FY2 Y2017 017 perfo forma rmance nce review iew Apr pril il - - PowerPoint PPT Presentation

SLIDE 1

FY2 Y2017 017 perfo forma rmance nce review iew

Apr pril il 25, , 2017 017

SLIDE 2

Opportu tunity ity In Indu dust stry ry ov

• ver

erview view

Agend enda

Company any st strategy tegy and per erforma rmanc nce

2

SLIDE 3

Opp ppor

• rtu

tunity ity Indust stry ry over ervie view w

Agend enda

Company any st strategy tegy and per erforma rmanc nce

3

SLIDE 4

Str trate tegy gy:

: Market ket lea eader dership ship + P Prof

• fita

table ble grow

• wth

 Leverag

age market opportunity tunity for saving ing produc ucts ts through ugh

 Deliver

ivery of superio ior r custo tomer mer value ue throug ugh h better produc ucts ts, customer r servic ice, fund nd performanc rmance and claims ims mana nagement ment

 Focus on key local

l markets through ugh customiz ized regional l strategy

 Multi

i prong ng produc uct/ t/ chann nnel l approac ach h to tap protectio ion opport rtun unity ty- Retail il throug ugh h online ine and offline ine mode, Mortgag age link nked and Group up term Segmente mented approac ach h to tap market

• pportunity

tunity- Saving ings & Protectio tion

 Expand

and our protectio tion n busine iness

 Improve customer retentio

ion

 Mainta

tain in market-leadi leading ng cost efficie iency ncy Focus on increas asing ing value ue of new busine iness

 Focus on deepening

ning existing ting bancas assur uranc ance relatio ionship nships and seekin ing allianc ances with h new bank nks

 Focus on increas

asing ing scale of our agency ncy distr trib ibutio ution n chann nnel

 Using

ng data analytics tics capabili lity ty to grow w direct t to customers

 Establi

lish h relatio ionship nship with h new non n bank nk partners with focus us on quali lity ty Strengt ngthen hen mult lti i chann nnel l archite tectur ture and explo lore non-tr trad aditio tional nal chann nnels ls Leverag age technol nology for profita itable le growth wth

 Digit

ital aliz izing ing sales and service processes

 Increas

asin ing digit ital al marketing ing and sales

4

SLIDE 5

Ke Key y Hi Highligh hlights

5

Rs bn FY2015 15 FY2016 16 Growt

• wth FY2017

17 Growt

• wth

APE1 47.44 51.70 9.0% 66.25 28.1% Savings ngs APE 46.68 50.31 7.8% 63.64 26.5% Prote tecti ction

• n APE

0.76 1.39 82.9% 2.60 87.1% Value ue of New Busines iness s (VNB) B) 2 2.70 4.12 52.6% 6.66 61.7% VNB Margi gin2 5.7% 8.0% 10.1% Indian an Embedd bedded ed Value ue 138.22 22 139.39 39 0.8% 161.84 84 16.1%

1. 1. Annua ualized d premium um equi uiva valent nt 2. 2. Based d on actual al cost

SLIDE 6

New ew busi siness ess

6

SLIDE 7

Market ket share re1

• 1. Retail weighted

hted rece ceived ved premium (RWRP) P) basis Source ce: IRDAI, AI, Life insu suranc nce counc ncil 7

Mar arket ket leader aders s in private rivate secto tor since ce FY2002 02

Rs bn FY2015 15 Growt

• wth

FY2016 16 Growt

• wth

FY2017 17 Growt

• wth

RWRP 45.96 41.3% 49.68 8.1% 64.08 29.0%

11.3% 3% 11.3% 3% 12.0% 0% 23.0% 0% 21.9% 9% 22.3% 3% 0% 0% 10 10% 20 20% 30 30% FY20 FY2015 15 FY20 FY2016 16 FY20 FY2017 17 Wit ithin hin to total al ind indus ustr try Wit ithin hin priv ivat ate secto tor

SLIDE 8

Premium emium summary mary

Compon ponents nts may not add up to the totals s due to roundi nding ng off 8

95.71 71 119.95 9.95 142.19 2.19 48.21 21 53.57 57 70.66 66 9.14 14 18.13 13 10.69 69 153.07 3.07 191.64 1.64 223.54 3.54 50 50 10 100 15 150 20 200 25 250 FY20 FY2015 15 FY20 FY2016 16 FY20 FY2017 17 Rs bn Ret Retai ail re l renewal newal pre remium mium Ret Retai ail n l new busi usiness ness pre remium mium Gro Group up prem remium ium

SLIDE 9

Product duct mix1

1

1. 1. Annua ualized d Premium um Equivalent nt (APE) E) basis 2. 2. Group p exclude udes group up protection ction produc ducts 3. 3. Protection ction incl clude udes retail and group p protection

• n produc

ducts 9

Product duct mix mix1 FY2015 FY2016 FY2017 Savings gs 98.4% 97.3% 96.1% ULIP 83.1% 80.8% 84.1% Parti tici cipat patin ing 13.2% 14.1% 9.6% Non-Partici articipat patin ing 0.6% 0.4% 1.1% Group up2 1.5% 2.0% 1.3% Protect ectio ion3 1.6% 2.7% 3.9%

39.40 40 41.79 79 55.69 69 6.26 26 7.27 27 6.38 38 1.02 02 1.25 25 1.58 58 0.76 76 1.39 39 2.60 60 10 10 20 20 30 30 40 40 50 50 60 60 70 70 FY20 FY2015 15 FY20 FY2016 16 FY20 FY2017 17 Rs bn ULI ULIP Par artic ticipating ipating Othe Others (s rs (savin avings) Prote tectio tion

