Bajaj Finserv Limited · NSE:BAJAJFINSV
Bajaj Finserv — Q2 FY23 Earnings Presentation
61 slides from Bajaj Finserv's earnings presentation, Oct 21, 2022
Slide 1: Covering letter to stock exchanges
21 October 2022 To To Corporate Relations Department. Corporate Listing Department. BSE Limited National Stock Exchange of India Ltd 1st Floor, New Trading Ring, Exchange Plaza, 5th Floor Rotunda Building, P J Tower, Plot No.C-1, G Block, Dalal Street, Fort, Bandra-Kurla Complex, Mumbai 400 001 Band
Slide 2: Bajaj Finserv Limited Investor Presentation – Q2 FY23
BAJAJ FINSERV LIMITED Investor Presentation – Q2 FY23* *Financial year 2022-23 Note: From Q1 FY23 Bajaj Finserv Limited has started reporting its numbers in Investor Presentation in Rs. Crores. Till FY22, the same was in Rs. Million.
Slide 3: Bajaj Group Structure
Bajaj Group Structure Bajaj Holdings & Investment Limited (Listed) @ 33.43%2 @ 39.12%1 51% Bajaj Auto Limited (Listed) Maharashtra Scooters Limited (Listed) Bajaj Finserv Limited (Listed) Auto Business Arm Auto spare parts Manufacturer Financial Services Arm 52.49%3 74% 74% 80.13% 100% Bajaj Allianz
Slide 4: Bajaj Finserv's Vision – A diversified financial services group
Bajaj Finserv’s Vision – A diversified financial services group with a pan-India presence Life cycle Family, needs of Investment/ Asset Asset Health & Individual & Wealth Retirement acquisition protection Income SME management Protection customers General, Health & Life ULIPs*, Fixed Loan (Personal,
Slide 5: Bajaj Finserv – Established businesses with strong track record
Bajaj Finserv – Established businesses with strong track record ❑ Non-Bank with strategy & structure of a bank ❑ Diversified financial services strategy with an optimal mix of risk and Bajaj Finance Limited sustainable profit ❑ Focused on mass affluent & above with a strategy to cross-sell with smar
Slide 6: Bajaj Finserv – Emerging Opportunities
Bajaj Finserv – Emerging Opportunities ❑ Health Tech venture - aims to transform healthcare sector in India ❑ Integrating the fragmented healthcare delivery ecosystem with Bajaj Finserv Health technology and financial services on a digital platform to bring quality Limited healthcare closer to consu
Slide 7: Role of Bajaj Finserv
Role of Bajaj Finserv ▪ Monitor and engage with our companies with the objective of long-term sustainable profit, meaningful market share, and effective use of capital - thereby delivering superior shareholder returns ▪ We do this by driving companies to create institutionalized frameworks through a
Slide 8: Bajaj Finserv performance highlights
Bajaj Finserv performance highlights – Q1 FY23 All Figures in Rs. Crore Performance Highlights of Q1 FY23 over Q1 FY22 (Ind AS) CY 20,803 1,557 42,462 5,184 16% 39% 12% 25% PY 18,008 1,122 37,886 4,152 Total Revenue PAT* Net Worth Net Worth (Consolidated) (Consolidated) (Consolidated) (Standalone) •
Slide 9: Consolidated profit components – Q2 FY23 (BFS Share)
Consolidated profit components – Q2 FY23 (BFS Share) All Figures in Rs. Crore Consolidated profit# components for Q2 FY23 (Ind AS) Intercompany Adjustments (Net of Tax)# adjustments ❑ Unrealized MTM* Loss on BAGIC Investments – Rs. 12 Cr Bajaj Finserv- ❑ Unrealized MTM* Loss on BALIC Investments – R
Slide 10: H1 FY23 Highlights
