#1FASHION HOUSE Investor Presentation - H1 FY22 FASHION i ㅁ HDFC Life Sar utha ke jiyo!#2Executive summary: H1 FY22 Revenue trends Profitability growth 22% Individual New Business Margin (%) H1 FY22 26.4% H1 FY21 25.1% WRP market share 16.2% Öö Rs bn 10.9 VNB growth 30% + Renewal premium growth 18% Rs bn 5.8 ₹ PAT growth -26% % H1 FY22 91% 13M Persistency1 H1 FY21 88% Solvency² (2021) Sep 30 Mar 31 190% 201% Protection/Annuity 1. 2. 2 Annuity growth% HDFC Life 47% Credit protect growth% H1 FY22 108% H1 FY21 -53% Includes single premium Post dividend payout of Rs 4.1 bn in Q2 FY22 Claims ■ Settled around 2 lakh claims in H1. Gross and net claims provided for amounted to Rs 36.4 bn and Rs 24.7 bn respectively ■ Individual claims tapered off in Q2 FY22; Overall experience in line with projections Excess mortality reserve (EMR) of Rs 7 bn as on Jun 30, 2021 sufficient to cover claims received to date With an additional EMR of Rs 0.6 bn in Q2, the unutilised reserves stands at about Rs 2 bn as on 30th September 2021 HDFC Life#3Agenda Performance Snapshot 1 Our Strategy Customer Insights 2 3 Exide Life Transaction Update 4 Managing Covid-19 Annexure 5 6 India Life Insurance 7#4Agenda Performance Snapshot 1 Our Strategy Customer Insights 2 3 Exide Life Transaction Update 4 Managing Covid-19 Annexure 5 6 India Life Insurance 7#5Demonstrating resilience in the current environment (1/2) Steady Individual WRP trends Mkt share 15.5% Growth Strong, sustainable growth¹ 17.8% 15.3% 16.2% 17% 22% 22% 22% Growth HDFC Life Pvt sector Industry 70.0 59.7 FY 21 H1 FY22 22% 32% 20% 2 yr CAGR 12% 8% 5% 34.2 28.1 13.1 17.4 21.1 10.7 Q1 22 Q2 H1 PY CY Balanced product mix Individual APE 5 26% Rs bn Improvement in CP² volumes on the back of higher disbursements Total APE 5% 6% Par 7% 6% 30% 25% 8% Non Par Savings ■ULIP 76% 204% Retail protection 6% 108% Group Protection Annuity 19.7 12.4 7.3 22% 27% Group Savings 32% Q1 FY22 Q2 FY22 H1 FY22 YoY Growth HDFC 1. Based on Individual WRP; 2. Based on Credit Protect NBP Life#6Demonstrating resilience in the current environment (2/2) Focus on diversified channel mix¹ Profitable growth New business margin 4% 9% 7% 6% 13% 30% 14% 13% 13% 14% 19% -12% 19% 21% 22% 26.1% 26.4% 64% 61% 60% 25.1% 55% FY19 FY20 Direct FY21 H1 FY22 ■Agency ■Brokers and others Bancassurance Strong growth in renewal premium 18% Improvement 89.2 75.5 in overall persistency H1 FY21 H1 FY22 1. Based on Individual APE 2. 6 Post dividend payout of Rs 4.1 bn in Q2 FY22 FY21 H1 FY21 H1 FY22 I VNB Growth Healthy solvency position Solvency margin² Rs bn VNB growth of 30% on the back of higher volumes and balanced product mix VNB has grown at 24% CAGR between FY17-21 Stable solvency 201% 203% 190% Mar 31, 2021 Jun 30, 2021 Sep 30, 2021 HDFC Life#7Agenda Performance Snapshot 1 Our Strategy Customer Insights 2 3 Exide Life Transaction Update 4 Managing Covid-19 Annexure 5 6 India Life Insurance 7#8Key elements of our strategy 1 2 3 4 5 Focus on profitable growth Ensuring sustainable and profitable growth by identifying and tapping new profit pools Diversified distribution mix Developing multiple channels of growth to drive need-based selling Market-leading innovation Creating new product propositions to cater to the changing customer behaviour and needs Reimagining insurance Market-leading digital capabilities that put the customer first, shaping the insurance operating model of tomorrow Quality of Board and management Seasoned leadership guided by an independent and competent Board; No secondees from group companies 8 "Our continuous focus on technology and customer-centricity has enabled us to maintain business continuity even through the second wave of Covid-19" HDFC Life#9Accounting Economic Profit Focus on profitable growth. Profit FY19 FY20 FY21 H1 FY21 H1 FY22 New business Margin 24.6% 25.9% 26.1% 25.1% 26.4% Value of new business 15.4 19.2 21.9 8.4 10.9 Profit after tax (PAT) 12.8 13.0 13.6 7.8 5.82 Underwriting profits 9.0 10.9 7.3 5.6 1.3 Shareholders' surplus 3.8 2.11 6.3 2.2 4.4 29.9 32.3 25.5 16.7 14.8 -11.1 -13.5 Underwriting profits breakup -16.5 -19.1 -25.0 FY19 FY20 FY21 ■Backbook Surplus ■New Business Strain 2. 1. FY20 shareholder surplus: Post accounting for impact of Yes Bank AT1 bonds write-off Numbers may not add up due to rounding off effect 19 3. EMR: Excess Mortality Reserve H1 FY21 H1 FY22 Lower due to strengthening of EMR3 Rs bn Profitable growth distribution mix Diversified leading Market- Quality of insurance Reimagining Board and innovation management HDFC Life#10Analysis of change in IEV EVOP 23.5 EVOP1% 18.4% 10.9 6.6 1.4 - 6.0 -3.2 11.2 266.2 VNB Unwind Operating variances³ Covid Wave 2 impact Economic variances Dividend & ESOP exercises 176.3 89.8 IEV at Mar 31, 2021 Post-EMR² EVOP1% 16.1% Adjusted Net worth (ANW) Value of in-force business (VIF) Operating variance continues to be positive and in line with our assumptions Unutilised reserves of about Rs 2 bn carried into H2 FY22 1. EVOP% calculated as annualised EVOP (Embedded Value Operating Profit) to Opening EV EMR: Excess mortality reserve 2. 3. 10 10 Persistency variance: 0.8, Expenses and Others: 0.6 287.0 194.4 92.6 Rs bn IEV at Sep 30, 2021 growth Profitable Diversified leading Market- distribution mix innovation insurance Reimagining Quality of management Board and HDFC Life#11Profitable growth mix distribution Diversified leading Market- Quality of insurance Reimagining innovation management Board and Diversified distribution mix enabled by multiple levers bRBLBAN Saraswat Bank Bandhan Bank YES BANK 人 Finance Limited AXIS RANK HDB FINANCIAL SERVICES HDFC BANK We understand your world RBLBANK TATA CAPITAL pnb Housing Chola HDFC securities Utkarsh Small Finance Bank BAJAJ FINANCE LIMITED JUJJIVAN UMAN SMALL FINANCE BANK Better Banking Better Living Integrated Aapki Ummeed Ka Khaata BLUECHIP EXPERT ADVICE. EASY INVESTING. SURYODAY A BANK OF SMILES Capital Small Finance Bank¦¦¦ equitas Small Finance Bank Enhancing and expanding proprietary¹ channels * Engage-Enable-Earr IDFC FIRST Bank P Probus Insurance SOUTH INDIAN Bank Experience Next Generation Banking Tapping new generation of customers through Online channel Expanding geographical reach via Online channel Focus on building a skilled and structurally solid Agency channel along with increasing agent productivity Emerging ecosystem CREDIT Ofisdom Leveraging analytics for upsell and cross-sell via Direct channel InsuranceDekho ICICI com Ni WEALTH policy bazaar ROBINHOOD INSURANCE BROKER- KNOWLEDGE ON YOUR SIDE Strong Partnerships: 250+ partners New Partnerships: Capital Small Finance Bank, South Indian Bank, Nabard Financial Services Bajaj Capital G GEOJIT Capital Small Finance Bank ICICI Securities Vishwas Se Vikas Tak Apollo Health and Lifestyle Ltd HOME Paytm Justdial Clix Capital FUNDSINDIA LENDINGKAT turtlemint AXIS ASSET MANAGEMENT 1. 11 Proprietary channels include Agency, Direct and Online HDFC Life#12Bancassurance powered by innovation, technology and people Product proposition Comprehensive product suite across par, non-par, term, annuity, ulip 12 Combo insurance products Innovative term products - limited pay, RoP1 and riders Mass distribution products - POS¹ & Saral plans Partner experience & engagement Tech integration & analytics Seamless operations Capability building & resourcing One stop solution for Quote generating illustration Straight through processing lead to conversion - Learning on the go: mobile nuggets for skill enhancement Defined engagement InstaPlan metrics Insta measured digitally CSR Joint CSR1 CORPORATE SOCIAL initiatives that strengthen INSTAInsure relationships PASA¹ using analytics Pre-conversion Ventication via Chat Digital sales verification via WhatsApp chat, video app or calling Comprehensive engagement YOUNite and training programs for sales teams Cloud based customer Telephony calling solution for sales Tie ups with medical centers Structured rewards and recognition program Dedicated HNI¹ cell Cloud Virtual TnstA assistant for sales & service teams! Profitable distribution Diversified leading Market- Reimagining growth insurance mix innovation management Board and Quality of 1. POS: Point of Sales; PASA: Pre-approved Sum Assured; RoP: Return of Premium; HNI: High Networth Individual; CSR: Corporate Social Responsibility HDFC Life#13Technology driving productivity in Agency channel Onboarding InstaPRL a simple, paperless and hassle free FC¹ onboarding platform Insta PRL Independent, link based App Optical Character Recognition (OCR) system Online payment for PRL fee OTP based consent Structured communication IC38 audio online training Easier and simper way to complete IC38² training • • Interesting & engaging Audio content Available in 6 major regional languages Auto calculation of training hours Skilling & Engagement Enablement Support & Servicing HDFCLife Agency Fengage Digital learning & skilling platform benefitting ~7,000 financial consultants daily Digital skilling session driving better tech adoption Enhanced earnings 3 HDFC Life Easy End 2 End Term Journey End-to-end digital customer journey Easy product selection Pre-defined validation Easy to fill forms Easy document upload and payments Partner Portal Dedicated platform for financial consultants giving business insights and fulfilling customer service requests • BUZZ Secure communication platform for all agency stakeholders With rich media delivery features Business update Contest: launch, update, qualification ÎnstA Virtual assistant at your fingertips . Helping financial consultants with Quote illustration Reward fulfillment process and status • Product & policy details . Product launch • Tax and TDS related details Contests & commission details Features: • . • • . • Pay-outs and payment history Tax declaration and exemption details Medical reports Communication history Cross selling opportunity Regular premium collection reminder Event updates 1. FC: Financial Consultant IC38: Qualifying exam for becoming an insurance advisor, conducted by Insurance Institute of India 13 2. Profitable distribution Diversified leading Market- Quality of Reimagining growth insurance mix innovation management Board and HDFC Life#14Expanding market through consistent product innovation Click 2 Invest Retirement & pension Click 2 Protect 3D Plus Sanchay Plus Group Poorna Suraksha Woman FY15-19 Click2Protect Life Auto balance death and critical illness cover or receive income payouts from age 60 Saral Jeevan Bima Saral Pension Standard term and annuity plan with uniform product structure/benefits across life insurers FY20 FY21 Group Credit Protect Cancer Care Youngstar Pension Guaranteed Plan Sanchay Par Advantage Classic One Balanced product suite helps in managing 1 business cycles ¹ FY22 Sanchay Fixed Maturity Plan Guaranteed return savings plan which offers complete flexibility in terms of age coverage, premium payment & policy terms with industry first liquidity features Calibrated growth in protection 2 (Rs bn) Indl. Protection: 6% Individual Protection 4% 4% 5% 5% 6% 17% 17% 13% 12% 14% Group 7% 9% Protection: 8% 6% 6% 6% 13% 26% 26% 27% 34% 15% 29% 28% 25% 16% 46% 23% 20% 20% 22% FY19 FY20 FY21 H1 FY21 H1 FY22 Savings Protection UL Par Non Par ■Group Term ■Annuity 14 Group Protection 108% 38% -6% -54% 20.7 19.8 9.5 2.4 2.3 1.7 H1 FY20 H1 FY21 H1 FY22 H1 FY20 H1 FY21 H1 FY22 1. As a % of Total APE 2. Individual protection numbers are based on APE and group protection numbers based on NBP. Group protection includes Credit protect, GTI, GPS and Group Health Profitable distribution Diversified growth leading Market- Quality of insurance Reimagining Board and mix innovation management HDFC Life#1550+ years Risks Addressed Asset Drawdown Addressing customer needs at every stage of life <25 years 25-35 years Objective Simple Savings Borrowing 36-50 years Investments Needs Product Offerings Pay off mortgage Retire Medical care First Job Medical care Get married Plan for retirement Medical care Medical care Buy new car Child's education: Buy Home Product mix across age categories¹ Mortality i Morbidity Net Worth Longevity Interest Rate Profitable distribution Diversified growth leading Market- Quality of insurance Reimagining mix innovation management Board and 28% 19% 27% 35% 36% 31% 7% 1% HDFC 2% 14% Life UL 38% 31% Par 32% 28% Non par 25% 28% savings Protection 5% 12% Annuity 0% 0% 15 1. Based on Individual WRP for H1 FY22; Percentages may not add up due to rounding off effect#16Our approach to retiral solutions 1. NPS R Largest Pension Fund Manager (PFM) in Retail and Corporate NPS segment, with AUM of Rs 223.3 bn Registered strong AUM growth of 97% yoy 2. Immediate / deferred annuity Largest player in the private sector Servicing 150+ corporates and >20,000 lives covered in H1 FY22 ☐ ■ Market share grew from 34.4% in Mar'21 to 36% in Sep'21 amongst all PFMs Company has around 9 lakh customers - ~5.8 lakh in retail segment and ~ 3.1 lakh in corporate segment 3. Group superannuation fund Managing funds for 150+ corporates under superannuation scheme 16 NPS AUM Annuity portfolio Rs bn FY17-21 CAGR: 93% FY17-21 CAGR: 70% Profitable distribution Diversified growth leading Market- Quality of insurance Reimagining Board and mix innovation management 223 144 164 116 12 52 13 54 FY17 FY19 FY21 H1 FY22 FY17 FY19 FY21 H1 FY22 HDFC Life#17Our protection philosophy Protection is a multi-decade opportunity that we plan to address prudently with continued innovation Supply side considerations ✓ Adverse mortality experience ✓ Recalibration by reinsurers ✓ Need for calibrated underwriting ✓ Sustaining robust claim settlement ratio ✓ Insurers moving beyond top 10 cities and salaried segment Demand side considerations ✓ Huge protection gap and under-penetration ✓ Customers valuing brand, onboarding experience and track record, apart from the price all Our Focus Areas Strengthening underwriting practices and use of deep learning underwriting models Continue to address protection opportunity through group platform (Credit Life) apart from retail business Product innovation catering to varying customer needs 17 Leveraging available market & industry platforms e.g., central medical repository for faster turnaround and greater underwriting precision Profitable distribution Diversified growth mix innovation leading Market- Quality of insurance Reimagining management Board and Pricing and underwriting to evolve in line with expanding geographical and demographic coverage HDFC Life#18Multi-pronged risk management approach for protection 1 Reducing incidence of fraud & early claims Analytics and Data Enrichment Risk+ AI-ML based risk models, rule engines, credit bureaus etc. 2 Limiting impact on profitability & solvency Reinsurance Optimized reinsurance strategies for risk transfer 3 Balancing pricing & underwriting Active re-pricing 4 Strong governance & audits @Partners TPAs & medical centers Ongoing wherever required (mostly applies for Group schemes) Ensure process & quality adherence No 'one size fits all' underwriting Catastrophe agreement Product boundary conditions Dynamic classification depending on profile, detailed medical & financial underwriting To protect excess loss Gate criteria depending upon sourcing channel Regular portfolio review Prudent reserving To identify emerging trends, outliers and take corrective actions Well provisioned to prevent sudden shocks from current pandemic 18 Distribution partners Adherence to best practices and continuous monitoring of risk Profitable distribution Diversified growth leading Market- insurance Reimagining Quality of mix innovation management Board and HDFC Life#19Protection Direct Banca 2 Product mix across key channels¹ Segment FY19 FY20 FY21 H1 FY22 UL 64% 32% 27% 30% Par 13% 18% 37% 33% I Non par savings 17% 44% 30% 31% Term 4% 4% 4% 4% Annuity 3% 2% 2% 2% ¡UL 50% 33% 29% 24% ¡Par 8% 14% 17% 14% I Non par savings 12% 20% 16% 23% ¡Term 6% 4% 3% 3% Annuity 24% 29% 35% 37% Company FY19 FY20 FY21 H1 FY22 Based on APE 17% 17% 13% 14% Based on NBP 27% 27% 20% 21% Online³ Agency Segment FY19 FY20 FY21 H1 FY22 ¦UL 55% 28% 24% 26% Par 18% 19% 34% 30% Non par savings 15% 41% 31% 32% Term 7% 8% 7% 7% Annuity 5% 4% 5% 5% 1. Basis Individual APE, Term includes health business. Percentages are rounded off 2. Includes banks, other corporate agents and online business sourced through banks / corporate agents 3. Includes business sourced through own website and web aggregators 19 Annuity Segment FY19 FY20 FY21 H1 FY22 UL 26% 12% 10% 14% I Par 40% 34% 37% 31% Non par savings 17% 40% 39% 40% Term 12% 12% 11% 11% I Annuity 5% 3% 3% 3% UL 62% 44% 39% 37% ¡Par 2% 1% 1% 2% I Non par savings 1% 18% 29% 33% ¡Term 35% 37% 30% 26% Annuity 1% 1% 2% 2% FY19 FY20 FY21 H1 FY22 Based on APE 4% 4% 5% 6% I Based on NBP 17% 16% 20% 24% HDFC Life Profitable distribution Diversified growth mix innovation leading Market- Quality of insurance Reimagining Board and management#20Aligned to make life simpler for the customers in a turbulent environment 20 20 1 Accelerate JOURNEY SIMPLIFICATION across channels Fast track PARTNER INTEGRATION 2 3 SERVICE SIMPLIFICATION for connect and personalization 6 7 Connecting with startups through Create a digital scalable efficient Futurance¹ Architecture DATA LABS ECOSYSTEM for decision making 4 5 PLATFORMS independent Building resilience.. 