Questions across 68 calls

Avinash Singh

Emkay Global

HDFC Life Insurance Company Limited

HDFC Life Insurance Company Limited CC-Dec23.pdf · 2024-01-12

Couple of questions. First one is again on products and our strategy of having a balance product mix. The question is that this is a heavily regulated sector and the regulation keeps evolving, and so does market conditions, be it interest rates or equities. In that backdrop, the company franchise wants a steady product mix instead of offering what the m arket is demanding, cus tomers are demanding and what the distributor can distribute. Aren’t you sacrificing growth opp ortunity? 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 move away from that product. So, why not have a strategy that is agnostic to product mix and your ability to distribute the products widely ? Second, looking at agency, any particular reason why there is a reasonable amount of churn in this quarter? Is it a clean up of unproductive agents or is there something specific to it?

Second question on churn in agents. 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 individual agents. Is this a planned cleaning up of your non-productive agents? What do we read, because by H1 you had 210,000 agents and now again the number is back to 190 or somewhere around that?

HDFC Life Insurance Company Limited CC-Sep23.pdf · 2023-10-13

Thanks for the opportunity. Couple of questions. The first one is on margins. Of course, a part of it is understood that mix in this FY so far has moved in favour of ULIP from non-par savings. But at the same time, we see increase in retail protection. Credit life is still doing well and there is a pickup in annuity. So, there is some favourable development on product mix of high-margin products as well. And, in your base, there was low margin of Exide Life. So, net-net with these favourable factors playing out, protection and annuity picking up and with expectation of benefit from Exide Life, margins are flat. Is this due to growth being lower or expenses picking up? An explanation around what's happening with the margin and what shall one expect for FY24. That's the first question.

My question was more on your direct channel , where you have been pretty strong. And these channels would not have much of above INR 5 lakh contribution, but that channel has slowed down in the first half. Is there some change of strategy in your direct channel? Are you focusing more on HDFC Bank? What has happened to the direct channel? Because your online, offline both have been very strong in the past.

The New India Assurance Company Limited

The New India Assurance Company Limited CC-Sep23.pdf · 2023-11-29

Couple of questions. First one is on your health. If you can help us understand in the retail side, I mean, this kind of 96 odd percent of the claims ratio that you mentioned, that's reasonably higher. Now, of course, you have taken a price hike, but this increase in claims ratio, I mean, how much of it, if you can try to provide some color, qualitative commentary, that will also help. How much of that is driven by the increase in claim frequency? And then how much of this is driven by severity? And also on the claims frequency side, if you help it, it is because of the kind of some morbidity profile changing or is it some behavioral change where sort of customers are now more proactive in opting for hospitalization in case of the vector borne diseases like malaria, dengue where earlier, they might be just doing wait and watch, now more proactively sort of hospitalizing? So, if you can help me understand this entire retail health behavior in terms of how much of it is claim frequency, how much of it is change in severity and frequency change also, how much of that is kind of a morbidity profile changing and how much of that is more to do with the behavioral change in the policy holder?

Its very interesting actually that you have mentioned, you know, we also do a lot of study on this and why the retail segment we are seeing a huge increase in the retail segment. Couple of things - Like you mentioned, yes, the claims frequency has increased. It would have gone up by 1% to 2% as compared to the earlier years. We did find that after COVID where it is resulting in COVID complications resulting in higher frequency, which we would attribute the increase infrequency about 10% to 12% of this would be due to the COVID related complications. That is one. Then secondly, we do find that the hospitals, they had increased their rates post-COVID because a lot of post-COVID surgeries were carried out, you know, which were not done during the COVID period, but non-COVID related surgeries were done after the COVID period was over, and that at that time many of the hospitals had increased their prices. And once the prices went up, they never came down. So, that's what I was mentioning, you know, the medical inflation being much higher than the regular inflation. So, these two things have resulted in an increase in the retail claim cost, which is impacting. Like I mentioned, the price correction has taken place, you know, a resultant of over a six years period, and we will be seeing a positive impact of that in the coming quarters. So, I hope this answers your question. So, largely you are saying that okay, post-COVID whatever term you use, long COVID, post- COVID complication, that had sort of a changed a bit of frequency. And overall, of course, on the severity side, it is more to do with the medical inflation that has sort of a taken-up procedure cost meaningfully. So, on that front, I guess, of course, because I mean, the health care providers' rate or rather sector is not as regulated. I believe there was some sort of voluntary action or initiative on the part of GI Council. I think they are trying, or they are exploring to come up with some kind of wider sort of package rate or something. So, I mean, are you the government or GI Council or the regulator IRDAI doing to sort of check this medical inflation? Because the medical inflation as you mention, I mean, of course, one can understand for the intermittent period of COVID and all, it is going up. But sustainably, I mean, depending upon which insurer we talk, typically a general consensus suggests that okay, nearly 12%, 13% kind of annual medical inflation that is far higher than overall inflation. So, is something that a regulator, government or council is looking to address? I mean, how are you looking to address? Because, you can increase price only up to certain point. Beyond the point, the price increase will mean that insurance becomes kind of prohibitively expensive for policy holders. So, that will affect the growth and sales as well. So, I mean, what are the ways you are exploring to sort of check this medical inflation?

