Per erfo formance rmance up update: date: H1-FY FY20 2020 20 - - PowerPoint PPT Presentation

Per erfo formance rmance up update: date: H1-FY FY20 2020 20

October 22, 2019

• Company strategy and performance
• Opportunity
• Industry overview

Ag Agen enda da

• Company

any st strategy tegy and per erforma rmanc nce

• Opportunity
• Industry overview

Ag Agen enda da

Key ey strategic rategic el elements ements

4

VNB NB Growth

• wth

Custom tomer er centricity ricity contin inues es to be be at the core

VNB NB Growth

• wth

Protecti ction

• n

Premium um Growt wth Produc uctivi ivity ty Persiste tency ncy

VNB Growt

• wth

Aspiration to double the FY2019 VNB in 3 - 4 years

VN VNB B gr growth

• wth

5

` billion ion H1 H1-FY20 FY2019 19 FY20 2019 19 H1 H1-FY2 FY2020 020 Value of New Business (VNB)1 5.90 13.28 7.09 VNB margin 17.5% 17.0% 21.0%

1. For full year, based on actual cost; H1: based on management forecast of full year cost

St Strateg rategic ic el element ements (1/4 /4)

6 1. Annualized premium equivalent 2. Received premium for retail and group

Premiu mium gr growth

• Deepen

en penetra tratio tion n in under-serv erved ed customer er segm gment nts s

• Enhanc

nce e cu current ent distrib tributio ution n

• Create

e new distrib ributi ution

• n
• Au

Augm gment t capabilit lity in Health th and Protec ection tion

• Increa

ease se focus on Pension ion and An Annuity

` billion ion FY2 Y2019 019 H1 H1-FY FY2020 2020 APE1 77.99 33.69 YoY growth 0.1% (0.4%) New business premium2 102.52 51.52 YoY growth 12.4% 20.5%

St Strateg rategic ic el element ements (2/4 /4)

7

Protection ection focus us Continu inue e to g grow both retail l and group up lines es of business iness ` bi billion ion FY20 2019 19 H1 H1-FY20 FY2020 20 Protection APE 7.22 4.97 YoY growth 61.9% 86.8% Protection mix 9.3% 14.8%

St Strateg rategic ic el element ements (3/4 /4)

8

Persistency sistency Improve

• ve persisten

istency cy across ss all cohorts ts Persist sisten ency cy1 FY2 Y2019 019 5M 5M-FY2 Y2020 020 13th month 84.6% 83.6% 49th month 63.8% 63.7%

1. Retail excluding SP computed as per IRDAI circular dated January 23, 2014

St Strateg rategic ic el element ements (4/4 /4)

9

Productivity Continu inue e to le leverage erage techn hnolo logy gy for process ss re- engineering ineering and to dr drive ve productivity tivity ` bi billion ion H1 H1-FY20 FY2019 19 FY20 2019 19 H1 H1-FY2 FY2020 020 Cost/TWRP1 16.1% 15.0% 16.6% Cost/TWRP (savings LOB) 12.7% 11.5% 11.0%

1. Total cost including commission/(Total premium- 90% of single premium)

Key ey strategic rategic el elements ements

10

Custom tomer er centricity ricity continu inues es to be be at the core

VNB NB Growth

• wth

Prote tecti ction Prem emium um Growth

• wth

Producti ctivit vity Persi sistenc stency

VNB NB Growth

• wth

4P: Premium

Produc duct t seg egments ments

12 1. Protection includes retail and group protection products Total may not add up due to rounding off

Prem emium ium growt wth

• Deepen

epen penet etra ration

• n in under-ser

served ed customer

• mer

segment ments

• Enhance

e current rent distri ribu butio ion

• Create

e new distri ribu bution

• n
• Augment capabi

bili lity y in Health and Protectio

• tection
• Increa

rease se focus s on Pension

• n and Annuity

APE (` (` billion) n) Mix Segme gments nts H1 H1-FY20 2019 19 FY2019 19 H1 H1-FY20 2020 20 FY2019 19 H1 H1-FY20 2020 20 Savings ngs 31.14 70.77 28.72 90.7% 85.2% ULIP 27.77 62.10 23.22 79.6% 68.9% Par 2.71 6.72 3.61 8.6% 10.7% Annuity 0.24 0.69 0.48 0.9% 1.4% Others 0.42 1.27 1.42 1.6% 4.2% Prote tecti ction

• n1

2.66 7.22 4.97 9.3% 14.8% Total APE PE 33.81 77.99 33.69 100.0% 0% 100.0% 0%

Annuity APE doubled in H1-FY2020

Distributi stribution

• n chan

annels nels

13

Prem emium ium growt wth

• Deepen

epen penet etra ration

• n in under-ser

served ed customer

• mer

segment ments

• Enhance

e current rent distri ribu butio ion

• Create

e new distri ribu bution

• n
• Augment capabi

bili lity y in Health and Protectio

• tection
• Increa

rease se focus s on Pension

• n and Annuity

APE (` (` billion) n) Mix Channel nels H1 H1-FY20 2019 19 FY2019 19 H1 H1-FY20 2020 20 FY2019 19 H1 H1-FY20 2020 20 Bancassurance 19.01 43.53 17.80 55.8% 52.8% Agency 7.46 16.89 6.87 21.7% 20.4% Direct 4.00 9.34 4.35 12.0% 12.9% CA & Brokers 1.92 4.59 2.39 5.9% 7.1% Group 1.42 3.65 2.27 4.7% 6.7% Total APE 33.81 77.99 33.69 100.0% 0% 100.0% 0%

