Ladies and gentlemen, good day, welcome to Bajaj Finserv Limited on this conference call hosted by JM Financial. As a reminder, all participant lines will be in the listen-only mode. 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 a touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sameer Bhise from JM Financial. Thank you. Over to you, sir. Thank you, Viko. Good morning, everyone, and thank you for joining this call today. First of all, I would like to thank the management of Bajaj Finserv Limited for giving us the opportunity to host this call. From the management team, we have Mr. S. Sreenivasan, Chief Financial Officer of Bajaj Finserv Limited, Mr. Tarun Chugh, Chief Executive Officer of Bajaj Allianz Life Insurance, Mr. Bharat Kalsi, Chief Financial Officer of Bajaj Allianz Life Insurance, Mr. Ramandeep Singh Sahni, Chief Financial Officer of Bajaj Allianz General Insurance Company, and we are also being joined by leadership from Bajaj Finserv Direct, Mr. Ashish Panchal, the Chief Executive Officer, and Bajaj Finserv Health, Mr. Devang Mody, the Chief Executive Officer of the company. Without much ado, I would want to hand over the floor to Mr. Sreenivasan for his opening comments and then we open for Q&A. Over to you, sir. Thank you. Thank you, Sameer. Good morning, everybody. I welcome everyone to this conference call to discuss the results of Bajaj Finserv Limited for Q4 of FY 2023 and the full year FY 2023. Let me welcome my colleagues from our newer ventures, Ashish Panchal, Chief Executive Officer of Bajaj Finserv Direct, or Bajaj Markets, and Devang Mody, Chief Executive Officer of Bajaj Finserv Health. As before, let me first clear up some hygiene points. 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, BFL. Bajaj Finance, BFL, is another major subsidiary of ours, has already had its conference call. 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, except to state that the status has remained the same as at the end of the previous quarter, and there is no change. Any statements that may look like forward-looking statements are just estimates and do not constitute an assurance or indication of any future performance result. Remarks on Ind AS, as required by regulation, BFL prepares its financials in accordance with Indian accounting standard or Ind AS. The insurance companies, however, are not yet covered under Ind AS. They have prepared Ind AS compliance financials only for the purpose of consolidation. Accordingly, for BAGIC and BALIC, any standalone numbers reported below are based on the non-Ind AS accounting standards, 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. Let me now get to the main briefing on the results for the quarter and the year. I'll start with the disclosures on our investor presentation. During the year-end, we have enhanced the disclosures of EV, including the EV WaR for BALIC and the claims reserving triangle for BAGIC. We have also increased the disclosures in respect of Bajaj Finserv Direct and Bajaj Finserv Health. As mentioned in earlier call, we have indicated that when the new businesses have reached some level of maturity and the path is clear, we would invite the respective Chief Executive Officer to attend this call. Bajaj Finserv Direct has started its digital technology services business under the brand of SKALEUP, while, my colleague Ashish and I will be pleased to take any questions you may have on Bajaj Markets or Bajaj Finserv Direct. In Bajaj Finserv Health, we have added slides indicating their business model and how their network and wellness stacks are building up. My colleague Devang and I will be pleased to take any questions you may have on these. I must caution, however, that these are still in startup mode, and you may see more frequent changes in business models when scaling up as we go forward. During this quarter, our AMC received the final approval for starting their mutual fund business. The Bajaj Finserv AMC is expected to launch their first suite of products during Q2 of FY 2024. Coming to the update on the performance for the quarter and the year. Q4 of FY 2023 has been a very good quarter, with all our businesses performing very well. Robust discretionary spending, strong auto sales, and very positive uptake of long-term savings combined to result in our businesses doing exceptionally well. Let me start with BAGIC. For the quarter, BAGIC reported a growth of 14% in gross domestic premium income, as against the private sector growth of 16.5% and industry growth of 16.2%. Excluding the tender-driven businesses, which are crop insurance and government health scheme, GDPI growth for the quarter was 16.4% and for the full year was 15.1%. During the quarter, BAGIC signed up with Axis Bank as their bancassurance partner, thereby further strengthening their bancassurance channel. BAGIC also launched floating bonds in the quarter, the first company to do so in the Indian market. Looking back at the year gone by, you may recall that we had a spike earlier in the year in the frequency and severity of claims in motor due to post-COVID increase in traffic density and in health claims where customers chose to undergo elective treatments which were postponed due to COVID. BAGIC, with its focus on strong underwriting, has reviewed these businesses in detail and taken corrective action, the results of which have started showing up in Q4. As a result of these actions, we saw sequential quarter-on-quarter reduction in claim ratios. This approach of balancing growth with profitability is at the heart of BAGIC designs. In Q4, Bajaj saw strong growth in both motor and retail health businesses. Growth in GDPI in Q4 was driven by motor 13.3%, retail and group health 16.4% and 29.8% respectively. Commercial line, which is fire engineering, marine and liability, 15.2%, and travel or overseas medical claim at 54.5%. Overall, in Q4 of FY 2023, Bajaj Motor growth of 13% was driven by two-wheeler segment growing at 26%, the private car segment growing at 18%, and the CV segment growing by 1%. The growth in commercial lines was aided by Bajaj's strong bank insurance network and multi-line agency channels, supported by strong underwriting and excellent reinsurance capacity for covering large risks. Bajaj continues its robust performance across retail, commercial, and industrial risk categories. Fire, marine and liability segments continued their growth momentum from the previous quarter. Overall, commercial lines continue to do well with Q4 and FY 2023 growth of 15% and 15.2% respectively, against industry growth of 12.3% and 13.9% respectively. Health insurance performance has improved in Q4 as compared to the previous quarters of FY 2023. Overseas medical or travel insurance continued its momentum, ending the year with a 54.5% growth, while Bajaj growth in retail health at 16.4% was better than the market of the private and PSU players growth of 11%. Similarly, in group health, Bajaj witnessed a growth of 29.8% in Q4, versus industry growth of 23.8%. For the overall industry, including standalone health insurers or SAHI, in Q4 2023, retail health growth was 16%, so Bajaj has grown a bit faster than that. While group health growth stood at 28.1%. In Q4 of FY 2022, that's about a year ago, Bajaj had launched the Health Prime rider, which is an OPD attachment to its health