Q4 20/21

May 3, 2021

Ladies and gentlemen, good day and welcome to the SBI Life Insurance Q4 FY 'twenty one Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Mahesh Kumar Sharma, MD and CEO, SBI Life Insurance Company, thank you and over to you, sir. Thank you very much. Good afternoon, everyone, and we heartily welcome you all to the results update call of SBL Life Insurance for the year ended March 31, 2021. Hope you are all taking good care of yourself and of your family members. Along with me, I have Sankaranjit Sarangi, President and CFO Anand Tejawar, President of IT and IB Abhijit Gulanikar, President, Business Strategy Subenu Kumar Bal, Chief Actuary and CRO Pritesh Jobe, appointed actuary and Smita Varma, Senior Vice President, 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 on the performance highlights, Let me acknowledge the efforts taken out by all our employees, distribution partners and other business associates who have worked tirelessly to provide continuous support to our Thanks to their efforts, we have delivered a strong performance in this unprecedented conditions. The key highlights of this financial year are New business premium registered a growth of 24% and stands at €206,200,000,000 renewal premium has shown a growth of 23% and at $296,300,000,000 Gross written premium crossed $500,000,000,000 mark with a strong growth of 24%. Protection new business premium is at 24,600,000,000 registering 18% Y o Y growth. Individual protection new business premium grew by 40 percent to $7,400,000,000 Annuity business witnessed 169 percent growth It stands at $30,200,000,000 Profit after tax stands at $14,600,000,000 On actual tax rate basis, Value of new business is $23,300,000,000 a growth of 16% Y o Y and new OMB margin is 20.4% with an improvement of 170 basis points over last year. The Indian embedded value stands at 333,900,000,000 a growth of 27% on actual tax rate basis. Assai Funds Management grew by 38% to INR2.2 trillion. So now we would update you on each of these elements in detail. The freemium Business ticked up well in the second half of the year, and the company delivered strong growth of 32% in total new business premium and 30% in individual new business premium. Last quarter of the year, that is January to March FY 'twenty one, the company grew by 63% in total NBP and 53% in individual business. Maintaining private market leadership position in new business premium, We collected new business premium of $206,200,000,000 and private market share of 21.9%, an improvement of 140 basis Individual business has always been a focus area of the company. Individual new business premium has grown to $124,900,000,000 a growth of 11%. Single premium contribution is 20% of individual new business premium. Individual rated new business premium stands at $102,200,000,000 leading to a private market leadership with share of 22.6%. Group new business premium marked a Y o Y growth of 52% and stands at 81,300,000,000 with private market share of 22.1 percent. The renewal premium grew by 23% to 296,300,000,000 which accounts for 59% of the gross written premium. Our gross written premium stands at $502,500,000,000 a growth of 24%. Annualized premium equivalent, APE, stands at 114,480,000,000. During the period, A total of 16.6 lakh individual new policies were issued, registering a growth of 7% over the previous year. Coming to the product mix, non par new business premium is 110,700,000,000 with a share of 54% in new business premium. Individual protection is at 7,400,000,000, registering a growth of 40%. Group protection stands at 17,200,000,000. On APE basis, Protection contributes 10% of new business and has registered a growth of 26%. Annuity business is at 30,200,000,000 a growth of 169% and contributes 15% of new business premium. ULEC momentum has been well Quarter 2 onwards, an individual ULIB business constitutes 68% of individual new business premium. Guaranteed non car savings product is contributing 8% of the individual new business and just 5% of total new business collected. Traditional savings business including Group savings accounts for 47% of the new business premium in this year, registering a growth of 49%. We will continue to grow all profitable lines of business. Now I come to distribution partners. Bank Assurance Business marks a share of 65% in individual new business premium. Total number of CIS stands at 50000240 as on March 31, Instant policy protection protection policy issuance through euro app of SBI has covered more than 6.3 lakh lives. Agency channel, another strong channel, contributes 28% in individual business premium. Our total number of agents stands at 1,700,096 as on March 31, 2021. During the year, other channel, Direct corporate agents, brokers, online and web aggregators grew by 107% in terms of individual new business premium. Protection new business premium through other channels registered growth of 57%. Coming to the company's profitability, the company's profit after tax for the year ended March 31, 2021 stands at 14,600,000,000 as compared to 14,200,000,000 in the previous year ended March 31, 2020. Registering our growth of 2%, our solvency remains strong at 2 15% as on March 31, 2021. As mentioned in my opening remarks, value of new business is $23,300,000,000 on actual tax rate basis and on effective tax rate basis, It is 26,600,000,000. Year on year margin is at 20.4% on actual tax rate basis, an improvement of 170 basis points and on effective tax rate basis stands at 23.2%, an improvement of 250 basis points. M and A value stands at $364,000,000,000 on effective tax rate basis, A growth of 32% and on actual tax rate basis is 333,900,000,000 with a growth of 27% over last year. Embedded value operating profit stands at $50,200,000,000 and operating return on embedded value is 19.1%. Coming to operational efficiency, cost efficiencies continue to improve with OpEx ratio reducing from 5.9% In the year ended March 31, 2020 to 4.8% in the year ended March 31, 2021. Our 13th month persistency ratio is at 87.9% as compared to 86.1% last year And 61 61st month persistency is at 61.6% compared to 59.9% in the corresponding period last year. On regular premium basis, 13 month persistency stands at 85.4% visavis 83.7% in the previous year. As mentioned in my opening remarks, assets under management have crossed $2,200,000,000,000 and stands at $2200,200,000,000 as on March 31, 2021, growth of 28% as compared to March 31, 2020. The company continues efficient use of technology for simplification of processes with 99% of the individual processes being Submitted digitally, 41% of individual proposals are processed through automated underwriting. Customer satisfaction is a key focus area where grievances with respect to unfair trade practices stands at 0.06%, one of the lowest in the industry. Our rapid adoption of new online capabilities has helped to maintain business activity. We introduced remote sales completion for all distribution channels and launched online services for customers. We moved our agency recruitment, onboarding and training online. Automation and digitalization have significantly enhanced Customer experience and straight through processing is now used for close to 1 third of the business. Refresence of COVID-nineteen pandemic has led to more Reliance on digitalization and automation, we continue to focus on strengthening of our digital services and automation for providing uninterrupted services to our valued customers during these challenging times. Our continuous effort It's on value enhancement for all our stakeholders by maintaining sustainable and consistent product mix, increasing the market share of production business along with Other profitable line of business, enhanced distribution network and the capability to reach out to customers in an efficient manner And for improving customer satisfaction. So thank you very much. 