Bajaj Finserv Limited · NSE:BAJAJFINSV
Bajaj Finserv — Q4 FY21 Earnings Presentation
60 slides from Bajaj Finserv's earnings presentation, Apr 28, 2021
Slide 1: Exchange filing cover letter
BA...J~...J FINS ERV 28 April 2021 To To Corporate Relations Department. Corporate Listing Department. BSE Limited ·· - · . NatiorialE$tp~Jc.~JfChange of India Ltd 151 Floor, New Tradim:fRihg, · ExchangePla~~. 5i1Jg1qor Rotunda Buildi~g, P J Tower, Plot No.C-1, G Block., .... Dalal Street, Mumbai 40
Slide 2: Bajaj Finserv Limited Investor Presentation Q4 FY21
BAJAJ FINSERV LIMITED Investor Presentation Q4 FY21* * Financial year 2020-21
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 52.74%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: 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 9: Bajaj Finserv performance highlights Q4 FY21
Bajaj Finserv performance highlights Q4 FY21 All Figures in Rs Million Performance Highlights of Q4 FY21 over Q4 FY20 (Ind AS) 153,873 9,791 358,300 38,009 CY 16% 403% 15% 7% PY 132,943 1,944 313,013 35,354 Total Revenue PAT* Net Worth Net Worth (Consolidated) (Consolidated) (Consolidated) (Standalo
Slide 10: Consolidated profit components Q4 FY21
Consolidated profit components Q4 FY21 All Figures in Rs Million Consolidated profit components for Q4 FY21 (Ind AS) Adjustments (Net of Tax)# Intercompany ❑ MTM* Gain on BAGIC Investments Rs. 160 Mn adjustments ❑ MTM Loss on BALIC Investments Rs. 200 Mn Bajaj Finserv- Standalone (2,409) Others 1,68
Slide 11: FY21 Highlights
FY21 Highlights All Figures in Rs Million Highlights of Group Companies BAJAJ FINSERV # FY21 FY20 Growth BAJAJ FINANCE # FY21 FY20 Growth Total Revenue 605,912 543,515 11% AUM 1,529,471 1,471,534 4% Net worth 358,300 313,013 15% Total Income 266,831 263,857 1% PAT 44,705 33,691 33% PAT 44,198 52,637
Slide 12: Bajaj Finance Limited
BAJAJ FINSERV Bajaj Finance Limited ll
Slide 13: 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 14: 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 1,690 locations products & furniture annual sales of around medium and l
Slide 15: Summary of COVID-19
Summary of COVID-19 ❑ Moving from Q3 which was a period of granular business recovery & significant improvement in risk metrics, Q4 was a good quarter with most lead financial indicators normalizing to pre-COVID levels. Also, the business transformation plan is on track. ❑ Quarterly AUM growth momen
Slide 16: BFL Key Highlights
BFL Key Highlights Q4 2020-21 ▪ Q4 AUM was at Rs. 1,529,471 Mn vs Rs. 1,471,534 Mn last year (4% growth); Core AUM growth in Q4 FY21 was approximately Rs. 93,970 Mn as compared to Rs. 20,610 Mn in Q4 FY20 AUM & Business ▪ 5.47 Mn new loans in Q4 FY21 as against 6.03 Mn in Q4 FY20; Franchise Growth ▪
Slide 17: BFL Key Highlights
BFL Key Highlights Q4 2020-21 ▪ Loan losses & provisions for the Q4 FY21 were Rs. 12,308 Mn vs Rs. 19,538 Mn in Q4 FY20; FY21 loan losses and provisions were Rs. 59,686 Mn (vs Rs. 39,295 Mn in FY20) in line with earlier guidance ▪ The Company has made accelerated write off in the quarter of Credit C
