Bajaj Finserv Limited · NSE:BAJAJFINSV
Bajaj Finserv — Q3 FY22 Earnings Presentation
57 slides from Bajaj Finserv's earnings presentation, Jan 20, 2022
Slide 1: Bajaj Finserv stock exchange cover letter
BA.JA.J FINSERV 20 January 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
Slide 2: Bajaj Finserv Limited Investor Presentation Q3 FY22
BAJAJ FINSERV LIMITED Investor Presentation Q3 FY22* * Financial year 2021-22
Slide 3: Bajaj Group Structure
Bajaj Group Structure Bajaj Holdings & Investment Limited (Listed) @ 33.43%2 @ 39.16%1 51% Bajaj Auto Limited (Listed) Maharashtra Scooters Limited (Listed) Bajaj Finserv Limited (Listed) Auto Business Arm Auto spare parts Manufacturer Financial Services Arm 52.65%3 74% 74% 100% 100% Bajaj Allianz B
Slide 4: A diversified financial services group with a pan-India presence
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, General Insurance Annuit
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 Bajaj Finance and sustainable profit Limited ❑ Focused on mass affluent & above with a strategy to cross-sell with smart
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 Limited quality healthcare closer to consume
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 Q3 FY22
Bajaj Finserv performance highlights Q3 FY22 All Figures in Rs Million Performance Highlights of Q3 FY22 over Q3 FY21 (Ind AS) 176,196 12,558 390,115 43,344 CY 10% -3% 10% 20% PY 159,607 12,900 353,269 36,120 Total Revenue PAT* Net Worth Net Worth (Consolidated) (Consolidated) (Consolidated) (Standa
Slide 9: Consolidated profit components Q3 FY22
Consolidated profit components Q3 FY22 All Figures in Rs Million Consolidated profit components for Q3 FY22 (Ind AS) Adjustments (Net of Tax)# Intercompany ❑ Unrealized MTM* Loss on BAGIC Investments Rs. 190 Mn adjustments ❑ Unrealized MTM Loss on BALIC Investments Rs. 190 Mn Bajaj Finserv- Standalo
Slide 10: 9M FY22 Highlights
9M FY22 Highlights All Figures in Rs Million Highlights of Group Companies BAJAJ FINSERV # 9M FY22 9M FY21 Growth BAJAJ FINANCE # 9M FY22 9M FY21 Growth Total Revenue 495,773 452,043 10% AUM 1,812,499 1,435,502 26% Net worth 390,115 353,269 10% Total Income 230,101 198,281 16% PAT 32,107 34,914 -8%
Slide 11: Bajaj Finance Limited
BAJAJ 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, to deliver a sustainable business model and deliver a superior ROE and ROA • Focused on continuous innovation to transform customer experience to create growth opportunities. DIF
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 SMEs with an average products covering short, model in 2,055 locations products & lifestyle lender annual sales of around mediu
Slide 14: Summary of COVID-19
Summary of COVID-19 ❑ Q3 FY22 was an excellent quarter as company delivered on all its long-term financial guidance metrics AUM & Profit growth, return on assets, return on equity, gross & Net NPA ▪ Focus on customer franchise addition continues; With increase in adoption of new App, annual customer
Slide 15: BFL Key Highlights
BFL Key Highlights Q3 FY 2021-22 ▪ Q3 FY22 AUM was at Rs. 1,812,499 Mn vs Rs. 1,435,502 Mn last year (26% growth); Core AUM accretion in Q3 FY22 was approximately ~ Rs. 147,000 Mn AUM & Business ▪ 7.44 Mn new loans in Q3 FY22 as against 6.04 Mn in Q3 FY21 Franchise Growth ▪ Acquired 2.56 Mn new cust
Slide 16: BFL Key Highlights
BFL Key Highlights Q3 FY 2021-22 ▪ Profit after tax (PAT) for Q3 FY22 increased by 85% to Rs. 21,253 Mn v/s Rs. 11,460 Mn in Q3 FY21 mainly on account of robust AUM Profitability & Capital growth, higher net interest income and better portfolio performance Position ▪ Capital adequacy remained very s
Slide 17: BFL Q3 FY22 Highlights