H1 FY23 Highlights All Figures in Rs. Crore Highlights of Group Companies BAJAJ FINSERV# H1 FY23 H1 FY22 Growth BAJAJ FINANCE# H1 FY23 H1 FY22 Growth Total Revenue 36,691 31,958 15% AUM 2,18,366 1,66,937 31% Net worth 42,462 37,886 12% Total Income 19,257 14,480 33% PAT 2,866 1,955 47% PAT 5,377 2,4
Slide 11: Bajaj Finance Limited
BAJA FINSERV Bajaj Finance Limited 10
Slide 12: BFL – Key Strategic Differentiators
BFL – Key Strategic Differentiators STRATEGY • Diversified financial services strategy seeking to optimise risk and profit, operate a sustainable business model and deliver a superior ROE and ROA • Focused on continuous innovation by transforming customer experience thereby creating growth opportuni
Slide 13: BFL : Business Segments
BFL : Business Segments BAJAJ FINANCE Consumer SME Commercial Rural • Largest consumer • Focused on affluent • Wholesale Lending • Unique hub-and-spoke electronics, digital products SMEs with an average products covering short, model in 2,313 locations & lifestyle lender in India annual sales of aro
Slide 14: BFL – Key Highlights
BFL – Key Highlights Q2 FY 2022-23 ▪ Q2 FY23 AUM was at Rs. 2,18,366 Cr vs Rs. 1,66,937 Cr last year (31% growth); AUM growth in Q2 FY23 was approximately ~ ₹ 14,348 Cr AUM & Business ▪ 67.6 Lakh new loans in Q2 FY23 as against 63.3 Lakh in Q2 FY22 Franchise Growth ▪ Acquired 26.1 Lakh new customers
Slide 15: BFL – Key Highlights
BFL – Key Highlights Q2 FY 2022-23 ▪ Profit after tax (PAT) for Q2 FY23 increased by 88% to Rs. 2,781 Cr v/s Rs. 1,481 Cr in Q2 FY22 mainly on account of robust AUM growth, higher net Profitability & Capital interest income and better portfolio performance Position ▪ Capital adequacy remained strong
Slide 16: BFL – Q2 FY23 highlights
BFL – Q2 FY23 highlights All Figures in Rs. Crore Performance Highlights of Q2 FY23 over Q2 FY22 (Ind AS) CY 2,12,721 9,972 2,781 32% 29% 88% PY 1,60,808 7,735 1,481 Book Size Total Income Profit After Tax CY 1.4% 5.9% ❑ Capital Adequacy stands at 25.13% as of 30 September 2022 vs 27.68% as of 30 Se
Slide 17: BFL : Book Size and Revenue
BFL : Book Size and Revenue All Figures in Rs. Crore Book Size Total Income FY22 growth of 30% Q2 FY23 FY22 growth of 19% Q2 FY23 growth of 32% growth of 29% 2,12,721 31,648 1,91,423 26,386 26,683 1,60,808 1,41,376 1,46,687 9,972 7,735 FY20 FY21 FY22 Q2 FY22 Q2 FY23 FY20 FY21 FY22 Q2 FY22 Q2 FY23 Ne
Slide 18: BFL : Loan Loss Provision and Operating Expenses
BFL : Loan Loss Provision and Operating Expenses All Figures in Rs Crore Loss Provision and Net NPA% ❑ GNPA & NNPA stood at 1.17% and 0.44% as of 30 September 2022 as against 1.25% and 0.51% as of 2.00% 60,000 30 June 2022 ❑ Provisioning coverage ratio (PCR) of 62% on stage 3 45,000 1.10% assets; PC
Slide 19: Bajaj Allianz General Insurance
Bajaj Allianz General Insurance 18
Slide 20: BAGIC – Key Strategic Differentiators
BAGIC – Key Strategic Differentiators STRATEGY Strive for market share growth in chosen segments through a well-diversified product portfolio and multi-channel distribution supported by prudent underwriting DIFFERENTIATORS ▪ Industry leading combined ratios consistently over Strong selection of Risk
Slide 21: BAGIC – Key Highlights
BAGIC – Key Highlights Q2 2022-23 ▪ GDPI de-grew by 5.6% in Q2 FY23 as against Industry# growth of 9.0% ; H1 FY23 growth of 4.7% v/s the industry # growth of 15.0% Revenue Growth ▪ Ex. Crop & Govt. Health, Q2 FY23 GDPI grew by 11.8% v/s Industry# growth of 13.9% ; H1 FY23 growth of 15.6% v/s the ind