SLIDE 10

Prote tecti tion

• n

10

666.67 6.67 979.40 9.40 1,62 624.44 4.44 528.68 8.68 566.85 6.85 1,31 315.96 5.96 1,19 195.35 5.35 1,54 546.25 6.25 2,94 940.40 0.40 1,00 1,000 2,00 2,000 3,00 3,000 4,00 4,000 FY20 FY2015 15 FY20 FY2016 16 FY20 FY2017 17 Rs bn New Busine iness Sum m Assure red Ret Retai ail Gro Group up

Rs bn FY FY2015 15 FY FY2016 16 FY FY2017 17 Reta tail Prote tecti ction 0.36 0.94 2.09 Grou

• up

p Term 0.06 0.06 0.13 Mortg tgag age e based d 0.33 0.39 0.38 Total APE 0.76 1.39 2.60

SLIDE 11

Channe nnel l mix

1. 1. Annua uali lized ed Premi mium um Equiv ivale lent nt (APE) ) basis is Graphs phs are on Retail APE basis

Chan anne nel Mix1 FY2015 15 FY2016 16 FY2017 17 Bancas assur surance ance 58.4% 57.3% 56.9% Agency cy 24.4% 23.8% 23.3% Direct ct 8.6% 9.8% 11.9% Corpora porate te Agen ents ts and Brokers

• kers

7.0% 7.0% 6.1% Grou

• up

1.6% 2.1% 1.7%

11

27.70 70 29.64 64 37.72 72 11.58 58 12.31 31 15.41 41 4.06 06 5.04 04 7.89 89 3.32 32 3.61 61 4.07 07 10 10 20 20 30 30 40 40 50 50 60 60 70 70 FY20 FY2015 15 FY20 FY2016 16 FY20 FY2017 17 Rs bn Ban Bancas assuranc urance Agency Dir Direct Corp rporate ate Agents an nts and Bro Brokers rs

SLIDE 12

Quality ity param amet eters ers

12

SLIDE 13

Pers rsis iste tency ncy1

Month FY2015 15 FY2016 16 11MFY2017 017 13 13th

th month

th 79.0% 82.4% 86.0% 25 25th

th month

th 65.9% 71.2% 74.2% 37 37th

th month

th 64.3% 61.6% 67.3% 49 49th

th month

th 54.4% 62.2% 61.1% 61 61st

st month

th 14.5% 46.0% 57.9%

1.

• 1. As per IRDA circu

cular dated d January y 23, , 2014 14 13

SLIDE 14

Cust stomer

• mer Serv

rvice ice

93.8% 96.2% 96.9% 0% 0% 50 50% 10 100% 0% FY FY20 2015 15 FY FY20 2016 16 FY FY20 2017 17

Claim im Settlement ment ratio1 Grievanc nce Ratio2

185 185 153 153 95 95 50 50 10 100 15 150 20 200 FY FY20 2015 15 FY FY20 2016 16 FY FY20 2017 17

• 1. Individ

ividual al Death th Claim ims

• 2. Numb

mber er of grievanc evances es per 10,000 000 new busines iness policies es issued ued in the same me period

14

SLIDE 15

Di Digitizatio gitization n impact act

Emplo loyee produc uctiv ivity ty3

3

E-Login in1

1 and onli

line ne renewal al payment ment2

1. 1. New business iness applic licatio ations ns gener nerate ated throug ugh h digital ital medium ium 2. 2. Transac nsactio tions ns process ssed throug ugh online ine , direct debit it and ECS 3. 3. RWR WRP / Averag age no. of emplo loye yees s during ng the perio iod

89% 89% 93% 93% 93% 93% 44% 44% 52% 52% 57% 57% 0% 0% 50 50% 10 100% 0% FY FY20 2015 15 FY FY20 2016 16 FY FY20 2017 17 E-Log

• gin

in Onlin Online ren e renewal pay ewal payme ment nt 4.26 4.61 5.55 2 4 6 FY FY20 2015 15 FY FY20 2016 16 FY FY20 2017 17 Rs mn

15

SLIDE 16

Cost t efficiency ficiency

• 1. Expens

nse ratio:

• : All ins

nsur uranc nce expens nses s (excl cl. . commissi sion

• n)

) / (Total al premium um – 90% of single gle premium um)

• 2. Commissi

sion

• n ratio:
• : Commiss

ssion

• n / (Total premium

um – 90 90% of single gle premium um)

• 3. Cost

st / (Total premium um – 90% of single gle premium um) 4. . Cost st / Averag age assets s under management nt during ng the period

• d

FY2015 FY2016 FY2017 Expens nse ratio (excl cl. . commissio ssion) n)1 11.6% 11.0% 11.4% Commissio ion n ratio2 3.8% 3.5% 3.6% Cost/TWR WRP3 15.4% 14.5% 15.1% Cost / A Average age AUM4 2.5% 2.5% 2.8%

16

16.97 97 19.25 25 24.01 01 5.53 53 6.20 20 7.59 59 22.50 50 25.45 45 31.60 60 10 10 20 20 30 30 40 40 FY20 FY2015 15 FY20 FY2016 16 FY20 FY2017 17 Rs bn Non- Non-Commis missio ion Commis mission

SLIDE 17

Maxim aximiser iser (Equit uity y Fund) nd) Balanc ancer er (Balan anced d fund nd) Protec ector r (Debt bt fund) nd) Preserve rver (Liquid iquid fund) nd)

Super erior ior fund d perfor formance mance acros

• ss

s cycle cles

* As on March 31, 2017 17 17

More e than 90% of linke nked portfol tfolio has out perfo formed bench chma mark k indices ces since ce incep ceptio tion*