policies. I'm glad to report that during FY 2023, Bajaj sold 8.8 lakh riders, much of this is serviced by Bajaj Finserv Health. For Q4 FY 2023, the loss ratio was 66.4% as against 68.8% in Q4 of FY 2022. The decrease was attributable to lower claims in motor health and some commercial lines. The combined ratio for Q4 was a healthy 97.3%, and for the full year, Bajaj ended with a combined ratio of 100.5%. We expect this will be among the best among the composite general insurance companies of comparable size. In a market which is intensely price competitive, this result, we believe, displays Bajaj's commitment to balanced and profitable growth on the back of strong sourcing and claims management. As a result, profit after tax at Bajaj grew 30% YOY and stood at INR 322 crore in Q4 FY 2023. For the full year, Bajaj reported a slightly higher profit than FY 2022 at INR 1,348 crore. Bajaj AUM grew by 13% to INR 27,809 crore as at March 31, 2023. The flow generated represented by increase in AUM was INR 3,176 crore, which includes advance premium at March 31, 2023 at INR 1,448 crore. The increase in advance premium was 30% YOY. One point I would like to highlight with respect to Bajaj is that Bajaj continues to be contributing a significant proportion of the industry's profit. I would also like to mention that in respect of the claims triangle which we have uploaded and which we do every year, we have seen that the revised ultimate expected losses for Bajaj is higher than the original expected ultimate losses by a reasonable margin, about 7.6%, which is higher than the 6.8% buffer that we had at the end of last year. Bajaj continues to remain well reserved in terms of its IBNR and IBNER. In summary, it was a quarter with intense competition, and Bajaj has chosen to hold its own with a very good combined ratio, not only for the quarter but also for the full year. Let me go to BALIC next. During the quarter, BALIC continued its month-on-month growth trajectory, reported an industry-leading individual weighted premium growth of 48% against the industry and private players growth of 24% and 35% respectively. Similarly, in FY 2023, BALIC's individual weighted new business grew 41% against industry growth of 19% and private players growth of 24%. In fact, in FY 2023, BALIC was the second fastest growing life insurer among the top 10 private players. BALIC's 3-year CAGR of 39% in FY 2023 is the highest in the industry. BALIC improved its market share of IRNB from 6.7% to 7.6% among the private players in FY 2023. The total number of policies for BALIC grew a healthy 24% to 2.05 lakh in Q4 FY 2023. The overall IRNB mix stood at PAR 15%, non-PAR savings 52%, term 3%, annuity 5%, and unit 25%. Predominantly it was non-PAR savings, followed by unit, PAR, and then annuity and term. Most lines have shown growth in absolute terms. The business mix changes reflect only relative differences in growth, and hence are not a matter of concern for us in the short term. During the quarter, growth was driven by all our main channels, with agency, institutional business, and Bajaj Finserv Direct growing at 65%, 39%, and 38% respectively. Another point I would like to highlight is the various initiatives undertaken by Bajaj Finserv Direct to improve persistency across most cohorts. Especially in the later buckets. 13-month persistency has now increased to 83% and the 49th and 61st month persistency has improved to 64% and 50% respectively. The increase in persistency helped deliver a strong growth of 26% in renewal premium in Q4 of FY 2023. The New Business Value net of expense overrun, the key metric of profitability increased by 35% from INR 308 crore in Q4 of FY 2022 to INR 415 crore in Q4 of FY 2023. For the year ended 31st March, the NBV was INR 950 crore, which is a growth of 53%. Overall, a good balanced quarter for BALIC with a strong focus on distribution growth with profitability. Another point I want to talk about is the introduction of IRDAI revised regulations on the Expenses of Management and commission. We believe this is a welcome change for the industry. With increased flexibility and long-term focus of the regulation, it will help improve insurance penetration as well as improve the ease of doing business in the country. Both BAGIC and BALIC are operating well within the prescribed guidelines as of the FY 2023 numbers, and together with our partners, we shall continue to seek a strong balance growth in accordance with the framework that the IRDAI has provided. Finally, both insurance companies are financially among the most solvent, BALIC with 516% solvency and BAGIC with 319%, and then to help foil together any external adversity. Needless to say, both BAGIC and BALIC are dividend-paying companies, and both have increased the dividend payout in this year from the previous year. All our businesses, insurance businesses are further augmented by digital capabilities, which along with greater digital acceptance by the customers should we hope, help create the foundation to deliver a strong performance in the coming year. Both BAGIC and BALIC have seen an increase in the utilization of the digital properties by customers and intermediaries. Further details of BAGIC and BALIC's digital capability are covered in the investor deck uploaded on the website. A short word on our lending businesses, BFL and BHFL. BFL, as mentioned in the conference call, had an excellent Q4 and the full year FY 2023 too was very good, as the company delivered on all its long-term financial guidance metrics, AUM, profit growth, return on assets, return on equity and gross and net NPAs. Continuing on a growth story, BFL acquired INR 31 lakh new customers in Q4 and INR 1.16 crore new customers in FY 2023, which is the highest ever customer franchise addition in a year for BFL. Building on this customer franchise, the number of new loans booked in Q4 FY 2023 increased 20% from INR 62.8 lakh to INR 75.6 lakh. The company's diversified business model has enabled it to record strong AUM growth as seen from the total AUM standing at INR 247,000 crore odd versus INR 192,000 crore on March 31. It continues to maintain a management overlay provision of INR 960 crore at a consolidated level as of March 31. The gross and net NPAs have shown further improvement, the gross NPA being below 1%, at 0.94% as against 1.6% last year. The net NPA is 0.34%, 34 basis points as against 68 basis points in the previous year. As a consequence of these, BFL ended the quarter with a profit after tax of INR 3,158 crore, which is 30% higher than the same quarter of the previous year. The capital adequacy remains strong with a 25% overall capital adequacy. Bajaj Housing Finance, the 100% mortgage subsidiary of the group continues to do well. The AUM grew 30% to INR 69,228 crore. The profit after tax grew 52% to INR 407 crore in Q4. For the full year, the PAT grew 77% to INR 1,258 crore. Welcome to the INR 1,000 crore club to Bajaj Housing Finance Limited. The capital adequacy ratio continues to be strong at 22.97%. In strong and a very good quarter for both BFL and BHFL. To give a update on our newer companies, Bajaj Finserv Direct or Bajaj Markets and Bajaj Finserv Health. During Q4 of FY 2023, Bajaj Markets attracted 1.06 crore consumers on its digital platform. These are people who visit our digital property, of which 200,000 