually about 1.4 times now. So, that's clearly taken over. Of course, it has materially less revenue per disbursal. And the good news is the secured business was just started in Q2. So, it's just been a six-month-old business. So, it's a very rapid growth and all organic. We are not here. So, the new initiatives are now showing a disbursal of INR 2,570 crores.
So, this is largely a secured business, which is now at almost INR 1,000 crores a month and INR 24 crore revenue for the quarter. So, that part is acting as a filler. The core credit business continues to be adjusted EBITDA positive. However, I must say, in this year, we will face about a INR 40 crore negative delta on the Paisabazaar side. However, that should be taken care of by some incremental EBITDA coming from the other parts of the business. We continue to strengthen our leadership in new initiatives with a revenue growth of 87%, as I said, and adjusted EBITDA margin moving from - 13% to - 7% with a 3% contribution. PB Partners continues to lead, which is our agent aggregator platform. Today, it has 270,000 advisors. Last quarter was 250,000 advisors. So, in the last one quarter, we've added another 20,000 advisors.
We have moved the business increasingly towards smaller and higher quality advisors, more diversified across different lines of business, and present in 18,900 PIN codes, covering 99% of the PIN codes in India. Our UAE insurance premium has grown at 58% YOY and is now aligning more and more towards health and life, similar to our India business. Our core health and life insurance businesses are growing ahead of expectations. In anticipation of the steady growth, we continue to invest in operational capacity as well as brand awareness campaigns. Happy to take questions.
Thank you, Yashish. We'll take the first question from Sachin Dixit, JM Financial. Sachin, please unmute yourself.
Hey, hi. Hi, Yashish and team. Hope you can hear me. Congrats on again delivering a good growth quarter. My first question was with regards to profitability, right? So, while obviously revenue continues to ramp up, the jump in sequential sort of PAT seems a bit muted. What is driving? Is this just Paisabazaar-related impact, or there is more to it in terms of contribution effect? Sorry, I have not been able to go through the presentation, so the question might be a bit naive.
No, it's not your fault. It's our fault because the presentation just got uploaded some time ago. No problems. So, yes, there is, as I mentioned earlier, last year, if I look at our credit P&L, was about INR 40 crores better than this year. So, yes, there is an impact that's coming from there. The other part, as I mentioned at the opening of my speech, was we anticipated a certain growth, and that growth delivered in health. It delivered in term, but we fell short of that growth rate on the savings business. That's partly reflective of the insurance market, of the market cycle that's going on, because most of what we are selling is unit, which are market-related, right? So, they are in a way the same alignment as mutual funds, if you think about it, right? So, that did get impacted.
And so, we were left, if you remember, at the last call, I said, yes, we have anticipated, we have invested in anticipation of growth. That growth did not really come in in the savings side. So, we were left with some additional operating capacity, which I think as we get towards through the next quarter, we are aligning. Also, obviously, our overall growth is at 44%, but the health growth, as I said, is about 15% higher. That continues to hit. Even our health renewal growth is at 46% or so, whereas the new business is growing faster. Fresh health business comes at zero margin, and that's obvious. In fact, a little bit of loss, actually. So, that continues to hurt us. Obviously, that doesn't hurt us from an NPV perspective, and we should also look at the NPV, but from a medium term, it does.
So, till we stay in this cycle where new business is outperforming, especially new business of health is outperforming, that stress will stay. But it's a good stress to have, not a bad stress. However, on the savings side, it's just, I think we made the right call because we saw a lot of growth in September- October. That growth did not translate in December.
Just a quick follow-up.
Sorry, Sarbvir wanted to add something here, yeah, because.
No, no. I just wanted to add, like you said, that the seasonality this year has been a little bit atypical in the sense that September was a very big month, and then October, because of Diwali, we expected it to be where it was. We thought November and December again would be very big months. So, I think that change in that, I would say there was a general slowdown, I think, in some kind of consumer demand also. So, it took a lot to get this growth. That's what you are seeing. But I just want to again say that if we can grow at these rates, I think, yeah, I mean, we cannot prioritize three-month profitability if you can grow at these rates.
Totally.
Completely, yeah. Just a quick follow-up on the savings piece, right? The markets, obviously, January has started very badly, and who knows how it's going ahead. So, savings could continue to be a laggard. Are you building accordingly, or are you still, or you believe that other segments will take care of the investments that you have already done?
See, when we say slow growth, do appreciate it was still north of 30% for the quarter, and even for the month, well, it was quite okay, and even in January, we are seeing quite okay, so it's not like we are where the rest of the industry is. We are definitely ahead, but it is just, obviously, we can't be not impacted by the cycles.
Got it. On my second question, quickly an update on the healthcare foray, if you have anything in place, we'll have a good update.
Yeah, it's the same as last time, so I was authorized by the board about, I think, 45 days ago to have negotiations with multiple parties in trying to get investors on board. We are in deep negotiations with the investors. I hope we are in a position to announce something in about 30 days or so. I hope. That's the best I know. Basically, multiple negotiations of SSAs, SHAs have happened, and at some point, we'll reach closure. Investors have been identified, of course, because that's why we are in that stage.
Understood. Thanks a lot for the update, and all the best.
Thank you.
Thank you, Sachin. We'll take the next question from Jayant from Jefferies. Jayant, please unmute yourself.
Thanks for the opportunity. First one is on the margin, Yashish Dahiya, I understand that savings is falling a bit short. If you could just sort of touch upon your long-term guidance of 50%-55% on the contribution margin, should we still continue to expect that over the next two, three years, or is there any revisit on that? And then I'll come back with the second question.
See, I think as you look at longer term, two, three pieces have to play out, and strategically, I think it's changed, right? So, strategically, the renewals part, which is the NPV, is a great driver of profitability. And eventually, both in health and life, that does contribute, and even in motor, it does contribute. I guess we are still a very early-stage business. If your fresh business is growing at the rates that we are growing, we are still quite early. So, I guess as time evolves, that's one part that plays out. The second part that has to play out is we have, for the last 12-18 months, decidedly been pushing the pedal in terms of operating spends and cost of acquisition spends, etc.