14.5% 18.7% 11.9% 15.5% 11.0% 12.8% 8.5% 7.4% 12.3% 21.2% 10.7% 14.7% 9.5% 11.1% 8.4% 7.1%

5Y 1Y 5Y 1Y 5Y 1Y 5Y 1Y Fun Fund Be Benchm nchmar ark

SLIDE 18

18 18

Asset sets s under er manage gement ment

More e than 90% of debt t inves estmen tments ts in AAA rate ted d and gove vernme nment t bonds*

Link nked Mix (%) %)

72.4 74.6 46.3 48.0 Rs bn Rs bn

* As on March 31, 2017 17 Compon ponents nts may not add up to the totals s due to roundi nding ng off

46.8 71.5

Equi uity ty Mix (%)

18

747.78 78 752.96 96 878.78 78 254.06 06 286.44 44 350.41 41 1,001.83 1.83 1,039.39 9.39 1,229.19 9.19 50 500 1,0 1,000 00 1,5 1,500 00 FY FY20 2015 15 FY FY20 2016 16 FY FY20 2017 17 Lin inked ed Non-L n-Linke inked 520.97 97 558.35 35 653.99 99 480.86 86 481.04 04 575.20 20 1,001.83 1.83 1,039.39 9.39 1,229.19 9.19 50 500 1,0 1,000 00 1,5 1,500 00 FY FY20 2015 15 FY FY20 2016 16 FY FY20 2017 17 Debt Debt Equit uity

SLIDE 19

Profi fitabi tability lity

19

SLIDE 20

12.21 21 1.00 00 6.66 66 0.99 99 0.98 98 0.35 35 0.76 76 5.82 82

• 6.32

32

IEV IEV (M (Marc rch 31, 31, 201 2016) Unw Unwind ind Op Operating ating Ass ssump mptio tion Cha Chang nges VNB Persis rsistenc tency vari varianc ance Morta rtality lity and and mo morb rbid idity ity vari varianc ance Expense nse vari varianc ance Othe Other vari varianc ance Econo nomic mic Ass ssump mptio tion Cha Chang nge and nd In Inve vestm tment nt Varianc ariance Net t Capit Capital al In Inje jectio tion IEV IEV (M (Marc rch 31, 31, 201 2017)

ANW 55.14 14 VIF 84.25 25 139.39 9.39 EVOP OP1 = 22.95 .95 ROEV2 = 16.5% VIF 94.28 28 ANW 67.56 56 161.84 1.84 ` bn bn

1: EVOP is the embe bedde dded d value ue operating ng profit net of tax 2: ROEV is the retur urn n on embedde dded d value net of tax Figur ures may not add up to the totals due to roundi nding ng off 20

Analysis lysis of movement vement in IEV (FY FY2017) 7)

SLIDE 21

Profit fit after er tax ax

21

 Well

ll capi pital talize ized for r growt rowth h oppo pportuni rtunities ties

 Divi

vidend nd pro roposed sed for r FY2017 017 is Rs Rs 10.55 billio llion

Solvency ncy Ratio (%) %) Profit it after tax (Rs bn) 337 337 320 320 281 281

16.34 4 16.50 16.82 4 8 12 12 16 16 20 20 FY FY20 2015 15 FY FY20 2016 16 FY FY20 2017 17 Rs bn

SLIDE 22

Summar ary

1.

• 1. Sum assur

ured d as a % % of GDP 2.

• 2. IRDAI

I Retail ail Weight ghted d Rece ceived ved Premium um (RWRP) RP) 3.

• 3. Excludi

uding ng FY2017 017 final divide vidend nd decl clared d but not paid 4.

• 4. Annua

ualized d Premium um Equivalent nt 

Low penet etrat ation ion1

1 vs mature

ure econom nomies ies and even n lower r densit sity



One of the he fastest est growin ing large e econo nomy my in the e world with h strong rong growth driver ers India: ia: High h growth potent ential ial 1



#1 in India ia on RWRP RP2 basis is for every y year since e FY200 002



Signif gnific ican ant market et share re gain in on RWRP P basis s sinc nce e FY2012 12 Consisten sistent Lead ader ersh ship ip Across ss Cycles es 2



Custo stome mer focused used produc uct suit ite; e; Delive iverin ing supe perior rior value ue through rough produc uct design gn and fund nd performa manc nce



Low grieva vanc nce e ratio io and one of the e best claim ims s settlem lemen ent ratios ios in the e industry dustry Custo stome mer Centric ric Approac ach Across ss Value lue Chain in 3



Access ess to networ work k of ICICI bank k (#1 Indian ian private ate bank k ) ) and d Standar andard d Chart rtered red Bank



Contin inue to invest est in agenc ncy y chann annel, el, adding ing qualit lity y agent nts s and improvin ving produc uctivi ivity



Strong rong focus us on techn hnolo

• logy

gy and digit itization ization to reduce e dependenc ndence e on physic sical al presenc ence Mult lti i Chann nnel el Distr stribu ibution ion backed ed by advanced anced digital ital processe sses 4



Low int nterest rest rate e risk k with h over 80% of APE4 contribut ribution ion from ULIP P products; s; Over 90% %

• f debt invest

estmen ents s in AAA rated ed and governm rnment ent bonds



Strong rong focus us on renewals ewals (high gh persist istenc ency y ratios) ios) Robust ust & Sust staina ainable le Busin iness ess Model



VNB has grown n at CAGR R of 57% durin ing FY201 015-20 2017 7 period

• d;