became customers, which is a growth against last year's numbers of INR 84 lakh and INR 1.9 lakh respectively. BFSG's lending operation unsecure and secure, both BSL as well as outside partnership disbursements stood at INR 1,313 crore as against INR 1,175 crore. It sold 65,167 cards as against 61,027 credit cards in the same quarter previous year. As of March 31, 2023, BFSG has attracted 3.4 crore consumers on its digital platform, of which INR 7.5 lakh have become customers. The total revenue for FY 2023 stood at INR 391 crore, which grew 89% YoY over FY 2022. Coming to Bajaj Finserv Health Limited, it carried out INR 11.5 lakh health transactions, having INR 3.34 lakh+ monthly active users. For the quarter, eBH had or Bajaj Finserv Health had INR 9.67 lakh paying users with INR 3.5 lakh users adding renewable products. Bajaj Finserv Health is also expanding its provider network, which includes INR 1.2 lakh plus doctors, 6,000 plus lab touchpoints, and 1,800 plus hospitals and clinics. Utilizing the network strength, Bajaj Finserv Health is powering OPD services for BAGIC as well. Recorded a gross premium of INR 82 crore for BAGIC in FY 2023. I would like to point out that owing to the strong performance of most of our measures of three throughout the year, BFS has recorded highest ever consolidated PAT of INR 6,417 crore in FY 2023, with a growth of 41% as compared to FY 2022. To summarize, consolidated total income for Q4, 25% increase at INR 23,625 crore. Consolidated profit after tax, 31% increase at INR 1,769 crore. For the full year, the consolidated total income was up 20% to INR 82,072 crore, and the consolidated profit after tax 41% higher at INR 6,400 crore. Just to highlight, the consolidated profit is after absorbing mark-to-market gains and losses on the equity securities portfolio held by the insurance companies, which is required to be mark-to-market under Ind AS to the extent they are held through profit and loss account. This the total impact was a loss of INR 328 crore in FY 2023 and a gain of INR 2 crore in FY 2022. Excluding the volatile impact of MTM losses, the profit after tax would have increased by 28% in Q4 FY 2023 and 48% for the full year. Before we open for questions, considering the limited amount of time, I would request the audience to kindly keep their questions brief. I would also request please do not ask questions which have already been covered by an earlier participant. With this, I invite questions from the audience, and we have the full management team here to take any questions you might have. Thank you. 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 their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mr. Dhaval from DSP. Please go ahead. Yeah. Hi, Sreenivasan. Hi, everyone. Thanks for the opportunity. three quick questions. One is on BAGIC. Overall, we've seen, you know, combination now settle between 99.5%-100.5%. You know, historically when the environment was more favorable, it was about 95-97 kind of combined. When do you think we are at the peak and maybe in the next two- years we move back in that direction? Some sense around the landscape and how do you think about the combined ratio? That's the 1st question. Yeah. Sorry. Yeah. Please mention your other questions as well, Dhaval. Okay, thanks. The other quick ones on Finserv Direct. If you could, you know, last time I remember, you said 80-20 is the broad split between lending and non-lending revenues. For the full year, if you could just provide a broad breakup between lending cards and others, that would be very useful. In terms of, you know, what I observed was, our visits and transacting customer base has been flattening over the last few quarters now. Any changes that we're doing in the operating model, if you could talk a little bit around that would be useful. The final question was on the Bajaj Health side. I think. If I go to slide 54, basically, the growth rates have started to taper down in terms of active user engagement. The MAU has come down, and even the prime retention seems to be tapering. Any comments around that would be useful, especially on the transacting user part. Okay. Thank you, Dhaval. I'll take the first question first, then hand it over to Raman briefly. Your question about combined ratio and where do you think it will taper? I think the combined ratio that you see is actually a weighted average of multiple lines of business done across multiple channels. The company, as you know, works on a very granular basis, and there is a continuous activity of, you know, managing combined ratio by weeding out losing relationships and looking at profit pools and et c.. If you recall the first quarter, we had a pretty high combined ratio of 105%, and then quarter-over-quarter we went into correction mode and we have brought it back to about 100%. Raman will take it on. Raman? Yeah. Yeah. Thanks, Sreenivasan. Hi, Dhaval. I think adding on to what Sreeni said, I think what's important here, Dhaval, is to understand there are too many moving parts at this stage. As we know, you know, there is a big impact expected from the Motor Vehicles Act. If you know, on the PP side, if we end up getting early reporting as we envisage, then things could look very different from where we stand today. The second one is the impact of the new year regulations. Given that the industry is, you know, 55%-60% of the players above the 30% limit, if the commercials are also expected to come down, I think both of these could play a big impact on how the card is expected to emerge going forward. To your point, at this stage, maybe it'll be very difficult to predict because if both of these work in the direction as we feel that, you know, early reporting starts and people start getting more rational about commercials, then maybe going back to, you know, earlier levels of 90% or 98% may not be a big challenge. If things continue the way they are, then, you know, obviously closer to 100% is where the things could emerge. Like Sreeni rightly said, our endeavor is to always be below 100%. In the worst of the scenarios, maybe this year could be one of them, we've been able to close that close to 100%, whereas in the industry for nine- months they are just 122%. It's moved up in fact compared to last year. Our endeavor will be to be less than 100 is where we stand today. Now I'll ask Ashish to take the next question. Your question was on whether the number of visiting consumers and active customers are slowing down. You mentioned that as an 80-20 split of revenue. I think I'll make a small correction. What we mentioned last time is between the Bajaj Finance business and the open access business, the split was about 80-20 across cards and loans. I'll now pass it on to Ashish. Thank you for the question. For Bajaj Finserv, there are two lines of businesses. One is our open architecture marketplace, and the other is we also are technology services provider both to some of the group companies and non-group companies. Let's call it as technology services business. The revenue split between the marketplace and the technology services businesses was 76 is to 34. Out of INR 357 crore of total revenue, INR 273 crore came from marketplace businesses, which are lending, cards, insurance, and investments. INR 85 crore came from technology services business. Further