Bajaj Finserv Limited · NSE:BAJAJFINSV
Bajaj Finserv — Q2 FY22 Earnings Presentation
58 slides from Bajaj Finserv's earnings presentation, Oct 28, 2021
Slide 1: Cover letter to stock exchanges
~BAJAJ \lii1 FINSERV 28 October 2021 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
Slide 2: Bajaj Finserv Limited Investor Presentation Q2 FY22
BAJAJ FINSERV LIMITED Investor Presentation Q2 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 ❑ Focussed 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 Q2 FY22
Bajaj Finserv performance highlights Q2 FY22 All Figures in Rs Million Performance Highlights of Q2 FY22 over Q2 FY21 (Ind AS) 180,084 11,222 378,860 41,517 CY 20% 14% 12% 15% PY 150,516 9,863 336,879 35,972 Total Revenue PAT* Net Worth Net Worth (Consolidated) (Consolidated) (Consolidated) (Standal
Slide 9: Consolidated profit components Q2 FY22
Consolidated profit components Q2 FY22 All Figures in Rs Million Consolidated profit components for Q2 FY22 (Ind AS) Adjustments (Net of Tax)# Intercompany ❑ Unrealized MTM* Gain on BAGIC Investments Rs. 280 Mn adjustments ❑ Unrealized MTM Gain on BALIC Investments Rs. 770 Mn Bajaj Finserv- Standalo
Slide 10: H1 FY22 Highlights
H1 FY22 Highlights All Figures in Rs Million Highlights of Group Companies BAJAJ FINSERV # H1 FY22 H1 FY21 Growth BAJAJ FINANCE # H1 FY22 H1 FY21 Growth Total Revenue 319,579 292,436 9% AUM 1,669,366 1,370,902 22% Net worth 378,860 336,879 12% Total Income 144,751 131,698 10% PAT 19,549 22,014 -11%
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 1,961 locations products & lifestyle lender annual sales of around mediu
Slide 14: Summary of COVID-19
Summary of COVID-19 ❑ Q2 FY22 was a quarter of sharp revival in terms of growth for BFL ▪ BFL registered a strong AUM growth of 22% on a YoY basis ▪ Focus on customer franchise addition resulted in YoY growths of 20% and 23% in terms of total customer franchise and cross sell franchise respectively
Slide 15: BFL Key Highlights
BFL Key Highlights Q2 FY 2021-22 ▪ Q2 FY22 AUM was at Rs. 1,669,366 Mn vs Rs. 1,370,902 Mn last year (22% growth); Core AUM accretion in Q2 FY22 was approximately ~ Rs. 111,500 Mn AUM & Business ▪ 6.33 Mn new loans in Q2 FY22 as against 3.62 Mn in Q2 FY21 Franchise Growth ▪ Acquired 2.35 Mn new cust
Slide 16: BFL Key Highlights
BFL Key Highlights Q2 FY 2021-22 ▪ Profit after tax (PAT) for Q2 FY22 increased by 53% to Rs. 14,810 Mn v/s Rs. 9,649 Mn in Q2 FY21 mainly on account of robust AUM Profitability & Capital growth, higher net interest income and better portfolio performance Position ▪ Capital adequacy remained very st
Slide 17: BFL Q2 FY22 Highlights
BFL Q2 FY22 Highlights All Figures in Rs Million Performance Highlights of Q2 FY22 over Q2 FY21 (Ind AS) CY 1,608,077 77,321 14,810 22% 19% 53% PY 1,317,649 65,200 9,649 Book Size Total Income Profit After Tax CY 0.9% 3.8% Borrowing mix as of 30 September 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 Total Income Q2 FY22 FY21 growth of 4% FY21 growth of 1% growth of 22% 263,856 266,831 1,608,077 1,413,760 1,466,869 1,317,649 Q2 FY22 growth of 19% 65,200 77,321 FY20 FY21 Q2 FY21 Q2 FY22 FY20 FY21 Q2 FY21 Q2 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 59,686 2.00% accelerated write-offs of Rs. 3,550 Mn of 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 ❑ With things easing up after COVID-19 second wave, turnaround observed in all key segments with BAGIC growing faster than Industry in chosen segments ▪ 21% growth in Q2 FY22 vs Industry# at 10.7% (excluding Crop & Govt. Health growth at 14.0% on GDPI) ▪ Motor: 4W continued to sh
Slide 23: BAGIC Key Highlights
