Please note that this conference is being recorded. I now hand the conference over to Mr. Sameer Bhise from JM Financial. Thank you, and over to you, sir. Thank you, Rico. Good morning, everyone, and welcome to the Q3 FY 2024 earnings conference call of Bajaj Finserv. First of all, I would like to thank the management team of Bajaj Finserv for giving us the opportunity to host the call. From the management side, today, we have Mr. S. Sreenivasan, CFO, Bajaj Finserv Limited, Mr. Tapan Singhel, CEO, Bajaj Allianz General Insurance Company, Mr. Tarun Chugh, CEO, Bajaj Allianz Life Insurance Company, Mr. Ramandeep Singh Sahni, CFO of Bajaj Allianz General Insurance Company, Mr. Bharat Kalsi, CFO of Bajaj Allianz Life Insurance, as well as Mr. Devang Mody, who is the CEO of Bajaj Finserv Health Limited. As usual, we will have opening comments from Mr. Sreenivasan, post which we'll open the floor for Q&A. Over to you, sir. Thank you so much. Good morning, everybody. I welcome all of you to the conference call to discuss the results of Bajaj Finserv Limited for the quarter ended 31st December 2023. As before, in this call, we will largely be concentrating on the consolidated results, as well as the results of our insurance operations and our other digital businesses, Bajaj Finserv Health and Bajaj Finserv Direct. While the conference call for Bajaj Finance Limited, as a major listed subsidiary, has already happened on 29th of this month. 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. 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. As you may be aware, BFS prepares its financials in compliance with Indian accounting standards. The insurance companies are not covered under Ind AS as yet. They prepare Ind AS financials only for the purpose of consolidation. Accordingly, for BAGIC and BALIC, the standalone numbers reported and what we will be talking about are based on the Indian GAAP as applicable to insurance companies. Our results, precisely, the accompanying results and our investor deck, have already been uploaded on our website on Tuesday. Before I get into the performance update for the quarter, let me briefly explain the acquisition of Vidal Healthcare Services Limited and its key subsidiaries by Bajaj Finserv Health. I will refer to it as Finserv Health going forward, which is our wholly owned subsidiary. Yesterday, on thirtieth January, our healthcare subsidiary, Finserv Health, announced that it has entered into an agreement to acquire Vidal Healthcare Services, Vidal for short. It is one of the top health services management companies in India and among the largest third-party administrators. And the third-party administration business, which is licensed by IRDAI, is carried out through its subsidiary, Vidal Healthcare TPA. Through another subsidiary, Vidal Medicare Private Limited, it provides health and wellness offerings to its customers. Vidal also has an international business which offers KPO services to a few clients in the Middle East. Finserv Health will acquire 100% of the company at an enterprise value of INR 325 crore for cash. Vidal TPA serviced over INR 5,000 crore of insurance premiums through claims in FY 2023, spread over 130 million lives across corporates, SMEs, and some government schemes as well. The strategic rationale for this is that this acquisition will provide Finserv Health with access to inpatient hospitalization payments, which is predominantly covered by insurance and is the largest segment of healthcare payments. To summarize, the acquisition provides Finserv Health the opportunity to offer integrated outpatient and wellness services, combined with inpatient or IP, to retail and corporate customers, thereby, thereby providing continuum of care. It effectively fills a gap in the entire payment space, which is what Finserv Health is trying to develop its business on. It enables superior digital customer experience platform access for Vidal customers. It complements IP network of Vidal with the well-established OPD network developed by Finserv Health. It opens up management of government schemes as a potential opportunity for the combined entity, some of which is already being carried out by Vidal. The core management team of Vidal, led by their managing director, Mr. Girish Rao, will continue to lead Vidal post the acquisition, and we welcome all Vidal employees to the Bajaj Finserv family. This acquisition, we expect, will accelerate Finserv Health's quest to become one of the largest players in the healthcare payment spectrum. The CEO of Finserv Health, Devang Mody, is with us on this call to take any questions you may have on this acquisition on, on Finserv Health strategy. If there are any questions related to the overall ecosystem of Bajaj Finserv, I would be glad to take that. Let me move on to the business update on the performance for Q3 FY 2024 now. Macro conditions overall were favorable during the quarter, with a higher level of business confidence, and in this conducive environment, our companies have once again delivered strong operating performance. Let me start with Bajaj, Bajaj Allianz General Insurance. Bajaj continued its growth momentum, recording above-market growth in Q3. While headline profit after tax showed a modest increase, the core profitability, excluding claims from a series of natural catastrophes events, was stronger... Headline Gross Domestic Premium Income, GDPI, this is what we report to the General Insurance Council. It includes inward, a small amount of inward reinsurance that some companies do. During the quarter, it grew by 18.7%, which is well above the industry, including private and public multi-line players growth of 11.2%. Excluding the tender-driven multi-government health and crop lines, the growth for Bajaj was even better at 19.6%, which was more than twice the industry growth of 9.4%. On the bottom line, the industry has been significantly impacted by a series of Nat Cat events this year. While we call it Nat Cat, these are not one significant, very large, events, but we experienced eight floods, including floods in North India, Sikkim, Tamil Nadu, apart from cyclone events such as Biparjoy and Michaung during the nine months. In fact, when events which are of medium size like this happen, the impact on the, net for that quarter can be somewhat higher because a lot higher proportion of the losses tend to be within the retention limits of the company. Accordingly, the combined ratio for the quarter was higher at 102.9% as against 100.3% in Q3 of FY 2023. Excluding the impact of Nat Cat events, the combined ratio would have been 99.5% on account of robust risk selection and prudent underwriting. Bajaj also continued to grow ahead of industry on all profitable commercial lines. Current investment income for Bajaj grew at 21.7%, backed by higher yields and 30% growth in advanced premium. Our capital gains on the investment side were lower in this quarter at INR 10 crore as against INR 36 crore in Q3 of FY 2023 on account of timing of booking gains. At the same time, the unrealized gains on equity grew from INR 298 crore to INR 595 crores. The profit after tax growth for Q3 FY 2023 was accordingly impacted by the lower capital gains and the Nat Cat losses, as highlighted earlier. Tax growth for the quarter was 3.3%, up from INR 278 crore in Q3 of FY 2023 to INR 287 crore in Q3 of FY 2024. Excluding the Nat Cat losses of INR 79 crore during the quarter, the profit after tax would have been higher by 24%. The INR 79 crore is the pre-tax number. While growth in motor insurance was muted at 5% due to Bajaj's tight focus on writing only preferred categories of business and somewhat of a slowdown, which was in line with the industry. In particular, Bajaj continues to be conservative in writing large volumes of commercial vehicle