8 9 Enable a hybrid Work From Home environment 1. Futurance: A program to collaborate with startups for harnessing cutting-edge technology buying / servicing Strengthen Cyber Security for post-Covid world growth Profitable mix distribution Diversified innovation leading Market- insurance Reimagining management Board and Quality of HDFC Life#21Service Simplification (नमस्ते) Hi Q - Conversational bots Highlights Chat in 8 languages Hindi, Gujarati, Marathi, Punjabi Bengali, Tamil, Telugu, Malayalam A 650+ queries available on chat and 200+ on voice bot 9 lakh+ unique users accessing conversational bots Claims and loan facility available on WhatsApp bot Technical Capabilities built in-house Deep learning Cognitive automation Multi platform NEO NLP1 Agent handover Voice enabled Elle Website bot Etty WhatsApp bot Neo Twitter bot Zoey Digital Avatar 1. 21 HI! Elsa Alexa bot Ezra Google bot Ella Multi- lingual Geo-tagging 2-factor Authentication FB bot Spok Email bot NLP: Natural Language Processing Profitable distribution Diversified growth leading Market- mix insurance Reimagining innovation management Board and Quality of HDFC Life#22Service Simplification - Branch automation CONTACTLESS TOKEN Simple and easy Insta Serv2.0 Eliminating physical forms V-Serv Device agnostic 直 No data connectivity required Real-time status Non-kiosk token system for queue & wait time management at HDFC Life branches Available at 182 high walk-in branches OCR¹ capability to OCR capture cheque/DD details for NEFT tagging and premium payment Quick & real time processing of requests with authentication code based customer consent ~80% policy servicing modules enabled on instaServ app Chat, audio, video, document exchange functionality Equipped to perform all major branch transactions Tool to connect with branch officer virtually and process transactions Enabling digital branch agenda 1. 22 OCR: Optical Character Recognition Profitable growth mix distribution Diversified innovation leading Market- insurance Reimagining Quality of management Board and HDFC Life#23Service Simplification - SimplyQlik I'm SimplyQlik Supports 11 key policy servicing transactions Other digital interventions Track Now Click2Upload On-the-fly, real-time service transaction status update Device agnostic; App-less experience for customer Enables customers/ 81% distributors to track transaction progress Sili Real time update on document requirement Customer document privacy maintained My Service Guide Book Simply Simple link based solution that allows customers to perform various policy servicing transactions 13K+ queries/requests addressed per month Simple link based solution that allows customers to track status of their policy servicing requests 50K+ average interactions on monthly basis Secured OTP transaction Document upload interface for all policy servicing requests across touch points 13K+ requests addressed per month OTP Clickable PDF: Direct navigation to digital platforms Provides complete guidance in a single booklet about different services Available with downloadable key service transaction forms 23 Profitable distribution Diversified growth mix innovation leading Market- insurance Reimagining Quality of Board and management HDFC Life#24Experimenting with emerging tech through Futurance Initiative started in June 2019 in collaboration with IvyCamp Ventures Advisors To more efficicntly assess current and predict future medical conditions For more effective screening through automated resume analysis, skill matching, and score generation Al Based Hiring As part of this program, startups connect with HDFC Life's business teams to find solution for specific use cases To improve customer engagement and information sharing 24 Non-Invasive Futurance>>> Behavioral Tools for Customer & Employee Engagement To raise employee engagement and customer conversion Medical Diagnostics 80+ startups have collaborated with us Document Gamification IvyCamp Intelligent Sales Engagement To contain attrition of front line sales staff. Speech to Text Alternate Data Sources Benefits solves for futuristic customer and stakeholder needs; provides investment opportunity in tech field Popular technologies explored Voice AI, gamification, CKYC, automation etc. 390 applications received in the first three phases To translate speech in multiple languages into text for improved customer interaction To provide authentic data sources of Income, Health, MedicalFraud, Identity etc. in order to enable faster decision-making process at different insurance value chain stages - Diversified 11 Profitable distribution leading Market- Quality of growth insurance Reimagining Board and mix innovation management HDFC Life#25Governance framework Board Committees Management Committees/Councils Board of Directors Independent and experienced Board Audit Committee Risk Management Committee Policyholder Investment Committee Protection Committee Nomination & Remuneration Committee Corporate Social Responsibility Committee Stakeholders' Relationship Committee With Profits Committee Whistleblower Committee Risk Management Investment Council Claims Review Committee Compliance Council Council ALCO1 Note: Credit Council Grievance Management Committee Information & Cyber Security Council Disciplinary Panel for Malpractices Prevention of Sexual Harassment Product Council Standalone councils Business and Innovation Technology Council Persistency Council Additional governance through Internal, Concurrent and Statutory auditors 1. Asset Liability Management Council 25 2. The above list of committees is illustrative and not exhaustive Capital Raising Committee Profitable growth mix distribution Diversified innovation leading Market- Quality of insurance Reimagining Management Board and HDFC Life#26Financial risk management framework Natural hedges Protection and longevity businesses Unit linked and non par savings products ALM approach Target cash flow matching for non par savings plus group protection portfolio to manage non parallel shifts and convexity ■ Immunise overall portfolio to manage parallel shifts in yield curve (duration matching) Managing Risk Product design & mix monitoring ■ Prudent assumptions and pricing approach Return of premium annuity products (>95% of annuity); Average age at entry ~59 years ■ Deferred as % of total annuity business < 30%, with average deferment period <4 yrs ☐ Regular monitoring of interest rates and business mix Residual strategy External hedging instruments such as FRAS, IRFS, swaps amongst others Reinsurance FY21 H1 FY22 I Sensitivity Overall Non par 1 Overall Non par 1 Sensitivity remains range-bound on the back of calibrated risk management Scenario EV VNB Margin EV VNB Margin EV VNB Margin EV VNB Margin Interest Rate +1% Interest Rate -1% 1.6% 0.9% 1.2% 1.8% (2.2%) (1.5%) (2.3%) (2.9%) (2.0%) (1.4%) (2.0%) (2.5%) 1.1% 1.6% 1.3% 1.7% 26 1. Comprises Non par savings (incl Annuity) plus Protection HDFC Life#27Agenda Performance Snapshot 1 Our Strategy Customer Insights Exide Life Transaction Update Managing Covid-19 Annexure 2 3 4 5 6 India Life Insurance 7#28Customer Insights from HDFC Life's LFI¹ study • Survey Results Financial Sufficiency and Adequacy Index Measures comprehensiveness of financial planning Down by 8.7 pts compared to 2019 Financial Awareness Index 90% Consumers had seen some level of Job/ Business losses during Covid-19 Higher need for financial planning given impact of pandemic 1. Consumer looking for a more holistic financial plan Avg. events considered for financial planning increases 2019 2021 4.3 5.8 2. Planning for medical emergencies considered a key priority Measures product knowledge Up by 2.1 pts compared to 2019 Financial Planning Index Measures confidence level and discipline in financial planning Down by 4.2 pts compared to 2019 Financial Liberty Index Measures psychological feeling of financial freedom and security Down by 3.7 pts compared to 2019 67% Consumers are concerned about economic slowdown 51% Consumers are concerned about job instability 48% Consumers are concerned about rising debts Financial security in case of medical emergency 2019 2021 39% 46% 3. 