Total may not add up due to rounding off

Retail constitutes more than 90% of new business

4P: Protection

Protectio

• tection gr

growth

• wth

15

Protection growth continues to be robust

APE (` (` billion) n)

Protecti

• tection
• n

growt wth

• Continu

nue to grow both retail l and group p lines

• f business

ss 4.46 7.22 2.66 4.97 FY FY2018 FY FY2019 H1 H1-F

• FY20

Y2019 H1 H1-F

• FY20

Y2020

4P: Persistency

Per ersist sistency ency (retail etail ex excluding cluding single gle premium) emium)

Month FY20 2019 19 5M 5M-FY2 Y2020 020 13th month 84.6% 83.6% 25th month 75.6% 75.0% 37th month 69.3% 69.1% 49th month 63.8% 63.7% 61st month 56.8% 57.2%

17 As per IRDAI circular dated January 23, 2014

18 As per IRDAI circular dated January 23, 2014

Month FY20 2019 19 5M 5M-FY2 Y2020 020 13th month 86.2% 85.5% 25th month 77.4% 76.8% 37th month 71.0% 71.3% 49th month 65.0% 64.9% 61st month 58.1% 58.6%

Per ersist sistency ency (retail etail including cluding single gle premium) emium)

4P: Productivity

Produc ductivit tivity: y: Cost st ef effi ficie ciency ncy

H1 H1-FY20 FY2019 FY2019 019 H1 H1-FY20 FY2020

Expense ratio (excl. commission)1 10.5% 9.5% 11.3% Commission ratio2 5.6% 5.6% 5.3% Cost/TWRP3 16.1% 15.0% 16.6% Cost/Average AUM4 2.7% 2.8% 2.5% Cost/TWRP (Savings LOB) 12.7% 11.5% 11.0%

20 1. Expense ratio: All insurance expenses (excl. commission)/(Total premium- 90% of single premium) 2. Commission ratio: Commission/(Total premium- 90% of single premium) 3. Cost/(Total premium- 90% of single premium) 4. Annualized cost/Average assets under management during the period Total may not add up due to rounding off

• 68.9% of new business policies issued within 2 days
• 93.6% of new business applications initiated via digital platform

` billion

• n

6.75 75 15.51 6.59 59 12.72 26.43 14.18 19.47 41.94 94 20.77 77

H1 H1FY FY2019 FY FY2019 H1 H1FY FY2020 Co Commiss issio ion Non Non Com Commis issi sion

• n

VNB growth levers update (4P’s)

` ` billion lion FY2019 19 H1 H1-FY FY202 2020 Growth Premium growth (APE) 77.99 33.69 (0.4%) Protection growth (APE) 7.22 4.97 86.8% Persistency (13th month)2 84.6% 83.6% Persistency (49th month)2 63.8% 63.7% Productivity (Cost/TWRP: Savings)3 11.5% 11.0%

21

• 1. For full year, based on actual cost; H1: based on management forecast of full year cost
• 2. Retail excluding SP computed as per IRDA circular dated January 23, 2014
• 3. Total Cost including commission / (Total premium – 90% of single premium)

Components may not add up to the totals due to rounding off

` billion lion H1 H1-FY FY201 2019 FY2019 19 H1 H1-FY FY202 2020 Value of New Business (VNB)1 5.90 13.28 7.09 VNB margin 17.5% 17.0% 21.0%

Financial update

Em Embedde bedded d Value lue (EV EV)1

23 1. As per Indian Embedded value (IEV) method

` billion

VIF grew by 18.6% over September 2018

126. 6.03 03 142.6 .69 149.4 .49 66.4 .45 73.5 .54 77.3 .31 Sep- ep-18 Ma Mar-1

• 19

Sep- ep-19 Value alue of I

• f Info

nforce (V rce (VIF IF) Adj Adjus uste ted n d net et w wort rth (AN h (ANW) W) 226.8 .80 192.4 .48 216.2 .23

An Analysis lysis of f movem vement ent in EV EV1

` billion FY2015 FY2016 FY2017 FY2018 FY2019 Opening EV EV 117.75 .75 137.21 .212 139.39 .39 161.84 .84 187.88 .88 Unwind 11.70 12.58 12.21 13.72 15.84 Value of New Business (VNB) 2.70 4.12 6.66 12.86 13.28 Operating assumption changes 1.60 1.042 1.00 7.64 4.20 Persistency variance 2.123 2.01 0.99 1.53 2.66 Mortality and morbidity variance 0.79 0.98 0.78 1.97 Expense variance 0.59 0.35 0.27 0.04 Other variance 1.09 0.76 0.00 0.02 EVOP 18.12 .12 22.23 .23 22.95 .95 36.80 .80 38.01 .01 Return on

