Bajaj Finserv Limited · NSE:BAJAJFINSV
Bajaj Finserv — Q3 FY23 Earnings Presentation
60 slides from Bajaj Finserv's earnings presentation, Jan 30, 2023
Slide 1: Exchange filing cover letter
30 January 2023 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 – Q3 FY23
BAJAJ FINSERV LIMITED Investor Presentation – Q3 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) @ 34.18%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 – Q3 FY23
Bajaj Finserv performance highlights – Q3 FY23 All Figures in Rs. Crore Performance Highlights of Q3 FY23 over Q3 FY22 (Ind AS) CY 21,755 1,782 44,551 5,213 23% 42% 14% 20% PY 17,620 1,256 39,012 4,334 Total Revenue PAT* Net Worth Net Worth (Consolidated) (Consolidated) (Consolidated) (Standalone) •
Slide 9: Consolidated profit components – Q3 FY23 (BFS Share)
Consolidated profit components – Q3 FY23 (BFS Share) All Figures in Rs. Crore Consolidated profit# components for Q3 FY23 (Ind AS) Intercompany Adjustments (Net of Tax)# adjustments ❑ Unrealized MTM* Gain on BAGIC Investments – Rs. 17 Cr Bajaj Finserv- ❑ Unrealized MTM* Gain on BALIC Investments – R
Slide 10: 9M FY23 Highlights
9M FY23 Highlights All Figures in Rs. Crore Highlights of Group Companies BAJAJ FINSERV# 9M FY23 9M FY22 Growth BAJAJ FINANCE# 9M FY23 9M FY22 Growth Total Revenue 58,447 49,577 18% AUM 2,30,842 1,81,250 27% Net worth 44,551 39,012 14% Total Income 30,043 23,019 31% PAT 4,648 3,211 45% PAT 8,350 4,6
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 established products covering short, model in 2,322 locations & lifestyle lender in India financials & mediu
Slide 14: BFL – Q3 FY23 highlights
BFL – Q3 FY23 highlights All Figures in Rs. Crore Performance Highlights of Q3 FY23 over Q3 FY22 (Ind AS) CY 2,25,399 10,786 2,973 29% 26% 40% PY 1,74,775 8,539 2,125 Book Size Total Income Profit After Tax CY 1.4% 6.0% ❑ Capital Adequacy stands at 25.14% as of 31 December 2022 vs 26.96% as of 31 De
Slide 15: BFL – Key Highlights
BFL – Key Highlights Q3 FY 2022-23 ▪ Q3 FY23 AUM was at Rs. 2,30,842 Cr vs Rs. 1,81,250 Cr last year (27% growth); AUM growth in Q3 FY23 was approximately ~ ₹ 12,476 Cr AUM & Business ▪ 78.4 Lakh new loans in Q3 FY23 as against 74.4 Lakh in Q3 FY22 Franchise Growth ▪ Acquired 31.4 Lakh new customers
Slide 16: BFL – Key Highlights
BFL – Key Highlights Q3 FY 2022-23 ▪ Profit after tax (PAT) for Q3 FY23 increased by 40% to Rs. 2,973 Cr v/s Rs. 2,125 Cr in Q3 FY22 mainly on account of robust AUM growth, higher net Profitability & Capital interest income and better portfolio performance Position ▪ Capital adequacy remained strong
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% Q3 FY23 FY22 growth of 19% Q3 FY23 growth of 29% growth of 26% 31,648 2,25,399 26,386 26,683 1,91,423 1,74,775 141,376 146,687 10,786 8,539 FY20 FY21 FY22 Q3 FY22 Q3 FY23 FY20 FY21 FY22 Q3 FY22 Q3 FY23 Net
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 1.14% and 0.41% as of 31 2.00% December 2022 as against 1.17% and 0.44% as of 30 60,000 September 2022 45,000 ❑ Provisioning coverage ratio (PCR) of 64% on stage 3 assets; PCR