Slide 22: BAGIC : Q2 FY23 Highlights
BAGIC : Q2 FY23 Highlights All Figures in Rs Crore Performance Highlights of Q2 FY23 over Q2 FY22 CY 4,781 CY 3,088 2,179 2,090 -5% 13% 1% 2% PY 5,034 PY 2,740 2,167 2,046 Gross Written GWP Excl. Crop & Net Written Premium Net Earned Premium Premium (GWP) Govt. Health 336 3.8% -21% 425 5.5% Profit A
Slide 23: BAGIC : Combined Ratio
BAGIC : Combined Ratio Combined Ratio 100.8% 99.6% 98.5% 99.8% 96.9% FY20 FY21 FY22 Q2 FY22 Q2 FY23 1. Combined Ratios are in accordance with the Master Circular on ‘Preparation of Financial statements of General Insurance Business’ issued by IRDA effective from 1st April, 2013. (Net claims incurred
Slide 24: BAGIC : Profit after tax and Capital efficiency
BAGIC : Profit after tax and Capital efficiency All Figures in Rs. Crore PAT Q2 FY23 PAT degrowth of 21% attributable largely to lower capital gains 1,330 1,339 999 425 336 FY20 FY21 FY22 Q2 FY22 Q2 FY23 BAGIC - Capital Invested - Networth Accumulated profit* 97% of Net worth as on 30 Sep 2022 Total
Slide 25: BAGIC : Consistently amongst top private insurers in terms of Gross Premium
BAGIC : Consistently amongst top private insurers in terms of Gross Premium Industry GDPI Trend (Rs. Cr.) Q2 FY23 GDPI growth of 11% 2,05,732 1,78,689 1,85,595 1,13,770 1,30,614 1,05,647 56,250 62,159 73,042 71,826 75,118 36,434 41,773 19,816 20,387 FY20 FY21 FY22 Q2 FY22 Q2 FY23 PSU Private Insurer
Slide 26: BAGIC : Balanced Product Mix
BAGIC : Balanced Product Mix Business Mix 9% 8% 13% 14% 20% 20% 19% 15% 34% 31% 13% 18% 19% 9% 13% 9% 10% 5% 12% 6% 6% 13% 9% 5% 4% 41% 38% 35% 24% 26% FY20 FY21 FY22 Q2 FY22 Q2 FY23 Motor (Retail) Health (Retail) Group Health Prop, Liability, Engg Agri (Crop Insurance) Others ▪ BAGIC’s excluding Cr
Slide 27: BAGIC: Diversified Channel Mix
BAGIC: Diversified Channel Mix Channel Mix 27% 27% 30% 44% 42% 37% 42% 42% 37% 37% 4% 3% 12% 10% 2% 2% 2% 10% 7% 8% 20% 18% 16% 11% 12% FY20 FY21 FY22 Q2 FY22 Q2 FY23 Individual Agents Corporate Agents - Banks Corporate Agents - Others Brokers Direct Business Bancassurance Agency & Retail OEMs* & De
Slide 28: BAGIC : Assets Under Management
BAGIC : Assets Under Management AUM (cash and investments) Q2 FY23 growth of 8% BAGIC continues to 26,052 grow its AUM 24,633 24,070 23,150 strongly Rs. Crore 18,746 Investments are largely in fixed income securities Investment Leverage of 2.84 as on 30 September 2022 FY20 FY21 FY22 Q2 FY22 Q2 FY23
Slide 29: Key Technology & Customer Initiatives of H1 FY2023
Key Technology & Customer Initiatives of H1 FY2023 Key Metrics Digital Agent Onboarding H1 FY23 Digital Issuance H1 FY23 From 100% in FY 21-22 -> 99% From 94.48% in FY 21-22 -> 95.09% Net Promoter Score* Motor Health Digital payment H1 FY23 FY21 FY22 FY21 FY22 From 91.23% in FY 21-22 -> 92.07% 65 ↑
Slide 30: 1st Large General Insurer in India to take Policy Admin System on Cloud
1st Large General Insurer in India to take Policy Admin System on Cloud* One of the early adopters of cloud, our Travel line of business was made live in 2019 on the new policy admin system – developed in partnership with TCS. This was followed by Retail Health & Motor TP lines of business Cloud Nat
Slide 31: BAGIC : Risk Management