• n embed

bedded ed value e (ROEV) EV) 15.4% 5.4% 16.2% 6.2% 16.5% 6.5% 22.7% 2.7% 20.2% .2% Economic assumption change and investment variance 11.11 (5.64) 5.82 1.13 (1.22) Net capital injection (9.77) (14.41) (6.32) (11.88) (8.43) Closi sing g EV 137.21 .21 139.39 .39 161.84 .84 187.88 .88 216.23 .23

24 1. As per Indian Embedded Value (IEV) method 2. Difference of FY2015 closing EV and FY2016 opening EV shown as operating assumption changes in FY2016;Components may not add up to the totals due to rounding off 3. Includes persistency, mortality and morbidity, expense and other variance

Financial ancial met etrics rics

` ` billio llion H1 H1-FY20 FY2019 FY2019 019 H1 H1-FY20 FY2020 Gro rowth th Retail new business premium 36.03 81.40 36.04 0.0% Retail renewal premium 86.59 202.25 91.26 5.4% Group premium 9.38 25.65 17.89 90.8% Total tal premi emium um 132.00 309.30 145.20 10.0% Value of New Business (VNB)1 5.90 13.28 7.09 20.2% Profit after Tax 5.83 11.41 5.87 0.7% Solvency ratio 234% 215% 211%

• AUM

1,461.293 1,604.102 1,655.123

• 25

1. For full year: based on actual cost; H1: based on management forecast of full year cost 2. At March 31, 2019 3. At September 30 of respective years Components may not add up to the totals due to rounding off

Technology initiatives

Objective jectives

27

Streng ngthenin thening g the core Be future ture ready Support rt new growth th engines ines

In Insta ta-insure insure

28

Data analytics lytics based real l time offers ers for custome tomers rs Applying data analytics on customers’

• ccupation, health,

financial and social scores available with us, we are able to offer pre approved life cover

Reduced clicks for faster

• nboarding journey

No financial documents required No medical requirements upto the limit Simple, hassle-free insurance purchase experience Endeavou deavour towards wards custom tomer er delig elight ht by ensur uring ing the follo llowing wing

AI AI in ser ervicing vicing

29

AI: Artificial Intelligence

For customer service For due diligence For complaint management For pre-claims assessment

• To help

lp custo tomer mer serv rvice ice executiv ecutive e to unde dersta rstand nd custom tomer er better tter

• Next

xt best st action ion predi rediction, tion, churn rn prediction rediction, , payme yment nt bounce

• unce

pred redictio iction, n, pitc itch h pro roduc uct to customer tomer etc.

• To
• identi

dentify fy cases es which ch shoul

• uld go for

r risk sk verifi rification cation

• To identify

dentify fraud audul ulent/ ent/risky isky profi rofiles les from rom our ur customer tomer pool

• ol
• To understand

derstand customers’ comp mplaint laint with h resp spect ect to mis-sel selling ling

• To help

lp in quic uick k and nd infor formed med dec ecisio ision-ma making king

• To identi

entify fy pote tenti ntially ly suspici icious

• us claims

ims based sed on risk k rep eport

• rt

Nudge ge

30

Appropriate, riate, short rt, , crisp sp message age for positive ive influ fluence ence & ap appropriate riate actions ns We have the capability to send customized messages to frontline personnel to help them in achieving their and

• rganization’s
• bjectives

Design sign

• Place

ace holde lder r in all l fro rontline ntline facing ing appli pplications cations Notifi tification cation feed ed

• Configur
• nfigurable

able nudge dge engine ine design sign App pproach ach

• Seaml

amless ess notificati tifications ns across ross digit igital al propert roperties es

• Rollov

llover er on the nudge udge message sage to expand xpand with h detail etails

• On click

ck actionab ionable

• Unread

read messages sages to be highli hlighted ghted like ke notifi tification cation

31

With this service, we promise to settle death claims in 1 day* Interest will be paid

• n claim amount

for every day of delay beyond 1 working day

1 D Day ay Death ath Claim aim Settl tlem ement ent is avail ailable le for r the e foll llowin ing Policies that have been active for continuous 3 years All mandatory claim documents submitted at a branch before 3 pm on a working day Total claim amount of all the policies is less than or equal to ` 15 million Claim does not require any on ground investigation

*Subject to terms & conditions document available with claims team **% of cases eligible for 1 day settlement; initiative launched in Q2-FY2020

Claim aim fo for r sure

99.6%** of claim settled in 1 day; Average claim settlement time 1.2 days

• Company strategy and performance
• Opp

ppor

• rtu

tunity ity

• Industry overview

Ag Agen enda da

Favo vorable rable dem emography graphy

33 1. Source: UN population division 2. Source: World bank

Large ge and growi wing ng populat latio ion n base1 Rising g afflue uence nce2 Driving ng GDP growt wth h 2 High h share re of working ng popul ulat ation

• n1
• 0.3%

0.0% 0.1% 0.1% 2.6% 4.4% 6.0% 7.3% 10.9% 9% Russia Russia Jap Japan an Bra Brazil U.S .S.A .A South

• uth

Kor Korea In Indon donesi sia In Indi dia Ch China na

GDP per capit ita a CAGR (FY2009-FY FY2019)

578 578 727 727 20 2015 15 20 2030 30 Populat lation ion of age 25-59 years rs (in mn)

51 51 58 58 127 127 146 146 209 209 268 268 327 327 1353 53 1428 28 S Korea rea S Afric rica Japan pan Russ ussia ia Brazil Brazil In Indone nesia sia US USA In India ia China China