splitting the marketplace revenue, out of the 76% of the total revenue that came from marketplace, 66% came from lending and eight from cards and two from insurance and investments. Now I'll give it to Devang. Yeah. Question on Bajaj Finserv Health. Thank you, Dhaval, for the question. You're absolutely right that our MAU has started flattening. I will give you the rationale of that. Few things. We set up a network of providers, which is doctors, laboratories, as well as hospitals. As we set up the network, it's imperative for us to give them transactions. Our product sales, either through Bajaj Health plan rider or other product sales, catches up after our network is well-equipped to service the transaction. Hence. If you see in last quarter four of last financial year, quarter one, quarter two, we had significantly higher traffic, primarily driven by paid traffic. That we have started weaning off, rather we are now not spending any money in getting paid traffic. What we are focused on as far as the growth metrics are concerned, which is the very important attribute for us to build the ecosystem around OPD, is how many transactions we are doing. If you see most of the category of transactions which we have started publishing now, doctor transactions have become 6x, diagnostic transactions have become 5x in last one- year. As we go forward, our focus is to get more transactions done rather than getting more traffic done. Most of these transaction happens from customers which are our paying users. Our level of paying user was significantly less last year, so we had to complement it with paid traffic to drive some relevance with network which we enroll. Hence there is a drop in the MAU. I hope I have been able to answer your question, Dhaval. Dhaval, just to add to this, I think both these companies, I think there are two aspects to it. You know, one is we continue to build capabilities both on tech side, on people side, and network and partners side. That is going on. As they grow, I think we expect more and more consumers will come to us. What is very heartening for us to see is the number of consumers who are actually coming and spending time in our ecosystem, which is a sort of vision that we had when we set up this open architecture business and the healthcare business. All these are potential customers for any of our manufacturing operation, whether it's insurance or lending or maybe in future the mutual fund as well. Got it. Thanks, and I'll come back in the queue. Thanks. Thank you. Our next question is from the line of Mr. Sanketh Godha from Avendus Spark. Please go ahead. Yes. Thank you. Thank you for the opportunity. Sir, my first few questions on Bajaj and a few on BALIC. The first one is on Bajaj. Basically, if you look at high margin products, which is including non-PAR protection and annuity, which was last year 41% of the total individual APE, today it is 52%. The margin expansion seems to be very limited, from 14.2 to 15.5. Just wanted to understand, is it the spread in the non-PAR business has come up meaningfully? Or the acquisition cost has been on the higher side is leading to that margin compression. Is my first question on margin. The other question which I had was with respect to BALIC that, if you can quantify the way you have quantified when the budget announcement came, how much high ticket non-renew contributed for FY 2023, Q4 FY 2023 and March 23. If you can give the figures, it will be very useful. Last one, there seems to be some weakness in annuity and group protection business because the, despite very strong growth, these two businesses seems to be little weak in FY 2023 and Q4. I just wanted to understand how you see these businesses do going ahead? That's on BALIC. Yeah. I would let Tarun and the team take the questions. Largely your questions were on the non-PAR savings segment being significantly higher than last year and being a high margin product, why the margins have not grown in proportion to business. The second question was on why group protection and annuity you think that have not done could have done better based on, you know, what you see in the market in terms of loan growth and demand growth. Yes. Um- Last one is how INR 5 lakh plus ticket size, what was the contribution for? That I don't know whether we want to disclose that or not, but I'll leave it to Tarun and team to take that question. Sure. Thank you, Sanket. Yeah. We'll, thanks, Sanket. I'll ask Bharat to answer the margin question and I'll take the rest. Yeah. Thank you, Tarun. Thank you, Tarun. See, Sanketh, there are two, three things. One, if you look at that, what has changed in the margin. As we always said that we look at more an NBV growth rather than a margin growth. We have a very strong growth of NBV of 53%. Yes. Margin is a factor of multiple things. NBV has actually reflected the change in the product mix. Specifically to your high ticket size in the non-PAR saving. What happens when you sell today, even if you look at our product of INR 5 lakh and above ticket size, the customer gets typically a say anything between 10-20 basis points higher IRR, which means. Yeah. In turn means the margin on a higher ticket size per unit is lesser. This year when higher ticket has actually gone up significantly, the same business because it is a significant portion was above INR 5 lakh would have resulted in a relatively little lower margin. That is one, it is reflecting in the NBM per se. As I said, NBV is still up by 53%. That's the first answer. Secondly, if you look at our group protection, that has not grown in the quarter four or it has only grown 4% in the full year. What has happened are we have two, three major large partners whom we work with, those are the banks and all that. Their own disbursements has not been growing as fast as the other industry players. Because it's a group, protection is an attachment product. When their disbursement or credit offtake doesn't go up, our business also doesn't go up. Our group is typically a higher margin because of the one tenth and ENP logic. In absolute term, it may be a 6%, 7%, 8% margin, but when it comes to our NBM, it goes into 60%, 70%, 80%. If that doesn't grow, it also reflects in the NBM part. That was the question on the overall on the margin. If you still have any question, I'm happy to answer. No, sir. I maybe if you can touch upon annuity. I don't know if Tarun can touch upon this, that will be helpful. I'll touch on that. Also just to add on to my previous thing, one, I'll further update you what has happened in that in the non-PAR saving in the higher ticket size. See, typically our average PPT on a non-PAR saving could be range of eight-10 years. In this period, people have went for a smaller tickets, smaller PPTs like a five- year, six- year, and seven. As you know, the longer the products, the higher the margin. Because in this year people have gone for a shorter PPT also, that also reflects in the margins. Again, it is all value accretive. 