#1BAJAJ B FINSERV BAJAJ FIN SERV LIMITED Investor Presentation - Q4 FY22* *Financial year 2021-22#2Bajaj Group Structure Bajaj Holdings & Investment Limited (Listed) €33.43%2 B BAJAJ FINSERV Bajaj Auto Limited (Listed) Auto Business Arm 39.16% 1 51% Maharashtra Scooters Limited (Listed) Bajaj Finserv Limited (Listed) Financial Services Arm 52.49% 3 74% Bajaj Allianz General Insurance Bajaj Finance Limited (Listed)* Bajaj Housing Limited Bajaj Allianz Life Insurance Limited 74% Auto spare parts Manufacturer 80.1% 100% Bajaj Finserv Direct Limited Bajaj Finserv Health Limited 100% 100% Bajaj Financial Securities Limited 1. 2. 3. 60.42% holding via promoter holding & promoter group 53.77% holding via promoter holding & promoter group 55.86% holding via promoter holding & promoter group Finance Limited Apart from these, Bajaj Finserv (BFS) also has two other fully-owned subsidiaries - BFS Asset Management Company (BFSAMC -in process of getting final approval from SEBI) and BFS Ventures (BFSV), both of which are in early stages of setting up their businesses Bajaj Finserv Limited (BFS) shareholding in Bajaj Finance Limited (BFL) was 52.74% as on 31 Mar 2021. Bajaj Housing Finance Limited (BHFL) is a 100% subsidiary of BFL which became fully operational in Feb 2018. Bajaj Financial Securities Limited (BFSL) is 100% subsidiary of BFL which became fully operational in Aug 2019 Maharashtra Scooters Limited (MSL) is termed as an unregistered Core Investment Company. Note: Shareholding is as of 31 March 2022. 2#3Bajaj Finserv's Vision - A diversified financial services group with a pan-India presence Life cycle needs of Individual & SME customers Asset acquisition Wealth management ULIPS*, Fixed Deposits, Shares Asset protection Family, Health & Income Protection Investment/ Loan (Personal, Home), Credit Cards General Insurance General, Health & Life Insurance Guaranteed Savings, Digital access to health ecosystem B BAJAJ FINSERV Retirement Annuities PRODUCTS & SOLUTIONS Bajaj Finance Limited (BFL) Bajaj Allianz Life Insurance Limited (BALIC) Bajaj Allianz General Insurance Limited (BAGIC) PLATFORM S Bajaj Finserv Direct Limited (BFDL) Bajaj Finserv Health Limited (BFHL) Bajaj Financial Securities Limited (BFSL) Diversified across products and markets, with a strong retail core Bajaj Finserv Asset Management Company has been incorporated on 18 October 2021 ■ BFS also incorporated Bajaj Finserv Ventures Limited, a wholly owned subsidiary, which will focus on alternative investments *ULIPS Unit Linked Investment Products 3#4Bajaj Finserv - Established businesses with strong track record Bajaj Finance Limited BBAJAJ FINSERV Bajaj Allianz General Insurance Ⓡ BAJAJ Allianz ⑪ Bajaj Allianz Life Insurance ® BAJAJ | Allianz ⑪ Non-Bank with strategy & structure of a bank Diversified financial services strategy with an optimal mix of risk and sustainable profit Focused on mass affluent & above with a strategy to cross-sell with smart use of data and analytics Focused on continuous innovation to transform experience and create growth opportunities customer ☐ Build a profitable & diversified portfolio of products & solutions with emphasis on multi-channel distribution, strong underwriting with stress on combined ratio & prudent financial management Drive the theme of "Caringly yours" on the foundation of customer obsession through innovations in customer experience Strive to be the best claims paying general and health insurer ☐ Balanced product mix and diverse distribution network to deliver sustainable profitable growth with robust risk management Life Goal Enablers for customers through differentiated products ☐ Customer-centric strategy to deliver seamless, simplified & personalized experience ☐ Use of innovation & data analytics as a strategic differentiator for customers & sales partners 4#5Bajaj Finserv - Emerging Opportunities Bajaj Finserv Health Limited B Health Health Tech venture - aims to transform health care sector in India ☐ Integrating the fragmented healthcare delivery ecosystem with technology and financial services on a digital platform to bring quality health care closer to consumers' reach through products, networks & Technology Introduced Aarogya Care', an industry-first product, offering a wide range of personalized, preventive and prepaid health care packages such as OPD care, telemedicine, and other services. Bajaj Finserv Direct Limited B BAJAJ FINSERV ☐ Diversified Financial Services & eCommerce Open Architecture Marketplace for Loans, Cards, Insurance, Investments, Payments & Lifestyle products ☐ Offering large number of Financial products and thousands of Lifestyle SKU's on its Bajaj MARKETS platform Attract new-to-Finserv customers by creating awareness and discovery of the Finserv brand in the digital medium Bajaj Financial Securities Limited* B BAJAJ FINSERV ☐ A digital stockbroker to provide Loan Against Securities (LAS) customers of BFL by offering them a full suite of investment products and services ☐ All-in-one digital platform combining dem at, broking, margin trade financing for retail and HNI clients on a predominantly B2C platform *Bajaj Financial Securities Limited is 100% subsidiary of Bajaj Finance Limited which became fully operational in Aug 2019 5#6Role of Bajaj Finserv B 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 accountable empowerment and encouragement of disruptive thinking Business Rigorous engagement in Long Range Planning and Annual Operating Plans Regular review of all businesses and their SBUS New business opportunities and Strategic investments CRO Chief Risk Officer ERM Enterprise Risk Management ORM Operational Risk Management and Risk Harmonization of risk policies framework, Regular engagement with CROS of business ■ Periodic review of top ERM risks including credit, business, financial, operational, reputation, etc. & mitigation actions planned Drive risk related projects across the group such as ORM People / HR One Finserv Group Talent mobility Group Young Leader Management Trainee Program ■ 30 Under 30 Program ■ 3 Tier Merit based remuneration plans combining fixed cash, annual bonus and ESOPS Collaboration and Best Practice Group Knowledge Forums - Analytics, Technology, Investments, Governance, etc. ■ Cross group stress identification forum to identify any cross functional view on investment risks ■ Cross Company projects on Data, innovation and digital strategy. Customer Experience, Investments, ESG Defining Customer Service protocols for businesses ■ Review and standardisation of investment processes ■ Oversight and monitoring of ESG policy and its implementation across the group CO 6#7Bajaj Finserv performance highlights - Q4 FY22 BAJAJ B FINSERV Performance Highlights of Q4 FY22 over Q4 FY21 (Ind All Figures in Rs Million AS) CY 188,617 13,461 402,468 43,682 23% 37% 12% 15% PY 153,869 Total Revenue (Consolidated) 9,791 358,300 38,009 Net Worth (Consolidated) Net Worth (Standalone) PAT* (Consolidated) Bajaj Finserv remains a debt free company. Bajaj Finserv's surplus funds (Excluding Group Investments) stood at Rs. 11.5 Bn as on 31 March 2022 (Rs. 12 Bn. as on 31 March 2021) • Consolidated Book Value Per Share at Rs. 2,530 as on 31 Mar 2022 (Rs. 2,253 as on 31 Mar 2021) • PAT