Ladies and gentlemen, good day, and welcome to the Q3 FY 2021 Earnings Conference Call of Bajaj Finserv, hosted by JM Financial. As a reminder, all participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Bunny Babjee from JM Financial. Thank you, and over to you, ma'am. Thank you. Morning, everybody, and welcome to Bajaj Finserv's earnings call to discuss the Q3 results. To discuss the same, we have on the call Mr. S. Sreenivasan, CFO, Bajaj Finserv, Mr. Tapan Singhel, CEO, Bajaj Allianz General Insurance, Mr. Ramanpreet Singh, CFO, Bajaj Allianz General Insurance, Mr. Tarun Chugh, CEO, Bajaj Allianz Life Insurance, and Mr. Bharat Kalsi, CFO, Bajaj Allianz Life Insurance. May I request Mr. Sreenivasan, sir, to take us through the financial highlights. Post this, we can open the floor for Q&A session. Over to you, sir. Thank you. Good morning, everybody. I welcome everyone to the conference call to discuss the results of Bajaj Finserv Limited for Q3 FY 2021. As before, in this call, we will largely be concentrating on the consolidated results as well as the results of our insurance operations through Bajaj Allianz General Insurance, BAGIC, and Bajaj Allianz Life Insurance, BALIC, and where material, the standalone results of our company, BFS. Bajaj Finance, BFL, which is another major subsidiary of ours, has already had its conference call yesterday. However, if there are any high-level questions on BFL, we would be glad to take that as well. We will not be taking any questions on the status of Allianz's stake in our insurance companies. The status has remained the same as at the end of the previous quarter, and there is no change there. Any statement that may look like forward-looking statements are just estimates and do not constitute an assurance or indication of any future performance result. A remark on Ind AS. As required by regulation, BFS has adopted Ind AS from FY 2019. However, the insurance companies are not covered under Ind AS. They have prepared Ind AS financials only for the purpose of consolidation. Accordingly, for BAGIC and BALIC, the standalone numbers reported below are based on the non-Ind AS accounting standards or Indian GAAP as applicable to insurance companies. Our results, the press release accompanying the results, and our investor deck have been uploaded on our website yesterday evening. I hope you have all had a chance to go through those. To give you an update on the performance, the conditions, as you know, have been tough, though sequentially, we have seen improvement in business performance and business conditions in Q3 as compared to Q2 were better. Under these challenging times, our businesses have shifted focus to recovering growth while continuing to manage risk. In general insurance, though the growth for BAGIC was below industry for the first two quarters, there was a sequential recovery that was being witnessed as seen from the fact that BAGIC reported a growth of 11% in Q3 FY 2021 versus the industry growth of 2% and private players' growth of 8.6%. This was from a 20% degrowth experience in Q1 of this year. BAGIC, however, has adopted a calibrated approach to growth. BAGIC is seeking to grow in preferred segments, which are private cars, 2-wheelers, commercial lines like property and engineering, and retail health, while remaining cautious on group health. As you are aware, most of the retail health business we do are the indemnity-based retail health business. Within commercial vehicles, passenger vehicles as a segment in which BAGIC has had a strong presence is yet to reach pre-COVID levels. At the same time, as we mentioned in an earlier call, BAGIC has been conservative in recognizing the potentially higher claims on COVID, non-COVID health claims, increase in claim frequencies, and potentially higher third-party claims due to potential interest from MACT. Most of these have panned out as we had expected. To give some more details, the motor segment showed a turnaround, and hence motor 2-wheeler and motor 4-wheeler reported growth of 13.1% and 9.6% respectively. While there was a 19% degrowth in commercial vehicles. The commercial vehicle also quarter-on-quarter has shown better performance because for the nine-month period, we have had a degrowth of -3%. The demand for retail health insurance has slowed down, partly on account of the fact that the first two quarters for most of the industry and for BAGIC also was supported by COVID-related policies. However, BAGIC growth in retail and furthermore, there has been a price increase by many of the players in this quarter, which has dampened the demand for health insurance for this quarter. On the other hand, BAGIC continues to be conservative on employer-employee group health business due to excessive price competition leading to high loss ratios. Among the commercial lines, property, which is predominantly we call fire insurance, continues to drive the growth for the industry on the back of IIB-based rates. However, rate increases have been higher for riskier segments while the more profitable segments have seen lower increases. Therefore, significant rate increases are also accompanied by higher risk. In some cases, there have been reduction in rates as well. As you're aware, BAGIC has always focused on the more profitable segments, and therefore, the average rate increase may seem lower for BAGIC. Nevertheless, we are very pleased with the overall performance on property and engineering and allied corporate lines. For example, in Q3, our property business grew by 33%. 9-month growth was 39.8%. Engineering grew 22.3% in the quarter and 38.5% for the nine months. Liability also showed a strong growth at 18.5% for Q3 and 14.4% for the 9 months. An important point to note here is that since the property price increases based on the IIB rates, the Insurance Information Bureau rates, was started since Q4 of the 5/20. Going forward, price-related rate increases may not be as high as we have seen in the first nine months of this year. That will apply not only to us, but we believe for industry as a whole as well. In the case of life insurance, since opening up of the economy in September, the industry has continued its recovery and private players reported a growth for the first time in the last three quarters. During the quarter, the industry reported a strong growth in October but de-grew in November as spending shifted towards consumer goods and durables due to festive season. Finally, in December, post the festivities, there was a swift recovery in the growth momentum. BAGIC's growth of over 40% in the month of December 2020, significantly over the industry growth, is a welcome sign, and we are optimistic about maintaining the momentum going into Q4, which is normally a very high sale season for life insurance. With recent increases in price and possibility of availability of vaccine, there has been a consolidation in demand. Where guarantee products took a strong preference in H1 FY 2021 because of market volatility, the demand for ULIPs in Q3 FY 2021 has improved on the back of strong recovery in the equity markets. This was also a key driver for growth in Q3, particularly in December. Despite these circumstances, BAGIC has done very well, recording a growth in individual rated NB of 14% in Q3, as against de-growth of 9% for the market and a growth of 3% for the private sector industry. Both BAGIC and BALIC continue to utilize their digital properties and continue to emerge stronger through this crisis. We have seen a substantial increase in the digital penetration across several parts of the distribution and service chain across both our insurance businesses. For example, in BALIC, the digital asset usage increased by 77% in November of FY 2021, and two-thirds of the renewals are now coming via the digital medium, which were a little under one-third before COVID. Further details regarding BAGIC and BALIC's digital capabilities are covered in the investor deck uploaded on the website yesterday. Coming to BFL. BFL already had its investor call. Broadly touching upon the high-level results, Q3 was all about granular business recovery, significant improvement in risk metrics, tracking implementation of the business transformation plan that the company had set out, and putting into motion a plan for pre-COVID financial performance from Q1 FY 2022. During the previous quarter, in Q2, BFL had an estimated expected credit loss in H2 to be around INR 2,600 crore-INR 2,900 crore. Post INR 1,352 crore of provisioning in the current quarter, the company expects a residual credit cost of INR 1,200 crore-INR 1,250 crore in Q4. With respect to the initial estimate of INR 6,000 crore-INR 6,300 crore of credit cost in FY 2021, BFL is expected to have a credit cost of about INR 5,900 crore-INR 6,000 crore in FY 2021 overall. The company experienced continued improvement in portfolio quality in Q3 and new volumes originated across businesses during Q3 have risk metrics better than the ones originated prior to COVID. The net NPA for Q3 is 0.19%. If we include the standstill assets as per the Supreme Court order, even then the net NPA ratio would have been 1.22% only. The company has started dialing down the liquidity buffer that it held, which was about INR 22,400 crore as of 30th September. It's down to about INR 14,300 crore as of 31st December. From BFL, the core AUM growth is expected to resume to pre-COVID levels by Q4 FY 2021, along with loan losses and provisions to revert to pre-COVID levels in FY 2022. The highlights of our