40% respondents availed an insurance policy post Wave 1 4. Significant increase in awareness about LI, indicative of accentuated need Those who have full knowledge LI- Term LI- Endowment LI- ULIP 62%(+11) 62%(+10) (Increase vis-à-vis 2019) 56%(+10) 1. HDFC Life's 'Life Freedom Index (LFI)' study was conducted by NielsenIQ in August 2021 28 HDFC Life#29Agenda Performance Snapshot 1 Our Strategy Customer Insights 2 3 Exide Life Transaction Update 4 Managing Covid-19 Annexure 5 6 India Life Insurance 7#30Exide Life transaction timeline 30 30 Step 1: Announcement of Transaction (Sep 3, 2021) Step 3: Application filed with IRDAI and CCI for acquisition, ongoing interactions Step 5: Application to IRDAI and NCLT for merging the two companies HY Completed 用 98 99 99 Step 2: Shareholders' approval for issuance of shares (Sep 29, 2021)¹ Step 4: Receipt of approvals. Exide Life becomes 100% subsidiary of HDFC Life Step 6: Approval for merger WIP 1. Subject to approval from IRDAI and CCI To be initiated Current phase HDFC Life#31Agenda Performance Snapshot 1 Our Strategy Customer Insights 2 3 Exide Life Transaction Update 4 Managing Covid-19 Annexure 5 6 India Life Insurance 7#32Dynamic approach to manage impact of the COVID-19 outbreak Employee Engagement/ Facilitation |32 HDFC Life Accelerated digital selling Focus on selling products with end to end digital customer journeys Digital Servicing Communication to customers about digital touch-points for claims, renewal collection and customer queries Prioritizing areas of focus Dynamic review and assessment, strengthening operating assumptions, heightened focus on cost Responsive operating measures Regular branch operations being sustained with daily tracking of employee and agent safety COVID 19 VACCINE Vaccination drive Work from home M T by BIT 21.5 ape Emotional & mental wellbeing program Doctor on call ICU at home Walkathon service HDFC Life#33Emphasis on digital across customer touch-points eCCD New business / purchase Digital sales journey - End-to-end digital sales, from prospecting till conversion, including customer interactions Chat PCV and eCCD - No dependence on salesperson or call center. ~48% digital pre-conversion verification (through chat and eCCD) in H1 FY22 Policy servicing SVAR Digital Renewal collections 87% based on renewal premiums and 96% based on no. of policies; SVAR (voice bot for renewal calling) and use of Cloud telephony in H1 Maturity payouts - Email, WhatsApp and customer portal 'My Account' enabled to upload necessary docs InstA HOFC Life Customer interactions Seamless support experience - ~2.1 mn monthly queries handled by instA (virtual assistant) Employee/Partner engagement e-learning platform -7,000+ agents attending training programs daily through Agency Life Platform - Use of mobile app Over 42% increase in mobile app usage Gamified contests - Launched to drive adoption of digital engagement initiatives WORK INSTAin sure 133 Telemedicals - 57% of the medicals done through tele- medicals in H1 FY22 LifeEasy - Simple '3 click claim' process, 94%¹ eligible claims settled in 1 day. Claims initiation process also enabled through WhatsApp Uninterrupted customer assistance - Work from home enabled across the organization; Access to Microsoft Teams, Citrix RPA -Robotic Process automation handled ~300 processes remotely Tnsta Serv 2.0 - InstaServe OTP based policy servicing tool to handle customer queries Insta PRL Ägent on-boarding - Insta PRL enabling digital on-boarding of agents 40,000+ applications logged in H1 FY22 HI! 24*7 self-service options ~95% of chats are self-serve via chat-bot Employee engagement - VC based skill building sessions with digital partners (Twitter, Google, Facebook) InstaInsure - Simplified insurance buying through a 3-click journey Contact centres - Branch staff replacing call centre agents Branches - Daily tracking of employee and agent safety Partner trainings - Conducted via digital collaboration tools New initiatives launched to manage volatile business environment due to the Covid-19 outbreak 1. Claim settlement ratio through LifeEasy (online) and WhatsApp platform, as on 30th September 2021 HDFC Life#34Agenda Performance Snapshot 1 Our Strategy Customer Insights 2 3 Exide Life Transaction Update 4 Managing Covid-19 Annexure 5 6 India Life Insurance 7#35Improvement in overall persistency trends¹ Across key channels (%) 92 86 82 75 Agency 67 67 Across key segments (%) 87 79 71 65 55 51 96 90 90 85 CY (H1 FY22) 91 84 76 76 72 67 56 Banca Direct ■13th month 25th month 37th month 49th month 61st month 94 89 81 81 74 67 70 64 0 Savings (Traditional) 67 48 48 92 22 84 == Company PY (H1 FY21) 88 79 79 19 72 72 69 99 66 53 Savings (UL) Protection ■13th month ■25th month ■37th month 49th month ■61st month Company 1. For individual business; Including single premium and fully paid up policies 35 Actuarial Financial ESG HDFC Life#36Improvement in overall persistency trends¹ Across key channels (%) 89 80 69 65 55 Agency 84 75 15 66 69 Banca 64 51 Across key segments (%) ■13th month 25th month 89 79 63 19 61 59 Savings (Traditional) 78 71 67 40 64 42 47 80 87 73 65 32 62 59 Direct 37th month 49th month 61st month 92 84 78 13 71 71 86 76 82 82 CY (H1 FY22) 66 99 63 33 Company PY (H1 FY21) 70 70 65 552 52 62 Savings (UL) Protection ■13th month ■25th month ■37th month 49th month ■61st month Company 1. For individual business; Excluding single premium and fully paid up policies 36 12 47 Actuarial Financial ESG HDFC Life#37Improving VNB trajectory 30% 0.7 0.1 10.9 2.0 0.3 8.4 H1 FY21 Impact of higher APE Change in assumptions New Business Profile Fixed cost absorption H1 FY22 VNB Growth NBM% 25.1% 0.0% -0.7% 1.7% 0.3% 26.4% 37 1. Reflects the impact of difference in mix of segment/distribution channel/tenure/age/sum assured multiple etc VNB - Value of New Business; NBM - New Business Margin Rs bn Actuarial Financial ESG HDFC Life#38Sensitivity analysis Analysis based on key metrics Scenario Change in Reference rate Equity Market movement Change in VNB Margin 1 % Change in EV Increase by 1% -1.4% -2.0% Decrease by 1% 1.1% 1.6% Decrease by 10% -0.1% -1.7% Increase by 10% -0.3% -0.6% Persistency (Lapse rates) Decrease by 10% 0.3% 0.7% Increase by 10% -0.5% -0.8% Maintenance expenses Decrease by 10% 0.5% 0.8% Acquisition Increase by 10% -3.2% ΝΑ Expenses Decrease by 10% 3.2% ΝΑ Increase by 5% -1.1% -0.8% Mortality / Morbidity Decrease by 5% 1.1% 0.8% Tax rate² Increased to 25% -4.4% -8.5% Actuarial Financial ESG 38 1. Post overrun total VNB for Individual and Group business 2. The tax rate is assumed to increase from 14.56% to 25% and hence all the currently taxed profits in policyholder/shareholder segments are taxed at a higher rate. It does not allow for the benefit of policyholder surplus being tax-exempt as was envisaged in the DTC Bill. HDFC Life#39Assets under management 39 Debt: Equity 62:38 71:29 64:36 62:38 UL:Traditional 50:50 43:57 43:57 43.57 18% 1% 37% 27% 1,912 1,738 1,256 1,272 Mar 31, 2019 Mar 31, 2020 Mar 31, 2021 YoY Growth Sep 30, 2021 Over 98% of debt investments in Government bonds and AAA rated securities as on September 30, 2021 Rs bn Actuarial Financial ESG HDFC Life#40Stable capital position NB premium growth ■ 40 40 32% 15% 17% 22% 201% 188% 190% 184% 97.0 94.3 20.5 24.0 70.8 62.7 13.1 25.5 23.4 12.7 19.2 16.7 33.3 38.5 Mar 31, 2019 Mar 31, 2020 ASM1 RSM @100% Incremental RSM @150% Stable solvency ratio, augmented by steady accretion to backbook 1. 