Ladies and gentlemen, good day, and welcome to HDFC Life Insurance Limited Results 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 in the conference 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 Ms. Vibha Padalkar, MD, CEO, HDFC Life. Thank you, and over to you, Ms. Padalkar. Thank you, Anju. Good afternoon. I would like to welcome everyone to our earnings conference call for the half year ended September 30, 2024. Our results, which includes the investor presentation, press release, and regulatory disclosures, have already been made available on both our website and the stock exchanges. Joining me are Niraj Shah, ED and CFO, Vineet Arora, Chief Business Officer, Distribution, Data and Technology, Eswari Murugan, our appointed actuary, and Kunal Jain, SVP, Investor Relations and Business Planning. Moving on to key highlights of H1 FY25. Starting with operating performance. The private sector and overall industry continued its strong momentum in Q2, growing in H1 FY 25 by 24% and 21%, respectively, on an individual weighted received premium basis. We have outperformed the private sector by growing at 28% during this period and 19% on a two-year CAGR basis. Our market share among private players registered an increase of 60 basis points, improving to 16.3%. We are also happy to inform you that our overall market share touched a new peak of 11% for the period ending H1 FY 2025. On an individual APE basis, we have recorded a robust growth of 31% on a YOY basis and 19% on a two-year CAGR basis, bolstered by strong performance across all metrics. We registered an increase of 22% in the number of policies sold, with a ticket size expansion of 7%. The growth in number of policies was significantly ahead of the private sector growth of 13%, with strong secular growth trends across Tier 1, Tier 2, and Tier 3 geographies. The proportion of new to HDFC Life customers remains promising, exceeding 70%. We achieved a strong growth in retail sum assured, which was 31% on a year-on-year basis and 45% on a two-year CAGR basis. We continue to remain market leaders in overall sum assured. Our product mix, based on individual APE in H1, was as follows: ULIP 36%, non-participating 38%, participating policies 15%, term 6%, and annuities 5%. ULIP has seen some intended moderation this quarter, with the proportion reducing from 38% to 35% from Q1 to Q2. We have observed strong growth in non-par savings products, with the segment achieving a 76% year-on-year increase, aided by new product variants launched this year. Retail protection APE in H1 and on a two-year CAGR basis saw growth of 27% and 36%, respectively. We expect the healthy momentum in retail protection to sustain for the rest of the year. The Credit Protect segment has been soft this year on account of calibration and disbursements across some of our partners and lines of businesses. As we have stated in the past, our focus remains on building a long-term, profitable business in this segment. Our annuity business experienced slower growth on the back of aggressive and unsustainable pricing by some peers. We continue to adopt a calibrated growth strategy, focusing on enhancing our product offerings while maintaining pricing discipline. Annuity and protection together contributed 44% to our overall new business premium. Moving on to key operational and financial metrics. Our H1 value of new business was INR 1,656 crores, reflecting a 17.4% year-on-year growth and new business margins of 24.6%. The margin compression is primarily attributed to product mix and deferment and repricing of certain traditional products. As we rushed towards ensuring product compliance by October 1, we took a considered call to defer repricing of certain non-par products that were going to be phased out. As we have articulated this year, equity markets are likely to stay buoyant, and hence we will prioritize new business 15%-17% VNB growth, with some flexibility on margin outcomes. Our embedded value stood at INR 52,114 crores as on 30 September, with an operating return on embedded value of 16%. Profit after tax has grown by 15% year on year, reaching INR 911 crores, driven by a steady increase of 18% in profit emergence from the back book. As on September 30, 2024, our solvency ratio stood at 181%. As we had indicated, we raised subordinated debt of INR 1,000 crore in the last week, thereby improving our solvency to 192% post the sub-debt issue. Premium collections grew by 12% year on year. We are pleased to share that persistency for the 13th and 61st month materially improved to 88% and 60%, respectively, marking increases of 120 basis points and 730 basis points versus the previous year. Next, onto distribution. We saw holistic growth in individual APE across channels. Our overall banc assurance channel grew by 32%, with deepening relationships across partner banks. Our counter share at HDFC Bank continued to be stable at around 65%. Proprietary channel grew by 27%, with the agency channel gaining momentum in quarter two on the back of improved productivity, thus outperforming the company's overall growth. Term business and agency grew at over 2X company growth. We continue to be the market leader in the broker channel and healthy growth across offline and online partners. The channel has seen a pickup in the HNI segment with strengthening, while strengthening its foothold in Tier 2 and Tier 3 markets. We're delighted to announce that our subsidiary, HDFC Pension, crossed the INR 1 lakh crore milestone in terms of assets under management, and is one of the fastest growing pension fund management companies in the industry, enjoying a market share of 43.6% in H1. The GIFT City branch of our Dubai subsidiary now offers six USD-denominated products to both NRIs and resident Indians across life and health categories of insurance. Moving to regulatory updates, we have successfully relaunched more than 40 top products, contributing to about 95% of the business as on October 1, 2024. We plan to relaunch other products during the course of the quarter. We are thankful to our regulator in allowing us an additional time of three months for transitioning to the new product regulations. We believe that the revised products are more attractive to prospective customers and strengthen the long-term life insurance proposition in India. We are in various stages of operationalizing the commercial changes with all our partners. We have adopted tailored solutions, including commission deferrals, reduction of clawback, depending on persistency track record and partner preferences. Whilst this transition might take some time, we expect to complete changeover across all our distributors in H2. Coming to sustainability and governance, HDFC Life continues to be recognized for its commitment to sustainability and responsible governance. The company was ranked among India's top four performers in the financial services sector by Businessworld's India's Most Sustainable Company, based on its publicly disclosed business responsibility and sustainability report for FY 2024. Furthermore, HDFC Life's S&P Global ESG score saw an improvement of over 20% versus last year, and we continue to be rated well among regional insurers, thereby demonstrating our leadership in aligning business practices with sustainable and socially responsible principles. Our MSCI ESG rating has also been upgraded to A. Our commitment to sustainability not only reflects our responsibility to society, but also strengthens our long-term profitability, ensuring sustained value for both customers and shareholders. Our employees, our success is driven by our valued employees, and we continue to invest in building a supportive and inclusive work environment that fosters innovation and collaboration. HDFC Life was recognized for its inclusivity and employee-friendly policies, being awarded the Best Companies for Women in India 2024 in the BFSI sector, an exemplar of inclusion, Most Inclusive Companies, India 2024 by Avtar and Seramount, affirming the company's commitment to diversity and inclusion at the workplace. In closing, we remain focused on driving sustainable growth and strengthening our leadership across key segments. We will invest in customer-centric innovation to ensure we meet evolving needs and remain resilient in a dynamic market. We are confident in our ability to deliver long-term value for our stakeholders while adapting to the evolving market landscape with agility and resilience. For a detailed overview of our results, please refer to our investor presentation. We are now open to any questions from all of you. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question comes from the line of Avinash Singh with Emkay Global. Please go ahead. Yeah, hi, good afternoon. Thanks for the opportunity. A couple of questions. First part on growth outlook. I mean, in the first half, a very strong growth, 24% APE growth. This also has a tailwind from, I mean, for the first five months, you're improving share within HDFC Bank channel. Now, in the second half, that is going to be part of the base. Also, there could be some frictional issues, at least in the initial 1-2 months with regards to the new product launch and all. So considering all this, I mean, what kind of growth outlook do you see for H2, particularly if you were to sort of compare with H1? Because in H2 also you have some slight benefit also from the favorable base. So, that is on the growth side. And related to that, you know, you also made a comment regarding a buoyant equity market. So is there some sort of a rethink around ULIP for H2? I mean, your strategy around ULIP for H2. So all this sort of, you know, around growth. And coming to margins, I mean, in second half, you will have whatever impact from this new surrender regulation playing its part. At the same time, I mean, whatever growth-related cost adjustment and all will also have. So how do sort of you see the margins for this H2? Because there are a lot of, I would say that, okay, unknown variable to us to sort of take a, you know, call how the margin is going to be, because, the growth composition across product segment, and particularly the continued probably sluggishness around your credit life due to whatever is happening in the, unsecured PL or microfinance. So that will also have a bearing. So how do you see sort of, our margin in the second half? Thank you. Yeah. Hi, thanks, Avinash. So I'll take it in seriatim. The first one on growth, like I said, in the past, I said, you know, 15% would be on the upper side, but we will revise it because there were something that the sector was going through a change in terms of surrender regulations and so on, and also coming out of or getting settled down into the new normal of an elevated equity market. So I think a 18%-20% revision in our outlook on a full year basis is something we feel reasonably confident about. As far as your second question on unit linked, and is there a rethink of unit link? Now, our thought process is as follows. You know, it is getting used to the new normal, wherein equity markets, and we are seeing that each dip in the equity market is of lesser intensity, and the bounce back is that much more just because of global factors. So how do we make it range-bound? I've articulated it before, that we have grown comfortably higher than in the first half. We've grown comfortably higher than the industry. So we grew almost 400 odd basis points higher than the private sector. Faster growth in the industry is something that we will drive, that is number one. Within that, there will be unit link. Unit link will continue to remain range-bound. It's unlikely to reach the levels of 50% that is quite common in our sector, but it will be range-bound in the 30s. Second aspect is that VNB growth, because that's really the cash, and the volume of cash as an insurance company is a treat to our embedded value, and delivering value. That kind of increase in VNB is our second priority, and I'm happy to share that what we said is what we've delivered, which is about in the 17-18% kind of growth, 17.6% H1 basis, that kind of growth. We will continue to deliver on a full year basis in that kind of a range. Maybe, you know, this could be a little bit lower, a little bit higher, but roughly in the 15%-17% range in terms of VNB growth. And then third point is that on margins. I've said in the past, and I want to again reiterate, that, some level of flexibility on margins with the first two objectives being sharply defined, will be there only because of couple of things. One is some of the changeover, very significant changeover that as a sector we are going through, as far as surrender regulations are concerned, and all aspects of, the customer, the manufacturer, as well as the distributor, everyone's being affected by it. So how that settles down, that unit link is something, and credit life also what you mentioned. So there are a few balls up in the air, and so margin will be an outcome. At the same time, we're not talking about—this is, we're not talking about unit link reaching about 50%. We are also not talking about kitchen sinking the margins, but there will be a floor. What that floor is, we will determine, but it will be range-bound, and that's really what we have delivered in H1 of this year. Okay, thanks. Thank you. Thank you. Next question comes from the line of Suresh Ganapathy with Macquarie Capital. Please go ahead. Yeah. Hi, Vibha. I have to harp a little bit more on margins, because when you ended FY 2024, you ended with a margin of 26.4%, right? And the guidance was that the new regulations perhaps can bring it down by 100 basis points. As I look at second quarter, we are already at 24.4, so we are already 200 basis points below what you ended FY 2024 at, and even without the surrender value regulations kicking in. So does that mean that your 100 basis points will now further be below 24.4? Which means it looks like you will be 300 basis points below your earlier guidance. I understand that the growth has been strong, so therefore your VNB outcomes will still be good. I mean, around 16-17% as you have been guiding. But clearly on the margin side, it looks like we are, of course, likely to undershoot the target. And the second thing is, I'm very surprised to see all your competitors say, completely, maybe rubbishing the new surrender regulation, saying that everything will be fine and they can easily manage and pass it on. Is that the view you hold, or, you know, how do you look at some of the commentary from your peers? Thanks for that, Vibha. Yeah. Yeah. Thanks, thanks, Suresh. So a few things on the comparison of H1 2024 versus H1 2025. Between H1 2024, our unit linked was 28% of overall versus 36% in H1 of this year. So quite a significant tilt, like I've alluded before, on the realities of what we are seeing right now. We can choose to give very or fairly easily 26% plus margins, but not grow. And this is something that I've been articulating over the last six, seven, six months or so. That is conundrum that is there. And when I look at my new to HDFC Life customers, over 70% of my growth in new customers, or addition of new customers, are new to HDFC Life, of meaning first-time buyers, and some of them are coming on the back of unit link. So my ability to cross-sell to them. So the conundrum is, do I say no to them, or do I have a balance? And hence I'm saying it will be range-bound, little bit on the upper side than what the 20, instead of it being slightly lower th an 30%, it is in the mid-30s. And that is a conscious call that we have taken. At the same time, I think there's a lot of focus on one metric that perhaps is an outcome. And reason I'm calling that out is yes, the margins are a shade lower, but if I were to look at growth in H1 of last year, I grew 9%, versus H1 of this year, I grew 31%. If I were to look at the VNB, like I said, VNB is really cash. Do I say no to generation of that cash?... and hence accretion to my embedded value, just because I want to stay range bound to a margin. I have no doubt in my mind that as and when there's a little bit more calibration in equity markets, unit links time and again, like you've seen, go down in terms of popularity. That will happen, and that's when, given our balanced product mix and our true ability to switch amongst all our sales force fairly seamlessly will happen, wherein slightly more higher margin products will start gaining center stage. So this we see as a, as a market phenomenon that's not likely to stay forever. And we have to react and adapt to the markets, and we very sharply focus that as long as I'm making money out of the business that I'm selling, I think it is good business. So, Vibha, you're saying that just for the time being, let us dismantle the VNB guidance. It's all what matters is the VNB growth. Whatever could be the components of that, the VNB growth will be a healthy 15% plus, or whatever, 16, 17% that you have guided. That doesn't matter what the composition is, right? Yes, except with the caveat that there will be a floor. So we are not talking about it could be 500 basis points, 600 basis points. That's not what we're saying. We're saying it will be range bound. On