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: Q3 FY23 Highlights
BAGIC : Q3 FY23 Highlights All Figures in Rs Crore Performance Highlights of Q3 FY23 over Q3 FY22 CY 3,821 CY 3,097 2,205 2,086 29% 13% 11% 8% PY 2,959 PY 2,730 1,988 1,930 Gross Written GWP Excl. Crop & Net Written Premium Net Earned Premium Premium (GWP) Govt. Health 278 3.1% 373% Solvency Ratio -
Slide 22: BAGIC – Key Highlights
BAGIC – Key Highlights Q3 2022-23 ▪ GDPI grew by 28.6% in Q3 FY23 as against Private sector growth of 22.3% and Industry# growth of 18.5% ; 9M FY23 growth of 11.4% v/s private sector growth Revenue Growth of 21.6% and industry # growth of 16.2% ▪ Ex. Crop & Govt. Health, Q3 FY23 GDPI grew by 12.8% v
Slide 23: BAGIC: Combined Ratio
BAGIC : Combined Ratio Combined Ratio 100.8% 99.6% 98.9% 100.3% 96.9% FY20 FY21 FY22 Q3 FY22 Q3 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 incurre
Slide 24: BAGIC: Profit after tax and Capital efficiency
BAGIC : Profit after tax and Capital efficiency All Figures in Rs. Crore PAT Q3 FY23 PAT degrowth of 8% 1,330 1,339 999 304 278 FY20 FY21 FY22 Q3 FY22 Q3 FY23 BAGIC - Capital Invested - Networth Accumulated profit* 97% of Net worth as on 31 Dec 2022 Total Capital infused is Rs. 277 Cr No Capital inf
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.) Q3 FY23 GDPI growth of 19% 2,05,732 1,78,689 1,85,595 1,13,770 1,30,614 1,05,647 50,326 59,990 73,042 71,826 75,118 31,696 38,910 18,630 21,080 FY20 FY21 FY22 Q3 FY22 Q3 FY23 PSU Private Insurer
Slide 26: BAGIC: Balanced Product Mix
BAGIC : Balanced Product Mix Business Mix 9% 9% 8% 13% 14% 7% 20% 19% 19% 15% 19% 17% 13% 18% 19% 10% 9% 6% 12% 9% 10% 5% 5% 6% 6% 48% 41% 38% 39% 35% FY20 FY21 FY22 Q3 FY22 Q3 FY23 Motor (Retail) Health (Retail) Group Health Prop, Liability, Engg Agri (Crop Insurance) Others ▪ BAGIC’s excluding Cro
Slide 27: BAGIC: Diversified Channel Mix
BAGIC: Diversified Channel Mix Channel Mix 27% 27% 30% 22% 22% 37% 42% 45% 50% 42% 4% 3% 3% 12% 10% 2% 12% 2% 10% 10% 20% 18% 16% 19% 15% FY20 FY21 FY22 Q3 FY22 Q3 FY23 Individual Agents Corporate Agents - Banks Corporate Agents - Others Brokers Direct Business Bancassurance Agency & Retail OEMs* &
Slide 28: BAGIC: Assets Under Management
BAGIC : Assets Under Management AUM (cash and investments) Q3 FY23 growth of 8% BAGIC continues to 25,977 grow its AUM 24,633 23,977 23,150 strongly Rs. Crore 18,746 Investments are largely in fixed income securities Investment Leverage of 2.72 as on 31 December 2022 FY20 FY21 FY22 Q3 FY22 Q3 FY23 9
Slide 29: Key Technology & Customer Initiatives of 9M FY2023
Key Technology & Customer Initiatives of 9M FY2023 Digital Journey Metrics Digital Agent Onboarding 9M FY22-23 Digital Issuance 9M FY 22-23 From 100% in FY 21-22 -> From 94.48% in FY 21-22 -> 100% 95.43% Net Promoter Score* Digital Payment 9M FY 22-23 Motor Health FY21 FY22 FY21 FY22 From 91.23% in