2. 51.0 46.9 Mar 31, 2021 Sep 30, 2021 2 Surplus Capital -Solvency margin ASM represents Available solvency margin and RSM represents Required solvency margin Investment in subsidiaries not considered in solvency margin; Includes impact of final dividend of Rs 4.1 bn, paid out in Q2 FY22 Rs bn Actuarial Financial ESG HDFC Life#41Focus on sustainability Our ESG strategy focusses on five pillars, each of which aims to address ESG related risks and create long term value for all stakeholders Reflecting on our ESG Tenets Our ESG strategy is based on following tenets: Active engagement with external agencies including MSCI, S&P Global (DJSI) Ethical Conduct Responsible Investment Diversity, Equity and Inclusion Holistic Living Sustainable Operations • MSCI rating improved from 'BB' in October 2019 to 'BBB' in August 2020 S&P Global (DJSI) rating improved significantly in FY 2021 First Integrated report published (FY 2021) ESG report published in July 2021 41 Actuarial Financial ESG HDFC Life#42Environment • Social Governance 5 pillars of ESG Governance structure & Compensation Framework Risk management and BCM STANDARDS COMPLIANCE POLICIES Ethical Conduct REGULATIONS RULES Responsible Investment Diversity, Equity & Inclusion Corporate governance policy Commitment to ethical business practices O Includes Corporate structure and stakeholder management Board Diversity policy Board evaluation & independence о Five independent directors o 'Fit and Proper' as per regulation strategy accept RISK reduce MANAGEMENT transfer mitigate avoid Enterprise risk management (ERM) framework 'Three Lines of Defense " approach' Reviewed and approved by the Board control Risk oversight by Board of Directors Review in multiple management forums Information/Cyber Security о ISO 27001:2013 and ISMS assessment program о Data Privacy Policy Responsible Investment (RI) о Generate optimal risk adjusted returns over the long term RI framework applicable to all major asset classes including equity and bonds integrated into investment analysis Business ethics and compliances STOP Holistic Living Sustainable Operations 。 30% women as on 30th Sep, 2021 Performance Management System based on the principles of balanced scorecard о Remuneration policy Seeks to balance the fixed and incentive pay Disclosure of managerial remuneration in the annual report Modes of Risk awareness Trainings, E- mailers, Seminars, Conferences, Quizzes and Special awareness Drives Sensitivity analysis and stress testing Business Continuity Management (BCM)- Creation of a recovery plan for critical business activities 1. PRSH: Prevention of Sexual Harassment 2. BRR: Business Responsibility Report 42 3. AML: Anti Money Laundering Code of Whistle blower PRSH¹ Conduct Policy BRR² & Stewardship Code COMPLIANCE 8 Anti Bribery & Corruption Policy Human Rights AML3 Privacy Policy HDFC Life#43Environment Social Governance 5 pillars of ESG Ethical Conduct TRAINING AND DEVELOPMENT Attracting talent Responsible Investment Hybrid work model and flexi hours to attract gig workers Diversity, Equity & Inclusion Holistic Living Sustainable Operations Robust employee referral schemes (>50% of the hiring through referrals) Hire-train-deploy model through tie-up with reputed learning institutions Training & development Career coaching and development interventions; woman mentoring Mobile learning app for self-paced learning Training for all including employees, contractors, channel partners Virtual product training Skill Up: Curated online training programs from reputed universities Employee engagement о О о Emotional and well being assistance program for employees and their families Doctor on Call: Unlimited free consultation E-Sparsh: Online query & grievance platform Family integration programs: Little Strokes Platform for employee engagement: HDFC Life Got Talent, e-appreciation cards о Regular online yoga classes, Click2Wellness app Employee diversity, equity & inclusion Promoting DEI ally ship: communication, strengthening policies, aligning workforce 26% women employees (maternity transition program, mentoring programs, Economic Times Femina Best Workplaces for women) Promoting diverse talent pool (work profiles for second career women, specially-abled) - #MyJobMyRules LGBTQ+ friendly organisation Mediclaim policy includes co-habiting partners TALENT MANAGEMENT Talent management/retention Brandon Hall awards for Learning Strategy, Simulation training, and Social Talent Acquisition program Special programs for campus hires: Management Trainees & Graduate Trainees, etc. Talent development interventions for leadership Managerial skill building workshops: Boot-camp (first time managers), Manager Transformation League Career microsite, job portal to educate employees on career opportunities within the company Internal Career Fair for employees to explore roles Long term incentive plans in the form of ESOPs and cash to attract, retain and motivate good talent Elaborate succession planning for Key Managerial Personnel, critical senior roles 143 HDFC Life#44Environment • Social Governance 5 pillars of ESG Inclusive growth Ethical Conduct Financial Inclusion Customer centricity :) Responsible Investment о Diversity, Equity & Inclusion xx swabhimaan The Corporate Social Responsibility wing is aligned with the UN Sustainable Development Goals (SDGs) with focus on Education, Health, Environment, Livelihood & Disaster Relief FY21: 22 CSR projects across 24 states and 3 Union Territories impacting >233K beneficiaries in India Support 10 out of the 17 UN Sustainable Development Goals O In line with the Government's social scheme 'Pradhan Mantri Jeevan Jyoti Bima Yojana', HDFC Life offers HDFC Life Pradhan Mantri Jeevan Jyoti Bima Yojana Plan, which is a pure group term insurance product o Group Jeevan Suraksha and Group Term Insurance are micro insurance products that have been designed for the members of micro finance institutions, co-operatives, self-help groups, etc. Under these plans, the Company covered a total of 1.1 cr lives till Sep 30, 2021 о Leveraging technology To simplify life insurance for customers through their journey across issuance, claims, servicing, or any other engagement Artificial Intelligence (AI) for text and speech recognition; Machine Learning (ML) to improve persistency; Cognitive bots (software robots) for 24x7 customer service; and Alternate data to enhance underwriting Holistic Living Sustainable Operations 44 о Customer Satisfaction Grievance Redressal Policy о 13th month persistency Complaints per 10K reduced from 47 in FY20 to 38 in H1 FY22 о improved to 91% Improvement in overall Customer Satisfaction (CSAT) Scores ◉ Life#45• Environment • Social Governance 5 pillars of ESG Energy and water Digitization Reduction of Paper Usage Waste management Ethical Conduct Responsible Investment Diversity, Equity & Inclusion Holistic Living Sustainable Operations Use of 3/5 star rated appliances with regular maintenance 69% of branches use LED based lighting system Use of sensor based urinals and water taps 12 water dispensing units installed in villages to provide clean drinking water 。 Implementation of switch rooms across 384 branches resulting in reduced air-conditioning usage (both in running hours and temperature settings) 。 Replacement of Uninterruptible Power Supply UPS with new energy efficient devices; reduction of UPS capacity by 50% (equivalent to 750 KVA) 。 