a full year basis, last year we ended 26.3%, leaving surrender charges, and that's your second question, I'll come to that. Leaving surrender charges aside, we are talking about some range bound, as margin being the outcome. But in the pecking order, I'll go for growth, I'll go for new customer acquisition, and second is I will grow VNB. Margins will be an outcome as long as it's range bound. Okay. Because otherwise, like I said, I could easily lose my ranking, and that's not. That's been seen before, wherein you lose your overall ranking in the, you know, in the industry, but you give very high levels of margin. We think that also is not a good outcome. I have to acquire more customers and look at how I upsell to those customers down the line. Right, so that's our considered strategy for now, as long as markets remain elevated. So that's point number one. To your second question, Suresh, on no impact, we have said that there will be 100 basis points impact at a company level. At the same time, we will try and reduce that impact by renegotiating with our 300 plus partners, and all our two lakh plus agents. And we are right now in that process. As you will, you will certainly understand, that we are in multi-tie in all relationships, each one of the relationships, right? So, so it's not a bilateral conversation, but it's a multi-pronged conversation. So we talk to a partner, partner talk to other insurers, and then there is a loop back into us, loop back into them, and so all of that is going on right now. By and large, partners understand where the regulator is coming from, and, it'll take about a quarter for the economics to settle down. And, some combination of deferment of commissions, clawback of commissions, is what... And even to some extent, lower commissions, a combination of these factors is what we're having conversations with. There will be some impact, but I don't see it as being a material impact. Should not be a material impact in the, you know, once all of this is through, all the discussions are through. So just one last clarification. You said there was a deferment of pricing you did, partially which also affected the margin. Deferment, deferment of pricing for non-par, why would you do it? It's all old products, right? In old products, the pricing remains the same, right? Yeah, yeah, yeah. Good, you mentioned. No, the thing is that, see, in the rush to be compliant, because, yeah, as of 1, October, if I'm not compliant with the new regulations on surrenders and some of the other nuances, then I'm not allowed to sell those new policies. So there's only that much of IT bandwidth and, you know, processing capability, the same set of people, and overnight, you know, I have to change more than 40 plus products to make them compliant. So we could have changed the IRRs on an existing old product because interest rates have changed, but we chose not to do it because then I would have had to sacrifice a new product in lieu of the old product. and so, you know, we just took a call that was just out for a few weeks, and that had 70 -odd basis points impact. But it was very important- Sure. for us that all our key products, and we are able to start with a bang on 1, October, that was the trade-off we had to make, so that none of our channels and sub-channels don't have the main bread and butter products that they are used to, and their partners are used to selling and customers are used to buying. So that's what happened. So you're just saying that it's a bandwidth issue. I mean, a bandwidth was dedicated towards the newer products and trying to focus on repricing the existing products. So that's the simple- Yeah. Okay. Okay. I had to focus on new business and not spook our distribution channels, you know, to say I don't have their the key product that they sell. And, you know, my different sub-channels have preferences on a certain variant, on a certain term, and so on. So, and every time there is a significant change, you know, even back in time when unit-linked changes happened, there's something or the other, given the volume of changes that one needs to do at a company of our scale. Yeah, sorry, one last question. I have to squeeze in on IFRS. I mean, what did the MCA circular state? It said that all non-subsidiaries of insurance companies, basically non-bank promoted insurance companies, have to comply with IFRS, and you guys get, for the time being, an exemption, and therefore you'll have to wait for the IRDA circular. Is that my interpretation right? And the- ...What is the impact and how you're looking at it? Yeah, thanks. Yeah, so Suresh, a couple of things. One is initially, MCA came out with a definitive timeline, and that you rightly said, one was for non-bank-held insurance companies and one was for the rest. They specified a date for the non-bank-held companies, which they later deferred to IRDA. So IRDA will basically decide the date of implementation for all insurance companies, whether they are bank-owned or non-bank-owned. So that was one change that happened after the initial MCA circular. Mm-hmm. As things stand today, there is. We have received a communication from IRDA, and we believe some peers have also received communication, which talks about IRDA's intent to roll it out from April 2027. So basically, that there is a phase-wise implementation plan which we understand will be followed, where all the large listed as well as unlisted insurance companies will go into phase one. And we basically have this window of about 24-30 months to get this done, and that's where it is as far as this is concerned. But of course, IRDA has also said that this is in some sense an endeavor, so we will obviously be prepared to be ready well ahead of time. But we'll await very clear direction from IRDA in terms of the final implementation guidelines. Okay, cool. Thank you. Thank you. A reminder to all the participants, please restrict yourself to two questions. Next question comes from the line of Madhukar Ladha with Nuvama Wealth Management. Please go ahead. Madhukar Ladha, please go ahead with your question. Yeah, hi. Vibha, you mentioned in your comments that you deferred pricing on a few of the non-par products. I wanted to get a sense of what was the impact on this quarter's sort of margins or the first half margins because of that. And this hundred basis points that we're talking about would be versus the margin of last year, right? So that was question number one. Also, if I look at your distribution mix, it seems that the bancassurance channel, the growth is there, but it's a little softer. So just wanted to get a sense of what is played out. So in, so on a year-over-year basis, growth is a little softer on the bancassurance side, right? So yeah, those would be my two questions. Thanks. Yeah, hi. I'll take the second question, and Neeraj can answer on the margin walk. Our growth has actually been very healthy at about 20%, so soft is because of the base effect. If you remember, last September was a bumper year for us, wherein we touched a counter share of 70% at HDFC Bank, and that's really what is causing it. So it's more a base effect than intrinsically there being a slowdown. If I may just ask again, what's our market share now, then? So just to clarify, we grew in just standalone Quarter Two by 26%, which I think is fairly healthy growth. If I and if I didn't have the base impact, then it would have been even healthier. Yeah, and you know, the bancassurance share hovers around 65-66%, so about two-thirds of the business, and it's settled down there. Okay, um- You wanna take the margins? Yeah, so on the margin front, there are basically a couple of things we had said. One is, of course, the unit link mix, which is higher compared to last year. Similarly, annual change is lower compared to last year. And also there is this residual impact that came through from the lag in repricing by a few weeks. So that, I guess, from a quantification perspective, you could take it about 30-40 basis points is something that we would attribute to that. But a significant part would be still attributed to the change in product mix, which we have articulated the reasons for, that change as well. Good- Our unit link, like I mentioned to the earlier caller, was 38% in Quarter One versus 34%. And also, when you look at last year comparison, it was 30% last Q1, Q2 of last year, versus 34% Q2 of this year. So some of it is just higher unit link as well as the repricing on non-par. And just, if I were to just ask what was the impact of the, you know, not repricing the non-par in this quarter, just to get a sense of more sort of normalized margins, before, you know, we go into the surrender value, increased surrender value regime? Yeah, that's what I mentioned. 