Q1 21/22

Jul 26, 2021

Ladies and gentlemen, good day, and welcome to SBI Life Insurance Company Limited Q1 FY 2022 Earnings Conference Call. As a reminder, all participant lines will be in a listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Mahesh Kumar, MD and CEO, SBI Life Insurance. Thank you and over to you, sir. Thank you very much, Neera. Good evening, everyone, and we heartily welcome you all to the results update call of SBI Life Insurance for the quarter ended June 30, 2021. Hope you are all taking good care of yourself and your family members. Along with me on this call, I have Sangrajit Tarangi, President and CFO Anand Pejavar, President, Operations IT and IB Abhijit Gulavenikar, President, Business Strategy Suvenu Bal, Chief Actuary and CRO, Pritesh Sobe, appointed Actuary and Smita Varma, SVP, Finance and Investor Relations. Update on our financial results can be accessed on our website as well as on the websites of both the stock exchanges. Before I brief you all our performance highlights, let me acknowledge the efforts taken by all our employees, distribution partners and business associates, We have worked tirelessly to provide continuous support to our customers. Thanks to their efforts, we have delivered a satisfying performance in this unprecedented Conditions. Now let me give you some key highlights for the Q1 FY 2022. Individual new business premium stands at $18,400,000,000 a growth of 37 percent renewal premium stands at $50,300,000,000 a growth of 10 percent Gross written premium stands at $83,800,000,000 Individual protection new business premium grew by 75% Over the quarter ended June 30, 2020 to $1,300,000,000 annuity business witnessed 26% growth and stands at 6,500,000,000 Profit after tax stands at $2,200,000,000 On actual tax rate basis, value of new business is $3,400,000,000 Registering a strong growth of 45% over the quarter ended 30th June 2020 and value of new business margin is at 21.2% with an improvement of 2 50 basis points. Assets under management grew by 32% to 2.3 trillion. We will update you on each of these elements in details. Let me start with premium. Individual business has always been a focus area for the company. Individual new business premium has grown to RMB 18,400,000,000, a growth of 37%. Single premium contribution is 27% of the individual new business Individual rated new business premium stands at $13,900,000,000 leading to a private market leadership with share of 18.9%. We collected new business premium of $33,400,000,000 and private market share of 19.5%. Group new business 3,000,000,000 stands at RMB 15,100,000,000. Credit Life Business has grown by 56% and stands at RMB 2,400,000,000. Fund Management business is at RMB 7,900,000,000. The ratio premium grew by 10% to RMB 50,300,000,000 which 60% of the gross written premium. Our gross written premium stands at 83,800,000,000, a growth of 10%. Total APE stands at RMB 16,200,000,000 registering a growth of 27%. Out of this, individual APE stands at RMB 13,900,000,000, a growth of 36%. During the period, total 2.6 lakh individual policies were issued and It registered a growth of 35%. Let me give you details about the product mix. Individual production is at 1,300,000,000, registering a growth of 35%, group production stands at 3,000,000,000. On APE basis, production quadrupled 13% of new business and has registered a growth of 37%. Annuity business is at $6,500,000,000 a growth of 26% and contributes 19% of new business premium. Individual ULEB business is at 12.4 Biren, which constitutes 68% of individual new business premium and has shown a growth of 59%. Guaranteed non par savings product is contributing 6% of individual business. So Something about our distribution partners, bank assurance business marks a share of 58% and grew by 30% In individual new business premium, individual APE stands at 8,700,000,000, a growth of 34%. Instant protection policy issuance through Yono app of NBI has covered more than 51,000 lives. Agency, another strong channel, Registered growth of 36% and contributes 32% in individual business premium. Individual APE stands at $4,600,000,000 a growth of 36%. During the quarter, other channels, direct, corporate agents, brokers, online and web aggregators grew by 32% in terms of individual new business premium and 79% in individual APE. Production new business premium through other channels registered a growth of 7%. New partnerships like Indian Bank, UCO Bank, South Indian Bank, Yes Bank registered growth of 86%. We are confident that all these partnerships will start contributing significantly in the coming period. On update on profitability during the quarter, COVID claims net of reinsurance paid as well as outstanding stands at RMB5,700,000,000 covering various lines of businesses. The company has made additional reserve amounting to RMB4,400,000,000 For COVID-nineteen pandemic over and above policy liabilities, our mortality assumptions are well within our estimates. The company's profit after tax for the quarter ended 30th June 2021 stands at 2,200,000,000. Our solvency remains strong at 2 15 percent as on June 30, 2021. As mentioned in my opening remarks, Value of new business is $3,400,000,000 on actual tax rate basis, a growth of 45% and on effective tax rate basis, It is $3,900,000,000 a growth of 52%. The OMB margin is at 21.2% on actual tax rate basis and improvement of 2 3 basis points and on effective tax rate basis stands at 24.1%, an improvement of 400 basis points. Coming to operational efficiency, cost efficiencies continue to maintain we maintain with Total cost ratio at 10.5 percent and OpEx ratio of 7.2% for the quarter ended June 30, 2021. Our 13th month persistency ratio has improved to 88.4% as compared to corresponding previous quarters. On regular premium basis, 13 month persistency stands at 85.9% versus 82.6% in the corresponding previous quarter. As mentioned in my opening remarks, AUM having crossed $2,300,000,000,000 on 30th June 2021 has a growth of 32% as compared to June 30, 2020. The company continues efficient use of technology For simplification of processes, with the 99% of individual proposals being submitted digitally, 45% of individual proposals are processed through automated underwriting. Customer satisfaction is a key focus area. Our grievances with respect to Unfair Trade Practices stands at 0.08%, one of the lowest in the industry. Our rapid adoption Our online capabilities paid an increase in business activity. Automation and digitalization have significantly enhanced customer experience and uninterrupted services during the times of the pandemic. To summarize, we will continue to focus on protection and other lines of profitable business, Efforts are on to enhance our vibrant distribution network to penetrate our reach. We will continue to maintain sustainable and consistent product mix, improve customer satisfaction and provide value to all our stakeholders. Thank you very much and we are now happy to take any questions that you may have. Thank you very much. We will now begin the question and answer session. While asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ajeof Sreedhar from B&K Securities. Please go ahead. Thanks for the opportunity, sir. Sir, again, this question is on COVID. So you have an additional reserve of 4.4. What is the total reserves, sorry, including The business has fulfilled that I'm excluding