consolidated financial results, which are announced in our press release, I'll just repeat it for those who have not had a chance to go through that. Consolidated total income INR 15,961 crores for the quarter versus INR 14,561 crores. Consolidated profit after tax, INR 1,290 crores versus INR 1,126 crores. Bajaj Finance consolidated profit after tax, INR 1,146 crores versus INR 1,614 crore last year. General Insurance had a strong quarter, a INR 330 crores profit versus INR 191 crores, which is an increase of 72%. Life Insurance shareholders' profit after tax, INR 118 crores versus INR 143 crores. As you know, the life insurance business largely works on new business margin, which also includes the expected profit as the policies get renewed over the lifetime of the policy. For the nine months, the consolidated total income, INR 45,200 crores versus INR 41,057 crores, and consolidated profit after tax, INR 3,491 crore versus INR 3,175 crore. I'm hastening to add that in the case of the insurance subsidiaries, while they are all standalone are in Indian GAAP, for the purpose of consolidation, we are considering Ind AS compatible results. The equity securities held by these companies is treated as fair value through profit and loss account. During the quarter, this has resulted in increase in consolidated profit after tax by INR 384 crore, and for the nine months of INR 896 crore. BFL, as a matter of prudence, has written off, provided for principal and interest to potentially unrecoverable loans which are under moratorium, by also utilizing the available expected credit loss provisions. BFL continues to hold a management overlay of INR 800 crore in provisions, given the dynamic and evolving nature of the pandemic, along with other variables. Overall credit costs for BFL for the quarter were higher by INR 521 crore on account of this, and INR 2,762 crore for the nine months. BFL has a very strong capital adequacy ratio at 28.18%, with a T 1 capital of 24.73%. This is more than twice what is required under the regulation. Bajaj Housing Finance, a 100% mortgage subsidiary of BFL, the capital adequacy ratios again stood very strong at 24.94%. BAGIC has an excellent combined ratio in Q3 FY 2021 at 96.1% versus 103.6% in Q3 FY 2020, and therefore it also had an underwriting profit this year as compared to an underwriting loss in the Q3 of last year. The profit after tax was INR 1,057 crore in nine-month FY 2021. I'm hastening to add that it's the highest ever nine-month profit that BAGIC has reported for the period April to December in its history. The underwriting profit was INR 27 crore, however, a loss of INR 87 crore in the previous year. Lastly, this is due to lower claim and expense ratios. Though there were lower claims reported in motor, the claim frequency for motor own damage is almost back to pre-COVID levels. On the health segment, number of COVID claims reported have started declining over the last few weeks. As expected, the non-COVID retail health claims are inching back to pre-COVID levels as customers have started visiting hospitals for non-emergency treatments, elective surgeries, and delayed corrective surgeries. Overall, BAGIC's COVID claim share is in line with its market share segment around 4%. At the current moment, based on the available information, we are well provided for these. Finally, motor TP claims are still not being settled at the same pace as courts are still not operating at full capacity, and we do see potentially a risk of higher interest when the claim gets settled. I must hasten to add that BAGIC has taken a view on that and is reasonably well provided at this stage. Coming to BALIC. BALIC AUM crossed INR 70,000 crore. This is the highest ever AUM reported by BALIC, and its net worth of BALIC is a shade under INR 11,000 crore. New business premium grew by 21% in Q3. This is the total new business premium. The performance was aided by the institutional business side as bancassurance partners Axis Bank, Bandhan Bank, RBL, IDFC FIRST Bank, and India Post Payments Bank have started contributing well. Excluding the fund business, the group protection business, however, de-grew by 12% during the quarter. This is largely dependent on the credit off-take by banks and NBFCs and MFIs. While it is improving sequentially, it is still well below COVID levels. BALIC has also recorded a strong 26% growth in renewal premiums. While there was some pressure on the 13th and 25th month persistency, BALIC's persistency has improved well on the longer vintages beyond 37th month to 61st month. Overall, we do see a trend where about 5% of the 13th month is collected in arrears after the 13th month. BALIC has now a formal guarantee policy and a forward rate agreements in place to hedge its interest rates arising from guaranteed products. Finally, both the insurance companies are among the most solvent. BALIC has a 708% solvency, and BAGIC has 330% solvency, and hence are financially well poised. The requirement by the regulator is only 150%. Finally, on Q3 FY 2021 was a satisfactory quarter with BALIC pushing forward on growth while BAGIC recorded excellent profit growth. BFL is now looking forward to getting back to growth with a close eye on risk and the credit cost due to the lockdowns and moratorium have largely been resolved. Before I open the floor for questions and answers, I have a small request. Please try to focus on the bigger questions on the larger issues. We have gone through a very difficult time and come out in a very satisfactory manner. We are very optimistic about Q4 and FY 2022 as things stand today. We are in long-term businesses, particularly in the insurance side. One quarter's result is not really an indicator. The capabilities that we are building over the long term is what drives our company and what has driven our companies in the past. Thank you. I now open the floor for questions and answers. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Anybody who would like to ask a question, you may press star and one at this time. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Dhaval Gada from DSP Investment Managers. Please go ahead. Hi, Sreeni. Thanks for the opportunity and congratulations on good performance. I had two questions. One is related to the motor business, and I'll split the question in two parts. One is related to the TP loss ratio, and I think you mentioned in your commentary around claims getting delayed in terms of settlement, and therefore from 1 Q onwards, we've seen loss ratios at a slightly elevated level. The question is, when do we see a sort of normalization in your assessment and any sort of approximate timeline on this would be quite useful and any monitor results around it. That is the first part. The second part on motor is related to growth. I think one of the conversations which a few quarters back we used to have is around discounting by certain players, and therefore we were not so strong or aggressive in terms of growth in the segment. How is the environment right now, and how do you see market share gain opportunity going into next year? That is the second. The second part is on the life insurance business. We've made this transition towards mass affluent customer segment. When I look at persistency data and the early vintage persistency data, it doesn't seem to sort of reflect the benefit which we envisaged while seeing this migration. At what point do we see the persistency number move closer to where the larger players are, given the migration that we have done on the customer acquisition side? Those are the questions. Thanks. Thank you. I will just take a high-level answer before I hand it over to Tapan first and then Tarun. On the motor third party, as we mentioned, the courts are not operating at full capacity. As you know, under actuarial principles, we are supposed to provide for the ultimate and expected losses. Clearly, there is a substantial amount of uncertainty over this, and the actuaries do take a fairly conservative view because all have seen our claims triangles that we publish annually. We continue to be, on that basis, reasonably conservative. As to when this will normalize, I think it's a million-dollar question. There's no specific answer. Things are improving quarter on quarter, and we wait and see. I think hopefully if the vaccine drive works very well, we think things should be coming back to normal. On the second question on motor discounting, I have nothing much to say except that discounting is nothing new for Bajaj. We have always been very strong players in motor insurance across a wide variety of channels. We have MISP, we work with brokers, we work with agencies, we have our own virtual points of presence. We also have our proprietary sales force. We have our online B2B, B2C channels. Together, all of these we are working very closely based on our assessment of profitability, effective price, and where we can build a sustainable business where we can acquire, keep, and grow our customer base. In terms of persistency of life insurance, yes, in the past we had moved on to higher proportion of mass affluent and above, and majority of the persistency impact has been on the unit-linked business where, as you know, the higher ticket affluent people have been holding on for the last six months. In the last couple of months, we are seeing good traction in terms of appetite for risk, in terms of buying more unit products. I'll now hand over to Tapan to add to this and followed by Tarun on the life insurance persistency