includes unrealized mark-to-market (MTM) losses on equity investments measured at fair value through profit and loss of BALIC and BAGIC of Rs. 910 Mn in Q4 FY22 as compared to MTM loss of 40 Mn in Q4 FY21 Note *PAT attributable to owners of the company 7#8Consolidated profit components - Q4 FY22 Consolidated profit components for Q4 FY22 (Ind AS) Adjustments (Net of Tax) # Unrealized MTM* Loss on BAGIC Investments - Rs. 80 Mn Unrealized MTM Loss on BALIC Investments - Rs. 830 Mn B BAJAJ FINSERV All Figures in Rs Million Intercompany adjustments Bajaj Finserv- Standalone (231) Others 169 Life Insurance General Insurance (503) (467) Bajaj Finance 1,760 12,733 Consolidated profit components for Q4 FY21 (Ind AS) Adjustments (Net of Tax) # Unrealized MTM* Gain on BAGIC Investments - Rs. 160 Mn Unrealized MTM Loss on BALIC Investments - Rs. 200 Mn Intercompany adjustments Bajaj Finserv- Standalone (2,409) Others 1,687 Life Insurance (278) General Insurance 1,484 Bajaj Finance 2,204 7,103 *M TM - Mark to Market | # Represents Impact on consolidated financials i.e. considering BFS's stake 13,461 Bajaj Finserv Consolidated 9,791 Bajaj Finserv Consolidated 8#9FY22 Highlights BAJAJ B FINSERV B BAJAJ FINSERV All Figures in Rs Million Highlights of Group Companies BAJAJ FIN SERV* FY22 FY21 Growth BAJAJ FINANCE* FY22 FY21 Growth Total Revenue 684,060 605,912 13% AUM 1,974,517 1,529,471 29% Net worth 402,468 358,300 12% Total Income 316,404 266,831 19% PAT 45,568 44,705 2% PAT 70,282 44,198 59% # Consolidated Ind AS PPOP^ 143,072 119,608 20% Consoldiated Profit Components* BAGIC FY22 FY21 Growth GWP 137,881 126,244 9% 5% 15% 13% 21% 22% Investments 246,329 231,502 6% 23% PAT 13,391 13,301 1% 31% Combined Ratio 99.6% 96.9% -2.7% abs. 95% 52% -4% -8% 81% -10% 73% BALIC FY22 FY21 Grow th 2020-21 2021-22 -3% -4% Q4 FY21 GWP 161,271 120,248 34% Investments 856,234 737,726 16% Q4 FY22 PAT 3,244 5,803 -44% IBFL BAGIC BALIC Others* NBV & NBM * 6,212|14.2% 3,608|12.3% 72% 1.9% abs. Bajaj Finserv Ltd. and Bajaj Finance Ltd. figures are as per Indian Accounting Standard (Ind AS). ■ BAGIC and BALIC figures are as per IRDAI Regulations (Indian GAAP) & the Indian Accounting Standard framework is used only for consolidated numbers ** NBV-Net New Business Value, NBM - Net New Business Margin, abs - Absolute Value, *Others includes Bajaj Finserv Ltd. Standalone, and all remaining components A Pre Provision Operating Profit Before Tax 6#10Some key new initiatives during the year towards furtherance of ESG B BAJAJ FINSERV “ESG is not just the right thing to do, it is what will shape a better tomorrow." Mega Vaccination drive to administer over 1 Million doses of the COVID-19 vaccine to the beneficiaries in districts of Pune and Aurangabad by Bajaj Group Adoption of Responsible Investment principles by Insurance subsidiaries Installation of rooftop solar generation plants at 3 offices and raw hard water treatment plant at an office As committed in FY21, BFL opened 50 financial inclusion branches in rural and backward areas in FY2022 and is committed open another 50 such branches in FY23 Adoption of consistent Code of Ethics and Professional Conduct across BFS Group Plan to early adopt SEBI's Business Responsibility and Sustainable Reporting for FY22 Accounting of GHG emissions (FY 21 and FY22) Bajaj Finserv Employability initiative BEYOND enters northern and eastern states of India and placement division also established Voluntary third-party assessments for 19 CSR partner organisations 10#11Illustrations on some of our ESG focus areas Governance •Board approved 'Responsible & sustainable business conduct policy (including material subsidiaries) Liquidity solvency continues to be higher than the statutory. requirement •Continuous improvement in gender diversity mix at BFS Group level Reaching Financial Services to Million of Indians •Crop insurance to 6.6+ million farmers in last 4 years Higher contribution of rural / social sector business compared to IRDAI norms Continued participation in Government backed financial inclusion program mes such PMAY, PM JJBY, Ayushman Bharat PM JAY, etc. B BAJAJ FINSERV Preserving and Protecting Environment •Renewable power generated is more than the electricity consumed •Reduced paper consumption through digital initiatives. •Exclusion list of activities and/or end use, for which BFL shall not lend, as detailed in its Environmental Policy • Empowering Society 20,000+ students (~70% women) enrolled for CPBFI, since inception (10,000+ during FY22) • Cleft Reconstructive Surgeries for more than 62,000 children, since 2014 In last 2 years, more than 25,000 households benefitted from livelihood projects involving trainings, skill building, etc.. Customer Centricity • Charters and policies to protect interest of customers • Use of technology to enhance customer experience • Conducted customer trainings and awareness campaigns - Fraud prevention 'Savdhaan Rahein, Safe Rahein', 'Be Cyber safe', etc. Human Capital • Adopted 'Covid Impacted Family Assistance Policy' for providing assistance to families in the unfortunate & extreme event of an employee passing away due to Covid❜19 • . 50,000+ employees upskilled / multi-skilled through trainings Awareness programmes on ESG for employees *CPBFI Certification Program in Banking, Finance and Insurance 11#12BAJAJ B FINSERV Bajaj Finance Limited 12#13BFL - Key Strategic Differentiators STRATEGY BAJAJ B FINSERV 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. DIFFERENTIATORS Focus on mass affluent and above clients Strong focus on cross selling to existing customers Highly agile & highly innovative. Deep investment in technology and analytics Diversified asset mix supported by strong ALM and broad-based sources of borrowings Overall customer franchise of 57.57 Mn. and Cross sell client base of 32.77 Mn Centre of Excellence for each business vertical to bring efficiencies across businesses and improve cross sell opportunity. 75% of new loans in Q4 FY22 were to existing clients Continuous improvement in features of products & timely transitions to maintain competitive edge. Has helped establish a highly metricised company and manage risk & controllership effectively Consolidated lending AUM mix for Consumer: Rural : SME: Commercial Mortgage stood at 32%: 10%: 13% 14% 31% as of 31st March 2022 Consolidated borrowing mix for Banks: Money Markets: Deposits: ECB stood at 28% 50% 19% :3% 13#14BFL Business Segments BAJAJ FINANCE Consumer SME Commercial BAJAJ B FINSERV Rural Largest consumer electronics, digital products & lifestyle lender in India • Presence in 1,368 . locations with 95,900+ active points of sale Amongst the largest personal loan lenders EMI Card franchise of over 30 Mn cards in force Among the largest new loans acquirers in India 6.28 Mn in Q4 FY22 Bajaj Finserv - Mobikwik active wallet users stood at 22.1 Mn as on 31 Mar 2022 who have linked EMI card to wallet • Bajaj Finserv - RBL Bank co-branded credit card stood at 2.75 Mn as of 31 Mar 2022 Focused on affluent SMEs with an average annual sales of around Rs. 150-170 Mn with established financials & demonstrated borrowing track records • Offer a range of working capital & growth capital products to SME & self employed