BAGIC : Risk Management Asset Quality Pricing & Underwriting ▪ 99.1% of the debt portfolio in AAA and ▪ Superior underwriting capability leading to low sovereign assets Combined Ratio consistently ▪ 92.9% of Equity in Nifty 50 stocks & 95.1% in ▪ Diversified exposure across business lines & BSE100 s
Slide 32: Bajaj Allianz Life Insurance
Bajaj Allianz Life Insurance 31
Slide 33: BALIC – Key Strategic Differentiators
BALIC – Key Strategic Differentiators STRATEGY • Continued focus on sustainable and profitable growth by maintaining balanced product mix and investment in retail growth engines • Business construct is to maximize customer benefits while gaining market share in retail space, maintaining shareholder
Slide 34: BALIC – Key Highlights
BALIC – Key Highlights Q2 2022-23 ▪ In Q2 FY23, IRNB grew by 32% (vs private players growth of 7% & LIC growth of 3%. Overall industry growth of ~6%) ▪ H1 FY23 growth of 51% vs private players growth of 21%; Market share in IRNB Revenue Growth & Market terms increased from 6.2% to 7.7% among private
Slide 35: BALIC – Q2 FY23 Highlights
BALIC – Q2 FY23 Highlights All Figures in Rs. Crore Performance Highlights of Q2 FY23 over Q2 FY22 CY 1,072 1,036 1,920 4,155 32% -23% 21% 9% PY 813 1,345 1,586 3,813 Individual Rated NB Group NB Renewal Premium Gross Written Premium CY 159 190 532% Solvency Ratio 40% as at 53% 30 Sep 2022 PY 104 13
Slide 36: BALIC – Growth momentum continues
BALIC – Growth momentum continues All Figures in Rs Crore New Business Renewals GWP 2 years CAGR* at 2 years CAGR* at 2 years CAGR* at 28% 21% 25% 4,155 3,813 2,227 2,235 1,920 1,586 2,677 1,305 1,372 Q2 FY21 Q2 FY22 Q2 FY23 Q2 FY21 Q2 FY22 Q2 FY23 Q2 FY21 Q2 FY22 Q2 FY23 ▪ The topline related metri
Slide 37: BALIC : Individual Rated New Business
BALIC : Individual Rated New Business All Figures in Rs Crore Whole Company Agency FY22 growth of 49% FY22 growth of 36% 3,686 Q2 FY23 growth Q2 FY23 growth 1,489 of 32% of 17% 2,468 1,098 Agency continues to stride ahead Industry beating growth with substantial growth 1,072 372 436 813 535 238 FY21
Slide 38: BALIC : Balanced product mix
BALIC : Balanced product mix IRNB Mix Share of Non-par savings stands at 35% in Q2 FY23 39% 38% 35% Individual - Unit Linked 41% 51% Individual - Non Par Protection 3% 3% 6% 3% Individual - Non Par Savings 1% 25% 27% 35% 20% 29% Individual - Annuity 0% 11% 12% 2% 9% Individual - Par 28% 23% 20% 22%
Slide 39: BALIC : Diversified Distribution Mix
BALIC : Diversified Distribution Mix Individual Rated New Business Channel-wise Mix ❑ Greater balance between institutional and proprietary retail channels - Agency, Institutional 11% 11% 9% 10% 10% Business and BALIC Direct contributing 41%, 49% and 33% 10% respectively in Q2 FY23 (in IRNB terms) 4
Slide 40: BALIC : Persistency
BALIC : Persistency Persistency 13th Month Persistency 25th Month 83% 74% 75% 82% 82% 72% 80% 71% Persistency - 13th Month Persistency - 25th Month FY21 FY22 H1 FY22 H1 FY23 FY21 FY22 H1 FY22 H1 FY23 Persistency 37th Month Persistency 49th Month Persistency 61st Month 63% 50% 62% 66% 66% 48% 59% 64%
Slide 41: BALIC : New Business Value & New Business Margins
BALIC : New Business Value & New Business Margins All Figures in Rs. Crore Rolling 12M Rolling 12M Q2 FY23 Q2 FY22 H1 FY23 H1 FY22 FY231 FY222 Annualized Premium (ANP)* 1,246 977 2,464 1,573 5,255 3,450 Net New Business Value (NBV)** 190 136 325 161 786 461 Net New Business Margin (NBM) on 15.2% 13.