It is the right thing to do because for us, if we had 5% higher growth, that is better than having 5% higher profitability at this stage, very clearly, right? Because that's the stage we are at, and we know which side of the coin we need to bat on. So, as we get to a more maturish phase, clearly, that part would also shift. So, I haven't actually thought of the exact numbers, but I don't think one should rule out a much higher contribution margin than today. And I don't think a 10% delta from where we are is out of imagination in any way.
Great. Second question for POSP.
Yeah, obviously, efficiency, etc., would also come in. We are also doing a lot of work on AI, on product development. We are doing, let me explain the kind of things that we are doing, right? On the garage network now, we are able to have, we've opened 100, we've got 100 different garage networks with our partners. And what that does is allows us to give better service to our customers. And that's, again, part of the reasons why our motor business has started to grow again. One of the reasons, so as we do these, hopefully, our sales also become easier. So, these are all linked activities, and all of these should drive further and further efficiency. But I would say in the last three years, we've been in a phase of high investment in capabilities that would enhance future sales.
Understood, Yashish. So, the second question is on the POSP business. This 3% contribution margin looks impressive. Is this the Dubai and the corporate business, or this is largely the POSP piece? And if we can sort of expect this number to stabilize and move up from here to the sort of 5%-7% range that you had at some point hinted to?
So, see, in the POSP business, so our new initiative, nothing swings the needle like the POSP. So, it's largely POSP, right? But I think the key thing there is your POSP is a low-margin activity, and then it depends upon are you dealing with really small individual agents, or are you dealing with people who are slightly larger agents? And with larger agents, you don't have negotiation ability. They are essentially auctioneers of business. With smaller agents, they tend to be more your partners. And thus, you make better margins when you deal with smaller. But when you deal with smaller agents, you have to also deploy your own sales team, your own relationship team, etc., right? So, I think 5% is certainly not out of reach. I hope we do better than that. Let's see. Let's see how that market evolves.
But you should hold on to this 3%+ ?
Yeah, we never. I don't want to comment on that. We want to always hold. You do realize that is a competitive area, and we will always be acyclical, counter-cyclical. So, we want to hold our cards close to our chest, and we don't give short-term or mid-term guidance on that. By the way, in that, now even Paisabazaar's PB Connect is also included in that, and Dubai is a contributor as well. Of course, everybody's a contributor, but now the new initiative is four things: Paisabazaar, PB Connect, Policybazaar, PB Partners. It's the Dubai business, and it is the corporate business, right, so all four are there, but I don't want to tie my hands or tie our hands in any way, shape, or form in the POSP business. It's a competitive arena, and we will stay competitive, and we will be somewhat counter-cyclical.
I think that's the only guidance one can take away.
Perfect, and congratulations, Yashish, for a great set of numbers.
Thank you.
Thank you, Jayant. We'll take the next question from Ankush, Surge Capital. Ankush, request you to please unmute yourself.
Yeah, am I audible?
Yes.
Yeah, just a clarity, I think, Yashish, you clarified, the secured business is now part of new initiative and is not considered a core business, right?
No, the secured has two parts to it. One is what we sell as a marketplace on our platform, which is Paisabazaar. And the second is what essentially is a platform for, in a way, like a consolidation platform, like POSP. Basically, it's the same as PB Partners. And so, we have both sides of the secured, and the number I gave you for secured was a total number.
Okay, got it.
Secured happened halfway now.
No, D2C will be, the D2C business will be in the core. The PB Connect is, of course, larger in terms of dispersals, about 3/4.
3/4
Y eah
So, about 3/4 is PB Connect, is the POSP business.
All right. So, can you give the core online business disbursal for the quarter?
About INR 2,866 crores for the quarter.
For the quarter, yeah. Okay, got it. That was helpful. Thank you.
Thank you, Ankush. We'll take the next question from Madhukar. Madhukar, please unmute yourself. Madhukar, we'll take the next question from you. Please unmute yourself. We'll take the next question from Shreya, CLSA. Shreya, please unmute yourself.
Hello, can you hear me?
Yes, Shreya.
Hello. Hi, thank you for the opportunity and congratulations on a good set of numbers. Keeping the quarter aside, I wanted to understand your outlook for the coming year in terms of growth across the major segment. I will not go into the lending business, but the health insurance segment. So, what we are hearing from the underwriters is a fresh round of price hikes are going on in the industry right now. And that segment already has challenges in terms of affordability. Now, I understand you have a major market share in the fresh business that you get over there. But the theme of the year that is coming through is first, fresh rounds of price hike. Second, rising pressure from the regulator on the underwriters to keep their expenses under control. FY26 is the year where they all have to comply with the EOM guidelines.
So, how do we look at our business going ahead, given that the underwriters will be going through a sea of changes in the year ahead on the health?
I will pass this over to Sarbvir because you have a much better answer. But I just wanted to leave you with one thing, which I'm sure you all know. I'm not talking about Policybazaar business. I'm talking about the industry. On new business, your claims ratio is 25%. On renewal business, as an industry, the claims ratio is 75%. This is unrelated Policybazaar. This is the reality. Policybazaar might be better on both. Let's leave that out of the equation. Everybody wants new business. I will leave it there. I'll pass it on to Sarbvir. I don't think anybody is anticipating that they don't want to grow in new business.
No, absolutely. I think that's the key point that fresh business is the solution.
If you think about it from an industry perspective also, the only solution is to grow your fresh book faster than your renewal book and manage that. So, I think anyone who can bring fresh business will always have higher value. And I think that's, if you notice, that's what we are doing, right? We are bringing fresh new lives into the industry. We are bringing them at a reasonable sort of loss ratio. We are a positive channel in terms of quality and disclosures. So, I think our proposition is, in fact, much more valuable in a year where you have stress on your book and you have various other things going. So, I don't necessarily anticipate that to be a major challenge for us. I would only say that you are right. Affordability is the key issue to work upon.
And I think this year we found a lever in terms of going much more into monthly mode policies and things like that. Now, as we go through that next year, we'll have to find newer and newer ideas. But yeah, I think if you can get fresh business, I don't think you will have a huge challenge next year.
And the last thing I would mention is if you go through the notes of all our calls and our conversations with each one of you, what's happening is exactly what we've laid out over the last three years. So, it's nothing. All I'm saying is there is zero surprise for us. I don't know where the surprise is. But I'm just talking about my own communication with all of you. It's always been exactly on the lines of what's going on right now.
