Ladies and gentlemen, good day, and welcome to the HDFC Life Insurance Company Limited 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 conference call, please signal an operator by pressing star ten zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Vibha Padalkar, MD and CEO of HDFC Life Insurance Company Limited. Thank you, and over to you, ma'amir Thank you, Zico. Good afternoon, everyone. Thank you for taking part in this conference call to discuss the business performance for 9 months ended December 31, 2023. Our results, which include the investor presentation, press release, and regulatory disclosures, have already been made available on both our website and the stock exchanges. Joining me are Suresh Badami, Deputy Managing Director, Niraj Shah, ED and CFO, Eswari Murugan, our appointed actuary, and Kunal Jain, representing investor relations. I will share key highlights into 9-month FY 2024 results and will be glad to take questions thereafter. Starting with operating performance, our individual WRP grew at 6% for the 9 months ended December 31, 2023. Private market share for the period 9 months FY 2024 stood at 15%, and we continued to be ranked among the top 3 life insurers across individual and group businesses. While quarter-on-quarter sequential individual APE growth was 8%, it has been lower than our initial expectations, largely due to a slower pace of recovery in ticket sizes above INR 5 lakhs. However, there is sustained positive traction across ticket sizes up to INR 5 lakhs. These cohorts continue to deliver well, clocking 3x overall company-level growth. Encouragingly, we are witnessing indications of a resurgence in the high-ticket segment, particularly in some of our recently introduced products. Additionally, we have noted a shift in asset allocation trends in favor of equity investments, influenced by the current buoyant market. We have also witnessed postponement in demand from specific cohorts due to the prevalence of high short-term interest rates. Nonetheless, we view these as temporary challenges and anticipate an uptick in growth as these macro trends gradually normalize. The number of policies sold continues to clock a healthy growth of 9%, outpacing private and overall industry. This aligns with our core objective of establishing a sustainable long-term business by broadening our customer reach. We have covered close to 5 crore lives across our individual and group businesses. Growth from tier two and three markets remains strong, witnessing 2x compounded growth. These markets contributed close to 65% of the overall top line. Average ticket size has remained stable despite the impact on high ticket size business. Our retail protection grew by 36% based on individual APE, and credit protect clocked 21% growth YoY. Overall, and retail sum assured registered growth of 38% and 54% respectively, with us continuing to be market leaders amongst private players in overall sum assured. Our private market share based on overall sum assured stood at 19% for nine months, FY 2024. Annuity and protection put together contributed to over 50% of new business premium in nine months, FY 2024. Towards the latter part of quarter three, FY 2024, we introduced Click 2 Achieve, a groundbreaking product in the non-par savings category, distinguished by several pioneering features. This innovative plan empowers customers to create unlimited combinations, tailor their cash flows to align with personal goals, with the cushion of a guaranteed return. The customer can also reduce the impact of inflation on income with increasing income options. It also provides the flexibility to grow survival benefits at a rate of 1.5% higher than savings bank deposits. The product has been received well across channels and garnered INR 100 crore within four weeks of its launch. This is our second 100 crore in a month blockbuster product to be launched this year. Product mix remained balanced, with non-savings and participating products at 28% each, ULIP at 32%, annuity and protection at 7% and 6% respectively, based on individual APE for nine months, FY 2024. Notably, the non-par mix saw 200 basis point increase sequentially, largely driven by the successful launch of Click 2 Achieve, reaching an exit run rate exceeding 30% in December. ULIPs have seen an increase on the back of thriving equity markets, including in the INR 2.5 lakh and above segment. Moving on to key financial and operating metrics. Despite shifts in our product mix and ongoing investments across channels, new business margin was sustained at 26.5% for nine months, FY 2024. This reflects our calibrated approach across multiple levers, including pricing, cost management, and underwriting, even amidst market disruptions. As indicated earlier, we have also been able to improve profitability across product segments. Value of new business increased by 5% year-on-year to INR 2,267 crore. Embedded value was at INR 45,173 crore as on December 31, 2023, with an operating return on embedded value of 16.5%. Profit after tax for nine months, FY 2024, was INR 1,157 crore. A year-on-year increase of 16%, supported by 18% growth in profit emergence from our back book. Solvency as on December 31, 2023, was 190%. Renewal collections continue to hold strong with a year-on-year growth of 15%. Next, on distribution. We registered a year-on-year growth of 17% across our bancassurance partners, while maintaining our counter share at HDFC Bank, benefiting from a strengthened group relationship. We are also happy to have extended our presence across bancassurance partners and expanded our personnel in their bank branches, while deepening collaboration via various initiatives, such as blockbuster products, bespoke training, and on-ground engagement. These efforts are dedicated to amplifying customer value and experience. We are glad to announce our new bancassurance partnerships with Karnataka Bank, Karur Vysya Bank, and NKGSB Cooperative Bank, and we are confident of growing with them over the next few years while offering their customers a range of innovative and customer-centric financial solutions. Our agency channel delivered growth in line with the company's performance. We added more than 50,000 agents in the channel during 9 months FY 2024, and we continue to build a robust proprietary franchise. Our strategy focuses on strengthening our distribution network by expanding branches, attracting relevant distributor profiles, and making consistent investments in technology and capability building. Among other highlights, we are pleased to announce the addition of Mr. Kaizad Bharucha, Deputy Managing Director of HDFC Bank, to our board. His expertise is a valuable addition, and we eagerly anticipate achieving significant milestones under his mentorship as a board member. Moving on to regulatory updates. As you are aware, IRDAI has published an exposure draft on insurance product regulations in December 2023. One of the key aspects in the draft is a proposal to address the concern on early surrender values in traditional products. The draft is currently under discussion, and the industry is in the process of sharing its feedback with the regulator. We believe that the product design should offer the best value proposition to the customer while encouraging long-term commitment to the product and without compromising growth for the sector. Further to the update on the GST show cause notice issued by Director General of GST Intelligence, DGGI, raising a demand in June 2023, the company has filed its detailed response on January 5, 2024, with the adjudicating authority. We are happy to announce our recent accomplishments, being honored with the prestigious Golden Peacock Award for Excellence in Corporate Governance in 2023, and achieving a Guinness World Records title through our 2023 Insure India initiative. This initiative was designed to heighten awareness about life insurance across the nation. In conclusion, as protection gap in our country continues to widen, we remain focused on offering solutions to tap into this vast opportunity. Growth in the INR 5 lakhs and below category, as well as in Tier two and three towns, remains robust, and these are our focus areas. Even for the growth potential of the above INR 5 lakh ticket sizes, we hold an optimistic outlook for the medium to long term. We expect to grow by leveraging multiple drivers, including strengthened counter share at HDFC Bank, capitalizing on ongoing investments such as branch expansion and new tie-ups, continuing to scale up a high-quality proprietary business led by agency and favorable macroeconomic shifts. The detailed disclosure on our results is available in our investor presentation. We now invite any questions from the audience. 