Slide 42: BALIC: MCEV – Analysis of Movement
BALIC: MCEV – Analysis of Movement All Figures in Rs. Crore 325 87 1,048 708 17,249 315 17,006 Embedded Value Operation Profit (EVOP): Rs. 1,120 Cr RoEV : 13.4% (Annualised) As at Unwinding NetVNB NBV Operational Investment Capital Distributed As at 31st March 2022 Variance Variance 30th Sept 2022 I
Slide 43: Digital Initiatives to offer best in class customer experience
Digital Initiatives to offer best in class customer experience Digital assets Key Internal Assets iSmart INStab LMS WhatsApp for ICs 67% increase in 34% increase in iRecruit 54% increase in 91% increase in logins in H1FY23 over unique user in ~12L logins in H1FY23 unique users in unique users in PY
Slide 44: BALIC : Assets Under Management (AUM) & Net Worth
BALIC : Assets Under Management (AUM) & Net Worth AUM (Mix) • AUM as of 30 September 2022 grew by 7%; Growth in UL AUM stands at 1%; Traditional AUM 85,623 86,907 grew by 11% 73,773 81,429 Rs Crore 52,196 53,352 44,917 48,173 • Of the UL Funds of Rs. 33,555 28,855 33,427 33,256 33,555 crore, 71% is
Slide 45: BALIC: Risk Management
BALIC: Risk Management ❑ Prudent assumptions while product pricing Product Pricing ❑ Stress and scenario testing performed at pricing stage ❑ Regular review of pricing based on prevailing interest rates ❑ Interest rate risk on the Individual Non-Participating Savings, Protection and Annuity portfoli
Slide 46: Bajaj Finserv Direct Ltd (Bajaj Markets)
Bajaj Finserv Direct Ltd (Bajaj Markets) 45
Slide 47: Bajaj MARKETS
Bajaj MARKETS STRATEGY BFSD is a unique & diversified Marketplace for Financial Services and eCommerce which acquires a large number of consumers and cross-sells products by leveraging Technology & Analytics. DIFFERENTIATORS ▪ Open Architecture platform offers Financial products’ variants across Loa
Slide 48: Bajaj MARKETS
Bajaj MARKETS Organic Visits Total Revenue (Rs lakh) Total Opex (Rs lakh) 6,000 12,000 5,200 10,685 Thousands 4,896 10,436 5,000 10,000 9,278 4,000 6,872 7,321 9,436 3,275 3,308 8,000 6,021 7,942 2,685 3,000 2,335 6,000 6,577 2,000 4,000 5,614 4,785 1,000 3,756 2,000 0 - Q1 FY21-22 Q2 FY21-22 Q3 FY2
Slide 49: Bajaj Finserv Health Limited
Bajaj Finserv Health Limited 48
Slide 50: Bajaj Finserv Health – Key Strategic Differentiators
Bajaj Finserv Health – Key Strategic Differentiators STRATEGY • Health Management platform to solve for Access and Financing of healthcare to Indian consumers • Making healthcare Prepaid, Preventive and Personalized by covering Hospitalization, Diagnostics and Doctor consultation spends DIFFERENTIAT
Slide 51: Bajaj Finserv Health – Business Metrics
