Ladies and gentlemen, good day and welcome to the HDFC Life Insurance Company Limited Q4 FY 2021 earnings conference call. As a reminder, all participant lines will be in the listen- only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to MD and CEO, Ms. Vibha Padalkar. Thank you, and over to you, ma'am. Thank you, Raymond. Good evening, everyone. Thank you for joining us for the discussion on our results for the 12 months ended March 31, 2021. Our results, including the investor presentation, press release, and regulatory disclosures are already available on our website, as well as that of the stock exchanges. I have with me Suresh Badami, Executive Director, Niraj Shah, CFO, Srinivasan Parthasarathy, our Appointed Actuary, and Kunal Jain from Investor Relations. I will run through the key highlights of our FY 2021 results and would be happy to take questions post that. In terms of the current situation, the second wave does appear to be steeper than the first one. We are hopeful that its impact on public health and the economy would be curtailed by a speedy vaccination drive and discipline observed by our fellow citizens. Once the second wave subsides and significant parts of our country are vaccinated, we believe that pent-up demand would lift economic and commercial activity. We are working closely with our partners and reinsurers to ensure prompt service and claims resolution. Over the course of the year, we have settled over 2.9 lakh death claims, resulting in payouts in excess of INR 3,000 crores. Despite logistical challenges through the year, we insured close to 40 million lives in FY 2021. Moving on to our business performance. FY 2021 was a year in which we were able to showcase progressively stronger business performance each quarter, clocking an individual business growth of 40% in quarter four. This has been delivered on the back of our proven strategy of adhering to a balanced product mix and diversified distribution whilst leveraging our digital capabilities. We continued on our trajectory of delivering consistent and predictable performance in FY 2021 while outpacing industry growth. We have recorded a growth of 17% in terms of individual WRP during FY 2021 on a base of 19% growth in FY 2020. The private industry grew by 8% on a base of 5% growth in FY 2020. We issued 9.8 lakh new individual policies, registering a Y-o-Y growth of 10%. Our market share in terms of individual WRP increased by 130 basis points from 14.2% in FY 2020 to 15.5% in FY 2021. Our product mix remains balanced with non-par savings at 31%, participating products at 34% and ULIPs at 24%. In FY 2021, we have once again exhibited our ability to run a calibrated product mix strategy without any single product segment dominating the product portfolio. Our individual and group annuity business saw strong growth of 46%, with annuities contributing about 5% to our individual APE. With a calibrated approach in addressing the long-term opportunity for protection, our individual protection business grew by 4% during the year. While the heightened customer demand in H1 normalized in H2, we saw customer inquiries improve towards the end of the year. We witnessed customers valuing brand comfort, onboarding experience, and claims payment track record as much as, if not more than, price. Supply side considerations such as difficulty in conducting physical medicals, lack of a centralized medical database, underwriting challenges in tier 2/3 locations become more important as we deepen our reach beyond the top few cities and the salaried customer base. However, we remain confident about the medium to long-term prospects of protection in India on the back of under-penetration, higher awareness, rising affluence, and increasing access to consumer credit. We are seeing encouraging trends in the Credit Protect business on the back of improvement in disbursements, registering growth of 26% in quarter four. Our renewal premiums grew by 19% on the back of robust collections in our recently launched long-term savings products, with our 13-month persistency improving from 88% to 90%. While we saw improvement in persistency across various time cohorts in FY 2021, we remain focused on this metric in light of the evolving situation. Next, on COVID claims. While we have had an overall positive operating variance during the year, we experienced a negative mortality variance, primarily on the back of higher than expected COVID claims. This was largely absorbed by the COVID reserve created by us at the start of FY 2021. Based on our actual experience in FY 2021, and after factoring in aspects such as latest mortality trends across business and customer segments, as well as geographic spread of COVID 2.0, we have provided for a COVID reserve of INR 165 crores for FY 2022. We will continue to review the adequacy of this reserve through the course of FY 2022. With this approach, we remain confident of our ability to absorb the impact of shocks from one-off events and deliver Steady returns with minimal variances through a realistic and disciplined assumption setting approach. At the start of this year and against the backdrop of a pandemic, we had aspired to maintain our new business margins between FY 2019 and FY 2020 levels. We are very pleased to report that we have been able to surpass that goal on the back of growth across channels, calibrated product mix, and extracting cost efficiencies. Our full year new business margin was 26.1% against 25.9% last year, with the value of new business at INR 2,185 crores, implying a growth of 14%. Our operating return on embedded value stands at 18.5% as against 18.1% in the previous year. Our profit after tax, post the additional COVID reserve of INR 165 crores, grew by 5% to INR 1,360 crores. Our solvency position remains healthy at 201%. We are pleased to announce that the board has approved a dividend of INR 2.02 per share in today's meeting. The payout of the dividend is subject to shareholder approval. On channel and product performance. Almost all our channels witnessed each quarter of FY 2021 getting better, with our bancassurance channel leading the pack with a growth of 29%. We saw a resurgence of growth in our proprietary channels in the latter half of the year, with agency channel growing 49% and 6% in quarter four and full year respectively. Towards the end of quarter four, we started clocking business with our new bancassurance partners and are confident of gaining traction in the year ahead. We remain focused on tapping a new generation of customers through our online channels whilst expanding our geographical presence across the country, especially in non-metros. We have seen contribution of business from tier 2 and 3 locations increase to over 50% of our online business. Our focus on driving a balanced product mix backed by our suite of innovative products is enabling us to effectively meet customer demand. There has been a concerted effort to enhance customer experience, refine pricing appropriately, while continuing to responsibly underwrite new business. Coming to our pension subsidiary, HDFC Pension continues to be the largest pension fund manager in retail and corporate NPS segments with an assets under management of INR 16,384 crores, thereby clocking a growth of 98% over the previous year. With a base of over seven lakh customers, HDFC Pension market share stands at 34.4% as of March 21. We see pension as the next big opportunity and envisage the business to grow further. Next, on digital. Digital is the backbone of our growth story, and we continue to invest in technology with a view to simplifying the buying journey, enhancing service experience for customers, whilst creating new product propositions. We have included a fairly detailed view on our digital approach in our investor deck for your reference. To conclude, given the resurgence of COVID and uncertainty looming around economic and market momentum, we will continue to maintain a cautiously optimistic stance for FY 2022 and evaluate our approach on a dynamic basis. We will strive to achieve sustainable new business growth and maintain an upward trajectory on new business margins whilst adhering to a robust risk management approach. We remain sensitive about the health impact and loss of lives due to the current pandemic and continue to prioritize employee, customer, and partner safety. The current pandemic has led to higher awareness around the need for protection and the inadequacy of current insurance coverage. Life insurance has surely emerged as a prominent theme to protect one's family whilst securing long-term financial goals. To this effect, we take cognizance of our responsibility as an insurer, and we extend our sincere gratitude to all our employees, partners, shareholders, and all of you who have stood with us in these tough times and helped us achieve our objective of being one of the most trusted insurers of choice. We also thank our regulator, IRDAI, for issuing several enabling notifications, without which our business might have struggled. The detailed disclosure on our results is available in our investor presentation. We wish you and your family a safe and healthy time ahead. We're happy to take questions now. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask questions may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star then one. The first question is from the line of Suresh Ganapathy from Macquarie. Please go ahead. Yeah, hi. We've got three questions I have got. The third one is an accounting question on COVID reserves. First, is it possible from a disclosure perspective for you guys to share the split of VNB into protection and savings? Look, your peers disclose it. For better transparency, it would be good that you guys also disclose it. Hi, Suresh. I thought you had three questions. Yeah. You want me to answer this one? Yeah. I think we can go one at a time. That would be great. Yeah. Yeah. Yeah. Yeah. Suresh, a lot of these expenses are allocated expenses, as well as there are nuances in terms of a particular channel. It's not only the segment, but there is a very overwhelming overlay of which channel is selling what. A particular channel that sells unit link could have a very different outcome to some other channel selling unit link. It does get fairly complicated, but certainly we'll take that into account. Thanks. The second thing is on the reinsurance part. Are the reinsurance guys flexing muscles? Do you think there is another round of hike which can happen this year with respect to reinsurance rates? As of now, there is no explicit conversation or no communication from them rather, that they intend to do that. If I were to look at rates in India, they are on the lower side. Even before the recent hike that happened towards the start of FY 2021, we were on the lower end and given that we are an emerging economy. They will, I think, look at risk profile, emerging risks, new long COVID risks of people who have recovered from COVID and is mortality signature different, and so on. It isn't entirely inconceivable that they might do that, but nothing concrete as of now. Finally, on this COVID reserving, Vibha, you guys had some INR 3 billion reserving before this INR 1.65, right? Well, we had an incremental COVID reserve of INR 41. Okay. Do you want to take that, Niraj? Yeah. Suresh, if you were to just simplify this into, let's say, what's happened in the P&L and what'll appear on the balance sheet. Yes. If you go with that, and then if you have any further questions or clarifications, we'll do that. Yes. So FY 2020- Yeah the hit to the P&L was INR 41 crores. Okay. FY21, the hit to the P&L that we've taken is INR 120 plus crores. Okay. The balance sheet number equivalent of that for FY 2020 would be INR 41 and for FY 2021 was INR 165. After adjusting for, we will have to take into account taxes and all of that. Okay. Very simply put, if you want to just look at what the statements capture at these points in time, this is what you need. Okay. The balance sheet number is INR 165 crores, and which is what is being reflected in the EV Walk, right? That's right. Okay. There has been some kind of an underestimation, let me put it this way, because at that time you guys thought INR 40 crore was enough. I, of course, understand that this is an extremely challenging situation for everyone. Are you really confident that this INR 165 crore balance sheet number is fine, or there can be some higher number and you're reasonably conservative with respect to this estimate? Suresh, again, we can never be 100% sure of anything, especially in times like these. What we can do is we can draw on what we've seen in the past and what level of prudence we want to keep here. Now, COVID as such, it's not necessarily only to do with COVID deaths. It's basically a phenomenon. That phenomenon will result in mortality experience, right? That, like Vibha mentioned, it will pan out now and it'll pan out over a period of time as well. If you were to just put things in perspective, we settled around INR 3,000 crores of claims, as Vibha mentioned earlier in her speech, through the year. Right? If you were to look at what was at an overall level, there was some on an overall basis, the claims that we would have settled in excess of what we had anticipated is a very small number of about INR 50 odd crores. The reason for that is that while COVID claims would have been marginally higher than what we had anticipated, but at an overall level, the claims were lower. What we have reflected in our operating variance is what you will see here, that overall adverse claim experience is to the extent that we've mentioned in our operating variances. What we've done to comfort ourselves and to all of you sitting outside the business is that we have spruced up the COVID reserve, and we've also, in anticipation of any sort of adverse mortality that could happen, we've also taken a sentiment our operating assumptions as well. That's also reflected in the EV Walk. After that, of course, we will review it every quarter because we can't be 100% sure of anything, right? Thanks, Vibha. Suresh, can I just come in? Yeah, sure. Actually, the expected claims for the year was INR 2,350 crores or so against the total claims. I'm not splitting into COVID and non-COVID because there is a little bit of one is up and one is down. If you look at the overall payout of claims was INR 2,412 crores against our expected of INR 2,350 odd crores. There was a gap of INR 50 odd crores, which was paid for by the COVID reserve of INR 41 crores. By and large, our estimate was not too far out of line with what actually panned out in practice. We were not very off, maybe by a few single-digit crores, maybe INR 4 or INR 5 crores is what the difference was between what we provided for and what actually happened. In terms of future, like Niraj outlined, we have various provisions that are set up under COVID reserve of INR 165 crores. We strengthened the mortality assumption also to the tune of INR 120 crores. Thank you so much. Yeah. Thanks. Thank you. The next question is from the line of Udit Karewala from Ambit Capital. Please go ahead. Yeah. Thank you so much. I had two questions. First is, on slide number 37, if you could explain the point around fixed cost absorption. That was my first question. The second question is that the solvency today looks fine at 201%, but then we saw last year when the markets go down very fast, the solvency could decline. Considering the kind of growth that HDFC Life has demonstrated, and I think this is also reflecting the bond which you had issued earlier, what is your expectation around a capital raise? These are my two questions. Yeah. Niraj, do you want to go ahead? Yeah. What you see on the VNB walk on slide 37 is basically the impact of each of these elements, both on the VNB as well as on the margin. The negative number that you see here of INR 47 crore and - 0.6% is primarily on account of lower volumes on CP. We've had 16%, 17% growth on the individual business. We've had 20% degrowth on CP. There is some sort of investment that continues in the business, which were not fully been able to recuperated in this year. As we see the trends through the year, we got about 25%, 26% growth in quarter four in CP. We are fairly hopeful that as the year pans out, we will be able to change this phenomenon. This is what happened in this period. Niraj, just one point, and then maybe just to understand it a little better. A CP product predominantly would be sold by the banks or the NBFCs, right? It's like a variable cost, right? I mean, if you could give more color around this, that'll be helpful. Right. It is not like an agency business where you need to maintain the agency force, where there'll be a high amount of fixed costs, right? It may not be as high as agency, you're right, but it's not that there is no fixed cost at all because we have, as you are aware, in excess of 300 partnerships across banks, MFIs, small finance banks, as well as NBFCs. Across each of these, we need to obviously have a setup which will ensure that there is smooth processes that happen at the end of the partner. For that, there are investments that need to be made, investments in people, investments in technology. All of those things get defrayed over a period of time because it's not something that can get completely recovered in a particular point of time. It's an ongoing exercise. Because we had a volume impact this year, you're seeing this number in this period. Through this period prior to this, we've had growth in the segment. You would not have seen this prior to this. Okay. On the solvency? On solvency, okay, now there are a couple of elements there. You're aware that our solvency as of now is 201%. We had this market impact in March of last year, which resulted in our solvency dipping by about 12-odd%. We saw that last time. Keeping that in mind, we did raise sub-debt earlier in