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. Ladies and gentlemen, we will wait for a moment while the questions The first question is from the line of Araf Samrai from BT Capital. Please go ahead. Yes. Hi, sir, both Paul, good at your end and thanks for the opportunity to ask questions. So I had three questions. My first question is on the VNB margin. So if I look at the V and D margin walk, there seems to be a negative variance in the margin In the change in margin, so I wanted to understand even though persistencies and cost ratio has improved dramatically. So is this margin negative only because of Change in mortality assumption or is there anything else in the margin change? My second question is on the margin difference between statutory tax rate and the effective tax So that seems to have gone up a lot in this quarter. So any color on that? And last question is on the Growth outlook for the next year that given ULIPs are coming back a lot, how are we thinking about restricting ULIPs in our mix because then again our margins might be affected? So those are the few questions. Yes. So on the VNB margin, the negative variance On operating assumptions is only on account of mortality, change in mortality. So that is the first one. The second is on effective and actual tax rate basis. So there is a difference. And this we'll have to actually the actual tax rate is at 14.5 percent And the effective tax rate is calculated taking into account all the other things like the dividend tax and Various things like that. So it actually comes out to that. So it's an actual calculation. So if you see that there is a difference, which is higher than What it used to be, say, last year, but yes, that is how it is. It is an actual figure. Then if you look at the growth outlook for ULIP, We see that it is there was a lot of talk about ULIPs not Being in demand, so the last year, the Q1, there was a visible lack of demand there. But after that, it has picked up, and I think we are almost where we were the year before that or even years before that. So I think that there is a real need for the customers for this product. This is a very, very important, What do you call it? Very important component of people Savings and the life insurance that goes along with it is, I think, a very, very good product for people. And people who are not really keen on going directly into the equity market but would like to have some kind of Protection, along with this investment, so that demand has not faded away. And in fact, we find that the demand is as Almost as before. So we have absolutely no plans of not or withdrawing this product or pushing People away from the product or anything. But having said that, we offer a huge bouquet of products to our customer, And we generally go by what the customer demands. Thank you. We would frequent the current participants to please come back in the question queue for any follow-up questions. The next question is from the line of Deepika Munra from JPMorgan. Please go ahead. Hi, sir. I hope everyone is doing well. So just two questions from my side. Firstly, on the new bank partnerships, they seem to be doing pretty well. I just wanted to get an understanding as to what is the activation level of the 12,000 order branches that you all have added. So In the sense as to how many of these would already be contributing to business? And secondly, if I'm not mistaken, I think the Group Protection volume is marginally down. Could you talk a little bit about that? Thank you. So just to take the question on Vamkha, at the moment, of course, it varies from partner to partner. But there is a long way to go in activation of those branches. We are where we were with SBI Many years ago. So about there is a significant roadmap ahead, even though as you said, we have done well with other banks. So group protection has actually grown One second. Yes. So group retention has grown by 65%. I don't know which figures you're looking at. Deepika, do you have more questions? Sir, I was mentioning for the quarter, I think there is some just slowdown in Group Protection. Yes. For the quarter, yes, there is a so Deepika, actually, we have Maintained our numbers according to the projected for this financial year quarter on quarter. And the Major part of the group protection has been done in the 1st 3 quarters. And the last quarter also, we grew by 16% And as far as the overall year on year basis is concerned, 65% growth. So that we maintained. And individual protection also, we grew by 40% And on quarter on quarter basis also 49%. So that as per the plan it has been maintained. Okay, sir. Thank you. Thank you. The next question is from the line of Ashok Fredrick from B&K Securities, please go ahead. Sir, thank you for giving me the opportunity. Sir, again, just to continue on the group protection piece, I am looking at the AP numbers And of course, versus peers who have done really well in 4Q, we were not able to do that much Well, on group side, of course, on the retail side, we're doing very well. So I have two questions. One is, I mean, in future, So where do we stand with respect to group protection? And number 2 was on retail protection, are we being slightly more aggressive in So I'll take the second question first. On Protection, we are not taking an aggressive line or anything. We are going by the customer demand. So wherever we see and as you can Very well know that last year, there has been a focus on protection. So protection was in slightly higher demand, And we have catered to the requirements of the customers. So Protection has been sold more last year as a result of customer demand, I should say, we are not we keep maintaining, I think, earlier also I have said, we do not push Any products to any customer. We have a big range of products to suit each and every customer, And you offer these products and we sell whatever products the customer chooses. Now coming to the first part, Just to give you the bipartisan between the group protection, we have got 2 lines. 