30-40 basis points is what you can basically look at. Just for the non-par, right? Yeah, this is for the non-par, because repricing is a non-par only. Basically, the non-par savings and annuity products. Understood. Got it. Thanks. Thanks. Yeah. Thank you. Next question comes from the line of Manas Agarwal with Sanford C. Bernstein. Please go ahead. Hi, couple of questions. Correct me where I'm missing the delta. Your Q-on-Q product mix has improved, but your margin has gone down. Your repricing impact is 30-40 basis points on the non-par piece, so not able to tie that in. That's the first question. Second question is, is there any impact on the funnel for your annuity business from changes in the government employee pension plans? That's it. Yeah, so the 30-40 basis points, as I was talking about on a H-one basis, because that's where we from our reporting perspective, that's what we're talking about. All the repricing lag happened in the second quarter, so the impact in the second quarter was higher. So if you see the slide that we carry in our investor presentation, there is also this. I mean, we followed out for the period, which is half year, but for the quarter, the impact of repricing would be higher. It will be closer to maybe 100 basis points. Understood. On the second one? Sorry, um- On the annuity business, we'll have to see as to what the government articulates in a lot of nuances. So we'll have to wait and watch to see any impact on annuity on them. Understood. I wanted a clarification. I know there's not a lot of clarity on what the modalities will be, but annuitization is not compulsory in the revised pension scheme. Is that correct? No, that is not yet clear. So we await clarifications on the UPS or the Unified Pension Scheme. What is basically being articulated so far is the intent to give some sort of a guaranteed pension for the government employees. How that is going to get funded to some extent has been discussed in that. But what happens once the funding is done is something that is yet to emerge in terms of how the management will happen. And what happens on vesting from an annuity perspective is also yet to be clarified. So we'll have to wait and watch on that front. Understood. Thanks. Yep. Thank you. Next question comes on the line of Gaurav Jain with ICICI Prudential Mutual Fund. Please go ahead. Hi. Thank you for the opportunity. A couple of questions from my side. If you can put in some more light on what is this calibration in credit life that we are taking, which has led to some degrowth in the group protection business? And what would be the guidance for the same going into H2? Second is, is the repricing required for the certain regulation with HDFC Bank done? And third is, if I take the lower end of the guidance also, which is like 18% AP growth in FY 2025 and 15% VNB growth in FY 2025, the ask rate on margin from H2 will be a high 26.4%, Vibha. So, I mean, while I understand margin is a derived number, and one should not put a lot of focus to it and focus more on absolute VNB, but, is there something that can give you some confidence as to these repricings, et cetera, will help you deliver better margin in H2, or how should that be looked at? Thank you. Right. So on the, I'll take your point on repricing. So there's no, as far as the customer is concerned, at HDFC Bank, there is no repricing or any customer for that matter. We are not looking at repricing as a result of the surrender charges. So that's not... In the normal course of any interest rate movement, like we reprice, that's something that will be an ongoing exercise as far as, HDFC Bank. Also, commercials in terms of HDFC Bank, yes, those, conversations have been had. Obviously, I don't want to share partner-level conversations, but yes, they've been long had, and, they are in line with, what is the expectation of the regulator as well. So that has been, that's going to be, a non-event. On as far as your margins are concerned, before I hand over the CP to Vineet, as far as margins are concerned, you know, again, we are not tethering ourselves to a margin, like I explained, while there will be a floor, but at the same time, it's not going to be... We're not back solving for a margin because I think that, like I explained, that it is fairly counterproductive. But you know, whether it's 100-150 basis points lower than where we ended last year, in lieu of growth and most importantly, VNB growth, that's what we are trying to solve for. We would love for all three to be all going in one direction, but in market realities, only because of unit link, are saying something else. And then we need to stay relevant while we go through this cycle as well. So that's how we see it. Want to take the question on? Yeah, hi, this is Vineet. I'll take the question on CP. Our CP numbers are largely, you know, based on the moderation, which is happening in the entire unsecured and the NFI sector. And because CP is an attachment product, so as the disbursements in that sector has softened, our CP numbers are not showing the growth that was planned for earlier. So I think that's the difference which is happening on the CP numbers. Apart from that, there is some bit of competitive pressure getting built up, and because, you know, volumes have gone down, so there is some bit of competitive pressure. So we might choose to reduce our exposure to certain partners where the competitive pricing is not making sense. So, we'll have a threshold for ourselves, and beyond that, you know, we might want to just lie low for some partners for some time. And just to add over there, you know, the sensible pricing on credit life is important. We are the market leaders in this space, and we've been in this space at least for the last 10, 12 years. And this irrational pricing time and again is not new. What also gives us the confidence is the deep relationships that we enjoy with our partners. And while there could be some pricing aggression time and again, we have found that we have gone back into that partnership. And without naming certain partners, a very marquee south-based lender, we went through this cycle of taking a back seat when the pricing was extremely aggressive... When we tried to triangulate what is the claims experience we're seeing took a back seat, and now we are full throttle when repricing was on the table again. We got invited again, and we won the mandate. So I think this is the phase that we are into right now, and that's something that is part and parcel of this cycle. And also, maybe just a couple of things I'll add is in terms of, unlike the retail business, which is about 30 - 40 years in terms of term, and the experience kind of, you know, pans out over a period of time. And, there are different levels of disclosure in the industry, as you're aware. So mortality variance for some, may not necessarily be disclosed. But as far as the CP business is concerned, most of the business lines have a tenure of anywhere between 12 to 30- 48 months. The last part of the business is in that range. And also, a large part of that business is retained on the books of the insurance companies, so there is very limited reinsurance support on that as well. So with that, the aggression is something that gets found out very quickly relative to the retail business. So that's something that we've seen over multiple cycles in our experience. Got it. That was helpful. Just one last question, if I may. You know, we also saw degrowth in annuity, which would have led to some margin compression. Is there also competitive intensity or challenge, or how is that shaping up? Yes, there is no other reason. It's purely competitive intensity, wherein. See, logically, if you see, if you're giving out a rate that you're more than what you're earning on a G-Sec underlying asset, clearly that is not a sustainable proposition. And time and again, we have seen, and I've talked about this in the past in the context of right pricing on retail protection. You know, when you withdraw this kind of stimulus, your frontline sales will struggle to sell. So we'd rather that we price it right. We're talking about longevity risk, and you know, there is a place under the sun, and some of this perhaps will start straightening out due to the change in surrender charges. Some of the aggression on pricing perhaps was, if I may say so, funded by, surrender charges on non-par, and with that reducing quite significantly, we expect to