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 answers 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 Suresh Ganapathy from Macquarie Research. Please go ahead. Yeah. Hi, Vibha. The first is on growth and margins itself, Vibha. I mean, my point here is, at the start of the year, you set a 15% guidance, and the actual outcome, unfortunately, has been well short of that, and so far, 9-month number has just been 5%. I mean, is this not getting... I know the smaller ticket size policies have done well, but the sheer, sheer contribution of the larger ticket size, you're confident that post we exit FY 2024 with the revised guidelines on surrender charges and stuff, we can get back to the mojo of getting 15% AP growth and perhaps VNB growth. What gives you the confidence there? Yeah, so a couple of things. And I'll come to the draft surrender related the draft circular. As far as on a standalone basis, I have no doubt in my mind about getting the mojo back, and that is very evident in a few things. One is, like I mentioned, below 5 lakhs is growing at, we've already grown by 17% and continuing to grow. That is number one. Number two is that you know they there's it's also a function of equity markets and unit links. We've always used a balanced product strategy, and so we will remain calibrated until some of that happens. It's you know it's bound to happen in the timeframe that you're talking about. A little bit of calibration in terms of exuberance and getting back to principles of more broader asset allocation. Another point is that, you know, in terms of the counter share at HDFC Bank also, because this year that counter share wasn't there for the full year, so you'll have a full year impact of counter share and slowly and steadily continuing to solidify and make inroads, you know, in the bank. A fourth point is all the onboarding of new relationships. Three I mentioned, there are some smaller ones that I haven't mentioned, but, you know, all of those will start kicking in, and wherever we have gone in with a new relationship, we have ended up with a counter share anything between 30%-40% over a span of the first 15 months or so. So that also will start happening given the strength of our product offering. And if you were to look at on the agency channel also, you'll see that, you know, there's 75 new branches that we are adding, so that also would, you know, start seeing that in, you know, in terms of, you know- No, but the problem, Vibha, is peers have done better than you, right? Which is pretty rare, I mean, for you guys not to outperform your peers. So this is the first time perhaps in the history where you're underperforming the peers by a wide margin. I mean, everybody is in the same boat and when it comes to all these challenges with respect to high product ticket sizes, right? I mean, so just to understand that, yeah, yeah. Yeah. Yeah, so Suresh, when you look at, since you're talking about peers, we are, we would like to point out that we have not dropped margins. So, if you versus peers, there has been a fairly significant margin drop. So if there's a margin drop, then selling more of unit linked as a percentage, perhaps more aggression on some of the products, is not very difficult. So we continue to, you know, to stay focused on triangulating all objectives, whether it is in terms of growth in term, whether it is in terms of growth in annuity, whether it's credit life, whether it is in so holistic renewal premium. If you look at assets under management, numbers are yet to be out, but we've grown 20% in terms of assets under management. So just the quality of business protection of the kind of business that has already come in and for us to continue with that. Number of policies also, if you look at, we are the market leaders in terms of retail number of policies, we've grown by 9%. So the reason I'm pointing all all of this is that is the holistic scorecard. It is not very difficult to just grow APE just for the sake of growing APE. I think it is you know the philosophy that I want to tick in every box because it's not just growth for this year. Growth for this year will hamper growth for next year. If I don't grow on number of policies, then it is going to hamper how much I'm able to mine next year. So sowing those seeds, you know, tier two and three, broad basing, that is important. Or even if you look at another metric, on agency channel, we are right up there on number of agents that we've added. 50,000 agents plus that we've added this year. So no letup at all in terms of number of agents that we are able to add and attract to that. So I think that is the kind of that is the reason why it gives confidence. Yes, this year, we've deconstructed in terms of the below INR 5 lakh and above INR 5 lakh, and I you know, we are quietly confident that you know, whether it's high single digits or 11%-12%, you know, that kind of I think will you know, the gap will get made up. So I think whether it's, you know, the remaining focus. Another aspect I want to mention, very, very important is the overall sum assured. That grew by 38%, and again, it's not just one quarter. Every quarter, we've been the market leaders on sum assured, and this is, I'm talking about overall, and if you look at retail sum assured, that has grown by about 50%. So, very, very strong in terms of retail sum assured. So all of that is making it possible for us to be neutral on margins, continue to give growth in value of new business and grow step by step. I think that core of our business ultimately is in protection. So while we will grow in savings, but we will calibrate all of these measures. The IRDAI regulations and what do you think on the non-par both from a growth standpoint, surrender standpoint, margin standpoint, behavior standpoint, can you just get... Because everybody is going to ask these questions. So for the benefit of the audience, can you just, yeah, yeah, yeah. Absolutely. So see, philosophically, we are completely aligned with the regulator that, where a customer wants his money down the line, thinks they bought the wrong product, how do we give some level of exit or, or protection of their capital? However, a few things here in terms of, you know, how do we get there? So philosophically, no disconnect, but the how part of it is what we are, we are engaging as a, as an industry with the regulator. We've had a few discussions as well, and we'll continue to do that. For example, the circular already has a few enablers, which currently we don't have. For example, we can have shorter tenured products. We can. There is some no GST on, on certain types of ticket sizes or sum assureds. Those sorts of things will anyway give us a somewhat of a ticker. How we do the cash flow matching on a longer tenured product? Can we have a discontinued policy fund kind of a avatar, which is already there in unit link, as a construct? So for example, in unit-linked products, if somebody were to surrender, then it goes and sits in the premium sits or the fund sits in the discontinued policy fund, and so you're discouraging just immediate churn, but at the same time, you're protecting someone's money. They don't want to pay or unable to pay future premiums, so you're protecting them. So it's those sorts of things, if they come through, then this will help mitigate, that is number one, and also is very much in line with what-... We are used to as a nation on longer-term products, for example, PPF. None of us worry about the fact that before seven years, we can't even get some element of it, you know? It's only after seven years there's a formula. We are all used to it. So these have different objectives rather than just giving liquidity. So we are right now, we're at a stage wherein we are explaining and engaging with the regulator. Not that they don't understand these things, but they're very receptive to hearing from us, and we'll see how and in what avatar finally it makes sense for the customer, manufacturer, intermediary, and the regulator. So that's where we are right now. But I do believe that even the product construct, I mean, I don't want to give away too many. There are at least five or six different ideas we have on product construct. One I will share, for example, can we have a differential kicker for someone who says, "I don't want liquidity, but I want that kicker on IRR," for example. So many such ideas are there, you know, and it's really the nuances of what the final shape or form will be, wherein there will be a business case to it. So, that's where we are, and will take some time for us as a sector also to deliberate. Okay, thanks, Vibha. Thank you. Thank you. Next question is from the line of Avinash