Replacement of bottled drinking water with water purifiers 00 Online /e-forms for customers Annual report FY21 digitally communicated to all stakeholders о Printers configured with default double side printing CSR initiatives О Installation of sensor-based taps at corporate office and other select office locations CSR G 20 city forests in over 50,000+ sq.ft. area using the Miyawaki method. Over 50 different native species used Over last three years, 75,000+ trees have been planted including plantations in Kheda, Gujarat and Sikkim Plans to expand to support solar on schools and water rejuvenation projects Business travel 40+ video conferencing rooms setup to reduce travel DO DO DO о о о о RECYCLE REUSE REDUCE 310 Kgs of e-waste was recycled/ refurbished/disposed in FY21 in an environmentally controlled manner, conforming to the guidelines of E-Waste (Management) Rules, 2016 Donated old IT assets to recycling agencies for helping under-privileged sections of the society Segregation and proper disposal of waste - dry and wet No single-use plastics Use of bio-degradable garbage bags Cafeteria with reusable plates, cutlery, wooden stirrers etc. Conference / meetings rooms with glass bottles and cups Employees encouraged to bring their own mugs/glass 45 HDFC Life#46Agenda Performance Snapshot 1 Our Strategy Customer Insights 2 3 Exide Life Transaction Update 4 Managing Covid-19 Annexure 5 6 India Life Insurance 7#4747 2015 67.6 Taiwan 2035 Hong Kong 16.5% Singapore 18.3% (2019) 6.0% 6.7% 3.3% Japan 3.4% Growth opportunity: Under-penetration and favorable demographics Life Insurance penetration 1 Life Insurance density US$ 2 Thailand Life expectancy (Years) 71.9 2055 Malaysia India 2.8% 2.3% China Hong Kong Taiwan 8,979 4,129 Singapore 3,244 (2019) 2,691 380 256 230 58 Japan Malaysia Thailand Population composition (bn) 1.3 1.6 1.7 6% 9% 75.0 15% 56% 61% 60% 38% 30% 25% 1. Penetration as measured by premiums as % of GDP, 2. Density defined as the ratio of premium underwritten in a given year to the total population Source: Swiss Re (Based on respective financial year of the countries), MOSPI, United Nations World Populations Prospects Report (2017) 2015 2035 2055 Less than 20 years 20-64 years ■65 years and above China India India remains vastly under-insured, both in terms of penetration and density Huge opportunity to penetrate the underserviced segments, with evolution of the life insurance distribution model India's insurable population estimated to be at ~1 bn by 2035 Emergence of nuclear families and advancement in healthcare facilities lead to increase in life expectancy thus facilitating need for pension and protection based products HDFC Life#48Low levels of penetration - Life protection Protection gap 2 (2019) 1.7 mn 172 mn 68 mn 83.0% 76.0% 74.0% 71.0% 70.0% 61.0% Urban Working Population Addressable Market (excl blue collared) Annual Policy Sales Only 1 out of 40 people (2.5%) who can afford it, is buying a policy every year 1 India Indonesia Malaysia 24 17 Even within the current set, Sum Assured as a multiple of Income is <1x 12 8 3. Kotak institutional equities 48 1. Goldman Sachs Report, March 2019 2. Swiss Re (Based on respective financial year of the countries) Thailand China Japan Singapore South Korea Trend of retail loans 3 (Rs Tn.) FY10 FY12 FY14 FY16 FY18 FY20 34 34 55.0% 55.0% 54.0% 41.0% Australia Hong Kong India has the highest protection gap in the region, as growth in savings and life insurance coverage has lagged behind economic and wage growth Protection gap growth rate is predicted to grow at 4% per annum 42 Retail credit has grown at a CAGR of 18% over last 10 years Increasing retail indebtedness to spur need for credit life products Immense opportunity given: Increasing adoption of credit Enhancement of attachment rates Improvement in value penetration Widening lines of businesses HDFC Life#49Macro opportunity - Retiral solutions 4.8 India's pension market is under-penetrated at 4.8% of GDP Pension Assets / GDP Ratio 60.8 56.4 43.2 130.7 120.5 Improvements in life expectancy will lead to an average post retirement period of 20 years Life expectancy at age 60 22 19 18 18 17 16 22 20 India Hong Kong India South Africa Japan USA Hong Kong South Africa ■Japan USA Australia Australia Elderly population is expected to almost triple by 2050 7% Ageing population 9% 14% 67% 68% 68% 1995-2000 2000-05 2011-12 2030E Males Females Average household size has decreased from 4.6 in 2001 to 3.9 in 2018 Total Pension AUM is expected to grow to Rs 118 Tn by 2030 (about 1/4th accounted by NPS) Mandatory schemes to increase coverage for both unorganized and organized sectors 26% 23% 19% 2020 2030 2050 Age <15 Yrs Age 15-65 Yrs Age >65 Yrs HDFC 49 Source: Milliman Asia Retirement Report 2017; Survey by NSSO, Ministry of statistics and Programme implementation Crisil PFRDA, Census of India, UN Population Estimates Life#50Government bond auctions Government Bonds - Tenorwise Issuance 21% 29% 27% 27% 35% 35% 71% 73% 79% 73% 65% 65% FY17 FY18 FY19 FY20 FY21 H1FY22 ■>15yrs 1,54,520 1,80,529 2,04,000 ■ <=15yrs 3,73,525 4,97,579 3,82,941 2,38,000 4,44,000 2,65,575 1,99,000 10,01,835 5,25,000 Total 5,28,045 6,78,109 5,86,941 6,82,000 12,67,410 7,24,000 ☐ Auction of >15 year maturity bonds has been ~25-30% on an average facilitates writing annuity business at scale The central govt. borrowing calendar for H1 FY22 is Rs 7,24,000 cr, ~60% of the full-year target of Rs 12,05,000 cr 50 50 Source: CCIL & National Statistics Office, Union Budget, RBI Rs cr HDFC Life#51Life Insurance: A preferred savings instrument Household savings composition Financial savings mix 25% 22% 18% 19% 3% 8% 11% 12% 15% 13% 19% 18% 20% 26% 17% 52% 68% 65% 60% 14% 48% 35% 32% 67% 56% 50% 51% 40% FY10 FY13 FY16 FY20 FY10 FY13 ■Financial savings ■Physical savings ■Currency & deposits Life insurance Household savings as % of GDP Increasing preference towards financial savings with increasing financial literacy within the population Various government initiatives to promote financial inclusion: Implementation of JAM trinity Launch of affordable PMJJBY and PMSBY social insurance schemes " Atal Pension Yojana promoting pension in unorganized sector 51 55 Source: DBIE-RBI Statistics, RBI Annual Report, Economic Survey, CSO, www.pmjdy.gov.in FY16 ■■Provident/Pension fund FY20 Others HDFC Life#52Industry new business¹ trends Individual WRP in Rs bn Sensex Private Players ■LIC 452 420 401 357 304 288 292 285 269 273 262 230 315 305 287 291 278 245 227 203 200208 214 175 178 172 211 128 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 H1 FY22 Private players Market share 57% 52% 46% 37% 38% 38% 49% 52% 54% 56% 58% 57% 60% 62% Growth % Private LIC 1% 7% -20% -24% 2% -3% 16% 14% 26% 24% 12% 5% 8% 32% -22% 29% 4% 11% -4% -2% -27% 3% 15% 13% 5% 8% -3% 4% Overall -10% 17% -9% -5% -2% -3% -11% 8% 21% 19% 9% 6% 3% 20% 52 22 Private sector gained higher Market share than LIC for the first time in FY16, post FY11 regulatory changes Amongst private insurers, insurers with a strong bancassurance platform continue to gain market share 1.Basis Individual Weighted Received Premium (WRP) Source: IRDAI and Life Insurance Council Sensex HDFC Life#53Private industry: Product and distribution mix 53 43% Product mix 1 ■Unit Linked Conventional Distribution mix 2 Individual Agents Corporate Agents - Banks Corporate Agents - Others Brokers Direct Business 57% 54% 52% 51% 51% 48% 49% 49% 61% 9% 10% 10% 12% 56% 14% 16% 16% 3% 703 20% 5% 3% 3% 3% 20% 3% 3% 3% 3% 3% 3% 46% 44% 39% 47% 52% 54% 54% 55% 53% 55% 36% 32% 30% 28% 25% 25% 23% FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Product mix has recently moved towards conventional business for the private players with high focus on non-par savings, protection Banca sourced business continues to dominate the channel mix on the back of increasing reach of banks along with increase in share of direct channel 1. Basis Overall WRP (Individual and Group); 2. Basis Individual New business premia for all private players Source: IRDAI and Life Insurance Council HDFC Life#54Appendix HDFC Life#55Financial and operational snapshot (1/2) New Business Premium (Indl. + Group) Renewal Premium (Indl. +Group) Total Premium Individual APE Overall APE Group Premium (NB) Profit after Tax - Policyholder Surplus - Shareholder Surplus Dividend Paid Assets Under Management Indian Embedded Value Net Worth NB (Individual and Group segment) lives insured (Mn.) No. of Individual Policies (NB) sold (In 000s) H1 FY22 H1 FY21 Growth FY21 FY20 FY19 CAGR Rs bn. 103.6 85.0 22% 201.1 172.4 149.7 16% 89.2 75.5 18% 184.8 154.7 142.1 14% 192.9 160.5 20% 385.8 327.1 291.9 15% 34.3 28.3 21% 71.2 61.4 52.0 17% 41.1 33.3 23% 83.7 74.1 62.6 16% 53.6 42.9 25% 100.3 87.8 73.3 17% 5.8 7.8 -26% 13.6 