see, some sense prevailing on the pricing of term, on pricing of annuities and pricing of credit lives. Got it. That's all from my side. All the best, and thank you. Thank you. Thank you. Next question comes from the line of Shreya Shivani with CLSA. Please go ahead. Hi. Thank you for the opportunity. Ma'am, I just wanted to understand how the negotiations with the distributors usually pans out. So, for example, you guys have launched majority of your 40 new products from 1, October onwards, so none of the distributor partners that or whoever is the distributor partner they've all agreed to certain terms and conditions. They can only come back and renegotiate with you after what time period? How does this usually pan out? That's my first question. And my second question, again, on the new products that have been launched, how much cut have we taken? I know that we did not reprice our non-par product in the second quarter, so how much repricing did we do when we... Or how much cut in IRRs did we do when we launched the surrender value version of these products? Those are my two questions. Thank you. Yeah. Hi, Shivani. On the first part, see, the conversations with partners, and not just for us, but even our peers, is fairly fluid at this point in time. Conceptually, there is an understanding, at least with key partners, and some combination of deferment, clawback or reduction. That's where we are today. It's not to say that we haven't done anything with certain partners. That's not the case at all. At the same time, like I mentioned earlier, that we are in a multi-tie situation in each one of our partnerships, and so it will be dynamic. There will be, to some extent, you know, conversations, multipronged conversations that the partners will be having. And perhaps also having some conversations with regulators, to understand what is happening and so on. This will take a quarter, in my view, to settle down. In terms of the question that when can they come back? Again, this is dynamic. It is not signed and sealed, but I think we'll have to see whether a very good outcome, like some of our partners are talking about, to say that wherever we will do a commission clawback, they're saying that we will strengthen our persistency in such a way that the amount that we have, that will be clawed back will significantly reduce, which is a good focus to have. And so some of these good practices might also come through. We'll have to wait and watch, and that's really where, you know, a good alignment between the customer, the distributor, and the manufacturer. If that were to happen and persistency goes up, then I think that it's a win-win, and if that happens, then we can share more economics with the partner as well, and vice versa. So, give us some time. I think it- Okay. I think a quarter or so will be required for it to settle down. Okay. Second question is, we haven't. It's a short answer, we haven't repriced on anything due to these regulations. In the normal course of repricing, because of interest rate movement, that keeps happening. Okay, so there has been no repricing since whenever the last was done. Nothing in one Q, nothing in two Q, in spite of the new surrender value regulations getting launched? No. So in fact, we were talking in the other direction for, I mean, in the last few minutes. In fact, there was some repricing that was required to be done, but we had delayed it because of compliance with the product regulations. Yeah. So no repricing, that's happened as a consequence of the. There's no intention to have any repricing, downwards repricing on account of the change in regulations. Okay, okay, understood. Okay, okay. Yeah, thank you. These answers, that's been good enough. Thank you. Thank you. Next question comes from the line of Sanket Godha with Avendus Sec, please go ahead. Yeah, thank you for the opportunity. Vibha, the way I understood is that you did not reprice products based on surrender charges, and you are not changing, as of now, any commission structure. So if I add back the 30-40 basis points what you made in 1H margin, so you are at 25. So because of no commission clawback to a large extent and no repricing, there is a 100 basis points impact in the margin till you renegotiate the commission structure, as any product mix remains the same. Is that the right understanding, right? Yeah. So we had said that 100 basis points impact if we did nothing. Ah, yes. But obviously we're not going to be doing nothing. But you said you'll take one quarter to renegotiate- Yeah ... and redo everything. So for a quarter you will operate at 100 basis points lower margin compared to you usually would like to operate at? No, no. No, no, no, no. That's not, that's not the outcome. Yeah, go ahead. Yeah. So hi, this is Vineet here. So we've already, like I think Vibha also mentioned, that we have already done commercial negotiations with most of our partners. Some of them are still underway. Some stability will arise because, you know, it's a open architecture and multi-tie arrangements uncertain. So some stability will apply. But, let me say that, you know, majority of our business, effective 1, October, is on revised commercials. Okay, got it. And the second question is, so in the first quarter result, we said that we intend to raise 20 billion rupees or 2,000 crores as subordinated debt. We stopped at 10 billion. And so just wanted to understand, what is the rate at which we have raised it and where we have parked it? So likely negative impact on the margins because of that INR 1,000 crore subordinated debt going ahead. And lastly, in ULIP, you intentionally said that your intention is slowing down the business or putting a cap on contribution. So that higher sum assured strategy still might be a lever available to grow if ULIP demand is still there. Or you think that story has already maxed out and therefore it's better to control the contribution of ULIP overall on the business? On your first point, we raised INR 1,000 crores. The rate is 8.05%, and the solvency that we get to or we have got to now is 192%. As regards your UL, I think you're referring to higher sum assured in UL. That, for certain segments of population, that is still an attractive proposition. The vehicle also currently is the flavor of the season. So, it's a combination of two propositions in one, and so, you know, whatever the customer wants, as long as it is within, you know, our fits overall within what delivers value for us in terms of VNB, we are happy to sell that. And, so we also have that in our arsenal. Sanket, to your pointed question, it's not maxed out. There is still some potential, and we are gonna be exploring that in the second half of the year and going forward as well, not just in terms of higher sum assured, but also rider attachment. So there is a significant scope in improving that as we go forward. Got you. And Vineet, this 8.05 negative carry on the VNB margin would be how much? Not material. In fact, we have this opportunity to, given that this money will be entirely invested, negative carry, we'll try and limit it to maybe 30-40 basis points. So not a very significant impact on the VNB. On 1,000 crore, it's not a meaningful number, as you can appreciate. Okay. Okay, that's it from my side. Thank you. Thank you. Next question comes from the line of Prakhar Sharma with Jefferies. Please go ahead. Hi, thank you. So actually, sorry to keep delving on the margin thing, but, given the so many factors involved, I just wanted to ask you that, you know, this quarter, as you mentioned in the last what 15-20 odd days, you were selling on the new products norms, and there was a 600 basis point impact on margin. Would it be like, you know, next quarter, if the whole three months actually goes in any sort of a fix, do you think the impact on margins in the third quarter will be, you know, basically a multiplier effect of the 100 basis points, given that the period gets longer, or how should we expect it to pan out? See, we will just a roundabout way of how we are thinking about it. First of all, last quarter, quarter two, Prakhar, the hundred basis points were not an impact. The 100 basis points is future impact due to surrender charges. The 70 basis points impact was due to the repricing. Now, how are we looking at, you know, the margins going forward? Again, it is just to, you know, keep repeating. What we are looking at is overall growth so that full year growth ends in the range of 18%-20%. VNB growth in the range of 15%-17%, and then the resultant will be the margins. At the same time, they will be fairly range-bound, but