Singh from Emkay Global. Please go ahead. Yeah, hi. Thanks for the opportunity. Couple of questions. First one, again, on the product and our strategies that we want to balance the slate. The question here is that, I mean, you know, that this is a sector heavily regulated, and regulation keeps evolving, and also the market, so is the market condition, I mean, be it your interest rates or equities. Should not, in that backdrop, it be sort of, the ability of the company franchise to offer what the market, is demanding, and customers are demanding, or what sort of, you know, a distributor can distribute, rather than having... Because, I mean, some way by just sticking to a certain product, mix strategy, isn't, I mean, aren't you sacrificing the growth opportunity? I mean, of course, you have already explained a lot on this regulation, but if regulations were to come hard on a certain product, then you will have to sort of move on from that product. So why, I mean, why not have a strategy that's sort of agnostic to the products and ability to sort of distribute the products widely? So that's one. Second, looking at, you know, the agency part, any particular reason why sort of there have been a reasonable amount of churn in this quarter on agency? Is it some sort of a cleanup to our unproductive agent or something specific? Thanks. Yeah. Hi, Avinash. On your first question, see, every business model, any company, even an FMCG, you will have differing margins, differing customer segments, differing interests on, differing objectives. And the same happens here. So these products are certainly not fungible, and we have to do a need-based analysis. Somebody might want zero exposure to volatility, somebody might want all the upside, somebody will want a lot more of, protection, someone will want to have vapor-thin protection, some will want to have more health, and we have combination products. So many, many such avatars, and that's why it's only through engagement and, finding out what it is the customer wants. And then, of course, margins also, within that as to how much can we afford to sell. But it's both ways, and that's why we will continue to be nuanced. I think the fact that we have a balanced product mix, even when the going is good, has stood us in good stead time and again. For example, when we launched Sanchay Plus five years ago, it took a long time to be even understood, and now it is ubiquitous. But even at that time, when we were the whole company selling products like Sanchay Plus, we said we will have, you know, certain levels of limitations in terms of how much of this we want to sell, unless, of course, the customer really wants it, right? So, the reason for that is exactly this, that it helps cushion over volatility, it helps wean away our frontline sales from only selling one type of product, and then when the plug is pulled because of something or the other, it could even be, you know, like COVID, not just regulatory or macro, then you kind of struggle to make a switch. And so our line is very, very attuned, and there's compulsory training in terms of being able to sell all types of products and genuinely being able to sell, not just a training that they go through. And so we don't really worry too much about it. I think we do innovate. So depending on the regulations that are now in existence, we will—there will always be an opportunity. There might—it might take a little bit of time for us to conceptualize and manufacture the product, but eventually, we do with whatever cards are given to us and whatever it is, as a framework, we are allowed to. So we have fair bit of confidence on ideating to be able to do that. And the nuances are always in the details, nuances are always in levels of innovation, and we will continue to do that. So just how I explained on you know, the surrender regulations, there could be something else that happens on non-par, wherein we might have an advantage. Of course, that also comes under these regulations. Something on UL, for example, the profitability on our unit-linked products, again, without, you know, getting into too much detail, that has increased quite meaningfully from what it was used to be maybe 2, 3 years ago, which means that at 30+% unit link where we are in just in standalone quarter three, we don't excessively worry about it. And that kind of answers your question, that this is exactly what we are trying to solve, that in the existing construct, how is it that it still makes business sense for us to be able to sell all kinds of products? Right. So, that was your first question. I don't remember what your second question was. Sorry, I don't know. Do you want to just mention it again, Avinash? Yes. Okay. The second question was around churning agents, because, I mean, of course, you are focusing on agents, but if I just see the count, there has been a big drop from Q2 to Q3 in terms of your individual agents. So is this some sort of a planned cleaning up of non-productive agents, or, like, what is do we read? Because, recall, by H1, you had 210,000 odd agents, and now again, the number is back to 190 or somewhere around that range. Hi. This is Suresh here. Just, just to quickly brief you, you know, as part of our stated agency strategy, even though already there is a minimum business that we are expecting all our financial consultant partners to be able to deliver, and they are supposed to be active. Now, the industry does see a fair number of additions on the number of financial consultants, as well as some financial consultants who kind of attrite from this line of business. So what we have tried to do over the last few years is kind of ensure that the mix, even within the type of financial consultants that we onboard, whether it's chartered accountants, whether it's mutual fund distributors, whether it's retired, you know, personnel, whether it's housewives who have wanting to do this as a career option, we try to kind of give a score and add people onto our number of financial consultants. And as and how we find people going on to alternate careers or not meeting the kind of requirements that we have in terms of quality of business, we keep in. It's not really churn, but effectively they don't fit into our business model, and they don't hit our, you know, minimum business numbers. So that's the way we have been kind of looking at it. And of course, it's a question of, you know, how many new agents do we have any catchment? So there's a fairly detailed strategy in terms of micro markets. Where do you want additional financial consultants, consultants? Which tier two, tier three markets we are coming into? Where do we add those set of financial consultants? So finally, the objective is to make sure that, look, there are people who are keen on this as career, stay active with us, be able to sell the right product mix, have a productivity which is good enough for us to be profitable, make sure that at every club or till the MDRT, COT, TOT, we have a career line of path for our agents. I think that's the way we've been looking at building this channel, and which is one of the reasons why, you know, you have one of the best-in-class persistencies. You have probably a fairly strong relationship. We have financial consultant partners who've been there as high vintage for us. And we do believe that given as we expand to larger markets, this number will keep increasing on a steady state basis. So yeah, some will go up, some will go down, but that's probably true, as long as we are able to attract the right profile of financial consultants. Okay, thanks. One quick follow-up. On the group protection side, of course, sequentially, there is some bit of softness. Is it more to do with credit, credit life or GTI? It is to do with credit life. Only I'm saying that because of the size. GTI is a lot smaller than my credit life is. GTI, as you know, that we are very calibrated in terms of opportunities that we see. There also has been a price normalization post-COVID, and we continue to see on a case-to-case basis whether it is rightly priced or not. As far as credit life is concerned, some of the RBI-led announcements have... We see a little bit of slowdown in disbursement, especially in some of the segments like auto and PL, and so on. So while our attachment rates have not gone down, overall, the disbursement itself has been a little bit soft. Not hugely. We still have grown over 20%, but yes, versus some of the earlier quarters, a little bit of that. That's the only big ticket reason. Okay, clear. Thank you. Sure. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one or two per participant. Should you have a follow-up question, we would request you to rejoin the queue. Thank you. Our next question is from the line of Sanket h Godha from Avendus Spark. Please go ahead. Yeah. Thank you for the opportunity. I just wanted to understand the current our market share in HDFC Bank, point number one. And second, if definitely it has improved compared to the last year, market share gain in HDFC Bank should has not resulted in banca channel to do well. Maybe I can understand the direct channel or broker channel or even agency channel, where high ticket size is an issue, where growth has not happened. But the banca channel, despite market share, the growth seems to be muted around 2% for third quarter, at least. So just wanted to understand whether this short-term thing, what you said, the people are preferring more short-term products rather than the insurance long-term product is driving that moderation? Is the thing which I wanted to understand a little bit from you. And second thing, Let me just answer this before you get, because I'll forget what your second question was. Okay. On this one, actually, I don't know where you're getting the numbers from, because overall, our banca channel, like I mentioned, grew 17%. So growth has been very robust in our banca channel. Just when I say very robust, just given some of the changes on the 5 lakh situation. Vibha, I was referring to third quarter, specifically for third quarter. 9 months, I understand it is 16, 17%. For third quarter, it seems to be weak. So that's the reason I was asking. ... So, third quarter was largely because of base effect. If you look on a 2-year CAGR basis, our bancassurance grew very well. The reason is, if you see, not just HDFC Bank, but all our other bank relationships also where had fructified last year. So whether it is Yes Bank or IDFC FIRST or Bandhan, you know, and RBL, Saraswat, all of that did very well, and so the some of the base effect that was coming in. On a normalized basis, that's not the case. Also, up to INR 5 lakhs continued to grow almost close to 20%, even in quarter three. So again, for this year, you'll have to pardon my just, you know, again and again saying up to INR 5 lakhs and above INR 5 lakhs, because quite expectedly the trends are very different. And so it is noteworthy that NOPs have grown by double digits in banca and it is grown by close to 20% up to INR 5 lakhs. Yeah, I understand that point, Vibha, but my point was that I thought that this will be more than compensated by the market share gain in HDFC Bank. So, I mean, but I believe we have definitely gained market- I talked about the market share. Yeah, the market share has continued to be in the mid-sixties, as again, mid-fifties that you saw earlier. So in that sense, that has happened, and year-on-year also that has grown. Okay. Right? So the slow growth is only attributable to above INR 5 lakhs. See, the above INR 5 lakhs, like you said, is enough to compensate in the market share gains. That is not the case because the amount of the INR 5 lakhs was tapered in the first 2 quarters and then continued to move upwards towards quarter three, and then, of course, quarter four, we know what happened, right? So, so that impact is coming through. Suresh, you want to add anything? Yeah. So, you know, look, I mean, quarter-on-quarter basis, obviously, the banks also have their own focus on the CASA as well as on the other side of business. So while most of our banca partners have grown in line with the overall private bank growth, including HDFC Bank, it also, while we have consolidated our market share, there are these quarters up and down, which will keep happening. And, you know, in some sense, we have managed to maintain our market share, grown it over last year. We've grown the number of NOPs, which was more critical. The greater than 5 lakhs is what has probably pulled us down a little bit across some of the banca partners, because many of them have their wealth verticals, which have got affected. But broadly, the trending in the direction in terms of how, one, the banca infrastructure is growing and expanding, two, our presence across all these banca partners, and, and three, of course, the fact that look, we are gaining ground in terms of market share at HDFC Bank and some of our new partners and additional new partners, I think that stays constant. To add there, the earlier comment, so one of the earlier callers wherein I talked about product mix and how we are looking at unit-linked products, that impacts bancassurance even more, you know, because banca does have 50%-60% unit-linked products. So if you were to look at our share excluding unit-linked products, that is in the 70s. If I just were to look at that, on a as a bifurcation, and so we will choose in terms of which segments, how much we want to want to be present. Okay. When some of this market exuberance goes down and our Counter Share continues to inch up, you will see, you will be able to see the overall growth. Right now, we are able to see growth in the segments that we, that make sense to us. Got it, Vibha. And the second question, which I wanted to check was that, when I look at our VNB work, it says that, 70 basis points improved because of the product mix, and 80 because of... It was negated by 80 basis points because of the higher cost. So given if I look optically, the product mix actually deteriorated, because your non-par contribution and par contribution has come down and unit has gone up. But you still say that, from the VNB point of view, 70 basis points led to the improvement in the margin. So is it completely led by protection or there is some other strategy, like in Unit, you attach higher sum assured that played a role, to see a margin expansion at the product level? And, second thing related to it, when do you think this cost-related thing will iron out? Because, is it more to do with your cost on technology, what you highlighted last year, or is it because of negative operating leverage, which is happening because of muted growth now? So, Sanketh, actually, you answered all the questions yourself. But, you know, starting with on the product side, it's margin delivery across all product segments has improved for two reasons. On unit-linked, like you yourself said, the amount of protection cover attached to unit-linked products has gone up significantly, both in terms of base sum assured as well as in terms of riders. Mm-hmm. Second, in terms of our persistency has also improved over the period of time across various channels, so that has led to better profitability compared to what it was in the same period last year on unit-linked products. Second, on the non-unit linked products, our pricing discipline approach is something that does help us in periods where there is a lot of aggression in the market. We try and balance our growth and profitability objectives. So that is something that has helped us maintain and improve some of our profitability in the non-unit linked segment as well. As far as protection is concerned, yes, you're right. So protection has grown both individual as well as credit life, so that continues to add to the value that that we that we make. And, the sum assured growth is an indicator of that as well. As far as cost is concerned, again, if you look at our overall expense ratio has been at the same level of last year, about 19.4%-19.5%.... And, the reason for this gap is largely because of, again, what you said, the operating leverage is negative right now because our planned growth is 15%-17% in terms of what we capacitated for, but our delivery is short of that. So that definitely is a function of the operating leverage, which should rebalance once our actual growth is in line with what we are capacitated for. Just to add to that, if you look at our new business sum assured for the quarter on retail itself, it's grown by 44%. So to some extent, what you had alluded to is absolutely right, that focus on protection at a sensible pricing. It's not just growing protection for the sake and having a price war on protection, but, you know, a sensible pricing on protection and continuing to grow that, is very evident in the sum assured—retail sum assured growth as well. And that has helped mitigate some of. So that's why you have a net positive in terms of product mix profile. Got it. Maybe just one small thing I want to screen. In digital protection, if I see on quarter-on-quarter basis, if I look at the second quarter, you probably did INR 150 crore. The numbers suggest that you did around INR 135-136 crore in third quarter. So, anything to read that the low base has already played out in first half, and now you will see a normalization of the growth path in the protection business? Is the right way to read it through the numbers or