basis. Tapan? Yeah. Thank you, Sreeni. I think you summed it well. As courts open up and cases are getting settled, we shall see the things getting normal in terms of how settlement is happening. One way when you have TP claims getting settled, interest is calculated from the time of the loss, which is payable. If you look at reserving, which typically done is based on your past experience of a normal settlement time. In today's time, because of courts being closed and settlement getting delayed, let's say one year delay has happened. If a one-year delay has happened from a normal time, the interest on that one year is going to be added to the order which is going to be passed. Typically, what is going to happen is if you have a book, which is, let's say, for a simplification, let's say it's INR 100 reserving that you have. In a normal time, you would be doing INR 100 because that is a normal pattern that is falling. Now this one-year delay, the interest on the INR 100 has to be provided for because that is what the judgment is coming and it's going to come because you've seen a few judgments. The interest is there for that period in which is not being settled. That is what Sreeni was mentioning is what we provide for. As courts open up, settlements are happening. This lag or this period of whatever time where settlement has not happened will obviously that past interest will be paid on the book that you already have which is there. That is why the reserving has to be strengthened for this particular part. That is what we have done, and that's why you see that TP loss ratio there. The second issue on motor discounting, those are market forces. They will continue to operate in terms of each company has a strategy, what they find good, what they find wrong, and we also have our own strategy. We keep on doing business in which we're able to serve customers well. If you look at our claim settlement ratios, if you look at our grievance ratio, the lowest in the industry. If you look at IRDAI sites, and it's all available in the IRDAI site, look at settlement ratios on the best in the industry. I think our focus is very clear that we want to serve the customer very, very well. We don't want to be in the game of just giving discount or zero discounting. We try and price the risk for what the risk is supposed to be, and that's what we shall continue. We're doing it from the beginning and continue doing in the future, and that is what our focus has to be, is the customer service. We are in the business of paying claims. Let's be clear about it. That we don't compromise on, and that is what we are focusing on. I hope I would answer your question. Just one clarification. If this delay in settlement were not to happen, would the loss ratios which were around 65, 66% in motor TP would have been lower because the incident rate would have been lower? Is that a right understanding? Yeah. If you look at the incidence rate again, that depends on how many cases have come to the court or which have come to you or you got intimated. If I look at the lockdown, the private cars initially were off the road. If I look at commercial vehicles or if I look at other motor two-wheelers, they started moving on the road. If you read newspaper reports of lot of accidents happening for migrant laborers and all the way, those claims have to come as yet for us to make a judgment that is the incidence rate low or high. The intimation has to come. If you look at third-party claims, there's unlimited time for it. The average time where the incidents are maturing is about four years when it gets reported. That is how it has been. On the own damage part, yes, the frequency had reduced for those lockdown periods. If I look at today, we are at pre-COVID levels in terms of the frequency and the claim on the own damage part already is there. If the own damage already is there, to assume that TP has not picked up just because you don't have intimation, that is a trend. In TP, you don't have immediate intimation. You have delayed intimation coming through. I think that as time progresses, can tell. Understood. Thanks. Thank you. Okay, let me come on the persistency bit for BALIC. I think it's a good point made, Dhaval. We're totally cognizant on the fact that there has been a 2% drop. Let me just give a little bit color to this data. Actually before I give this, let me just give you a little bit of a trend because you talked about the mass affluent and how we've moved as a company. I think your point is absolutely on target. When there is a movement from mass to mass affluent, these things should start getting better. Customer capability to pay is getting better. We have had a journey. We weren't so great earlier in the early fifties, and now we are in the late seventies. The journey is directionally positive, and we have moved from average premiums, which are half of what we are today. The movement towards mass affluent is strong and sturdy. Let me just also tell you that we do have segments where we write policies where we have small finance banks and others as partners as well. That is a small mass segment that is there. Although as Sreeni correctly pointed out, and till now I've answered your question on the mass affluent, really. The point I'm making is there is a segment of mass which is on proportion basis because we are relatively smaller to the listed companies that you also track is a little higher, given we are one of the largest players in the SFB segment. Having said that, the persistency is showing a very different kind of movement on the HNI side. I'd be interested to see if you see something similar in the other listed companies as well, because this is something we are kind of learning as we are going and this is a unique time. Just a little bit color on this. Upwards of three lakh ULIPs we've seen a drop of persistency by almost 4.95%. If I look at the various profiles of investors who are customers who've been with us, we are seeing a segment which has actually gotten unemployed, and there is about a 5% drop in that segment. In the housewife segment too, we are now seeing a drop. These segments have been robust in the past, but as unemployment is impacting particularly and the higher ticket is getting hit, my guess there would be that this is a lot to do with the self-employed who are now either keeping some money in cash with them and deploying it back into business. That is possibly impacting us in numbers. When you start going from the late 70s to the 80s, then you're working on fine margins, right? Every bucket has to get better. This bucket has actually gotten a little worse. That is broadly how I'd say it, but largely on ULIPs, 13-month persistency has actually dropped. That is one key segment. The positive bit there is that these are only early signs as the year progresses. See, because there is a thirteenth month and then there is future buckets that start coming in. I mean, of course the IRDA benchmark that all of you also look at is a 13-month bucket. I'm more interested honestly in the second premium, whether it comes now or 13th, 15, 16 month, because in actuarial valuation that doesn't really have much of an impact. In COVID becomes very necessary to look at. Already I'm seeing that my rolling bucket of the past has gone upwards of 80. It is getting better. This is only going to help us. The difference between us and the other listed bank insurance companies is that a very systematically large proportion of HNIs for them come from the bank side. A lot of us, for BAGIC although it is agency, bank, and the proprietary channel, which makes a big difference because if you go to a bank now, I might have data on customer mobile numbers, but there may be contactability data which I can clean or wash through with the bank. That bit on bank insurance does have a little bit of an upper edge, and I should very clearly tell you folks that that does impact the system. See, this contactability tends to get better. Understood. Thanks, Tarun. All the best. Thank you. Thank you. The next question is from the line of Bharat Shah from ASK Investment Managers. Please go ahead. Yeah. Hi, everybody. Once again, delighted to see the progress on the life part of the business and continuing strength in the general insurance. I had basically one point to discuss about, which is about the technology. Collections and payments being done digitally and policy issuance being done digitally is routine and bread and butter application. From the point of view of how much is technology first is the DNA of the firm in terms of conceiving, creating, and executing things from a digital perspective. In general, services are most amenable to digitization, and finance is at the intersection of that particular financial service as well as the technology. We see that over the period of time in Bajaj Finance, where things are conceived from that milieu and mindset. It is important to have that DNA of technology as a fundamental approach. From that perspective, where do we stand and what are the plans? Yeah. I will take broadly that question. I think while Bajaj Finance has been showcased, I think the insurance companies are not far behind, except that we are also looking at changing our entire core system. We are in the midst of big projects in both the companies to also make this thing adaptable. Secondly, we are investing heavily in analytics and our digital capabilities in terms of servicing, such as on-the-spot claim issuance for motor or health. I think we are