53% NBV growth is what it reflects in. That's the question. Can you just repeat your question on the annuity? What is exactly you wanted to know? No. There seems to be some weakness. Is it because of the competition, because the different, regular pay deferred annuity was now is launched by every insurance company? We were first to introduce it. Since then, when the competition has launched, we have seen a weakness in that particular product. Just wanted to know. Thanks, Bharat. Bharat's answered your questions on margins. Let me give you the data. I am okay with sharing the data with you on the high ticket and the impact that has gone into your Excel sheet. Sanket, we really value the way you look at life insurance. Just to let you know that, till the last year, January, our high ticket above INR 5 lakh is about 9%. February and March for those two months it went up to 24%. Okay? Okay. Yeah. On the normal year, a normal year, which was not last year, our dynamic equilibrium is in the range of 8-9%. If I look at FY 2022, if I look at till January 2023. Of course, we all know that last two months of the year were more because of the tax benefit and hence that's not going to be repeated. We expect this to remain the 8%-9%. I think the abnormal growth that we had is because of high ticket is something which the sector should not really be expecting any further. That is just on the data itself. Just to answer that we've been the 8%-9%, which is what we are comfortable with. In any case, Bharat has told you that very clearly that when we go for high-Value, the margins also get to be lower because it is only a customer who's looking at investments really more than the insurance cover. Right. That is stabilized. On group protection, Bharat's already answered from the past that yes, we basically have two, three very large carriers, and because of them, not growing much their asset business, that kind of came down and didn't really grow. I'd say 4% is hardly a growth out there. I think we are back in spending that business. We want to be sure on whatever is coming out in the EoM guidelines, and based on that, we'll be take a call for this year. Going forward, we've always been in the past as well, strong in the group protection. We shall go back and wrestle our market share back, and that remains. On annuities too, you are right. We've been a leader. We've been the first deferred annuity plan was ours, the GPG, and it still has a lot of traction in the market. What had happened last year was that the during the INR 5 lakh, and above benefit that was coming through in February, March. Right. Our share annuities particularly has come down to near single digits during these two or during the last quarter. We remain very bullish on the annuity. Now with the INR 5 lakh and above market, and particularly the 45-year and above customer, we expect to start getting back into the deferred annuity space. It's a very good space to be in. The product also is beneficial in various ways. It is the only product in the entire life insurance, not life insurance, entire financial services which handles the risk of longevity. Right. That is what India doesn't have. I think there's a natural market for it. You will see the share grow and our focus going back as well. Got it, sir. Thanks for answering. Probably if I can ask one, two questions on Bajaj General. Sir, on Bajaj General, the question which I had was that if you look at the in motor CP, which is 64% and 61% respectively, seems to be very good compared to the kind of competition it made in the market. You believe that you have already made all those kind of corrective measures and expect these kind of loss ratios to be demonstrated going ahead, because full year numbers are very different from the fourth quarter. Just wanted to understand that part even better, how we see 2024 with respect to motor business. Last one, and last one on BAGIC is that, see, expense of management, it is believed to have a material impact on commercial lines because many companies, as you highlighted, 60%-65% of the companies are not compliant with 30%. They might try to chase commercial businesses to improve their loss, to improve their expense ratios. This business is probably most profitable business probably in FY 2023. So, just wanted to understand that EoM guidelines and even the reinsurance hardening, do you think commercial lines will see a immense pressure in FY 2024? I will briefly take the first question, then hand over to Raman to expand on it and also answer the second question. I think the way BAGIC works, as you have seen, when things are going good, I mean, the loss ratio is a function of sourcing as well as pricing. Pricing is decided by the market, sourcing is controllable by the company. Now, when you do an experience-based pricing or a selection underwriting, as we see in insurance, you write a lot of business, you do it through partners, and when you write new cars, you are tied up with dealers, and whatever car they write, you try to get a share out of it, depending on whether they are exclusive or not. Now, later on, as you gain experience, you find out where you weed out and where you focus on. The same applies to all other channels like multi-line agency or bancassurance, which do also do motor business. This is the factor. In Q1 we saw there was a spike in frequency and severity which led to high claim ratio, high combined ratio. We announced at the time that we are now going into correction mode, and this is not the first time we have done it. You go back three, four years, you'll find the same commentary in our investor calls that Q1 was not good, we have repaired. Commercial lines are different. Commercial lines also do come from catastrophes and other events also. I'll now let Ramandeep expand on this as well as take the second question which you had on the EoM. Yeah. Thanks, Sanketh. I think on the loss ratios, like Sreeni nicely articulated, this year has been a unique year because Q1 we had a big spike come in because of, you know, the revenge travel, as everybody called it. That really took up the loss ratios to upwards of 85% for us and I think similar ratios for the industry. Now, we know that Q4 is normally an aberration because a lot of clean ups are done in Q4, you know, assumption changes and so on and so forth. Maybe, to answer your question, you know, the levels of 63% and 65% obviously are not sustainable. I think in the long term, OD as we believe 65%-67% is what we've experienced, and that's where we will probably end up. One change, however, what we're seeing is something as you know, our mix of two-wheeler used to be low earlier. Right. Here we are scaling up. The impact of that on the overall motor loss ratios, we'll have to wait and figure out. I think as we stand between 65-67 on maybe is something which we, what we can expect. On TP, I, like I mentioned earlier, with Rahul also, I think it's a big take from what happens in the outcome of the Motor Vehicles Act. Right. As we all know, we are expecting early reporting to start. There are some green shoots which we are seeing, nothing significant at this stage to start taking benefit of that. If that was to really come, you know, then anywhere between 70-75 would be a decent number to expect. Otherwise, I think as an industry we will struggle because of the impact of inflation which we've seen in the past. Mm-hmm. That's where I believe the loss ratios will turn out to be. On the EoM, again, like I mentioned earlier, and like you rightly articulated, 60% of the industry seems to be higher than 30%. Obviously there will be lot of plays on, you know, how the commercials start playing