; Self funded nded business siness – no capit ital al calls ls since e FY 2009; ; cumulat mulativ ive e divid iden end pay-out

• ut of Rs 45.83

83 bn bn3



With strong rong solve venc ncy y of 280.7% 7% and less s capit ital al requirem irement ent due to produc uct mix, , well l posit itioned ioned to take e advant antage ge of growth Delive iverin ing Consisten sistent Return urns s to Sharehold areholders ers 5 6

22

SLIDE 23

Opportu tunity ity Indust stry ry over ervie view

Agend enda

Company any st strategy tegy and per erformanc rmance

23

SLIDE 24

Larg rge and Growing ing Populatio lation Base se1 Driving ving GDP Growth th 3 High h Share of Workin king Populatio lation1 Rising sing Affluenc luence2

 Indian

an econo nomy my poise sed to head towar ards ds susta tained ined growt

• wth fuelled by

favoura urable ble demo mogr grap aphics, hics, rising sing afflue fluence ce

 Growt

• wth rate

te of total al prem emium um writte ten n by the insura uranc nce e indust stry y has outpaced ced the GDP P growt

• wth rate

te

• ver

er the period d of FY FY2002 02-FY201 Y20174

1. 1. Source ce: UN popul ulat ation

• n division
• n 2015

15 revise sed d estimates 2. 2. Source ce: Econom nomist Intelligenc gence Unit, , CRISIL IL Rese search ch 3. 3. Source: ce: World ld bank databa base se

• 4. Source

ce: FY200 2002-16: 16: Life Insur uranc nce Counc ncil, , CSO; FY201 2017: 7:com compa pany ny estimate

Fa Favour

• urabl

able e demogra

• graphy

phy to driv ive e macro ro growth wth

GDP per Capita CAGR (2007 07-2017) 2017)

50 50 54 54 127 127 143 143 208 208 258 258 322 322 1311 13111376 1376 S K S Kore

• rea

S A S Afr frica Japan an Russ ussia Bra Brazi zil Ind ndon

• nesi

sia USA SA Ind ndia China hina

2015 Popu pula lation tion (mn) n)

0.6% 0.7% 1.2% 1.3% 2.2% 6.2% 7.4% 11.9% Russ ussia Japan an Bra Brazi zil So South K h Kore

• rea

USA SA Ind ndia Ind ndon

• nesi

sia China hina 4.9% 9.8% 8.5% 6.6% 5.1% 6.9%7.2%7.6%7.0%7.6%7.8% 1.9% 4.3%

• 1.7%

3.1%2.4%2.4%2.7%2.7%2.3%2.7%2.9% FY02FY08FY10FY12FY13FY14FY15FY16FY17FY18FY20 Ind ndia World

576 726 201 2015 203 2030 Popu pula lation tion of age 25-59 years s (in n mn mn)

24

SLIDE 25

Share of Insurance in Savings Expected to Rise

Share re of insur suranc ance e in house seho hold ld savi vings ngs

• 1. Source

ce: CSO, RBI 14.4% 4% 26.2% 2% 21.1% 1% 17.0% 0% 15.4% 4% 19.6% 6% 18.3% 3% FY200 2002 FY201 2010 FY201 2012 FY201 2013 FY201 2014 FY201 2015 FY201 2016

Distrib tributio ution n of financ nancia ial l assets sets1

Pro Provide dent / nt / Pen Pensi sion F

• n Fun

und / d / Cl Claim aims s on G

• n Govt

vt Shar hares s / D / Debe bent ntur ures s / M / MFS Life In Insu suran ance ce F Fun und Cu Currenc ncy & y & D Depos posits

Househ ehold ld Saving

ings1

 Part

rt of physica hysical l savi vings ngs shifting fting to financial nancial savi vings ngs

 Insur

urance ance shar are e of finan ancial ial savi ving ng 18.3% comp mpared ared to peak eak of 26.2% % in FY2010 010

 Impro

proved ved pro roduct uct pro ropositio sition n of life fe insur urance ance savi vings ngs prod roduc ucts ts

2.98 8.56 14.23 3 14.99 9 14.49 9 16.24 4 15.27 27 2.47 7.75 6.43 7.34 8.32 9.19 9.19 10.82 82 45% 45% 48% 48% 31% 31% 33% 33% 36% 36% 36% 36% 41% 41% 0% 0% 20% 20% 40% 40% 60% 60% 20 20 40 40 60 60 FY200 2002 FY201 2010 FY201 2012 FY201 2013 FY201 2014 FY201 2015 FY 201 2016 Rs trillion

• n

Finan nanci cial s al savin vings gs Phy Physi sical s al savin avings Finan nanci cial s al savin vings a gs as s a % a % o

• f H

Hous

• usehol

hold d Savin vings gs 25

SLIDE 26

270% 270% 260% 260% 226% 226% 166% 166% 149% 149% 106% 106% 96% 96% 60% 60% 0% 0% 10 100% 0% 20 200% 0% 30 300% 0% 40 400% 0% US US Japan Japan Singap ingapor

• re

Kore Korea Malay Malaysia sia Germa rmany ny Thaila Thailand Indi ndia

Sum m assur ured as % of GDP1

Prote tecti tion

• n oppor
• rtuni

tunity ty

1.

• 1. Source

ce: McKins nsey y analysi ysis 2015 5 and interna nal estimate 2.

• 2. Protection

ction Margin: n: Ratio

• of protection

ction lacki king/pr ng/prot

• tection
• n neede

ded d 3.