professionals • Dedicated SME Relationship management approach to cross sell Wholesale Lending products covering short, medium and long term financing needs of selected sectors viz. ✓ Auto component and ancillary manufacturers ✓ Pharma Specialty Chemicals ✓ Light engineering ✓ Financial institutions • Structured products collateralized by marketable securities or mortgage • Financing against shares, mutual funds, insurance policies and deposits Unique hub-and-spoke model in 2,136 locations and retail presence across 29,800+ points of sale • Diversified rural lending model with 10 product lines across consumer and SME business categories 14#15- BFL Key Highlights Q4 2021-22 BAJAJ B FINSERV AUM & Business Franchise Growth ☐ ■ Q4 FY22 AUM was at Rs. 1,974,517 Mn vs Rs. 1,529,471 Mn last year (29% growth); Core AUM* accretion in Q4 FY22 was approximately ~ Rs. 108,370 Mn ☐ ■ 6.28 Mn new loans in Q4 FY22 as against 5.47 Mn in Q4 FY21 Acquired 2.21 Mn new customers in Q4 FY22 vs 2.19 Mn in Q4 FY21; In FY22, custom er franchise recorded highest ever increase of 9 Mn ■ Total customer franchise stood at 57.57 Mn as of 31 March 2022 - 19% growth Yo Y; Cross-sell franchise grew by 22% to 32.77 Mn NIM Metrics, Liquidity and Operating Expense ■ Net Interest Income (NII) for Q4 FY22 was Rs. 60,677 Mn vs Rs. 46,594 Mn in Q4 FY20; NII for FY22 was Rs. 218,922 Mn vs 172,691 Mn in FY21 (27% growth) ■ The Company is carrying liquidity buffer of Rs. 101,103 Mn - normalized to pre-COVID levels ■ As of 31 March 2022, deposit book stood at Rs. 307,995 Mn - growth of 19% YoY ☐ Operating expense in FY22 was higher as company continues to invest in teams and technology for business transformation ■ Opex to NII came in at 34.6% vs 34.5% in Q4 FY21; Opex to NII for FY22 was 34.6% as against 30.7% in FY21 *Core AUM Growth = (AUM growth for the quarter - short tenor IPO financing book + additional losses on account of COVID) 15#16BFL - Key Highlights Q4 2021-22 В ВАЈАЈ B FINSERV Credit Costs ▪ Loan losses & provisions for the Q4 FY22 were Rs. 7,016 Mn vs Rs. 12,308 Mn in Q4 FY21 ■ FY22 loan losses and provisions were Rs. 48,034 Mn (vs Rs. 59,686 Mn in FY21) in line with earlier guidance ■ Continues to carry a management overlay of Rs. 10,600 Mn as of 31 March 2022 ■ GNPA & NNPA as of 31 March 2022 stood at 1.60% & 0.68% respectively as compared to 1.79% and 0.75% as of 31 March 2021 Profitability & Capital Position ☐ Profit after tax (PAT) for Q4 FY22 increased by 80% to Rs. 24,195 Mn compared to Rs. 13,466 Mn in Q4 FY21 ■ FY22 PAT stood at Rs. 70,282 Mn as compared to Rs. 44,198 Mn in FY21; Highest ever PAT for the quarter and the entire year Capital adequacy remained very strong at 27.22% as of 31 Mar 2022. Tier-1 capital was 24.75% 16#17BFL Subsidiaries - Key Highlights Bajaj Housing Finance Limited (BHFL) AUM & NIM Metrics Credit Cost Profitability & Capital Position B BAJAJ FINSERV AUM increased by 37% to Rs. 533,217 Mn as of 31 Mar 2022 from Rs. 388,709 Mn as of 31 Mar 2021 Net Interest Income for Q4 FY22 increased by 22% to Rs. 4,517 Mn from Rs. 3,695 Mn in Q4 FY20; FY22 NII increased by 36% to Rs. 16,118 Mn ■ Opex to NII increased to 32.5% in Q4 FY22 as against 26.6% in Q4 FY21 as it has accelerated its investment in geographic expansion; FY22 Opex to NII stood 29.2% as compared to 27.7% in FY21 Loan losses & provisions for Q4 FY22 were Rs. 379 Mn as against Rs. 299 Mn in Q4 FY21 ■ FY22 credit cost was Rs. 1,811 Mn as against Rs. 2,472 Mn in FY22 ■ Carries a management overlay of Rs. 2,110 Mn as of 31 March 2022 Profit after tax (PAT) increased by 11% to Rs. 1,976 Mn in Q4 FY22 vs Rs. 1,789 Mn in Q4 FY21; FY22 PAT increased by 57% to Rs. 7,096 Mn ■ BHFL's Capital adequacy ratio (including Tier-Il capital) as of 31 March 2022 stood at 19.72% Bajaj Financial Securities Limited (BFSL) Customer Franchise Revenue & Profitability ■ Acquired 62K & 288K+ customers during Q4 & FY22 respectively; ■ Retail & HNI custom er franchise stood at ~331K as of 31 March 2022 ■ Total Income of Rs. 395 Mn in Q4 FY22 and Rs. 1,243 Mn in FY22 Net profit of Rs. 93 Mn in Q4 FY22 and Rs. 168 Mn in FY22 ■ 17#18BFL - Q4 FY22 Highlights BAJAJ B FINSERV All Figures in Rs Million Performance Highlights of Q4 FY22 over Q4 FY21 (Ind AS) CY 1,914,233 PY 86,303 30% 26% 1,466,869 Book Size CY 1.3% 68,549 Total Income 5.7% PY 0.9% 3.7% Return on Assets ROE (Non-annualized) (Non-annualized) 24,195 80% 13,466 Profit After Tax Borrowing mix as of 31 March 2022 is 28:50:19:3 between banks, money markets, deposits and others (Mix was 32:44:20:4 as of 31 March 2021) 18#19BFL Book Size and Revenue Book Size FY22 growth of 30% 1,413,760 1,466,869 BAJAJ B FINSERV All Figures in Rs Million Total Income Q4 FY22 FY22 growth of 19% 1,914,233 316,404 ! 263,856 266,831 FY20 FY21 FY22 growth of 26% 86,303 68,549 FY20 FY21 FY22 Q4 FY21 Q4 FY22 Net Interest Income FY22 growth of 27% Q4 FY22 growth of 30% 218,922 169,124 172,691 60,677 46,594 FY20 FY21 Bajaj Finance Consolidated results are as per Ind AS, previous years figures have been re-casted for comparability FY22 Q4 FY21 Q4 FY22 19#20BFL: Loan Loss Provision and Operating Expenses Loss Provision and Net NPA % 59,686 60,000 48,034 45,000 0 FY21 FY22 2.00% BAJAJ B FINSERV All Figures in Rs Million GNPA and NNPA as on 31 March 2022 stood at 1.60% & 0.68% respectively as compared to 1.73% and 0.78% as on 31 December 2021 ☐ Provisioning coverage ratio (PCR) of 58% on stage 3 assets; PCR stood at 134 bps on stage 1 & 2 assets as of 31 Mar 2022 vs 181 bps as of 31 March 2021 (was 90-100 bps during pre-pandemic) Overall, the portfolio composition across stage 1, stage 2 and stage 3 assets is better than pre- COVID metrics 30,000 0.75% 0.68% 0.68% 15,000 0.75% 12,308 7,016 0.00% Q4 FY21 Loss Provision (Rs. millions) Q4 FY22 Net NPA %* Operating expenses as a % of NII PAT FY22 growth of 59% 70,282 52,637 33.5% 34.6% 34.5% 34.6% 30.7% 44,198 Q4 FY22 grow th of 80% FY20 FY21 FY22 Q4 FY21 Q4 FY22 FY20 FY21 24,195 13,466 FY22 Q4 FY21 Q4 FY22 20 *Net NPA, recognized as per extant RBI prudential norms and provisioned as per Expected Credit Loss (ECL) method prescribed in Ind AS.#21Bajaj Allianz General Insurance 21#22BAGIC - Key Strategic Differentiators STRATEGY BAJAJ Allianz Strive for market share growth in chosen segments through a well-diversified product portfolio and multi-channel distribution supported by prudent underwriting DIFFERENTIATORS Strong selection of Risk & prudent underwriting Balanced Product Mix Deep and wide distribution Retail & Commercial orientation Investments in technology with focus on all stakeholders - "Caringly yours" ■Industry leading combined ratios consistently over time Combined Ratio stood at 99.6% in FY22 Business construct is to deliver superior ROE ■ Diversified product portfolio offering across retail and corporate segments Continuous innovations in product features to maintain competitive edge Multi channel distribution network encompassing multiline agents, bancassurance, broking, direct, and ecommerce network serving all segments Focused on retail segments (mass, mass affluent & HNI) & commercial segments (SME & M SM Es) while maintaining strong position in large corporates & government business Deep investments in technology