Got it. Got it. And I understand the part of your ability to bring new lives into the industry, etc. Do you see any advantage in the past three months? Have you seen any advantage of other distributors in the industry slowing down, or particularly in the last three months? There was a lot of news around other distributors having some sort of pressure. So, in those terms, would you sense anything on the ground, or was it just the great momentum that has been going?
Shreya, honestly, I appreciate the question, but honestly, we genuinely don't even have time to think about any of the others as far as health insurance is concerned in terms of distribution. We are kind of in our own race, and honestly, it's like, I remember the first few days in IIT when I had joined, there was a run going on, and I think in the 800 m race, I was about 100 m ahead of everybody else, then it became just my race, there was nobody else to compete with, right, so honestly, this is just us, that's it, from a distribution standpoint. I don't know what else is going on, and I don't know who we can focus on.
Got it. Got it. Anyway, thank you so much. This was useful and all the best.
Thank you, Shreya. We'll take the next question from Sachin Salgaonkar, Bank of America. Sachin, please unmute yourself.
Congratulations to management on a good set of numbers. My first question is on your core growth. Clearly, every year we have a new base, and you guys continue to positively surprise on the overall growth. On this high base, should we continue to see 30% plus growth for the next couple of years? Do you see downside risk to this growth?
Growth is the only thing nobody can predict. I have always maintained that for the last five, six years. We think we can grow at 30%. It's a hard problem. It is not an easy problem. If it's less than 30%, we'll be very unhappy also, is all I can say. It's impossible to tell what your growth is over the next five years going to be. I think the way we are growing, I hope we can maintain. I don't know, Sarbvir.
Yeah, I have no one. It's absolutely very hard to say anything, but yeah, we definitely, we will plan, and we will. I think the main thing as we go forward is that we have to execute fearlessly, and we can't be worried too much about what happens in certain time periods. I think you have to think beyond where you are today, and I think we have to keep our eye on the future. I mean, you can't just say, "Keep this profitability this month or this quarter," so I think that is the main thing to avoid. And if we can avoid that and focus on basic building blocks, right? Affordability, product disclosure, service, claim support. I honestly think that there is no reason to believe that we cannot grow for many years.
No, and I totally agree with Sarbvir, and I echo this. In fact, I specifically wrote a note out to management because sometimes communication gets misunderstood. Because I do believe that this quarter, our profit was slightly less than what I anticipated for various things. And so, I specifically wrote the message saying, "Please, that is not important at all. What is important is our growth, and let's focus on that. And this INR 10-INR 20 crores up or down will keep happening. Just don't worry about it at all. Over the long term, it'll all even out.
So, let's just focus on that, totally on that, and let's focus on the building blocks. So, even next year, if we had to err, we would err towards growth rather than err towards trying to get profitability by 5% lower growth. No, that is not what our objective is going to be.
Thank you. Very clear. In one of your slides, you did mention the future growth will be coming from tier two, tier three cities. So, the question out here is, can you help us in terms of the contribution today for premium from tier two, tier three cities? Where do we see that going? And again, incrementally, should we see higher investments or a bit of pressure on margins as we go and target consumers into these places?
So, I would say that today, about two-thirds to 70% of our business comes from tier two, tier three cities. And I think this number will, that's the way I think growth in the country is happening. So, I have a feeling that we will definitely reflect that. Is it going to be more expensive or less expensive than where we are today? I'm not really sure. Because see, our funnel works in a way that we do digital as well as television advertising, which brings people into our website. And there, it's not really, it's not like we have to spend on hoardings in Bombay versus hoardings in a smaller city or something like that. It's all national kind of work. So, I think it brings these people, and then, yes, there will be a service element that we have to manage.
In some cases, we have to be distributed more in terms of, we are today, I think, serving in over 120 cities. We have sales capability. So, maybe the 120 will keep growing incrementally as we go along. So, there could be some, you could argue, some cost associated with it. But honestly, I feel that it's in reasonably good shape right now. Because we do gain in productivity. We learn how to manage ourselves better in the existing areas, right? So, the new area may come in at a slightly lower profitability, but then you also have existing areas which improve. I think Yashish mentioned the use of technology is, I think, very exciting. There's a lot of opportunity with a lot of, I'm sure you all are hearing about all the GenAI models and things like that.
But practically, what it really means is that you are able to bring some productivity gains. You are able to translate what is the intent of the customer more clearly. And I think that will help. So, yeah, I don't know the answer to your question, but I feel it will be all good.
Got it. Very clear. My third question is on Paisabazaar. Clearly, you're seeing better growth coming from secured versus unsecured. Question to management is, in medium term, how should we think about the growth coming from unsecured space? Is this something where the company is looking to defocus? Or as in how the stress in this part of the industry goes down, we should see growth again picking from unsecured?
Naveen.
As you may have heard from the various con calls that happened in the banking and the lending industry, that the industry consensus seems to be that the risk is peaking, and we should hopefully have bottomed out in terms of the growth in the last quarter. We are starting to see some positive signs already in our conversations with the partners. So firstly, hopefully, the growth will come back, and again, if you look at the fundamental pieces on banking industry, liability is growing at about 12%-14%. Those have to be deployed into assets. And within that, secured assets give you a 1% or less than 1% ROA. Unsecured is the one which gives you higher ROA. So, unsecured as an industry should get back from this base to about 15% + growth, which the regulator also hopefully would be comfortable with.
As that growth comes back, we as a digital player would hope to grow faster than the industry. Unsecured will remain a focus area. We are working really hard in terms of going deeper into the product and use of technology, which Sarbvir also alluded to, in terms of improving our productivity, reach, and efficiency. Unsecured will remain a focus area, but secured will have its own growth path because it started recently, and we found a segment in PB Connect and PB Partners equivalent, which is where we see a big opportunity, although at a lower margin, but a big scale opportunity.
Absolutely.
Thank you, Naveen. And my last question generally is, I mean, Yashish, your last guidance in the company was two plus years back. Today, we are pretty comfortable in terms of PB Fintech reaching that INR 1,000+ crore in terms of net income for FY27. Given the fact that even your new initiatives' margins are improving, your core business margins continue to improve, any thoughts in terms of coming up with a new guidance or revising that guidance as we head forward?