Slide 18: BFL Subsidiaries Key Highlights
BFL Subsidiaries Key Highlights Q4 2020-21 Subsidiaries A. Bajaj Housing Finance Limited (BHFL) ▪ AUM increased by 19% to Rs. 388,709 Mn as of 31 Mar 2021 from Rs. 327,046 Mn as of 31 Mar 2020 ▪ Profit after tax (PAT) increased by 97% to Rs. 1,789 Mn in Q4 FY21 against Rs. 907 Mn in Q4 FY20 on accou
Slide 19: BFL Q4 FY21 Highlights
BFL Q4 FY21 Highlights All Figures in Rs Million Performance Highlights of Q4 FY21 over Q4 FY20 (Ind AS) CY 1,466,869 68,549 13,466 4% -5% 42% PY 1,413,760 72,308 9,481 Book Size Total Income Profit After Tax CY 0.95% 3.7% Borrowing mix as of 31 March 2021 is 32:44:20:4 between banks, money markets,
Slide 20: BFL: Book Size and Revenue
BFL : Book Size and Revenue All Figures in Rs Million Book Size Total Income FY21 growth of 4% FY21 growth of 1% Q4 FY21 growth of -5% 1,413,760 1,466,869 263,856 266,831 1,125,128 185,002 72,308 68,549 FY19 FY20 FY21 FY19 FY20 FY21 Q4 FY20 Q4 FY21 Net Interest Income FY21 growth of 2% Q4 FY21 growt
Slide 21: BFL: Loan Loss Provision and Operating Expenses
BFL : Loan Loss Provision and Operating Expenses All Figures in Rs Million Loss Provision and Net NPA% 59,686 2.00% ❑ Loan losses and provisions (expected credit loss) for 60,000 Q4 FY21 was Rs. 12,308 Mn as against Rs. 19,538 Mn in 45,000 39,295 Q4 FY20 ❑ GNPA and NNPA stood at 1.79% & 0.75% respec
Slide 22: Bajaj Allianz General Insurance
Bajaj Allianz General Insurance 21
Slide 23: 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 24: Summary on COVID-19
Summary on COVID-19 ❑ FY21 growth has been slightly lower than industry but is back on track : negative growth in H1 FY2 to positive growth in H2 FY21 ▪ Motor: strong growth in 2W & 4W segments but Commercial vehicles still below pre-COVID levels ▪ On Fire, Engineering, Crop, BAGIC has done better ▪
Slide 25: BAGIC Key Highlights
BAGIC Key Highlights Q4 2020-21 ▪ In Q4, GWP grew by 5%in Q4 FY21 as against Industry# growth of 9% ▪ 2% de-growth in FY21 vs industry growth of 2% Revenue Growth ▪ Ex. Crop & Govt. Health, Q4 FY21 GWP grew by 11% vs Industry growth of 10.8% ▪ Growth in Q4 was driven by Motor 4W (21.4%), 2W (27.9%)
Slide 26: BAGIC Key Highlights
BAGIC Key Highlights Q4 2020-21 ▪ Q4 FY21 PAT de-grew by 10% on account of lower earned premium, higher LR partially offset by higher realized gain of Rs. 210 Mn vs loss of Profit after tax (PAT) 12 Mn in Q4 FY21 ▪ FY21 PAT grew by 33% to Rs. 13,301 Mn - highest ever profit for BAGIC in any financia
Slide 27: BAGIC: Q4 FY21 Highlights
BAGIC : Q4 FY21 Highlights All Figures in Rs Million Performance Highlights of Q4 FY21 over Q4 FY20 CY 27,874 19,635 17,944 2,729 5% 6% -9% -10% PY 26,555 18,598 19,723 3,041 Gross Written Net Written Premium Net Earned Premium Profit After Tax Premium 3.9% ▪ Retail Growth at 10% (Ex. Crop, Govt. He
Slide 28: BAGIC: Combined Ratio
BAGIC : Combined Ratio Combined Ratios (Including Motor TP Pool Losses) 100.8% 96.8% 96.7% 96.9% 96.6% 92.3% 93.8% FY17 FY18 FY19 FY20 FY21 Q4 FY20 Q4 FY21 1. Combined Ratios are in accordance with the Master Circular on of Financial statements of General Insurance issued by IRDA effective from 1 Ap
