#1Investor Presentation - H1 FY23 शं HDFC Life Sar utha ke jiyo!#2Executive summary: H1 FY23 2 Revenue & Scale Profitability & Cost Customer & Capital New Rs. bn 37.8 41.1 CY 27.6% 26.2% CY 88% 87% Individual WRP Business Market Share 14.8% 16.1% Margin (NBM) 13th month persistency1 PY 26.4% PY 86% Renewal premium Rs (Bn.) 108.0 120.1 Rs (Bn.) 12.6 12.9 VNB Growth 21% NM* Growth 16% NM* Claim settlement ratio (FY22) Overall 99.6% Individual 98.7% Rs (Bn.) 2,044 2,249 Rs (Bn.) 6.8 6.9 CY 25 AUM Growth 7% NM* Profit After Tax (PAT) Growth 18% NM* Complaints per 10K policies² PY 29 Rs (Bn.) 330 360 CY 14.3% 14.7% Sep'22 210% 210% IEV EVOP 17.7% NA Operating exp. ratio Solvency PY 12.0% Mar'22 176% XX Pre-Merger Basis# Excludes single premium Complaints data (excluding survival and death claims) for FY22 & FY21 1. 2. * Not meaningful as previous year numbers are not comparable # Pre-Merger numbers exclude Exide Life; Post-Merger numbers include Exide Life XX Post-Merger basis# HDFC Life#3Agenda 1 Performance Snapshot 2 Our Strategy 3 Exide Life Transaction Update 4 Our approach to ESG 5 Annexures HOM 6 Life insurance in India#4Consistent, predictable, sustained performance Holistic growth Consistent track record over multiple periods New business premium Renewal premium ~2X >2x 242 1.5x 218 ~3X 113 122 80 40 FY14 FY18 FY22 FY14 FY18 FY22 Protection APE² 13.2 >2x N4X 6.2 1.6 Annuity new business VNB FY18-22 >2X FY16-20 A>2.5x FY17-21 >2x 26.8 21.9 19.2 12.8 9.2 7.4 FY16 FY17 FY18 FY20 FY21 FY22 48.7 ~5X ~7X 10.7 1.6 FY14 FY18 FY22 FY14 FY18 FY22 AUM 13M persistency³ dd9+ ~ ~ +10pp ~2X 81% 2,042 71% >2x 1,066 506 Rs bn Embedded Value¹ FY18-22 ~2X FY16-20 >2x FY17-21 >2x 300 266 207 152 125 87% 102 Mar 31, 2014 Mar 31, 2018 Mar 31, 2022 FY14 FY18 FY22 1. Including cash payout of Rs 7.3 bn for acquisition of Exide Life, but excluding Exide Life's EV of Rs 29.1 bn 2. Based on Overall APE 4 3. Excluding single premium FY16 FY17 FY18 FY20 FY21 FY22 HDFC Life#5Healthy performance across all key metrics (1/2)* Strong, sustainable growth Rs bn Strong CP volumes on the back of higher disbursements¹ 9.2% 9.3% 9.4% 10.2% Overall 8.1% mkt share Pvt. mkt 14.2% 15.5% 14.8% 14.8% 16.1% share 17% -19% 55% 66% YOY 19% 17% 16% 11% NM# growth 53.0 81.5 70.0 42.4 59.7 34.2 32.8 37.8 41.1 FY20 FY21 FY22 H1 FY23 (Pre-Merger) H1 FY23 (Post-Merger) Balanced product mix² Total APE 2% 7% 26% 16% 23% 18% 31% Total NBP 11% 11% 32% 1. Based on Credit Protect new business premium 2. Product Mix is on Post-Merger basis 3. Based on Individual APE on Post-Merger basis FY20 FY21 FY22 H1 FY23 YoY Growth Focus on diversified channel mix³ 9% 7% 6% 8% 14% 13% 14% 18% Par 19% 19% 22% 17% 15% Non Par Savings ■ULIP Protection 61% 60% 55% 57% 8% Annuity ■Group Retirals FY20 FY21 FY22 H1 FY23 ■Bancassurance ■Direct ■Agency ■Brokers and others HDFC 5 * Numbers include Exide Life metrics from April 1, 2022 onwards, prior years are not comparable # Not meaningful as previous year numbers are not comparable Life#6Healthy performance across all key metrics (2/2) 16 Improving Persistency¹ 86% 52% 88% 54% 87% 51% H1 FY23 (Post-Merger) H1 FY22 H1 FY23 (Pre-Merger) 13th 61st Strong growth in renewal premium 89.2 T H1 FY22 21% Improving persistency trends across channel and product cohorts Growth backed by consistent improvement Rs bn Steady expansion in New Business Margins 16% 27.6% 26.4% 26.2% H1 FY22 H1 FY23 (Pre-Merger) VNB Growth Stable solvency position H1 FY23 (Post-Merger) Margins continue to improve for both existing and acquired businesses Sep 30, 2022 (Post-Merger) Successfully