That we don't like to give guidances very often, and usually, we are long-term thinkers, and that guidance will come from fundamental blocks of the business, so those blocks are fairly unshakable, so I think we will be able to hit those numbers and quite easily so, but I don't think we are giving any new guidance, and we don't give any guidance. We don't have any guidance for next year or for the year 2028 or anything of that sort. We just gave a guidance for 2027 once, and I don't think we're changing guidance. If we do better, that's great.
Got it. Thank you.
Thank you, Sachin. We'll take the next question from Manas, Bernstein. Manas, please unmute yourself.
Thanks, team. Trying to delve into unit economics a bit. I've never really liked the fact that your first-year business is actually not making money. In an industry, it typically makes money almost entirely in the first year. I understand the LTV. So, I wanted to understand what is the CAC trend and what really sits in the CAC? Is it just digital marketing? Is it something more? So, that's the first piece, and I want to follow up.
Yeah, so if you wanted me to answer the first piece, I will just, yeah, finish the follow-up, and then I can kind of, we can answer it all in one go.
Sure. So, the follow-up is related. So, next year, sitting on this very strong new business growth, you should have very strong renewal business growth in terms of commissions. And therefore, margins should flow through if the economics is what it is.
So, see, when I gave the INR 1,000 crore guidance, there was a very simple principle behind it. By the way, it was given in November 2021. So, it's a long, long time ago, right? But it was, and at that time, you used to make INR 1,000 crore losses. That was the time when that guidance was given. And why was the guidance given? It was based on one simple premise, nothing else. It was based on renewals doubling every two years. And we are seeing that. That's why I emphasize on one number. Renewal ARR was INR 665 crores two years ago. That's the reason I mentioned two years ago. It was INR 287. So, we are more than doubling. And this will happen once more within the next two years, right? It's currently growing at 46%. Whether you grow at 40%, 45%, you'll be in that ballpark.
That is your guarantor of profitability. Now, coming to your question, the first question, which is, see, ours is a very simple business. Life insurance, you make a bulk of the revenue in the first year. Motor insurance, you make about 2/3 of your, or whatever, of your lifetime value in the first year or something like that. In health, fortunately or unfortunately, whichever way you want to think about it, we think it's fortunate, you make only 20% of your revenue of your NPV in the first year. And so, you have a huge, because health is a product where the premiums keep going up, commissions are flat, and in the first year, nobody makes money by selling health within one year, right? And thus, our CAC is about 22%, 23% of LTV. So, it's a very high-margin business for us.
But the point is, our revenue in the first year is only 20% odd of NPV or thereabouts. And thus, in the first year, we make a loss. It's a beautiful product. It's a product where we have our book for the last 17 years. And around IPO, we put out some of those numbers, and we can always start putting out those. All those renewals are holding up. The renewals are higher than they've ever been before. Now, you said because of the growth we've had in the last 18 months on health, yes, that should reflect into renewal, higher renewals. And you're seeing that. If you look back, our renewal rate was slightly lower in the beginning of the year than in the latter part of the year. But again, if you look back, we had guided towards that.
Because see, the only thing I will ever guide you on is renewals because that is fairly certain. Like, we know what our renewals next quarter and next year are going to be. Other pieces we don't know. We don't know where fresh growth is. And so, fresh growth, we always shy from guidance. We just say, "Look, our target is 30%. We don't know. It's our guidance." And all of our businesses at an NPV level, we operate at about 2.7x. So, what that means is our cost, our acquisition cost, our customer service cost is less than 40% of our lifetime value calculated with an IRR of 15%, right? And it goes through lots of checks and balances. It is not that business just puts it and we take it. It is based on a lot of scrutiny and a lot of data over the last 17 years.
But that's our current number. We are at about 2.7. We would love to be at 3, but that's not as important as growth. Because if you're at 2.7, you do want to grow.
Understood. Thanks.
That clarifies.
Thanks for the detailed answer. Would love to have more disclosures around this from the DRHP time, but that's it. Thank you.
Sure.
Thank you, Manas. We'll take the next question from Dipanjan. Dipanjan, please unmute yourself.
Hope I'm audible.
Yes.
Yeah. So, just a few, first, a few questions. So, one, I missed the POSP premium data when you mentioned it, if you can spell that, and also the PB Corporate premium data. Second, you mentioned in your presentation that the revenues from the lending business through the partner channel was around INR 77 crores, sorry, in the 2Q. Could you give the similar number for 3Q? And third, again, I mean, if I just look at your overall disbursals to existing customers in Paisa, the ratio to existing customers seems to have grown. So, are you getting new customers because of your relative change in mix towards more of secured business? And how do you see this trajectory going ahead?
Paisa, I'll leave to Naveen. Just the numbers, from a numbers perspective, POSP INR 1,326 crore is the premium of the quarter. The other premium you wanted was?
The corporate business.
Corporate is about INR 390 crores.
[crosstalk] .
On the advisor revenue for the Paisabazaar business?
Yeah.
For Paisabazaar, your question was PB Connect, Q2 revenue was INR 7 Cr, and Q3, that number would be around INR 24 Cr, right? And your second question was around the customer growth.
Sorry, just to follow, so this should be included under the new initiative contribution profitability from this quarter onwards. Is my understanding correct?
This is revenue. This is not profits. This is revenue. It is, as of now, a loss-making business. It makes a loss of about INR 3-INR 4 crores a quarter. INR 4 crores a quarter.
Okay, so just to clarify and understand correctly, X of this, I mean, if you are comparing apples to apples, the new initiatives might have been maybe a, whatever, maybe 4% or 5% contribution margin during the quarter if you are doing it on a historical accounting basis.
It's very small right now. INR 24 crores is very small in the overall scheme of things as far as new initiatives are concerned. But yeah, you may be right a couple of percentage points here and there.
Got it. On the existing customer disbursals, I mean, that seems to have dropped for our new customers coming into the ecosystem because of this product mix change in.
Let me leave Naveen in a very fundamental way and leave Naveen to answer. Consumer demand is not down. Supply is down. And so it is not that we are seeing less consumers. It is just the loans available to people are far fewer. Naveen, you're good.