insurance, purely for reasons of risk. Overall growth was strong in commercial lines, 19%, group health, 36%, and miscellaneous lines such as extended warranty and rural packages, which was up 145% Y-O-Y. This was partially offset by a decline in crop insurance of 17%, which again is seasonal because crop insurance is mainly in two quarters of the year. The loss ratio during the quarter was 72.9%, as against 72.1% in the same quarter of the previous year. Excluding the effect of Nat Cat claims, the claim ratio would have been lower at 69.5%. Now, the loss ratio has increased during the quarter for health, PA, fire, and engineering, while motor business reported a decline in loss ratio. As we highlighted earlier, the natural premium takes time to catch up when growth is very strong. The NEB growth for this quarter was 13%, as against a single-digit growth in the first quarter, the first two quarters. The higher premium recorded in nine months should hopefully continue to get earned over the next couple of quarters. Bajaj's AUM, including cash, crossed INR 30,000 crore during the quarter, growing by 17% to INR 30,296 crore as on 31st December 2023, versus INR 25,977 crore as on 31st December 2022. The advanced premium from long-term policies was INR 1,778 crore at 31st December 2023, which is higher by 30% over the same figure a year ago. As we mentioned before, many of the new initiatives which Bajaj has invested in over the last 18-24 months, including focus on smaller tier towns, distribution expansion, doing more with bank insurance partners, and increasing presence in large ticket corporate segments, have resulted in this performance. Bajaj was further able to capitalize on a strong presence in smaller towns and rural areas through its virtual satellite offices. In a market where general insurance is intensely price competitive, this operating result, we believe, displays Bajaj's commitment to a balanced and profitable growth on the back of a deep and broad distribution and prudent underwriting while focusing on best-in-class customer service. In summary, strong growth-... Excellent underwriting performance, core underwriting performance excluding Nat Cat claims, strong investment income, and core profitability increasing, but headline numbers lower due to Nat Cat claims and timing difference of capital gains. Let me move to Bajaj Allianz Life. During the quarter, Bajaj Allianz Life continued its strong market-leading growth trajectory and reported an individual rated new business premium growth of 24% against the industry and private industry growth of 6% and 9% respectively. So it's about four times the industry growth. Bajaj Allianz Life IRNB growth of 24% in Q3 is highest among the top 10 private players in the industry. The growth was broad-based and driven by all key channels with agency, institutional business, and Bajaj Allianz Life Direct, growing at 22%, 18%, and 62% respectively. BAL's market share in IRNB or the individual rated new business terms increased from 7% in Q3 FY 2023 to 8% in Q3 of FY 2024, and this market share is among the private players. BAL's continued to maintain its sixth position on IRNB basis, but in terms of number of policies, it is in the fourth position. BAL's group protection new business, however, showed a decline of 8%, mainly due to lower MFI business, where there was less lending happening during this period. On the back of strong renewal premium growth, BAL's GWP grew 21% during the quarter, whereas GWP, excluding the low-margin group and business, has grown by 22%. The total number of policies, NOP for Bajaj's, grew by 20% to Lakhs 4.92 in nine months of FY 2024, and a strong growth in Q3 of 16%. I'm pleased to say that Bajaj's ended the nine months with the fourth highest number of new business policies. During the quarter, the Bajaj's new business value grew by 19% from INR 201 crore to INR 251 crore. To some extent, the NBV was affected by lower, lower group protection business, but over the next few quarters, we hope this should get corrected as well. After a relatively lackluster Q1, as we mentioned earlier, when we had focused more on launching low-margin products like unit link, Bajaj's has reported strong NBV growth for the last two quarters, with a strong focus on getting the right product mix. Overall, the IRNB mix for Q3 FY 2024 stood at 32% participating, 20% non-participating savings business, 4% of individual term business, 5% of annuity business, and 39% of unit linked insurance business. Bajaj's has continued to focus on scaling up the agency and direct channel through investing in people, processes, and also institutionalizing its variabilization of agency costs through lower cost models. It has led to Bajaj's building up one of the largest agency channels in the private life insurance space with over 143,000 agents. Bajaj's is also building on the data and analytics for direct sales through upsell and cross-sell initiatives, apart from new acquisition. It has led to Bajaj's presence now in 313 cities, with dedicated verticals for different customer segments. During this year, the nine months of FY 2024, BAL's has started activating several of the recently signed corporate agency tie-ups, which include Karnataka Bank, AU Small Finance Bank, South Indian Bank, the Development Bank of Singapore, DBS, City Union Bank, Tamil Nadu Mercantile Bank, Punjab & Sind Bank, and Jammu and Kashmir Bank. BAL's now has a reasonably large number of bank insurance tie-ups, and over the next couple of years, should help it reduce any concentration risk. For the nine months ended 31 st December 2023, the 13-month and 37-month persistency stood at 83% and 66%, and the 61st-month persistency has also improved to 51%. Profit after tax grew 34% from INR 81 crore to INR 108 crore, supported by higher profit realized from past business, higher charges from unit link due to increased AUM and better claim experience, partially offset by higher new business strain driven by strong growth. I'm also happy to share that BAL's has crossed INR 100,000 crore of AUM during the quarter. To summarize, strong market-leading growth, growth across all channels, activation of new tie-ups in banca space, growth in NBV and fourth position in number of policies issued. Overall, a good balanced quarter for BAL's. Let me move on lending business, BFL and BHFL. I would broadly touch upon these companies because they already had their call. It was a good quarter for BFL on all growth metrics, customer acquisition, new loans booked, and AUM. Profit after tax grew strongly by 22%, although it was affected by higher credit cost and lower NIM due to higher cost of funds. The reasons have already been explained by BFL in its investor call on 29. BFL acquired 38.5 lakh new customers in Q3 of FY 2024, the highest ever till date in any quarter. Total customer franchise on 31st December stood at INR 8.04 crore, while cross-sell franchise stood at INR 4.93 crore. The total number of new loans booked in Q3 FY 2024 increased 26%, from 78.4 lakh in Q3 FY 2023 to Lakh 98.6 in Q3 of FY 2024. Further, in Q3, BFL added 158 new locations and 9,500 distribution points. Geographic presence stood at 4,000 locations, or a little over 4,000 locations, and achieved over 1.9 lakh distribution points on 31st December 2023, as against 3,714 locations and 1.44 lakh distribution points on 31st December 2022. The Bajaj Finserv app now has 4.9 crore net users, as against INR 3.1 crore a year ago. The company's diversified business model has enabled it to record strong AUM growth, as seen from the total AUM growing by 35% to INR 3,10,968 crore. The gross and net NPA, recognized as per extant RBI prudential norms and provisioned applying the expected credit loss methodology prescribed in the Indian Accounting Standards as on 31st December 