BAGIC Key Highlights Q2 FY 2021-22 ▪ GDPI grew by 21% in Q2 FY22 vs the Industry# growth of 10.7% (Pvt. players grew by 13.7%); H1 FY22 growth of 16.8% vs the industry # growth Revenue Growth of 10.9% ▪ Ex. Crop & Govt. Health, Q2 FY22 GDPI grew by 14% vs Industry # growth of 13.3% ▪ Growth in Q2 FY
Slide 24: BAGIC: Q2 FY22 Highlights
BAGIC : Q2 FY22 Highlights All Figures in Rs Million Performance Highlights of Q2 FY22 over Q2 FY21 CY 50,345 21,668 20,461 4,252 21% 4% 3% 28% PY 41,556 20,859 19,859 3,323 Gross Written Net Written Premium Net Earned Premium Profit After Tax Premium 5.5% Excluding Crop and Govt. Health, GWP was Rs
Slide 25: BAGIC: Combined Ratio
BAGIC : Combined Ratio Combined Ratios (Including Motor TP Pool Losses) 100.8% 98.5% 96.7% 96.9% 97.4% FY19 FY20 FY21 Q2 FY21 Q2 FY22 1. Combined Ratios are in accordance with the Master Circular on of Financial statements of General Insurance issued by IRDA effective from 1 April, 2013. (Net claims
Slide 26: BAGIC: Profit after tax and Capital efficiency
BAGIC : Profit after tax and Capital efficiency All Figures in Rs Million PAT 13,301 Q2 FY22 PAT growth of 28% 9,988 7,799 Rs. Million 4,252 3,323 FY19 FY20 FY21 Q2 FY21 Q2 FY22 Total Capital infused is Rs.2,768 Mn BAGIC - Capital Invested - Networth Accumulated profit* 97% of No Capital infusion si
Slide 27: BAGIC: Consistently amongst top private insurers in Gross Premium
BAGIC : Consistently amongst top 2 private insurers in terms of Gross Premium Industry GDPI Trend (Rs. Bn.) 1,856 Q2 FY22 GDPI growth of 12% 1,785 1,617 930 1,052 1,137 502 562 687 733 718 315 364 186 198 FY19 FY20 FY21 Q2 FY21 Q2 FY22 PSU Private Insurers* Industry BAGIC Premium Trend 128,331 126,2
Slide 28: BAGIC: Balanced Product Mix
BAGIC : Balanced Product Mix Business Mix 8% 9% 5% 13% 20% 13% 20% 19% 42% 15% 31% 13% 18% 14% 9% 9% 6% 12% 5% 12% 6% 8% 9% 6% 4% 44% 41% 38% 27% 24% FY19 FY20 FY21 Q2 FY21 Q2 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% 35% 44% 37% 37% 42% 4% 41% 7% 3% 37% 12% 12% 3% 2% 10% 7% 7% 21% 20% 18% 14% 11% FY19 FY20 FY21 Q2 FY21 Q2 FY22 Individual Agents Corporate Agents - Banks Corporate Agents - Others Brokers Direct Business Bancassurance Agency & Retail OEMs & Dea
Slide 30: BAGIC: Assets Under Management
BAGIC : Assets Under Management AUM (cash and investments) Q2 FY22 growth of 17% BAGIC 240,699 continues to 231,502 grow its AUM 206,262 strongly 187,458 172,367 Investments Rs. Million are largely in fixed income securities Investment Leverage of 2.84 as on 30 September FY19 FY20 FY21 Q2 FY21 Q2 FY
Slide 31: Digital initiatives and adoption
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 94% Omni & multichannel 55% experience Key Initiatives & Digital Adoption I Mitra/Ezeetab BAGICAR
Slide 32: BAGIC: Risk Management
BAGIC : Risk Management Asset Quality Pricing & Underwriting ▪ 99.3% of the debt portfolio in AAA and ▪ Superior underwriting capability leading to sovereign assets low Combined Ratio consistently ▪ 89.0% 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 ❑ Despite the second wave of COVID-19 pandemic, BALIC continued to report industry beating Individual Rated New Business (IRNB) growth of 52% in Q2 FY22 & 51% in H1 FY22 with consistent improvement in quality parameters ❑ Digitization across each channel has help drive IRNB growt
Slide 36: BALIC Key Highlights
BALIC Key Highlights Q2 FY 2021-22 ▪ In Q2 FY22, IRNB grew by 52% (vs Private Players growth of 35% & LIC growth of 3%. Overall industry growth of 21%); ▪ H1 FY22 growth of 51% vs Private players growth of 32%; Market share in Revenue Growth & Market IRNB terms increased from 5.4% to 6.2% among Pvt.