1 is Credit Life and second one is other than Credit Life. So, PREDICT LIFE grew in the quarter 4 by 27% and Y o Y by 2%. And This is on APE. APE. Yes, okay. And group protection other than Credit Life on quarter on quarter, 4th quarter, it grew by 16%. And on the YOY, it is 65% on NBP basis. And on APE basis, In fact, on YOY, it is 8% growth. Okay, sir. That was 8%. If I can Let me ask one more question on the deficit tax rate again. So we saw effective tax rate margins going up by 60 bps, If I see only 4Q versus 4Q, whereas the mix is not very much different, of course, Banfar has gone up, but protection has come down over the 4th year. So what how should I read this? Because last Q4, we had 21.1% in this terms, 27.7% on excess tax rate margins. So basically, we generally declare our VNB and everything on Actual tax rate basis, but what we do what we have done is we have done calculated this on effective tax rate basis As is being done by everybody else in the industry. Just to give a comparison, every time there is this question of why our Margins are much lower. So that is why we calculated it on the same terms that our the industry rest of the industry is calculating. That is how it comes to this much. But usually when the dividend is not paid, that time the effective tax rate should worsen, right, Or get closer to the actual tax rate. So, can you just give me like last, of course, if you can, on last year's basis, what was the effective tax rate and FY 'twenty one, what was the effective tax rate? Yes. See, simple terms, what we have done this time is that The effective tax rate calculation, we brought it in line with the industry practice. And the whole assumptions and the methodology what is being used by the industry, We have applied that in our calculation, and this is the derivative of this outcome. So we will continue to do that. But as earlier said, we will continue to declare both Actual tax basis as well as effective tax rate basis, so that at least you will get a clearer picture and a comparison with the peer group also. Thank you. The next question is from the line of Madhukar Laddha from Elara Capital. Please go ahead. Hello, everyone. This is Yvonne. Congratulations on a good set of numbers. My first question is, see our protection share and non par share, actually more non par share is much lower And some of the other competitors in the industry. Any sort of steps that you're taking to increase Monpar in the mix? So that is actually value or margin accretive, right? So how do we see this mix moving Into FY 'twenty two, FY 'twenty three, that's number 1. And number 2, So what is your view on any protection rate hike? Also remember that your new product approval was due in The last quarter of FY 'twenty one, has that come through and what sort of price hikes, if any, have you done or are expected to be now? Yes. So as far as nonpar is concerned, if you see, we have grown nonpar at about 50% last year. So I don't think we are so again, let me come back to the statement I keep repeating. We don't push Any product down the throat of any customer. We sell only products which are demanded by customers. We have all the products And therefore, there is no way we are holding back on a product or pushing a product. What we do have is part of your second question, where we can price So sometimes when we find that a product is selling more because there are We could likely make a loss or something, then we would reprice the product. But that would be that I'll answer On the production side, what you asked me, but if you ask me, I do not push nonpar products nor do I withdraw any product or keep it In keep it from my customers, having said that, our we have a bouquet of 38 products covering virtually every requirement by anybody. And we have a very strong nonpar individual product Called Smart Platinum Assure. So that was very much in demand in last year, And we have been able to sell that in large numbers. So we do not propose to push this product Any further or anything like that nor do we propose to withdraw it or anything. And coming to production rate hike, yes. So we have actually repriced one product and we are launching it today. It has been launched today. So there has been a hike in one of our products, SmartShield. And then the product that you are talking about, which we We're supposed to launch. We already have a product on that in that area. But what we we had to delay that Because we had a lot of statutory products which we launched in the meantime. So we came out with last year if you asked The EIDI mandated products, we brought out Corona rakshav, then we got Saral Biba And we also got we have filed for the pension product. So now this one, This product, yes, and apart from that, we also had the repricing of the Smart Platina, And then we also launched Poor Suraksha. That is a health come critical illness come life cover. So that was what we were busy with. And as a result of this, we had to reprioritize. But this year, definitely in the first Quarter, we are likely to come up with the product that we were talking about earlier also. So that also is likely to come. But in the meantime, you already have production products in the market, which are which have strong uptake, as you can see. So, what is the price hike that you have taken on SmartShield? And do you expect Another round of reinsurance rate hikes? See reinsurance, I don't know what they will do. And it will depend a lot on the experience and what they their own experience and their experience with us. So it will depend a lot on that. So I will not crystal ball gaze on that. But what I can say is that the What is the price I can ask, Rodan? Yes. No, no. Saral, Shield, if you ask me, it is age wise and Tell your wife, there is a chart. So, if you ask me on an average around 10% let's say. That's it? Yes. Okay. I'll come back in the queue. Thanks. Yes, sure. Thank you so much. Thank you. The next question is from the line of Anshooman Dev from ICICI Securities. Please go ahead. Yes, hi. Thanks for the opportunity, sir. My question was regarding our It's the 1st month persistency on the regular premium side. So it has declined, I think. So, if you could give some reasons for that. And second question was on protection. So do you believe the new product, which is you're talking about, can drive some new volumes Is this in FY 'twenty two or do you believe it will not be any special kind of a warning trigger? Yes. So, you know the new product definitely we expect that some volumes will Goa, that because it's what we are bringing out will be Implementing our suite of products. So obviously, we will be able to find more people who will be interested in buying these products. It will be a pure term product, right? It will not be an ROC but a pure term product, right? Yes, it will be a pure term product, absolutely. So that this is something which we will we like I said, we already have a lot