2023, stood at 0.95% and 0.37% respectively, as against 1.14% and 0.41% as on 31st December 2022. I must highlight here that NBFCs are under Ind AS, which require ECL provisioning and deferment of some fees or charges on effective annualized yield basis. BFL holds a management and macroeconomic overlay provision of INR 590 crore as on 31st December 2023. It has released INR 150 crore from the overlay in Q3. BFL ended the quarter with a consolidated profit after tax of INR 3,639 crore, which was 22% higher than the same quarter of the previous year. The capital adequacy ratio as of 31 December 2023 remains strong at 23.87%, as against the required minimum of 15%. The Tier One Capital stood at 22.8%. The impact of higher risk weight for certain categories of business announced by RBI impacted BFL's capital adequacy by 2.9%, but this has been made up with the fund raise and profits. Bajaj Housing Finance, the 100% mortgage subsidiary of BFL, continues to do well. AUM grew 13.1% to INR 85,929 crore, from INR 65,581 crore a year earlier, and the profit after tax grew 31% to INR 437 crore in Q3 FY 2024, again, as against INR 337 crore in the same quarter of the previous year. Again, Bajaj Housing Finance capital adequacy ratio stood at 21.92%, and the GNPA and NNPA stood at 0.25% and 0.10%, which is more or less similar to what it was a year ago. Again, to summarize, strong growth from both Bajaj Finance and BHFL, across all metrics, slightly higher credit costs, which is in line with what it was pre-COVID, and, lower NIM by about 11 basis points due to higher cost of funds. Now, to give us some update on our platform company, Bajaj Finserv Direct, Bajaj AMC, and Bajaj Finserv Health. Bajaj Markets or, Bajaj Finserv Direct attracted about 84 lakh customers on its digital platform, of which Lakh 1.9 became customers. This is against, one crore trust consumers and Lakh 2.3 customers in Q2 of FY 2024. The numbers are lower because in line with the Bajaj Finance's the RBI's order on Bajaj Finance to temporarily stop the issuance of digital cards, Bajaj Finserv Direct has voluntarily taken up in the spirit of the order to stop the lending until the deficiencies pointed out by RBI are cleared. As mentioned by BFL, these deficiencies have mostly been cleared, and as soon as that is done and RBI allows, Bajaj Finance will start disbursing again, and BFSD should also start lending soon. Therefore, it shows 36,603 cards as against 82,828 cards in the last year. And during the current quarter... Now, coming to the AMC, during the current quarter, the Bajaj Finserv AMC, it is just under six months since the AMC launched its first fund. It launched new funds, the Banking and PSU Fund and the Balance Advantage Fund, and it attracted an AUM of INR 882 crore during this quarter. Both these funds were available for part of the period, not for the full quarter. Overall, AUM stood at INR 6,375 crore as at thirty-first December, of which about INR 3,000 crore is in equity or equity-oriented funds, like arbitrage and balance advantage funds. In Q3, now, coming to Bajaj Finserv Health, in Q3 FY 2024, Bajaj Finserv Health, or BFH, carried out 13.45 Lakh health transactions, versus 9.13 Lakh in the same quarter of previous year, which is almost a 50% increase. It has 2.89 Lakh+ monthly active users. For the quarter, Finserv Health had 18.55 Lakh paying users, versus 9.74 Lakh in the Q3 of FY 2023, with about 5.5 Lakh users having renewable products, whereas with a 3.11 Lakh in Q3 of FY 2024. Bajaj Finserv Health is also expanding the provider network, which includes 1 Lakh 7,324 doctors, 5,368 Lab touch points, and 2,110 hospitals. Utilizing the network strength, EBS is able to offer and service differentiated product plans for both the retail as well as to corporates for employee health benefits management. Let me now conclude with the highlights of our consolidated financial results. Consolidated total income up 34% at INR 29,038 crore. Consolidated profit after tax, up 21% at INR 2,158 crore. The consolidated profit after tax includes the mark-to-market adjustments on the equity investments held by BALIC and BAGIC on the shareholder funds, and if we were to do the impact of that, the profit would still have been higher by 18% in Q3 of FY 2024. BFL recorded top line growth of 26% in net total income. Consolidated profit after tax up 27% for the nine months, and ROE of 21.95% for the nine months, as against 23.98% in the same nine-month period of last year. For the nine months, Bajaj's gross written premium was up 34% at INR 15,668 crore. The profit after tax, up 14% at INR 1,171 crore, and the ROE at 11.8% versus 11.6% the same period last year. The combined ratio was 99.3% versus 101.5%. In the same nine-month period, Bajaj recorded gross written premium increase of 14%, 14,860. Profit after tax higher by 26% at INR 457 crore, and the NBV increase of 11% at INR 581 crore versus INR 535 crore. Overall, for the nine months, the consolidated total income for BFR increased 34% to INR 78,341 crore, and the consolidated profit after tax increased 30% to INR 6,029 crore. Before we open for questions, considering the paucity of time, I would request the audience to kindly keep their questions brief so that we can cover more queries during the call. With this, I invite questions from the audience. 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 Sanketh Godha from Avendus Spark. Please go ahead. Yeah, thank you. Thank you for the opportunity. So I have questions with respect to general insurance and life insurance. First on general insurance. See, my question is more on growth. I understand that your growth has been pretty strong in the current year. But if I look at third quarter growth in motor, there is a sharp slowdown in the numbers, both in OD and TP. Just wanted to understand that the two-wheeler market share gain story, which played out till one half, now the base effect kicking in, and that is leading to a little moderation in the motor growth. The competition has intensified and therefore you have taken a conscious decision to slow down to protect your combined ratio in that particular piece. That's one part on growth. Second thing, I'm just asking from FY 2025 perspective, if I look at your crop business, last year you did INR 2,700 crore. It seems to be difficult to achieve in the current year that number. And in FY 2025, maybe with AUM rules, that might be much more competitive. So crop, how you see that to play out? And second is on government health. You did almost INR 3,500 crore of business in the current year. To what extent it is sticky and it can repeat in the next year, so that there might not be a significant decline in the top line growth for Bajaj. That's one largely on growth on general. Maybe life I will ask after you answer on general. Tapan, would you like to take it? Okay, thank you for your questions. I think the question you asked is mostly strategic in nature, no? So I can give you broad answers, not very specific on that basis. The first one, if you look at overall our retail growth, and Sreeni mentioned in his opening remarks, you know, it's much over the industry. Even if when he removes, crop, he removes, you know, government health. So if you look at it, I think overall we are growing much over the industry in terms of retail growth. But when you come to micro segmentations, those will vary over time, no? Sometime when we see an opportunity, we will be aggressive in some segments. Sometimes we don't see an opportunity, we will now slow back, and that is what we have been doing for 22 years now. This is something that, as a company, we always pick up, where we see good opportunities, we get aggressive. Where we don't see opportunities, we slow down. That will keep on happening as we see. So, if you look at the