the year, as you're aware, which helped us create that further cushion of 15-odd%. Vibha also mentioned we've declared the board has approved dividend, which will get approved by the shareholders, recommended dividend, which will get approved by the shareholders in the upcoming AGM. We've taken account of that as well while looking at the dividend bit. The solvency would still be upwards of 180%, and any sort of equity impact is something that we can look at in that context. It bakes in all the elements that we've seen in the past and the sub-debt raise was actually on account of that. Sorry, just one last thing. What is the quantum of incremental sub-debt that you can issue? I'm not talking from the approval point of view, but from the regulatory point of view. It's actually the same thing really. Like we mentioned last time, we maxed out based on the formula that is available in terms of net worth and capital. We've raised 25% of that. Only when the equity capital starts or the net worth starts growing in a meaningful manner can we get to a size which makes sense to raise, which will probably happen only a few years down the line. Okay. Yeah. Thanks. Thank you. Before we take the next question, we'd like to inform participants that in order that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we request you to rejoin the queue. We take the next question from the line of Aarav Sanghavi from VP Capital. Please go ahead. Hi, ma'am. Hope all well at your end, and thanks for taking my question. I have two questions. My first question is on slide 27. There's a slight increase in sensitivity of VNB margin in non-par products. Is there any kind of pressure in selling non-par business or is there any kind of margin impact in this business given a lot of players have gotten aggressive in this area? That's my first question and second question is a broader question on protection. We have been hearing that India is very under-penetrated from a protection point of view, and this year was kind of an inflection point from a protection point of view again. First half we did see robust growth in protection and second half it kind of wavered off a lot. Obviously, there were some pent-up demand. The broader question remains that even after pandemic year, if we see across peers on the individual protection basis, ignoring the CP, there's not much of a change in the component of protection from one year or two years. Do you think the kind of fast protection penetration we anticipated in India that might not happen because after six months only, the kind of slowdown we witnessed in individual protection, that was a lot. Any clarification or any guidance on the protection front, how should we think about it going ahead? Thank you. I'll answer your second question first and then leave to Niraj. I'll hand it over to him. On the protection bit, even when we grew by 50% in first quarter, you will recall us saying that this is unusual. For us, anything growing by suddenly 50% and very sharp rates, apart from something like annuity, which we understand the overall opportunity and why it is growing. We do believe that the opportunity is significant with all the data points put together. However, it will be calibrated. Reason here is it's a little bit more complex than something like annuity because there are also supply-side constraints. There are also constraints in terms of very heavy underwriting, both medical and financial. As we move to different age groups, different geographical customer base, and so on, the underwriting requirements are level of a good sense as to what does it mean when a certain document is given, and so on, is evolving and largely nascent. That doesn't take away the overall opportunity, but it does slow down growth because as insurers, we also need to understand the risk that we take on our balance sheet and also what the risk that reinsurers take on their balance sheets. It will be a more calibrated growth, but I do believe that in the medium term it will be faster than overall company growth. Niraj, you want to address the first part? On your first question, if you look at the VNB sensitivity which has increased marginally, that's nothing much to do really with the pricing. We continue to be fairly calibrated in the way we price the products. It's just to do with the excess assets that are sitting in the book at the beginning of the period, where the first few premiums that come in are not really matched by the liabilities and assets. To do a full cash flow match, there is excess sensitivity that is happening at the beginning of the period because of the excess assets. That is what is being reflected here. As such, from any sort of interest rate movements which are beyond just the parallel shifts, whether it is convexity or slope change, any of those, for that, cash flow matching is something that continues to be done. That's the reason what's causing this excess sensitivity. To give you comfort, typically in any guaranteed non-par product, you would worry about what happens when interest rates are going down. If you look at the table here, you'll find that the value only enhances when interest rates go down. That just basically tells you that the book is fairly well hedged and there is no risk really coming from a downward movement in interest rate. Also the excess sensitivity is something that we can easily take care of by putting the excess cash just in overnight paper rather than investing it in bonds. The yield we do not believe there is any reason to give up that yield that we can get by actually investing these assets in bonds rather than putting it in treasury. That's basically the reason for this. Nothing much to do with pricing at all. Ma'am, just a follow-up question on the protection. Last quarter we had introduced a kind of a ROP product in the protection. Do you think that insurance becomes a little expensive in India? Obviously we have less data compared to a lot of other nations. This share of ROP products will naturally increase in India across time and we might see going ahead this becoming a more dominant portion of the protection portfolio for our companies. We believe in really selling policies that customers want, what is pull of the market and whether we are able to satisfy that pull. I don't think we want to take a purist approach to say that I will only sell what I think you should be buying because any kind of insurance is better than no insurance. If it is ROP, so be it, but at least that individual will get a fairly significant amount, anything up to 200x cover. That's our philosophy. This year it's still relatively lesser, which is sub about one-fourth of our business. Could we see this increasing? Perhaps we could. It's again that classic argument about one should unbundle an insurance savings product and buy terms separately and put your savings into fixed deposits or mutual funds and so on. That's where our philosophy comes in to say that if someone is looking for a bundled solution or someone will not buy anything unless you give him money back, then at least he has this. Yes, I think hopefully I've answered your question. Great, ma'am. Thank you so much and all the very best. Thank you. Thank you. The next question is from the line of Sanketh Godha from Spark Capital. Please go ahead. Yeah, thanks for the opportunity. My question is on the margins. In nine months FY 2021, when we reported margin of 25.6, when we look at the VNB walk, the product mix change contributed 10 basis points to the margin expansion. Now if I look at FY 2021, the product mix change contributed almost 150 basis points to the margin expansion. I know the opening numbers are little different, but still if I factor in that it is an 80, 90 basis points improvement to the VNB margin because of the product mix change. If I look at the overall product mix, it has significantly not changed compared to nine months FY 2021 and FY 2021, maybe except for the fact that group protection has gone up and individual protection has come down. Just wanted to understand what led to product mix change almost like a 50 basis point sequential improvement in the VNB margin. Is it safe to assume right now that individual protection because of reinsurance rate hardening group protection business has become much more profitable than individual protection and therefore the margins are more positively? Srini, you want to take that? Yeah, sure. Sanketh, you're right. There is a shift towards group protection last quarter, primarily on account of disbursements. The NBFCs and other financial institutions are coming back. That has led to a growth in the group protection in the last quarter. In fact, it grew by 26% on the standalone Q4 quarter. That is certainly a profitable business that has added to the increase in the margin in the last quarter. Maybe if I look at from fourth quarter perspective, then the group protection margins maybe seems to be better than the individual protection, because