very much ahead of the market in terms of that space. I'll now hand over to Tarun and Tapan to take the question further. This is Tapan Singhel here. Good question, let us understand the two business, that is lending and insurance are very different businesses, and their requirements are very different in terms of discretion. If I look at, let us say, the insurance business in terms of discretion, what we basically do is we issue policies, settle claims. How do we do it? Insurance business is basically distribution-driven. It's done by distributors. Most of the advancement in technology will happen in the hand of distributors, which should be there. If you look at BAGIC in the year 2013, started something called VSO, which is virtual sales office. We set up about 1,000 locations. We have already crossed about INR 1,000 crore of premium there. Set up massive distribution without any physical infrastructure. It was the first in the country and maybe to a large extent, among the first in the world where something like this was experimented. Today, I'm happy to see most of my competitors also copying that footstep and now setting up those kind of distribution which is there. That could not have happened if you're not digitally strong because we're issuing policies, settling claims at the doorstep of the customer just using a tablet without any physical office presence. I think that was a very massive movement. Like Sreeni mentioned, I don't think that we have been talking about it, and that is why this question has come. Second, if you look at by the year 2000, I think 2014 and 2015 itself, we are among the first in the world to settle claims on the spot using machine learning, uploading of documents, scanning, OCR, whatever technology are used. If you look at if a claim happens on motor, even today if you are our automobile customer, and God forbid, if you have claim up to the limit allowed by IRDAI, you can actually get down from the car, use our app, click pictures, upload, and we transfer money to your account in 20 minutes time. We do it even today, it is one of the most advanced positions in the world. Quite a few companies are doing it. When we started it way back in about 2015 to 2014, I don't think there was any company which was thinking of doing that. If you look at if you're a travel customer of ours, if you're traveling, there's something called compensation for the flight delay. We use blockchain and then if a flight delay happens and if you have registered it through the app, your travel policy and you put it there, you actually get the claim paid to your phone even without you asking for it. From a digital perspective, I think as a company, we've been the front runners of innovation and pushing things forward. The point that Sreeni was mentioning in terms of the core, if I look at it, we are the first again, in the non-life business across the world maybe, who is putting up the entire core that TCS BaNCS that we are now working with on the cloud. Where have you heard somebody moving the core to the cloud? Our belief is with the number of transactions, the hyper speed at which things are happening and innovation change is happening, you can't have a core which is on-premise. We took the bold step, put it on. It's already going to showcase in the world in terms of company, which is now challenging and pushing this to that level. I can go on and on in terms of the digital infrastructure that we've created, the way we're pushing innovation and what we are doing currently. Rightly mentioned by Srini, I think this is something that we should talk more about. Thank you for the question. It gives a chance to speak about it. Thank you very much. Tarun here, let me just address this as well. I think Tapan and Sreeni have done a brilliant job already. I think it's a very good question, as always, because numbers are finally an output of all the inputs that go into building a company. Particularly in BALIC's case, because it's a big U-turn we are seeing, this becomes so much more important. Broadly, I'll just quickly address it in four layers. I think one, in a way, Tapan touched on the core policy systems. BALIC too is moving away from legacy systems, which all companies in the country today have. We are actually setting up a core which will be on the cloud, and it's a first of its kind system in the country. Actually not just in the country, in the world. We partnered with Infosys for this. Its system is called Engine. It's being set up parallelly to our existing core, which we have earlier sourced from Allianz. A lot of things are going to be determinant on this because how soon and how often and whether virtually you can reach out to the core in a secured manner is very simply to put, is going to decide how this future really moves for various companies. We've already taken that sturdy call, although this impact doesn't start coming in just ASAP, it takes time. The core is getting implemented, will take a few more years, in the case of BALIC, because these are long-term policies which have to move. That is on the core itself. There is a digital layer. I think everything else, which is CRM, CCMs, customer relationship management, customer communication management, and all other set of architectural layers that can come in. All that is already in the process of getting digitized and separate systems have been acquired and put in place. A lot of our expenses actually and investments are going into this as a company. The third layer, which I think gets referred to particularly where BFL excels, is on the data side. Bajaj Allianz Life is pretty much on the same track. There's a lot of learning we have from BFL, which we've been gladly taking on. I must say that we've only just benefited because the group is very positively inclined towards data. As a company, we are only just getting better and better at it. The good news there is the life insurance data, because we capture a lot of data points on customers, much more than any other financial services sector. It is really a boon, and how to be able to upsell, et cetera, becomes very critical. One very clear outlay of the output is the fact that our proprietary sales channel, which is about 10% of the company, was something that started three years back and is totally dependent on this upselling data. It just goes back to existing customers and based on profiles, offers new policies, new services, and just kind of gets more ingrained in that household in terms of a relationship. Ultimately, ours is a pretty long-term relationship product. I think that's what we are getting to. The fourth layer is really the innovation layer, if I might call it. I think one thing we are very clear about in the group itself is that we don't do innovation for the heck of it. We do it based on context and benefit to the customers. One clear example of this has been the one you may have seen in earlier decks, which is a Smart Assist. We really saw that today's problem was social distancing and customers unwilling to meet. Around September, October, we launched a product where our secured app on which today you would buy a life insurance policy can be done on a distant basis. You need not be sitting next to me and looking at paper. I can be sitting five meters, five miles, 500 miles away from you, and you can actually talk to me, converse, and do form filling on that. That's done very well, 21,000 policies, and five times that multiple in terms of customer interactions have already happened through that, and that's helped us in Q3 as Sreeni talked about how we've kind of moved. I think you should be rest assured that in BFS group, each of the companies will be only just doing more and more, and I think that's the core of the group. Yeah. Thank you for those very detailed responses. One last point on that. You see, technology has become inevitable across the businesses, and increasingly, businesses will be a fusion of both physical and digital. That's given, and therefore, there is a constructive pressure on all businesses to adapt technology. My moot question was, when technology comes from as a core DNA of the business, of the heart of how we do things, then our technology responses are proactive and in anticipation rather than delayed and reactive. The issue that I wanted to understand was, is technology at the heart of what we do and how we conceive? Of course, the business remains protection and cover and to do it efficiently at intelligent cost and adding intelligent value to the capital of the business. If technology is seen as the core to the business, then our responses, our plans are of one kind. When it is seen as a popular thing to do or need is felt in the environment, our responses, even if they are efficient, they tend to be of a different kind. I wanted to understand how far is it central to our scheme of things. I will give that answer, Bharat. Across the group, I think we are very much focused on technology. The way we look at technology is that it has to be a digital business where technology is a significant enabler. Anybody can buy the technology, they can copy it, and they can use it, but how smartly you use it will make the differentiator. BFL obviously is in the lending business, where it is more about managing risk than demand, because at a certain price, there is unlimited demand for lending. An insurance business is highly regulated. Even for the regulator to allow full digital issuance of policies, I think it required a pandemic to enable that. There is a