to drive efficiencies for the Company and convenience for all stakeholders - Customers, distributors and employees 22#23BAGIC-Key Highlights Q4 2021-22 BBAJAJ Allianz Revenue Growth Segmental Performance (Gross Direct Premium Income) Loss Ratio (LR) Combined Ratio (COR) ☐ Industry beating GDPI growth of 17.8% in Q4 FY22 as against Industry# growth of 7.8%; 8.9% growth in FY22 vs industry growth of 8.8% Ex. Crop & Govt. Health, Q4 FY22 GDPI grew by 6.0%; For FY22, the Ex. Crop & Govt. Health GDPI growth was 9.1% ■ Ex. Crop & Govt. Health growth of 6.0% was attributable to Fire (11%), Engineering (16%), Marine (23%) & Liability (33%) Overall, in FY22, motor growth of 2.5% was lower than the industry growth of 4.0%, and Commercial lines (Fire, Engineering, Marine and Liability) continue to do well with a growth of 16.5% against the Industry. growth of 12.6% ■ For Q4 FY22, LR stands at 68.8% as against 64.3% in Q4 FY21; Higher loss ratio was mainly on account of increase in severity of non COVID health claims and higher crop claims in Kharif season of FY22 ■ FY22 LR stands at 73.0% as against 68.5% in FY21 - Higher on account of COVID claims, higher severity of non COVID health claims and OD releases in FY21 ■ COR increased slightly but still at very healthy 98.3% in Q4 FY22 v/s 96.6% in Q4 FY21; ■ FY22 COR was 99.6% vs 96.9% in FY21 on account of higher LR partially offset by lower expenses Source: IRDAI Monthly Business Figures & GIC Council Segmental Reports #Industry growth excluding specialised insurers and Standalone Health Insurers, *Commercial Lines - Fire, Engineering & Liability 23#24BAGIC-Key Highlights Q4 2021-22 Profit after tax (PAT) Capital Position & Grievance Ratio Initiatives during the year BBAJAJ Allianz Q4 FY22 PAT de-grew by 9% mainly on account of lower capital gains (Rs. 27 Mn vs Rs. 210 Mn in PY) ■ FY22 PAT grew to Rs. 13,391 Mn despite impact of higher COVID claims in FY22 as compared to FY21 and OD releases from lockdown in FY21 - highest ever profit for BAGIC in any financial year ■ Solvency Ratio stands at healthy 344% at 31 March 2022 Grievance ratio for FY22 is 1.05 per 10,000 policies issued - expected to be amongst the best in the Industry Some of the initiatives institutionalised during the year are: 1. Health Prime Rider introduced for retail and group health customers. It covers 24*7 unlimited tele consultation with 90,000+ doctors, investigation, pathology & radiology expenses, and annual preventive health check-up. 2. 3. cover. BAGIC continued its push towards enhanced digital services with capabilities like ■ ■ Al enabled BOT ('BOING') - serviced 7.55 lakh unique customers Customer facing app 'Caringly Yours' crossed 1.9 million downloads. ■Innovative mobile app for the farming community, 'Farm itra', saw 5.34 lakh downloads; some 1.34 lakh claims were processed through it Its new core policy administration system has accelerated the growth in travel business. Retail health insurance module has also been launched. 24#25BAGIC: Q4 FY22 Highlights Performance Highlights of Q4 FY22 over Q4 FY21 BAJAJ Allianz All Figures in Rs Million CY 32,998 CY 28,708 PY 18% 27,874 Gross Written Premium 7% 20,727 19,884 6% 11% PY 26,915 19,635 17,944 GWP Excl. Crop & Govt. Health Net Written Premium Net Earned Premium 2,480 -9% 3.0% 2.729 3.9% Profit After Tax ROE* (Not Annualized) Return on Equity (ROE) is excluding fair value change 25#26BAGIC: Combined Ratio Combined Ratios (Including Motor TP Pool Losses) BBAJAJ Allianz 100.8% 99.6% 96.7% 96.9% 96.6% 98.3% 92.3% FY18 FY19 FY20 FY21 FY22 Q4 FY21 Q4 FY22 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 incurred divided by Net Earned Premium) + ( Expenses of management including net Commission divided by Net Written Premium). 26#27BAGIC: Profit after tax and Capital efficiency BAJAJ Allianz All Figures in Rs Million PAT 13,301 13,391 9,988 9,212 7,799 FY18 FY19 Total Capital infused is Rs.2,768 Mn No Capital infusion since FY08 Q4 FY22 PAT de-growth of 9% 2,729 2.480 FY20 FY21 FY22 Q4 FY21 Q4 FY22 - BAGIC Capital Invested - Networth Accumulated profit* 97% of Net worth as on 31 Mar 2022 88,222 75,245 85,454 56,421 51,640 72,477 44,664 53,653 48,872 41,896 2,768 2,768 2,768 2,768 2,768 FY18 FY19 FY20 FY21 FY22 Capital Invested Reserves Net Worth *Accumulated profit includes reserves and fair value change on equity investments 27#28BAGIC: Consistently amongst top 2 private insurers in terms of Gross Premium BAJAJ Allianz ① Rs. Million Industry GDPI Trend (Rs. Bn.) Q4 FY22 GDPI growth of 10% 2,057 1,787 1,856 1,617 1,415 1,306 1,056 1,138 930 737 504 553 678 687 730 718 751 315 373 189 180 FY18 FY19 FY20 FY21 FY22 Q4 FY21 Q4 FY22 PSU Private Insurers* BAGIC Premium Trend Industry 94,865 60,586 110,970 70,098 128,331 126,244 82,063 FY18 FY19 FY20 FY21 137,881 Q4 FY22 Premium grew by 18% 74,361 77,794 27,874 32,998 17,944 19,884 FY22 Q4 FY21 Q4 FY22 ■GWP NEP Source IRDAI, GDPI: Gross Direct Premium Income | *Private Insurers Includes Standalone Health Insurers, PSU excludes AIC of India, and ECGC 28#29BAGIC: Balanced Product Mix BAJAJ Allianz Business Mix 9% 8% 13% 11% 14% 4% 11% 20% 19% 15% 20% 19% 13% 18% 19% 9% 9% 10% 9% 9% 10% 7% 5% 6% 6% 49% 41% 42% 38% 35% FY20 FY21 FY22 Q4 FY21 ■Motor (Retail) | Health (Retail) ■Group Health ■ Prop, Liability, Engg ■Agri (Crop Insurance) BAGIC's ex-crop & govt. health GWP growth for Q4 FY22 vs Q4 FY21 was 7% Note: The components might not add up to total of 100% due to rounding off Q4 FY22 ■Others 29#30BAGIC: Diversified Channel Mix BAJAJ Allianz Channel Mix 10% 19% 27% 27% 30% 51% 47% 37% 42% 42% 3% 4% ༣% 2% 13% 3% 12% 12% 10% 10% 23% 20% 18% 16% 19% FY20 FY21 FY22 Q4 FY21 Q4 FY22 Brokers Direct Business Individual Agents Bancassurance Partnerships • Over 238 Bank partners . 18 National Tie-ups & MNC Banks 36 NBFCs, 5 SFBs, 1 Payments Bank 138 Co-operative banks, 9 RRBs • 31 Others Corporate Agents - Banks Agency & Retail Channels 47,600+ agents & 60,670+ POS ⚫ Virtual Sales Offices • Acquisition of Direct Customers through our Sales Force • Agency segmented under prime, key, emerging and Retail and SME Corporate Agents - Others OEMs & Dealer Partnerships •34 national Tie-ups and over 9000 network of dealers across pan India •National Tie-ups: Maruti, Honda, Toyota, Mahindra, Hyundai, MG, Kia, VW, BMW, TATA Motors, Bajaj, RE, Yamaha; Piaggio, JCB, Bgauss, Revoult etc. Note: The components might not add up to total of 100% due to rounding off Rural Focus 19.3 Million+ farmers covered in PM FBY in last 4 years of which 18.5 lakh farmers covered in CY ⚫Issued 12.5 Lakhs NOPS under crop insurance in FY22 34,800+ active CSC centers Presence in ecosystem s 17+ Partnerships across Insuretech companies, aggregators, wallets such as Phone Pe, payments bank, etc 30#31BAGIC: Assets Under Management AUM (cash and investments) FY22 growth of 6% Rs. Million 148,229 172,367 187,458 231,502 246,329 BBAJAJ Allianz BAGIC continues to grow its AUM strongly Investments are largely in fixed income securities FY18 FY19 FY20 FY21 FY22 98.9% of debt portfolio is in AAA or sovereign securities. 