2018 2018 Populat ulation ion (mn)

4.8% 7.7% 7.9% 5.2% 5.5% 6.4% 7.4% 8.0% 8.2% 7.2% 7.0% 6.0% 6.9% 1.9% 4.2%

• 1.7%

3.1% 2.5% 2.7% 2.8% 2.9% 2.6% 3.2% 3.0% 2.6% 2.7% FY02 FY08 FY10 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E Ind ndia World

Financiali ancialisation sation of f savings: vings: Opportunit portunity y fo for insuranc urance

• Financia

nancialis lisatio ation n of savi vings ngs aid ided ed by Direct rect Benefit efit Transfer ansfer, , RERA and d GST

34 1. Source: RBI and CSO 2. Source: RBI 3. Total life insurance industry premium including renewal; Source: IRDAI

Househol hold savings gs1 Di Distribu butio ion n of financial ncial savings gs (exclu ludi ding ng currency rency)2

2

FY2002 02 FY2008 08 FY2010 10 FY2012 12 FY2014 14 FY2018 18 FY2019 19 Life insurance premium3 as % of GDP 2.1% 4.0% 4.1% 3.3% 2.8% 2.7% 2.7%

• 0.52
• 1.88
• 2.03
• 2.90
• 3.77

(3.91)

• 4.69
• 7.41

2.86 7.72 9.90 9.33 12.57 14.96 14.38 18.70 2.98 5.38 8.56 14.23 15.59 13.64 16.53 18.09 54% 54% 69% 69% 60% 60% 45% 45% 52% 52% 61% 61% 55% 55% 64% 64% 44% 44% 52% 52% 48% 48% 31% 31% 36% 36% 45% 45% 37% 37% 38% 38% 0% 0% 10% 20% 30% 40% 50% 60% 70%

• 3
• 30
• 1
• 10

10 10 30 30 50 50 70 70 90 90 FY2002 FY2008 FY2010 FY2012 FY2015 FY2016 FY2017 FY2018

Phy Physi sical s al savin avings Gr Gros

• ss

s finan nanci cial s al savin vings gs Hous

• usehol

hold bo d borrowings wings Gr Gros

• ss

s Finan nanci cial savin vings gs as a % as a % o

• f Hous
• usehol

hold S Savin vings gs Net Net Fi Financial nancial sav savin ings as a s as a % of % of H House

• usehold S

hold Sav aving ngs

16.0% 25.1% 29.0% 23.8% 26.7% 20.5% 20.3% 23.3% FY2002 FY2008 FY2010 FY2012 FY2015 FY2016 FY2017 FY2018

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 Depos posits

` ` tn

tn

8.56 6.58 5.30 1.09 0.79 0.77 0.52 0.40

Protectio ction n gap 3,4

92 92 56 85 33 73 78 73 56

Protectio

• tection opportunit

pportunity: y: In Income

• me rep

eplacem lacement ent

35 1. FY 2019 data for India; As of FY2015 for US, Germany and others as of FY2017 2. Source: McKinsey estimates. 3. Protection gap (%): Ratio of protection lacking/protection needed 4. Source: Swiss Re, Economic Research and Consulting 2015

• 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 $ 8.56 trill illion

273% 273% 270% 270% 252% 252% 144% 144% 142% 142% 113% 113% 106% 106% 78% 78%

Sum Assured ed as a % of GDP1,2

Protectio

• tection opportunit

pportunity: y: Liabili ability ty cover

• ver
• Retail

ail cred edit it has been een gro rowing wing at a heal althy thy pace ce

• Cred

edit t life fe is vol

• luntar

untary

36 Source: RBI Components may not add up to the totals due to rounding off

` billio ion

4,56 567 5,38 386 6,28 285 7,46 468 8,60 601 9,74 746 11,60 601 4,40 409 4,71 711 5,37 378 6,45 454 7,59 599 9,33 339 10,60 606 8,97 976 10,09 097 11,66 663 13,92 922 16,20 200 19,08 085 22,20 207 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019

Ho Home Lo Loans Oth Others ers Retail Credit

Protectio

• tection opportunit

pportunity

• Prot
• tection

tion premi emium um ~ ` 125 bill illion n for

• r life

fe insur urance ance indus ndustr try y in FY2019 19 Gro ross direct irect premium remium (` bill illion) ion) FY FY2009 009 FY2019 019 CAGR GR Heal alth th 66.23 346.95 18.0% Moto tor 138.21 644.55 16.6%

• Motor Own Damage (OD)

87.56 264.73 11.7%

• Motor Third Party (TP)

50.65 379.82 22.3%

37 Source: General Insurance Council and company estimate

• Company strategy and performance
• Opportunity
• Indust

stry ry over ervie view

Ag Agen enda da

Ev Evolution

• lution of

f life fe insurance rance industr ustry y in In India ia

39 1. Retail weighted received premium (RWRP) 2. Individual and Group in-force sum assured Source: IRDAI, CSO, Life Insurance Council, *Company estimate

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

FY2019 5,089 FY2002 116 116 501 501

21.5% 5% 23.2%

Assets ets under der mana nageme gement nt (` bn) n)