quarter before this, we were growing aggressively. This quarter, motor has come down. Next quarter, it may again pick up, depending on how we see the market. The market is very agile. It is not static, like in a year you can decide it will move like this. On crop, if you again see, if I take you back six, seven years back, when you're writing crop, no, most of the questions were that: "Nobody writing crop. Why are you writing crop?" And if you look at results-... I think, we did pretty good in terms of our profit, in terms of our growth, and now everybody wants right crop, which is fair. So again, where we see an opportunity, we are there in crop, and I think we still are one of the largest players in crop insurance. And now that we are small, but with a lot of players there, obviously, when more players enter, the market gets divided into a lot of players, which is fair, but we will remain as a key player in the crop insurance. We have invested a lot, we understand the business well, and we serve the customers well on that perspective. If you look at government health also, it's not the first time we've done government health. We have done Gujarat, the year before that also. We have done J&K before that also. So it is something that we keep on looking at the business, strategy, you know? So this we shall continue doing as we move forward. So as a company, our focus is very clear. We are obsessed about customers, innovate, bring in, new innovation to the market, look at all segments of businesses, and ensure that we have healthy growth, and we also take care of our bottom line and solvency. Because in insurance business, it's very critical that you are able to consistently look at your, balance sheet and have very strong balance sheet so you can serve customers well. I hope it answers your question. But it's your, but my question was more on motor. Honestly speaking, the moderation is because our market share gain strategy in two-wheeler has incrementally not happened in that manner, and that's why the slowdown? Or it is more tactical, as you rightly explained right now, it's more tactical that you will lose little in the market in the current quarter. So as I, as I told you in my answer, that micro answers I don't give, because, you know- Okay. On strategy basis, as a philosophy, which I told you, this is what we, you know, keep on doing. Mm-hmm. When we see an opportunity, we'll again see it growing up, no? So, you'll never see as that it's something that, no, we would continue doing even if it doesn't make sense. We will do what makes sense, because, a strong company's, and insurance is not a, is a, not a quarter-on-quarter business, it's a long-term business. You should look at insurance business for a hundred years to see how to run a company in insurance, because then only you can, you know, look at things. So a very strong balance sheet, at the same time, acquisition of customers, being obsessed with customer service. If you look at our results, and I think when we, in the, document given, you see consistently we have had the least grievance ratio in the industry for, you know, over a decade now. Consistently, if you look at, we have acquired more customers. Today, we are the largest in terms of customer base. Consistently, we are one of the top players, you know, in the industry which is there. And but in the micro level, you'll see that, there would be fluctuations in our line of businesses. Sometimes it is aggressive, sometimes it slows down. But that is our business strategy. That's how we run this company over a longer time. Got it. Got it. And last year on general insurance, I just wanted to understand that motor TP and motor OD loss ratios have improved in the current quarter. Are these numbers sustainable? Because last year in motor TP, we were last quarter at 67. It is a sharp improvement to 72, and OD is at 62, probably the best in the industry. Just wanted to understand if these numbers are sustainable and there is a sanity in the pricing with respect to in the market in general. If you look at the loss ratios, OD and TP, OD is a short-term, and TP is a long-term in terms of the loss ratio development, no? Yeah. Because TP takes about four years to develop and OD is short term. So if you look at OD loss ratios, at 62%, it's a short term, it's an immediate result, and the provisioning in OD is very less because of it being short term in nature for loss development. I'm sorry, I'm getting a bit technical, but then you can understand this ago. So when you look at our best industry, best loss ratio, then it is, it is you should be very happy that the company writes brilliant business in spite of being having the large motor books and does so well. TP being long term, has a lot of play on reserves. If you look at our reserves, it's among the best in the industry again. So this company not only gives, you know, a good, bottom line, not only, you know, acquires customers, as it serves customers well, but also reserving is among the strongest in the industry. So that should give you a lot of comfort in terms of when you look at the results of the company. Got it, sir. My question on life insurance, on margin, two points. One is the natural impact of the surrender charges on the life insurance, the proposed norms. How do you see it? And if you can possibly quantify out of the total VNB what we report, what is sourced probably from surrender pool, in the non-unit business, if it's possible. And the current margin pressure, if I see from nine months point of view compared to the last year, should I attribute largely to product mix change or at product level also we are seeing a margin pressure either because of unfavorable fra market or intense competition on IRR, either in annuity or non-par? Or is it largely attributed to product mix? That's my question. One on regulation and second on the margin at the company level. Second question probably is on data keeping, how much Axis contributes, what's our market share, and are you seeing any pressure with the Tata being available on Axis Bank channel, in that sense? Yes. Thank you. Before I hand over to Tarun, I'll just take the first question. I think that is a draft proposal floated by the regulator, and that is being discussed at different levels. I don't think there is consensus yet as to whether that will happen or when it will happen or if at all it will. Mm-hmm. The industry is collaborating and there are multiple options given back to the regulator to handle that situation. We do not, as of now, see a significant risk that it will happen in the near term. ... but it will depend on how the regulator views all the, different, discussions. Tarun? Yeah. I think you've largely answered it, Sreeni. I think this is already speculative, if I might say, Sanket. Okay. The discussions are on. I think, IRDAI has given it more from a discussion perspective, because quite rightly so, the surrender values, for customers, it gets to be an issue. Having said that, there are ample products in the market, which are long-term products and, usually are structured a lot more tediously, I would say, if the surrender value perspective is concerned. They don't have any surrender value. But we understand the, with IRDAI, the customers', issues, and we are working together with them. I think IRDAI is also quite receptive. They understand that, it's a long-term product, and these discussions are going on quite actively. A lot more to be said in this area, and I'm assuming that this is just speculative in nature. What you'll possibly be seeing is something which will be discussed a lot more before it comes out. So that's my response to the first one. Yeah. Your second question is on NBN product mix and whether the NBN impact is on product mix, or is it squeezing out of margin in individual