13.0 12.8 3% 1.3 5.6 -76% 7.3 10.9 9.0 -10% 4.4 2.2 102% 6.3 2.1 3.8 29% (1) 4.1 NA 4.0 ΝΑ 1,912.1 1,506.2 27% 1,738.4 1,272.3 1,255.5 18% 287.0 233.3 23% 266.2 206.5 183.0 21% (2) 86.9 77.9 12% 84.3 69.9 56.6 22% 20.0 10.2 96% 39.8 61.3 51.4 -12% 409.1 444.2 -8% 982.0 896.3 995.0 -1% 55 1. Proposed final dividend of Rs 4.1 bn, to be paid in Q2 FY22 (subject to shareholders' approval) 2. Comprises share capital, share premium and accumulated profits/(losses) HDFC Life#56Financial and operational snapshot (2/2) H1 FY22 H1 FY21 FY21 FY20 FY19 Overall New Business Margins (post overrun) 26.4% 25.1% 26.1% 25.9% 24.6% Operating Return on EV (1) 18.4% 17.6% 18.5% 18.1% 20.1% Operating Expenses / Total Premium 12.0% 11.1% 12.0% 13.1% 13.1% Total Expenses (OpEx + Commission) / Total Premium 16.3% 15.3% 16.4% 17.7% 17.0% Return on Equity (2) 13.5% 21.0% 17.6% 20.5% 24.6% Solvency Ratio 190% 203% 201% 184% Persistency (13M / 61M) (3) 91%/56% 88%/53% 90%/53% 88%/54% 188% 84%/51% Market Share (%) - Individual WRP - Group New Business - Total New Business Business Mix (%) 16.2% 17.5% 15.5% 14.2% 12.5% 28.1% 27.4% 27.6% 29.0% 28.4% 22.3% 23.3% 21.5% 21.5% 20.7% - Product (UL/Non par savings/Annuity/Non par protection/Par) (4) - Indl Distribution (CA/Agency/Broker/Direct) (4) - Total Distribution (CA/Agency/Broker/Direct/Group) (5) - Share of protection business (Basis Indl APE) - Share of protection business (Basis Overall APE) 26/32/5/7/30 23/30/5/9/33 60/13/6/21 60/13/6/21 23/6/2/17/52 23/6/2/18/51 6.6% 8.5% 13.9% 12.1% 24/31/5/7/34 28/41/4/8/19 55/15/5/7/18 61/13/7/19 55/14/9/22 64/13/4/19 25/6/2/17/50 23/7/3/17/51 26/7/2/16/49 6.8% 7.6% 6.7% 12.8% 17.2% 16.7% - Share of protection business (Basis NBP) 21.4% 14.1% 19.6% 27.6% 27.0% 1. 2. 3. Pre excess mortality reserve (EMR) EVOP% is 18.4%; Post accounting for EMR, EVOP% stands at 16.1% Calculated using net profit and average net worth for the period (Net worth comprises of Share capital, Share premium and Accumulated profits) Individual persistency ratios (based on original premium) 4. Based on individual APE. UL: Unit Linked, Trad: Traditional, Par: Participating & CA: Corporate Agents. Percentages are rounded off 5. Based on total new business premium including group. Percentages are rounded off 56 HDFC Life#57Revenue and Profit & Loss A/c Revenue A/c¹ H1 FY22 H1 FY21 Rs bn Profit and Loss A/c¹ H1 FY22 H1 FY21 i Premium earned I 192.9 160.5 ! Income I I Reinsurance ceded (3.0) (2.8) Interest and dividend income 2.5 2.0 I Income from Investments I I 158.4 150.7 Net profit/(loss) on sale 2.1 0.3 I Other Income 0.5 0.7 Transfer from Policyholders' Account 3.3 5.6 I Transfer from Shareholders' Account 2.0 0.1 I Other Income I Total Income 350.7 309.1 Total 7.9 8.0 Commissions 8.1 6.7 I Outgoings | Expenses 23.0 17.7 I I I I Transfer to Policyholders' Account 2.0 0.1 GST on UL charges 1.8 1.7 I I I i Expenses 0.2 0.1 ■ Provision for taxation 0.1 0.5 I I ¡ Interest on convertible debentures 0.2 0.1 i Provision for diminution in value of investments (2.4) (0.5) I I I I Benefits paid 134.7 72.5 i Provision for diminution in value of investments (0.3) (0.1) I I Change in valuation reserve 176.6 203.8 I ¡Provision for Taxation 0.1 0.0¦ I Bonuses Paid 6.6 2.9! Total 2.1 0.2 Total Outgoings 348.5 305.2 Surplus Transfer to Shareholders' Account 2.2 3.3 3.9 Profit for the year as per P&L Statement Interim Dividend paid (including tax) 5.8 7.8 (4.1) 5.6 I Funds for future appropriation - Par Profit carried forward to Balance Sheet 1.7 7.8 (1.0) (1.7) Total Appropriations 2.2 3.9 1. Numbers may not add up due to rounding off effect ◉ HDFC Life 57#58Balance sheet I Sep 30, 2021¹ Sep 30, 2020 Mar 31, 2021 Rs bn Shareholders' funds Share capital (including Share premium) Accumulated profits Fair value change Sub total Borrowings Policyholders' funds Fair value change Policy Liabilities 25.9 24.4 25.0i 61.0 53.5 59.3 2.3 0.4 2.1 89.1 78.2 86.4 6.0 6.0 i 6.0 30.0 11.2 25.6 947.9 745.8 855.2 I Provision for Linked Liabilities 789.8 615.6 709.6 Funds for discontinued policies 41.8 36.9 38.0 Sub total 1,809.4 1,409.5 1628.4 I Funds for future appropriation (Par) 8.9 7.1 9.9 Total Source of funds 1,913.5 1,500.8 1,730.7 I Shareholders' investment 86.3 74.4 85.4 I Policyholders' investments: Non-linked 994.3 779.3 905.4 Policyholders' investments: Linked 831.5 652.5 747.6 Loans Fixed assets 5.4 3.2 4.2 3.3 3.3 3.4 I Net current assets (7.4) (11.9) (15.4) Total Application of funds 1,913.5 1,500.8 1,730.7 1. Numbers may not add up due to rounding off effect 58 HDFC Life#59Segment wise average term and age¹ Average Policy Term excluding annuity (Yrs) H1 FY22: 23.3 (H1 FY21: 25.2) UL 12 12 22 Par Non-par Health Non-par Savings Non-par Protection 41 42 222 22 23 22 12 TL 12 38 40 Non-par Pension 12 10 H1 FY22 H1 FY21 Average Customer Age excluding annuity (Yrs) H1 FY22: 36.2 (H1 FY21: 35.7) 36 UL 37 33 Par 33 Non-par Health 32 32 37 Non-par Savings 36 34 Non-par Protection 34 Non-par Pension 55 57 H1 FY22 H1 FY21 Focus on long term insurance solutions, reflected in terms of long policy tenure Extensive product solutions catering customer needs across life cycles from young age to relatively older population 59 1. Basis individual new business policies (excluding annuity) HDFC Life#60Summary of Milliman report on our ALM approach • Scope of review Assess appropriateness of ALM strategy to manage interest rate risk in non-par savings business Review sensitivity of value of assets and liabilities to changes in assumptions - FY20 Portfolios reviewed - ■ Portfolio 1: Savings and Protection All non-single premium non-par savings contracts and group protection products ■ Portfolio 2: All immediate and deferred annuities Description Interest rate scenarios Interest rate + Demographic scenarios 100% persistency and low interest rates Stress scenarios tested Parallel shifts/ shape changes in yield curve within +- 150 bps of March 31st 2020 Gsec yield curve Interest rate variation + changes in future persistency/ mortality experience Net asset liability position Changes by < 4.5% Changes by 7% 100% persistency with interest rates falling to 4% p.a. for next 5 years, 2% p.a for years 6 -10 and 0% thereafter Still remains positive 60 60 Opinion and conclusion ALM strategy adopted for Portfolios 1 and 2 is appropriate to: ■ meet policyholder liability cash flows ☐ protect net asset-liability position thereby limiting impact on shareholder value 1. Opinion issued by Milliman Advisors LLP on ALM strategy (for non par business) basis FY20 disclosures HDFC Life#6119 61 Indian Embedded value: Methodology and Approach (1/2) Overview Indian Embedded Value (IEV) consists of: ☐ ☐ Adjusted Net Worth (ANW), consisting of: - Free surplus (FS); - Required capital (RC); and Value of in-force covered business (VIF): Present value of the shareholders' interest in the earnings distributable from assets allocated to the covered business, after making sufficient allowance for the aggregate risks in the covered business. Components of Adjusted Net Worth (ANW) ■ Free surplus (FS): FS is the Market value of any assets allocated to, but not required to support, the in-force covered business as at the valuation date. The FS has been determined as the adjusted net worth of the Company (being the net shareholders' funds adjusted to revalue assets to Market value), less the RC as defined below. Required capital (RC): RC is the amount of assets attributed to the covered business over and above that required to back liabilities for the covered business. The distribution of this to shareholders is restricted. RC is set equal to the internal target level of capital equal to 170% of the factor-based regulatory solvency requirements, less the funds for future appropriations ("FFA") in the participating funds. HDFC Life#62Indian Embedded value: Methodology and Approach (2/2) Components of Value in-force covered business (VIF) ■ Present value of future profits (PVFP): PVFP is the present value of projected distributable profits to shareholders arising from the in-force covered business determined by projecting the shareholder cash flows from the in-force covered business and the assets backing the