considerable number of rules and regulations. Every product has to approve. The product goes through maybe a six-month cycle of approval at IRDA, and the final output of the approved product may not be exactly what we wanted. We are in a business where we have these significant overhangs. Within that, we have to operate. For example, if you take commercial vehicles. Commercial vehicles, largely people buy at the time of buying the vehicle. Along with the registration, the insurance is also sold, and there is a whole lot of intermediaries who work in that space. We have to work with those intermediaries because when you buy a commercial vehicle or a private car or a two-wheeler, you're not going to change your car because the insurance is cheaper. Therefore, if you see even B2C businesses across India have not really picked up in a big way in the general insurance space. In the life insurance space, it is all about savings. In the long run, you have to deliver on your promise to the customer. You have to deliver a superior return. If you use technologies which are not adding value to the customer or where the customer does not perceive value, then we are not going to add significant value in terms of the savings or the promise you make to the customer. Given the context of all this, the whole focus of technology in the group is to enhance customer experience, make it as simple as possible to buy a policy, and make it as simple as possible to make a claim. More importantly, when there is a claim, how fairly you assess it, and I think both our companies, I think, stood out on those counts. You can look at all kinds of statistics. You can look at the grievance statistics. You can look at the claim settlement ratios. For example, if you look at health claims, the rejection ratio of Bajaj, because health is something which has a considerable number of pre-existing conditions and other clauses, is probably in less than 5%. If you look at many of the peers, you will find that there are more than 10% of the claims are rejected. We are very focused on customer experience. In insurance, we do deal with across the spectrum. We do with social businesses, we do rural businesses, we do very small-ticket businesses. We also do the affluent, the HNI, and the whole gamut of customers. In lending, one has to be selective as to which segment you want to lend to and we want it. We combine all this. At a BFS level, we have very strong institutional framework to address technology, to transfer knowledge, and to encourage people across the group to actually get together and learn from each other. Obviously, the new risk that we are seeing across the group is cybersecurity, which is becoming more and more important. In a few months' time, we will have the Data Privacy Bill as well, which will pose a further layer of diligence that is required. So compliance costs are high for any regulated industry. Within that framework, depending on what the regulator allows, I think we are really on top of technology. As we go around, if you ask me three years from now, a lot of the stuff that we do today will be seen as bread and butter, and the stuff that we are doing then would become a lot more appreciated by customers and all other stakeholders. Tapan, Tarun, anything else you want to add? No, I think Sreeni, you did a beautiful summary. You summed it up very well. Okay. Nothing more. Yeah. Thank you so much, and all the very best. Thank you. Thank you, Bharat. Thank you. The next question is from the line of Ajox Frederick from B&K Securities. Please go ahead. Thanks for the opportunity. I have two questions, one for Bajaj and one for BALIC. The question on Bajaj is with respect to motor OD claims. Of course, it has been better for us versus last year. You did mention about the frequency reaching almost to pre-COVID levels. The only way that can be true is that intensity is pretty low. How far can we extrapolate this into the future for the intensity being low, or is it because of the mix shifting into heavy segments? Thank you, Sreeni. If you look at it, no, I think let's understand why the loss ratio for motor OD looks lower. It's a cumulative loss which you see now. What actually happens is, in the month of April and May, the loss ratio dipped. The vehicles were not in use, and it was low. By making a statement that is back to pre-COVID level means the loss ratios have reached to the pre-COVID levels, as we progress now. Going forward, it will be the way it was before COVID. All of us, if you look in the streets, you actually see the traffic back to normal. I think I remember in the COVID time when I used to come to office, it was like one-tenth the time I took. Nowadays, it takes me the same time it used to take me before COVID, in fact, sometimes more also now. I think the vehicle on the road has reached what it was before COVID. Obviously the loss ratios also, the accidents also start reaching the same level as it was the pre-COVID time. That is the statement. I expect that it will now normalize now in terms of what loss ratios were there. It will continue there in terms of the quantum of loss and the frequency. Loss ratio is also a component of what price are you charging. Let us say if people have started charging less, and the frequency and the severity is reaching the pre-COVID level, then obviously loss ratio for the industry will start shooting up. That is why discounting in the market has to be observed very carefully. When the lockdown was there, it was less, and that's why cumulatively it looks less. As these months progress and no fresh lockdown comes in, then I think you'll start seeing that from a pure quantum of loss in terms of frequency and severity, it will be where it was pre-COVID, where the price charge has been lower than the loss ratios are shooting up as months progress now in the motor business. That is what I would be seeing as we progress further. That was my answer to your question. I hope I could answer what you asked. Yes, sir. Even in 3Q, we had that lockdown effect for us. It was moving up. You start breaking up quarter-wise. You will see the frequency and the severity. It has started moving up from April to June, it was the lowest. The second quarter, it moved up. Third quarter, as I told you, it's already pre-COVID level. The fourth quarter will be the most interesting to watch. As you get segment-wise loss ratios and data from IRDAI sites, it will be very interesting to see how it has moved on and how the industry has played this on to see that. I think that is the time when you likely will be good to see. You see my words, what I mentioned to you, that with the frequency and the severity reaching pre-COVID levels, if industry is charging less than the pre-COVID times, then the loss ratio will start going to hit in the fourth quarter, much higher than what industry saw in the pre-COVID time. Let's see how it plays out. Okay. That was helpful, sir. Sir, the second question is on BALIC. We saw some very strong growth on the institutional business. What kind of businesses are these, savings or protection? If savings, is it because of us aligning in FRA market that's giving us an advantage into that? Yeah. Yes, the impact has been more pronounced positively for the institutional side. As you know, BALIC hardly had any institutional business. For five years back, we used to be 91% agency. That movement has been strong. There's a lot of ground that we have to cover, and I think that's getting covered. Yes, from channels perspective, institutional is the one which is contributing to a lot of that growth. In terms of the product mixes, it's currently a very low percentage of term, particularly in the last quarter as we're seeing, and Sreeni talked about it in the earlier part itself, that it's now balancing our term is maybe currently recalling in terms of growth. It's coming down as for the entire sector as a percentage overall. Maybe it will balance out once this entire price increase has gone and will get stabilized. Having said that, the initial two quarters was pretty much in line even for institutional business, where the term was growing up segmentally there as much as in the agency and the PoSP side. That hasn't come down proportionately like for the entire company itself. Yes, the non-par and even the par, I'm quite happy to say, is actually selling well in the institutional side, which usually is restricted to the non-par. As far as the risk side, which you just kind of allude to, yes, we are totally covered by FRA on the non-par side. We've actually had a very good, I'd say a very comforting hedging strategy in the last four months. That has only just helped us stabilize IRRs. Stabilize NBVs and feel a lot more comfortable on the guarantees that we have. Got it, sir. That was very helpful, sir. Thank you. That's it from me. Thank you. The next question is from the line of Nidhesh Jain from Investec Capital. Please go ahead. Thanks for the opportunity, sir. Firstly, on the general insurance, given your commentary on the motor OD loss ratio expectation in future, do you expect price hike to come into for the industry next year or sometime next year? Tapan? That the market forces decide. I won't think how it goes because every company has their own strategy. If you look at industry combined ratio, and this again, in the world is not seen before. 