raised Rs 20 billion of equity capital in Q2 FY23 120.1 108.0 in overall persistency 210% 210% 176% Mar 31, 2022 H1 FY23 (Pre-Merger) H1 FY23 (Post-Merger) I Sep 30, 2022 I (Pre-Merger) 1. For individual business; Excluding single premium and fully paid up policies HDFC Life#7Agenda 1 Performance Snapshot 2 Our Strategy 3 Exide Life Transaction Update 4 Our approach to ESG 5 Annexures HOM 6 Life insurance in India#8Key elements of our strategy 18 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 "Our continuous focus on technology, diversification and customer-centricity has enabled us to deliver consistent performance even in the most challenging times" HDFC Life#9Focus on profitable growth Profit Accounting Economic Profit FY20 FY21 FY22 H1 FY22 H1 FY23 (Pre-Merger) New business Margin 25.9% 26.1% 27.4% 26.4% 27.6% Rs bn H1 FY23 (Post-Merger) 26.2% Value of new business 19.2 21.9 26.8 10.9 12.6 12.9 Profit after tax (PAT) 13.0 13.6 12.1 5.8 6.8 6.9 Underwriting profits 10.9 7.3 4.41 1.3 4.7 4.5 Shareholders' surplus 2.1 6.3 7.7 4.4 2.1 2.4 29.9 32.3 34.9 14.8 Underwriting profits breakup -13.5 -19.1 -25.0 -30.5 1. Post accounting for impact of excess mortality reserve (EMR) 9 FY20 FY21 FY22 H1 FY22 35% 19.9 ■Backbook Surplus ■New Business Strain -15.2 H1 FY23 (Pre-Merger) Profitable distribution Diversified growth mix innovation leading Market- Reimagining Quality of Board and insurance management HDFC Life#10Analysis of change in IEV EVOP-25.5 EVOP1% 17.7% 12.6 11.9 300.5 VNB 1.0 Operating variances 12.4 16.6 Unwind Economic variances Dividend & Capital infusion 211.9 Adjusted Net worth (ANW) Value of in-force business (VIF) 88.6 IEV As at Mar 31, 2022 30.0 360.2 330.2 Exide Life EV 220.4 109.7 Pre-Merger IEV As at Sep 30, 2022 Operating variance continues to be positive and in line with our assumptions 1. EVOP% calculated as annualised EVOP (Embedded Value Operating Profit) to Opening EV 10 239.4 120.7 Rs bn Post-Merger IEV As at Sep 30, 2022 Profitable Diversified growth distribution mix innovation leading Market- insurance Reimagining management Board and Quality of HDFC Life#11Diversified distribution mix enabled by multiple levers "" Proprietary¹ 1.5L+ Agents ~450 Branches 48 Digital Branches² www.hdfclife.com HDFC Life App NBFCs, MFIS HDFC SALES Utkarsh Small Finance Bank Aapki Ummeed Ka Khaata Banks, SFBs, Other CAS HDFC BANK Saraswat Bank DhanlaxmiBank established 1927 HDB FINANCIAL SERVICES TATA CAPITAL CreditAccess Grameen Fullerton India Chola Brokers & Aggregators IBLUECHIP EXPERT ADVICE. EASY INVESTING Integrated since 1974 Investments Simplified policy bazaar Coverfox.com (WW) SIRVAD AXIS BANK इंडिया पोस्ट India Post pnb Housing ⭑VFS Π Ni पेमेन्ट्स बैंक Payments Bank Finance Limited Authoot MICROFIN INSURANCE BROKERS Compare. Buy. Save com 6 BajajCapital The Sara Clive Bank Ltd (A Scheduled Bark Bandhan Bank IDFC FIRST Bank b RBL BANK S Union Bank of and AU SMALL AU FINANCE BANK DCB BANK YES BANK Capital Small Finance Bank SOUTH INDIAN Bank SURYODAY A BANK OF SMILES JUJJIVAN UJUAN SMALL FINANCE BANK TJSB SAHAKARI BANK LTD. DULED BANAK MULTI-STATE IIFL HOME LOAN HeroFinCorp. BAJAJ FINANCE LIMITED TATA Motorsfinance driven by trust nabblins InsuranceDekho ROBINHOOL CE BROKER KNOWLEDGE ON YOUR STOE Probus Insurance C-NTRUM Group, Pension & International Business NPS Corporates Group Annuity (MPH/CA) 160+ Superannuation Funds Rep Office NRI - Partnerships in emerging eco-systems across Health, E-commerce, Auto, Telecom, Mutual Fund, Fintech Equity Brokers & Wealth ICICI Securities HDFC securities Fin Mapp fisdom