COVID that you're holding. Pritesh? Anything out of the results we made in March, were we able to carry it forward So the COVID reserve, let me tell you, as on March 2021, we had INR183 crores COVID reserve. As of June 2021, we have INR 445 crores COVID reserves. See, our total reserve For this quarter 1 FY 2022, which includes my all lines of businesses amounting INR 9,930 crores. So with the picture of Parr, non Parr and ULEP altogether. Okay. All right. Sir, second question is on group protection split, if you can give us group term credit life this quarter versus last year. Okay. Once again. And what is behind the program? Yes. Sure, sir. Credit Life, this quarter, we have done, As far as my NBP is concerned, INR 240 crores. As far as NVATE is concerned, So that is 24%. So it's a growth of 56% quarter on quarter. This is year on year growth, right? Yes. Quarter 1 2022, you said it's quarter 1 of 2021. Okay. And GTI specifically, Indranha, so GTI annually taken together, we have done almost kind of INR 500 crores. Do you have separate numbers? Okay. At this moment, I don't have separate numbers. Okay. I'll take it with you. So what is your thought process on GTS? Some of the peers have diverging views like What is your view with respect to the TGA? So GPI, we will evaluate and continue with GPI And it will depend a lot on what kind of business we are looking at and also the reinsurance And the whole thing put together, so we are evaluating on a case to case basis and we will take good business. All right. So just a final question on the non par fees where both agency and bank recovery slowed down during the quarter. So what's happening out there on the non profit? So basically, what is happening is that in the Q1, we saw good traction on Yulip, Possibly because the markets are on a rebound and very, very doing very well. So I think that was one of the reasons we saw good traction in This ULE Business. But going forward, we have targeted for good growth in Non par. And we are also coming out with slightly revised pricing on our non par offering. So I think that will also help us to get more non part business. All right, sir. Sir, I'll join back in the queue. Thank you for your Thanks. Thank you very much. Thank you. The next question is from the line of Madhu Garlatta from Elara Capital. Please go ahead. Good afternoon, sir. Thank you for taking my question. First on this COVID provisions and reserves. So what is the closing outstanding provision at the end of 1Q? Yes. So that is INR 445 crores. Okay. So in the beginning of the year, we had INR 1 INR 80 crores approximately. So INR 83 crores. INR 1.83 crores. Yes, INR 1.83. And then Benefits are at 5.benefits paid are at 5,700,000,000. Yes, correct. Correct. Okay. And so then what would be the hit in This quarter's P and L? Well, the our reserves are enough to take care of The changed situation also. But having said that, We have made prudent provisions going forward, because you don't know really how things are going to pan out in the future. Our hope is that With the vaccination rollout and almost 24% people already being vaccinated and the numbers coming down, we are hopeful that this will tide over. But knowing that there are a lot of impounderables, we have actually set aside a larger number as COVID reserve. Sure. And sir, can you give us some idea in terms of severity? So in FY 2021, what was the severity on a per claim basis and how did it trend in 1Q? See, really last year was not a time to actually look at it because there was a total Lockdown kind of situation and claims really were not coming in. And as a result, the claims were much lower and all. So it's a totally different situation then and now. So really can't compare those 2 things. So what I meant was if we take the full year number, full year FY 2021 number versus 1Q FY 2022 number? Yes. So there is the numbers, if you look at our position, it cannot be very different from what is happening in the country. So if you look at what is happening in the country, so last year the numbers sort of grew till, let's say, October or something And then started coming down, but it was a very gradual kind of increase and a gradual kind of decrease. Now we have seen from, say, March, April May, we have seen a sudden spike. So those 2 are not really comparable. And this is Not in anybody's experience. So really speaking, we take it as it comes and we make conservative estimates. Right. So just I just did some calculations. So if INR 257 are the additional reserves And then INR 5.70 crores is the net claims. So then the total hit In the P and L for this quarter is INR 8.27 crores. Would that be correct? See, claims you have to look at in a different kind of way. There are COVID claims, there are other claims. So we look at all claims as one thing, because a claim is a claim. So percentage of COVID, heart attack or whatever we have to pay, okay. So we look at that But you mentioned in the PPP COVID-nineteen claims net of reserving the gross? Yes, yes, yes. So this is those debts which are marked as debt due to COVID in the debt certificate, Okay. So I think what I'll do is I'll ask one of my colleagues to clarify, okay? Thanks, sir. Just to explain to you, see, when you look into the any impact of debt, You look into the overall claims, correct. So for the quarter, our overall claims is well within the provision that we made for I am on 31st March. So our if you remember, in the 31st March, we have strengthened our mortality assumptions. On top of what we had additional provision of INR183 crores. So if you look into this Q1 performance, our actual claims are Within that provisions, as a company, we are honored to be prudent on the size. So despite our claim is within that limit, We made additional provisions and in case INR183 crores to INR 445 crores as on 30th June. Understood. And can you verify on the INR 827 crores, Which I just said INR 5.70 crores of COVID claims plus INR 257 crores of additional results. So would that be So that's what I'm saying. That's what I would like to say. It is not a direct hit or P and L or anything. Okay. So the INR 5.70 crores, even though it has come from COVID, We look at overall mortality. Yes. So just to add that what the way we are calculating doesn't make sense because when you're looking to the In fact, you will see the overall claim rather than looking one part of the claim. So COVID claim is a part of overall claims. So when you look into the impact, You look into total claims and what we have provided for and the differential impact will come on the PMS. To that perspective, we are saying that our It's your claim for the Q1 is well within the provision we made first as on 31st March. But as I said, prudent, we will and in case this COVID provision from INR 180 to INR 45 crores. Okay. I'll come back in the queue. Thank you. Yes, please. Thank you very much. The next question is from the line of Pratesh Upal from IDBI Capital Markets. Please go ahead. Yes. Hi, sir. Am I audible? Yes, yes, yes. Go ahead. Yes. Thanks for taking my question. My question is on the So, we've seen a good growth and peers have reported a slight slowdown in this segment. So any color on like what helped us during this quarter and any and how is the outlook for individual protection Going ahead, are we still going to be aggressive in this segment? And how are we looking at underwriting right now