2007, free pricing happened and now it's what, 2021. Industry combined ratio has been way over 100 for such a long time. If you pick up any case study in the world for the GI industry where the combined ratio has been so high for the long time, you may not find so. I think this is unique in its own way. That happens because quite a few companies are comfortable with the high combined ratio and they're comfortable with that kind of status. To predict how the market would move in terms of pricing, it would be difficult. Depends on each company's strategy as to how they would like to position themselves and how they would like to be there. Just to add to what Tapan said, it is about selection. There are two aspects to choosing business in insurance. One is the price, and one is the selection. The two are linked. At a certain price, where do you want to select? Our Bajaj effort has always been to find more and more granular ways of cutting and slicing the business. It is not something we started two years ago. It has been there for the last 20 years. We will continue to do that. We are sharpening our analytics. We are sharpening our technology. We are sharpening our data lake. Quite a lot of steps we are taking at the back end to continuously improve this. At any given price, we would be able to select better customers because on an average, only about 25% of the customers will have a claim in any given year. The challenge of underwriting is to select the 75% who are not having a claim based on data analytics and propensity models. We'll continue to do that. Sure. I think it seems like in motor OD segment, we have lost some market share in nine months and probably in Q3 also, because probably the price are not adequate. No, I think it is largely related to commercial vehicles, especially passenger vehicles, because we were more aggressive on commercial vehicles two years ago. After COVID, because of loss of production, motor OD is not a segment for us. We have private cars, we have two-wheelers, we have commercial vehicles. We have multiple cuts within that by make, model, geography or goods carrying, passenger carrying. Based on what we see at a given point of time, we will take a call. That is how this business is very dynamic. What works today may not work tomorrow and what worked yesterday is not working today. We have to be very agile and fast. Tapan? I think that is, if you look at, I think passenger carrying and the three-wheelers are available. It is just not back to the pre-COVID time. Car sales have moved up and I think the presentation it is mentioned, if you look at our growth in the two-wheeler and the private car for the quarter, it's over industry. It is not that we would have lost that position there, but passenger carrying vehicles have not moved up to the pre-COVID levels in terms of the sales or in terms of where business is moving. We had a good chunk of commercial vehicles, the right segment again, and that is why you look at our loss ratio was good. As you see now that has come down. Obviously a good segment that we were strongly present in. When that comes down, then it takes time for us to make it from other segments. Like Sreeni said, it's a very agile business. We keep on moving and seeing where and what opportunities lie and we keep on taking it on. Thank you, sir. On the life insurance protection business has been quite volatile. In Q4 and Q1, there was a very strong growth, and it has become almost 17% of our AP, and then it suddenly declined to 5% of AP in Q2 and now 4% of AP in Q3. If you can just explain what is happening and what is the strategy going forward with respect to debt collection. Yeah, I will just respond to that. I think it's a good point and it is pretty much the trend that we've seen in the sector. Of course, companies who've been in term life for longer than us have learned their ropes in it, and maybe they would be settling on a little bit higher% product mix than we are at today. See, we are, of course, focused on the term side, but we do not want to just make this as the core. It is also something that customers want to buy. We should not forget that India is average age of 29, where some will sell, of course, but it will not be always the first product, while it maybe should be, but it today isn't. In terms of strategy, we are focused, but we are not going to be kind of making it so critical that we just focus only on this being the major product mix. It will be an important part, let me put this way. As we go by, we are looking at ways of issuing policies a lot more quickly. I think the big issue around the term, is around how soon you get the policy issued, what is the kind of process we follow, what is the kind of reinsurance guidelines. Marred the sector in this year. They have changed so much in the last six months, where reinsurers have struggled themselves and passed that struggle on to the life insurance companies as well. We need to have this stabilized and then start looking at things afresh. Like I said, it'll remain a very critical part, but it's not that we kill ourselves only doing term. Sure, sir. Lastly, do you expect further reinsurance rate hike on term insurance? I think for the time being, it is stabilized. I do hear some reinsurers who are dealing with some other companies who have developed concerns with them. This is all hearsay currently. I think we should wait and watch. I feel at least in our book, we are stabilized quite well because we've been quite mindful of the kind of policies we're writing. Sure, sir. Thanks a lot, sir. Thank you. Thank you. The next question is from the line of Hitesh Gilani from Kotak Securities. Please go ahead. Yes, sir. Thank you for taking my question. Sir, I just wanted to check on the pricing in group health, because you mentioned that group health pricing has probably deteriorated and also crops, because I think crop pricing has improved this year. Does that explain why our claims ratio is down in crop in nine months, and also growth has been strong in Q3? Let me take that upfront. Group health, Tapan will give greater flavor. On crop, I think this is now since 2015, the Fasal Bima Yojana was launched. It has undergone many metamorphosis in the process. Today we are in the sixth year. We have consistently maintained a similar level of crop insurance throughout these six years. I think every year we have been able to deliver a very good underwriting result. As we mentioned earlier, this is not a float business because governments do take time to pay. It has to work on combined ratio. It is because of the size of the risk, it has to be heavily reinsurance-driven. We have one of the best reinsurers in the world to support us. Therefore, crop insurance is something we take a call every year. We do stress tests to see how much is the downside, what is the upside, and we have taken. Over time, we have built a lot of capabilities, which I think Tapan can again further expand what I'm saying. Tapan. Okay. Let's look at group health. I think what was our assumption on group health so that we get an idea of what it is. If I see how COVID was coming up and the way COVID claims started rolling in. Also, if I look at learning, which we have from the SARS issue a bit many years back in Hong Kong when SARS was there and what happened to hospital claims when SARS ebbed out. Actually shot up much before levels what was there when SARS happened. You combine the two together to make a guess on the pricing we write or not write for group health was a bit difficult because if COVID claims and the way it actually went through the roof in the month of September, October, August. These were 400 odd% and it started going up in terms of how it is moving up. Now with COVID coming down, the hospital claims moving up. We thought it's better to be a bit low on the group health policy because on an annual contract basis, it is not like a retail health policy where, okay, fair enough, you have a high claim ratio this year, but next couple of years will be better. In a group health, it's an annual contract, it gets over with that. That is why for a group health, and that's the point Sreeni mentioned in terms of the pricing, we were a bit cautious on that. We said, no, we'd go a bit slow here because not very clear as to how it will pan out. On the crop business, I think Sreeni said it beautifully. We have been doing it now for five, six years, and it's not a hobby for us. Consistently, we have delivered good results in the business. It's not about price moving up. It's about like for all our business, we do selection of risk, our spread, our commitment to the ground level, our commitment to serve well, our commitment on the technology part of it, and be one of the leading players. I think I mentioned in one of the previous calls also that as a company, we want to be in all lines of businesses and in all distribution, and we want to be one of the leading key players. For that, we work hard to understand the business and do it well. I think that is what we have been doing consistently for such a long time. It's not like one-off that we say, "Okay, this quarter this has happened or that has happened." It's part of our business plan. Thank you, sir. That's it from me. Yes, thank you. Thank you. The next question from the line of Harshit Toshniwal from Premji Invest. Please go ahead. Hi, sir. Congratulations on the numbers. Am I audible? Yes. Hi. Just two questions. One, that yesterday on the Bajaj Finance call also, they said a lot about creating an ecosystem and marketplaces for insurance, asset management products, et cetera. Just want to understand that how cohesive the entire group's decision is