zopper MyLoanCare.in Baat Aapke Interest Ki पे AXIS ASSET MANAGEMENT LENDINGKAT realme рау PhonePe mswipe.. turtlemint FUNDSINDIA sbi securities MOTILAL OSWAL Edelweiss Ideas create, values protect GEOJIT Investment Services ZERODHA 1. Proprietary channels include Agency, Direct and Online (Post-Merger basis) Digital Branches: Virtual branch for servicing customer requests remotely through dedicated app and webpage 11 2. Profitable distribution Diversified leading Market- Quality of growth insurance Reimagining mix innovation management Board and Angel Broking HDFC Life#12Product innovation across segments Protection Offline Plain vanilla term plans where customer gets life cover Online Cheaper compared to offline term plan Credit Protect Term insurance attached with loan Add ons New features such as spouse cover, smart exit (zero cost insurance), life stage, WOP CI/ TPD1 Protection with ULIP Provides higher coverage with market linked returns शं Savings Lumpsum endowment plans Pay for a defined premium term and get guaranteed lump sum/ Sum assured+ bonuses Guaranteed income plans Offers tax-efficient structures with short term and long term income Immediate income plans Life long participating plans which provide income from 1st month 12 Retirement Immediate annuity Pay one time and get life time income 1.Wavier of premium on critical illness, Total permanent disability 11 Profitable distribution Diversified growth mix innovation leading Market- Quality of insurance Reimagining Board and management Pension accumulation plans Save systematically and build retirement corpus (used for buying annuity) Deferred annuity Pay one time, wait for a few years and then receive life time income. Annuity rates locked at the start Regular pay deferred annuity Pay premiums regularly for 5/7 years and receive life time income. Annuity rates locked at the start HDFC Life#1350+ 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 UL 32% 26% Par 32% 29% Non par 32% 37% savings Protection 4% 8% Annuity 0% 0% 13 1. Mortality Morbidity Net Worth Longevity Interest Rate Profitable distribution Diversified leading Market- Quality of growth insurance Reimagining mix innovation management Board and 22% 15% 26% 29% 44% 35% 4% 1% HDFC 3% 20% Life Based on Individual APE for H1 FY23; Percentages may not add up due to rounding off effect. Pre-Merger basis numbers shown#14Our approach to retiral solutions 1. NPS R ■ Largest Pension Fund Manager (PFM) in Retail and Corporate NPS segment, with AUM of Rs 351 bn¹ Registered strong YoY growth in AUM of 57% during H1 FY23 2. Immediate / deferred annuity Largest player in the private sector Market share grew from 36% in Sep'21 to 39% in Sep'22 amongst all PFMs Company has over 1.25 mn customers #2 POP2 in new Corporate and Corporate Subscriber business 3. Group superannuation fund Managing funds for 160+ corporates under superannuation scheme Ranked #1 based on AUM NPS AUM Doubled in 15 months 57% 351 284 52 164 FY19 FY21 YoY growth Annuity portfolio 189 164 54 116 Rs bn 11 Profitable distribution Diversified growth mix innovation leading Market- Quality of insurance Reimagining Board and management FY22 H1 FY23 FY19 FY21 FY22 H1 FY23 HDFC 1. As on Sep 30, 2022 2. POP: Point of presence for enabling opening of accounts on a platform 14 Life#1515 Protection Direct Banca 2 Product mix across key channels¹ - Post-Merger basis Segment FY20 FY21 FY22 H1 FY23 UL 32% 27% 29% 26% I Par 18% 37% 33% 29% I Non par savings 44% 30% 33% 37% I Agency Term 4% 4% 4% 3% Annuity 2% 2% 2% 4% FUL 33% 29% 28% 18% ¡Par 14% 17% 14% 19% I