of production products And even pure protection products we already have, but this will complement that suite overall. Okay. Okay. And as far as the 60 1st month persistency, Sagaram, can you just highlight that? Generally, the regular premium paying products, There are few products got matured after the 5th year. So that is a little bit bucket. As far as the regular premium is concerned, [SPEAKER SRINIVASAN VENKATAKRISHNAN:] That also got a little hit. So there is a small dip in the regular premium basis. But if you see overall, all premiums taken together, that is there is a growth And which is beyond now 61.6%, so which is the one of the best in the industry. Right, right. And one last question, sir, on regarding the increase in the margin that we have seen on Q4. So We had some positive operating assumptions which were supposed to unwind this quarter. So is it has it contributed to this kind of a Higher increase in Q4? No, no, that's not. So if you see This margin growth is mainly on account of the active management of the products, balanced product both for the protection side We have been doing this active repricing and other things and optimizing. Even now, within the same proportion, Margin has been increased. So margin can be percent mainly on account of the product mix. Right. But we would have started some assumptions On this when we started this year because of COVID, we would have made some assumptions and throughout the year, the experience would have been positive or And some contribution would have come from this? So we have to revisit those assumptions and partially we have managed that. And you know, COVID is still around and we as SBI Live, we wanted to be prudent on that side. So we are carrying some part of that. Got it. And any mortality reserves that we have additionally made? Yes. So being prudent, we did 2 aspects. One aspect is that we have given a staff part of mortality for the next year, given Uncertainty, though our COVID claim is very comfortable, we are within that. On top of, we have also made additional provision of INR183 crores for the COVID Item 21st March, 2021. 1.83 crores, right, sir? 1.83. Okay, sir. Thank you. The next question is from the line of Adarsh Parathampuria from CLSA. Please go ahead. Hi, sir. Congratulations on strong numbers. Sir, I'll just go through your operating alliances over the last It's been a very big positive, especially if I try and look at the breakup, it comes more on the And then there is another one. So two questions here is 1, Given that our efficiencies have continued to improve on a headline basis and you can talk about product wise, Do you feel the need to now tinker with it and make it a part of margin because it's been a very strong Persistency variances for 2 years now. And 2 on the other variances, What's the 280 crores of other variances that you can talk about? Just to When we set the assumptions for future, we not only look into our current experience, we look into long term emerging experience. So partially, You need to look into. 2nd part is though persistency is very sound and you see the COVID scenario, We just want to maintain that we want to be extra cautious on that side so that and you see this party variance will keep coming next year as well. And once we see This experience is very credible. We will go and update our percentage as well as the embedded value. The reason I'm asking is that we had an equally difficult last year, right, in terms of Business being difficult in the 1st year and having a lot of logistical issues. In spite of that, we've got whatever Mariah answers. You are saying that maybe this year as well we look into it and second half there could be a possibility of getting some of this in the margin? Yes. Not necessarily in the second half or anything, but then yes. As general situation evolves, we'll do that. Yes, we'll definitely look at the On an ongoing basis. Got it, sir. And second question is on the margins, right? So you're at, Let's say the comparable margin is 23% versus peers. Can you just talk a little bit about just some earlier you used to do it, some of your Yes, Dewey. Give a breakdown between Protection and Savings. And given that the Savings business, you are skinny, you live heavy versus a lot of Here is more non par saving, how much headroom we have there and how much of a margin lever that can be because your margins now are Relatively more comparable to peers and your non par mix is quite low. So in that sense, that would end up being a kicker over the next couple of years. So we've had this mix, relatively similar mix Over the years. And if you see our margins, we have been improving steadily on our margins. So every quarter, every year, Our margins are getting better and better. And we are doing it on a sustainable basis. So like Pritesh has already said, You know the pricing, repricing, being dynamic about the whole thing, not trying to push any particular product, Meaning what the customer chooses, that kind of strategy has worked for us very well. And we do not Things that we need to actually go all out to sell some particular product which has a higher margin or something. So, The other question of your margin breakup comes up. We wouldn't like to actually commit on figures because we have Even if you ask me the production products that we have, so suppose I have 4 pure production products, the margins will all be different for them. I can only say that the production products margins are going to be higher and the ULE products, as you all know, the margins are going to be lower and the Traditional products are somewhere in between. So and that's the whole thing. But we are not looking, Again, let me emphasize, we are not looking to push any particular product to push up our margins. We successfully sell more To more customers and that gives us our edge and our profits and our growth. And I do not think that you tamper with the winning team. Just to add to what our MD said is, see you should look at what is our view on the growth And the EV growth. So, Amit, whatever strategies we have adopted and this year we've also faced a little bit challenge on the volume because of the industry Circumstances, we still manage to grow VUMB very heavily. So that fact that we have Reasonable margin even in the low margin products helps us meet customer demand and show sustainable much from Increase in OMB year on year. Got it. And just as related question, right, when IPO happened just Couple of years after that, we had a steady margin improvement story then Protection came in and now non pass savings and margins improved From the 17%, 18% number to 23%. Any sense and direction given that we still have some low hanging fruits, if I can so call it on the non par side. Any sense on what one should expect from here on because the improvement in the last 2 years have been very strong? We will continue I would like to it may sound very boring. So the whole of last