Yes. So individual production, as you see, We have been trying to grow this I mean, we have been actively growing this for another 3 years, 3 or 4 years. We've been focusing on this segment and we feel that this is a way to increase the penetration of insurance in the country And also to get more and more customers, more and more coverage across. So we have products in protection, Which offer cover from say, 5 lakhs cover to say, 50 lakhs, 1 crore or Even above that. So there are various segments. So we are growing in all these segments. So that is the Ruth, and going forward, we would very much like to grow this segment at least for now. And so any Deepak, between how much is the ROP versus your term like for improving capacity for this quarter? Yes, I'll Similar to the Lightfast. Yes, so about 85, 15 kind of Correct. So just to reiterate the individual protection, we do think that with appropriate repricing of the product And you know, tactically enhanced underwriting to protect the risk that we are currently doing, We do think there is scope to grow this segment. Okay. So any kind of number like For the growth rate target that we would look at? No, no, no. For the retail production? No, no. See, I we generally don't look at any We have our internal targets, but those are only that will depend a lot on the circumstances and the situation outside Demand from customers, acceptance of products, etcetera. But I wouldn't like to give any numbers, but you can I'd say that we expect a steady growth in this business. Okay. So my next question is in terms of the distribution. So how much sort of penetration within the SBI channel itself, if you could Give some ballpark number as to how much it is and how what are our plans to increase Customer acquisition purely from the SBI customer or this, so how are we going about that? See, basically, this whole strategy we've been doing, we've been increasing this business, we've been growing both the SBI Business and the Agency business and now we have other channels which are also growing very well. So SBI Business, we will look to Continue the strong growth that we have and maybe if we don't have the limitations of the previous year, Then maybe the growth can be even more. But we are also looking to grow the other channels at a good rate. Okay. So within SPIA, how much penetration, if you could share a number Based on the customer base, how much is be our share? I'll tell you, we have not penetrated very large base of SBI and there is still scope to increase. So what we do track is What is the penetration base for customers below age 55, what percentage of saving account we have penetrated? And similarly for pension product, we track for equal above 50 also what we have penetrated. And we will actively try to increase that penetration from current levels. The public figure that we do disclose is per branch productivity and that per branch productivity from 34 lakhs will go up substantially in the current year. Okay. Fair enough. Thank you. I'll be joining the queue. Thank you. Yes. Thank you. Thank you. Next question is from the line of Jayant Karote from Credit Suisse. Please go ahead. Yes, yes, yes. Sorry, can you repeat the question? The IDNR reserve number incurred does not See, IBNR is a part of our Exterior liability, and we generally don't call out Hello. Am I audible? Yes, sir. Go ahead. Yes. I think secondly, on the insurance side, Have you had any communication with the reinsurers on the rates? And what is your outlook on premiums? Some of the peers are indicating that rates might go through another round of sight. So what is our Reinsurance, we keep talking to them for each product, for each new launch, for each thing we have meeting with the reinsurance. So we keep talking to the reinsurers. So there is nothing new to be talking on a daily basis, we are following up with them for various things. So while range shows may be high grades based on pools, but at a company level, 80% to 90 The high burden usually depends on the company specific factors such as concentration, divergence in experience, etcetera. Okay. So to that extent, SBLI is relatively insulated from reinsurer hikes, given that we have low dependence on reinsurance, Risk based pricing, we are very sustainably priced in most of our products. And then different production products, Like I said, I already told you that we have different protection products with different terms as shown. So all that lends us to a very diverse Kind of a protection basket and really speaking, at this point of time, we are the ones who are not very, very Worried about reinsurance itself as a per se, but then if it affects the industry, it also affects us to some extent, But we are relatively protected. Okay. And sir, just only following up, Some of the peers have also hinted that they'll be tightening the standard when it comes to writing fraud protection. So see, we never limited our standard. So there is no question of tightening. All those people who probably tried to cut prices, Try to gain market share by unethical practices of wrongly pricing of increasing Penetration by, I mean, increasing protection business by undercutting and also By taking the optimistic assumptions on mortality, etcetera, they are having to look at all these things. So all those people who loosen their Than we will have to tighten it. We are very, very sustainable. We are very boring as a company in that matter. We are very conservative. We are stable, steady and there is no way we are going to come down from our High standards just because somebody else is undercutting or something. We lose market share sometimes, we gain market share sometimes, but not because we wanted to gain or Lose at the cost of ethical principles and strong insurance principles. Thank you, sir. Just slightly Healthcare mortality experience or mortality facing for that matter has that undergone change after onboarding In March, we did change our mortality assumptions. So March, we have changed our mortality assumptions and like Pritish has already told you that those were enough to take care of our Claims for the quarter. No, no. Actually, I was referring to pre COVID that is FY 2020 March 2020. Yes, so every year we changed our assumptions Looking at the circumstances and COVID itself is one of the factors, because of pandemic or some sudden Catastrophe cannot be the reason for changing assumptions, mortality assumptions going forward. It has to have A more stable basis. So this will be one of the factors which has been taken into account, but definitely not based only on that. Pritaj, would you like to add something on this? Thank you, sir. Just to what Saril mentioned that each year as a part of our In one exercise, we revisit our assumptions. We consider our past experience. We also look into our emerging trend Accordingly, we set our long term mortality assumption. So if you remember in the March, despite our actual claim, we are well within our Exemption, that is what we said in March 20, despite that as a company wanted to adopt a prudent approach and Hence, we went back and we revised our hotel assumption accord as on 31st March 2021. So and we can't tell, but if you exclude the COVID, we don't see any adverse impact or worsening trend in our clinic experience. It's very stable and in fact we see the early sign up improvement on website. It excludes the COVID. Great, great. Thank you very much, sir. Yes, welcome. Thanks for the call. Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Thank you for taking my question and good evening to all the participants. Good evening, Sal. Yes. Sir, one first question on the persistency, especially on the linked book. Just to notice the surrender ratio that you put on Slide 11 has gone up in Q1. Why, why if you look at it? So just want to understand How the ULEB book is behaving? Are you seeing more cylinders now that markets have started trialing? How should one Look at the overall persistency for your annual book. Persistency will go up. We have we are making efforts to increase improve our proficiency. And persistency, as you know, is a factor of right selling and also on follow-up on renewals. So that is happening already. But then obviously, when the markets are buoyant and people who have policies which can be surrendered or can be encouraged upon, Some of them will do that. So that trend we do see now in the increased surrender. But then it is also true that people then realize that continuing with this will also be a good thing. So we have enough People who continue with the schemes. Sir, the so I look at the 50% of Instancy for your overall company is about 61%, but where will the unit table be? It will be lower, right? Yes. Unit would be lower. Like you say rightly, it will be it is a function of the product itself. Sir, it is similar, sir. You look for consistency is good persistency. It is very close to company average, in fact, marginally better Current company, Harish. Sorry. Sir, it seems to be contrary to some of the peers. So what are we doing different just in terms of Keeping policies even beyond the 5th year. There are 2 things. The differentiator between us and the industry is that First is our ticket size. We are second one is our spread across geography and third is our Fund performance of the UBLIB and the strategy which we have been following consistently about retention of the policyholders renewal, That has been working very well for us. And that is what you have seen for last 5 years. We have been consistently performing as far as our persistency is concerned And specifically for Evinced, which in fact in case of any eventualities in the market or in the economy, it has been consistent. That's very helpful. Second question is on you mentioned in the start that nonpar you have done some revised pricing. So can you just walk us through how that is going to help the nonpar growth for the remainder of the year? See, the whole idea is that Non par, we keep repricing, because it's a it depends on the market circumstances. So when we see that there could be a hardening of yield, then we take a look at that because that is what the market expects, the higher returns. So nonpar, we would be we would keep aligning it with the realities. So does it make it a less profitable kind of business given that About repricing not being there from a reinsurance perspective, how should one look at even the nonpar product? No, no, We have never actually what I would like to say is that it's a nonpar product. The pricing is always sustainable. Like I said, it is not with an intention to grab market share or anything. So We will do business only, which is profitable to the company and which is beneficial to the customer. So That is the true fact and this will be this will have sufficient margin for the company after the change also. Just to add what Saree is saying that as a company, we follow very active pricing mechanism where we skip particularly for this guaranteed Products, be it the annuity, be it the savings, and we align our pricing along with the interest rates. So the moment we are saying that we are re pricing this product, we re priced, This is reflecting the upward yield. So you see there is an increase in yield. So you want to pass on to the benefit to the customer. At the same time, we wanted to Enhance that protect our margins. So there is no question of compromising repricing on account of compromising margins. So we'll continue Do this activity regularly and will ensure that our margin gets protected, if not enhanced. Got it, sir. I missed the data point that was mentioned in the start about guaranteed as a percentage of the book. There was some data point that was given. Can you So non par book is at the moment 7% and balance sheet value will be significantly less because that book Started much later than our other group. So it is only 3% in individual business, non par savings. Got it, sir. Thank you. Last data point, COVID came net of reinsurance is JPY 5,700,000,000. What was the gross amount? And what is has our retention ratio relative to the past? Has it changed? Sorry, can you please repeat? Sir, the COVID case, net of reinsurance was INR 5.70 crores. So I just want to know what the gross amount was. And has our retention respective to reinsurance, has it changed? Correct, correct. So the overall COVID gross claim was INR 713 crores Yes. And headcount was INR 572 crores. Got it. So if I just do the ratio, it seems to be we are north of 70 Looks like, right? Has that changed over time was the question I had. No, no. So you said there's no change as far as the reinsurance Proportion is concerned. It really reflects the business. So protection will have the higher proportion coming from the reinsurance pocket. Saving might be lesser coming from. And thirdly, it will also depend on the average ticket size. So it's a reflection. We can confirm that we are not there is no change in the insurance strategy is concerned. Got it, sir. Thank you and all the best. Thank you. The next question is from the line of Abhishek Sarraf from Jefferies India. Please go ahead. Yes, hi. Thanks for taking my questions. Good afternoon, everyone. Good afternoon. A few Most of my questions have been touched upon in earlier by earlier participants. So just looking at COVID claims plus reserving for this quarter, It comes to roughly around $1,000 crores. And if I see the net COVID claims what we had in FY 2021, I believe that was around $350,000,000 crores, right, sir? Am I right on that? Yes, yes, yes. 320 was the net COVID claims last year. Bhakti, thanks a lot for taking me on that. Chitra, sorry, am I right? So what number do you think, 1,000 crores? How are you measuring that number? I was asking about the net COVID claims last year. Last year, Surya. Yes, last year, Surya was INR320 crores, net of this loss. INR 220 crores net COVID claim. Yes, go ahead. What was your question? The multiple of the claims that we had last year and the claims that's reserving for this quarter, That's slightly it's like around 3x of last year's claim. And that somehow means is a bit different from what our other peers have seen to wear, At least in the range of 0.5 to 0.05 times of the provision plus expenses that our peers have seen. So would you Do you think that these reserving and all will be sufficient or and But I don't know where you are getting your figures from because the calculation doesn't seem to be right. What is happening is that We have already said that we have increased our mortality assumptions the last year, okay, in March. And we have said that our claims have been taken care of largely by our increased assumptions. So now can you ask the same the question, I didn't understand. So just what I was trying to understand is the remedy of claims or the multiple of Claims that we could see this year versus last year. So last year, as you said, that was INR 3.20 crores. And right now, based on that we have Yes, sir. So Abhishek, just to add 2 points on this. One is that when you look into the claim provisions, Fa, you look into not only the COVID experience, You also look into the overall claim experience. So as a company, we first look into the overall claim experience and accordingly, we make a provision on that. This is first part. 2nd part is that if we compare the last year claim experience versus this year claim experience for COVID, Not very sure how we'll link into. If you look into the wave 1, it is longer, but the curve is flat. If you look into the second wave, it is steeper, but if you see the decline, it is a sharp decline. This is coming from. So Difficult to reiterate on that, Bhans. 