And we continue to acquire, to your question on new customer acquisition, new customers typically experience credit score as a first product. So there we continue to acquire about five, five and a half lakh new customers every month. That's not down. And secured is not very relevant from the number of consumers' perspective because the ticket size is very high. It's a INR 40 lakh average ticket size. So that is not a consumer driver. It is a disbursal and then eventually a revenue driver, but not a number of consumers. Number of consumers is more credit score driven, which is now at about 49.5 million. And then, of course, some of them take unsecured, some of them take credit cards, some of them take some of the other products. Secured is not a number of consumer driver.
Just one small question, if I can squeeze in. Your yields on the insurance business seems to have gone up. So is this more of a function of mix change or if you can give some color on that?
It's nothing very dramatic, is what I would say. I think it's fairly within, yeah, just totally mixed.
Got it. Thank you. And all the best.
Obviously, fresh business might have slightly higher yield than renewal business. That may have some impact.
Almost flat.
Almost flat. It's almost flat, by the way. Yeah.
Got it. Thank you.
Thank you, Dipanjan. We'll take the next question from Neeraj, UBS. Neeraj, please unmute yourself.
Yeah. Hi, team. So I just saw in one slide that we have entered into FLDG arrangement with one of the partners. Can we elaborate more on that?
Yeah. So Naveen will answer, but I will just give you a very quick detail. We as the board authorized it. One partner, because of lack of supply in the market, we went in for this. The way we are reporting our revenue, we are assuming that the FLDG, whatever we have promised in the FLDG, we've lost it at the beginning itself. That's the assumption. So if we don't lose anything, it will come back. Yeah, I don't think I should give out the exact number. I think Naveen just stopped me from saying that, but.
[crosstalk]
Yeah. But we've 100% provisioned on day one. So we provisioned whatever.
Restricted to only secured business or even unsecured?
No, it's unsecured. You don't need FLDG unsecured. You need unsecured.
Unsecured business.
Yeah. It's with one partner. The rationale was to try and work with them and see how does the profitability play out over 36 months-38 months, which is a typical tenor of a personal loan. This allowed us to expand the segment, which was our objective. We've taken a much lower FLDG than the allowed threshold by the regulator. And like Yashish mentioned, we are provisioning that fully as we kind of do the business. We've already seen, so this was the end of December. We've already seen the expansion of the segment happen in January because of that.
From a revenue category, from a revenue reporting perspective, please appreciate there is no further risk. It is not like anything else is coming. Whatever we have put, we have already written it off and if it comes back, it's only positive and it is helping us expand the category, yes and we may or may not do more of it. We'll see.
There will be two filters that we will use to consider any other proposal. One would be that either it helps us expand the segment and expand the number of consumers we can go to and test it out along with the partner. The second would be to expand the margin. So if it's fitting one of those two objectives, then we would consider it and take it through the process of board approval, etc., before we go there.
Is the unit economics higher than the normal unit economics in this category?
Unit economics are very similar. Like I said, this particular deal, the objective was to expand the segment. So by expansion, we have seen the higher disbursal growth, but unit economics is similar to what it would have been without the FLDG. Very similar.
Net of FLDG. Just wanted to clarify, net of FLDG, unit economics is similar. But I think the specific deal, I don't think we should comment too much on that particular deal in terms of its profitability, loss to us, etc.
Sure. And in terms of PB Connect, which we are now entering POSP model into Paisabazaar, how is the unit economics and can it be scalable significantly from here? Or again, it will be similar to insurance POSP model where the margin should be low for a very long period of time?
Yeah, yeah. So almost all the points that you mentioned in your comment. So it's very, very scalable. The opportunity is very high. We've seen it over the last few years, and PB Partners has kind of shown the path there that in secured, especially home loans and LAP , there is a lot of business that's out there which requires physical processes and fulfillment, and it's very, very distributed and spread across multiple partners. So we're trying to build a platform to bring all of them together. As we build the scale, it will continue to be low margin. Currently, it's at negative margin, small negative margin, like Yashish mentioned. And the objective would be, again, as we scale it up and bring more efficiencies and bring more smaller distributors, the margin should continue to improve.
At some point, like PB Partners has reached now, it gets into the positive contribution zone.
See, and the risk is cyclical. And secured is quite cyclical. So we're building this strategically so that Paisabazaar cyclicality goes down. That's one of the primary reasons why we're building this. And of course, it also includes influence with partners because suddenly we do large volumes with them. As you can see, it is already 1.4 times the unsecured business in terms of overall disbursal. And it's going to grow quite rapidly. So that's the other part. Like POSP built our relationships, this should also build our relationships with partners.
Got it. And the last question, if I may squeeze in, is on the cost rationalization we talked about in the last call that we might free up some of the capacity on Paisabazaar given slower growth. So wanted an update on that?
Some of it has happened. But when you do that, it doesn't reflect immediately because there are processes, etc. But yeah, that's a process. It started. So you'll see some effect of it now onwards, from December onwards it started coming. And a lot more impact will come from April onwards. That's not because we're doing anything else. It's just we've got empty offices right now. So those empty offices, we've given notices to leave those offices. But you can't just leave them, right? Your accounting still takes the costs, whether they're empty or fulfilled.
So how much savings if we can quantify, we'll be able to add?
Once we do the exercise, we'll update you. Maybe Rasleen can update on that. We haven't quite done the exact exercise. But just to put in perspective, I know it may sound a bit odd, but we almost have between 1,500 - 2,000 empty seats right now. That's a lot of seats. So if you do a per seat analysis, a seat typically costs what, about per month, about INR 10,000. Yeah. So I'd leave it there. But that's the straightforward answer, right?
Got it. This is helpful. Thank you, Yashish.
Thank you, Neeraj. We'll take the next question from Nischint, Kotak. Nischint, please unmute yourself.
Hi. I hope I'm audible. 3Q was a weak quarter for life, as you mentioned, and I think you've capacitated for more, but volumes were a little weaker. Just curious, how are you looking at fourth quarter? Have you sort of made similar investments and any feelers that you have from insurance companies?
So I think, first of all, maybe I've given the wrong impression here. Our life business grew at more than 40%. So just putting that out there, right? So I should not give the wrong impression that it's been a weak quarter or anything of that sort. The only thing is in savings, we had got used to 100% growth YOY. That hasn't come, right? So our growth is definitely lower than that. And I think our health and term businesses have grown exactly as expected. And that is a reflection of the market that the savings business has been. But it's still decent growth over last year. Even if I look at current, I don't see any challenge in giving what our usual projections are as growth, only for the savings business. And of course, health and terms should outdo that.