Slide 29: BAGIC: Profit after tax and Capital efficiency
BAGIC : Profit after tax and Capital efficiency All Figures in Rs Million PAT PAT CAGR of 16.3% between FY17 FY21 Q4 FY21 PAT growth of -10% 13,301 9,212 9,988 7,278 7,799 3,041 2,729 FY17 FY18 FY19 FY20 FY21 Q4 FY20 Q4 FY21 Total Capital infused is Rs.2,768 Mn BAGIC - Capital Invested - Networth Ac
Slide 30: BAGIC: Consistently amongst top private insurers in gross premium
BAGIC : Consistently amongst top 2 private insurers in terms of Gross Premium; Advanced ahead of Oriental Industry GDPI Trend (Rs. Bn.) 1,856 Q4 FY21 GDPI growth of 11% 1,617 1,785 1,415 1,199 1,052 1,137 737 930 597 502 451 602 678 687 733 718 262 313 189 189 FY17 FY18 FY19 FY20 FY21 Q4 FY20 Q4 FY2
Slide 31: BAGIC: Balanced Product Mix
BAGIC : Balanced Product Mix Business Mix 8% 13% 9% 12% 9% 4% 13% 9% 20% 19% 20% 15% 16% 13% 18% 9% 14% 8% 9% 9% 9% 8% 6% 5% 6% 47% 49% 44% 41% 38% FY19 FY20 FY21 Q4 FY20 Q4 FY21 Motor (Retail) Health (Retail) Group Health Prop, Liability, Engg Agri (Crop Insurance) Others ▪ -crop GWP growth for Q4
Slide 32: BAGIC: Diversified Channel Mix
BAGIC: Diversified Channel Mix Channel Mix 9% 10% 23% 27% 27% 47% 51% 37% 37% 42% 5% 3% 7% 4% 15% 12% 12% 3% 13% 10% 21% 20% 18% 24% 23% FY19 FY20 FY21 Q4 FY20 Q4 FY21 Individual Agents Corporate Agents - Banks Corporate Agents - Others Brokers Direct Business Bancassurance Agency & Retail OEMs & De
Slide 33: BAGIC: Assets Under Management
BAGIC : Assets Under Management AUM (cash and investments) FY21 Increase of 23% 231,502 BAGIC continues to grow its AUM 187,458 strongly 172,367 148,229 Rs. Million Investments 108,291 are largely in fixed income securities Investment Leverage of 3.08 as on 31 March 2021 FY17 FY18 FY19 FY20 FY21 99%
Slide 34: Digital Distributor Onboarding Digital Policy
Digital Distributor FY21 Digital Issuance FY21 Onboarding From 85.6% in FY20 to Intermediaries onboarded digitally 100% 96.7% FY21 Digital Customer FY21 Digital Policy From 46.1% in FY20 to Servicing 96.5% From 24.1% in FY20 to 65.2% Key Initiatives & Digital Adoption I Mitra/Ezeetab BAGICARE - CRM
Slide 35: BAGIC: Risk Management
BAGIC : Risk Management Asset Quality Pricing & Underwriting ▪ 99% of the debt portfolio in AAA and ▪ Superior underwriting capability leading to sovereign assets low Combined Ratio consistently ▪ 85.6% of Equity in Nifty 50 stocks ▪ Diversified exposure across business lines & ▪ Oversight by Board
Slide 36: Bajaj Allianz Life Insurance
Bajaj Allianz Life Insurance 35
Slide 37: 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 38: Summary on COVID-19
Summary on COVID-19 ❑ Despite the impact of COVID-19, BALIC consistently reported industry beating IRNB growth & improvement in quality parameters (including balanced product mix, NBV, persistency) ❑ Given the uncertainty due to the pandemic, retail investors preference for Guaranteed and protection