product segments? I think that's exactly what you asked for, Sanketh? Yeah, yeah. Exactly. It's more due to the mix change or product level is also seeing a compression. Yeah. So see, the, I'll answer the second one first, because I'm sure you'll value that. So overall, there has been some squeeze versus last year. Okay. I think that's been playing out in terms of what you see for various players. Lastly, that happens when the rates of its deposits and the G-Secs tend to narrow. Mm-hmm. And that is what is largely happened here. As far as our margins are concerned, I think we've had a flattish margin, I'd say, for the nine months and for Q3 also. We've been able to maintain our margins despite that. In fact, if I overall say we've gone quite better than what we expected to in terms of product mix. As you know, Q1, we have taken a clear decision, Sreeni mentioned in, in his period as well, where we wanted to wear out the load of the INR 5 lakh tax break. Yeah. The strategy for this year has actually worked out perfectly. The margins are on an upstream, and I think we should expect more of that. Our product mix has also settled to somewhere where we would like it to be in the longer term. And that's the way I think it's healthy for all segments of customers. We get to see customers who would want more part plans and more non-part plans. Also, there is a separate segment for that, and we launch, of course, the HNI and the master fluent that works well. So that's on the answer on the NBN question. As far as Axis Bank is concerned, the overall statement I've always been making for the last so many calls, and this is what I maintain in the board and everywhere, is that we intend to not being lopsided in any one relationship. I think that's been a strategic decision that we have taken, which is why we actively go ahead and sort out new bank partners, and our agency channels and our direct channels have been fast growing. In terms of specifics, I can answer. Axis Bank last year, this time used to contribute 26% of our business. This year it's 23%, despite the fact that we've been the fastest growing as a company. So what you should understand is that we are achieving a twofold objective. One is of growth. Yeah. Second, of the fact that we would not want... It's good for Axis is good for us, but we are not dependent on one relationship to such an extent. It does- it's not a healthy relationship then. Our share broadly remains the same within the Axis Bank. So the good news there is that for us also, Axis Bank has grown in terms of business, and it is growing healthy even this month. We expect as we retain our share there, so Axis Bank has been able to add more customers and has been able to do better than its peers as a bank in terms of selling third-party products. Perfect. Perfect. And, sorry, last one. Just an extension to it. Are you seeing any, any, new partner, that is Tata probably started selling in Axis? So any, any pressure from that side, just, just competitive pressure from that side? I think, this is the thing, Sanketh, we should expect. IRDAI has allowed from three to nine partners. Directionally, now it's four in Axis. I dare say there could be more. And similarly, therefore, all of the banks- ... then, we haven't seen a squeeze as you, the word you used, because, as I said, we maintained our market share. So there's no squeezing of market share, in, in for us. But, I, I think the overall gainer will be the bank assurance, the bank itself, and I expect more and more banks to add, life insurance companies as, as partners. Because overall it helps the, competition on ground, the choice to customers, different companies have different strengths, and they're able to make the best out of it. The fact that we've been able to add a lot many more partners, and this momentum has only just been holding for the last 18 months, only just shows that we've been benefiting out of that. Perfect, sir. Thanks, thanks for your answer. It's useful. Thank you very much. Thank you, sir. Thank you. Our next question is from the line of Nishant Shah from MLP. Please go ahead with your question. Hi, am I audible? Yes. Please carry on. Hi, sir. Yeah, hi. Thank you so much for your time, and congrats for the results. So just a couple of questions from me. First is on this acquisition of TPA. Could you talk about that a bit? Like, how do you see this acquisition? Is it more for, like, internal consumption? Is it some— Is it a new business line that you are kind of looking at, like, more favorably? And just like, you know, just general thoughts around that. So that's my first question. Second question is about, you briefly mentioned about Axis Bank, and the wallet share kind of like coming down a bit on the life insurance business. Like, now that, like, Axis is becoming more prominent as an investor in Max, do you, do you worry that there is like a further kind of, like, decline in wallet share or do you think it kind of like stabilizes your, the wallet share at 23%? Okay. I briefly covered the strategic rationale in my opening remarks, but I will let Devang Mody, the CEO of Bajaj Finserv, help articulate its, how he sees the acquisition of Vidal Healthcare and Vidal Healthcare TPA. And thereafter, Tarun can take over there. I mean, you already mentioned about Axis, but he can just add some flavor. Mm. Thank you. Perfect. See, we built out Bajaj Finserv Health with a purpose- Mm. - that we want to create a health management platform to provide access and financing to Indians. Mm. Now, in health management platform, the largest spending pool is hospitalization. But we set out to first solve the harder problem of solving for OPD, because there were- Mm. Very fragmented players on OPD side. Having made some progress there, we have extensive market network, we have created digital flow, it was logical for us to get into hospitalization, which is the largest spend pool. Mm. With acquisition of Vidal, we get access to healthcare spends in hospitalization. As I told, it is the largest spend pool in healthcare ecosystem at this point of time in India. So- Mm. I think it's a strategically logical next step. With this acquisition, what we get access to is very deep domain knowledge of Vidal, because they are amongst the first TPAs in the market for more than 18 years, and a very capable team who has this domain knowledge. So that's the strategic rationale, that today we are uniquely placed to be able to provide continuum of care. Nobody checks into the hospital without accessing the doctor or doing diagnostic tests, right? So- Mm. Having created OPD network as well as transaction capability, and now having hospitalization service capability, we will be unique, in unique position to service consumer. That's what we mean by continuum of care, that you go visit a doctor, we have capabilities. You have to do diagnostic or radiologic tests, we have the capabilities. And now with Vidal's acquisition, if you need any hospitalization, we can service your need. So that's the strategic rationale. I hope it is, it answers your question. Yes, sir. Fair. Thank you. And just the second question on Axis. Yeah. Yeah. Yeah. So I'll just answer that. Yeah, largely did answer. So- Mm. There is no, currently, there is no drop on wallet share. I actually mentioned that. Mm-hmm. But needless to say, this can be under threat. Mm. I think the fact that Max has always been there for the last 13 years, and they have already clearly indicated their desire to increase equity. I think the bank and bank employees are well aware. Despite that, the bank is adding, and as you heard in my response earlier, Mm ... added us as a partner four years back, and then added one more partner recently, and could add furthermore.... I think what one should look at is the growth overall, whether