36,657 2,304

24.0%

FY2015 550 550 2,654 12,899

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

11,812* 2* 37,505 147,501 01

15.5%

2.1% 4.1% 2.7%

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

50.1% 57.9% 77.6% FY2010 408 408 3,281 2.6% 23,361 78,091 62.7% 692 692

• 5.8%

4.3% 12.6% 15.8% 14.1% 11.6% 11.9% 17.2%

Indu dustry stry is ba back k to to grow

• wth

th tr trajec ecto tory ry

Channel nnel mix1

Given a well developed banking sector, bancassurance continues to be the largest channel for private players

40 1. Individual new business premium basis Source: Life Insurance Council

Industry dustry Priv ivate te pla layers yers

69% 69% 66% 66% 62% 62% 23% 23% 25% 25% 27% 27% 8% 8% 9% 9% 11% 11% FY FY2017 FY FY2018 FY FY2019 30% 30% 28% 28% 25% 25% 54% 54% 54% 54% 54% 54% 16% 16% 18% 18% 21% 21% FY FY2017 FY FY2018 FY FY2019 Age Agency ncy Banca cassur ssurance ce Oth ther ers

Produc duct t mix1

41 1. New business weighted premium basis; Source: IRDAI, Life Insurance Council

Industry dustry Priv ivate te pla layers yers

75% 75% 73% 73% 74% 74% 25% 25% 27% 27% 26% 26% FY FY2017 FY FY2018 FY FY2019 Non Non Li Linked nked Li Linke nked 49% 49% 46% 46% 49% 49% 51% 51% 54% 54% 51% 51% FY2 FY201 017 FY2 FY201 018 FY FY2019

Annexures

Aver erage age AP APE by E by produ

• duct

ct categori tegories es

Averag erage e reta tail il APE per er pol

• licy

icy (`) (`) FY2017 017 FY2018 018 FY2019 019 ULIP 169,701 180,746 159,329 Par 56,325 62,379 60,308 Non Par 39,153 54,187 76,468 Protection 9,815 9,123 12,048 Total tal 92,735 90,620 83,309

43

Policy icy ter erm m and d customer tomer age ge1

44

• 1. For FY2019; protection excludes credit life

12 12 30 30 Savin ings gs Pr Prot

• tec

ecti tion

• n

Average erage pol

• licy

icy term rm (yea ears) rs)

43 43 36 36 Savin ings gs Pr Prot

• tecti

ection

• n

Average erage custo tome mer r age e (yea ears) rs)

Channel nnel wi wise e product roduct mix1

Channe nel l category gory Product duct category

• ry

FY2017 FY2018 FY2019

Bancassurance ULIP Par Non par Protection Total 92.1% 5.3% 0.4% 2.2% 100.0% 0.0% 89.8% 7.3% 0.1% 2.7% 100.0% 0.0% 93.4% 2.1% 0.6% 3.9% 100.0% 0.0% Agency ULIP Par Non par Protection Total 79.5% 14.2% 2.0% 4.3% 100.0% 0.0% 81.8% 13.5% 0.4% 4.3% 100.0% 0.0% 75.3% 18.1% 0.5% 6.1% 100.0% 0.0% Direct ULIP Par Non par Protection Total 85.3% 5.0% 3.1% 6.5% 100.0% 0.0% 88.0% 4.3% 2.4% 5.3% 100.0% 0.0% 79.3% 5.3% 6.4% 9.1% 100.0% 0.0% Corporate agents and brokers ULIP Par Non par Protection Total 46.5% 44.1% 0.4% 9.0% 100.0% 0.0% 36.8% 49.9% 0.5% 12.8% 100.0% 0.0% 28.2% 49.5% 0.6% 21.8% 100.0% 0.0%

45

• 1. Retail Annualized Premium Equivalent (APE) basis

Components may not add up to the totals due to rounding off

Produc duct t wi wise e channel nnel mix1

Product duct category

• ry

Channe nel l category gory FY2017 FY2018 FY2019

ULIP Bancassurance Agency Direct Corporate agents and brokers Total 62.4% 22.0% 12.2% 3.4% 100.0% 0.0% 57.4% 25.4% 14.5% 2.7% 100.0% 0.0% 65.5% 20.5% 12.0% 2.1% 100.0% 0.0% Par Bancassurance Agency Direct Corporate agents and brokers Total 31.3% 34.3% 6.3% 28.1% 100.0% 0.0% 35.4% 31.5% 5.3% 27.7% 100.0% 0.0% 13.8% 45.4% 7.4% 33.3% 100.0% 0.0% Non par Bancassurance Agency Direct Corporate agents and brokers Total 22.8% 49.0% 25.6% 2.6% 100.0% 0.0% 15.9% 24.5% 52.8% 6.8% 100.0% 0.0% 27.4% 8.0% 62.0% 2.6% 100.0% 0.0% Protection Bancassurance Agency Direct Corporate agents and brokers Total 35.2% 27.9% 21.6% 15.3% 100.0% 0.0% 35.2% 27.6% 17.9% 19.3% 100.0% 0.0% 36.9% 22.8% 18.7% 21.7% 100.0% 0.0%

46

• 1. Retail Annualized Premium Equivalent (APE) basis

Components may not add up to the totals due to rounding off

Ret etail ail per ersistency sistency ex excluding cluding single gle premium emium1