associated liabilities. Time Value of Financial Options and Guarantees (TVFOG): TVFOG reflects the value of the additional cost to shareholders that may arise from the embedded financial options and guarantees attaching to the covered business in the event of future adverse market movements. Intrinsic value of such options and guarantees is reflected in PVFP. Frictional costs of required capital (FC): FC represents the investment management expenses and taxation costs associated with holding the RC. VIF includes an allowance for FC of holding RC for the covered business. VIF also includes an allowance for FC in respect of the encumbered capital in the Company's holdings in its subsidiaries. Cost of residual non-hedgeable risks (CRNHR): CRNHR is an allowance for risks to shareholder value to the extent that these are not already allowed for in the TVFOG or the PVFP. In particular, the CRNHR makes allowance for: - asymmetries in the impact of the risks on shareholder value; and - risks that are not allowed for in the TVFOG or the PVFP. CRNHR has been determined using a cost of capital approach. CRNHR is the present value of the cost of capital charge levied on the projected capital in respect of the material risks identified. 62 62 HDFC Life#63Embedded Value: Economic assumptions¹ Years Forward rates % Spot rates % As at Sep 30, 2020 As at Sep 30, 2021 As at Sep 30, 2020 As at Sep 30, 2021 1 3.90 3.95 3.83 3.87 23 5.12 5.17 4.41 4.45 6.01 6.02 4.89 4.92 4 6.65 6.68 5.28 5.31 5 7.09 7.17 5.59 5.63 10 7.67 8.19 6.45 6.63 15 7.37 8.10 6.71 7.04 20 7.05 7.78 6.77 7.18 25 6.84 7.49 6.75 7.21 30 6.72 7.28 6.72 7.19 63 1. Forward rates are annualised and Spot rates are continuous HDFC Life#64Glossary (Part 1) ■ APE (Annualized Premium Equivalent) - The sum of annualized first year regular premiums and 10% weighted single premiums and single premium top-ups ◉ Backbook surplus - Surplus accumulated from historical business written ■ ■ ◉ Conservation ratio - Ratio of current year renewal premiums to previous year's renewal premium and first year premium Embedded Value Operating Profit ("EVOP") - Measure of the increase in the EV during any given. period, excluding the impact on EV due to external factors like changes in economic variables and shareholder-related actions like capital injection or dividend pay-outs. First year premiums - Regular premiums received during the year for all modes of payments chosen by the customer which are still in the first year. For example, for a monthly mode policy sold in March 2021, the first instalment would fall into first year premiums for 2020-21 and the remaining 11 instalments in the first year would be first year premiums in 2021-22 ◉ New business received premium - The sum of first year premium and single premium. ◉ New business strain - Strain on the business created due to revenues received in the first policy year not being able to cover for expenses incurred 64 HDFC Life#65◉ ◉ ■ ◉ ■ ◉ ◉ ◉ Glossary (Part 2) Operating expense - It includes all expenses that are incurred for the purposes of sourcing new business and expenses incurred for policy servicing (which are known as maintenance costs) including shareholders' expenses. It does not include commission. Operating expense ratio - Ratio of operating expense (including shareholders' expenses) to total premium Proprietary channels - Proprietary channels include agency and direct Protection Share - Share of protection includes annuity and health Persistency - The proportion of business retained from the business underwritten. The ratio is measured in terms of number of policies and premiums underwritten. Renewal premiums - Regular recurring premiums received after the first year Solvency ratio - Ratio of available solvency Margin to required solvency Margins Total premiums - Total received premiums during the year including first year, single and renewal premiums for individual and group business ◉ Weighted received premium (WRP) - The sum of first year premium and 10% weighted single premiums and single premium top-ups HDFC Life 165#66Disclaimer This presentation is for information purposes only and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase any securities ("Securities") of HDFC Life Insurance Company Limited ("HDFC Life" or the "Company") in India, the United States, Canada, the People's Republic of China, Japan or any other jurisdiction. This presentation is not for publication or distribution, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia). The securities of the Company may not be offered or sold in the United States in the absence of registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. The Company does not intend to register any securities in the United States. You confirm that you are either: (i) a "qualified institutional buyer" as defined in Rule 144A under the U.S. Securities Act of 1933, as amended, or (ii) outside the United States. By receiving this presentation, you are agreeing to be bound by the foregoing and below restrictions. Any failure to comply with these restrictions will constitute a violation of applicable securities laws. This presentation should not, nor should anything contained in it, form the basis of, or be relied upon in any connection with any contract or commitment whatsoever. The information contained in this presentation is strictly confidential and is intended solely for your reference and shall not be reproduced (in whole or in part), retransmitted, summarized or distributed to any other persons without Company's prior written consent. The Company may alter, modify or otherwise change in any manner the contents of this presentation, without obligation to notify you or any person of such revision or changes. This presentation may contain forward-looking statements that involve risks and uncertainties. Forward-looking statements are based on certain assumptions and expectations of future events. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Although Company believes that such forward-looking statements are based on reasonable assumptions, it can give no assurance that your expectations will be met. Representative examples of factors that could affect the accuracy of forward-looking statements include (without limitation) the condition of and changes in India's political and economic status, government policies, applicable laws, the insurance sector in India, international and domestic events having a bearing on Company's business, particularly in regard to the regulatory changes that are applicable to the life insurance sector in India, and such other factors beyond our control. You are cautioned not to place undue reliance on these forward-looking statements, which are based on knowledge, experience and current view of Company's management based on relevant facts and circumstances. The data herein with respect to HDFC Life is based on a number of assumptions, and is subject to a number of known and unknown risks, which may cause HDFC Life's actual results or performance to differ materially from any projected future results or performance expressed or implied by such statements. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside Company's control. Past performance is not a reliable indication of future performance. This presentation has been prepared by the Company. No representation, warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information and opinions in this presentation. None of Company or any of its directors, officers, employees, agents or advisers, or any of their respective affiliates, advisers or representatives, undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise and none of them shall have any liability (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. Further, nothing in this presentation should be construed as constituting legal, business, tax or financial advice or a recommendation regarding the securities. Before acting on any information you should consider the appropriateness of the information having regard to these matters, and in particular, you should seek independent financial advice. 66 HDFC Life#67Thank you Superbrands 2021 20 YEARS Protecting India with Pride HDFC Life