something else? Yes, directionally, yes, Sanketh. We did say that, the base effect will be a lot more pronounced in H1, and will get normalized over H2. It is what is happening. So we still believe 20-25% growth is possible on a normalized base, and we're heading in that direction. However, in terms of absolutes, I would not read too much in terms of a reduction. You know, it might be a little bit here and there. We also react to competitive intensity, wherein it is wiser to withdraw rather than, drive close to loss-making business or, you know, margins that don't make sense or give up on underwriting. So a little bit of calibration you'll always find, but secular growth quarter on quarter should continue to, be our target. But growth will also depend on what happened last year, and we, we have said that if, if-- we should end protection growth over the next three years higher than company-level growth. Will it be in the 50% range? Not if we want it to price it sensibly, but it's, it should very comfortably beat company-level growth. Got it. Perfect. That's it from my side. Thank you. Thank you. Thank you. Our next question is from the line Shreya Shivani from CLSA. Please go ahead. Hi, thank you, and congratulations on a good set of numbers. I have two questions. First is on the, you put a slide on Bharat geographies, tier three, four cities. Can you- Shreya, maybe question to use your answer. Please, the audio is slightly muffled. Is this better? Hello? Yes, ma'am. Hello. Please, go ahead. Yeah. So, I have two questions. First is on the Bharat sli- the slide on, tier three, four cities. Can you help us understand which channels do you think will help you grow better in those geographies, whether it's the agency channel, whether it's the banca or a combination of both? And also one question, as you expand into deeper geographies, what is the timeline that you think of when you will be able to deliver higher than industry growth now that you are pivoting your business model away into driving it in more into the smaller cities? Second is on the timeline for regulation. While we've discussed—you've mentioned a few things about the regulation, can you help us understand, is there any indicative timeline that you can give us that maybe it'll get implemented in the next quarter, half year or anything, any flavor around that would be useful? Thank you. So Shreya, Suresh here. I'll answer your first question on the tier two, tier three growth. Frankly, if you ask, we are looking at taking insurance across to tier two, tier three, across as many platforms, as many partnerships as possible. And, you know, I mean, even if you start with, let's say, bancassurance, if you look at primarily with HDFC Bank, they're expanding into all these rural markets, the semi-urban and rural markets, they're expanding by more than 1,000 branches last year. Right, you look at most of our other banca partners who are there, are also expanding in. We have partnerships with many of these small finance banks and many other banks which are present in specific markets, whether you take the, you know, Ujjivan, Equitas, Utkarsh, Bandhan, IDFC, many of them are expanding. So clearly, bancassurance is going to be one of the platforms through which we expand. Agency clearly is a channel which we believe we should be able to expand, where we are adding 75 new branches. We are looking at seeing how we can appoint, agents, you know, in some of these newer, models in terms of many of these upcountry locations, where we should be able to take it into... This is the first time that you would have seen that as an industry, we have kind of created an agency structure which is looking at tier one and tier two, three markets. So our entire team has a dedicated vertical, which is looking at tier two and tier three markets. It is not to say, firstly, I would also correct that we are not saying we're pivoting to tier two, tier three. I think we see the opportunity even in tier one. So we will come out with both the products as well as the strategy on the tier one markets. There's no reason why we look at lesser productivity through banca in tier one. We are looking at micro markets even within, the tier one markets, and that is something that we're doing. It's just that we see that in tier two, tier three, we also have a significant brand advantage when it comes to, customers looking at HDFC, which is a fairly well-known, thing. Other than LIC and SBI, which typically have been there in these markets, HDFC Life clearly stands out in terms of awareness and consideration, and we believe we have the opportunity to go out there and grow. So now the question is, how quickly we'll be able to take and ramp this up? I see the banca presence. Clearly we can expand fast, but with these, our bank branches as well as—you know, our agents going into these markets anywhere between 12-18 months, we should start seeing numbers expand. The third thing which I would also like to add is that, look, we do believe that through some ecosystem partners, you know, we should be able to take a very different kind of product range to market. So if you remember earlier, we had looked at the Airtel tie-up, where we were able to reach out to a combi product. We were able to reach out to many of these markets. I think those opportunities will also come. So we'll not let go of any of these opportunities to reach into these new markets. Thank you. That's very useful. On the timeline of the regulation, please? So Shreya, slightly difficult to answer that, but, you know, the exposure draft is out. It's for, we are in the process of submitting our, representation as a sector and some companies individually as well. And then we are very, you know, hopeful and confident that we will have a chance of meaningful deliberation over the next, few quarters. And I think depending on when the regulator is thinking of, making this, applicable prospectively, I think, it's a function of how soon some of these engagements happen. But it's, it's really up to, you know, the regulator to, you know, decide on this. But we do believe that, the engagement is something that will happen. And also there will be, we do hope that there will be, you know, some time available for making whatever transition that's required. And in light of our earlier conversation, I think there is no disconnect at all. We are all aligned in terms of, you know, protecting the long-term proposition as well as, providing better value to early exit customers. So it's some technicalities that need to, you know, be discussed and deliberated upon. Once that is done, then I think we are good to go. But, timelines, we don't really have visibility on that. Sure. So you mean that even if the regulation comes into place, if you have to change your product structure, et cetera, it will take some time to launch those new products as well, right? So it can be a little... If this thing could actually play out over a couple of quarters in that case, right? See, again, it depends on which shape and form the final draft final regulations come in. I mean, just taking extreme scenarios, if it comes in the existing form, it will take a significant amount of product redesign, which will require some more amount of time for that. If there are some tweaks that need to be made, which aligns with the regulator and, you know, the industry objective, then it might be sooner. So it really depends on which form the final regulations actually come into effect. Yeah. Okay. Okay, great. Thank you. This was very useful. Thank you. Thank you. Our next question is from the line of Supratim Datta from Ambit Capital. Please go ahead. Thanks for the opportunity. So the first question that I would like to pose is on the EOM guidelines changed. So over the last two quarters, we have heard that, you know, the commission rates have been, you know, changed across different channels. So just wanted to know, what is the current status with, you know, this? Has the negotiation with all the channel partners come to a close, or is this something which could, you know, continue for the next two or three quarters? Yeah, I- That's the first question from me for second. I'll take that. I'll take that. So, yeah, more or less, we are past the EOM conversations. We are coming almost towards the end of the year. And, you know, we look at it holistically with our partners, that it needs to be that it makes sense to the customer, it makes sense to the manufacturer as well as the partner. And those conversations have been had. I'm very happy to share that there's been no, there's been no detrimental impact on the customer, and the partners also do understand that, ultimately they're their customers, and it is