95.5% of Equity Investment Leverage of 2.79 as on 31 March 2022 investment is in BSE 100 stocks Investment Leverage AUM as of date / Net worth as of date 31#32Key Technology Initiatives of FY 21-22 - 1/2 Digital Onboarding (Agents) FY 1-22 From 100% in FY 20-21-> Digital Journey Metrics 100% Digital Policy FY 21-22 From 93.51% in FY 20-21-> 93.61% BAJAJ Allianz Digital Issuance FY 21-22 From 96.70% in FY 20-21 -> 94.48% Digital Renewal Notice FY 21-22 From 100% in FY 20-21 -> 100% API API Factory API Integration landscape expanded. 175 distinct integrations done with 56 new partners 386+ crores of business booked via API Core Transformation Programs has accelerated the speed post successful implementation of Travel line of business Retail Health & Motor TP is live 10 Key Initiatives Summary BAGICARE CRM Agri, HAT, Motor, EW, Ops BAGICARE department on boarded with 6 new email ids Syndications 4.3 Mn+ Service Requests CRM Data Lake 8K+ attributes across structured & unstructured data with models across fraud management, claims, renewals, customer churn, underwriting etc. 20+ live AI/ML models Anveshak 'ALL-IN-ONE' smart investigation platform to provide a seamless experience to both Investigators & end consumers Cloud Our cloud migration has accelerated with almost 50% of workload moved on cloud 50% of workload moved to cloud 32#33Key Technology Initiatives of FY 21-22 - 2/2 Website Existing Digital Capabilities Enhanced & Scaled-up Our website is now available in 7 different languages for our customers 2.4 Mn unique visitors every month 4.2 Lakh policies issued (mitra I Mitra Our flagship portal for agents has over 90+ products available for policy issuance and services 2.2 Mn+ policies issued with over 1400 Cr. of business booking 00 Caringly Yours App Our Customer facing app remains as the most used app in Insurance Industry 1.92 Mn downloads 9 Lakh active users in FY 21-22 Ezeetab Our Agent & VSO app has over 87 products available for policy issuance and services 2 Mn+ policies issued with over 481 Cr. Of business booking Innovation Scaled-up WhatsApp + BOING 2.0 Al based chat BOT enabled with 27+ services & whatsapp 7.55 Lakh Unique Customers 12 Lakh+ conversations OCR Data Extraction using OCR We have scaled up our existing capabilities of OCR to other relevant use cases like NEFT & Commission Automation 30%+ auto approvals of NEFT requests BAJAJ Allianz Digital Payments Capabilities for EMI payment (e- Imandate, SI), straight through integration with payment providers for renewals, device agnostic UI/UX were developed Farm itra App The usage of the app launched for Farmer Community has seen a significant uptake 5.34 Lakh+ downloads 1.34 Lakh claims processed through app Cyber Security Measures Cyber security Projects like digital assets risk monitoring in the dark web, email spoofing and DMARC integration, revamp of privilege access. management, cyber security maturity assessment and projects like red teaming were implemented 33#34BAGIC: Risk Management ◉ Asset Quality 98.9% of the debt portfolio in AAA and sovereign assets 91.2% of Equity in Nifty 50 stocks & 95.5% in BSE100 stocks Oversight by Board & Executive investment committee and group level investment forum Robust ALM position Re-Insurance Reinsurance ceded only to the A- and above & AA rated reinsurers, except mandatory ceding to GIC (Average Retention of 20% for commercial lines) Large reinsurance capacity & optimum retention Robust process concentration of risk. of monitoring Catastrophic events adequately covered BAJAJ Allianz Pricing & Underwriting Superior underwriting capability leading to low Combined Ratio consistently Diversified exposure across business lines & geographies - Granular loss ratio modelling geography, distribution, car make/model, vintage, etc. ■ Investigation, loss management & analytics intervention ☐ Reserving & Solvency IBNR loss triangles show releases from settlement of claims, indicating robustness of reserving at the point of registration of claims Highest solvency amongst peers 34#35Bajaj Allianz Life Insurance 35#36BALIC - Key Strategic Differentiators STRATEGY BAJAJ Allianz 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 returns and continued focus on increasing Net New Business Value (NBV) DIFFERENTIATORS Diversified Distribution Strong proprietary channels Innovative products and Sustainable product mix Efficient Operations Pan India distribution reach with presence over 509 branches Balanced channel mix Agency, Institutional Business including Banca, and BALIC Direct Strong presence in group credit protection and online offerings ■ 3rd largest agency in terms of IRNB amongst private players in FY22 ■Robust BALIC Direct channel to invest in up-selling and cross- selling ■ Diverse suite of products across various need segments, with an aspiration to provide our customers 'Best in class' features ■ Innovative products & features like the new Assured Wealth Goal (Non-par), Guaranteed Pension Goal (Annuity), SISO** (ULIP SIP), Smart Wealth Goal (ULIP), Flexi Income Goal (Par), Guaranteed Income Goal (Non-Par) have witnessed strong response from the customers ■ Embarked on a customer obsession journey ■ Auto pay improvement across all cohorts and channels ☐ Focusing on faster issuances, claim settlement and drive FTR **Systematic in Systematic Out; FTR : First Time Right 36#37BALIC-Key Highlights Q4 2021-22 BBAJAJ Allianz Revenue Growth & Market Share Product Mix (IRNB Basis) Renewal Premiums New Business Margins IRNB grew by 36% in Q4 FY22 (vs Private Players ~9%); IRNB grew by 49% in FY22 (vs Private players growth of 22%) ■ Fastest growth among the top 10 Private Players in FY22 as well as in Q4 FY22 ☐ ■ FY22 market share (IRNB terms) increased by 1.2% to 6.7% among Pvt. Players Achieved highest ever GWP of Rs. 161,271 Mn in FY22 (vs previous highest of Rs. 120,248 Mn in FY 21) ■ Par: Non-Par Savings: ULIP: Protection: Annuity (20%:33%:36%:2% :9%) ■ Guaranteed Pension Goal annuity product launched during Q4 FY21 continues to do well & contributed 11% to product mix in FY22(IRNB terms) ■In FY22, BALIC along with an ATS growth of 34% reported an industry beating NOPS growth of 11% vs Private players reporting a NOPs growth of 2% Registered a strong growth of 24% and 22% in Q4 FY22 & FY22 respectively ■In FY22, digital payments contribution increased to 70% of renewal collection (vs 64% in FY21) ■ Strong growth in Net New Business Value (NBV) by 72% from Rs. 3,608 Mn in FY21 to Rs. 6,212 Mn in FY22 ■ Net New Business Margin (NBM) increased to 14.2% in FY22 from 12.3% in FY21 Source: IRDAI Monthly Business Figures IRNB Individual Rated New Business, EB - Existing Business, NB - New Business, GWP - Gross Written Premium, ULIP - Unit Linked Investment Plan, ATS - average ticket size, NOP number of policies 37#38BALIC - Key Highlights Q4 2021-22 Profit after tax Capital Position & Grievance Ratio Initiatives during the year BBAJAJ Allianz PAT for Q4 FY22 stands at Rs. 483 Mn as against Rs. 2,339 Mn in Q4 FY21 ■ On account of lower investment income & higher new business strain on account of higher business growth ■FY22 PAT stands at Rs. 3,244 Mn as against Rs. 5,803 Mn in FY21 On account of higher COVID-19 reserves & deaths and higher NB strain given the business growth which was partially offset by reversal of income tax provisions basis favorable CIT (Appeal) order of Rs. 