overall protection remains broadly same, still margins expanded. That's an easy, maybe normal conclusion to make? Actually, the fourth quarter individual protection margin also is slightly higher because as you would know, the reinsurance transition took place in the first quarter of the fiscal. The first quarter business is a little bit a blend of the old regime and the new regime. It was a little bit transitional phase. Therefore, when you compare the nine-month figure of individual protection standalone versus standalone Q4, I think individual protection also has a slightly higher margin than what we saw in the nine-month individual protection. Okay. Got it. I have one more question, maybe two rather. One is on the EV walk. Your assumption changed, you said that it's INR 180 crore. Out of which 124 incremental what you provided towards COVID, explain partially that part, but what residual INR 60 crore or INR 55 crore-INR 56 crore is due to what reason? That's the one question I had. Second question is with respect to COVID death claim. I was looking at the data in FY 2020. We paid almost 2.8 lakh to death claims last year, which was INR 2,300 crore of payout. In the current year, we made 2.9 lakh per claim, and the payout is around INR 3,000 crore, and the difference is around INR 700 crore. Given probably we were more group heavy last year compared to what we are now, the mortality experience in a group business will be significantly different from individual business, maybe worse rather in group. Just wanted to understand that this INR 700 crores growth despite number of claims remaining broadly constant, the growth in INR 700 crores of death claims is largely due to COVID. Probably you can see in the second surge when the numbers reported would be higher, we can see a significantly negative number coming in or our INR 165 crores, repeating myself, INR 165 crores or incremental INR 124 crores could be good enough to absorb it. I think I didn't quite catch your first question on the EV Walk. You're talking about the operating variance there or you were talking about the assumptions change? Assumption change which is INR 180 crores, - INR 180 crores in the EV Walk. Out of which assumption change of incremental INR 124 crores is explained by additional COVID provision. Just wanted to understand - INR 56 crores is due to what? That's the first question I had. In the page number 10 or slide number 10, if I see INR 180 crores, INR 1.8 billion is the negative operating assumption change and incremental, last year we provided INR 41 crores, now we provided INR 165 crores. The balance INR 124 crores is because of COVID, what is the rest amount of around INR 56 crores coming from? This is the positive variance due to expenses and persistency. No, no. I'm not speaking about operating variance. I was speaking about change in operating assumptions, which is red color, - INR 180 crores. Srini, that is more in terms of you have the COVID reserve sitting there. We also have strengthening of mortality assumptions as well. There is a positive operating assumption change for expenses and persistency based on the favorable experience. On the mortality, in addition to the COVID reserve, Sanketh, there is also strengthening of assumptions on mortality at an overall level as well. Basically you can simply say that specific to COVID, you provided incrementally INR 124 crores, but additional you have even strengthened your mortality experience, so it became INR 180 crores. That's right. Last year, if you recollect, we had strengthened the persistency assumptions and in expectation of mortality becoming adverse, we had made some assumption change on strengthening on the mortality as well. Overall, the assumption change was positive because of the expense variance. This time around, we have a positive in persistency and expense, but on mortality, in addition to the COVID reserve, there is additional strengthening of mortality assumption as well, which we had done last year as well. Okay. Just one small thing. Mortality experience of INR 50 crores, that 0.8 operating variance number. Should we believe that protection margins which we were anticipating in historical years have got little bit impacted because your experience is coming little different from what you have initially baked in while calculating EV or VNB of previous years? To the extent of the negative operating variance that we have just disclosed, yes. To the extent of that, yes. That's the reason why we have actually strengthened our assumptions further so that we factor that into a prospective VNB. As we write new business. For 26.1, consider that additional mortality negative experience, right? Of course. Okay. Finally, if you can clarify on the death claim, because I was just looking into public disclosure, I realized that we paid almost 2.8 lakh claims last year, and we paid death claims of INR 2,300 crores. Today, this year, we have paid 2.9 lakh claims, and we have paid around INR 3,000 crores. Actually, product mix have moved in favor of individual rather than group, from incremental business point of view. Just wanted to understand this additional INR 700 crores seems to be little higher. Are we experiencing relatively higher death or our mortality experience could be higher than what we have actually anticipating? Sanketh, the INR 700 crore we are comparing with what last year numbers, is it? Last year public disclosure numbers, if I see, where they give a statement of death claims paid. I can see that in FY 2020, you paid a claim of around INR 2,300 crores for 2 point lakh claims. That number is INR 3,000 crores for 2.9 lakh claims. Right. Size has already gone up and also the absolute number seems to be very high. Yeah. The book has also grown, right? It's not like it's the same book. The book, since we keep writing new business every year, the overall book size also keeps growing. As a result, the number of claims that we expect from that cohort also keeps growing. If you really look at the expected claim, what we need to look at is how much did we provide for accepting claims versus how much actually turned out in practice. If you look at the expected claims in INR crores, all claims put together, it's COVID or non-COVID. Net of reinsurance, our number says INR 2,350 odd crores is what the total expected including, I mean, all claims, including COVID as well. Compared to that INR 2,350 crore odd of expected claims, the actual claims including COVID were INR 2,412 crore. There was a gap of about INR 50 crore. Within this INR 50 crore, this INR 50 crore is also funded by the INR 41 crore of COVID reserves that we set up at the start of the year. There was hardly a single-digit figure of crores extra claims is what actually occurred in the last fiscal. Okay. Yeah. That answers largely my question. Thanks. Okay. Thanks. Thank you. Before we take the next question, a reminder to participants to please limit your questions to two per participant. The next question is from the line of Prakash Kapadia from Anived Portfolio Managers. Please go ahead. Yeah, thanks for the opportunity. I have two questions. If I look at UL, why is it that UL, despite capital markets doing well, it's actually not growing on a low base and if I look at the absolute value of UL, it is trending down. If I compare that with three years ago, it's been lower. That's the first question. Secondly, as we step into FY 2022, obviously the second wave has taken most of us as a shock. What are we seeing? Because last year we had a very low base. What kind of momentum are we seeing, especially in non-metro cities? If you could give some color that would be good. Suresh, you want to go on this? Yeah. Yeah. The first one I'll take on the UL. Frankly, like we have always mentioned that we've always believed in a very balanced product mix strategy. I think the idea is not to skew our overall product mix either to a non-par or to a PAR or to a UL. term and annuity will remain focused as long as in term we write good quality business. It's actually been a fairly conscious strategy for us to be able to drive the product mix the way we want it. Like we had mentioned earlier, the idea was to ensure that every channel of ours was profitable. We fully understand what you're saying, that the markets are large. There is a huge opportunity on UL, on term, on PAR. What we are trying to make sure is to say that first we look at what the customer is wanting. If, let's say, we also look at the quality of the business and what is it that we are looking at in UL, because in some of the products in UL, it is important that we drive high persistency like in all other products. We have been selective in terms of what kind of product mix should we be driving through each of the channels, because we want at a channel level a certain profitability, ensuring the customer meets his requirement and we sell the right sale so that overall, over a period of time, his persistency is