So I think no point giving any specific guidances here, but that's how I see it. I think savings, we're okay.
I don't know if you.
No, no. I mean.
It's an obvious thing, right? If you are selling unit-linked products and if the market is soft, there will be some impact. I think that's what we have seen.
Yeah. We are anyway going too much to your guidance. So just moving on to the non-life part, the industry has moved to, or the regulator has asked the insurance players to move to one-by-one formula. I believe, obviously, you are not part of it. So your premium numbers continue to be the way you have been doing it in the past. But have they changed the commission structures? Have they deferred the commissions for long-term policies?
I think we would prefer not to discuss commissions, I think, like this. We are part of the industry. We follow all the rules and regulations as per the industry, and we continue to do that. See, Policybazaar is not a commission-hungry platform. I think we are more focused on number of customers, better quality products, more affordable pricing, better service. So I think, yeah, it's not really clashing right now with that approach.
And the data proof, if you want data-based proof that, okay, we are saying we are not commission-hungry, but actually we must be commission-hungry because that's how everybody's supposed to be. Just look at the data. From the day of the IPO till today, our premium is about six times higher. But our commissions are exactly the same. Obviously, a six times larger player with larger market share should have been able to attract higher commissions if they wanted to muscle into it or something of that sort. That's not our intent, yeah. That's never been our intent. We are exactly where we were. We are getting the same commission today as we were getting when we were six times lower. And even when we were 30 times lower, we're getting the same commission.
Sure. Got it. Thank you very much and all the best.
Thank you, Nischint.
See, read us very clearly. We are growth of premium-hungry. We are not growth of commission-hungry. I know that at some level, from a financial perspective, that sounds very stupid, but I think at another level, it's very smart. We really want to be large in our impact. That's all.
Got it. Thank you.
Thank you, Nischint. We'll take the next question from Sanketh, Avendus. Sanketh, please unmute yourself.
Thank you for the opportunity. See, probably the question is on similar lines. So out of the total health, what we do, just to understand what portion is long-term, say, three-year indemnity health you sell. And just if you were getting upfront, whether you were recognizing commission on deferred basis or you were accounting profit, I mean to say, NPV, I understand. But in accounting basis, you were recognizing on deferred basis or you are recognizing on cash basis. So that's the only thing I wanted to check.
So I'll give you a very simple answer to this. We have renewals and we have fresh. Overall, when you look at it, it all evens out. Because if you are doing three-year business, then your renewals from the last two years will not come up as renewals. So eventually, when you look at it, it's not a big impact to anyone, at least as far as we are concerned. I'd leave it there for now. We don't want to go into very specifics of how much is three-year, how much is two-year, etc. What I can say is our three-year, and this is important, our three-year in the last 18 months has been lower than our three-years in the previous 18 months. And this is important so that you know that our number of transactions is actually growing.
It's not like we're growing because we've had some three-year story or something of that sort.
Got it. And just on the contribution margin on the core business, see, the mean last year, if you see, on an average, you reported around 44-45% contribution margin on the core business. But now that number, every quarter in the current year, at least, seems to be dipping. Today, it is at 40% or so. So just wanted to understand, is it largely because of Paisa or is it largely because health has done very well? So just wanted to understand how you see it.
You are absolutely right. Health has done very well. Health takes away about three to four percentage points. Let me explain to it in very simple terms. When a business continues to grow for 18 months, two years, it scales up compared to the other businesses. So if the rest of the business is growing at, let's say, over the last, if you take everything ex-health, it is growing downwards of, maybe it's growing at 35%-40%, right? And health has been growing at 55%-65%. So let's say it's growing at about 25% more than the rest of the business. Essentially, on that, you're making zero compared to 45%, which you were making on the overall piece earlier, right? And that affects you. Of course, your renewal piece is also coming in, and that helps you.
Plus, we have explained to you that we put a little extra effort in trying to get sales on the savings side. And we anticipated 100% growth. Maybe we got a 40%, 50% growth, whatever it was. So it wasn't 100%. That was all. And I think if you think about it, over the multiple years, Policybazaar has been in that 42, 44, 45, 45, 42, 41 range. And these changes are very minor compared to all I'm saying is, yes, you might want to worry about them. That's your choice. If you want to hear me say it, don't get fussed by this too much. It is largely some new health happening, some little investment here and there. Whenever we want to, which is going to be a key point, we can always take this a few percentage points up very quickly.
That's just a question of when do you get into a slightly lesser growth mode? It's not any time now.
Got it. And lastly, given you have a very strong health growth in the current year, as it flows to the next year in the reverse direction.
The market is growing at, see, the market is growing at 10%-12%. We are growing at, I don't want to keep repeating it. It's like a multiple, multiple of the market growth. And it's like everybody is trying. It's not like we are the only ones trying, right?
Everybody is trying.
So I think Sarbvir is spot on. I don't think we can focus on this quarter you had this profit or last quarter you had that much profit. That has to be seen over multiple years. And I'd say [audio distortion].
I would just draw your attention. There's a very interesting slide that Rasleen puts out, right, which has a four-quarter rolling average. Actually, if you look at that four-quarter average, which has gone through various cycles, right, of different businesses going at different rates, you can see the very steady progression that we've been able to maintain for the last three years. And I think that is perhaps the right thing to focus on. Because one quarter here and there is very hard to explain also, actually, sometimes.
Okay. Got it.
And lastly, one small thing. See, my back-of-the-envelope calculation suggests that probably if a retail health insurance industry size is around INR 10,000 crores, you are probably at 23%-25% market share on new, what industry is generating and what you are generating. So you see this, if you are already at 25%-26% market share, you see there is a meaningful more scope to gain market share or incrementally, the growth might be not 3x of the industry, maybe a little lower than the industry average.
See, I don't think it's a market share problem anymore, right? And I don't want to get into what our exact market share is and whether what you're saying is correct or not correct. But I'm saying it's not a market share problem anymore. I think all of us need the industry to grow. And for all of us, for the industry to grow, certain things need to fall in place. And we are part of the solution. We will be a larger and larger part of the solution because we want to be. And I think we are being welcomed by the industry for that reason. As a seller, as a solution provider, as a bearer of new business, I think from many perspectives, we are coming at it. But the whole idea is to have a steady industry which grows a lot.