out year on. At this stage maybe it's too early to predict. Maybe after the end of first quarter there'll be more clarity. I personally believe that, you know, given the way the industry has been operating at 122% loss ratios and, Sorry, 120% combined ratio and 60% of the industry being above the 30% of GWP on cost, it has to get normalized. I personally believe that the commercials will start coming down going forward. Like I said, let's wait for quarter one to end, and maybe we can then discuss in more detail. Perfect. Perfect. Raman, around the UIM, see, IRDAI has given a budget of 30%. Yeah. The company, each company has to decide, how do I play 70/30 and reach 100% combined ratio, 70% loss ratio, expected loss ratio. I mean, you never know what the actual loss ratio till you have actually experienced it. Somebody might say that, "Okay, I will go for 40% expense ratio." They can't do that. They will have to either stand up and, selecting customers with a higher loss ratio and say, "I will run with a higher combined ratio." I think that math will play out over the next few months, and let us see how it goes. Got it, sir. Thanks. Thanks for answering my question. Thank you. Our next question is from the line of Mr. Uday Pai with Investec. Please go ahead. Hello. Thank you for taking my question. Just one question from my side. What was the share of Axis Bank channel in BALIC? Bharat, the... Tarun? Yeah. Sorry, I was talking on mute. Axis share in 2024 is the question? Yeah. Axis share has been at 25% for us, the entire business. Okay. With the growth rate in other businesses growing faster, we expect it to remain in this broad range and not really go beyond that. That's the way we were always comfortable and maintained for the last three years. Unlike our peers, we are very clear that there's not one bank or one distributor who should have more than a certain percentage. Hence, you know, it's even healthy for the banks, honestly, if that's the way the insurance providers are. Good thing is we've added a lot many banks last year, and we expect them to prop up our businesses in the coming year. Okay. Thank you. Thank you. Our next question is from the line of Shreya Shivani from CLSA. Please go ahead. Hi. Thank you for giving me the opportunity. I have a basic question on Bajaj. I was trying to understand while you've given us the growth in the private car, two-wheeler and CV segment. If you can help us understand what is the mix of your motor book across these segments, and how has it moved over the years? Are you targeting one particular segment, or how are you looking at this business segment wise? Yeah. Shreya, thank you for your question. I think, you know, in motor the way outside it looks like one line of business. It is many, many lines of business. There is private cars, there is own damage, TP, combination of the two. There is two-wheelers, which are new two-wheelers, the older two-wheelers which have a higher proportion of TP premium because OD premiums are very low in two-wheelers. There are many types of commercial vehicles where in some areas Bajaj does not compete, some of them they compete more aggressively. It's very difficult to put a target or a mix. We have seen the commercial vehicle growth has been low because we have been focused only on a segment which historically has been profitable for us. Raman, would you like to expand on that? Thanks, Shreya. Shreya, I'll just try to summarize. While we don't share so much of granular information because like Sreeni said, there are too many, you know, breakdowns which are available. What I can summarize is, if you look at the overall motor segment, there are three large parts, two-wheeler, four-wheeler and CV as we know. Two-wheeler, I'll just try to give you a flavor where we stand. Two-wheeler, as you know, we used to have a handicap earlier, and our market share on new two-wheeler sales used to be sub 4%. As we've highlighted in the recent calls, we have started gaining out the OEMs. You know, the issue of the brand conflict seems to be behind us, except for Hero and almost all other tie-ups like Suzuki, TVS, Royal Enfield, Yamaha, we've been able to break the ice there. Our market share has now moved up to close to 9%. Similarly, four-wheeler, our market share on new sales is close to 9%. These are two segments where we really focus a lot. Except Maruti, where we know that, you know, there is this issue of open market and high amount of discounting going on. Our endeavor is to focus more on the new two-wheeler sales barring the Maruti that is issued there, and try to garner a good share of the profitable business. TV is something which, and just to give you a flavor, we've grown 26% on two-wheeler, which is after a very long time we've seen this kind of growth. Four-wheeler also the growth is pretty healthy at about 18% for the quarter. TV is something which we are less focused on this year as, I don't know if you've been tracking as a company. Last few years, we've been kind of leaders on the TV space because that is one of the profit pools we had identified for ourselves, and we had garnered a great share of, you know, the free bus business especially, because it is highly profitable. After seeing the profit pool being exploited by us, I think now the market has got overcrowded and that's why we are diversifying away from that. Hence our growth on TV this year has been marginal, I think 2% or something for last quarter. That's where we stand. If you summarize any more details, maybe we can take it off here. No, this is quite useful. Thank you. I'll take further. Thank you. Ladies and gentlemen, to ask a question, please press star and one. Our next question is from the line of Nischint Chawathe from Kotak. Please go ahead. Hi. This pertains to the claims ratio in the health business. There has been a fair amount of volatility and in fact, a significant increase on a sequential basis. Maybe you can help us, you know, understand this one. Yeah. Raman? One point I'd like to make is on group health. I think they're doing exceptionally well. We have always been saying that group health is not a business. We are either aggressive or conservative, we do business on our own terms where we see possibility of profit and that it has a combined ratio below 100% in group health, which is, I think, I think maybe multi-year best performance and despite growing at close to 30%. Raman, would you like to add on the volatility and claim ratios on health? I think this year has been a little stressful as far as the health loss ratios are concerned. Especially the first half of the year, we see a lot of increase on the severity of health claims and, you know, a lot of these were coming because of the impact of inflation. Now I think that it's trying to taper down. We saw some amount of fraud getting reported, especially in pockets, some states in the country, you know, that is something which we've addressed very significantly in second half of the year. I must admit that while, you know, our anti-fraud controls are very good as far as motor is concerned, we were less focused on the other lines of business because the frauds were not that many there. Recently after the pandemic, we've seen that the number of frauds now getting reported on the health lines of business, and not only retail health, even