year, I kept saying this. And we will continue to sell products that the customer wants. And as Avilez has said very clearly, you can see from our VONV growth, You can see from our EV growth that our strategy has been working very well for our company. We are number 1 in A rack of parameters that you see across the industry. So, I think we don't Tapper with a giving formula, keeping the customer at the center, selling products that he wants and then only adjusting things which you know, let's go Probably not in our control. Got it. It's very useful. Thanks Amit. Yes. Thank you. Thank you. The next question is from the line of Hitesh Gulati from Haidam Securities. Please go ahead. Thank you, sir, for giving me the opportunity and congratulations on a very good set of numbers. First question is what is the new business trend for the quarter for the year? So new business, we have done a lot of new business, so there is But I don't think we want to quantify that right now. Okay. And sir, what is the quantum of mortality claim Due to COVID that we have paid both on a gross and net basis? Yes. So if you ask me, the total claims that we have paid is INR320 crores. So this is the net claim, net of reinsurance. And Yes. So that's it. And so what would be the number of claims that the C 'twenty is amounting for? 5,000. Yes, 5,000 something. So it's 5,07,000. I can give you the exact numbers you want. 5,07,000. Yes. And so just one last question, your operating assumption changes minus INR 80 crores. So this is obviously including that INR 183 crores of mortality. There is a positive also of 100, so what is that amounting to? No, no. So, Hitesh, This RMB183 crores is on top of the additional provision we made on COVID. Assumptions is mainly as I mentioned earlier as well, we wanted to be more on-site, in the though our COVID claim is well within that, we wanted to be. And so we increase our mortality assumption, also give the mortality stocks for the next 1 year. In case CJS only do our same, we will be in a stronger position. Okay. Thank you, sir. That's it for me. Yes. Thank you. Thank you, sir. Thank you. The next question is from the line of Harshadoshniwar from Trangi Invest. Please go ahead. Yes. Hi. Thank you for the opportunity. Am I audible, sir? Very much, sir. Go ahead. Thank you. So, few questions are on the mortality piece. I think Clearly, demand is there from customer and that is not questionable. But when we talk to peers, the common concern is that right now it is a Critical times and that's why they are precautions in terms of selling a lot of protection policies. So More from the risk perspective rather than ability or demand perspective, do you think that being aggressive on term protection right now Makes sense. Given the risk that the early mortality claims can be very high, it seems it won't go away. And second on so I think in the last question, you mentioned that we had INR320 crores of claims. So that is for the full year. And just want to know that what is the absolute amount of gross and net claims there for the full year? Because 3.20 looks very low What is the name of the peers? No, this is 320 is the net claims COVID claims that we have for the year. That's all. And overall mortality claims, if I just say COVID, non COVID altogether, Lee, for the whole year, what would be the claim, sir? Total debt claim was around INR 3,017 gross. Okay. So it has grown by Yes, it has grown by around 70%. 70%? 34%, yes. So over there, just want to understand, sir, that this obviously of that INR 3,000 crores, maybe INR320 was because of COVID, But the non COVID viovine increase in claims, that also appears to be very high. Even if I split that 10%, then also we have 50%, So, just want to understand that Yes. So, one of the things is that we have been growing In number of policies sold, okay. So over the last few years, we have been every year, we have been growing the number of policies that we are selling. So the claims will naturally grow to that extent. That is the first thing. Secondly, yes, there have been There has been a slight increase in the number of claims in the last one year apart from COVID, And this could be related to the pandemic, it may not be related, we do not know, But then there has been an increase in the number of claims there. But having said that, our estimation Of the claims that and the assumptions that we had made last year, I think that has come out very, very close to our Actual experience. So I think to answer your question, even though there has been a spike in the number of claims, It has been this is something which we had estimated. Just one additional data point if I can ask. So instead 3,200 crores claim, CCSH, what was our initial assumption? No, no. See, this is the total claim paid, okay. And what we mentioned that, and you can see Our disclosure as well, our mortality balance is hardly negative. It is 2020 crores, so this step indicates that our reserves are closer to the number. That's why MD has also explained to you. Sure. And the INR 180 crores, where asset got accounted for? So I just missed in the last question. It's a provision. We have made a provision of that. So it will not so in the EV, I'm just trying to understand that where will that Reflect or it will not reflect right now? It is a part of the statutory liability, okay. So it is part The liability unwind, so it is reflect to some extent in the VIB and A and W Both aside. Secondly, as I mentioned, we have also given the stock in our assumption for 1 more year. So if you consider both aspects, I think our assumption is well within the quite prudent in the current scenario as well. And we expect that we'll get a parity balance next year as well. So basically, it's implied in the VNB only. There is no separate it's there in the VNB calculation itself. It's a simpler way to resolve. Yes. Okay. Perfect. Okay, thanks a lot. One more question if I may ask or I can go out to the queue. But in the April months, How has the initial trends been? So because of COVID, do you think that impact on us will be very much similar to last year Then there was very maybe sometime around May June where there was a positive lockdown. Or do you think that we are right now well equipped digitally and within the bank That our growth won't be impacted that much because of April 1? Thank you. No, I wouldn't I would hate to Trying to be an astrologer, so I will not try to crystal ball gaze. So I will leave it at saying that We are looking at the situation, and we will take our business targets looking at what we know right now. If you look at both the sites, there have been some lockdowns now and there is a vaccine out there And there is a huge program of vaccination going on. So putting all those things together, we will take our own call on this, But I wouldn't like to forecast anything at all right now. Thank you very much. Thank you. The next question is from the line of Abhishek Sarraf from