BFL Q3 FY22 Highlights All Figures in Rs Million Performance Highlights of Q3 FY22 over Q3 FY21 (Ind AS) CY 1,747,750 85,351 21,253 27% 28% 85% PY 1,379,199 66,583 11,460 Book Size Total Income Profit After Tax CY 1.3% 5.3% Borrowing mix as of 31 December 2021 is 29:47:20:4 between banks, money mark
Slide 18: BFL: Book Size and Revenue
BFL : Book Size and Revenue All Figures in Rs Million Book Size Q3 FY22 Total Income growth of 27% FY21 growth of 4% FY21 growth of 1% 1,747,750 1,466,869 263,856 266,831 1,413,760 1,379,199 Q3 FY22 growth of 28% 85,351 66,583 FY20 FY21 Q3 FY21 Q3 FY22 FY20 FY21 Q3 FY21 Q3 FY22 Net Interest Income F
Slide 19: BFL: Loan Loss Provision and Operating Expenses
BFL : Loan Loss Provision and Operating Expenses All Figures in Rs Million Loss Provision and Net NPA% ❑ During the quarter, company has done accelerated write-offs of Rs. 1,630 Mn of 59,686 2.00% 60,000 principle outstanding on account of COVID-19 stress and advancement of its write-off policy 45,0
Slide 20: Bajaj Allianz General Insurance
Bajaj Allianz General Insurance 19
Slide 21: 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 22: Summary on COVID-19
Summary on COVID-19 ❑ During the quarter, excluding tender driven businesses (Crop & Govt. Health) BAGIC recorded a 6.1% growth in GDPI; Most of the key & preferred businesses grew in-line or better than the market ▪ Slowdown in Motor: Shortage of semi-conductor chips impacted new 4W sales, leading
Slide 23: BAGIC Key Highlights
BAGIC Key Highlights Q3 FY 2021-22 ▪ GDPI de-grew by 13.2% in Q3 FY22 vs the Industry# growth of 6% (Pvt. players grew by 5%); 9M FY22 growth of 6.4% vs the industry# growth of Revenue Growth 9.2% ▪ Ex. Crop & Govt. Health, Q3 FY22 GDPI grew by 6.1% vs Industry# growth of 9.9%; 9M FY22 growth of 10.
Slide 24: BAGIC: Q3 FY22 Highlights
BAGIC : Q3 FY22 Highlights All Figures in Rs Million Performance Highlights of Q3 FY22 over Q3 FY21 CY 29,594 CY 27,302 19,881 19,297 -13% 7% 0% 5% PY 33,923 PY 25,600 19,941 18,381 Gross Written GWP Excl. Crop & Net Written Premium Net Earned Premium Premium Govt. Health 3,036 3.8% -8% 3,300 4.8% P
Slide 25: BAGIC: Combined Ratio
BAGIC : Combined Ratio Combined Ratios (Including Motor TP Pool Losses) 100.8% 98.9% 96.7% 96.9% 96.1% FY19 FY20 FY21 Q3 FY21 Q3 FY22 1. Combined Ratios are in accordance with the Master Circular on of Financial statements of General Insurance issued by IRDA effective from 1st April, 2013. (Net clai
Slide 26: BAGIC: Profit after tax and Capital efficiency
BAGIC : Profit after tax and Capital efficiency All Figures in Rs Million PAT 13,301 Q3 FY22 PAT de-growth of 8% 9,988 7,799 3,300 3,036 FY19 FY20 FY21 Q3 FY21 Q3 FY22 BAGIC - Capital Invested - Networth Accumulated profit* 97% of Total Capital infused is Rs.2,768 Mn Net worth as on 31 Dec 2021 No C
Slide 27: BAGIC: Consistently amongst top private insurers in terms of Gross Premium
BAGIC : Consistently amongst top 2 private insurers in terms of Gross Premium Industry GDPI Trend (Rs. Bn.) 1,787 1,856 Q3 FY22 GDPI growth of 7% 1,617 1,056 1,137 930 465 502 687 730 718 292 316 173 186 FY19 FY20 FY21 Q3 FY21 Q3 FY22 PSU Private Insurers* Industry BAGIC Premium Trend 128,331 126,24
Slide 28: BAGIC: Balanced Product Mix
BAGIC : Balanced Product Mix Business Mix 8% 9% 12% 9% 13% 13% 7% 20% 19% 19% 19% 15% 13% 18% 14% 10% 14% 9% 7% 6% 5% 9% 5% 5% 6% 44% 48% 41% 38% 42% FY19 FY20 FY21 Q3 FY21 Q3 FY22 Motor (Retail) Health (Retail) Group Health Prop, Liability, Engg Agri (Crop Insurance) Others ▪ -crop & govt. health G
Slide 29: BAGIC: Diversified Channel Mix
BAGIC: Diversified Channel Mix Channel Mix 23% 27% 27% 22% 33% 37% 37% 45% 42% 38% 7% 4% 3% 3% 3% 12% 12% 10% 12% 9% 21% 20% 18% 17% 19% FY19 FY20 FY21 Q3 FY21 Q3 FY22 Individual Agents Corporate Agents - Banks Corporate Agents - Others Brokers Direct Business Bancassurance Agency & Retail OEMs & De
Slide 30: BAGIC: Assets Under Management