the bank is able to achieve its objective. I think it is. One of the reasons the bank is growing is largely because of the fellow partners like us that they've added. And strategically, I think they're going the right way. Plus the product that is being made available is to the strength of each of the insurance companies, hence they're able to increase the pie and customer penetration. As far as we're concerned, I repeat that we will not be dependent on one relationship. It is healthy for Axis, it's healthy for us. Our other businesses, which is the rest of the bank insurance relationships, have only just been increasing, growing. So much has been agency also growing, and direct has been growing significantly as well. I think that's the way the company's long-term vision remains. Yeah, let me just add some flavor to what Devang said, how we look at it from Bajaj Finserv. Clearly, healthcare is one of the mega trends that we believe is going to play out over the next several years in India. There is a big gap between supply and demand, and there are multiple pieces in this puzzle. There is the healthcare providers, which is the healthcare industry. We are not in it. There are also multiple payers. We have seen the Ayushman Bharat, which is going to address the needs of the lowest income strata of the country. Then you also have the insured population with all kinds of you know, P&C companies and health insurers there. You will also see more and more convergence of the inpatient, OPD, and wellness coming together over the next few years. We are also seeing a significant digital drive kicked off by the National Digital Health Mission. If I look next five, 10 years, we are looking at a significant expansion of all segments of the healthcare industry. Now, this is one industry where you need to continuously update or expand your knowledge of the domain. It is different from, say, doing auto insurance or life insurance. They're different domains requiring different expertise. These two vehicles that we have in Finserv, one is the risk-bearing, Bajaj Allianz General Insurance, who is already a well-established player in all segments of health, which is insurance, which is your, hospitalization, private insurance for retail, the government, schemes, and, corporate employer-employee. And now, this vehicle, Finserv Health, will create, digital capability, it will create domain capability, it will provide servicing capability across the market, because as the market expands, insurers will also demand more and more care services, because a lot of it is indemnity-based. You want to go and get treated, you don't want just a bit of cash from the, pr- payer, you know, whether it's government or... So as it grows, you need people who can be in the entire ecosystem with sufficient knowledge, sufficient digital capability, who can deliver that. So when we look at it, over the long term, this, we want to be in all segments of this. Today, about last year, I think about INR 70,000 crore was the insured payment, but the total payment across the healthcare industry, across government and uninsured, is significantly larger. When that converges, this pie will increase, and as we participate in more and more and keep building our capability based on the digital analytics capability that we have, we think the game is pretty big going forward. Perfect, sir. That's very comprehensive. Just one small follow-up on the Axis Bank point, and it's probably not related to Axis Bank specifically, more across your bank insurance partners, like, any conversation with them? Because the liquidity is very tight right now in the banking system as a whole. So is there any scope of, like, you know, the banks trying to prioritize deposits over cross-selling insurance, like, from, in a more transient manner until, like, the liquidity issues ease a bit? Any conversations around that with any of your bank insurance partners? Yes. Let me just answer that for you. I think the point is correct. The banks ultimately have been always prioritizing the bank insurance, the bank core products than third-party products all throughout. It's not just about Axis, it's a larger bank insurance, industry-level question, and that does remain. And yes, because of that, there will be pressure on the bank insurance side, and actually there's always been. So I think the time has long been there, where the products have to independently coexist in the bank's ecosystem. And it's not like the first time we are seeing pressure on deposits and liabilities. It's been there for the last significant period of time, I would say 18 months for sure, and maybe even there earlier. So and the banks remain hungry for that. It doesn't impact third party, maybe slightly, but has it impacted us more? Has it... I mean, you've seen our healthy growth in any case. And in a way, I think it's good that, ... banks keep concentrating on increasing their customer base, and third party is more like another product where they add to the customer relationship. That is only good for us if they are adding more depositors. Yeah? I hope that answers. Yep, fair. No, I understand, like, these cycles have come and gone in the past, but, like, it seems like from the, like, what media reports, it's like the RBI is kind of like pressuring some of the banks to who have, like, a higher NDR ratio to kind of bring it down. So I'm just wondering whether, like, you know, there's a transient phase of a few months where banks just, like, prioritize deposits over. Like I said, they always do. Yeah. Particularly every quarter end and mostly in the year-end, the pressure on deposits has always been high. Mm. Fair. Perfect, sir. Thank you so much. Yep. Thank you. Thank you. Our next question is from the line of Swarnabha Mukherjee from B&K Securities. Please go ahead. Hi, sir. Thank you for the opportunity. Most of my questions have been answered. Just, Mr. Mukherjee, may we request you to use your handset, please? So your audio is slightly muffled. Yeah. Is this better now? Yes, sir. Please go ahead. Thank you very much. Yeah. Thank you. So I have one question on Bajaj from the expense side. So, the expense ratio looks a bit higher this quarter. Now, even, you know, your growth has been, I think, largely driven by the commercial lines this quarter. So considering that, factoring in the acquisition costs because of that, how to look at the expense ratio and how should we think about it going? Hello? Hello. It's on the loss ratio and expense ratio on the health business, right? Overall, on the GI business. Yeah. Raman or Tapan, would you like to take that? I'll take that, Sreeni. Yeah. So on the expense side, I think, if you look at the expense ratios, on GWP terms, it's actually moved up, slightly. Even on NWP terms, it's moved up by 1%. Largely it's happened because if you compare nine months versus quarter three, nine months, it had a lot of bulky businesses like crop and, government health sitting in it. Given that in quarter three, that business was on the lower side. In fact, in crop we had a degrowth. That's why the ratio looks a little skewed compared to nine-month period. The other reason is also, you know, our focus has largely been on driving some profitable motor businesses. So there, so, so commissions are a little on the higher side. So temporarily, I think that's also looking a little higher on the acquisition side. But largely, I think, we are well in control on our expenses. Overall, on nine-month period, I think, we're running at about 24% on NWP terms, and I think, close to that range is something which we are comfortable at. Having said that, we've also mentioned in the past that we will be expanding our sales force, and if you look at the headcount number, which is at, basically at wage cost, is our largest cost