• 3. Source

ce: Swiss s Re, Econom nomic c Researc arch h and Consu sulting ng 2015 15

 Sum

m assure ured as % % of GDP low

• w comp

mpar ared ed to othe her r coun untri tries es

 Prot

• tection

tion gap p for

• r India

dia US US $ $ 8.56 trill illion

• n

8.56 6.58 5.30 1.09 0.79 0.77 0.52 0.40 2 4 6 8 10 10 Indi ndia Japan Japan

• S. K

Kore

• rea

Aust ustralia ralia Indo ndonesia nesia Thaila Thailand Malay Malaysia sia Singap ingapor

• re

USD D tn tn

Prote tectio tion n Gap Gap3 92 92 56 85 33 73 78 73 56 Protection Margin2,3 (%)

26

SLIDE 27

Prote tecti tion

• n oppor
• rtuni

tunity ty

Gro ross s direct irect premium remium (Rs Rs bn bn) FY2007 007 FY2017 017 CAGR GR Heal alth th 33.19 307.65 24.9% Motor tor 106.97 502.45 16.7%

 Prote

• tection

tion prem emium um was ~Rs Rs 67 bn for r Life fe insura uranc nce e indu dustr try y in FY2017 017

27 Source ce: IRDAI, AI, General Insu suranc nce Counc ncil and compa pany ny estimates

SLIDE 28

Opportu tunity ity In Indu dust stry ry ov

• ver

erview view

Agend enda

Company any st strategy tegy and per erformanc rmance

28

SLIDE 29

Total tal premi emium um (Rs bn) n) Penetra netration tion (as as a % to GDP) P) New busine siness s premiu remium1 (Rs bn) n)

FY2016 16 441 441 3,669 FY2002 02 116 116 501 501 2.1%

21.5% 23.2%

Source ce: : IRDAI, AI, CSO, Life insu suranc nce counc ncil * Compa pany ny estimat ate

Evol

• lutio

ution of life fe insura surance nce industr dustry y in Indi dia

Assets ets under der managem nagement nt (Rs bn) n)

25,294 94 2,304

24.0%

• 1. Retail weighted

hted premium um

• 2. Indi

dividu vidual al and Group p in-for

• rce

ce sum assur ured

FY2010 10 550 550 2,655 12,899 99

• 3.6%

6% 5.5% 11.9%

2.8%

In In-fo force ce sum assured ured2 (Rs bn) n)

11,812* 12* 37,505 05 90,752 52

15.5% 15.9%

2.1% 4.1% 2.7%

In In-fo force ce sum assured ured (as s % to GDP) P)

50.1% 57.9% 66.8% Life fe insura urance ce indust stry pred edomina

• minantly

tly savings ngs oriented ted

29

SLIDE 30

• 1. Retail

ail weight ghted d new busi sine ness s premium um Source ce : IRDAI, AI, Life insu suranc nce counc ncil

Growt wth FY2015 FY2016 FY2017 Privat ate 15.9% 13.6% 26.4% LIC

• 26.3

.3% 2.9% 14.7% Industry ry

• 10.3

.3% 8.1% 20.7%

Ne New business siness1

30

49.0% 0% 51.5% 5% 53.9% 9% 0% 0% 20 20% 40 40% 60 60% 10 100 20 200 30 300 40 400 FY20 FY2015 15 FY20 FY2016 16 FY20 FY2017 17 Rs bn LIC Priv ivate ate Priv ivate mark ate market t share hare

SLIDE 31

Channe nnel l mix1

• 1. Indi

ndividu vidual al new busi sine ness ss premium um basis Source ce: IRDAI, AI, Public c discl clos

• sur

ures

 Given

Given a well ell deve evelope ped banking anking sec sector, tor, ban ancas cassur surance ance has has beco come me lar argest gest channel nnel for priva rivate te player ayers

Industry ry Privat ate players rs

31

71% 71% 68% 68% 72% 72% 21% 21% 24% 24% 21% 21% 8% 8% 8% 8% 7% 7% FY20 FY2015 15 FY20 FY2016 16 9MF 9MFY2 Y201 017 Agency Ban Bancas assuranc urance Othe Others rs 36% 36% 32% 32% 31% 31% 47% 47% 52% 52% 52% 52% 17% 17% 16% 16% 17% 17% FY20 FY2015 15 FY20 FY2016 16 9MF 9MFY2 Y201 017

SLIDE 32

Product duct mix1

• 1. New busi

sine ness ss premium um basis Source ce: IRDAI, AI, Life insu suranc nce counc ncil

 Strong

rong val alue ue prop ropositi sition of

• f ULIPs

Ps

 Transpar

sparent nt and low charges es

 Lowe

• wer disco

disconti ntinuanc uance charg harges es up upto yea ear 5 and zer ero sur surren ende der pen penal alty ty afte ter 5 year ars

 Choice

ce of

• f asse

set allocatio cation to to match ch risk sk appet etite te of

• f diffe

ferent custome

• mer

Indust stry ry Privat ate players rs

32

62% 62% 57% 57% 61% 61% 38% 38% 43% 43% 39% 39%

FY FY20 2015 15 FY FY20 2016 16 9MFY2 9MFY201 017

88% 88% 87% 87% 89% 89% 12% 12% 13% 13% 11% 11%

FY FY20 2015 15 FY FY20 2016 16 9MFY2 9MFY201 017

Trad aditi itional al UL ULIP

SLIDE 33

33

Annex exur ures es

SLIDE 34

Consi nsisten stent leader dership ship in priv ivate ate sector ctor1

Market Share FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 LIC 63.5% 62.0% 62.0% 51.0% 48.5% 46.1% ICICI Prude dent ntial ial 5.9% 7.0% 7.2% 11.3% 11.3% 12.0% SBI Life 4.4% 5.1% 6.2% 7.7% 9.7% 11.2% HDFC Life 5.7% 6.7% 5.2% 7.3% 7.6% 6.8% Max Life 3.1% 3.2% 3.9% 4.8% 4.8% 5.0% Kotak Life 1.0% 1.0% 1.0% 1.5% 2.1% 2.3% Tata AIA 1.3% 0.6% 0.5% 0.6% 1.4% 2.0%