Jefferies, please go ahead. Yes, thanks a lot for the opportunity. Most of my questions have been answered. So I just wanted to know your view on the nonpar savings product now that we have grown it very fast and of course the Eel covers help us to write a lot of this product. But going forward, do you see similar kind of pace continuing in the next year? And in this regard, I also wanted to understand that we in the VND margin, we have taken negative economic assumption effect, And that seems to be primarily on account of change in risk free rate. So are we assuming higher rates? And what would that imply For the E curve and our growth in on per savings for the guarantee product? Thanks. Yes. So basically, nonpar, we don't look to push the product or Okay. So like I said, this has become a very old statement of mine. We don't push any product to the customer. We have all the products And we wherever the customer demands and like last year, you will know that guaranteed products was Part of the flavor of the season during the earlier days of the pandemic. So I think A lot of nonpar guaranteed product got sold at that point of time. And that if it plays itself again, We are ready for that. We are okay with selling more of that product also because Finally, it is a question of what the customer is looking for at that point of time. And so that is how we will look at. And like you said rightly, the change in the economic assumption is because of the risk Free rate change. That's all. Thanks a lot for that. Just if you can dwell a bit on sorry for belaying on this. So what I'm trying to understand is that obviously at the lower rates, there will be demand for the non pass savings. But If we are assuming that the yield curve could probably flatten, so would that make writing Guaranteed Products Profitable for us or will that lower the margin? So that's what just I wanted to understand. Maybe you can continue with the growth, but could the margins on non pass savings come down With the contraction in yield curve. So, Just to give the brief to you, see, this is entirely the yield curve impact for economic assumption, nothing else. Now negative economic assumption doesn't mean that margin is negative or is lower. What we do that we Effectively, we monitor our margins. At some point in time, we're not going to skip daily basis changing your pricing. And so the part is there. If you look into despite this 1% impact on the margin, our margin has significantly grow over the Yes. This early indicates that the non profit product that we are selling today has a very significant margin. And if margin will continue to be there, We will continue to sell this product as our MD also mentioned several times that we don't push any Specific product, it's depending on the customer's size. What we do just to lock in our margin and Enhance the margins, we continuously monitor the premium rates and try to reprice those products effectively so that our margin gets intact. Thank you. The next question is from the line of Sanket Oda from Par Capital, please go ahead. Yes. Thanks for the opportunity. Sir, the question was asked on the operating Number of INR 380 crores others coming from. So just wanted to know the number looks to be a little higher in the current year, but what contributes to the INR 380 crores, that's my first question. And second question is that COVID results, we've made a provisioning of INR 70 crores last year. So, 183 is an outstanding number. So, it's an incremental provision of 1.10 crores. Therefore, it has been rooted through embedded value. That's my second question. And third one is if you can give EV breakup into A and W and Ziff, it will be useful. So Saket, the first question I will take the last question one. And firstly, that we normally don't disclose this bifurcation of A and W and We can say that our EV has grown 27%. It should indicate that how we are performing. 2nd part on your what is COVID? COVID reserve. So last year COVID reserve was 60 crores. INR 70 crores, December. December. And this is the additional provision we have made as on date. So when we make the provision, we look into the item valuation rate. So INR183 The provision made as on March 31, 2021. This is second. 3rd point, you're looking for the operating First question on the other operating variance. This is mainly on the CMSR and then some tax provision other part. And there is some smaller things, if you look into our EV side, this amount is not significant. So, having a change of capital charge assumption from 5 percentage to 4 percentage and therefore you are seeing that operating variance number others to come at the higher So you are interested? No, we have not changed anything. So we have not changed anything. Okay. So basically to clarify that balance sheet number, so 183 is the floor number of the current year, right? So it is total provisioning what you need for COVID, it's around 250,000,000 or so. That's the way I should look at or 1 is No, no, no, no. You look at last time's provision has gone. So that goes away with the New P and L and the new balance sheet, the old provisions disappear because it doesn't matter whether you call it, whether you paid it out of the provision Are you paid it out of your P and L and kept that provision into this provision? So it doesn't really matter. So that is up to you, but then finally, the accounting is the same. So right now, the COVID reserve that is made is INR183 crores. So, the operating assumption change of 80 crores In the easy walk, ease with respect to Watson, INR 80 crores what we have made in operating assumptions, it is largely to factor in this So that is a separate mortality. There's a change in our mortality assumptions. So we have what we have done is we have taken a Higher mortality assumption for the year going ahead. So we have said that there will be more claims, less claims To the extent of INR 80 crores. And so that has already been factored into the VONB movement. And then we have an extra provision of INR183 crores. Just in case we fall short And we there are more claims than we that our enlarged assumptions, Then we want to be safe because this is a year where we last year, we made a provision of INR 70 crores, and it turned out Pretty much okay. So we just thought that we will enhance that assumption by that amount And a slightly more to account for the enhancement and business also. And then later, We also kept the COVID reserve because the COVID reserve is something which really works psychologically also very well. Got it, sir. Sir, my next question is on annuity business. So we have done a phenomenal job in the current year. We have done around INR 3,000 crores of business In annuity compared to INR100 crores last year. So just wanted to understand this business is largely driven by individual annuity Or if you can give us break up into individual line group and you think that's one point. And how do you see this growth standing