Slide 37: BALIC Q2 FY22 Highlights
BALIC Q2 FY22 Highlights All Figures in Rs. Million Performance Highlights of Q2 FY22 over Q2 FY21 CY 8,128 13,446 15,863 38,131 52% 62% 22% 42% PY 5,351 8,300 13,046 26,771 Individual Rated NB Group NB Renewal Premium Gross Written Premium CY 1,040 1,360 626% Solvency Ratio as at 6% 82% 30 Sep 2021
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 51,790 45,735 97,525 2 years CAGR at 2 years CAGR at 2 years CAGR at 34% 26% 31% 22,268 38,131 15,863 13,046 26,771 12,352 13,725 10,005 22,356 FY20 FY21 Q2 FY20 Q2 FY21 Q2 FY22 FY20 FY21 Q2 FY20
Slide 39: BALIC: Balanced product mix
BALIC : Balanced product mix IRNB Mix Share of Annuity stands at 12% both in Q2 FY22 and H1 FY22 36% 38% Individual - Unit Linked 51% 41% 60% Individual - Non Par Protection 5.4% 3.2% 5.9% Individual - Non Par Savings 0.5% 1.2% 25% 20% 29% 36% Individual - Annuity 9% 0.1% 1.6% 12% Individual - Par 3
Slide 40: BALIC: Persistency
BALIC : Persistency Persistency 13th Month Persistency 25th Month 82% 72% 80% 71% 71% 79% 77% 70% Persistency - 13th Month Persistency - 25th Month FY20 FY21 H1 FY21 H1 FY22 FY20 FY21 H1 FY21 H1 FY22 Persistency 37th Month Persistency 49th Month Persistency 61st Month 64% 59% 45% 63% 54% 42% 60% 58%
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 Q2 FY22 growth Q2 FY22 growth 10,826 10,977 19,271 is 52% of 56% Agency continues to stride Industry beating growth ahead with substantial growth 8,128 3,716 4,502 5,351 2
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 wider presence by exploring alternate partnerships 10% 11% 11% 11% 10% ❑ Greater balance between institutional and 20
Slide 43: BALIC: Assets Under Management & Net Worth
BALIC : Assets Under Management & Net Worth • AUM as of 30 September 2021 AUM (Mix) grew by 27%; Growth in UL AUM stands at 36%; Traditional 814 738 AUM grew by 20% 561 644 Rs Billion 449 482 400 • Of the UL Funds of 333 Bn, 70% 365 333 289 is equity as on 30 September 244 196 2021 (59% as on 30 Sep
Slide 44: BALIC: New Business Value & New Business Margins
BALIC : New Business Value & New Business Margins All Figures in Rs. Million Rolling Rolling Q2 FY22 Q2 FY21 H1 FY22 H1 FY21 FY21 12M FY22 1 12M FY21 2 Annualized Premium (ANP)* 9,770 6,463 15,729 10,456 34,496 23,652 29,223 Net New Business Value (NBV)** 1,360 747 1,613 611 4,611 2,582 3,608 Net Ne
Slide 45: Market Consistent Embedded Value Analysis of Movement
Market Consistent Embedded Value $ Analysis of Movement All Figures in Rs. Million 4,753 - 166,164 1,613 93 1,237 5,784 - 155,345 EVOP: Rs. 7,304 Mn RoEV excluding COVID-19 & Tax Impact: 9.6% (annualized) As at Unwinding Net NBV Operational Assumptions COVID-19 & Investment Capital As at 31st March