on the GMC side have gone up significantly. Fortunately, we caught it early and we've invested a lot in that team. So that is one reason, Nischint, that our loss ratios were higher for some part of the year. I think year one they will start tapering down, at least for retail health. Overall, I think they're looking a little higher this year also because our proportion of group health has gone up. As you would have seen, the growth is significantly higher there compared to, I mean, GMC I'm talking about, where the growth is significantly higher compared to retail health. That's why overall you are seeing that the loss ratios are looking on the higher side. I must admit that overall GMC is looking profitable after a very long time that is. You would have heard from us in the past that we had slowed down on GMC significantly because of the impact on profitability. Now whatever we are writing is only the profitable one and hence the growth is pretty decent there. That's where we are on health. Like this year I believe is an aberration. Maybe, you know, quarter one onwards you'll start seeing the real loss ratios emerge for retail health is where I will commit. I'll just add to what Raman said, Nischint, is that, you know, health is a very high level of engagement business and very service-oriented. It's not a business where people change insurers every year. One of the things I will urge everybody to look at is the repudiation ratio, which is published every quarter in the public disclosures. For the market, this year has been varying from 5%-20%, and we are at the lower end of that. Probably in claim servicing, we continue to take pride that we are among the best. There is some news that, you know, within the industry they have collaborated, and the indications are that the incidents of fraud are in double digits for the industry. These are suspected frauds and, you know, through the Insurance Information Bureau, further work will be done. One of the downsides of the pandemic was suddenly the fraudsters have also realized that this is one more area where we can now make a bit of money through reimbursement claims of various types of frauds have been noticed there across the industry. You can check with many other participants also, I think they'll also confirm this. The industry is very seriously addressing this. The regulator is very much on top of it, and we think by now about a year or two this will get sorted out. Okay. You somewhere mentioned that. Yeah. Sorry. Go ahead. You somewhere mentioned that, you know, inflation is controlled now, so is it meaning that you're kind of, you know, the cost is going down or does it mean that, you know, you have raised tariffs? I think. Sorry. No, you take it. Yeah. I think the impact of inflation, you know, the way after the pandemic it emerged is, as you know, during the pandemic, everybody was charging much higher for not only the COVID-related treatments, but otherwise also. That I think sustained for a period of time after the pandemic also. You know, we've gone back to the hospitals, renegotiated quite a few of the rates. Put pressure on them to, you know, rationalize the rates. Because of that, we feel that the severity had started coming down a little compared to what we had seen in the earlier part of the year. One more thing I didn't mention earlier, Nischint is, the other reason for volatility in our retail health loss ratio also is the fact of the proportion of fresh health business. As we know that the first half of the year we were not doing as well, and specifically you and I have had a discussion, and I told you that we will focus a lot more on retail health. You would have seen that now, you know, for the last quarter, our retail health growth is higher than the rest of the industry. With the proportion of retail health also going up, you will start seeing that the loss ratios will normalize further compared to some of the other players in the market. You would have raised tariffs in the retail side? Sorry. Can you please say again? Are you gonna clarify it on the retail side? Clarify it? No. We will move it towards the end of the year. Yeah. Yeah. We did it immediately before the pandemic, as you would remember. Normally, you know, our experience has been once in three- years is what is largely acceptable to the public at large. Hence, we end up following that rate. Maybe sometime during the year or towards the end of the year is what we expect the next round of hikes to happen. Sure. Sure. Thanks. Just one small question on life. There has been some increase. Sorry. Let me come offline. Sorry. Thank you. Thanks. Thank you. Our next question is from the line of Mr. Dawal from DSP. Please go ahead. Thanks for the opportunity again. Just quickly on the return ratios for Bajaj. Maybe question for Raman. Overall, when do you see the business move back to 17%-18% full year ROE, and is that a sustainable level of return that we are targeting or is there a possibility we move back to 19%-20% ROE as well? Any thoughts and broad, you know, sort of timeline that would be very useful. Raman, you want to take that? The line from Mr. Raman. Okay. I would add that, Dawal. I think, you know, it used to be 20% plus for several years. Thereafter, what we have seen is because our focus on profitability, we are generating capital over the last few years, although we are paying dividends, our solvency margin is increasing quarter-on-quarter. To that extent, the equity is somewhat high. Therefore, the ROEs have come down. Secondly, the business mix has also changed, more commercial business, extensive price discounting in motor, which is only the real flow generator is only from motor third party. To that extent, the investment leverage has come down a little bit. If you ask me today, we would be more comfortable with a 15%-18% ROE range as compared to, say the earlier range of maybe 18%-22%. The other point is, you know, the way we do accounting here on standalone Indian GAAP is we do not have our acquisition costs. There is a big impact of that as your premium gets earned over time, but your costs are written off upfront. Secondly, we also have seen that we are somewhat conservative on reserving. If you look at our ULR triangles, it's pretty clear that we hold about 7.5% more than what the original ULR. Our original ULR is about 7.5% higher than our revised ultimate loss ratios. Overall, I think these are some hidden, you know, things which are if you were to compare this to another company internationally. A 20% ROE, if you adjust for these, it'll probably be closer to 20, I presume. We have not done the math, I think it'll be higher than where it is anyway. Sure. Sreeni, you expect this business to move to a higher ROE, let's say 16%, 17%, 18%, from here on? The bottom has been made? That is top. See, we have to make investments in business also. There are a lot of regulatory changes happening. There is this Bima Sugam, Bima Vistaar. You know, all these require investment. We are also investing into what we call our GEO framework, which is G-E-O, not J-I-O. We are investing in a lot of tier three, tier four towns because we see that we have the brand strength, we have the expense allowance, and we have the capability to deliver. We started that last year, and this year we expect that to grow very well as