important to be both fair, transparent, equitable to their customers as well. So that's really where we are right now, and, don't really see any material impact, as it rolls out. We're just thankful to the regulator to have given us the flexibility, to be able to see what kind of arrangement, what kind of contractual nuances that we can tweak, with this flexibility, as long as overall, akin to a TER, we have to stay within the EOM ratio. Understood. Understood. And, coming back to a previous comment that you made, that, you know, the ticket sizes below INR 5 lakh have been growing at 3x the company level, which basically means 15%. And given you have previously indicated that, you know, above 5 lakh ticket size policies are around 11%-12%, that would mean that the above ticket size policies, you know, 5 lakh and above policies this year has contracted by around two-thirds compared to last year for the first 9 months. Is that the correct implication or, you know? So the above five ticket size business, last year, I think our overall total AP, what we mentioned after the budget was around 12%. It's now around 6% of our total AP. So it's about, I mean, its proportion is now 6% of our total business, total AP, compared to 12% last year. Got it. Got it. Okay, sir. That's very helpful. Thank you. Thank you. Our next question is from the line of M.W. Kim from JP Morgan. Please go ahead. Yeah. Thank you for taking my question. So, I have one question. I guess that's about the embedded value growth outlook. For last 9 months, 2024, the unwind from the value in force is larger than new business value creation. So then my question is, should we concern the potential slowdown on the EV growth in next 12 or the 24 months? ... So MW, I think, basically the two large components that will affect this are the unwind, which is upwards of 8%. And what has got impacted is definitely the VNB contribution. And the VNB contribution, given that we've held our margins, is largely a function of APE growth. This year, we definitely are at a lower level of APE growth than our capacity. So that is what is dragging down the embedded value operating profit. And at 15.5%, it's fairly close to where we were last year. The delta being a function of two things. One is the VNB contribution is lower to the extent of about 50 basis points, and the remaining 50 basis points is actually coming from the denominator effect. We had a preferential capital raised in the pre-previous period. That has expanded the denominator, and that is giving another 50 basis points kind of gap. So by the end of the year, we are expecting to be in the range of what we have been talking about in the 17%+ range, and that's what we would aim to deliver in the coming years as well. Once the VNB contribution stabilizes to the numbers that we've seen in the past. Oh, yeah, that's very clear. Thank you. Just one thing, but it's not really the question, but, the -- my, my understanding is that the regulator, the draft, looks too conservative in terms of the, the surrender by the, the related one. So the, the one... My, my guess is that the, now, the India, perhaps the, the, may have the, the highest surrender value, among the, the Asia countries if the, the initial draft, were to be accepted. So just to... I'm, I'm wondering whether, do you expect any certain portion of the, of adjustment compared to the initial draft on this surrender value, the related regulation? Or you think that the, the, due to the very high customer protection, this largely makes sense, based on the, the industry, the perspective. I just want to get some sense about this. So MW, I think, in all fairness, right now, we have, we are still in the process of engaging with the regulators. We do understand their broad thought process in terms of protecting the interest of the customer, and we are all aligned to that objective, as we discussed on the call. The regulator, of course, is aware of similar long-term products available both globally as well as in India, and the kind of trade-offs that an investor or a customer needs to make between guarantees and liquidity. So I think, given that the overall of- Ladies and gentlemen, please stay connected while we reconnect the management. Thank you. Ladies and gentlemen, we have the management line reconnected. You can go ahead, sir. Yeah. So basically, just, taking off from where we got disconnected, is that the regulator is aware of the landscape in terms of long-term products, which have a guarantee attached to them. But we've not had a chance to formally interact with them as a sector or as a company. So we look forward to doing that, MW, and we do believe that some of the technical aspects of product design is something we'll be able to impress upon and without diluting the ultimate objective of customer interest. And we believe that is possible to achieve with some, you know, some tweaks in what the exposure draft is suggesting at this point in time. But I think we'll be able to, you know, we'll be able to give more clarity only after some of these interactions that hopefully will happen over the next few weeks. Thank you so much. It's very clear. Thank you. Ladies and gentlemen, please stay connected while we reconnect the management. Ladies and gentlemen, we have the management line reconnected. Our next question is from the line of Madhukar Ladha from Nuvama Wealth. Please go ahead. ... Hi, thank you for taking my question. Actually, most of my questions have been answered, but just a clarification. On the above INR 5 lakh ticket size policies, what has been the decline in the 9 months period? Can you give us that number? Second, when you say 12% of your individual AP is from the INR 5 lakh and above segment, which was last year, this does not include the additional INR 1,000 crore, right? I just wanted to clarify that once more. And- I'm just coming here so that before you ask for the question on the fifth. So as- Yeah. Ticket sizes above INR 5 lakhs, I don't have the number handy right now, but I'll just give you an indication. Different channels reacted differently. For example, our wealth channels, obviously, there was a much more adverse reaction, but the overall size of the, or contribution of our wealth channels is lower. Lesser, if I were to look at, say, an HDFC Bank channel or any of our, you know, bank insurance partners, that reversal is beginning to be seen now. And like I mentioned earlier, with the launch of our latest new product, Click 2 Achieve, we are, we are beginning to attract higher ticket sizes also. And we're again, after a hiatus, beginning to have conversations such as higher levels of underwriting and so on. So varies quite a bit. Agency is somewhere in the middle of maybe double-digit negative growth on the INR 5 lakh and above. So really varies. Again, INR 5 lakh and above is more amenable to something like a pension, because some nuances on tax and other things and also limited underwriting. So mixed bag, really. Right. Okay, and, and the clarification on the full year number, the 12% does not include the INR 1,000 crore additional sales, right? No, it does not. Yeah. See, what we did not do, perhaps, is that while we only backed out INR 1,000 crore, it is not that above INR 5 lakh was sold only in March. It was sold, and it was picking up pace towards the beginning of quarter three, and that's really what is playing out. So, so quarter two was bigger than quarter one, quarter three was bigger than... and so on. Sequentially, it was, and also given where interest rates were then. Right. This was doing exceedingly well for us and for the sector. That's really what there's a seasonality of play also that we're seeing here. That's why, as we exit this year, some of that rebasing will start happening of more normalized levels of ticket sizes. Got it. Understood. Then, just in the light of how things have played out, you know, this year, in nine months, any sort of... I don't know whether you have changed your guidance. Like, have you spoken about that earlier in the call? I'm sorry I missed a little bit of it, but, but what's-- Do we still sort of gun for 15% growth excluding the thousand, or do you... It seems to me that most likely we will miss that number. No, I think we're gunning for a double-digit growth in quarter four. Okay. Okay, that's the- Excluding the INR 1,000 crore. Excluding INR 1,000 crore. Yeah. For the individual AP, we should look for a double-digit growth. That's right. Yeah. Yeah. While we don't really... It's not our active guidance, but what is it that we are gunning for? You know, double-digit growth. Understood. Understood. And finally, on the group savings side, I see that, you know, there is some reduction in