Life Insurance Corporation Of India

Life Insurance Corporation Of India CC-Sep23.pdf · 2023-11-10

Good evening sir. Wish you all a very happy Diwali. A few questions. The first one is on your accounting P&L employee expense part. That has had a lot of volatility due to some kind of a bonus and provision. So if I read correctly, nearly of INR500 crores a quarter you are providing for that, that pension that was kind of approved, I guess, FY '20 or somewhere around 11,000- odd spread over 20-odd quarters, meaning INR500 crores per quarter. Additionally, there is something more -- the change in the family pension that has led to another, I guess, close to INR11,000-odd crores, where you have, I guess, taking close to 2,900-odd crores of it in this quarter, if I read correctly. So can you sort of break up your employee cost, that okay, what sort of cost is kind of your wage and related run rate and what sort of other provisions you keep doing? Because there is a lot of volatility in employee cost and given that you're kind of stable employees and also the wage revision happens. If you can just provide some sort of color on the employee cost mark. So that is one. And second is around more to do with, I mean, now, I mean, as you have changed your accounting policy related to non-par offer being transfer to shareholder's account. And, of course, your profitability remains good as well as solvency is accruing because growth overall is not that strong. In that backdrop, can there be some clarity around what is the sort of a board mandated floor on solvency? And as long as you are comfortable with that, what sort of dividend can you pay out? Because given that the accounting profit is pretty good and solvency is gradually increasing. So, there should be some kind of a more clarity on the dividend side because the growth is not that strong. So, these are my two questions. If anything, I will follow-up.

So, sir, on employee cost part again, if I look for this quarter, so INR2,900-odd crores, you have provided for the family pension and there is sort of a INR500-odd crores kind of a run rate for that initial pension part that was taken in FY ‘20 or something. So these two are kind of a one- off. And what has been a sort of adjustment or kind of additional you provided for the pension part with the actuarial valuation? To just get an idea because last quarter, of course, you have a number closer to INR5,700-odd crores. This quarter is going to INR10,000-odd crores. And of course, I can differentiate this INR2,900 crores is one-off. Still, it's like a higher than last quarter by another INR50-odd crores. So what has been a sort of adjustment in that actuarial liability towards pensions?

Cholamandalam Investment and Finance Company Limited

Cholamandalam Investment and Finance Company Limited CC-Sep23.pdf · 2023-11-03

Two questions. First one again continues on that, your FLDG arrangement with the partners. So, technically, I mean, from accounting perspective, as asset quality develops depending upon the stage three, different stage developments, you will provide the credit cost and whatsoever FLDG recovery, that will come into your other income line . So, is my understanding correct there ? That's number one.

And second one is more, if you can provide some color on the yield development, not from the external factors because, of course, externally, it all depends how the interest rate are going to behave. But based on your loan product mix, growth across different channels at a different stage a bit of a product mix change that will happen over the next three, four quarters. Of course, housing typically will be slightly lower yield. Within vehicles also, the growth outlook would be different. How are you seeing sort of your yield movement due to product mix changing or setting up over the next three, four quarters?