driver. And if you see our headcount, last year we were at about 9,500. We've already moved to 11,000, and this number is going up. So on short-term basis, I think costs might go up a little, but I think we are comfortable at these levels. Okay, understood. And also one question to Tapan, sir. You mentioned about the growth. So now even if you don't go into a lot of micro segmentation, but I think since commercial lines have been doing quite well this year and has been on the forefront of growth in marine or engineering and similar lines. Now, if we were to think about next year, I understand that of course there would be a tactical element and you will capture opportunities in micro segment as you go ahead. But would we, you know, since maybe commercial lines are also kind of might peak out in terms of the overall capacity in the industry, would we be considering that we'll see, you know, a higher growth number in the retail lines, maybe for FY 2025, to compensate for any such kind of, you know, evolution in the commercial lines so that we can broadly maintain a run rate of close to industry or above industry growth? Thank you for the question. I think first and foremost, to understand GI business, you should look at the economy of the country, because the GI business always, you know, follows the economy. So in the economy of the country, what is it that you hear when you look at, you know, the speeches by the Prime Minister or by, you know, ministers? You would hear a lot of investment in infrastructure. You would hear a lot of, you know, talk about, you know, creation of, you know, Make in India. You'll hear a lot of talk of creation of factories. So which means that the commercial space saturation, I don't think is going to happen so soon in terms of the way the country is exploding. If it has to become third largest economy, it has to keep on, you know, expanding the commercial activities in the country. As long as it keeps expanding, it will require companies to ensure that. To require ensure commercial businesses, you should have a good, strong balance sheet, you should have good RI capacities, and you should be among, you know, a player with substantial book to able to do so. General, in the GI business, Allianz meets this criteria. So I don't think that we will be, you know, like slowing down on commercial or saturating. That would not be happening.... Now, we don't try to make a one by pushing aggressively. If we can push aggressively today, we'll push aggressively today only. If we feel it is aggression not required, we'll not do so. So we don't try to balance, in terms of that, if this is going down, so we push something aggressively, at the cost of not writing business sensibly. The way we look at business is that whatever we think is sensible, in which we serve the customer well, we would push aggressively there. We would keep on expanding. But for your commercial vehicle, sorry, for your commercial line of businesses answer, I don't think, you know, in the Indian context, for the next, at least a decade, I would see a slowdown in the commercial business in the country. Okay, sir, got it. If you could, you know, share some of your thoughts on the retail line, particularly motor, given that, you know, one previous participant also highlight that there has been a tapering down in terms of growth. Now, we had initiatives running, like, say, the Geo initiatives, which were kind of focused on gaining the market share on the, in the retail line. So how is it that happening? And, you know, should we see some kind of diversion in terms of growth rates, going ahead? I missed the point. Which initiative did you talk about? Sorry. You had earlier mentioned that there is a geo initiative running. Right. So those, those initiatives are still going strong because, as I said, our country, you know, wealth creation in the country is happening. And as I mentioned, GI business follows the economic growth of the country and the wealth creation as it happens. So obviously, if you look at the smaller towns and, you know, they are getting much better. And we also have this ambition of reaching to every household in India. Now, if you look at the reliance, in the current context, we would be in at least one in maybe four household, which already present there. So in that, our strategy of, reaching out to the last mile will continue, and the geo will continue. And that will have an impact on the retail business, as you have rightly know, thought so and figured out. So just to clarify, sir, would we then expect that in some time, maybe not in the coming quarter, but in one, two quarters, we'll see some uptick in the motor growth as well? Because, I mean, why I'm just harping on that is that over the last two, three quarters, that has been the bellwether in terms of driving growth in the retail line. And since that has tapered down, you know, the market is looking a little bit weak at this point of time, so. It is just, it is just this quarter. No, I don't think it has tapered down. And, that is why I say when you look at our businesses, if you start comparing quarter to quarter, you will have this kind of fluctuation in thought process. As a strategy, I don't think we are tapering down any, any business or any growth. And as we expand, obviously the motor business in those areas also will start, picking up. But we are very cautious of one, two things, and as I said, for 22 years, we have done that. If the business will not make sense, we don't, pick it up. No, we only pick up business which makes sense. And this, making sense fluctuates over time, no? If you again, look at, if you... Again, let me take you back a couple of years when you're writing commercial vehicle. A lot of questions were coming on commercial vehicle, and again, nobody's writing. And we actually made good writing profit, and we you know, did very well in commercial vehicles. And now a lot of people have entered that space again. Then we entered two-wheelers, then we entered four-wheelers. We look at the pattern, you will see that wherever we see that it makes sense and we can serve the customer well, we would aggressively push that on. There's no tapering of business. And, and so I don't think that is the right way. This quarter, if it has gone down a bit, there's a certain, you know, I think in the market, we didn't find it good enough for that particular, you know, price point in which you feel it is good. But that market keeps on fluctuating very well. So to understand how we operate, you should also, when you look at these questions, also look at the loss ratio movement in the market, look at reserving in the market, no? And then you will see that how our business fluctuates with that and how it picks up. So when you start seeing those patterns, then this will become clear to you. So it is not that we are tapering down something or we're going slow on something, no? You will see that it keeps on moving up. Sir, very clear, sir. That's all from my side. Thank you so much. Thank you. Thank you. The next question is from the line of Supratim Datta from Ambit Capital. Please go ahead. Hi. Thanks a lot for the opportunity. My questions, I'll start off with the Bajaj business. On the retail health side, could you give me a, you know, could you give me a split of the loss ratio between the retail and the group health business? You have clubbed it together. So that would be the first question. And secondly, on retail health, the growth, when I see it, in the third quarter as around 14.5%, that is lower than, you know, what the SAHI are doing or other private multi-line players are doing. And this is despite, Bajaj investing in this business, creating, creating a separate, vertical for retail health. So just wanted to understand how you're looking at growing this