Slide 39: BALIC Key Highlights
BALIC Key Highlights Q4 2020-21 ▪ IRNB grew by 63% in Q4 FY21(vs Private Players growth of 40% & LIC growth of 15%); IRNB grew by 28% in FY21 (vs Private players growth of 8%) Revenue Growth & Market ▪ Fastest growing among the top 10 Private Players in FY21 Share ▪ Market share increased from 4.6%
Slide 40: BALIC Key Highlights
BALIC Key Highlights Q4 2020-21 ▪ PAT for Q4 FY21 increased by 516% from Rs. 378 Mn to Rs. 2,339 Mn ▪ On account of higher investment income of Rs. 2,160 Mn which was partially offset by higher NB strain of Rs. 430 Mn owing to higher non par Profit after tax contribution ▪ FY21 PAT grew by 29% from
Slide 41: BALIC Q4 FY21 Highlights
BALIC Q4 FY21 Highlights All Figures in Rs. Million Performance Highlights of Q4 FY21 over Q4 FY20 CY 9,888 14,711 20,085 45,013 63% 66% 25% 44% PY 6,059 8,883 16,091 31,283 Individual Rated NB Group NB Renewal Premium Gross Written Premium CY 2,339 3,608 666% Solvency Ratio as on 516% 59% 31 Mar 20
Slide 42: BALIC Topline continuously growing
BALIC Topline continuously growing All Figures in Rs Million New Busines BALIC Group Protection NB GWP FY17 FY21 CAGR of 17% 63,132 FY17 FY21 CAGR of 16% FY17 FY21 CAGR of 18% 120,248 18,714 51,790 49,228 15,974 97,525 42,911 14,501 88,571 75,784 33,382 9,795 61,833 8,823 FY17 FY18 FY19 FY20 FY21 FY
Slide 43: BALIC: Balanced product mix
BALIC : Balanced product mix IRNB Mix Share of Non-ULIP individual is increasing 41% 46% 44% Individual - Unit Linked 51% 60% Individual - Non Par Protection Individual - Non Par Savings 0.5% 1.2% 5.9% 3.2% 24% 3.5% 9% 20% 29% 27% Individual - Annuity 0.1% 0.0% 3.8% 1.6% 0.1% Individual - Par 30% 28
Slide 44: BALIC: Persistency
BALIC : Persistency Persistency 13th Month Persistency 25th Month 68% 71% 71% 80% 79% 80% 77% 58% 51% 68% Persistency - 13th Month Persistency - 25th Month FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 Persistency 37th Month Persistency 49th Month Persistency 61st Month 63% 54% 42% 55% 58% 47% 5
Slide 45: 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 12,039 Q4 FY21 growth 10,826 10,977 Q4 FY21 growth 19,271 17,420 is 63% of 37% 9,888 4,195 6,059 3,060 FY19 FY20 FY21 Q4 FY20 Q4 FY21 FY19 FY20 FY21 Q4 FY20 Q4 FY21 Instit
Slide 46: BALIC: Diversified Distribution Mix
BALIC : Diversified Distribution Mix Individual Rated New Business Mix ❑ BALIC embarked on diversifying its distribution mix, scaling up alternate channels and enabling 10% 11% 11% 12% 11% wider presence by exploring alternate partnerships 20% ❑ Reduced over reliance on Agency channel with 33% 37% 4
Slide 47: BALIC: Assets Under Management & Net Worth
BALIC : Assets Under Management & Net Worth AUM (Mix) • AUM as on 31 March 2021 grew by 32%; Growth in UL AUM stands at 47%; Traditional AUM 738 561 grew by 23% 520 566 449 Rs Billion 493 336 365 • Of the UL Funds of Rs. 289 Bn., 279 306 289 214 214 230 65% is equity as on 31 March 196 2021 (59% as
Slide 48: Digital Initiatives to offer best in class customer experience