business. I think group protection side, you already explained, but what's happening on the group annuity and the other group savings business? So we had a one-off last year. Suresh, you want to... Without, you know, we're not giving further details and so on, but there was a one-off large account last year, so it's more a base effect. Yeah. So, of course, there has been a little bit of slowdown in some corporates, but otherwise we... And it's not that we've lost market share in any of this as a segment. Second, we had a little bit of a base effect of what we had gained previous year, which has led to this little bit of a degrowth. Right. Is it possible to- We are in a strong footing with- And you know, to be fair also, there is a lot of competition coming in in this segment, given the overall rates and margins in this segment. So, you know, it's a combination of all three, but we are confident that we should be able to get back our growth with you know all factors playing in. Got it. Got it. Understood. And can you quantify the one-off effect, if, if that is possible? No, this is- There'll always be some pluses and minuses, but, you know, it was, you know, fairly one-off in the sense that there was some corporate that we signed up and then, the employees' account moved to us. So that's what happened. Understood. Got it. Thank you for the opportunity, and all the best. Thank you. Thank you. Our next question is from the line of Anirudh Shetty from Solidarity Advisors Private Limited. Please go ahead with your question. Yeah. Hi. Thank you for the opportunity. I'll take my question one at a time. So my first question is essentially on the, you know, the draft document around surrender charges. I know it's at early stages of discussion, and, you know, there is a range of outcomes that can happen, but assuming a more extreme outcome happening in terms of the capping of charges, how does one think what implications for us, you know? You know, and could you talk a little bit more about our non-par product in terms of, you know, what would the persistency that we kind of see in this product and, you know, how much of the margin could get impacted as, you know, we see a more extreme capping of charges in this product segment? So it's, like you actually said, it's very early stages and, very difficult to, you know, make a guess here. But, I mean, just philosophically, we can talk about two things in terms of design. One is in terms of, what will still enable, creating a product which, is similar to what we see today in terms of a long-term guarantee. That will have a certain set of, things to be dealt with. And second is in terms of, what you mentioned in terms of, cap on charges equivalent. That will probably have a different implication in terms of, profitability or distribution remuneration. So these are two separate aspects. We are more concerned about the first one. The second one can be dealt with, you know, a lot more seamlessly because they are more controllable. One thing that none of us would want is compromise on being able to design a long-term proposition that we are able to design today, and that's what will be the focus of our discussions and engagement with the regulator. Okay. Then next question is, you know, our non-par product is fairly unique in its ability to kind of give our customers the ability to lock in a yield, a certain yield for a long period of time. Do you see this unique value proposition getting diluted if, say, you know, customers could buy, you know, long-term G-sec, say, directly from on a trading platform? So, you know, this, this is possible even today. Well, I mean, it may not be very seamless, but it is still available today. And, you know, the same argument holds for, let's say, even an annuity product to some extent, if someone wants to, you know, buy a long-term government paper. But, you know, having that stream of premiums that you pay at one contract, say, 5 premiums or 8 premiums or 10 premiums, and then get a stream of income constructed in one solution that, you know, may not be very feasible for an average customer. So, you know, the conversation is very different from, you know, an ultra HNI who has access to a lot of, wealth management, advice and ability to structure solutions which are very, bespoke to him or her. But for our average customer who we target, anywhere between, you know, from a sector perspective, INR 15,000 to maybe INR 75,000, INR 100,000 kind of a ticket size, we suspect that kind of advice is not really available to such an average, you know, investment. So from that perspective, I think, it's good to kind of have, you know, solution, which is addressing all of those things without having to do too much engineering at, you know, one's personal level. A regular premium product is different from a single premium product, as you know, in terms of the biggest aspect of reinvestment risk. So that is an additional aspect to really consider. I mean, so a lot of these things really come into play, and we believe that the regulator will be, you know, thinking more of an average customer who is still kind of in that form of protecting and then, you know, creating some sort of wealth for themselves and their family and their post-retirement period. So a large part of our population at least will not have access to a lot of that bespoke advice that will be required to, you know, do some of the things that we spoke about. Got it. And just one final question. You know, more on, you know, when we look at your product level persistency, you know, protection, the 13th month is 72%, for savings it's 56%, ULIP 49%. We look at persistency as a metric to understand the customer, you know, satisfaction in the product. So what explains why it's so, you know, savings ULIP is, you know, lower persistency product for us? Two, two things. I mean, and, and, you know, unit link is, yeah, needs to be seen differently from some of the other products. Unit link, I think, what happens typically is that, there is this notion that after five years, I mean, I can withdraw my money. Of course, you can withdraw money as a customer, but, I mean, does it do you full service being a product for, five years? We do not believe so. So, when you're saying 50, 50-odd% of the people continue, it's a combination of two sets of people. One set of people are actually continuing in the policy but are not paying any further premiums. That is also part of that number, and that's a fairly meaningful part of that number, which is, you know, a fair call that I paid 5 premiums, I will stay in your product for 15 or 20 years, but I will not pay any further premiums. We're okay with that because that's the choice that the customer is making, and it's probably, you know, will meet his or her requirements. Then there is a set of customers who are just exiting from the product completely. Now, that is the choice that we would question, you know, in terms of whether it's in the interest of the customer. It's certainly not in our interest, no question about it, but we don't believe it's in the interest of the customer as well. But I think as awareness levels increase, more and more customers will make more informed choices. If they're looking for a shorter time horizon, then so this is not the place to go. And that is something that we are very clear in terms of making our conversations with customers when we are engaging with them at the point of sale. The other products, you will see a fairly strong improvement in subsequent period persistency. And that, again, we need to kind of, you know, break it up into two parts. There are products in which customers, after paying 2 or even 3, or 2 or 3 premiums, can continue being in the product and get proportionate benefit. They do not really lose out in terms of, you know, what happens to in case of someone who stops after paying 1 or 2 premiums in today's context. So a large part of our customers is what is called paid-up. They get proportionate benefit because they choose to pay part of the premiums that they contracted for initially, and then they stay in the full course of the policy and get the proportionate benefits. So that's again a choice similar to someone who has stopped paying premiums in unit-linked, and it's probably an informed choice by some of them. Very, very few number of customers, after paying two or three premiums, actually surrender and exit the policy. That number is, you know, in our case, at least, about not more than 1% every year after the first couple of years. Got it. Thank you for a very elaborate answer. I appreciate it. Thank you. Ladies and gentlemen, in the interest of time and fairness to all participants, may we request participants to limit