business, what are the key investments you are making, and when we should see these investments play out? That's on the Bajaj side. I have a few questions on the Bajaj side as well, but I'll get to that later. Okay. First and foremost, no, I don't think we give individual micro-level splits and loss ratios. But if you look at the Bajaj Health portfolio overall, we are one of the large health players in Indian market, no? You combine the total health business that we do, and you put a position of where does Bajaj stand, you'll find us, you know, among the top health insurance company in India, put it together. Now, when you get down to the segmentation and come to retail health segmentation, you would actually notice that our growth is not lower than the industry growth, GI industry growth. We are actually above the industry growth in retail health also. SAHI, yes, obviously, they grow faster. Because they are focused on, you know, health as a monoline of business, and it is a business model to be going fast, which is good. I think the awareness creation, the more the merrier. I always said, our country can have many more insurance companies. The more they are, the better it is, because it creates awareness, it pushes the market, and it takes it to the next level. We are focused on health, and on health, I think the bigger issue is not about just looking at growing aggressively. The bigger issue is how do you build a business model which is sustainable in a very long period of time? I think that is what is very, very critical. How do you build a business model in which you are able to have customer delight? If you look at our NPS scores, be it both in motor and health, we're among the top companies in India in terms of the customer delight which is there. So you can't build a model in which the customer delight goes down, no? So it has to be built very sustainably in a long-term basis as we take that on. And retail health, again, if you look at our initiatives, we are taking as industry also, and you must have heard about the announcement of cashless for all, which is one. We're also looking at an exchange with the government NHA, in which, you know, we're putting the companies in, and we're also trying to get hospitals on board. There are a lot of initiatives that have been taken in somehow the health servicing happens, and how does it get turned into picture? So we have our team, we have our health vertical, we have a health as view head. We have a very clear focus on health. And I said if you look at overall health, we would be on the large-- one of the largest players in the health insurance space in India also, currently with that. Got it. Thank you for that answer. Now, moving to the life business, over the last two quarters, the growth in the direct channel has been very strong. I just wanted to understand what, you know, has changed in this business that it's delivering 40%-60% kind of growth now. That's the first one. And secondly, you know, you spoke about, you know, product level margins. I wanted to understand that, you know, when we look at the different channels, have the commissions in the different channels changed? Because some of the life insurance companies have indicated that in the multi-insurer channels, commissions have increased. And given you typically compete mostly in multi-insurer channels when it comes to bank partners, just wanted to understand if, you know, there has been any shift in commissions in this segment. Yeah, those are the two questions. Thank you. No, no, okay. Yeah. So I'll answer the first one on Bajaj Direct, and Bharat can answer the commission part. So on the Bajaj Direct side, I think it's a good thing you noticed that the growth has been significant, and we are very bullish on this. The core reason has been really where we run this business, the quality of the team we've put together, the amount we've invested in this business. And the significant bit is the data and technology piece that is now finally breaking through. So this has been the strength of the Bajaj Finserv group. We ourselves have been also riding the same piece of core competence. I think it's finally coming up and showing its capability, where we are able to upsell and cross-sell to our existing customers. There is usually a learning because ours is not an easy product to sell. I think we are now getting the learnings in, and have been able to verticalize the business into various verticals, that they are able to use the data appropriately, and we are able to work with our warmed-up leads quite well. We should expect that Bajaj Direct shall be the fastest growing business. It's not the largest yet, but shall remain the largest, fastest growing business for a few more quarters usually. Bharat, on commissions? Yeah. So thank you for the questions. First of all, specifically, there is no increase in any other costs of acquisition because of the change in the regulations. And even if you look at our overall OpEx plus commission ratios percentage to GDWP or any metric, either we have improved marginally or it is there and thereabout. So there is, net-net, there is no change because of these regulations. Got it. That's very helpful. Thank you. Thank you. The last question for today is from the line of Vishesh Jain from IIFL Securities. Please go ahead. Hi, thank you for taking my question. I just have one question on the acquisition- Sir, may I request you to use your handset, please? Your audio is very low, sir. Is this better? Not really, sir. Could you please- Please, please speak up, I can hear it. Okay. So, I just have one question on the acquisition, acquisitions side. So, Bajaj TPA being the, one of the largest TPAs in India and providing TPA services to many insurers, so is there any chance of potential conflict of interest, and how much of the current revenues of the TPA business do we expect from retaining over a period of time? Yeah. Uh, Devang. Yeah. See, we have our group company, Bajaj Allianz General, which is doing health insurance business, so, while we have same parentage in BFS, even before this acquisition, we were servicing other health and general insurance companies as well as life insurance companies, which are not our group companies. Having said that, I think what our customers—mainly on Vidal side, that means insurers or corporates—look forward to is how we as service providers to them, able to solve their problem or rather service their customers little better. That's where we are focused on, and we have a reason to believe there would be no impact. Having said that, Bajaj Allianz General also processes their claim on their own. See, this market and the job to be done is so large, as Tapan was highlighting on the call earlier, that government is taking various initiatives. Rapid transformation of healthcare ecosystem is happening, led by NDHM blueprint of current government, and regulator is driving initiatives like Insurance For All and cashless initiatives. There is a lot of work to be done by entire industry together, and there is a room for everybody to add value. So we feel very confident that we should be able to service all insurers, and there should be no impact of that. Hope I have answered your question. Yes, sir. Thank you so much. That answered my question. Thank you. Ladies and gentlemen, that brings us to the end of our question and answer session. I would now like to hand the conference over to Mr. Samir Bhise from JM Financial for closing comments. Thank you, everyone, for joining this call today, and thanks to the management team of Bajaj Finserv for giving us the opportunity to host the call. Thank you so much. You may now disconnect. Thank you, all. Thank you. Thank you. Thank you. On behalf of JM Financial, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.