also very good. I don't think it is the fact that we are not driving UL, and like I said, as compared to some of the other products, UL profitability is slightly lower. To ensure that we maintain a good mix between margins, top-line growth, quality of business, all of that is what we have been treading and that gets reviewed across our product committees, across our channel efficiencies, across customer level CSAT, all of that. I don't see really too much of a concern to say UL is coming down. Yes, if we want, we can grow UL higher, but then again, we want to make sure that our overall NBMs remain the way we want it. We want our channels to remain profitable and as well as persistency. That's broadly our strategy. I was trying to understand, there is something called base effect and it takes few years. Is there some channel resistance or banca channel or some other channel? No, not really. Actually, it's what we have been looking at from a customer perspective. It's also looking at where we will open up. Frankly, it's also a question of how we train our people, which product we want them to go into the market with. It depends, like our strategy from partner to partner. There are certain banca partners who are more comfortable doing a product strategy which is more skewed towards traditional product. There are some customers who are okay with the UL because they believe they don't want to run the customer issues when tomorrow if the market becomes a little volatile. We work very closely with HDFC Bank, all the other banca partners to ensure that, look, we fix our strategy on UL accordingly. In agency also, I think there's a very select set of agents we work through on UL, where we say that, "Okay, fine, we are willing to work with you because we are seeing good quality business and where the customer also understands the product better." We just don't want to sell UL to customers who can't take the risk down the line. That's broadly the UL strategy. It's not that, look, there is a resistance. We can grow. Frankly, at our end, annuity is the largest market, like Vibha Padalkar had mentioned. Simple product, no missell, everybody understands we can grow it. Term also, it's been a very calibrated approach. Frankly, you don't want to go into term in a manner where tomorrow either you're leading to higher mortality or you're getting into segments where you're taking higher risk. That is something that we have been watching out. I don't see a concern. I think it's up to us to decide how the overall mix should remain. Frankly, right now we are operating at a very comfort level of 25%-30% on UL, 30%-35% on PAR, 30%-35% on non-par and term. Term, yes, if it can increase without us taking higher risk, we'll be happy. Second part, if you can comment on as we are stepping into. Sorry, could not hear you very well. Yeah. As we are stepping in FY 2022 last year at a very low base. What are the ground reality, especially in non-metro cities, and what challenges are we facing because of the pandemic? So- Yeah, go ahead, Suresh. Yeah. I'll go ahead. See, frankly, it's not that it's a lower base. I think we've done fairly well even in terms of our year on year growth. I know the industry has had a low base. If you look at our two-year CAGR, we have done fairly well and our market share has increased. Last year saw a good base, and even by the time we have ended this year on individual APE, we have grown fairly well, right? I do think that as compared to the rest of the industry, we have more of a base effect where we are higher on the base. Having said that, we believe our opportunity is higher and will continue to grow. On the specific questions on how do we go back and expand into some of the other markets. Look, we are watching the situation very closely, both across metro as well as some of these smaller locations. We are looking at what is happening in terms of trends in certain states and certain geographies. We will take a call in terms of how aggressive or how conservative we want to be in each of these markets. Our approach to actually reaching out to these smaller geographies has been multiple. One, primarily, we are looking at banca partners who are reaching out to different geographies. While some large partners like HDFC Bank are anyway doing a rural expansion and have a tier 3, tier 4 strategy, we are happy to ride with them. Similarly, what we have done is we have gone back and partnered with a lot of other partners like Ujjivan, Equitas, Utkarsh, Bandhan, who are respectively very strong in some of the tier 2, tier 3 markets. Our agency and direct are limited to certain larger cities, but there again, we are looking at how do we go into these markets. The way we look at it, look, these markets are also growing decently fast. There is a lot of under-penetration which is there in terms of insurance, both on protection as well as savings. As long as we have a good partner to work with, we are able to write the right quality of business, we'll be happy to grow even in these markets. Understood. Thanks. Thank you. Thank you. The next question is from the line of Deepika Mundra from JP Morgan. Please go ahead. Ms. Deepika Mundra from JP Morgan, you may go ahead with the question. Hi. Yes. Thank you. Good evening, everyone. I just had a couple of questions. Firstly, on the VNB walk. In the fourth quarter, expense transition also seems to be negative, despite the bounce back in CP as well as in overall APE. Anything related to commissions or anything on the distribution side where expenses are essentially going up? My second question is on the savings business. Last couple of years have been great for the company. Just wanted to understand if this lockdown or partial lockdown in states is impacting the momentum to a certain extent. Between the traditional businesses between par and non-par, do you see any particular tailwinds again in either of those two lines, between any of those two lines going into next year? Thanks. Deepika, on your first question, I am not sure if I got it right. For the full year, yes, there is an expense impact negative, which we did mention a little while back as well. That's because of lower CP volumes for the year. Also, I think Srini covered earlier as well in terms of Q4 versus Q4. Largely, it was on account of a product mix while it was covered in terms of overall protection remaining the same, retail being lower, group being higher. That was more in terms of Q4 to Q4. On a year-on-year basis, the expense negative impact was only on account of lower CP volumes. I don't know if I missed any part of your question? Sorry. Yeah, just to clarify, specifically for fourth quarter, for instance, if I take it by difference of FY 2021 versus nine months. For fourth quarter also the expense impact is a tag negative, and which had basically turned around in 3Q because of the pickup in the business. I just want to understand that why is expense again negative. Yes. Last year was definitely the partial lockdown situation that we had, and that was basically the result of that. This year, like we said, it is on account of CP for the full year. For Q4 this year, there is no negative expense impact on NBM, if that's what you're saying. Okay. All right. Okay. Q4 to Q4, the margins have expanded from 24.3% to 27%, right? Yeah. Deepika, we're not sure where you're picking up the expense negative in quarter four. That's right. The rupee value obviously will be higher because of the growth. Yeah. Actually, there's been a better expense defraying in quarter four, and thereby resulting in much higher margins of 27% for the standalone quarter four. Okay. Maybe just some rounding off from my end. Okay. Yeah. On the second question in terms of the partial lockdown and what kind of savings you're seeing in savings. Deepika, our point is that, look, it's too early in the year to look at the April, but we get a sense from the ground in terms of what's happening. Frankly, in some states and some markets, like you can read across, there is a fair amount of concern in terms of the number of cases which are there. Again, from our side, frankly, the advisory is very clearly in terms of employee safety, in terms of partner safety and our financial consultant safety. We have again gone back to say that, look, work totally on remote. Our strength is on technology, our strength is in terms of being able to manage the entire sales process end to end. You saw that in Q1, Q2, Q3 of last year, where we were able to grow much faster than the industry while we also de-grew in Q1. Our ability to come back in terms of growth was fairly fast. We do sense a little bit of an apprehension on the frontline sales as I see, given what is happening in the market, and rightly so. You will really get the full impact on the partial lockdown in terms of the business over the next. We are watching it quarter on quarter. Frankly, we would like to do the same as what we did last year. While there is clearly an