whether it will be 50 basis points, 100 basis points, here and there, that will be an outcome. On a base case, Prakhar, H2 margins are likely to be slightly higher than H1 margins, on a base case, given everything else being equal, but it really depends in terms of how some of these things evolve. We've already discussed in terms of the surrender value implementation as well as the product mix, but on a H2 basis, that's what we can expect. We'll wait and see where that finally lands, and we'll obviously try and solve for the VNB growth number. And also, just to add over there, we have put out our impact of surrender charges of 100 basis points, and we do believe that some of the pricing aggression that we saw in some of the value accretive segments like annuity and protection, some of that we think should taper off a little bit, and thereby, hopefully putting us on an equitable footing to be able to compete and get market share in those segments. So we are reasonably optimistic on that. Understood. So just to reconfirm from, you know, the IRDAI gave an extension of about three months, so the way it will apply is that the manufacturer, as HDFC Life, you will have to be compliant on 1, October, or is it, you know, three months later? And second, when you have these partner arrangements, can they continue to remain fluid or there is a sunset clause to make those adjustments also? So Prakhar, just to be clear, October 1, all products that are allowed to be sold after October one have to be compliant. There is no dispensation on that. The three-month period is to launch products which are not yet compliant as on October 1. Three more months have been given by the regulator to make your other products which were not compliant by October one, compliant if you want to sell them, and you may choose to withdraw them. So this is basically the So they need to be systems, you know, systems compliant and the, you know, the clauses and so on, that needs to be compliant. But if it's not compliant, you won't be allowed to sell it after 1, October. You won't be required to withdraw it, but you will not be allowed to sell it. That's what we've got three months of. Thank you. Thank you. Next question comes from the line of Nischint Chawathe with Kotak Institutional Equities. Please go ahead. Hi, thanks for taking my question. You know, you reported a fairly strong growth in non-par, in fact, much higher than you left. You know, it's a little counterintuitive in the current regime. So, you know, I remember you mentioned that, you know, you're not going to engage in flash sales towards the end of the quarter. So I was just curious what happened. You know, is this a specific variant or something special that kind of was pushed in this quarter? Or is it something that, you know, the delay in repricing actually helped in selling these products? Yeah. So, we had talked about the Click 2 Achieve product, which is a blockbuster product that amassed 100 crores in 16 days. So this is that same product that we had made reference to last quarter. Nischint, there's been no change in our product mix through the quarter. It has been in that range anywhere between 37-38% on non-par. In fact, close to 40% non-par in quarter two. Right through the quarter, it's not been any higher in September. Sure. And, you know, just again, you know, going back to the, you know, sharing burden of surrender penalty guidelines. You know, somewhere, you know, the smaller agents would probably be at some kind of a risk because they may not have cash flows when commissions go down to support their earnings. You know, there is some risk of you know, people at the margin kind of you know, exiting the industry. So, you know, what is it that you are thinking to kind of you know, support the smaller agents and you know, kind of ensure that the industry continues to grow? Because, you know, there's always this kind of a debate, right? Whether you know, when you cut down commissions, some of the weaker agents tend to be weeded out of the market. Yeah. So I think the way we have launched the structure is also quite similar to what you're seeing in the market, being launched by, you know, other players. It's also tiered in a fashion that, you know, the agents who are with us for a longer period are able to, you know, get, let's say, a higher upfront and the adjustment happen in the subsequent years. Also, the agents who have better persistency are the ones who benefit more. So clearly, there is a move towards getting more quality business. As far as smaller agents are concerned or new agents are concerned, yes, they start with a smaller upfront, but as they improve on their quality and as they improve on their book with us, they start to move to the higher slabs. So it's a matter of building the book and, you know, staying with us, and then they start to move in for the higher slabs. So how this impacts the entire distribution and acquisition of agents, I think still insurance is a very favorable piece. Even after this kind of adjustment on the upfront, we would still stand out in the market as compared to other financial instruments. And, we don't believe this should have a substantial impact, but we'll observe it over the next few months. Would you sort of, you know, envisage or kind of think that we kind of move to a near full trail model on commissions? So we have all kind of structures available. There are certain agents who prefer certain models, and there are certain agents who prefer slightly more upfront, depending on, you know, their disposition and where they come from. And, I think as agents become stronger and build more and more book for themselves, they also then like to move to a trail model, so that they can, you know, even out their commission and maybe earn slightly higher overall. But agents who are new, we have seen that they do prefer a higher upfront. Got it. Thank you very much, and all the best. Thank you. Next question comes from the line of Dipanjan Ghosh with Citi. Please go ahead. Hi, good evening. So just a few questions. First, you know, agency growth has been quite robust over the last three quarters, and especially this quarter, and you have been adding agents also at a very sharp speed. Just want to understand in terms of the agency growth, if you can kind of split it or give some color on the quality of growth between the new agents versus the existing agents, or any sort of numbers on the activation ratio, if they have changed. And lastly, you know, whether you are adding more agents in the tier two markets or the growth from these agency is more in tier two markets because your term growth in the agency channel has also been quite strong. Some color on the overall agency cohort. And the second question is more of an extension from the previous participant question, which is on the non-par segment. Just wanted to get some color on the ticket size breakup and growth across different ticket sizes in the non-par category. What is driving that? And just one data keeping question on the HDFC Bank channel, what would be your growth for the second quarter? If you can kind of spell that out. Sure. So first I'll address the entire agency. So our agency, you know, growth and the business mix is actually quite robust and spread geographically. We actually would have got nearly 70% of our business coming from Tier 2 and Tier 3. And the expansion of agency, expansion of branches that we undertook about, let's say, a year and a half back, is also starting to now give us results. And we're continuing with our expansion on agency and, you know, adding more branches as well. You have seen the number of agents that we are adding, so obviously this entire focus is what is helping us go deeper in the market and get a better quality business from these agents. Your other question was on HDFC Bank. The 21% was the HDFC Bank quarter growth. Just to add here, this is despite, like I mentioned to an earlier caller, a very significant traction that we saw in September of last year. Yeah, last year, August, September was high. It was a high day. Yeah. First, and, the question on non-par, across ticket sizes, if you can give some color on that? Ticket sizes, all our savings products are fairly tightly in that one 100,000- 110,000 kind of a range. So in fact, non-par and unit linked are very close to each other, about 115- 150,000, also in certain pockets. And participating is maybe in the 90,000 range. So overall, ticket size is about 100,000 on the savings product. But the mix of growth would be similar across this cohort when I look at Tier two, tier one? Within