Non par savings 20% 16% 27% 32% I ¡Term 4% 3% 3% 3% Online³ I !Annuity 29% 35% 28% 28% Segment ¡UL FY20 FY21 FY22 H1 FY23 12% 10% 16% 11% I Par 34% 37% 33% 39% Non par savings 40% 39% 39% 39% Term 12% 11% 10% 7% | I Annuity 3% 3% 3% 4% UL 44% 39% 46% 50% Par 1% 1% 2% 2% I Non par savings 18% 29% 30% 33% Term 37% 30% 20% 10% I Annuity 1% 2% 2% 4% Segment FY20 FY21 FY22 H1 FY23 Company UL 28% 24% 26% 21% ¦ Par 19% 34% 30% 31% Non par savings 41% 31% 33% 37% ~40% of business with policy term <=10 years; ~17% of received premium in single-pay policies for H1 FY23 Term 8% 7% 6% 4% Annuity 4% 5% 5% 6% FY20 FY21 FY22 H1 FY23 !Based on Total APE 17% 13% 14% 16% Based on NBP 27% 20% 24% 32% 1. Based on 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 Annuity FY20 FY21 FY22 H1 FY23 Based on Total APE 4% 5% 5% 7% I Based on NBP 16% 20% 20% 23% Profitable distribution Diversified leading Market- Quality of growth insurance Reimagining Board and mix innovation management HDFC Life#16Aligned to make life simpler for customers 16 1 Accelerate JOURNEY SIMPLIFICATION across channels Fast track PARTNER INTEGRATION 2 6 7 Connecting with startups through Create a digital scalable efficient Futurance¹ Architecture 3 SERVICE SIMPLIFICATION for connect and personalization DATA LABS ECOSYSTEM for decision making 4 Building resilience.. 8 9 Enable a hybrid Work From Home environment 1. Futurance: A program to collaborate with startups for harnessing cutting-edge technology 5 PLATFORMS independent buying / servicing growth Profitable mix distribution Diversified innovation leading Market- insurance Reimagining Quality of management Board and Strengthen Cyber Security for post-Covid world HDFC Life#17New in-house automated underwriting rule engine Developed inhouse automated rule engine to replace existing externally sourced rule engine Benefits 17 DEPENDENCY Complete control- No dependencies on external rule engine service provider Rλ Highly efficient, scalable & reliable КУ API Integration of APIs and third party services to improve decision making Substantial cost saving: License fee, amendment fee and maintenance fee growth Profitable mix distribution Diversified innovation leading Market- insurance Reimagining Quality of management Board and HDFC Life#18Journey Simplification Credit Bureau, ITR & EPFO Integration aiding better throughput Empowering a seamless customer onboarding journey Proposal Submission Bureau/ITR/EPFO output fetched through API ما . 85% Success metrics Financial UW by Rule Engine 25-30% Bureau is triggered for the estimated income Option for digital authentication available for ITR ping Option for EPFO trigger available for the customer Value received is passed to UW rule engine ITR documents for latest 3 financial years fetched PF passbook fetch through EPFO ☐ Financial viability is verified and for eligible case no additional requirement is raisied Aversion of risk related to fraudulent documents 18 Benefits Bureau score is received for 85% of cases Hassle free customer onboarding experience ITR document fetch successful in 25-30% of cases shared 32% overall document fetch observed Enhanced risk assessment for underwriting Reduced cancellation due to unavailability of financials with customer Offline utilization 40-45% of EPFO Improvement in overall issuance TAT Diversified Profitable growth mix distribution leading Market- Quality of insurance Reimagining innovation management Board and ◉ HDFC Life#19Strengthening underwriting and simplifying customer journey Cardiac risk assessment at home for medical underwriting Cardiac