3rd point, normally as a company, we don't comment on the work of others. But I would like to add one point that the if your overall volatility assumption is well prudent, You may not need to make additional significant additional provisions. If you are not having too strong on that side and you get Significant hit on the actual experience. There is a reason for revisit your assumptions. So as As it's concerned, like we mentioned in the March, despite our experience is closer to the estimate, we have strengthened our monetization in March. On top of it, we made the Additional provision. If you look at the Q1, our actual claim total, including COVID claims, Are well within the provision we made for the claims. Despite, we are not very sure how the COVID will behave, But we normally wanted to take a prudent approach. We have increased the provision from INR183 crores to INR 445 crores. So this is the reason we wanted to make to you. Just one follow-up on this one. The INR 245 crores will be mostly IDNR or you have also provided for something which has not yet Okay. And could materialize in future as well? Abhishek, this is not totally IVMR. See, IVMR Always be the part of our exterior liability. That is significant amount we keep on overall claim notification basis, so that's IVNR. And then you have to make provision for the future. So this is the provision, additional provision we are making Okay. One last bit on the non part savings side. So obviously, this has seen a decline this quarter. So is it mostly related to pricing part? Or are we seeing some happening in the market that we are probably So what I said about this was that we have seen a lot of traction in ULIFS in the Q1. And so going forward, we will definitely see increase in nonpar savings fees. And so as you're thinking that if pricing when pricing comes through, so you just That will definitely be one of the factors, yes, definitely. Lastly, on the protection, but may I know how the different channels have behaved in terms of driving protection, Individual production is 76% growth. Is it largely driven by It is across the board, if you see. So we have Banka, the growth is 55%, Agency it is 57%. It's like so other channel would have grown much, much faster that way, right? So because overall protection has grown individual protection has grown by 76% And when we say that the Bankai and Agency have grown at around 50% So individual, I'll just check my figures once again. Individual Tanhram, can you pull out individual Channel wise? Yes. So overall, for the other canals, the protection has grown by 73%. The next question is from the line of Nitesh Jain from Investec. Please go ahead. Thanks for the opportunity, sir. Firstly, the increase in margins on effective tax rate and the The margin that we report is quite different on a YY basis. So why on the effective tax rate margin increase is higher than the normal margin that we report? So that is basically a function of calculation. It is just a function of calculation. So what we do is our reporting is done on the actual tax rate basis. And then considering the product mix, there will be a difference in the Tax rates applicable and therefore this will change. So there is no correlation, direct correlation. It will actually be a function of what is the final product mix that have been achieved. Sure. Secondly, when we are seeing mortality experiences in line with assumptions, are we talking about non COVID mortality experience or What is the experience including COVID? No, no, we have said already that claim experience is claim experience, death claims are death claims, COVID or non COVID, they are deaths. So what we do is, when we make the assumption, we make the assumption for death only. We don't make the assumption for COVID death, road accident death or something like that. We make an assumption for death And then we provide for that. So COVID would be one of the factors which will be in our mind when we are actually making the assumptions. So because we know that there is COVID, COVID will be one of the factors which we will take into account. Does that mean that the mortality variance will not be negative when we look at the full year EV walk? At that time, the mortality variance for us will not be negative? So yes, what we are expecting that if our current Experience will continue. There will not be any negative mortality variance by end of the year. Sure, sure. That's quite useful. And lastly, how do we think about the SPI Bank channel? Please correct my understanding. I think the decent portion of our sales from SPI Bank is from branch stockings. And slowly, I believe that branch lock ins will reduce as the economy moves more towards utilization. And over a period of time, not probably even money, but over the next 5 years and years, the branch lock ins that we are seeing today will continue to reduce. So in that light, how do we plan to change our selling strategy for life insurance products, especially for SBI Bank? We have already been doing that. And if you see last year, when there was this pandemic and it was there was hardly any walk in And we have and the number of walk ins throughout the year was much lesser than what was there earlier. We have still managed the net growth in business. So going forward, We have been developing strategies to market to customers who get have contact Customers have relations programs with customers over various online means and we have been doing very successfully. So we don't think That we see a challenge out there. It is a great opportunity. We will probably be able to get more people When we now that we are targeting people who are not walking in. So it would mean a lot of growth. Sure, sure, sure. And in terms of penetration, we have reached almost all the viable branches that we plan to reach or There is more scope to There is always scope. So the number of people selling, the number of Customers sold to the number of branches from which we are selling. So now activation last year end was around 85% of the branches had sold policies approximately, please correct me if I'm wrong. And so the idea is to get to 100%. So we want to come to a status where all the branches are selling policies to their customers and ideally to all their eligible customers, But that will take some time. So we see some growth going forward, a lot of growth over a number of years. Sure, sure. And then can you say the quantum of premium that we originated from Yono channel last year? Quantum of premium, yes, we have that. On AP terms or NB terms, whichever. INR 30 crores was this for whole financial or FY 2021? Is it an NBP or I think? NBP. Okay. Thank you very much. The next question is from the line of Manish Shekla from Citigroup. Please go ahead. Good evening and thank you for the opportunity. What was the total that clicked in the Q1 total that came? Just a minute. Value and number ideally if you can give both. So total number of claims were 28,000. 