I think the industry is currently facing a challenge, right, that the growth is being restricted by the trust in the industry. You're seeing parliamentary conversations, this, that, and the other. There is the belief that claims is a hard process. And again, don't want to get into it's a large call, right? So I think that problem does need solutions. And as I said, we are part of the solution. So we allow growth to happen because we allow claims to be settled better. And I think that is the biggest part of our proposition.
Got it. Thanks for the answers.
But a simple way to think about it is only four crore people in India today have health insurance. All said and done, whether you even count the middle class, the middle class alone is perhaps INR 20-INR 30 crore. So you have a lot of people who don't have health insurance yet. And I'm talking about lives. I'm not talking about number of policies. I'm on the retail side. And I'm not even talking about INR 140 crore Indians, right? I'm just talking about the, whatever, INR 30-INR 40 crore middle class.
Yeah. Got it. Thanks for the answer.
Thank you, Sanketh. We'll take the next question from Srinath, Bellwether. Srinath, please unmute yourself.
Hi, hi guys. Just wanted to understand how is the performance marketing cost trending? My assumption is that our growth in health insurance terms has largely been driven by conversions. May not be that much of upper funnel growth. So would the performance marketing cost as a percentage of revenue or premiums, have they seen a significant reduction given that health insurance has seen significant growth over the last two years? Second question on this would be, I would like to understand how persistency in health insurance renewals are playing out in the context that the base last year already health insurance growth had taken off. So just wanted to get a feel if how persistency is broadly trending. Yeah, these are my two questions on Policybazaar.
I'll just answer the first part. See, whenever we have to advertise on Google or any performance marketing or anything else, we are another commodity player with a brand. So we are slightly more efficient than anybody else. We are probably two times more efficient than anybody else because it's a recognized brand. But our primary way of growing is brand, which is that people come to us without us having to spend on performance marketing. And that is a bulk of our business. And specifically on health and term, that is a large part of our business. I think it's Sarbvir's prerogative to answer the remaining questions.
No, no. I also just want to explain to you on performance marketing that you have to understand it's an auction platform, right? Google is, at the end of the day, an auction platform, and it is our, while we are obviously going to be a more efficient player than anyone else, given our brand, given our experience in conversion, having a multitude of choices, it is our job to keep the foot on the pedal. We would not like to leave room on that side for anyone to find efficiency, right, so you should expect that we would be very, very whatever we can do to get the leads, we will do. Because as Yashish explained, our majority of our business is coming from our direct side.
The 20% business or so that we are getting from performance, I would never want to leave anything on the table because that is essentially leaving oxygen for someone else, right? We will never do that. As far as renewal rates are concerned, very happy to tell you that in December and we look at it on a number of policies basis because I think that's the most important number. Both our first-year renewal and our second-year renewal onwards are at the highest rates that we've ever had, and again this is because obviously our team has done a phenomenal job. The products that we have introduced with our insurance partners over the last few years, we've been talking about the modular products, they have this feature that the no-claim bonus increases rapidly every year.
That, as you can imagine, acts as some sort of a barrier to leaving that product. Hence, we have seen our renewal rates, and I think we have room to grow in terms of improving our renewal rate persistency. All the work that we do on the service side should finally translate to higher and higher renewal rates. I think that's a fairly straightforward equation.
Fantastic. Congratulations on that. On Paisa, just one question. There's this number in our presentation, monthly inquiries. That number has actually seen a significant growth. Wanted to just clarify or understand what drives that particular metric.
Which slide number is this on?
Monthly inquiries.
Yeah. No, no. I think that should be a typo. Apologies for that. That should be quarterly inquiries. It should not be monthly.
Oh, okay, okay. Thank you. Congratulations on a good set of numbers, guys. Thanks.
Thank you.
Thank you, Srinath. We'll take the next question from Nidesh in Investec. Nidesh, please unmute yourself.
Thanks for the opportunity. There are two questions. Firstly, if you can share contribution margin and EBITDA margin for credit business, for the core credit business? Hello?
Yeah, yeah. No, no, we are there. We are there. It's in line with the overall core business. So roughly in the 40s, and the overall EBITDA margin is 9%.
On the credit side, core credit side.
Credit side is 9% and 45%. So it's actually more efficient than Policybazaar because there's also a factor of the NPV of Policybazaar. But right now, it's at 45% on the core business.
Sure, sure. And secondly, what would be your market share on the new health side for, let's say, for nine months or any period that you can get?
We don't discuss that, yeah. We don't discuss that.
Sure, sure. And lastly, just a comment that if you can share the renewal rates the way you have shared in DRHP and RHP, that would be very helpful.
I'll just explain. You may not know about this. Our mindset has shifted. Our mindset has shifted from Policybazaar should be big towards the industry should be big. We know that if the industry is big, then we will also be big. And so would our partners be big. I think that works for everybody. That's really how we are thinking about it. And I think for that, fundamental problems need to be solved. We have deep problems. It's not an easy problem to solve for any nation as far as healthcare is concerned. And we hope we are going to be part of the solution.
Sure, sure, and just one comment is that if you can share the renewal rates the way you have shared in the RHP on health specifically, that will be very useful on the cohort basis.
We don't share exact numbers, but yeah, we'll look into it. We'll probably try and share it in the future.
Sure, sure. Thank you. That's it for my side.
Thank you.
Thank you. We'll take the next question from Madhukar, Nuvama. Madhukar, please unmute yourself.
Hi, good evening. Congratulations on a good set of numbers. First, just your contribution margin has been lower, but if I look at your adjusted EBITDA margin for the existing business, that has improved. So there has been a pretty good control over costs, the indirect costs.
Don't say that. Don't say that. Don't say that. You're making my life harder. Okay. Just do not say that. Okay. That's not true. So anyway, anyway.
And this is despite you telling us that you mentioned 1,200-1,500 vacant seats. So I wanted to understand what is really driving this and when do we see either we eliminating some of these seats or we filling up these seats for future growth?