non-par, you mean? I mean, the growth in, like, what you mentioned is the average or the median ticket size. But if I look at, let's say, the higher end of the spectrum versus the lower ticket size segments, would the growth be similar? Let's say more than four-five lakhs. On a very low base, which got impacted after the budget, the growth is fairly robust across all ticket sizes, within non-par as well, even at higher ticket sizes. So the growth that you see in the non-par mix, which is upwards of a non-par segment of about 70% plus, is reasonably uniform across ticket size. Got it. Thank you and all the best. Thank you. Thank you. Next question comes from the line of Rishi Jhunjhunwala with IIFL Institutional Equities. Please go ahead. Yeah, thank you for the opportunity. Just one question, you mentioned about not changing much on the repricing, of the products post the surrender value, changes from 1, October. Given that we are fifteen days into the quarter, you know, just wanted to understand how your competition has reacted during the same period, in terms of repricing of products, and in case there has been lower repricing being done, do you see that as an opportunity to gain market share in multi-insurer distribution channels? So this is a point, while Neeraj will answer specifics on any repricing, but this is a point I made earlier also, Rishi, that, see where can some of this aggression on pricing, especially when you're earning a lot more... Sorry, what you're giving, and you're hardly retaining any spread, or having very aggressive pricing, maybe 40% cheaper on term, or even annuity rates. We do believe that some of it was, the source was perhaps, surrender charges. You know, surrender charges. So, with calibration and surrender charges, some of that aggression is bound to go down. Everything possibly might not be passed on, to the partners, and it will have to be shared between, different, the three different constituents in this. So, yes, I do believe that some of this over the next quarter will hopefully move to more calibrated pricing. Any recent incidents on? Yeah. So we had some instances of repricing across non-par saving products as well as annuity products downward. And to be fair, it could be a combination of responding to the surrender guidelines as well as interest rate changes. So I think hard for us to say, but we have observed definitely downward repricing on some of these segments. Okay, thank you. Thank you. Next question comes from the line of Aditi Joshi with J.P. Morgan. Please go ahead. Yeah, sure. Thank you for taking my question. Two questions. One on- Sorry, unable to hear you, Aditi. Sorry, can you hear me now? You're still very faint. ... Is it better now? Yes, it is. Okay, sure. So first of all, thank you for taking my question. The first one is on the participating product. The growth was, the product category has been particularly weak. And when I talk about some of your peers, they have been saying that they would like to grow this particular category. So I just wanted to understand, like, what are you thinking about this particular product going forward? And the second one is on the: can you just help explain the growth differential between the Tier two, Tier three, and the Tier one? Just particularly in the context of Tier 2 and Tier 3, I just wanted to understand that even in terms of the ULIP product, is it again like a popular product in Tier 2, Tier 3? Because, somewhat, the Tier 2, Tier 3 are less discovered. So I just wanted to understand that the ULIP continues to be popular in those cities as well. Yeah, those are my questions. Thank you. I'll take the question on PAR and hand over to Neeraj on Tier two, three. On PAR, we have been known as a PAR company forever. And so we are fairly enthused about PAR products, especially to certain customer profiles and certain geographies, certain channels, and so on. It's just that right now what we're going through is a fairly polarized buying behavior and preferences. One is, like we've talked a lot on this call on the unit-linked in equity markets, and the other is in terms of guaranteed products. PAR lies somewhere in between and actually can give a fairly good upside, because the equity component backing a PAR product is significantly more than a non-PAR product. For us, it's where it's virtually zero. So we do believe that over a period of time, this should bounce back, and hopefully with certain product launches and some of these injections to revitalize that segment, hopefully in H2, we see a little bit of traction. Neeraj, you want to take the question on Tier two, three? Yep. So, the growth has been fairly even across Tier 1, 2, and 3 for us in this period, close to 30-31% across Tier 1 as well as Tier 2. It's Tier 2 and Tier 3. It's just that, the base on which this growth has come is different. As you can appreciate, last year, Tier 1, we had a fairly, you know, challenging period given post the budget. So the base on that was favorable, and there was a 30% plus growth in Tier 1 markets. Tier 2 and 3 grew fairly well last year as well, if you recollect, both in terms of volume as well as ticket size. That growth journey continues in this period as we continue to expand our distribution and product portfolio. So even on a higher base, Tier 2, Tier 3 growth has been fairly robust and very close to company average in this period. And in terms of unit-linked products, I think, you know, contrary to what we may think, given the aspiration to get the upside and participation in the equity markets, it's been fairly uniform across tiers. We don't see any, you know, very meaningful difference in demand for unit-linked products across different tiers. We of course exercise caution in terms of our engagement with customers, depending on their, you know, their profile. But the demand is fairly, you know, secular, whichever geography you look at, given the external environment. And just to maybe add one more aspect to what Vibha mentioned on PAR, very linked to this whole environment, where right now moderation is something which people are kind of giving a pass right now. It's either the upside from equity or the long-term guarantee of non-PAR, which is attracting customers at this point in time. So as the environment normalizes, you would expect PAR to come back fairly strongly as well. Got it. Thank you so much. Thank you. Next question comes from the line of Roshan Chutkey with ICICI Prudential Mutual Fund. Please go ahead. Thanks so much for taking my question. First question is essentially, firstly, I want to congratulate you for laying out this 17%-18% sort of guidance for VNB growth over margins. Very commendable, that is. But I want to understand here, how sustainable is this 17%-18% growth, say, in the face of falling market conditions, when ULIP will probably not do very well for us? So is that sustainable? That is question number one. Two, question two is, essentially, we want to understand, where this 100 basis points impact on margins came from for this quarter, which was 30-40 basis points for the non-par that you referred to. That was not clear to me. These are my two questions. Yeah. Hi, Roshan. I'll take the first question. Yeah, we should be able to deliver. We said 15-17% VNB growth the year after, not really knowing what the environment is going to be, the macro environment. But over the past several years, that's through business cycles, that's the kind of growth we have managed to deliver. And given our balanced product mix, given innovation on, you know, product innovation, hopefully, credit life also comes back, like I explained previously. So I think that we have many levers for us to continue with this growth trajectory as far as VNB is concerned, without remaining tethered to a particular NBM. Neeraj, do you want to on the margins? Yeah. So we just reiterate our conversations on the margin movement. So firstly, from last year to this year, largely it is product mix, higher unit link, lower annuity, and some aspect of repricing. If you were to just look at for the quarter versus last year, it's primarily repricing lag, because all the repricing lag happened pretty much towards end of this quarter. And that's broadly where it is. So it's for the period, it's a combination of higher unit link, lower annuity and some repricing. For the quarter, it is largely or pretty much repricing lag. What do you mean by repricing of the product? I mean, did we kind of miss out on repricing based on interest rate movements? Yes. Not missed out. We basically took a view that we had these three months since the