28,000 plus and amount wise, it was around we have disclosed it is net of reinsurance is INR 13.15 crores. INR 13.50 crores. So of the INR 13.50 crores COVID was 5.70. Manish, it is INR 13.15. Sorry, 1315, so of 1315, COVID was 570, is that right? Yes. Yes. And what would the same number be for full year FY 'twenty one, if you have it? June 'twenty? No, full year 'twenty one. Full year 'twenty one will be around INR 3,000 crores, a debt claim. Debt claims, okay. Yes. And number of claims would be? Around 68,130. Okay. All right. Thank you. That's very clear. The other question which I had is on the incremental individual production that you're selling. How does the mix Square between metro and non metro or let's say Tier 1 and non Tier 1, approximate split if you can give us? No. So it's spread well across the country. So, say roughly about 50%, 55% coming from Taiwan cities and metros and the remaining coming from other places in India. And Abhijit, how would this have changed over the last 2 or 3 years in terms of mix? No, there has not been significant change in that. Is there a piece similar proportion? Thank you. Okay. Question really, what is the average share for Yalip and 1 pass savings of individual business? How do the 2 compare? I mean, if you don't want to do absolute, I mean, how do the 2 compare? So our ticket size for ULETE is around 1 lakh, touching 1 lakh. And for nonpar, it's around 50,000 to 60,000. Okay. Maybe there's one of the potential reasons I have a question to come back in the question queue for a follow-up question. The next question is from the line of Nishin Chawaty from from Koda Securities. Please go ahead. Hi, yes, thanks. Just continuing from the previous conversation, What you said was that in this quarter, the total gross claim was around INR 13.50 crores. And the total number of cases were around 8,956. Last year, for the full year, you had about 3,000. No, no, 28,000. Total number of claims were INR 28,756, Amounting INR13.15 crores net of reinsurance. Okay, got it. Thanks. That's it so much. Thank you. Thank you. The next question is from the line of Sighna Ghoda from Spark Capital Advisors. Please go ahead. Yes. Thanks for the opportunity. Sir, my question is on the claims, again, with respect to COVID. So if you're saying that INR 5.70 crores what you have paid with respect to COVID is already part of your conservative mortality assumption, Then the shift on the EV walk should be the difference between INR 445183 crores on the EV walk. So gross of taxes is 62 crores and net of tax rate should be closer to 2.29 crores. That's the way I should be looking at the kind of mortality Because 5th is already part of your mortality assumption. Is my understanding right, sir? I think difficult to comment on that part. I think what I can say that when you look into, you look into the overall claims segment. So expected claims Based on the assumption that we set on March 31, 2021, and against that there is total claims. So this COVID claim of RUB 5.70 crores net of the reinsurance is a part of that, I agree. So once you look into the overall Expected claim to the actual total claim, delta, if that will be negative, then we'll have some impact on the operating variance on the Prithal Singh, that is the question that INR 5.70 crores is any negative deviation you have or expect what you expected in Q1 and you had a negative deviation Significantly away from I mean, because you paid additional claims of ICENTY COVID, so the deviation is positive or delta from what you're hedging for the quarter? No, no. So what we're saying that for the quarter, if you consider the total claims, including the COVID, It's well within the expected that we expected for the quarter. So then it's Simple, I think that any additional core units which you have made is likely because that is over and above what you have assumed. So it's the likely hit on the EV, right then, sir? Yes, that will have impact, Anurag. Yes, that will have impact. Okay, okay, perfect. And I just wanted to understand this INR 4.42 crores of So, Ravi, what is sitting on the balance sheet, RMB45 crores, does it provide only for the change which are reported, which are likely, which have Already happened in the month of in the quarter 1 or you have even provided for the likely claims coming in subsequent quarters either for the 3rd year or any other claims that are going to come Next 3 6, 9 months because of COVID? No, no. This is additional claims towards the COVID. And I mentioned earlier as well, IVNR that you are referring to that has not been intimated is a part of our external liability and that we always keep. And when we said the IVNR, we look into the Overall claims. So this provision is on top of the overall claim that we're holding. Got it. Understood, Finally, on this is again on hunting on the non part business part. So entire industry did that business very aggressive in the current So, every player has reported a very strong growth. So, due to some reason that number is very weak for us despite there is a strong demand for that kind of product. So just failing to understand, is it because our staff are not in place or participate debentures are not exhausted and therefore we are not seeing we are restricted to grow that piece or is To grow that piece or is Riva something else in that sense? No, we don't have any such constraints. We don't have any such constraints. And like I said, we have seen a lot of demand for unit products, Maybe as a factor of the market is doing very well. And I think that is the major Difference. And as I said, we are also repricing going forward. Our targets are To actually grow the book in non par by the year end. So I'm giving all those things together. I will not compare myself with any other peers in the market, because they have their own policies and practices to Do whatever we do. But from our side, our action plan is very clear that we will Probably end up with a good nonpar percentage at the end of the year. Yes, Abhijit, would you like to add something? Yes, just to compare. Last year, quarter 1 was higher than our average non par book. Year end, we ended up non paring 9% of our individual APE. Currently, it is just above 7%. We do Think that with the repricing and the other strategies we will have to play that our non par book will be a double digit number in the current year by year end. So it will go about definitely above 9%, which we had last year. Exact number is something which we will evolve. Got you, sir. Perfect. Thanks. Thank you. The The next question is from the line of Deepak Munra from JPMorgan Chase. Please go ahead. Good evening, sir. Can you hear me? Yes, Swamy. Okay. Thanks. Sir, firstly, just one question on the renewal premium growth. It seems like last 2 quarters, renewal premium growth has slowed down. I understand some of your syndicated revenues is up, but still the team came for quite a shift in the last half of the quarter. And the expected impact on cost ratio Audio in between, may I request you to repeat your question once again? I'll just repeat again. So basically, renewal premium growth has slowed last couple of quarters. So just want to understand what is driving that and what will be the expected impact on cost Issues because of the same. And secondly, more in the Panta channel and Agency channel, we've seen better protection numbers. Can you talk about the incentive structure in both these panels to grow the protection? Yes. So Abhijit, can you please answer? So second part, we will not want to make any comment on the incentive structure. As we said But there are strategies in place to promote the right lines of business Within our company, so there is something which we already have in place. We don't have any specific comment. 