34 1. 1. Retail weighted hted received ved premium um (RWRP) P) basis Source ce: IRDAI, AI, Life insur uranc nce counc ncil

SLIDE 35

Aver erage age APE by prod

• duct

uct categor egories ies

Average age retail l APE per policy cy (in Rs) FY201 015 FY201 016 FY201 017 ULIP 129,0 ,087 87 149,7 ,777 77 169,7 ,701 01 Par 38,43 430 44,53 533 56,32 325 5 Non par 25,233 23,656 39,153 Pure protect ectio ion 4,408 10,284 9,815 Total 73,047 87,194 92,735

35

SLIDE 36

Channe nnel l wise se product duct mix1

36

Channel Categor egory Produc duct Categor gory FY201 015 FY201 016 FY201 017 Bancassura rance ULIP 88.4% .4% 88.9% .9% 92.1% .1% Par 10.0% .0% 9.1% 1% 5.3% 3% Non par 0.0% 0% 0.0% 0% 0.4% 4% Protec

• tectio

ion 1.5% 5% 2.0% 0% 2.2% 2% Total 100.0 0.0% 100.0 0.0% 100.0 0.0% Agency ULIP 78.5% .5% 76.4% .4% 79.5% .5% Par 19.2% .2% 19.6% .6% 14.2% .2% Non par 1.0% 0% 0.8% 8% 2.0% 0% Protec

• tectio

ion 1.3% 3% 3.2% 2% 4.3% 3% Total 100.0 0.0% 100.0 0.0% 100.0 0.0% Direc rect ULIP 93.0% .0% 86.0% .0% 86.3% .3% Par 2.9% 9% 7.8% 8% 5.1% 1% Non par 2.1% 1% 1.6% 6% 2.0% 0% Protecti

• tection
• n

2.0% 0% 4.5% 5% 6.6% 6% Total 100.0 0.0% 100.0 0.0% 100.0 0.0% Corpo pora rate e Agents and Broke

• kers

rs ULIP 62.0% .0% 47.4% .4% 46.5% .5% Par 34.4% .4% 49.0% .0% 44.1% .1% Non par 2.4% 4% 0.5% 5% 0.4% 4% Protecti

• tection
• n

1.2% 2% 3.1% 1% 9.0% 0% Total 100.0 0.0% 100.0 0.0% 100.0 0.0%

1. 1. Retail Annuali alized d Premium um Equivale valent nt (APE) ) basis

SLIDE 37

Pers rsis iste tency ncy (11MFY20 FY2017) 7)1

1.

• 1. As per IRDA circu

cular dated d January y 23, , 2014 14 37

Persistenc istency across Product uct Categories ies Persistenc istency across Chann nnel Categories ies

86.0% 83.6% 98.2% 88.5% 58.9% 49.8% 63.8% 57.4% 0% 0% 50 50% 10 100% 0% 15 150% 0% UL ULIP Pa Par Non-par n-par Pro Protection ion 13 13th mo month 49 49th mo month 84.1% 88.7% 89.6% 87.1% 63.0% 57.3% 63.1% 56.7% 0% 0% 50 50% 10 100% 0% 15 150% 0% Banc Bancass assuranc urance Agenc ency Direc Direct Co Corpo rporate rate Agen ents and s and Brok Brokers ers 13th th mo month th 49th th mo month th

SLIDE 38

Indian n Embedded edded Value e met ethodo

• dology

logy

38

SLIDE 39

IEV methodology … (1/2 /2)

 EV result

ults s prepare red d based on the Indian ian Embedded ed Value ue (IEV) ) methodology logy and princ nciples iples as set out in Actuaria uarial l Practi ctice e Standard ard 10 ( (APS1 PS10) 0) issued ued by the Institute titute of

• f Actu

tuaries ries of

• f India

dia (IAI) I)

39

SLIDE 40

IEV methodology … (2/2)

 IEV consists

ists of Adjust usted ed Net Wo Worth (ANW) W) and Value ue

• f
• f in-fo

force rce cov

• vered

red bu busine iness ss (VI VIF)

 AN

ANW is market value of assets attribu ibuta table ble to sharehold holders ers, , consistin ting g of

 Requir

quired ed Cap apital tal

 Free

ee Surplus rplus

 Value of in-force

• rce covered

ed business ess (VIF) ) is

 Presen

esent t value lue of future ure profi rofits; ts; adj djuste usted for

 Time

me value lue of financial ancial opt ptions ns and nd guar arantees; ntees;

 Frictiona

ictional l costs ts of requi equired ed capital; pital; and nd

 Cos

• st

t of residua sidual l non

• n-he

hedgea geable le risks sks

40

SLIDE 41

 Require

ired d capital tal (RC)

 The level

vel of require quired capi pita tal l is set equa qual to the amount mount requi equired ed to be e held ld to meet t supe perv rviso sory ry requ quire iremen ments ts

 It is net of the funds

nds for r futur ure e appro ppropria iation tion (FFAs) FFAs)

 Free surplus

lus (FS)

 Ma

Market rket val alue of

• f any

any assets assets al alloca

• cate

ted to,

• , but

but not

• t re

require quired to to suppo pport, rt, the in in-fo force ce cover vered ed busine siness