Bajaj Finserv Health – Business Metrics REGISTERED USERS (Cumulative) MONTHLY ACTIVE USERS 1,00,00,000 7,00,000 6,35,353 79,00,353 6,00,000 80,00,000 4,67,121 62,08,816 5,00,000 4,15,496 4,42,510 60,00,000 48,02,926 3,53,532 4,00,000 36,82,526 40,00,000 3,00,000 25,10,886 2,00,000 20,00,000 1,00,000
Slide 52: Additional Information – BAGIC
Additional Information – BAGIC
Slide 53: BAGIC : Investment Performance
BAGIC : Investment Performance All Figures in Rs Crore Total Funds# Investment Leverage ❑ Investment Portfolio mix 3.32 3.08 2.79 2.84 2.84 for Q2 FY23: Corporate 25,329 bonds 28.1%, G-Sec 23,016 24,401 24,310 18,778 58.7%, Equity* 8.0%, and Money Market 5.3% ❑ Unrealized loss of Rs. 321 crore as on
Slide 54: BAGIC : LOB wise Net Loss ratio
BAGIC : LOB wise Net Loss ratio Net Loss Ratio Line of Business Q2 FY23 Q2 FY22 H1 FY23 H1 FY22 Fire 17.7% 69.3% 40.5% 74.4% Marine Cargo 92.1% 55.3% 90.3% 73.4% Motor OD 68.8% 66.4% 75.5% 61.5% Motor TP 81.6% 73.5% 85.1% 76.0% Motor Total 76.4% 70.4% 81.2% 69.7% Engineering -9.5% 95.7% 40.9% 81.4%
Slide 55: BAGIC : LOB Growth (Major LOBs)
BAGIC : LOB Growth (Major LOBs) GDPI Growth Line of Business Q2 FY23 BAGIC Growth H1 FY23 BAGIC Growth Commercial Lines** 11.4% 15.3% Motor OD 6.2% 12.6% Motor TP 2.0% 11.3% Motor Total 3.8% 11.8% Personal Accident + Travel 46.2% 63.3% Health (retail + group)* 25.4% 19.5% Total -5.6% 4.7% Total (Ex
Slide 56: Additional Information – BALIC
Additional Information – BALIC
Slide 57: BALIC : Investment Performance (Shareholder Fund)
BALIC : Investment Performance (Shareholder Fund) All Figures in Rs Crore AUM~ ❑ Asset mix as on 30 10,990 September 2022: Corporate 10,796 Bonds 25.6%, G-Sec 45.5%, 10,229 Equity 16.3%, FD & other 10,105 assets 12.6% (on Market 9,493 value basis) ❑ Capital gains booked in H1 FY23 were Rs. 194 cr FY
Slide 58: BALIC : Regular Premium Ticket Size
BALIC : Regular Premium Ticket Size All Figures in Rs. Whole Company Non Par Savings FY22 Q2 FY23 FY22 Q2 FY23 increase of 34% increase of 12% increase of 41% increase of 68% 77,648 79,018 69,385 70,326 61,716 57,782 51,650 41,323 36,579 27,437 FY20 FY21 FY22 Q2 FY22 Q2 FY23 FY20 FY21 FY22 Q2 FY22 Q
Slide 59: BFS - ESG Initiatives undertaken in identified focus areas
BFS - ESG Initiatives undertaken in identified focus areas “ESG is not just the right thing to do, it is what will shape a better tomorrow for all.” Reaching Financial Services to Million Preserving and Protecting Governance of Indians Environment • Board approved ‘Responsible & • Financial products
Slide 60: Thank You
BAJA FINSERV Thank You
Slide 61: Disclaimer
Disclaimer This presentation has been prepared by Bajaj Finserv Limited (the “Company”) solely for your information and for your use. This presentation is for information purposes only and should not be deemed to constitute or form part of any offer or invitation or inducement to sell or issue any s