2nd, the way to look at renewal is to look at persistency number. So in certain cases, even the business had growth had slowed down a little in last especially last couple of years. That is why you're seeing renewal Percentage go down slightly, persistency has kept on increasing. So there is no challenge as far as renewal is concerned. Just to add, Renewals are being growing for us for last few years at double digit rate, which is beyond 20%. And at this moment also it is double digit growth. And growth, I think we should set aside, rather you should see what is my renewal bucket. As Avish said, our persistency is a reflection of our Renewal Premium Collection, and it is going in line as per our expectation, and we believe that it will continue also. Okay. So just that this quarter the renewed premium growth is about 10% This is why I was asking what is given the change. And my last question, sir, on Sorry, the changes didn't work I can't hear you. Can't hear you. Hello? Yes. No, I don't hear you. Sorry. So in the VND walk, the assumption change is given to mortality, minus 1%? Yes. So just to say, this is we have not made any change in assumption around 30th June. Assumption sales have been done in the 31st March. So that is reflected in the V and V work and this is mainly on account of mortality that we explained in the March. Okay, sir. Thank you. Thank you. Thank you. The next question is from the line of Neeraj Toshnihal from UBS Securities. Please go ahead. Hello, sir. So when you say we are not kind of taking any additional reserving in terms of taking the hit from the assumptions, this Additional coupon price and dividend is the pass through from P and L and sitting in the EUV. That is the only net additional impact we have from the COVID. Is it right? I'm just standing in terms of point sense to kind of the Yes, I didn't get your question. Could you please repeat? The additional rate of RMB2.5 billion, the difference between RMB2.25 billion and RMB1.83 billion, that is the only pass through we have from P and L on the additional basis Because we are already prudent in terms of reserving. That is what we have not touched upon any changing assumptions? You could possibly say that, I don't know. Pritesh, please elaborate. Yes. So you're Right, the incremental results that we provided far along with the claim that we have paid, we will look at to the P and L And any top up we might need to provide for In quarter, do we think that this will suffice or given custody both the mortality assumptions, what is sitting in the book plus That is the deserving we have or what's your thoughts on that? Yes, I think Pritesh has already answered this in response to a question earlier. If everything goes according to how it is tallying out now and there is no sudden spike or There is no 3rd wave hitting us and there is no sudden spike in debts or company, then we will end up with Within our whatever we have reserved. Okay. And between this 28, is it Any change in trend you've seen between individual and group in terms of the headwinds in earlier quarters? And What would largely, if at all, if we have that handy? I think it should be about the same, but can somebody take the It is the same, actually, we do not have the separately, we do not do this way and this one goes to that line. Overall, expense wise, we do just make the provision. Got it. And on the reinsurance size hike in terms of group term and credit life, have you also kind of 1st, we have got the increase on the insurance like years. And if at all, have we passed on the price increase to maintain the margins? So if you see that as of now, our reason is what we had. So March, we did some hike in the individual side that we accounted in the March. So individual side, we don't see any challenge on the reinsurance side. Now coming back to the group that you are particularly looking for, looking to the experience as of now though we have not seen, but looking to the overall claim experience for the company and the There is a possibility that reinsurer may come back and hike the scheme. Only one submission that we made, particularly for the GTL product that you're referring to is that it is a price on a case to case basis on yearly basis. And whenever any new scheme comes Our existing comp for renewal, we look into the experience, consider the reinsurance support at that point in time and accordingly we price on that. So our interviewee, that should not have impact on the margin per se. So because we account appropriately the price, we go to the customer, customer would like And like our MD sir already mentioned that we wanted to do a profitable business without compromising any of the standard. So we don't Trade Life is a long term. As of now, we have not seen there might be possibility very difficult to comment on behalf of the reinsurer. As of now, we're holding up our reinsurance rates. As Farrell mentioned, that our average ticket size is lower than the market as compared to the other spheres. So Even that will happen, the impact will be not significantly in our book as compared to others. Got it. This is interesting. Thank you very much. Thanks. Thank you. The next question is from the line of Shashank Bandra from Reliance Group Online. Please go ahead. Sir, you mentioned that your net claim for the quarter INR 1,300,000,000, Can you please state the number of gross claims? 1 1576, 1576 crores. Yes. Okay. And what's the embedded value for June? We don't calculate the embedded value in June. We calculate the embedded value only in March. Okay. Thank you. Thank you. The next question is from the line of Pratik Poddar from Nippon India. Mutual Funds, please go ahead. Yes. Hi, Sasur. Just one small clarification, this INR440 crores is for Wave 3, 4, 5, if at all they happen? Is that a fair understanding? See, I don't think there is any question about all these assumptions of various ways and all. What happens is, Because we saw this pandemic before this pandemic, we didn't have a significant pandemic reserve. We used to have some small amount as a reserve. And this last year was the first time that we actually saw there was this pandemic and we had to make These additional reserves are a matter of abundant prudence, abundant prudence and It really is more psychological than anything else because when you ask me whether I paid out of reserve, I just Paid out of my profit or I paid out of anything, it is all the same. The net result is the same. But what we do is because we are reserving and because we are in an uncertain situation, we are making an extra reserve, additional reserve. And