47 1. 11M-FY2019 persistency As per IRDA circular dated January 23,2014; excluding group and single premium policies

Persist stency ncy acros

• ss

s product duct categories gories Persist stency ncy acros

• ss

s chann nnel l categori gories

86.0% 89.4% 84.8% 79.4% 64.3% 62.7% 74.1% 49.8% UL ULIP Pa Par Non- n- Par ar Pro Protection ion 13 13th mo month 49 49th mo month 84.8% 88.6% 85.6% 88.5% 62.7% 64.9% 66.5% 67.9% Ba Banc ncas assura suranc nce Agenc ency Direct Direct Corp rporate ag rate agents and b ents and bro rokers ers 13th th mo month th 49th th mo month th

Technology

Objective jectives

49

Streng ngthenin thening g the core Be future ture ready Support rt new growth th engines ines

Digita gital l ev evolution

• lution path

ath to maturity turity

50

End to end digi gital taliza zati tion

• n of journe

urneys ys Leverage rage ecosy

• system

stems s and tech ch advance ncements ents

Build ld digit ital al founda ndatio tion Optimize processes and systems Digit itiz ize onboard rding ing and service Build seamless presentation layer

1 2

Leverag age ecosyste tem Collaborate with internal stakeholders And partners for enhancing experience and productivity Market leadership hip IT as an enabler for Business innovation

3 4

• Seamless AI, ML,

NLP interventi tions

• ns

in the journe ney

• Enhance

nce experie ienc nce and produc uctiv ivity ty

• Integrat

rate internal nal, , Partne ner r systems and external nal ecosystems s

• Provide

de friction ionless ss journe ney

• Proce

cess re- engineeri ring ng

• Technol

nology

• gy

archi hitect ectur ure

• Service

ce archi hitect ectur ure

• Proce

cess s automati ation

• n
• Build

d seamless presentat tatio ion n layer

• Integrat

ration ion archi hitect ectur ure

AI : Artificial Intelligence| ML : Machine Learning NLP : Natural Language Processing

2011 2011-2013 2013 2013 2013-2015 2015 2015 2015-2018 2018 2018 2018-2019 2019

Need eed Anal alysis ysis Lead ad Manage anagemen ment t System stem Cognit

• gnitive

ive BOTs Nudge udge Engine ines Lear arner ners Box Custom tomer r Prof rofile iler

Product duct recommendat ndation ion based on customer’s life stage, goal, , risk appetit ite Enhanc anced d with voice capabili ability y and geo taggin ing Know custom

• mer

r better through ugh social al platform

• rms

Prompt pt for appropr ropriat iate action

• n

24x7 query resolut ution ion using g chat t bots On On-the he-go go e-learn rning ng modules s and video based d sales pitches hes

Pre sales les

51

Flexi exible le

• n
• n-board

arding ing Paperl aperless ess

• n
• n-board

arding ing Tele le underw derwrit riting ng Rob

• botic

tic enabled abled issuance uance AI assisted isted unde derwri rwriting ting Instant tant doc

• cume

ument nt veri rification fication (OCR OCR)

Platform

• rm agnost

stic ic and availabl lable for all chann nnels End to end digital al and seamless onboardin arding Real time identificati ication

• n

and verificat catio ion n of docum ument nts Robotic ic proce cessin ing g for faster issuance nce Improves s efficie iency ncy and reduce ces issuanc nce TAT Empowers rs underw rwri riters rs with compre rehe hens nsiv ive insights hts

Onboarding boarding and d issuance uance

OCR : Optical Character Reader AI : Artificial Intelligence

52

Anyti ytime. me.. ..Anywher Anywhere Premium remium pay aymen ment WhatsApp atsApp Serv ervice ice bot

• ts

s (LiGo iGo) Auto toma mated ted Claim aims Pro rocessing cessing Intui uitiv tive IVR

76% trans nsact actions

• ns self

serviced ed, , omni chan anne nel l experie ience nce Over 60% renewal al premium um through ugh electroni

• nic

c modes 50% naviga gation ion time saved 92% good d unders rstanding anding with 75% service ce coverag age First st life insurer r to g get busine ness verified d acco coun unt AI based pre-claim laim assessment nt & c claim im proce cessing ng

Custom tomer er servicing vicing and claims laims

IVR : Interactive Voice Response

53

Rank k high gh on

• nlin

line e sear arches ches Segmen gmente ted targetin rgeting True uecall caller integratio tegration Selfi lfie e quote uote Co Co-bro browsin sing g Hyp yper er person ersonal alisati sation

Mach chin ine learnin ing g used to rank us higher r when custom

• mers

rs search ch Reachi hing g the c custom

• mer

r by mappin ing g their interests ts and affini niti ties Personali nalized d messaging ng to engage custome mers rs througho ughout ut journe ney AI back cked d quote based d on facial ial recogni gniti tion

• n

Facil ilitat tate auto form fill Instant nt screen n share re availabl lable for assistanc ance in form fill

Marketing rketing and d lead ad ge generatio eration

54

Pro rocess cess simplif mplificati ication Flexi exible le integr egrati ation Custom tomer r serv rvice ice Easy sy UI Web eb portal