1,609 Mn (pre-tax) for past years Impact of COVID-19 claims was marginal in Q4 FY22 ■ In FY22, the impact of COVID-19 death claims and reserve was (pre-tax) Rs. 3,459 Mn (including Par Rs. 4,441 Mn) as against (pre-tax) Rs. 321 Mn. (including Par Rs. 391 Mn) in FY21; Reserves for probable future COVID-19 claims stands at Rs. 626 Mn (including Par Rs. 780 Mn) ■ Solvency Ratio stands at healthy 581% at 31 March 2022 ■ Grievance ratio for FY22 is 40 per 10,000 policies issued (vs 44 in FY21) Some of the initiatives institutionalised during the year are: PASA with 60 mins approval/ issuance journey enabled in Instab ■Inculcated point of Knowledge Management in the organization ■ Launched Al/ML capability program for Satellite team ■ Focus on OTC issuance and claim settlement ■ BALIC collaboration with Meta (WhatsApp) Focus on Customer obsession initiative including NPS to be tracked as a measure of customer satisfaction ■ Upsell & PASA uptake for existing customers, designing framework for prospects Al: Artificial Intelligence; ML: Machine Learning; OTC: Over the Counter; PASA : Pre approved sum assured; Instab: Sourcing app 38#39BALIC Q4 FY22 Highlights - CY 13,470 BAJAJ Allianz Performance Highlights of Q4 FY22 over Q4 FY21 All Figures in Rs. Million 17,807 24,825 57,187 36% 21% 24% 27% 9,888 PY 14,711 20,085 45,013 Individual Rated NB Group NB Renewal Premium Gross Written Premium CY 483 3,075 581% Solvency Ratio as at -79% 40% 31 Mar 2022 PY 2,339 PAT 2,189 NBV Individual Rated NB = (100% of first year premium & 10% of single premium excluding group products), NBV - Net New Business Value 39#40BALIC - Growth momentum continues 63,132 New Business 91,364 Renewals 69,906 161,271 2 years CAGR* at 46% 57,116 2 years CAGR* at 24% 120,248 32,362 24,928 15,192 24,825 20,085 16,091 BBAJAJ Allianz All Figures in Rs Million GWP 2 years CAGR* at 35% 57,187 45,013 31,283 FY21 FY22 Q4 FY20 Q4 FY21 Q4 FY22 FY21 FY22 Q4 FY20 Q4 FY21 Q4 FY22 FY21 FY22 Q4 FY20 Q4 FY21 Q4 FY22 NBV & NBM 6,212 M CEV & RO EV 1,72,494 1,55,345 3,608 14.2% 12.3% FY21 FY22 Net NBV Net NBM 11.9% 9.4% FY21 FY22 ■M CEV -RO EV ■ FY22 GWP grew by 34% to Rs. 161,271 Mn from Rs. 120,248 Mn in FY21 - showing a phenomenal grow th ■ Topline related metrics for BALIC continue to grow and are well above the pre-COVID-19 levels ■ Strong growth in NBV at 72% aided by business growth & balanced product mix Increase in RoEV by 2.5% (abs) mainly due to strong business performance and growth in NBV. CAGR is for the quarter; MCEV: Market Consistent Embedded Value; RoEV: Return on Embedded Value 40#41BALIC: Balanced product mix IRNB Mix BAJAJ Allianz ① Share of Annuity stands at 9% in Q4 FY22 and 11% in FY22 41% 39% 36% 44% 51% 2% 3% 6% 3% 1% <1% 27% 33% Individual Unit Linked Individual Non Par Protection Individual Non Par Savings 20% 29% 24% Individual Annuity 2% 11% 4% 9% Individual - Par 28% 23% 20% 24% 20% FY20 FY21 FY22 Q4 FY21 Q4 FY22 Group NB Mix Protection (Group) new business in Q4 FY22 - Rs. 7,503 Mn (vs Rs. 7,392 Mn in Q4 FY21) 41% 58% 56% 50% 58% 59% 50% 42% 44% 42% FY20 FY21 FY22 Q4 FY21 Q4 FY22 - IRNB Individual Rated New Business - (100% of first year premium & 10% of single premium excluding group products). Note: The components might not add up to total of 100% due to rounding off Group Fund NB Group Protection NB 41#42BALIC: Persistency Persistency 13th Month 77% BBAJAJ Allianz Persistency 25th Month 82% 68% 80% 80% 58% 79% Persistency 13th Month FY18 FY19 ■FY20 FY21 FY22 Persistency 37th Month 63% 66% 55% 58% 49% Persistency 49th Month 62% 54% 51% 47% 42% 71% 71% 74% Persistency 25th Month FY18 ■FY19 ■FY20 FY21 FY22 Persistency 61st Month 48% 38% 40% 42% 33% Persistency 37th Month - FY18 FY19 FY20 FY21 FY22 Persistency 49th Month FY18 FY19 FY20 FY21 FY22 Persistency 61st Month - FY18 FY19 FY20 FY21 FY22 Continued focus on renewal collection via various initiatives such as driving auto-payment registration, digital payments & higher distribution ownership have led to significant improvement in persistency across cohorts especially in the later buckets wherein 49th & 61st month have seen significant improvement of 8% & 6% respectively *Note: Persistency as per IRDAI framework; Individual business excluding single premium and fully paid-up policies | The persistency ratios for the period ended have been calculated for the policies issued in March to February period of the relevant years 42#43BALIC: Individual Rated New Business FY22 growth of 49% 36,861 24,676 BAJAJ Allianz All Figures in Rs Million Whole Company Agency FY22 growth of 36% 14,890 Q4 FY22 grow th of 36% Q4 FY22 grow th of 12% 10,977 Industry beating growth Agency continues to ahead with substantial growth stride 1 13,470 9,888 4,195 4,695 | I 3,060 6,059 FY21 FY22 Q4 FY20 Q4 FY21 Q4 FY22 FY21 FY22 I Q4 FY20 Q4 FY21 Q4 FY22 Institutional Business BALIC Direct FY22 growth of 68% FY22 Increase of 29% 18,588 Q4 FY22 grow th of 64% 3,384 Q4 FY22 grow th of 13% 2,614 11,085 FY21 IB continues to provide overall incremental growth 4,623 2,244 7,565 I FY22 IQ4 FY20 Q4 FY21 Q4 FY22 I FY21 1,070 1,210 756 FY22 Q4 FY20 Q4 FY21 Q4 FY22 Individual Rated NB = (100% of first year premium & 10% of single premium excluding group products) 43#44BALIC: Diversified Distribution Mix Individual Rated New Business Channel- w ise Mix 11% 11% 9% 11% 9% 33% 45% 50% 47% 56% 56% 44% 40% 42% 35% FY20 FY21 FY22 Q4 FY21 Agency Institutional Business Q4 FY22 BALIC Direct Agency: Focus on profitability and driving higher traditional Mix 3rd largest agency in private LI space; backed by 96K+ agents (1,100+ qualified for MDRT/COT/ TOT & above membership vs 589 in FY21) Continued balanced product mix with traditional individual rated new business mix at 59% in FY22 Variabilization of Agency cost through low-cost models (10% contribution in FY22 vs 4% in FY21) BAJAJ Allianz ☐ BALIC embarked on diversifying its distribution mix, scaling up alternate channels and enabling wider presence by exploring alternate partnerships Greater balance between institutional and proprietary retail channels - Agency, Institutional Business and BALIC Direct contributing 40%, 50% and 9% respectively in FY22 (in IRNB terms) ☐ Within existing retail channels, focus is to drive profitable product mix; improve sales productivity; drive cost efficiencies through hierarchical synergies, improving span of control and variabilization Institutional Business: Building sustainable business through strong integration with partners Diverse mix of large and small partner banks, NBFC, brokers and web aggregators Axis bank share in total IRNB has increased from 29% in Q3 to 31% in Q4 due to the opening up of all geographies Corporate agreement tie-up with City Union Bank (CUB) & Development Bank of Singapore Individual Rated NB = (100% of first year premium & 10% of single premium excluding group products) BALIC Direct: Analytics backed, focused verticals for upsell and cross sell initiatives Presence in 150 cities, with Dedicated Verticals for various customer Segments ✓ Maturity ✓ Service to Sales ✓ Elite Relationship force Hub & Spoke Data and Analytics as a key pillar for Direct business *Note: The components might not add up to total of 100% due to rounding off; MDRT: Million Dollar Round Table; TOT: Top of the table; COT: Court of Table 44#45Digital Initiatives to offer best in class customer experience ⑱BAJAJ Allianz Life Assist App 26% increase in transactions in FY22 over PY WhatsApp 69% growth in unique users in FY22 over PY Digital asset usage i-Recruit 322% increase in unique users as on FY22 Customer facing apps Smart Assist Internal facing apps 70,159 business logins in FY22; 27% increase in unique user in FY22 over PY WhatsApp for ICs 2.72L sessions as on FY22 0000 000 川 BALIC Innovations CDP (Customer Data Platform) Dynamic engine to target customers and build sharper use cases to pitch at the right time of servicing, cross-sell/upsell etc Video Medical via Smart Assist Gone live on March'22 with an objective of facilitating faster policy issuance Customer 360 A platform to facilitate an intelligent nudge and rich intuitive feature based platform for the salesforce Website 4% growth in unique user in FY22 over PY#46BALIC: Assets Under Management (AUM) & Net Worth (AUM) & Net Worth BAJAJ Allianz ① Rs Billion AUM (Mix) 856 738 561 522 566 520 449 365 306 336 334 289 214 230 196 AUM as of 31 March 2022 grew by 16%; Growth in UL AUM stands at 16%; Traditional AUM grew by 16% Of the UL Funds of 334 Bn, 71% is equity as on 31 March 2022 (65% as on 31 March 2021 out of the UL Funds of Rs. 289 Bn.) Rs Million FY18 FY19 Unit Linked FY20 Other than Unit Linked FY21 FY22 AUM Total Capital infused is Rs. 12,107 Mn No Capital infusion since FY08 Net worth 107,355 109,388 92,182 96,538 97,307 95,248 97,281 84,431 85,200 80,075 12,107 12,107 12,107 12,107 12,107 FY18 FY19 FY20 FY21 FY22 Capital Invested *Accumulated profit includes reserves and fair value change on equity investments Reserves & Surplus Networth BALIC's accumulated profits are 89% of the Net worth as on 31 March 2022 46#47BALIC: M CEV Update #$ Particulars Annualized Premium ** (ANP) Net New Business Value* (NBV) Net Margins on ANP (Post overruns) Embedded Value ++ (EV) BBAJAJ Allianz All Figures in Rs Million FY 22 FY 21 43,639 29,223 6,212 3,608 14.2% 12.3% 172,494 155,345 • One-year forward rates derived from the risk free yield curve are used for discounting cash flows. Allowance for risk is provided in computing cash flows for various risks and the cost of risk capital. Investment returns are derived from the risk free yield curve. . • Results not audited or reviewed externally but methodology is in line with APS 10 of the Institute of Actuaries of India. *New Business Value represents discounted present value of expected net cash flows from new business written during the year. **ANP refers to annualised new business written during the year and is calculated by assigning a 10% weight to single premium and 100% weight to regular premium. Group Fund business is included in the definition of ANP. ++On Market consistent basis #Market Consistent Embedded Value $Calculated on the basis of effective tax rate (ETR) 47#48BALIC: M CEV - Analysis of Movement BBAJAJ Allianz All Figures in Rs. Million. 6,212 120 381 945 1,027 1,371 172,494 11,725 155,345 EVOP Rs. 18,438 Mn Ro EV excl. one-time COVID-19 claim s/reserves & tax impact: 11.9% As at Unwinding 31st Mar 2021 Net NBV Operational Assumption Variance Change One-Offs: COVID-19 & Tax Impact Investment Variance Capital As at Distributed 31st Mar 2022 Further details on COVID-19 and Tax impact: Higher mortality claims amounting to Rs. 3,557 Mn and overall positive tax impact of Rs. 872 Mn One time benefit of Tax provision reversal from previous assessment years of Rs. 1,609 Mn Increase 1. Decrease Par Business Overruns are considered at 10% of Overrun net of tax 2. Unwinding is the roll forward of opening figures at long term Best Estimate rate of interest 48#49BALIC: Risk Management RISK MANAGEMENT Product Pricing Asset Liability Management (ALM) Ongoing Risk Management Prudent assumptions while product pricing BAJAJ Allianz Stress and scenario testing performed at pricing stage Regular review of pricing based on prevailing interest rates ☐ ALM focused on cashflow matching & achieving an im munized portfolio ☐ Interest rate risk on the Individual Non-Participating Savings, Protection and Annuity portfolio managed through partly paid bonds, and Forward Rate Agreements ☐ For annuities, there is continuous monitoring of business mix in different variants, age bands and deferment period ☐ Prudent interest rate assumptions to ensure adequacy of statutory reserves Periodic product condition sensitivity & stress testing. monitoring, periodic ☐ Regular monitoring of business mix ☐ Mortality risk is managed by diligent in-house underwriting, analytics driven risk scoring and appropriate reinsurance arrangements Additional provisions set out for COVID-19 claim s 49#50Additional Information - BAGIC#51BAGIC Investment Performance Total Funds Investment Leverage 3.32 3.34 3.32 3.08 2.79 230.2 244.0 187.8 168.6 140.2 FY18 FY19 FY20 FY21 FY22 Total Return # 12.2% 8.3% 8.0% 6.3% FY18 FY19 FY20 FY21 6.4% * ⭑ FY22 BAJAJ B FINSERV All Figures in Rs Billion ☐ Investment Portfolio. mix for Q4 FY22: Corporate bonds 35.5%, G-Sec 47.1%, Equity 8.8%, and Money Market 8.6% ☐ Unrealized gain of Rs. 6.47 billion as on 31 March 2022 We have booked Rs. 3.93 billion of capital gains during FY22 Investment Leverage AUM as of date / Net worth as of date | *Equity includes AT1 bonds, Mutual Fund Units, Equity and ETF # Total return includes change in unrealised gains during the period. * Mainly on account of Mark-to-Market losses of Rs. 3,517 Mn (mostly in fixed income securities) in FY22 51#52BAGIC LOB Net Loss ratio BAJAJ Allianz ① Net Loss Ratio Net Loss Ratio Line of Business Q4 FY22 Q4 FY21 FY22 FY21 Fire 12.9% 17.2% 57.1% 54.5% Marine Cargo 42.9% 57.2% 64.0% 66.0% Motor OD 67.6% 66.0% 65.1% 54.0% Motor TP 66.8% 79.6% 71.2% 78.1% Motor Total 67.2% 73.7% 68.5% 68.1% Engineering -2.7% 0.8% 49.7% 36.1% Personal Accident 32.8% 39.0% 35.7% 44.2% Health (retail + group) 86.7% 74.1% 96.1% 81.7% Crop 73.7% 1.8% 72.5% 68.0% Total 68.8% 64.3% 73.0% 68.5% Total (Ex Crop) 68.6% 67.5% 73.0% 68.5% Net Loss Ratio = Net claims incurred divided by Net Earned Premium | LOB trend for major LOB 52#53BAGIC: LOB Growth (Major LOBs) Line of Business BAGIC GDPI Growth BAJAJ Allianz Q4 FY22 FY22 Fire & Engineering Marine Motor OD 11.3% 15.6% 23.4% 27.3% -4.6% 0.4% Motor TP 3.0% 4.1% Motor Total -0.2% 2.5% Liability 33.4% 16.1% Personal Accident + Travel 25.2% 19.9% Health (retail + group)** 12.3% 17.3% Crop 183.0% -18.6% Total 17.8% 8.9% Total (Ex Crop) 10.0% Total (Ex Crop & Govt. Health) 6.0% 15.9% 9.1% *Health includes Retail, Group and excludes Govt. Health | PA includes retail and group business | LOB trend for major LOB 53#54Particulars (Rs. Mn) : BAGIC: Loss Triangle Whole Account Excluding IM TPIP on Net Basis as at 31 March 2022 A] Ultimate Net loss Cost - Original Estimate B] Outstanding losses & IBNR (end of year 0) BBAJAJ Allianz Accident Year Cohort 31-Mar- 12 and Prior 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 13 14 15 16 17 18 19 20 21 22 71,135 17,138 24,093 27,962 31,663 35,293 42,579 52,882 62,943 53,030 65,918 11,724 6,721 10,516 12,782 13,818 16,782 23,378 26,764 32,869 30,727 33,196 C] Cumulative Payment as of one year later 1st Diagonal two years later - 2nd Diagonal three years later - 3rd Diagonal four years later 4th Diagonal five years later 5th Diagonal - 62,585 12,799 16,386 18,585 21,930 22,884 26,713 33,054 38,143 28,452 63,946 13,326 17,297 19,435 23,006 64,959 20,110 23,940 13,798 17,936 65,843 14,075 18,471 20,905 24,886 24,316 28,294 34,088 40,678 25,294 28,848 35,799 25,719 29,890 66,515 14,335 19,002 21,570 25,219 26,565 . six years later 6th Diagonal 67,119 14,706 19,485 21,815 25,898 seven years later - 7th Diagonal 67,869 14,965 19,676 22,308 eight years later - 8th Diagonal 68,456 15,055 20,046 nine years later 9th Diagonal 68,685 15,196 ten years later 10th Diagonal 69,010 . . . 