aspiration to grow, we will watch it quarter on quarter and evolve as the market grows. There are a few of our branches we've had to shut down because of being in geographies where there are high number of cases or some of our ops guys have got affected. We monitor that on a daily basis through our task force. Those are operational calls where we can clearly see some business impacted. There is a little bit of a slowdown in the last few days, and we are okay with that because, look, it's a long-term business anyway. In terms of tailwinds on certain products, yes. Look, frankly, all said and done, it also depends on the customer, one, on the term, as well on the savings. Last year when we went into this, people were really not sure whether they had their jobs impact or their businesses will get affected. There is still a little bit of a worry, but probably not the same level of concern now that the vaccines are there in place. You will find that people will migrate to insurance because the awareness is there and the ability to pay is slightly better. I think now that the second wave is fairly serious, a lot of people who were on the borderline of taking a decision will come back. We'll see higher awareness and higher inclination to buy these products. I don't think the slowdown will be like the way we saw in Q1 and Q2 of previous years. Operationally, yes, we will see a little bit of a slowdown because people will not go for medicals. Our sales force will probably have to work only on remote. That is not as fully effective as what could have been earlier. I would say H1 would probably be marginally better. Very difficult to predict. We'll have to wait and watch for the next one or two months. Savings products will, I think, clearly do well because, look, people do realize that they need to invest in insurance for a long period of time. There are some fantastic products from our side on the non-par and par side, which are competing with many other asset classes, given what kind of rates are in the market. I would say savings products will continue to do well given the customer has to put the money somewhere, and they will migrate it into insurance is my opinion. Okay. Thank you so much. Thank you. The next question is from the line of Hitesh Gulati from Haitong. Please go ahead. Good evening, everyone. Thank you for giving me the opportunity. Congratulations on a very good set of numbers. My question is, what would be the quantum of COVID death claims paid by us on a gross and net of re insurance business? Niraj, go ahead. You want to give the numbers? Hitesh, the COVID death claims paid were about INR 145 crore on a net basis. Gross basis was INR 231 crore, and number of claims were 2,324. Thank you. Before we take the next question, we'd like to inform participants to please limit your questions to one per participant. We take the next question from the line of Madhukar Ladha from Elara Capital. Please go ahead. Hi. Good evening, everyone. Thank you for taking my questions and congratulations on great set of numbers. Most of my questions have been answered. I just wanted to get a comment on what sort of persistencies are you seeing in the guaranteed non-par segment. Are they above what we have budgeted or below? Some sense on what those numbers are. Yeah, we are seeing a very good uptick. It is 93%. We have put out the numbers here. Of course, the numbers here are the entire traditional book. Yeah, non-par book also has positively surprised us. We were expecting robust, but it's trending extremely well. As a consequence, we are also quite happy that down the line in terms of all the future cohorts also should continue to stay robust. Very much in line with our assumption. Thank you. The next question is from the line of Nischint Chawathe from Kotak Securities. Please go ahead. Yeah. Hi, am I audible? Yeah, Nischint, go ahead. Hi. Just trying to understand, if I look at the effective unwinding rate, that seems to have gone up in FY 2021 versus FY 2020. Just trying to understand, is there a specific reason for the same? Niraj, you want to answer that? Yeah. Last year, in FY 2020, since the markets were falling, we were a little bit extra cautious since the pandemic started, or at least the lockdown started mid-March, late March, and we were a little bit worried about the economic impact. As a result, to be extra conservative, we reduced our expected return assumptions or the unwind assumptions. Since at the start of this year we saw markets rallying sharply, we had recalibrated the expected return assumptions to 8.4%. That is unwind rate, which we have kept constant all through the year. You see that this 8.4% this year has not been one-off, but it's been there for the last four quarters. Thank you. The next question is from the line of Mayank Mukerji from Franklin Templeton. Please go ahead. Hey. Hi, Ruchita. Thanks for taking my question. I have three questions, all based on your distribution channels. First one is on the bank, very strong growth this year. How much of that growth is from HDFC Bank? In a pandemic year like this, what's really driving such a strong growth on the bancar channel? Second, the direct business, which was doing so well for the last four or five years, seems shade weaker compared to other channels this year. Any color on why that has happened on the direct channel this particular year? Last, on the agency channel, what is your sense of the incremental growth that you can deliver on the agency channel versus the incremental investment you have to put into the pyramid? I think for the same fixed cost on agency right now, how much more growth can we do over there? I have these three questions. Yeah, go ahead. I'll quickly answer on the bank first. Yes, frankly, this year has been good on the Bancassurance across all our partners. We have seen a fairly decent growth year-on-year, especially from HDFC Bank. I think they have primarily done very well. Two, three reasons. One, I do believe that they have done very good work in terms of their distribution expansion, in terms of the specified persons who are there. There is a full-fledged understanding, training, and they picked up at the right time. Since it was an essential services, the banks were open even in the initial six months. Asset businesses were a little low, I guess. In any case, all the specified persons were at the branches. All the customers who reached out were converted both on savings as well as for term product. We didn't really see a slowdown both on the savings as well as on the term. HDFC Bank has done very well for us. Have some of the other banks who are expanding. People like IDFC has also grown Y on Y. Even though we had multi-tie coming in in some of our partners this year, our overall Y on Y growth from all bank partners has been fairly good. I would say, one, because of the fact that they continued through the entire pandemic period in some form because of essential services. Two, a lot of relationship with the customer level were leveraged in terms of being able to sell insurance because the customers were more aware. Three, a lot of effort by our team in terms of mapping each of the branches. There's been a lot of effort that we've done in terms of strengthening our whole Bancassurance proposition with our partners on the product as well as also support in terms of what we can do on conversion. I think all of it came together. Frankly, this year Bancassurance performed. On the direct business, your point is valid. We did see a muted performance. We kind of expected this also. Direct business is primarily our sales force who's on the ground. There are two, three verticals through which we typically do this business. The primary large business line that we do it is through what we call the BCSs or the branch sales model for us, which is through our HDFC Life branches. Given that while we were essential services, we were only servicing our customers for critical needs on claims and maturities which are happening at the branches. The footfalls are lower, and it is not like a high banking transaction kind of a branch. When the footfalls are lower, that particular channel for the first half of the year slowed down in terms of its numbers. Similarly, a lot of the other frontline were working on customers that they worked with directly in the market. They were also advised to stay at home and not go out. For the first six months, our direct channel saw a slowdown. As you see, as things opened up in Q3 and Q4, our quarter-wise growth was quite sequential, even in direct, and they ended flat. While there was a huge degrowth given the fact that the direct business was just not available in H1, H2 was fairly decent, and we do believe that depending on the situation, we will again come back in terms of the various avenues of direct business that we are looking at. The year was affected in direct. On your third question on agency, in terms of what kind of incremental growth we can