with respect to, when they say it as a marketplace, do they mean specifically for Bajaj products, or they mean that they would want to be a platform for all of the insurance and asset management products? Let me take that question. Bajaj Finance, as you know, as a corporate agent, they're allowed to have three life insurance, three general insurance, and three health insurance. They have never been exclusive corporate agent of our group companies only. Our focus is on what the customer wants. Bajaj Finance, with all the type of business they run and the various verticals they run, they have a variety of customers. You have retail customers, B2B, B2C customers, personal loan customers, home loan customers. Depending on that, I don't think there is any one company which can meet all their requirements that also meet their underwriting requirements. It is for that company to decide. The insurance marketplace obviously will now provide a digitally seamless platform where the customer can choose from multiple insurers. As a distinct part of their strategy, which Rajiv must have talked about, it will be like that. The next wave of that will be also the investment marketplace, where they have their own FDs, but they will now offer mutual funds and other investments. Across this, customer has a choice. Now, we are very confident that because we are strong companies, both in life, non-life and others, we have the lion's share of that business, of the type of business that the companies want. There is interaction between the companies and some of the ecosystem is common to all the companies, especially on the digital technology side. Some of the ecosystems are unique to each company because of the nature of their businesses. As we go forward, it will be more and more about the ecosystem, the partnerships, and how well we combine across the board. It is not a particular risk for any of our companies because you could say that the investment marketplace of BFL could be a competitor to its own strategy of acquiring FDs. It won't be like that because there will be a specific focus on driving FD. The value that they offer, the security that they offer, will also drive customers' demand for those products. Similarly, insurance will be driven more and more by the claim experience, the product range, and the ability to quickly deliver what the customer wants. Got it. Right. Yeah. Thanks for the explanation, sir. Maybe just one more thing. On the crop insurance, when we look at the current loss ratio, please correct me if I'm wrong, I think this is the Kharif season which is getting reflected for the rubber. We are going to get the numbers in Q4, Q1. That is right. Q4 will be the time we write the premium. We make estimated provisions based on information available because we track the growth of the crop across all the clusters over the sowing season till the harvesting. Based on that, we have a reasonably good estimate as at end of March. The final determination will be sometime in April, May by the state governments and the central government. Okay, got it. Sure. Thank you, sir. Thanks a lot. Thank you. Thank you. The next question is from the line of Sanketh Godha from Spark Capital. Please go ahead. Yeah, thanks for the opportunity. Just wanted to understand that, in slide you have mentioned that, excluding that probably we have taken a high price hike in the retail health segment, which I believe from October 1st onwards many players have done. Just wanted to understand quantum of price hike we have taken and likely impact of it on combined ratio because do you think because of more inclusions happening, the severity could potentially go up and for combined ratios can deteriorate for the kind of price hike we have taken or you think it can potentially improve and maybe severity will not change meaningfully? That's the first question I have on Bajaj. The second question on BAGIC, just wanted to understand given how PTV or passenger commercial vehicles have slowed down, just wanted to understand how overall motor mix looks maybe in the current nine months and compare it with two previous nine months of last year. Those are two questions on BAGIC. On BALIC, just wanted to understand, we have seen a sequential improvement in the credit protect for the current quarter and even in Q2. Just wanted to understand that given we had bit of a negative experience with respect to MFI portfolio last year because our negative operating environment was from largely from MFI portfolio. This growth what we are seeing or revival in the growth we are seeing on sequential basis is largely coming from non-MFI portfolio or if you can give us the broader indication that how much is Axis Bank back, MFI, mortgage, some favor on that particular piece basically on credit protect. Yeah, these are the questions I have. Let me just summarize the question. The first question was on retail health, the price hike, and whether with this price hike, what will be the impact on combined ratio, especially with more and more people taking health insurance. Is that your question? Yeah. Even the inclusions increasing because the hike was more to consider more inclusions. The severity could go up potentially because of that reason or not. Yeah. Okay. We had a question on life credit protect, whether MFI portfolio is causing losses or whether we have a better spread of business across MFI and non-MFI portfolio. Right. Third was on the commercial vehicles, you had a question whether how we are seeing the nine months and the rest of the year. I was largely asking for the mix of motor, how it appears now compared to previous year, given commercial vehicles have declined for us in the current fiscal. Okay. Tapan, maybe Tarun can take the MF and the credit protect thing, and Tapan, you can take the health and the commercial vehicles. Let's understand the retail health issue for the industry and then see how it moves. I think on giving mixes of our segmentation, how much business we do what, that I would like to refrain from because that's too micro a question. On the industry part, I'd like to answer, that's the retail health. As per regulations, we can't increase the price for three years. Let's say if you increase the price, then for three years you can't increase the price. There are two things to it. If you look at the medical inflation, that will hover from 12% to over 15%. The hospitals in India are not regulated. From that perspective, the price moves. We saw also in COVID times how the prices started moving up for the treatment of COVID, which is there. The third thing which comes into play is that if you look at the book of retail health, on the first year, the loss ratios are in the range of 30%-40%. By the fourth year, they would be in the range of over 100%. That is for the same policy as it moves forward. It is not a simple calculation of how much increase we do and how the combined ratio starts improving immediately, and how does the market play out. It's a complex parameter of three, four big issues and there are more micro issues which we see into perspective, and then we decide how do we look at the business and how does it go forward. If you write a new book, let's say if you write a more new business, then overall your loss ratio will look lower because the new business has a lower loss ratio compared to the older book, which is there. How do you balance the two, and how do you create a book which is long-term standing, and how do you serve your customer well is what the health pricing and how it is looked into. That is how that should be done. That is why it should be known that suddenly because of September, October, you saw a price hike happening. It happens once in three years. That is how the regulations allow it. As companies see their books and they try and figure out at what segment, what they should be looking at and what is the right way to look at, that is how they do that. That is what we have also done and certain companies have also done it. That is good. Which actually means that as the COVID and then the other issue comes in is the awareness part of it, if you look at the retail health. In the month of April, the retail health growth industry was -3%. It peaked up in, let's say August, where it reached 40%, and it had the Corona product also in that. If you look at the retail health growth now, it's again back to what, 14%-15%. Fortunately and unfortunately, if I look at awareness level, peaks up when a crisis is high. We saw that in floods also when we saw Chennai flood or we saw Uttarakhand flood. The awareness for a home insurance was at high for about five, seven days. As the flood water receded and as things went back, the awareness level was as it was before as it is being going forward. Having said that, retail health is a huge chunk of business which has still to be done. Because if you look at total coverage by the industry, it's about INR 10 crores, INR 12 crores. In fact, the government scheme covers about INR 40 crores, which is much more than what the industry has covered over so much time. There's a huge chunk of population which has to be covered. It's a very good product and that is an endeavor, and we should keep on doing that. The loss ratio will definitely get better with the price increase, but that is more a combination of four, five things that I explained to you, not just simply a price increase. Thank you. Okay, got it. On this time, credit protection. Yeah. Actually the trend in general on MFI and the non-MFI credit