out going ahead because is it largely coming from our Old superannuation points or your NPS, which is from a sister company is also driving this growth of annuity business? And how do you foresee the growth going forward? It's part of everything. So we have amounts coming in from Customers then we have coming it is from individual also. So I would say it's like it's about A fifty-fifty kind of thing from individuals and from corporate business and also NPS. So If it's all altogether, it is 3,000. So that growth, it is a reflection Of the demand for partly, it is a reflection on the increased demand for Annuity products, I should say. There is definitely a trend toward more people picking up annuity. Thank you. The next question is from the line of Jayant Kaye from Credit Suisse. Please go ahead. Congratulations on the good set of numbers. I wanted to ask on the hike that was taken 10%. So does this protect our margins? I mean, of the total hike that came out from the reinsurers, Were we able to pass through the hike entirely? And second question is, can you just tell the protection share in BNB this year? So the reinsurance rate has nothing to do with that 10%. There is no correlation between that. There were some the whole thing, along with the reinsurance rates, We decided to reprice the product. So in that reprising, the final result would be on an average 10% across that particular product. So it has got nothing to do with the exact hike in the reinsurance rates, etcetera. So we wouldn't like to go into that Because each product has got a different negotiation going with the reinsurer and there are different assumptions. Even for us with the same reinsurance, we would have different reinsurance rates for different products depending on the Constituents of the who are taking those products. So there is no direct correlation. Okay. And sir, if I may just add on to that. So for example, this year, our mortality premiums are almost 60% higher. I'm guessing some of that would be because we've returned a lot of protection business in the last couple of years. Does this mean that this has not been P. Vijay Kumar:] Accounted for in the last round of reinsurance rate hikes and going ahead we should expect sharper Well, I don't know. We didn't do any such I mean, we haven't seen any such correlation. It is not related to the production Business or anything. Like I said, there has been growth in business over the last few years also. So claims have gone up. And also the mortality, I think across the board, people would have felt more debt claims last year than In a normal year, so that I think that is just that. So I don't think we have seen any such correlation. Thank you, sir. Adjust the protection share in VNB ratio. The protection share in? We only? Lee, I can't really, I don't know. We wouldn't like to state any numbers over there. Thank you. Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs, please go ahead. Hi. Thank you for taking my question. Just the first one on the banker. I think for the quarter on an APE basis, we started seeing good growth. And I think at the start of your comments, you also talked about other channels, Including direct other banks and stuff growing. So just wanted to know the sustainability of this, just from the backdrop of systemic liquidity, Do you think these channels can actually grow through next year? I think that's the question. Yes. So the channels will grow Over the next year, so if you see, we have a very good partnership going with SBI. So that's the first one that we had. And if you see the way the activity levels in SBI have grown and the amount of business that It's being done through SBI. So that gives us an indication of the kind of potential that all these other banks hold. So that would be definitely growing going forward. Sir, just In terms of penetration of just say SBI, is there some metrics that you would like to share in terms of, if you have reached 10% of the bank Is there something that we can look to say and this is part of the ecosystem that we can hope to achieve say over the year? We don't look at it that way. What we do look at is how we can give how we can have products Which will be in demand by the customers, how we can help the bank to service Those customers sell to those customers first and then service those customers with those products. So whatever is Very good mix for the customer, the bank and our company. That kind of The thing we do. So that and it has been growing for the years, which you see. The absolute numbers have been growing steadily, a blip here and there because of like COVID. So we still were able to grow, but then it was not a spectacular number in terms of What we could probably do in a normal year, but we still manage to grow very well. So that is the kind of thing that we would like to continue It's a winning formula and we would like to go with that. Got it, sir. And my last The question is on the OpEx ratio. Actually, you called it out at about 4.8%. Is there any physical flows to this number in terms of can this go further lower or you think We kind of reached some kind of a bottom there. Yes, probably. I don't know because I don't think we've seen this kind of number in Any other company anywhere else. So maybe we are somewhere near the floor, but I really don't know. So we will continue to optimize costs. We will try to build in efficiencies. And if it goes further down, then well, we'll know that the floor is not yet reached. But yes, what you're saying is true. It is a very low number. And we don't really want to push it by bringing down costs just like that just to achieve a Different kind of number or something. But then we will definitely look to optimize our costs and Try to see where we can bring in more efficiencies. Got it, sir. Thank you and all the best. Thank you. The next question is from the line of Nishin Chawati from Kodak Securities. Please go ahead. Yes, hi. Most of my questions have been answered, but I was just wondering This INR182 crores, the reserve that you have created, I was just wondering if I can see that number anywhere in the EV work or in your financials? It is there in the financials once again. It is part of the liabilities And it is specifically disclosed also part of the financials as a note to announce. Sure. The other thing was the mortality, the negative variance on mortality, morbidity of INR 20 crores, That is purely what? That is because of COVID or that is earlier is that the annual experience of last year? See, this is mainly on account of the COVID. That's why I don't COVID would not be there. We would have been seeing the very positive And incrementally, given the fact that you have kind of created more results now, You would probably say that I mean maybe you'll probably be more comfortable at these levels, is that what 120 or would you see more Are there changes happening during the course of the year? No, no. Like we mentioned that we have