expect by putting in the same amount of money as compared from years. Look, the way we look at agency is slightly different. We are one of the few most profitable agencies in the industry. Secondly, the quality of our agency business is very good. It has one of the highest persistencies in the market, and over the last few years we have been growing that fairly fast. We do see an advantage in an agency business in some sense because it's proprietary to us. There is a huge amount of effort that we can put in terms of recruiting new financial consultants. There's a very clear strategy in recruiting active and high-quality consultants. There is also a fact that we can train them better. Three, they are much more loyal to us for a very long period of time. Given for many of them, it's their primary source of business. As long as they associate with a brand like HDFC, they stay with us for multiple years. Some of us maybe have been here for seven, eight years, but there are financial consultants who have been with us since for 20 years. We are investing in that business more at a strategic call. We do get fairly good returns also. It is not that the agency productivity is lower. We have to manage the cost of acquisition in agency channel to make it profitable. Frankly, the term business and the product mix that the agency channel is able to deliver for us makes it fast-growing as well as profitable. We are heavily invested into the agency channel. I want to make a couple of more points and add to what Suresh has just said. Mayank, if you look at our slide 18 of our presentation and direct channel, you will notice that our annuity business has gone up very significantly being sold through direct channel. Annuity, as you know, is a single premium. We are turning the wheels in our direct channel wherein they can directly sell annuities and focus on that. They need to do a lot of running to deliver the same level of EPI. Yes, it will take a year or so for us to turn the wheels there. Optically it will look like the EPI is flat but a lot more profitable. That is point one as far as the direct. You'll notice that the unit link business has been curtailed quite significantly by 400 basis points. That too, in a way, their wings have been clipped. If they were allowed to do and pretty much sell whatever they can sell or want to sell perhaps that growth would have been more than what we ended up with. We are going through a bit of a change management in the direct channel. As far as agency is concerned, we remain extremely all the reasons that Suresh mentioned and also to add that if you look at term, post online channel, it is the highest in terms of the term share at trending anything between 11%, 12% odd. We do see a lot of potential for us to continue to do that. Also in some of the other emerging markets, you do find that agency channel is very well-placed to sell more and more of protection because of their deep and continued relationships at a family level. That gives us the leverage to, the more protection that they sell, it gives us the leverage to plow it back into the agency channel and starts becoming a self-fulfilling prophecy, if you like, of being able to fund their own growth. You know, agency grew on a fairly high base. Even though we had a fairly good growth last year, even then we managed to do a. You have to look at it from that perspective. In a COVID year, they've grown despite a very high base. Even on banca, for instance, while our growth primarily came from HDFC Bank, some of our new partners like Bandhan delivered very well for us. Now we have Yes Bank, we have SBI Cards, quite a few of these new partners who are looking at where we can see similar growth, which can come in in the following year. To that point and maybe the final point, if you look at a two-year CAGR of agency channel, it's been about 19%. A two-year CAGR of our bancassurance channel has been about 15%. One year, because of some COVID specifics of not being able to meet in person looks a little bit muted at about 6%. If you look at a slightly longer horizon of 24 months, they've done exceptionally well. Thank you. The next question is from the line of Ashok Frederick from B&K Securities. Please go ahead. Thanks for the opportunity. Sir, you have strengthened the mortality variance. Have you strengthened your base assumption itself and if you have done so, are you factoring in worse of impact in the general population of India because of COVID? Yeah. I'll take this question. We don't know what is the medium-term or long-term impact of COVID going to be. Just to be erring on the side of caution, we thought we'll take more of a shift in the trend level mortality as well, in addition to the one-off results that we talked about earlier. Just to get this right, probably if you are having better experience, you will reverse this base assumption in future, let's say two, three years down the line probably. Yes. If we get a better experience, we will reverse gradually. Yes. We don't know because there is something called long COVID and we don't know how the actual is going to pan out over the next two, three years. Yes, if it does turn out favorable, we will reverse these strengthening. Okay. Sir, you have increased the IRRs of Sanchay Plus and we are slightly above the comfortable range, probably 35% or below. Is 40% still comfortable for us on non-PAR plans? Sorry, IRR, can you repeat? Your voice was not very audible to me. During the quarter, we have seen the IRR of the return of Sanchay Plus products going up, and our mix also is pretty close to 40% on non-par side. Are we comfortable with the 40% mix or do we expect the mix to be reined in to 35% or 30% on non-par? I think the non-par was 30%, if I'm not wrong. I don't think it was 40%. It's 31% for the full year. Last year it was 40%. This year it's 30%. Hello? Yeah. Was I audible? Yes. I can hear you. Non-par sales will be just 31%, Rajeev, unless you're including annuities in it. The overall non-par. Annuity is a significant portion, right? That's about 5%, 6%. Non-par is just about 33%, 2%. That's the range we'll be targeting, right? We will be in that range, 32%-35%. 32, 35 is what we're comfortable with, and of course, it depends on how the environment is and customer preference, but broadly that range, yes. Got it, sir. Thank you for those answers. Thank you. The next question is from the line of Prayesh Jain from YES SECURITIES. Please go ahead. Yeah. Thank you for the opportunity. Just one question is on your VNB margin trajectory. Vibha, you mentioned that in your opening comments that you are expecting further improvement in margins to come. This would be driven by premium growth. Obviously, we'll be looking at premium growth. My question is more on profitability of individual segment. It seems like the protection margins are likely to improve from what we've seen in last year, mainly because of the fact that Q1 was a low margin quarter. Yeah, there could be some push from there, but what about other products? You had mentioned during the year about par profitability improving because of the larger in-house. What is your sense on what will drive the VNB margin expansion in the next years? We have a philosophy wherein every channel is company-level profitable in the long term, as well as, like Suresh alluded to agency channel being in fact more profitable, as well as every segment. It is a mix and combination of all of these, which help in giving that margin accretion. It is not just one factor like protection or non-par, but every. That's the point I wanted to make on the last call. If I were to understand your question, yes, par very much contributes towards the margin accretion and will continue to do that. Also judicious product mix at a channel and sub-channel also plays an important aspect. Product innovation hitting the market. There are so many products that we've been the originator of those products, whether it's a deferred annuity or whether it is in the non-par space wherein Sanchay Plus has almost become synonymous with the category. Now Sanchay Par Advantage. All of them do their bit in helping with the margin accretion. Thank you. The next question is from the line of Nawaz from Dalal & Broacha. Please go ahead. Nawaz from Dalal & Broacha, you may go ahead with the question. There seems to be no response, so we'll move to the next question. The next question is from the line of Nidhesh Jain from Investec. Please go ahead. Thanks for the opportunity. In the VNB boc, we see assumption change negative impact of 70 basis points. It is entirely because of mortality or are there any more other assumption change which has impacted this? Nidhesh, you want to? Only mortality. Yes. The expenses and persistency were both positive. We set up this INR 165 crores of COVID reserves and net of taxes already is also part of this assumptions change. Additionally, we also strengthened the mortality assumption also, which is to the tune of