• rtal

Superior ior custom

• mer

r experie ience nce Modul ular ar integrat ration ion as per the choice ice of partne ners rs Self service ce module for Group up busine ness Pre-cod coded d pages for quick cker r integrati ation

• n

Enabl blin ing g custom

• mer

r service e on partne ner r portals als

Partner rtner integration tegration

UI : User Interface

55

Actiona ionable le insights sights Data ta mod

• del

elling ling Data ta lake ke solution lution Goo

• ogl

gle e Big Query uery, , Had adoop, , Pytho thon Smart art solutions lutions

Acce celer erat ate sales, enhance nce custom

• mer

r experie ience nce & personali nalizati zation

• n

Customer r interac action ion based segmentati tion,

• n,

propens nsity ty, nudge ges Pre appro roved d life cover; provide de best offer to custom

• mer

Using g best techno nology logy availabl lable to process ss the data Use of AI & M ML to analys yse struct ctur ured d & unstruct uctur ured d data

An Analytics lytics

AI : Artificial Intelligence ML : Machine Learning

56

Embedded value

An Analysis lysis of f movem vement ent in EV EV

58

1: EVOP is the embedded value operating profit net of tax 2: ROEV is the return on embedded value net of tax EV results prepared as per APS 10 and reviewed by Milliman Advisors LLP Components may not add up to the total due to rounding off

` billion

VIF 117.6 .64 ANW 70.2 .24 15.8 .84 4.20 13.2 .28 2.66 1.97 0.04 0.02 (1.22 22) (8.43 43)

IEV IEV (M (Mar r 31, 1, 201 2018) 8) Unw Unwind ind Op Operating ating Ass ssump mptio tion Cha Chang nges VNB Persis Persistency tency vari varianc ance Morta rtality lity and nd mo morb rbid idity ity vari varianc ance Expense nse vari varianc ance Othe Other r varianc ariance 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 (Mar r 31, 1, 201 2019) 9)

VIF 142.6 .69 ANW 73.54 187.8 .88 216.2 .23 EVOP1 = 3 38.01 ROEV2

2 = 2

20.2%

Em Embedded bedded value lue

` ` billio llion FY2017 017 FY2018 018 FY2019 019 Value of In force (VIF) 94.28 117.64 142.69 Adjusted Net worth 67.56 70.24 73.54 Embedd bedded value lue1 161.84 187.88 216.23 Return on Embedded Value (ROEV) 16.5% 22.7% 20.2% EV growth-pre dividend 20.6% 23.4% 19.6% EV growth-post dividend 16.1% 16.1% 15.1% VNB as % of opening EV 4.8% 7.9% 7.1% Operating assumption changes and variance as % of opening EV 2.9% 6.3% 4.7%

59 1. As per Indian Embedded Value (IEV) method Components may not add up to the totals due to rounding off

EV EV met ethodolo hodology gy

• EV results prepared based on the Indian Embedded Value (IEV)

methodology and principles as set out in Actuarial Practice Standard 10 (APS10) issued by the Institute of Actuaries of India (IAI)

• EV consists of Adjusted Net Worth (ANW) and Value of in-force covered

business (VIF)

• ANW is market value of assets attributable to shareholders, consisting of
• Required capital
• Free surplus
• Value of in-force covered business (VIF) is
• Present value of future profits; adjusted for
• Time value of financial options and guarantees;
• Frictional costs of required capital; and
• Cost of residual non-hedgeable risks

60

Componen mponents ts of f AN ANW

• Required capital (RC)
• The level of required capital is set equal to the amount required to be held to

meet supervisory requirements.

• It is net of the funds for future appropriation (FFAs)
• Free surplus (FS)
• Market value of any assets allocated to, but not required to support, the in-force

covered business

61

Componen mponents ts of f VI VIF (1/2 /2)

• Present value of future profits (PVFP)
• Present value of projected distributable profits to shareholders arising from in-

force covered business

• Projection carried out using ‘best estimate’ non-economic assumptions and

market consistent economic assumptions

• Distributable profits are determined by reference to statutory liabilities
• Frictional Cost of required capital (FC)
• FCs represent investment management expenses and taxation costs associated

with holding the Required capital

• Investment costs reflected as an explicit reduction to the gross investment

return

62

Componen mponents ts of f VI VIF (2/2 /2)

• Time value of financial options and guarantees (TVFOG)
• Represents additional cost to shareholders that may arise from the embedded

financial options and guarantees

• Stochastic approach is adopted with methods and assumptions consistent with the

underlying embedded value

• Cost of residual non-hedgeable risk (CRNHR)
• An allowance for risks to shareholder value to the extent not already allowed for in

the TVFOG or the PVFP

• Allowance for asymmetric risks of operational, catastrophe mortality/morbidity and

mass lapsation risk

• Determined using a cost-of-capital approach
• Allowance for diversification benefits among the non-hedgeable risks, other than

the operational risk

• 4% annual charge applied to capital required

63

Componen mponents ts of f EV EV movement vement (1/2 /2)

• Expected return on existing business (unwind)
• Expected investment income at opening reference rate on VIF and ANW
• Expected excess ‘real world’ investment return over the opening reference rate
• n VIF and ANW
• Operating assumption changes
• Impact of the update of non-economic assumptions both on best estimate and

statutory bases to those adopted in the closing EV

• Value of new business
• Additional value to shareholders created through new business during the

period

64

Componen mponents ts of f EV EV movement vement (2/2 /2)