Compo ponen nents ts of ANW NW

41

SLIDE 42

 Present

sent value lue of future ure profits ts (PVFP) P)

 Pr

Present esent val alue ue

• f
• f

pro projected jected di dist strib ibut utabl ble profits

• fits

to to shar areho eholders ers arisi rising ng from

• m in

in-fo force rce cove vered red business siness

 Pr

Proj

• jecti

ection

• n car

arrie ried out ut using sing ‘best estimate’ non

• n-econ

economic

• mic

assump umptions tions and nd market rket consistent sistent econom

• nomic assump

umption tions

 Distr

Distributab butable le profits

• fits are

re determin etermined by by ref refer erence ence to to statut statutory ry liabil abilitie ities

Components of VIF … (1/4)

42

SLIDE 43

 Frictio

ctional nal Cost of require ired d capital tal (FC)

 FC

FCs represen present inv investment estment manag managemen ement ex expenses enses an and taxation xation costs ts associ

• ciated

ted with hol

• lding

ing the Requi quired ed capital pital

 Investm

Investment ent costs costs reflec reflected ed as as an an ex explic plicit it re reducti duction

• n to

to the the gro ross investment vestment retur turn

Components of VIF … (2/4)

43

SLIDE 44

 Time value

lue of finan nancia cial l options s and guarant arantee ees s (TVFOG) OG)

 TV

TVFOG OG re represents esents addi diti tion

• nal

al cost

• st to

to shareh shareholder ders that that ma may arise ise from

• m the embedd

bedded ed finan ancia ial optio ptions ns and guaran arantees tees

 Stochastic

Stochastic app approa

• ach

ch is is adopt pted with with metho methods ds an and assump umptions tions consis nsiste tent nt with the unde derl rlyi ying ng embedde edded value lue

Components of VIF … (3/4)

44

SLIDE 45

 Cost of residual

dual non-he hedge dgeable able risk k (CRNHR HR)

 CRN

CRNHR HR is is an an al allowa

• wance

nce for risks risks to to share hareholde

• lder val

alue ue to to the the extent tent not alre lready dy allow lowed ed for in in the TVFO FOG or

• r the PVFP

FP

 All

Allowance

• wance

has has be been en mad made for asymm asymmetric etric risks isks

• f
• f
• pe

pera rationa

• nal, cata

catastr stroph phe mort rtality lity / morbi

• rbidity

ity an and mass mass lap apsati sation risk sk

 CRNHR

NHR deter etermin mined ed using ing a cost st-of

• f-cap

capita ital appro pproach

 All

Allowa

• wance

nce has as been een made fo for dive diversifi rsificatio cation benef enefits ts among among the non

• n-hed

hedgea geable le risks, sks, other her than the operation perational al risk

 4% annual

nual charge rge app pplie lied to to capital pital require quired

Components of VIF … (4/4)

45

SLIDE 46

 Operating

ting assump umption tion chang nges es

 Imp

Impact act of

• f th

the upda date te of

• f no

non-econ economic mic assump assumptio tions ns bot

• th on
• n

best best estim estimate ate an and statu statutor tory ba bases ses to to th those

• se adopte

pted in in th the closi

• sing

ng IEV IEV

 Expected

ted return urn on existing ting business iness (unwind) ind)

 Exp

Expected ected inv investment estment inco income me at at open pening ng refe reference rence ra rate te on

• n VIF

IF and nd ANW

 Exp

Expected ected ex excess cess ‘real world’ investme investment nt retu return rn ov

• ver the

the openin ening refer ference ence rate te on

• n VIF and

nd ANW

 Value

ue of

• f new bu

business iness

 Add

dditional tional value lue to share reho holder lders s created eated throu rough gh new busine siness s during uring the e period eriod

Compo ponents nents of IEV movement … (1/2)

46

SLIDE 47

 Operating

ting experience ience variance riance

 Captu

Captures res im impa pact ct of

• f any

any de deviati viation

• n of
• f actual

actual ex experi erience ence fr from

• m

assum umed ed in in the ope pening ning IEV IEV during uring the inter ter-valua valuation tion period eriod

 Econo

nomic ic assump umption tion chang nges es and Inve vest stment ent varian iance

 Imp

Impact act of

• f the

he upda date of

• f th

the refe referenc ence rate ate yi yiel eld cu curve, ve, inflation inflation an and va valu luation ation ec econ

• nomic
• mic assu

assumpti mptions

• ns fr

from openi pening IEV IEV to to closi

• sing

ng IEV IEV

 Captu

Captures res th the di diff fference rence between etween the he actua actual investment nvestment return turn and the expe pecte ted ‘real world’ assum umed ed retur turn

 Net capital

al injec ection tion

 Refle

lects ts any capi pita tal injected jected less ss any div ividend ends pai aid out

Compo ponen nents ts of IEV movement vement … (2/2 /2)

47

SLIDE 48

 Disco

coun unt rate and Fund earnin ning g rates

 Set equa

ual to to refe feren rence rates tes which is is pro roxy for

• r risk free

ee rates tes

 Ref

Referenc erence rates rates de derive rived on

• n the

the basis asis of

• f ze

zero cou coupon

• n yiel

ield curv rve publ ublished shed by by the Clea eari ring ng Cor

• rporati

ation of

• f Indi

dia Limited ited

 Expenses

nses and commission ission

 Based

Based on

• n th

the Company’s actua ctual expenses enses durin during FY FY2017 2017 with no no anticip ticipati ation for pro roduc uctivity tivity gains ins or