INR 120 crores. The negative items in the assumptions changes are only due to mortality. Sure. In our protection sales, what will be the share of our online channel and web aggregators respectively? How do we see the increasing influence of web aggregators specifically on the protection sales? On the second part of your question, web aggregators actually started off largely selling protection. Now, at least for us, we are diversifying very well and really the customers of web aggregators pretty much buy the entire suite of products. That is really the maturing of any channel. You will see on slide 18, this is of course combined online channel, but you will see how, say, non-par was zero in FY 2018 and then trended upwards from 18% last year to 29% in FY 2021. That is, like I said, the maturing of a channel and we're quite happy with that kind of an outcome. Niraj, do you want to give some of the split details? Yeah. Aggregators took around 4%-5% of our whole business. Like Roopa mentioned, the remaining within the aggregator space, after diversifications, about 35%-40% would be protection, the rest would be savings. That's a significant shift over the last few years. Also in terms of demography, the shift has been fairly significant. Tier 2, tier 3 contributes a fair bit of the business there, upwards of 50%. Apart from that, the online business would be people coming to our site directly, and also some of our traditional distribution partners having a full end-to-end online journey. That would be our overall business on online space. Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Hi. Thank you for taking my question. Just continuing on this online one, I recollect you put it under direct channel, right? That number was 50% of direct was online. Would that number be right? That's right. Yeah. Just looking at the growth then, direct has not grown. I remember you told the challenges around direct from an employee perspective first two quarters, but online should have ideally grown, right? A little surprising that that percentage has not increased vis-a-vis fiscal 2020. Yeah. Suresh spoke about the offline channel. On the online side, if you recollect in quarter one, that was really the only channel that grew online because of this whole lockdown situation, face-to-face not being possible. While we had the tools, we still had to get everything in place in terms of getting the customer ready to speak to us, and online was the only channel, really, which the customer kind of sought us out or working through the aggregators and some of the other distribution channels. As the time progressed, we saw that the face-to-face model started coming back. A hybrid model of distribution started coming back. Online by itself, if you look at the trends in Google Search, they started normalizing through the year because initially everything was driven by this whole fear psychosis and the need for protection, which we saw growth of 50% in quarter one, which started normalizing through the rest of the year. That coincided with that effect as well for online. If you were to look at relatively how within the online searches on Google, what has been the case with HDFC Life, it has been at the top of the charts in terms of what people are really searching for when looking at a specific brand. In terms of how things have panned along the way, it's been more a hybrid model using a combination of digital as well as face-to-face to give people comfort and confidence around some of these aspects of business. We also mentioned the change in mix, right? Initially, which was only protection a few years back, is now a combination of savings and protection. Within the two segments, there is a difference. Savings has definitely grown. It's just that protection, which is something that has slowed down in the second half of the year. Overall, that is basically the impact. Market share within aggregators, it's protected very similar to where we were same time last year. Thank you. We have one last question in queue. We take the last question from the line of Rishi Jhunjhunwala from IIFL. Please go ahead. Yeah, thanks for the opportunity. Just one question. You split out your online businesses. Just wanted to understand, can you break down how much of your business today you can do completely digitally and spread across distribution channels, given that the regulations and other things have been eased off in the past one year because of COVID in terms of eKYC? Secondly, in the online channel, why is it that we are either not able to or not selling PAR at all? Suresh, you want to take this? Yeah. Rishi, just to add, I think, look, if you were to leave aside the customer going for the medicals, the way we have invested in building our processes, we can do all our business digitally. Whether it's through the agency channel, whether it's through the broking channel, of course, all the online net banking, clearly. Ideally, we can do the end-to-end without actually meeting the customer in front. We spoke about Wise as a platform last time. Our entire application submission process, payment process, FMR submission, medical appointment set up, everything can be done digitally. Which is why if you see the online contribution overall through net banking of our bank partners as well as our own online website, it's significantly high and a lot of customers are now looking at. The way we always look at it is there's an assisted online and unassisted online. Unassisted online is still very small. Technically everything can be done digitally and I think we have invested fairly high on that. That is exactly what we are telling our teams even now to say that, "Look, you don't really need to go out and meet a customer." Yes, obviously there are some products where the customer would like to meet face-to-face. Follow all the safety protocols in week. As far as possible, you can actually sit and do this end-to-end from your branch or your home or wherever it is required. That's where we are in terms of the digital journey. In terms of PAR being sold through the online product, there are certain products which come in easier in terms of explanation, ease of conversion, as well as the customer adopting on certain sites. Our non-par product proposition on Sanchay Plus was very strong. The way we look at the entire online journey is customers who are able to decide end-to-end by themselves and are able to search and who have some assistance. Term was obviously the first primary product which can come in. Given that non-par proposition is quite strong and people are able to explain this product proposition, that has also got built up. Par, in some sense, will still take some time for customers to adopt to going online and figuring out because there are a lot more questions which they probably want to ask. As we go, one, with more digital tools, and second, when customers start buying the second par product. The first PAR product may be a face-to-face as they go and look at the product which they've already bought earlier, you will see a little bit of migration happening even on PAR products. Got it, just to wrap up, can you remind me once again about the reason for increase in sensitivity to interest rate? Thank you. Srini. The sensitivity increase is mainly due to the excess assets or the expected profits that will come when you write a policy. What happens is every policy has got an in-built profit loading in it. That profit, as you hedge all the liability cash flows, what you're left with that is unhedged is the profit cash flows. As the scale grows, that surplus or the excess assets which we have, which is not required to meet any liability cash flows, that excess assets keep growing. That is like a shareholder fund, if you like, which doesn't have a matching liability cash flow. This excess cash flow will be sensitive, and if you look at the sensitivity signs, it is actually counter to what you might expect. Say in non-par, particularly, the risk is actually interest rates falling. These excess assets are there without any matching liability cash flows, when interest rates go down, actually the EV goes up and vice versa when interest rates go up. It is really not a risk of interest rates falling, so it behaves more like any other fund which doesn't have a matching liability cash flow. That's why as the business grows in size, the excess assets also grow in size, and as a result, the sensitivity also will keep going up. I hope that answers the question. Yes. Thank you so much. Thank you very much. That was the last question in queue. I would now like to hand the conference back to Ms. Vibha Padalkar for closing comments. Thank you. The detailed disclosure on our results is available in our investor presentation. We would like to thank all of you for participating in our results call. Stay safe. Good evening. Thank you very much. On behalf of HDFC Life Insurance Company Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.