• Operating experience variance
• Captures impact of any deviation of actual experience from assumed in the
• pening EV during the inter-valuation period
• Economic assumption changes and Investment variance
• Impact of the update of the reference rate yield curve, inflation and valuation

economic assumptions from opening EV to closing EV

• Captures the difference between the actual investment return and the expected

‘real world’ assumed return

• Net capital injection
• Reflects any capital injected less any dividends paid out

65

Key ey assumptio umptions ns underl erlying ying EV EV (1/2 /2)

• Discount rate and Fund earning rates
• Set equal to reference rates which is proxy for risk free rates
• Reference rates derived on the basis of zero coupon yield curve published by

the Clearing Corporation of India Limited

• Expenses and commission
• Based on the Company’s actual expenses during FY2019 with no anticipation

for productivity gains or cost efficiencies

• Commission rates are based on the actual commission payable to the

distributors

66

Key ey assumptio umptions ns underl erlying ying EV EV (2/2 /2)

• Mortality and morbidity
• Based on company’s experience with an allowance for future improvements in

respect of annuities

• Persistency
• Based on company’s experience
• Taxation
• Taxation costs reflect the reduction in costs due to dividend income being tax

exempt

67

Se Sensitivit sitivity y analysis alysis (FY20 Y2019) 19)

68

Scenario ario % c change nge in VNB % c change nge in EV Increase in 100 bps in the reference rates (4.3) (2.0) Decrease in 100 bps in the reference rates 4.4 2.0 10% increase in the discontinuance rates (8.5) (1.3) 10% decrease in the discontinuance rates 8.9 1.4 10% increase in mortality/morbidity rates (9.4) (1.4) 10% decrease in mortality/morbidity rates 9.4 1.4 10% increase in acquisition expenses (13.0) Nil 10% decrease in acquisition expenses 13.0 Nil 10% increase in maintenance expenses (3.6) (0.9) 10% decrease in maintenance expenses 3.6 0.9 Tax rates increased to 25% (7.5) (4.0)

Ec Economic

• nomic assumptio

umptions ns underlying derlying VN VNB B and d EV EV

69

Teno nor (yea ears) s) Refer erences ences Rates es March rch 31, 2018 March rch 31, 2019 Sept eptemb ember er 30, 2019 1 6.57% 6.66% 5.77% 5 8.21% 7.83% 7.35% 10 10 8.31% 8.35% 8.00% 15 15 8.11% 8.35% 7.95% 20 20 7.97% 8.22% 7.78% 25 25 7.91% 8.11% 7.65% 30 30 7.88% 8.05% 7.58%

Glossary

• ssary
• Annuali

ualized zed Premium um Equivale alent nt (APE) E) – Annualized Premium Equivalent (APE) is the sum of the annualized first year premiums on regular premium policies, and ten percent of single premiums, from both individual and group customers

• As

Assets ts un under er manag managemen ent (A (AUM) M) - AUM refers to the carrying value of investments managed by the company and includes loans against policies and net current assets pertaining to investments

• Emb

mbed edded ed Value alue (EV EV) - Embedded Value (EV) represents the present value of shareholders’ interests in the earnings distributable from the assets allocated to the business after sufficient allowance for the aggregate risks in the business

• Emb

mbed edded ed Valu lue Oper erat atin ing Prof rofit (E (EVOP) P) - Embedded Value Operating Profit (EVOP) is a measure of the increase in the EV during any given period due to matters that can be influenced by management

• Retai

tail Wei eight hted ed Rec ecei eived ed Pre remiu ium (RWRP) RWRP) - Premiums actually received by the insurers under individual products and weighted at the rate of ten percent for single premiums

• Total
• tal weigh

ighted ed re recei eived ed pr premi mium um (T (TWRP) WRP) - Measure of premiums received on both retail and group products and is the sum of first year and renewal premiums on regular premium policies and ten percent of single premiums received during any given period

• Per

ersist isten ency Ra Rati tio - Persistency ratio is the percentage of policies that have not lapsed and is expressed as 13th month, 49th month persistency etc. depicting the persistency level at 13th month (2nd year) and 49th month (5th year) respectively, after issuance of contract

• 70

Sa Safe fe harbor rbor

Except for the historical information contained herein, statements in this release which contain words or phrases such as 'will', 'would', ‘indicating’, ‘expected to’ etc., and similar expressions or variations of such expressions may constitute 'forward-looking statements'. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward- looking statements. These risks and uncertainties include, but are not limited to our ability to successfully implement our strategy, our growth and expansion in business, the impact of any acquisitions, technological implementation and changes, the actual growth in demand for insurance products and services, investment income, cash flow projections, our exposure to market risks, policies and actions of regulatory authorities; impact of competition; experience with regard to mortality and morbidity trends, lapse rates and policy renewal rates; the impact of changes in capital, solvency or accounting standards, tax and other legislations and regulations in the jurisdictions as well as other risks detailed in the reports filed by ICICI Bank Limited, our holding company, with the United States Securities and Exchange Commission. ICICI Prudential Life Insurance undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof.

71

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