• r cost

st efficie icienc ncies ies

 Commissi

• mmission
• n ra

rates es are re ba based on

• n the

he actua actual commissi commission

• n

pay ayabl able to to the the distri stributo utors

Key assumptions underlying IEV … (1/2)

48

SLIDE 49

 Mortality

lity and morbidity ity

 Based

Based on

• n Company’s exp

xper erience ience with ith an an allowance llowance for

• r

futur ure impro prove vemen ments ts in in resp spect ect of

• f annuities

nuities

 Persistency

sistency

 Based

ed on

• n Company’s exper

xperien ience

 Taxation

tion

 All

Allowa

• wance

nce has been een made for

• r fu

futu ture re taxati axation

• n costs

costs ex expecte pected to to be be incurr urred ed by by the Company

• mpany

Key assumptions underlying IEV … (2/2)

49

SLIDE 50

50

Sensitiv sitivity ity analy lysis sis (FY FY2017) 7)

Scenar enario io % change nge in IEV % change nge in VNB

Increa ease se in 100 bps in the refe ference ce rate tes

(2.0) 0) (5.2) 2)

Decr creas ase e in 100 bps in the refe eferenc nce e rate tes

2.1 5.5

10% increase rease in the e disconti ntinua nuance rates tes

(1.1) 1) (10.6 .6)

10% decre creas ase in the e discont continu nuan ance ce rates tes

1.2 10.9

10% increas ase in morta tality/ ty/ morbidit bidity y rate tes s

(0.8) 8) (6.1) 1)

10% decre creas ase in morta tality/ ty/ morbidi bidity ty rate tes s

0.8 6.1

10% increas ase in acquisiti sition

• n expens

enses es

Nil (20.5 .5)

10% decre reas ase in acquis isition tion expenses enses

Nil Nil 20.5 20.5

10% increas ase in mainte ntenan nance ce expen penses ses

(1.1) 1) (5.5) 5)

10% decre creas ase in mainte ntenan nance ce expen penses ses

1.1 5.4

SLIDE 51

51

Economi nomic c assumpti umptions

• ns underlying

erlying IEV

Tenor nor (yea ears) s) Refer erence ence Rates tes March rch 31, 2016 March rch 31, 2017 1 7.24% 6.35% 5 8.22% 8.22% 7.78% 10 10 8.34% 8.02% 15 15 8.40% 8.03% 20 20 8.46% 8.03% 25 25 8.50% 8.50% 8.03% 30 30 8.52% 8.03%

SLIDE 52

Safe e harbo bor

Exc Excep ept for for th the hi histor torica ical in infor forma mati tion

• n co

contai ntained ed her erein in, stat tateme ments ts in in th this is re releas ease wh which ich contai contain words

• rds or
• r phr

phrase ases su such ch as as 'wil will' l', 'would' would', ‘indicating’, ‘expected to’ etc tc., and and si simi mila lar expr expres essi sions

• ns or
• r variat

variation ions of

• f such

uch expr expressi sion

• ns ma

may con const stit itute 'f 'forward

• rward-loo

looking ng stat tatemen ents' s'. Th These forwa forward rd-look

• okin

ing sta tateme ment nts in invol volve a num umber er

• f
• f ris

isks, uncer ncertain tainti ties and and other ther fa factor ctors tha that coul could ca caus use ac actual tual res esult lts to to dif differ er mat ater eriall ially fro from tho hose su sugg ggest sted ed by by th the for forwa ward-lo look

• kin

ing stat tatem ements

• ts. The

hese ris isks and and un uncer ertai taint ntie ies includ nclude, e, bu but ar are no not li limi mited ed to to our ur abi abili lity ty to to succ uccessf ssful ully ly imp mplemen ent our

• ur stra

trateg egy, y, our

• ur gro

growth wth and and expa expans nsion ion in in bu busi siness, s, th the impact mpact of

• f any

any ac acqui quisi siti tions ns, techno echnologi logica cal imp mple lemen enta tati tion

• n and

nd cha chang nges, the he ac actual ual gro growth wth in in demand mand for for in insur uranc ance prod product ucts and and ser ervi vices es, in invest stmen ent in inco come, e, ca cash sh flow flow pro projecti ections

• ns, our
• ur ex

expos posur ure to to mark arket ri risks, s, po poli lici cies and and ac acti tion

• ns of
• f regu

egulator latory au autho thori riti ties; impact mpact of

• f com

compet etiti tion

• n; exp

exper erien ence wi with th rega gard rd to to mor mortali tality and and morb

• rbidi

idity tr tren ends ds, laps lapse rat rates and and pol policy icy ren enewal ewal rat rates; th the im impac pact of

• f cha

change nges in in ca capi pital tal , solv solven ency or

• r ac

accoun countin ing st stan andards dards , tax tax and and oth ther er leg egis islati lations

• ns and

and regu egulati lations

• ns in

in the the ju juri risdi sdicti tions ns as as well ll as as oth ther er ri risks detail tailed ed in in th the repo eports ts fil filed ed by by ICI CICI CI Bank Bank Li Limit ited, our

• ur ho

holdi lding ng co compan mpany, y, wi with th the the Uni United ed Stat tates Securi ecuriti ties es and and Exc Exchang hange Comm mmission

• ssion. IC

ICIC ICI Pr Prud uden enti tial Lif ife Ins Insur uranc ance und nder ertak takes no no oblig

• bligati

ation

• n to

to up updat date forward

• rward-loo

lookin ing stat tatemen ents ts to to ref efle lect ev events ts or

• r circu

circums mstanc tances es af after er th the da date thereof.

52

SLIDE 53

Thank k you

53