well. There are investment required. We need to continue to invest in capability on the health side. On the commercial and other lines, we have been doing very well, but there is an element of, you know, catastrophes and other sources of volatility in those businesses. Having said that, the range of the market is a bit hard this year. We still have some pretty good terms for the rest of the year. FY 2024 at least looks reasonable for the commercial side in terms of opportunity. Got it. Thanks a ton, Sreeni. Thank you. Our next question is from the line of Mr. Anand Bhavnani from White Oak Capital. Please go ahead. Thank you for the opportunity. On Finserv Health, I see losses widened in this year to INR 188 crore versus INR 129 crore. If you can give us a broad sense, to simplify this, how are we thinking of this business? What's the potential here? Is there a focus on breakthroughs in here? You see, last time I think I mentioned that we are invested about INR 400-INR 450 crore by end of the year. Over the next two to three- years, because this is a new business, you know, and we will have to continue to invest. We think we will make an equal investment over the next three to four- years. Is Anand there to add to that? See, at this point of time, our focus is to get more health transactions done. As you are seeing, what we have started publishing is cohort-wise transactions. Priority for the company at this point of time is to build out more and more service. Like, we are investing deeply in technology as well as network as far as dental network is concerned, and that's where you will see transactions going up in coming years. To create the product framework. After that, we have lined up more services to be covered. At this point of time, our priority is to get more and more health transactions done and to play larger and larger role in consumers' healthcare management. I think that is how we define success at this point of time. Obviously, we'll refine, the spend, as one of the participants asked question. We are not spending in getting traffic. We are just servicing our customers and getting transaction done. We believe where we will invest where it is required, which is to build out network and to build out technology services. Let me give you one view from BFS side. If you see our, record profit is after absorbing 100% of these losses because they are fully owned subsidiary. You know, we have businesses which have multiple levers. They behave differently under inflation. Inflation is bad for BALIC. With a bit of lag, it is generally good for BSL and it's pretty good for BALIC because the guaranteed rates do not increase with the lag. We also have this ecosystem which has open architecture under Bajaj Markets. We have the healthcare ecosystem, which is a population business whereby say 10, 14 years, it's a business where you have to hang on and create the capability and become a player with a large brand which can operate all over India with operational excellence. I mean, that's what this business is about. We have to get more and more customers to use for products and services and keep expanding the network and the products and services. When you add up all these together is what you have as BFS. It is an. It's not an investing holding company that we put in financial markets and carry huge amount of surplus. It's a company where we continue to invest in the ecosystem of our customers, which today is largely middle class, mass affluent and above. Over time, some of the businesses like insurance and health will also go into the mass markets in a bigger way because the businesses are like that, and that's where the market is. Got it. The second question is on Bajaj Markets. There we see a lot of traffic. In terms of monetizing that traffic, particularly on the insurance side, which is a push product, how are you thinking? Like, there are dedicated players who have this pricing discovery platform, and then they call the customers and push the insurance product. Do you think you really would explore that kind of option, having a dedicated call center to push through the insurance products from the leads on Markets app? Let me first take that and then hand over to Ashish. I think if you look at Both companies are insurance companies have very solid distribution, very broad and deep distribution across channels, you know, whether it is individual agents, whether it is banks, whether it is brokers. Bajaj Markets is an open architecture platform and to start with the first few years, the focus has always been on loans. I think as a group distribution, we are much bigger and better than what we were last year. In terms of products that they will sell, I think Ashish will expand on how we want to look at from a Finserve Market distribution. Sure. Answering specifically for insurance, while as I mentioned, loans and cards are the bigger revenue generators on the marketplace for us. As far as insurance is concerned, A, we have a corporate agency license as an entity, and therefore we have tied up with insurance manufacturers on life, general and health side to offer their products. We have a marketplace, insurance marketplace that is embedded inside the overall app and web, digital properties that we have, where customers can choose products, they can compare, and they can do end-to-end buy journey, either assisted or unassisted in a DIY format. In addition, we have about 400 innovative tech products which are insurance stroke value-added products, which cover various aspects of life, both arising out of insurance needs as well as otherwise. That is the entry point for the customer into the insurance pool. Can we just add one more point here? I think when you look at Bajaj Markets as open architecture and over time, we have now been able to demonstrate neutrality. They will have multiple partners. The customer will make a choice, so it's a customer-centric organization. In that, Bankit and Bankit will participate in those businesses, which as a manufacturer, given their risk profile and their profitability needs, they feel they need to compete. The other partners will also compete, and so we have the distribution revenue pool from all the partners and our own companies may compete on certain segments of the manufacturing profit pool where they feel comfortable. In the process, I think there is a multi-stage thing. The first is to acquire customers. The pocket products that Ashish talked about is bringing us a lot of customers. Many customers will buy it. They will use the app. They will find the value in the app. They will also take other products from our ecosystem because they are in the ecosystem. Next time they want to buy something, they'll go to them and check us out. I mean, that is the first step. Once they do that, over time, I think we will be able to grow these products. Sure. Thank you. On to the next. Thank you. That was the end of our question and answer session. I now hand the conference over to Mr. Akshay Jain from JM Financial for closing comments. Over to you. Thank you all for joining the call, and thank you to the management of Bajaj Finserv Limited for giving us the opportunity to host this call. Thank you. Thank you. On behalf of JM Financial, that concludes this conference. Thank you for joining us. You may now disconnect your lines.