made the additional provision for the COVID. In addition to that, we have also taken the prudent assumption for the maturity in our assumption. So we are very comfortable on this side. One last question was there was a change in unwinding rate and this was reflecting lower interest rates or what is your Yes, it is totally on account of reflecting the current interest rate. Last year, you had not changed the rate. And I think the argument that you had given last time around Was that you would make the assumption make the adjustment to the economic assumption change line item. So maybe I can sort of maybe read that We are changing the thought process at this point of time. Is that the way we can read it? Because your unvailing rate for the previous 3 years has been consistent to 8.5%. So, see, some point in time you have to keep revisiting your economic rate and winding rate in your Thank you. The next question is from the line of Manish Chikla from Citigroup. Please go ahead. Yes. Good evening and thank you for the opportunity. For the individual protection business, could you give the ticket size in terms of sum assured per policy for FY 2021, FY 2020? We'll give you a letter as far as the sum assured is concerned. So average ticket size is In the range of around INR 22,000 to INR 25,000. What would that have been in FY 'twenty? That I will come back to you. Okay. All right. The second question is what was the share of ROP in individual protection FY 'twenty one and FY 'twenty one? Both for last year and this year, it is the same range. So around 84%, 85% ROP, Non ROP is around 15 to 16. Okay, understood. Last question in terms of channel mix, when you show Banka, that is only SBI, right? Yes, I will. And all other banks are part of others? Yes. So the new bank partnerships that you are Entering Dhruv, I'm assuming you would be selling the entire suite of products across all banks, including credit, protect and everything, right? Yes, that is the general idea. It depends also on the bank And they are comfort with various products. So it will depend a lot on what we agree with the bank to sell. Okay, understood. Those were my questions. Thank you very much. Yes, thank you. Thank you. The next question is from the line of Sonal Minhas from Precinct Capital. Please go ahead. Hi there, this is Unal. Am I audible? Yes, sir, we can hear you. Go ahead. Yes, okay. Sir, just one question on the new business. I just wanted to understand the sustainability of these margins With an outlook of next 1 to 2 years, because you've seen a significant bump in this year. So just wanted to understand How does this add up? And is there a guidance you would want to give for the next 1 or 2 years outlook on this? Yes. So I said earlier also, if you look at the trend in the last 4, 5 years, Quarter on quarter, year on year, we have been improving our VNB margin. So we are very happy doing that. And if you ask me What it will be going ahead, we'll keep doing the things right. We will try to do the same things Better and better. And like we said, repricing when there is an issue somewhere Or you're trying to have more products where there is a demand. So that kind of thing we'll continue to do and we are very hopeful and the Yes, we will bear we out that we will we have been able to steadily increase the VNB and the VNB margin. So we hope that it will continue. Okay. Just asking more from a boundary analysis condition that If you see a significant Filaboda growth in the Eudep business going further or so Just asking, this is a significant bump in this particular year. It is year on year, otherwise, I think it's been Growing by a lesser amount. So that's why I was concerned about the sustainability of the numbers. So I understand there is a quarter on quarter increase in the VNB margin, but this year it's a little higher. That's why I was curious to know this. Yes. So if you look at the actual tax rate business, so it is a very steady kind of a curve. It is a slightly higher number this Yes, definitely. Because we had a very good performance this year. But If you look at it, it's not very significantly different. But if you look at the effective tax rate, this is probably there is a huge bump. And that, as Samra has already explained, is because now this was probably the first time that we calculated on the effective tax rate basis the way It is being done by the peers. That was probably the reason why it looks slightly different. I think earlier it used to be like apples to oranges comparison that's the reason why. Yes, yes, yes. So we had this unfair comparison for a long time And that is why we decided to provide that comparison. We still report on an actual tax rate basis. Okay. All right. And sir, just understanding from an internal control perspective, we see that the return on equity and the matrices Actually been dipping here on here. Just want to understand from a sustainability part, again the same bit that Over the course of next 2, 3 years as the margins improve, the V and G margins, do you see the business actually recovering its return on equity As we see the shareholder the contribution to the shareholders actually growing Over the course of next 2, 3 years? We will not be focusing on shareholder making, I mean, Growing the shareholders value or something, it will grow as a result of the increase in business That we are doing. And like I said, stable sustainable policies, stable sustainable pricing We'll always win the day any day. Thank you. We take the last question from the line of Harshadosh Nivas from Trangi Invest. Please go ahead. Yes. Just one last thing, Harshadosh. So you said that You have changed the methodology for the effective tax rate versus what state needs to be up there to make it in line with us. Can you throw some light on what that changes are? And I think finally, a great set of numbers, so it has been one of the best results we have had. Thank you. We can provide you the calculations offline. We can send it across to you. We've noted that I mean, fundamentally, sure, sure. Just want to understand that broadly, theoretically what I think, but anyway, I'll take it offline. Thank you. Yes. Thank you very much. Thank you. That was the last question. I would now like to hand the conference over to Mr. Mahesh Kumar Sharma for closing comments. Yes. So, thank you very much. We really appreciate your time and your patience in Europe going through all our financials and All the questions that you ask, which make us want to work harder and do better. And all the pointers that we get on where we can do things better. So thanks a lot. And we hope to Hope that all of you will be safe and sound with this pandemic going. So please wear your masks and Sanitize yourself, hands, washing hands and keeping social distance. Thanks a lot for attending our call. Good day. Thank you. Thank you. On behalf of West AI Life Insurance Company, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.