Slide 46: Digital Initiatives to offer best in class customer experience
Digital Initiatives to offer best in class customer experience Few Other Initiatives Employees & Partners • WhatsApp for ICs self Smart Assist WhatsApp Life Assist App servicing chatbot Co-Browsing capabilities : Real Time servicing First time in India Customer servicing app • iManage - App to view
Slide 47: 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 48: Additional Information BAGIC
Additional Information BAGIC
Slide 49: BAGIC: Investment Performance
BAGIC : Investment Performance All Figures in Rs Billion Total Funds Realized Yield# Investment Leverage 3.06 2.84 7.6% 8.0% 7.7% 3.34 3.32 3.08 230.2 243.1 207.7 187.8 168.6 4.5% FY19 FY20 FY21 H1 FY21 H1 FY22 FY19 FY20 FY21 H1 FY22 Total Return# ❑ Investment Portfolio mix for Q2 FY22: Corporate 12
Slide 50: BAGIC: LOB Net Loss ratio
BAGIC : LOB Net Loss ratio Net Loss Ratio Net Loss Ratio Line of Business Q2 FY22 Q2 FY21 H1 FY22 H1 FY21 Fire 69.3% 43.9% 74.4% 76.2% Marine Cargo 55.3% 104.4% 73.4% 90.2% Motor OD 66.4% 39.9% 61.5% 45.4% Motor TP 73.5% 79.0% 76.0% 79.4% Motor Total 70.4% 62.9% 69.7% 65.5% Engineering 95.7% -7.3% 8
Slide 51: BAGIC: LOB Growth (Major LOBs)
BAGIC : LOB Growth (Major LOBs) BAGIC GDPI Growth Line of Business Q2 FY22 H1 FY22 Fire & Engineering 23.4% 16.8% Marine 52.9% 29.8% Motor OD 8.5% 9.5% Motor TP 7.0% 5.8% Motor Total 7.6% 7.4% Liability 0.5% 12.2% Personal Accident & Travel 21.6% 7.5% Health (retail + group)*# 154.9% 96.1% Crop -12.
Slide 52: Additional Information BALIC
Additional Information BALIC
Slide 53: BALIC: Investment Performance (Shareholder Fund)
BALIC : Investment Performance # (Shareholder Fund) All Figures in Rs Billion AUM Realized Yield 108.0 9.3% 102.3 7.0% 6.3% 94.9 95.8 91.9 4.0% FY19 FY20 FY21 H1 FY21 H1 FY22 FY19 FY20 FY21 H1 FY22 ❑ Asset mix as on 30 September 2021: Corporate Total Return* Bonds 20.2%, G-Sec 54.4% and Equity 16% (
Slide 54: BALIC: Regular Premium Ticket Size
BALIC : Regular Premium Ticket Size All Figures in Rs. Whole Company Non-Par Savings FY21 Q2 FY22 FY21 Q2 FY22 decrease of 6% Increase of 29% increase of 33% increase of 10% 70,326 41,323 36,579 37,602 61,716 57,782 54,457 27,437 FY20 FY21 Q2 FY21 Q2 FY22 FY20 FY21 Q2 FY21 Q2 FY22 Par Savings ULIP F
Slide 55: Thank You
BAJA FINSERV Thank You
Slide 56: Annexure
BAJA FINSERV Annexure
Slide 57: 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 58: 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,