to one question per participant. Should you have a follow-up question, we would request you to rejoin the queue. Thank you. Our next question is from the line of Neeraj Toshniwal from UBS India. Please go ahead. Yeah, hi. So just wanted to check as a- Sorry to interrupt, Mr. Neeraj. May we request you to use your handset, sir, you're not audible, sir. Is it better now? Yes, sir. Please go ahead. So, wanted to check on the, are you still maintaining margin neutrality, given you just mentioned that probably will deliver double-digit kind of growth in Q4 under the APE, but that would be a little, you know, on the margin side could be a little tautness. So wanted to check, are you still maintaining that? Yes, we are. 3, 3 quarters we have done that, so 1 more quarter to go. Yes, that's what we're saying. Okay. And, given this year, obviously had a lot of volatility in terms of the base effect and changes in budget regulations, how do we think about the next year and the wallet share from HDFC Bank, which it still looks a little muted as the bank has been because the bank has more focus on the deposits and all. So how do we see bank growth per se, even if and on the elevated wallet share? No, so look, I think directionally, like we said earlier, the bank is looking at a market share, which will be growing for HDFC Life. Obviously, we have to ensure that our support to the bank, whether it's in terms of products or training or manpower, is adequate, and I think that expectation is right. The bank obviously is going through the next round of merger, you know, at their level. So, given what's happening in the market on the liability side, trust internal, in the long run, obviously, they will continue to focus on ensuring that their customers also have life insurance. So we don't see any reason why the focus on penetration, the focus on fee income, the focus on life insurance should come down, and we should grow along with them. They're expanding their market. They're growing into multiple locations now. Even their branches are scaling up, their customer base is increasing. So if you were to look at it in terms of the opportunity on their customer base, there's no reason why they shouldn't grow. And if, as for they're indicating that, look, as long as we are able to make sure that, we are in line with their expectations, our market share will also continue to grow. So it's, I would say there's no reason why anything should happen differently next year. The target wallet share is around 65%-70%, or are we aiming for 70%+? The target is definitely that. At the same time, we will look at, you know, even the product mix. It is not just top line for the sake, sake of top line. We will see as to which segments we want to increase our market share. For instance, this year, the bank has done very well in terms of the protection share increase, right? Yeah. That is really good in terms of the sum assured growth that it has helped us deliver. Sure. Coming to that, group protection actually looks a little lower. I think also you mentioned that there has been some impact, which in recent regulations from RBI, but do you think it's just temporary or it could actually pick up from here? Sorry, this is on Credit Life, right? Yeah. Yeah. So, I think that, at least the banks will continue to do well. Maybe some level of softness in the NBFCs for some time we might see, but I think it will normalize. And for us, we are very blessed in terms of our credit life portfolio that, it's very well-balanced across banks, NBFCs, small finance banks, HDFC Group and so on. So, so there's enough in terms of balancing of any regulatory changes. Sure. Thank you. Thank you so much. Thank you. Thank you. Our next question is from the line of Dipanjan Ghosh from Citi. Please go ahead. Hi, good evening. So just coming to the Tier 2 and Tier 3 markets, you know, if you can give some color on the margin profile for, let's say, similar products in Tier 2, Tier 3 versus Tier 1. Now, I understand it will depend a lot on multiple operational factors, channels, persistency, pricing, et cetera, but if you can give some, give some broad color on how that has been evolving. And on that context, if you can, you know, just also mention on the demand or the customer appetite, in Tier 2, Tier 3 versus Tier 1 in terms of product profile, duration, ticket size out there. Yeah. So, fairly similar in terms of margin profile, Dipanjan. Nothing that is... Because the pricing has to be right, things like your, us selling longer tenured, has to be there, for us to understand what the mortality profile is, as well as what is the persistency profile. As long as those are taken into account in, in how we price, how we underwrite, then margins are fairly similar. So that's not something that is way off or something that we worry about. And, you know, in terms of, you know, what kind of products and so on, these would be tailor-made for tier two and three. We always look at certain variants that will make sense, that will also protect, for example, someone whose income levels might be slightly lower, or whose appetite to take risk might be a little bit lower. And so, for example, on protection, even in terms of understanding the product or if regular premium is a non-starter, maybe that individual can start off with ROP, followed by a top-up on regular premium or a rider or something down the line, but maybe they start off with an ROP, maybe they start off with simpler savings products, easier on underwriting and so on. So yes, the kind of product variants could change a little bit, but essentially products would be the mother product, but the variants that we sell could be very nuanced for a slightly different customer segment. Got it. Got it, got it. And thanks, and all the best. Sure. Thank you. The last question for the day is from the line Noel from Ubisoft Entertainment Limited. Please go ahead. Hi. So my question is, with regards to the yearly performance for the past year and what are your projections of how corporate bond yields and G-SEC rates are going to go down? And, in respect of that, what do you think will be the track business performance, and what rates are you expecting out of the next year of your business as well as LIC? So, honestly, it's difficult to try and make a guess in terms of where the interest rates will be, but what we've seen in the past is that typically, whatever the rates of interest are, the demand for the long-term guaranteed products for the past five years has been fairly robust, as you would have seen. Whoever had a product has had a fairly significant share of that product for the last five years. What has definitely been more relevant in terms of short-term versus long-term interest rates. So if the short-term interest rates are very similar to long-term interest rates, there may be customers who may be thinking about postponing their decision to buy or commit to a longer-term product. Has that happened? Yeah, we've seen some of that happen when we talk to customers and some of the distributors. Now, there is a broad expectation that interest rates will go down over the next 12 months, 18 months. When that happens, the key will be in terms of what is the, you know, short-term and the long-term interest rate. So if the interest rate environment is still upward sloping, then we don't see any change in the way customers are likely to think about committing to a long-term product. But if the yield curve is flat, then you could see some sort of softness relative to what, you know, we could otherwise see. But beyond that, I think, typically, customers who are looking at a long term do not really think too much about what the shorter-term trends are. So even at this rate, we're seeing 30+% mix on non-par. So I think that's a fairly strong indicator of that. Okay, but then what is your expectation regarding LIC and how will they be changing their rate mix? Honestly, not for us to answer that, but what we can just say about them as a very respected peer is that they have been very calibrated in the way they've approached pricing and underwriting on all categories of products, whether it's long-term savings, annuities, or protection. So we would believe they would continue on that path. Okay. Thank you. Thank you. As there are no further questions, I would now like to hand the conference over to Ms. Vibha Padalkar for closing comments. Thank you, Zico. Thank you, everyone, for joining today's call. On behalf of HDFC Life, I wish you all a great year ahead. Please feel free to reach out to our IR team in case of any further queries. Have a great weekend. Thank you. On behalf of HDFC Life Insurance Company Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.