Digital Initiatives to offer best in class customer experience Smart Assist WhatsApp Co-Browsing capabilities : First Real Time servicing Platform time in India • 273,000+ Transactions Done in Q4, an • Face-2-Face meetings NOW Screen-2- increase of 36% over Q3 Screen (device agnostic platform for •
Slide 49: BALIC: MCEV Update
BALIC: MCEV Update #$ All Figures in Rs Million Particulars FY 21 FY 20 Annualized Premium** (ANP) 29,223 22,945 Gross New Business Value* (NBV) 6,839 4,351 Net New Business Value* (NBV) 3,608 2,266 Net Margins on ANP+ (Post overruns) 12.3% 9.9% Embedded Value++ (EV) 155,345 134,384 • One-year forwa
Slide 50: BALIC: MCEV Analysis of Movement
BALIC: MCEV Analysis of Movement All Figures in Rs. Million EVOP : Rs. 12,642 Mn RoEV : 9.4% (Annualized) (excluding ETR benefit) Net NBV 2 9,088 1,658 155,345 6,839 3,231 156 550 889 9,429 134,384 As at Unwinding Gross NBV Expenses Operating Assumption Benefit due Investment Capital As at 31st Marc
Slide 51: 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 RISK MANAGEMENT ❑ ALM focused on cashflow matching & achieving an immunized portfolio Asset Liability ❑ I
Slide 52: Additional Information BAGIC
Additional Information BAGIC
Slide 53: BAGIC: LOB wise Net Claim ratio (Major LOBs)
BAGIC : LOB wise Net Claim ratio (Major LOBs) Net Claim Ratio Line of Business Q4 FY21 Q4 FY20 FY21 FY20 Fire 17.2% 48.0% 54.5% 68.0% Marine Cargo 57.2% 59.2% 66.0% 67.3% Motor OD 66.0% 66.4% 54.0% 67.7% Motor TP 79.6% 59.4% 78.1% 64.5% Motor Total 73.7% 62.2% 68.1% 65.8% Engineering 0.8% 71.6% 36.1
Slide 54: BAGIC: Loss Triangle: Whole Account Excluding IMTPIP
BAGIC : Loss Triangle : Whole Account Excluding IMTPIP on Net Basis as at 31 March 2021 Accident Year Cohort Particulars (Rs. Mn) 31-Mar-10 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- and Prior 11 12 13 14 15 16 17 18 19 20 21 A] Ultimate Net loss Cost - O
Slide 55: BAGIC: Loss Triangle: Whole Account Excluding IMTPIP
BAGIC : Loss Triangle : Whole Account Excluding IMTPIP on Net Basis as at 31 March 2021 Accident Year Cohort Particulars (Rs. Mn) 31-Mar-10 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- and Prior 11 12 13 14 15 16 17 18 19 20 21 A] Ultimate Net loss Cost - O
Slide 56: BAGIC: Loss Triangles - IMTPIP reserving
BAGIC : Loss Triangles - IMTPIP reserving • The IMTPIP came to operation on 1st April 2007 exclusively for third party claims in respect of commercial vehicles. All insurers registered to carry on non-life insurance business including motor business were automatically required to participate in the
Slide 57: Additional Information BALIC
Additional Information BALIC
Slide 58: BALIC: Regular Premium Ticket Size
BALIC : Regular Premium Ticket Size All Figures in Rs. Whole Company Non Par Savings FY21 Q4 FY21 FY21 Q4 FY21 decrease of 6% Increase of 18% increase of 33% increase of 24% 71,788 40,189 61,716 57,782 60,865 36,579 56,128 32,314 27,437 20,484 FY19 FY20 FY21 Q4 FY20 Q4 FY21 FY19 FY20 FY21 Q4 FY20 Q4
Slide 59: 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,
Slide 60: Thank You
BAJA FINSERV Thank You