notification of the new regulation came in. We had this period to make most of our product available on October 1. That requires us to make a lot of changes across all products. And one of the changes that would have got done was on repricing. For us, the priority was to ensure that 90-plus% of our business was products were available for business on October 1. That's what we did prioritize. There would have been maybe some repricing that we would have ideally liked to do, maybe towards end of August, that got done towards end of September. So that is something that caused this kind of a gap as far as repricing of non-participating and annuity products is concerned. So that was to the extent of 100 basis points because of this one month delay? Yeah, you could say that. A few weeks. In fact, just maybe three to four weeks of delay as well. Yes. Okay. And how much is the impact on VNB margin this quarter because of credit life products? So just to me, just to complete the earlier point, non-par is about 38-40% of the mix. That's the reason why the impact is fairly meaningful. Annuity is also a fairly meaningful part of the business. That's close to 5 odd percent. So where close to 50% of the business, there was some elements or some products in which the repricing had a lag. That's the reason why the impact is what it is. Credit life, yes, it is a profitable segment. We need to speak about some segments in which there was a slowdown and the competitive intensity because of which we would have probably stepped back a bit. Yes, that would have added to some extent to this issue, but primarily driven by repricing. Understood. Thank you. That's all. Okay. Thank you. Thank you. Next question comes from the line of Prithvi Srivastava with Elara Securities. Please go ahead. Yeah, hi. Thanks for taking my question. Just wanted to understand where you see the business mix, you know, moving in the second half, given that we have some pricing competition intensity in annuity and Credit Protect, and we want to be a little more calibrated around the ULIP segment. So, how do you, which products do you see, you know, driving the growth for us in the second half? And, particularly around non-par as well, you know, given the uncertainties that are there with distribution, what is the outlook for, you know, how you see this particular segment performing as well? Basis is, you know, if you look at your full year guidance, close to where the margin for the second half works out to be between 26-27% kind of range. You know, what products do you think would essentially drive that? That's the first question. Yeah. So, on non-par that you mentioned, I just thought I'd pick that up. In the first half of the year, we've grown upwards of 70+%. So growth has been good in non-par. So your question on what sort of a mix that we'll see, it'll be fairly similar. So unit link is a shade above 35%, and non-par savings is just shy of 40%. Term and annuity together is about 11-12%. We would like to see an uptick, like we discussed with the previous caller on par. And par going up to about one-fifth of our business would be a good outcome in H2, and that's the endeavor. Hopefully, we'll also have some interesting offerings in H2 on par to be able to revise interest and some other interventions also. So we've reasonably been fairly steady, except for unit links uptick that you see in H1. That we think those elevated levels, while range bounds, will continue to be there. So that's as far as the you know, the retail product mix is concerned. Credit life should get slightly better than where we were in H1. But we will have to see to what extent, like I mentioned, recalibration in terms of sensible pricing on credit life as well as annuities come through now that there is pressure on the system due to the new surrender charge regime. We believe there will be some level of restraint in terms of the aggression, and that's where I think we should benefit to some extent in both what you mentioned, credit life and in annuities. Just continuing on one of the questions from an earlier caller, which is, as peers and competition looks at revising the IRRs upward downwards, so, because the spreads compared to what, you know, we were offering was significantly, you know, higher for some of the smaller and mid-sized companies. So as these spreads narrow and given, you know, the, with interest rate movement also come repricing that should come through. How, you know, how, how are you looking at the, the segment from, from a competition perspective and, you know, like, just in terms of how favorable do you, you think the scenario can play out for, for, for, HDFC Life? So we started to see some, you know, calibration in terms of the IRRs from some of the players on a few products. We believe we will see more of it as the quarter and the rest of the year pans out. And we do believe that the gap should start closing between now and the end of the year, but we'll have to wait and see. I think there'll be different approaches that companies may choose to follow. We've been fairly consistent in terms of what we would like to do, and the business that we've garnered in various product categories are with our pricing and underwriting approach. So I would believe if there is more convergence in that within the sector, it should benefit us. Yeah, that's it from my side. Thanks. Thank you. The last question comes from the line of Supratim Datta with Ambit Capital. Please go ahead. Yeah, thanks for the opportunity. A lot of my questions have already been answered. I just wanted to get some sense on, you know, we got a sense on the margin side. Just wanted to understand, you know, how does the return profile across the products differ? You know, we have a sense of how the margins across different products looks like, but how does the risk returns differ? And how does this... How do you plan to balance margins versus returns across the product mix? And could this change once we move to IFRS 17? You know, that's my key question. Over. Sorry, Supratim, just to be clear, your question is in terms of margin versus return on capital? Is that your question? Yes, yes. Within the product, different products. Because what we know that unit link is lower margins, but how would the ROE profile or return on capital profile differ across the products? And how does that play a role there in your, you know, product selection or the balancing the products? And how would that change once you move to IFRS? So for us, I'll answer in short, not very different. For per unit of capital in terms of value, it's not very different because when you look at a category like unit link, where the required capital might be low, but the gap between the customer charges and the cost of acquisition at the point of sale is fairly high. So I think it's whichever way you look at it, we would. Even if we were to, let's say, move from VNB per value of or unit of capital to return per unit of capital, we would probably make the same decisions from a business perspective. So that's the way we would like to think. As far as Ind AS or IFRS is concerned, the big change there will be in terms of the matching principle being followed more consistently between revenue recognition and expenses over the course of the policy. So that should give a better view of the accounting results, let's say, as you go forward. But we'll have to wait and see once the regulation finally kind of comes in or rather gets implemented. Okay. And would that change the capital requirement across products, right? Or would that be the same? So that's more to do with risk-based capital, which IRDA may come up with over the next maybe 18 to 24 months. At that point in time, there would be you know the capital requirement, which today is based on a certain framework that could change as we go forward. Directionally, we believe it'll allow most players to write more business with the same amount of capital, but we wait and we will wait for some of these things to get completely clear in terms of how the regulator plans to implement this as we go forward. Got it. Thank you. Thank you. We have reached the end of question and answer session. I would now like to hand the conference over to Vibha Padalkar for closing comments. Thank you, everyone, for joining today's call. Please feel free to reach out to our IR team in case of any follow-on queries. Have a great evening, and wish you all a very happy Diwali. Good evening. Thank you. On behalf of HDFC Life Insurance, that concludes this conference. Thank you for joining us. You may now disconnect your lines.