product. There has been a degrowth more on the MFI side on credit product in the last nine months, and we see that continue even in the last quarter. Having said that, the non-MFI part, the NBFC and Axis Bank as well, there has been an upside in terms of the credit product in Q3. Although overall the bucket is still negative, all of this put together. Q3 has been relatively positive for the non-MFI side. You did also hint about the past experience in the MFI business as well. I think we've taken a lot of actions as a company, and I think I would say that today as a company, we are way more led by lead indicators and lag indicators on how we manage the MFI portfolio as well. We are actually a lot more stable and relaxed the way it seems as of now. Of course, it's a statement I'm making in the midst of COVID on the MFI portfolio as well. Despite the fact that, yes, it is a substantial part of our business, and despite the fact that we have Axis and NBFC, I'm still quite proud of my MFI business. Okay. That's it from my side. Thank you. The next question is from the line of Hasnukala from Synvest Advisors. Please go ahead. Yeah. I just wanted to know in the BAGIC, what is the difference of net and premium and gross retained premium is so wide? I think one factor will be definitely the higher reinsurance these days. How much would be the unexpired reserve, et cetera because we don't have that P&L with us? You're asking, see, in the general insurance, gross premium is what you get from the customer net of GST. Correct. You pay the reinsurer, depending on the type of policy, you may have different reinsurance arrangements. For retail policies, you'll normally retain more. For large high-ticket policies, you may retain less. If you deduct that, you get what is called net return premium. Correct. This net return premium has to be spread over 365 days. The premium cannot be earned on day one. You create a reserve for the amount of unearned premium. After you deduct the net change in unearned premium, you will get what is called net earned premium. That is the premium you book as your this thing. You carry forward that unearned premium because till the policy expires, you still have a possibility of claim. When that claim happens, you must have the premium in your books to offset that claim. Okay. In Q3 from P&L, we have seen that Reinsurance received was almost INR 2,000 crore from gross written premium of INR 4,100 crore. This adjustment for changes in reserve was only INR 100 crore. It depends on the makeup business, no? If you write more of the higher ticket business, you will have a higher reinsurance. Quarter-on-quarter, you cannot compare. It keeps on changing. Overall, it depends. Line by line, if you check it, there would not be a significant difference. There will be some difference because every year we do relook at our reinsurance treaties, but you won't find a major difference. If we have more of the corporate business, because this time, for example, fire engineering, there has been price increase, so their share of the premium is higher. You'll find the reinsurance component is maybe higher. When motor and health are growing faster than the commercial lines, you will find that you will have higher retention and lesser reinsurance. There's nothing specific that a company does to manage that. Okay. My second question is in case of Bajaj, a lot of questions have been asked about the claim ratios being lower, and you expect more claims to come as things get to normal, especially on the motor side. Your crop claims also will start coming. You think that your reserving what we have done is quite adequate to cover those higher claims? The very fact that we recognized the problem early answers that question. Okay. As more data comes in, we keep putting it into our actuarial models, and we keep recalibrating our reserves. Eventually, when all this blows off, we will know where we stand. It is just like the banks and NBFCs are also providing for credit losses. Did they know in April how much it will be? By November, they have a better picture. By March, they will have an even clearer picture. Okay. My last question is on the unit-linked policies. What will be our strength going ahead in Bajaj? Tarun? Yeah. See, we don't take any specific stand on products like the way you just said. We are a lot focused on segment, customer segments. Distribution segment, as well as the cities we are working in. Like in Bombay, you'll find more unit-linked selling. The moment Bombay starts thriving a little bit better, it's been struggling, I'd say, in the last eight, nine months for all companies, you will see ULIPs going up. These trends are actually ruled more by city-wide plans that we've got and distribution segment-wise plans. Yes, directionally, we are working towards a product mix which is more balanced. You would have already seen that impact that ULIPs has come down. Yeah. That directionally has been a conscious call, yes, and shall remain. If I was to make a statement that am I comfortable with the amount of ULIPs that we are selling or would I want it to be higher or lower, I think at this point in time, I'm at a sweet spot. I like this mix. Would I want this to be higher or lower? No, I think it is just perfect. Okay. As far as the group fund business is concerned, what will be our strength? That has substantially increased in Q3. Yeah. No, good question. I think normally it doesn't get asked in these presentations. Group fund is basically a very low-margin product. Yeah, exactly. Yeah. At the same time, it's a very low-cost product. See, because it's a fixed cost of your sales teams. The sales team is quite limited in size. It's like maybe we'll have maybe 20, 25, 30 people only selling it. If the throughput through that team goes better, it's only just good. It's not a conscious push, I would say. If I was to be asked whether I would do more of that than retail, I would do more of retail, of course. If I am getting this based on the same cost containment, it's great because this then helps me, A, in terms of my brand, it helps me in terms of upselling. It helps me in standalone profitability because group business by itself, group employee benefits business, is a profit-making business. Okay. Thank you very much, sir. Wish you all the best. Thank you. Thank you. I think we'll stop now. The next question from the line. Last call, is it? Last question. Yes. We'll take one last question. Yeah. The next question is from the line of Mr. Chawathe from Kotak. Please go ahead. Yeah, hi. Am I audible? Yes. Good morning, sir. Good morning. Hi. Just one thing I wanted to check was your views on the banking license. If you have any updated view on this? There is an IWG report that is not a regulation yet. It has raised a lot of questions. I think debates are going on. We will have to wait for the final guidelines. We had in the past, as you know, in 2013, applied for one. The situation was different then. We did not have on-tap licenses. They brought in on-tap guidelines, but then nobody really applied. We'll have to wait and see what the final guidelines are. Whatever is good for our companies and our group, we will do. At this stage, that's all I can tell you because we still don't know what the guidelines are going to be because RBI is responsible for bringing out the guidelines. From a promoter point of view, is there any kind of a comfort that if the stake goes down to 25%, is there some comfort that seems to be okay? Obviously, the higher the better, and the law does not allow more than 26. If it is less than that, we'll have to wait and see how we want to take a call. Obviously, that involves a much higher level decision than the managements of the companies. I think everybody is seeing the problem, the risk, the opportunities presented by the banking license, the strength of the brand, and the role of the promoters and everything is there. I mean, the availability of liability financing. We know what are the pluses and minuses of doing that. As an NBFC, we are well-capitalized now for the next three, four years. If there is an opportunity coming up there, we will look at it on merit. Just one last aspect in this, in terms of processes or compliance with PSL, et cetera, are you kind of preparing for it or are you well-placed, or you would kind of want to do some? See, we keep doing our math internally. I think if it does happen and we find the opportunity and we want to get into it, we'll be well-prepared. Clearly, converting from NBFC from bank has its own set of challenges in terms of the asset side being logged in PSL. As you know, we already run an SLR book. Our liquidity is almost stronger than what a normal NBFC should keep. We also do a lot of rural business on our auto finance and our regular financing side. There will be some gaps we will assess as it comes. If we do take the decision, we will take a call at that time. We will do our math completely and then take a decision at that time. Sure. From a PSL is the only thing that you'll have to work on. Maybe. Okay. Perfect. That was my question. Thank you very much. All right. Yeah. Thank you. Ladies and gentlemen, due to time constraints, that was the last question. I now hand the conference over to Ms. Bunny Babjee for closing comments. On behalf of JM Financial, I would like to thank Mr. Sreenivasan, sir, and the senior management of the Insurance Services and all the participants for joining us on the call today. Thank you very much. Bye. Thank you. Thank you.