that is only for surprises. So that surprise can be in the form of the 3rd wave, 4th wave, 5th wave, whatever you want to call it. So, it can be any of those things. But really speaking, we can't predict the waves or anything. So, Because the COVID epidemic is still playing out, we have made this prudent reserve. Great. So this is the surprise. Thanks. Thank you. The next question is from the line of Manish Shukla from Citigroup. Please Go ahead. Yes. Thank you for giving the opportunity, Avi. And so the question which I was trying to ask earlier is how do the ticket sizes for ULIP And non pass savings for individual business compared? Yes. For the lakh and 60,000 is what I think Sanuram said. Sanuram, go ahead. Yes. So Manish, specific for EULIP and this nonpar flattina, it is kind of similar number, Around 116,000 to 120,000. Okay. Because I was going back to the point of interchangeability of the 2. Is the customer segment who is buying the 2 products largely same because I would have thought that a ULEP customer would have slightly more risk appetite because there is some equity component, Whereas non bar customer would want a short return. So interchangeability of the product for the customer is something which I was trying to understand. For the same customers, they will change. I mean, like for example, when they look at the pandemic kind of situation, The customers' appetite can also change. Abhijit, would you like to add on this? So, it's part of the I mean broadly it is affluent customer, but now we also have a POS non par product, which we will start pushing from this quarter. So you would see ticket sizes as a portfolio may come down because there is a current product where minimum ticket size For both Yulip and nonpar is roughly 50,000. And going forward, we have a level of product where minimum ticket size is 12,000 for nonpar. So you might see some change there, but current portfolio is individual customer's risk appetite or part of the portfolio in his overall portfolio. Okay, got it. Customer segment. Right. So then incrementally, when after adjusting the Repricing of the nonpar segment nonpar products, sorry, and the new pricing that you're coming. So to go down, how does the profitability for you of the non top product, I mean, in terms of NANDB margin? So profitable margin will be intact. Our objective is to because it has gone up, we wanted to pass on the benefit to customer and that will give a better value in terms of their full view and view. And we will ensure that our margin will get impact if not enhanced. Okay. Thank you. That was my question. Thank you. Thank you, Manish. Thank you. The next question is from the line of Mitesh Goel from Ambit Capital. Please go ahead. Yes, go ahead. My question has been answered. Just had a one data keeping question. So the annuity for the quarter is SEK 700,000,000 APE. So I just wanted to know the break up between individual and group annuity? So the individual annuity Is around INR 2.24 crores and group annuity is INR 425 crores. Okay. Thanks, sir. On AP basis? One time. Okay. Okay. I'll check it, sir. Got it. Thank you so much. Thank you. The next question is from the line of Mayank from Saa, Unibanci. Please go ahead. Yes. Hi, sir. Just wanted to confirm for COVID claim, which we had In net of free insurance in this quarter, we have not utilized our existing COVID reserve of RUB183,000,000 which we made in last quarter, Meaning existing modularity assumption that have taken care for 5.70 crores of play. Is that right? Maheem, just to tell you that when you do the provision, you do the provision as on balance sheet date. So balance sheet date is 30th June. As on 30th June, we kept the provision towards commodities 4.25 crores. And other things doesn't matter, I mean, what we are planning forward and all because your liability will release and accordingly you will pay the claims. Yes. So the difference being that if we are not at 183 growth, then impact On EV work would be lower and if we have utilized that then impact on EV could be higher. So we were looking from that perspective. So just explain, we don't look into the piece of your manners. So if you look into this, we have to look into how much Overall claims and how much you have paid for, right? That's the way we are looking into, not looking into COVID is one subset of the overall claims. So When looking the work and our overall claim experience, we are looking in totality rather than going and looking for COVID. COVID is just emerging. We don't have any Understanding how COVID will behave, who knows that 1 life infection will go to the 4 life infection per day. So that's the reason we're not looking specific to the COVID. We are looking overall. And to be prudent, we wanted to keep Additional buffer like we mentioned, so March, you guys won 80 crores, today it is 45 crores. Okay. Thank you. Ladies and gentlemen, we will take the last question from the line of Manish Gupta from Solid Sway Advisors. Please go ahead. So just wanted to check, would it be fair to assume That our mortality assumptions in our BNB margins are more conservative than our peers? See, once the event has happened, you can say so many things. So what we would like to just say Is that whatever we have reserved has served its purpose. So our reserving has been Correct. So that's what I would like to put in that. Pritesh, would you like to add something? Yes, sir. So just to add what Sari is saying that We don't say that we are keeping prudent assumption or liberal assumptions. What we say that and we clarify in the initial call as well. We said our assumption, which is sustainable in long term. So that's the reason, as I said, neither Pune nor neither we. In our view, right of now, it is a plant and sustainable agent that we're playing with. Sir, if I may just ask a follow on question. If one has to understand what the mortality assumptions of different companies are, where can one find this data? Is this data in the public domain? No. So it's not in the public domain. Public domain, you can see the industry data. So you can go and see the Institute of History of India, if you want, you can help on that side. So Institute of History of India published some standard mortality table that reflects the 20 insured Motel, I think. So there's nothing available on the earnings. Why do you guys look into it's difficult to compare things. You have to because it will depend on the Mix of the product, whether you're selling protection, you're selling ULEEP, you're selling Saving, you're selling PaaS. Then again, you look into the Which area you are saying? Then again looking at what ticket size you are saying, what is your customer segment in other parts? So that's the reason is it Extremely difficult to compare one company, majority of them with other companies because it reflects their own portfolio experience. Right. Thank you very much. Thank you. Thank you very much. I now hand the conference over to Mr. Mahesh Kumar Sharma for closing comments. Yes. Thank you very much, Nirav, and thank you very much for all the to all the Participants in this call for asking very relevant questions and keeping us on our toes. We propose to continue with our Sustainable policies and our growth and hope to see you again with a very strong performance going forward. So thank you very much. Stay safe. Get vaccinated. Good life. Thank you very much.