BAGIC : Assets Under Management AUM (cash and investments) Q3 FY22 growth of 10% 239,767 BAGIC 231,502 218,731 continues to grow its AUM 187,458 strongly 172,367 Investments Rs. Million are largely in fixed income securities Investment Leverage of 2.79 as on 31 December FY19 FY20 FY21 Q3 FY21 Q3 FY2
Slide 31: BAGIC digital initiatives
Digital Distributor Digital Issuance Onboarding Easy & few clicks policy Intermediaries onboarded digitally 100% issuance option 94% Digital Customer Digital Policy Servicing customer by going paperless 93% Omni & multichannel 52% experience Key Initiatives & Digital Adoption I Mitra/Ezeetab BAGICAR
Slide 32: BAGIC: Risk Management
BAGIC : Risk Management Asset Quality Pricing & Underwriting ▪ 99.2% of the debt portfolio in AAA and ▪ Superior underwriting capability leading to sovereign assets low Combined Ratio consistently ▪ 90.4% of Equity in Nifty 50 stocks ▪ Diversified exposure across business lines & ▪ Oversight by Boar
Slide 33: Bajaj Allianz Life Insurance
Bajaj Allianz Life Insurance 32
Slide 34: 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 re
Slide 35: Summary on COVID-19
Summary on COVID-19 ❑ BALIC continues to report industry beating Individual Rated New Business (IRNB) growth along with improvement in quality parameters; 2 Year CAGR for Q3 IRNB is 38% - highest in the industry ❑ Strong growth registered across channels; Agency, Institutional Business and BALIC dir
Slide 36: BALIC Key Highlights
BALIC Key Highlights Q3 FY 2021-22 ▪ In Q3 FY22, IRNB grew by 68% (vs private players growth of 28% & LIC growth of 8%. Overall industry growth of 20%); ▪ 9M FY22 growth of 58% vs Private players growth of 30%; Market share in Revenue Growth & Market IRNB terms increased from 5.3% to 6.4% among priv
Slide 37: BALIC Q3 FY22 Highlights
BALIC Q3 FY22 Highlights All Figures in Rs. Million Performance Highlights of Q3 FY22 over Q3 FY21 CY 10,330 12,878 17,023 40,797 68% 19% 18% 30% PY 6,132 10,842 14,406 31,467 Individual Rated NB Group NB Renewal Premium Gross Written Premium CY 881 1,524 604% Solvency Ratio as at -26% 89% 31 Dec 20
Slide 38: BALIC Growth momentum continues
BALIC Growth momentum continues All Figures in Rs Million New Business Renewal GWP 57,116 63,132 120,248 45,735 51,790 97,525 2 years CAGR at 2 years CAGR at 2 years CAGR at 30% 22% 26% 23,775 17,023 40,797 17,061 14,406 31,467 14,107 11,412 25,519 FY20 FY21 Q3 FY20 Q3 FY21 Q3 FY22 FY20 FY21 Q3 FY20
Slide 39: BALIC: Balanced product mix
BALIC : Balanced product mix IRNB Mix Share of Annuity stands at 12% both in Q3 FY22 and 9M FY22 41% 42% 43% Individual - Unit Linked 51% 60% Individual - Non Par Protection 6% 4% 3% <1% 1% Individual - Non Par Savings 20% 29% 28% 23% 9% Individual - Annuity <1% 0% 0% 12% 2% Individual - Par 30% 28%
Slide 40: BALIC: Persistency
BALIC : Persistency Persistency 13th Month Persistency 25th Month 81% 80% 73% 79% 71% 71% 78% 70% Persistency - 13th Month Persistency - 25th Month FY20 FY21 9M FY21 9M FY22 FY20 FY21 9M FY21 9M FY22 Persistency 37th Month Persistency 49th Month Persistency 61st Month 65% 59% 46% 63% 61% 54% 42% 53%
Slide 41: BALIC: Individual Rated New Business
BALIC : Individual Rated New Business All Figures in Rs Million Whole Company Agency FY21 growth of 28% FY21 growth of 1% 24,676 10,826 10,977 Q3 FY22 growth Q3 FY22 growth of 68% of 44% 19,271 Agency continues to stride Industry beating growth ahead with substantial growth 10,330 4,101 6,132 3,253
Slide 42: BALIC: Diversified Distribution Mix
BALIC : Diversified Distribution Mix Individual Rated New Business Channel- ❑ BALIC embarked on diversifying its distribution wise Mix mix, scaling up alternate channels and enabling 10% 11% 11% 11% 9% wider presence by exploring alternate partnerships ❑ Greater balance between institutional and 20%
Slide 43: BALIC: Assets Under Management (AUM) & Net Worth