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 ▪ 99.0% of the debt portfolio in AAA and ▪ Superior underwriting capability leading to low sovereign assets Combined Ratio consistently ▪ 93.4% of Equity in Nifty 50 stocks & 96.7% 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 – Q3 FY23 Highlights
BALIC – Q3 FY23 Highlights All Figures in Rs. Crore Performance Highlights of Q3 FY23 over Q3 FY22 CY 1,255 291 605 2,215 22% -49% -16% 30% PY 1,033 571 717 1,702 Individual Rated NB Group Fund NB Group Protection NB Renewal Premium CY 4,504 81 210 529% Solvency Ratio 10% 38% as at -8% 31 Dec 2022 P
Slide 35: BALIC – Key Highlights
BALIC – Key Highlights Q3 2022-23 ▪ In Q3 FY23, IRNB grew by 22% (vs private players growth of 16% & LIC growth of 6%. Overall industry growth of 12%) ▪ 9M FY23 growth of 38% vs private players growth of 19%; Market share in IRNB Revenue Growth & Market terms increased from 6.4% to 7.4% among privat
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 16% 24% 2,215 20% 4,504 2,377 2,289 4,079 1,702 1,706 3,147 1,441 Q3 FY21 Q3 FY22 Q3 FY23 Q3 FY21 Q3 FY22 Q3 FY23 Q3 FY21 Q3 FY22 Q3 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 Q3 FY23 growth 1,489 Q3 FY23 growth of 22% of 28% 1,098 2,468 Agency continues to stride ahead Industry beating growth with substantial growth 1,255 524 1,033 410 613 285 FY
Slide 38: BALIC: Balanced product mix
BALIC : Balanced product mix IRNB Mix Share of Non-par savings stands at 37% in Q3 FY23 39% 33% Individual - Unit Linked 41% 43% 51% 4% Individual - Non Par Protection 6% 3% 2% Individual - Non Par Savings 1% 27% 37% 20% 29% 23% Individual - Annuity 0% 11% 12% 2% 7% Individual - Par 28% 23% 20% 19%
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% 9% 8% Business and BALIC Direct contributing 33% approximately 42%, 50% and 8% respectively in Q3 45% 50% 50%
Slide 40: BALIC: Persistency
BALIC : Persistency Persistency 13th Month Persistency 25th Month 83% 74% 82% 73% 73% 81% 80% 71% Persistency - 13th Month Persistency - 25th Month FY21 FY22 9M FY22 9M FY23 FY21 FY22 9M FY22 9M FY23 Persistency 37th Month Persistency 49th Month Persistency 61st Month 66% 63% 62% 66% 49% 65% 59% 48%
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 Q3 FY23 Q3 FY22 9M FY23 9M FY22 FY231 FY222 Annualized Premium (ANP)* 1,419 1,206 3,883 2,779 5,468 3,923 Net New Business Value (NBV)** 210 152 535 314 843 533 Net New Business Margin (NBM) on 14.8% 1
Slide 42: Performance of Key Digital Assets and New Tech Initiatives
Performance of Key Digital Assets and New Tech Initiatives Digital assets Internal Assets INStab iRecruit LMS WhatsApp for ICs ~22K Unique Users ~18 Lakhs total logins ~16K Unique users ~23K Unique Users 26% increase in 57% increase in 40% increase in 159% increase in 9MFY23 over PY 9MFY23 over PY 9
Slide 43: BALIC: Assets Under Management (AUM) & Net Worth
BALIC : Assets Under Management (AUM) & Net Worth AUM (Mix) • AUM as of 31 December 2022 grew by 8%; Growth in UL AUM stands at 4%; Traditional AUM 85,623 89,466 83,194 grew by 10% 73,773 55,002 Rs Crore 52,196 49,902 44,917 • Of the UL Funds of Rs. 34,464 33,427 33,292 34,464 crore, 71% is equity a