Star Health and Allied Insurance Company Limited

Star Health and Allied Insurance Company Limited CC-Sep23.pdf · 2023-10-31

Couple of questions. So, the first one, I would sort of try to go more aroun d this claims ratio, particularly because we have been taking price hike on new policy starting February and on renewal starting March, for a significant part of portfolio. Now, even in this backdrop off course seasonality is there, but at the Y -o-Y basis seasonality is taken care of, and it is not also that you are sort of growing very fast. So, there could be some kind of , if at all for growth sector is facing some sort of profitability or underwriting compromise. So, that is not the case you are growing in-line with the industry, have taken price hike. And of course, you are big enough, you have processes and better sort of claims processing or fraud control, yet the claims cost is sort of surprising on the higher side. Now, the question is does this raise sort of some kind of a challenge in terms of the business model itself, because now in a pretty normal, because now COVID or delayed impact from COVID everything is behind, yet I am a +68% claims ratio and of course combined is 99%, that sort of raises some concern around the 95% combined kind of a business model, because I'm saying that all the things that should have been there or you can do you have already done. So, is that something that there is kind of some challenge around the business model of retail health insurance in India or what is it , because 99%, of course I would say sort of a comfort zone for you, I will ask next question after this.

And so now sort of, where would you like to sort of guide at least for FY24 your claims ratio, and also if I were to break down again your H1 experience, can you help us understand, what sort of average claim ticket size increase, or if there's any sort of a change in claims frequency vis-à-vis last year. So, how much of the claims cost going up has been due to claims frequency change or claims severity.

ICICI Prudential Life Insurance Company Limited

ICICI Prudential Life Insurance Company Limited CC-Sep23.pdf · 2023-10-17

A couple of questions. First one is on your shareholders account. If I see for the quarter close to ₹ 420, 425 crores of investment income and for the first half is more than ₹750 crores. I mean annualized yield of close to 15% -odd on shareholder investment. So, I mean why such high kind of probably investment gain booking, what is driving this, is it coming from some equity or fixed income and why sort of the trend is very unusual when you park? Second one on the margin profile, I do acknowledge that there is shift from I mean towards ULIP and probably within non-ULIP maybe some kind of a lowering of non-par guarantee towards par. But at the same time if I see the most profitable retail or protection has gained for the first half YoY, it has gain ed material share there, so somewhat, it should have sort of offset. Is it also the margin also a fact of your cost because the growth is not coming, but if you look at the commissions and OPEX also both sort of gone up, is it also coming because of the kind of an is sue with cost absorption? And as far as OPEX is concerned, you kept saying the capacity building for future growth, but that is what, I mean, we have done for last few years that we have been creating capacity to grow, but the growth has not been coming. S o, I mean what are the areas where still we need to sort of expand to our capacity building because the growth has been slower?

If you can just help me that your ex-ICICI Bank APE of ₹ 5.2 billion for the first half, what would be the contribution for say the top three in that?

ICICI Lombard General Insurance Company Limited

ICICI Lombard General Insurance Company Limited CC-Sep23.pdf · 2023-09-30

Best wishes to you, Bhargav, for your future endeavors. And congratulations to Mr. Sanjeev for his new role. Good set of performance. A couple of questions. First one on Motor side, of course, you commented about the competitive intensity, but whatever I see incrementally in Q2 FY2024, overall motor profitability seems to be quite good for you. Yet, you remain sort of very guarded with the motor. Why such, guarded approach even when profitability seems to be suggesting that things are better than what they were a few quarters back. Tha t is on your entire strategy around motor because even in motor CV, you have started to take more business. But again there, it seems that you are trying to slow down. On overall motor, I would like to understand the philosophy. And on that same point, now I guess, if I understand the regulations correctly, even in motor TP technically a commission is possible because the business line - wise commission caps has gone. So, what are the practices you are witnessing in the market as far as motor is concerned. And on health, I see that the results are coming from your focus on agency and that is leading to the growth in retail. Yet, if I see, because you are growing strongly in the group both on the banca side as well as the employer -employee side, your mix is shi fting again more towards group. Of course, the banca is largely retail, I understand. Yet, on your individual side, is that growth still a bit of calibrated, because, on the group employer -employee side , the price hike is now behind. So, it would be largely a volume-led growth. That growth is strong, Banca growth is strong. On the pure retail, why a bit of a slower as per your own experience?

And that question regarding current practices around commissions in Motor because technically now one can pay commissions on Motor TP. Basically the commission caps are going to uncap, so post this, what market practices you are seeing as far as payoffs are concerned?