BALIC : Assets Under Management (AUM) & Net Worth AUM (Mix) • AUM as of 31 December 2021 grew by 18%; Growth in UL AUM stands at 21%; Traditional 832 AUM grew by 17% 738 703 Rs Billion 561 499 449 427 • Of the UL Funds of 333 Bn, 71% 365 333 is equity as on 31 December 289 276 196 2021 (65% as on 31
Slide 44: BALIC: New Business Value & New Business Margins
BALIC : New Business Value & New Business Margins All Figures in Rs. Million Rolling Rolling Q3 FY22 Q3 FY21 9M FY22 9M FY21 FY21 12M FY22 1 12M FY21 2 Annualized Premium (ANP)* 12,061 7,330 27,789 17,786 39,226 24,518 29,223 Net New Business Value (NBV)** 1,524 807 3,137 1,419 5,329 2,555 3,608 Net
Slide 45: Digital Initiatives to offer best in class customer experience
Digital Initiatives to offer best in class customer experience Few Other Initiatives Employees & Partners • Lead Management System - Module for sales to Smart Assist WhatsApp manage/update leads Reverse Co-Browsing (Customer) Life Assist App capabilities : First time in Real Time servicing Customer
Slide 46: BALIC: Risk Management
BALIC: Risk Management ❑ Prudent assumptions while pricing ❑ Stress and scenario testing performed at pricing stage Product Pricing ❑ Regular review of pricing based on prevailing interest rates ❑ ALM focused on cashflow matching & achieving an immunized portfolio RISK MANAGEMENT ❑ Interest rate ris
Slide 47: Additional Information BAGIC
Additional Information BAGIC
Slide 48: BAGIC: Investment Performance
BAGIC : Investment Performance All Figures in Rs Billion Total Funds Investment Leverage ❑ Investment Portfolio 3.34 3.32 3.08 2.97 2.79 240.4 mix for Q3 FY22: 230.2 222.7 Corporate bonds 38.9%, 187.8 168.6 G-Sec 50.5%, Equity 8.5%, and Money Market 2.1% ❑ Unrealized gain of Rs. FY19 FY20 FY21 9M FY
Slide 49: BAGIC: LOB Net Loss ratio
BAGIC : LOB Net Loss ratio Net Loss Ratio Net Loss Ratio Line of Business Q3 FY22 Q3 FY21 9M FY22 9M FY21 Fire 64.7% 46.4% 71.3% 66.1% Marine Cargo 70.6% 34.5% 72.3% 69.3% Motor OD 69.9% 59.1% 64.3% 49.9% Motor TP 65.6% 74.0% 72.6% 77.7% Motor Total 67.5% 67.7% 69.0% 66.2% Engineering 46.8% 35.7% 68
Slide 50: BAGIC: LOB Growth (Major LOBs)
BAGIC : LOB Growth (Major LOBs) BAGIC GDPI Growth Line of Business Q3 FY22 9M FY22 Fire & Engineering 18.1% 17.1% Marine 25.5% 28.6% Motor OD -7.1% 2.4% Motor TP 2.7% 4.5% Motor Total -1.6% 3.6% Liability 14.0% 12.7% Personal Accident + Travel 40.7% 18.0% Health (retail + group)*# 16.7% 19.0% Crop -
Slide 51: Additional Information BALIC
Additional Information BALIC
Slide 52: BALIC: Investment Performance (Shareholder Fund)
BALIC : Investment Performance # (Shareholder Fund) All Figures in Rs Billion AUM 108.2 ❑ Asset mix as on 31 December 2021: Corporate 102.3 102.2 Bonds 18.4%, G-Sec 48.1% and Equity 15.6% 94.9 91.9 (on Market value basis) ❑ Capital gains booked in 9M FY22 were Rs. 1.63 billion FY19 FY20 FY21 9M FY21
Slide 53: BALIC: Regular Premium Ticket Size
BALIC : Regular Premium Ticket Size All Figures in Rs. Whole Company Non Par Savings FY21 Q3 FY22 FY21 Q3 FY22 decrease of 6% Increase of 39% increase of 33% increase of 33% 84,810 46,333 36,579 34,736 61,716 57,782 61,033 27,437 FY20 FY21 Q3 FY21 Q3 FY22 FY20 FY21 Q3 FY21 Q3 FY22 Par Savings ULIPs
Slide 54: Thank You
BAJA FINSERV Thank You
Slide 55: Annexure
BAJA FINSERV Annexure
Slide 56: Some of our key initiatives towards furtherance of ESG
Some of our key initiatives towards furtherance of ESG Reaching Financial Services to Preserving and Protecting Governance Million of Indians Environment • Board approved business • Crop insurance to 4.8+ million • Renewable power generated is responsibility policy (including farmers in last 3 years
Slide 57: Disclaimer
Disclaimer This presentation has been prepared by Bajaj Finserv Limited (the 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 securities,