1. Ultimate Net loss Cost - Original estimate: is the year end position for the year (For 2012 and prior it is the position as at 2012 end for all prior year) 2. Outstanding losses & IBNR includes outstanding claims provisions, IBNR / IBNER & ALAE 3. Ultimate Net loss cost (A) - Net Claims provision (B) = Amount of claims paid within the year 4. IMTPIP: Indian Motor Third Party Insurance Pool 54 .#55BAGIC: Loss Triangle Whole Account Excluding IM TPIP on Net Basis as at 31 March 2022 BAJAJ Allianz Accident Year Cohort Particulars (Rs. Mn) 31-Mar- 12 and Prior 31-Mar 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 13 14 15 16 17 18 19 20 21 22 A] Ultimate Net loss Cost - Original Estimate 71,135 17,138 24,093 27,962 31,663 35,293 42,579 52,882 62,943 53,030 65,918 D] Ultimate Net Loss Cost re-estimated one year later 1st Diagonal two years later - 2nd Diagonal three years later - 3rd Diagonal four years later 4th Diagonal - five years later 5th Diagonal six years later 6th Diagonal seven years later - 7th Diagonal 70,443 16,705 23,462 26,603 30,848 70,351 16,523 22,998 26,285 30,775 70,439 16,526 22,655 26,084 30,390 70,903 16,195 22,507 25,851 30,296 71,389 16,149 22,367 25,839 30,325 32,150 71,301 16,255 22,534 25,948 30,317 71,380 16,366 22,543 25,901 33,286 38,830 48,555 59,611 32,458 37,266 47,596 57,144 32,189 37,170 47,067 46,742 32,306 37,026 . eight years later - 8th Diagonal 71,587 16,396 22,272 nine years later - 9th Diagonal 72,096 16,335 . ten years later 10th Diagonal 72,123 Favorable (unfavorable) development Amount(A-D) (988) 803 1,821 2,061 1,347 3,143 5,553 5,815 5,799 6,288 In % [(A-D)/A] -1% 5% 8% 7% 4% 9% 13% 11% 9% 12% 1. Ultimate Net loss Cost - Original estimate: is the year end position for the year (For 2012 and prior it is the position as at 2012 end for all prior year) 2. Outstanding losses & IBNR includes outstanding claims provisions, IBNR / IBNER & ALAE 3. Ultimate Net loss cost (A) - Net Claims provision (B) = Amount of claim s paid within the year 4. IMTPIP Indian Motor Third Party Insurance Pool 55#56BAGIC: Loss Triangles - IMTPIP reserving BBAJAJ Allianz 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 pooling arrangement to provide cover at rates notified by IRDA. Losses from the pool were distributed to each company in proportion to their market share from all lines of business. The pool was dismantled on 31st March 2012. The outstanding claims in respect of vehicles ceded by BAGIC to the pool were transferred back to the company. An amount of Rs 20,587 Mn was paid to BAGIC to pay off the outstanding claims. The position of the IM TPIP claims transferred to BAGIC as at 31st March 2022 is as follows:- Particulars Amount received by BAGIC from the disbanded pool Claims paid till year end Balance available to settle remaining claims Provision Particulars in Pool Gross Outstanding claims of IMTPIP IBNR reserves of IM TPIP Total provision FY 22 FY 21 20,587 20,587 -19,346 -18,407 1,241 2,180 2,942 3,675 1.497 1.505 4,439 5,180 IM TPIP Indian Motor Third Party Insurance Pool 56#57Additional Information - BALIC#58BALIC: Investment Performance (Shareholder Fund) B BAJAJ FINSERV All Figures in Rs Billion AUM ~ 102.3 91.9 94.9 85.2 FY18 FY19 FY20 Total Return * 7.3% 5.8% 5.1% FY18 FY19 FY20 109.9 FY21 FY22 14.2% 5.2% ** Asset mix as on 31 March 2022: Corporate Bonds 24%, Long Dated G-Sec 37%, T-Bills 17% and Equity 15% (on Market value basis) ☐ Capital gains booked in FY22 were Rs. 1.87 billion^ ☐ In Q4 FY2022, additional impairment provision of -16% for Jana SFB (total impairment provision of ~31%) and at ~27% for RGVN microfinance limited the Unrealized gains in Shareholder Fund was Rs. 4.0 billion as on 31 March 2022 Unrealized gain on equity portfolio at Rs. 4.1 billion. Unrealized gain on other than equity portfolio at Rs. (0.1) billion FY21 FY22 - On market value basis, *Total return includes change in unrealized gains during the period | **While return in FY22 is lower mainly on account of Mark- to-Market Losses of Rs. 1.6 Bn (mostly on account of debt investments), return is higher in FY21 on account of Mark-to-Market gains of Rs. 5.8 Bn ^ Net of impairment of Rs. 0.10 billion, SFB - Small Finance Bank 59#59BALIC: Regular Premium Ticket Size Whole Company FY22 Q4 FY22 increase of 34% increase of 13% 77,634 80,763 71,788 61,716 57,782 Non Par Savings BAJAJ Allianz All Figures in Rs. Q4 FY22 FY22 increase of 41% increase of 55% 62,405 51,650 40,189 36,579 27,437 FY20 FY21 FY22 Q4 FY21 Q4 FY22 FY20 FY21 FY22 Q4 FY21 Q4 FY22 Par Savings ULIPS FY22 Q4 FY22 FY22 Q4 FY22 increase of 16% increase of 10% increase of 5% decrease of 11% 95,055 94,315 115,014 82,161 86,017 113,191 70,897 108,461 102,959 102,623 FY20 FY21 FY22 Q4 FY21 Q4 FY22 FY20 FY21 FY22 Q4 FY21 Q4 FY22 60#60Thank You B BAJAJ FINSERV#61Disclaimer B BAJAJ FINSERV 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 securities, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied upon in connection with, any contract or commitment therefor. In particular, this presentation is not intended to be a prospectus or offer document under the applicable laws of any jurisdiction, including India. The financial information in this presentation may have been reclassified and reformatted for the purposes of this presentation. You may also refer to the financial statements of the Company available at www.bajajfin serv.in, before making any decision on the basis of this information. This presentation contains statements that may not be based on historical information or facts but that may constitute forward-looking statements. These forward looking statements include descriptions regarding the intent, belief or current expectations of the Company or its directors and officers with respect to the results of operations and financial condition of the Company. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in such forward-looking statements as a result of various factors and assumptions which the Company presently believes to be reasonable in light of its operating experience in recent years but these assumptions may prove to be incorrect. Any opinion, estimate or projection constitutes a judgment as of the date of this presentation, and there can be no assurance that future results or events will be consistent with any such opinion, estimate or projection. The Company does not undertake to revise any forward-looking statement that may be made from time to time by or on behalf of the Company. 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