Listen, don't take it too seriously. We've already given the notice to the real estate guy that we are getting rid of those seats. It's just that we can't empty those offices, right? So the offices will get emptied by April. The notices are playing out, right? So all that will lead to is our depreciation costs and all those coming down and financing costs coming down, hopefully. Don't take them too seriously. It'll have some impact, and you'll see it by April. We did overplan a bit on the Paisa side, and the requirement was much lower finally. So that's what I would say, and no, on OFC, our costs are not low. Please don't get that wrong. Our revenue has increased, but the percentage OFC will look low. Of course, if your revenue is growing 45%, thank God our OFC is not growing at 45%, yeah?
But our OFC is growing quite fast.
[crosstalk]
But to be honest, I just want to explain to you that our marketing, actually, our television in Q3 was significantly higher than last year because we were on air all three months. Many times in Diwali, that month, we reduce our spend significantly. But this time, we were on air three months. So I would say that whatever be Yashish's view on the cost, but as far as the numbers reflect, the fact is that this quarter, we were able to leverage our fixed costs quite effectively.
Yeah, because when I look at when I back out the fixed costs or indirect costs between contribution and adjusted EBITDA margin, for six months, there's a growth of about 12.5%. But for nine months, there's actually a decline on a year-over-year basis. So.
You seem to be on Sarbvir's take, yeah. That's all I can say.
So is this sustainable? Because then that could lead to a higher margin expansion Q4 and beyond. So how should we think about this? And what is driving this?
Don't be able to answer this. Perfect. You set it up for Sarbvir.
See, I would look at it more on a long-term basis that, yeah, we try to maintain, as we've always mentioned, that we would like to keep our fixed costs growing significantly slower than our revenue. And again, I would say three months is not the right way to look at it. But yeah, over a period of time, that should happen. And we'll see. We'll see how it goes. I mean, see, if you have to invest in new businesses, new people, people are the.
Add will do the right thing. It's as simple as add will do the right thing.
Got it. And also coming back to this whole thing by the regulator of accounting for long-term policies on one-by-one basis, are we changing our strategy in any way? Because I think what I sort of understood from.
Madhukar, we are not so small there. Honestly, we're not so small that we would change our strategy basis some commission payout or something of that sort. No, not at all. We want to be big in health. We will continue to be big in health. We will continue to do three-year plans, two-year plans, one-year plan, everything. In fact, if I was to say from a - and again, I don't want to - from a competitive perspective, this is a huge advantage to Policybazaar, right? Because as a player, we are very keen to go down that direction of investing in our growth. Not everybody can invest in the growth.
As an insurance broker, I would tend to believe that it's always better for you to sell a three-year plan over a one-year plan, right? Because it guarantees you persistency upfront or reduces its lapse rate.
When you look at a 10-year view, and because we have the data, thankfully, of the last 10 years, the numbers basically become even seamless. There's lots of factors, and it's a more detailed conversation. There are lots and lots of factors that go into this decisioning. But over a 10-year period, it's the same story. Whether you sell a one-year plan or a 10-year plan, it becomes the same thing.
Understood. And just I haven't gotten a chance to.
A three-year plan will have one decision point at the end of three years, which will have a higher drop than a continuous drop that you—so there'll be lots and lots of complexity. We can have a proper conversation. It's a long conversation.
Okay, got it. And can you just give me your renewal premium for the platform business and for the new initiative separately?
Our core business on renewals. Just a second.
[corsstalk] .
Premium. Premium, yeah. Premium is about just over INR 2,000 crores. Yeah, just about INR 2,050 crores. That's our renewal premium. INR 2,042 crores.
For core?
For core. That's only core, and all the new businesses put together, we're about INR 500 crores more. So we have about INR 6,000 crores or INR 6,100 crores of total business, right? Which means we are at an ARR of about INR 24,000 crores. About half is fresh. A little more than half is fresh. About 55%, almost 60% is fresh. 57% is fresh. 43% is renewals, which is a great place to be if your new business is more than your renewals, because that means you're really growing fast.
Understood. Thank you. All the best.
Thank you, Madhukar. We'll take the last question from Rina, Trident Capital. Rina, please unmute yourself.
Congratulations for the good set of numbers. And thank you for providing this opportunity. So I have basically three questions. What is your market share in the incremental life business within the industry? That is one. Another is how big is your savings business for you now in terms of premium? And the third is what is your agent productivity? If you break down your growth between your agent growth and productivity growth.
Honestly, I think each of these questions, I think we don't discuss market share as you would have seen on the call. I think it's not necessarily a very relevant metric. Obviously, our term market share is more than our, I would say, saving market share, but I don't think that's beyond that we would like to discuss. I think equally, I wouldn't necessarily like to put a number. I think maybe Rasleen can share whatever is normally shared with you later in terms of what is the relative sizes of the businesses. We are obviously a big source of term business for the industry. So I think that will be a disproportionately higher share for Policybazaar as compared to the overall industry. And I think the last point you asked was what agent productivity and thing. I would say.
Agent growth and productivity, yeah.
Yeah. See, this varies by quarter because we build scale for the season. So what happens is that the first two quarters, typically, we build agent size and numbers and setup, etc. And then we try to obviously. The back half of the year, we tend to do better in terms of productivity. So I would say in Q3, it was similar that, yes, productivity was not as good as we would have hoped to be because, like you said, we had just set very ambitious growth targets. But other than that, I would say, yes, largely, it would be 50/50 in Q3. And in Q4, I think it will be higher on the productivity side than on the growth side because we will not add capacity in Q4.
Okay. So then it is better to assume if you expect to grow 30%, so then you will be adding 30% more agents or employees who bring business for you, or there will be the existing agent who will be more productive and can bring 30% more business. So just.
I think it's a mixture. Yeah, it's a mixture of both. It's not an exact science in that sense because what also happens is it depends if you're opening a new center, it's a different geography versus existing geography. So overall, we assume a certain productivity growth of existing people, and then we do our capacity planning. And typically, see, we are not aiming for 30% growth. We are aiming for much higher growth. So there is an element of always having to add capacity as we go along.
Okay. And if you can say that, how big is the savings business in terms of percentage of total premium right now, if?
I would let Rasleen answer that question because we don't discuss that, actually. We don't disclose those exact numbers.
Okay. Okay. Sure. No problem. Thank you.
Thank you.
Thank you very much, everyone. Really appreciate your patience listening in till quite late, and once again, apologies for the late start. Thank you very much. Take care, yeah. Have a good evening.