Slide 44: 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 45: Bajaj Finserv Direct Ltd (Bajaj Markets)
Bajaj Finserv Direct Ltd (Bajaj Markets) 44
Slide 46: 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 47: Bajaj MARKETS
Bajaj MARKETS Organic Visits (in Thousands) Total Revenue (Rs lakh) Total Opex (Rs lakh) 6,000 14,000 5,200 5,220 11,490 4,896 12,000 10,685 5,000 10,436 9,278 10,000 4,000 3,275 3,308 10,396 6,872 7,321 8,000 9,436 2,685 6,021 3,000 2,335 7,942 6,000 6,577 2,000 5,614 4,000 4,785 1,000 2,000 3,756
Slide 48: Bajaj Finserv Health Limited
Bajaj Finserv Health Limited 47
Slide 49: 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 50: Bajaj Finserv Health – Business Metrics
Bajaj Finserv Health – Business Metrics REGISTERED USERS (CUMULATIVE) MONTHLY ACTIVE USERS 1,00,00,000 87,03,587 7,00,000 5,97,758 74,34,129 6,00,000 80,00,000 4,92,029 4,66,061 59,89,920 5,00,000 3,94,480 60,00,000 48,58,625 4,00,000 3,53,532 40,66,591 40,00,000 3,00,000 2,00,000 20,00,000 1,00,000
Slide 51: Additional Information – BAGIC
Additional Information – BAGIC
Slide 52: BAGIC: Investment Performance
BAGIC : Investment Performance All Figures in Rs Crore Total Funds# Investment Leverage ❑ Investment Portfolio mix 3.32 3.08 2.79 2.79 2.72 for Q3 FY23: Corporate 25,100 bonds 24.6%, G-Sec 23,016 24,401 24,043 18,778 63.9%, Equity* 9.1%, and Money Market 2.2% ❑ Unrealized loss of Rs. 83 crore as on
Slide 53: BAGIC: LOB wise Net Loss ratio
BAGIC : LOB wise Net Loss ratio Net Loss Ratio Line of Business Q3 FY23 Q3 FY22 9M FY23 9M FY22 Fire 26.2% 64.7% 35.0% 71.3% Marine Cargo 54.7% 70.6% 77.8% 72.3% Motor OD 67.6% 69.9% 72.9% 64.3% Motor TP 76.6% 65.6% 82.2% 72.6% Motor Total 72.9% 67.5% 78.4% 69.0% Engineering 55.1% 46.8% 45.4% 68.6%
Slide 54: BAGIC: LOB Growth (Major LOBs)
BAGIC : LOB Growth (Major LOBs) GDPI Growth Line of Business Q3 FY23 BAGIC Growth 9M FY23 BAGIC Growth Commercial Lines** 14.9% 15.2% Motor OD 13.5% 12.9% Motor TP -0.2% 6.6% Motor Total 5.5% 9.3% Personal Accident + Travel 31.9% 51.4% Health (retail + group)* 30.0% 22.5% Total 28.6% 11.4% Total (Ex
Slide 55: Additional Information – BALIC
Additional Information – BALIC
Slide 56: BALIC: Investment Performance (Shareholder Fund)
BALIC : Investment Performance (Shareholder Fund) All Figures in Rs Crore AUM ❑ Asset mix as on 31 10,990 December 2022: Corporate 10,816 Bonds 24.7%, G-Sec 44.0%, 10,468 10,229 Equity 17.1%, FD & other assets 14.1% (on Market 9,493 value basis) ❑ Capital gains booked in 9M FY23 were Rs. 220 cr FY20
Slide 57: BALIC: Regular Premium Ticket Size
BALIC : Regular Premium Ticket Size All Figures in Rs. Whole Company Non Par Savings FY22 Q3 FY23 FY22 Q3 FY23 increase of 34% decrease of 2% increase of 41% increase of 73% 84,810 82,739 80,117 77,648 61,716 57,782 51,650 46,333 36,579 27,437 FY20 FY21 FY22 Q3 FY22 Q3 FY23 FY20 FY21 FY22 Q3 FY22 Q3
Slide 58: 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 59: Thank You
BAJA FINSERV Thank You
Slide 60: 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