risk assessment service at home promises convenience to individuals who have to undergo medicals while applying for an HDFC Life insurance policy 19 MULTI-FUNCTIONAL SCREEN MASSAGE FOOT PEDAL TRIANGULAR REGULATOR JOYFIT BOLD SENTS السمسم JOYFIT Applicants / users step on a stepper with speed & resistance adjustments Conventional print based ECG equipment is replaced with a portable, bluetooth and mobile connected ECG equipment for real time data recording and analysis Recording is transmitted to the remote physician for review and interpretation HYDRAULIC GAS ROD RUBBER SLEEVE PLUG ■ Instead of an onsite physician, an online consultant physician is available to monitor the progress of the stress test (incl. real-time ECG) over a video call ■ The physician can talk to the site technician and the applicant / user for any instructions ▪ This service is currently live in 19 locations growth Profitable mix distribution Diversified innovation leading Market- insurance Reimagining Quality of management Board and HDFC Life#20Home medicals for NRI customers In an industry first initiative, we have now launched home medicals for our customers overseas in 21 countries 20 20 Canada 2 USA Austria Belgium Denmark UK 2 2 Hungary Germany Switzerland Netherlands France Israel Greece Dubai Oman Mexico St.Thomas 2 2 Grand Cayman St.Croix Singapore Australia growth Profitable mix distribution Diversified innovation leading Market- insurance Reimagining Quality of management Board and HDFC Life#21Governance 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 Stakeholders' Responsibility Committee Relationship Committee With Profits Committee Whistleblower Committee Investment Council Claims Review Committee Risk Management Compliance Council Council ALCO1 Note: Credit Council Grievance Management Committee Information & Cyber Security Council Disciplinary Panel for Malpractices Prevention of Sexual Harassment Product Council Board Approved Committee Product Management Committee Standalone councils Business and Innovation Technology Council Persistency Council Additional governance through Internal, Concurrent and Statutory auditors 1. Asset Liability Management Council 21 2. The above list of committees is illustrative and not exhaustive Capital Raising Committee Profitable distribution Diversified growth mix innovation leading Market- Quality of insurance Reimagining Management Board and HDFC Life#22Financial 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 FY22 H1 FY23* I Sensitivity Overall Non par 1 Overall Non par 1 Sensitivity remains range-bound on the back of calibrated risk management Scenario Interest Rate +1% Interest Rate -1% 1. VNB Margin (2.0%) (1.4%) (2.1%) 1.6% 0.8% 1.4% Comprises Non par savings (incl Annuity) plus Protection EV EV EV VNB VNB VNB Margin Margin Margin (2.5%) (2.3%) (1.4%) (2.0%) (2.2%) 1.5% 1.9% 0.7% 1.3% 0.9% EV HDFC Life * 22 22 Pre-Merger basis sensitivities shown#23Agenda 1 Performance Snapshot 2 Our Strategy 3 Exide Life Transaction Update 4 Our approach to ESG 5 Annexures HOM 6 Life insurance in India#24Exide Life Performance Snapshot: H1 FY23 1. 2. 24 Scale Profitability & Cost Customer & Capital Others Individual APE Rs bn: 3.2 Growth: 15% AUM Rs bn: 205 Growth: 9% Margins VNB (Rs bn): 0.3 NBM: 8.2% Opex ratio H1 FY23: 20.3% H1 FY22: 20.7% 13M Persistency¹ H1 FY23: 76% H1 FY22: 73% Claim Settlement Ratio FY22: 99.1% FY21: 98.5% Channel Mix² Agency: 56% Banca: 7% Broker: 25% Direct: 12% Embedded Value Renewal Premium(Rs bn) H1 FY23: 12.1 Rs bn: 30 H1 FY22: 11.5 Growth: 8% For individual business; Excluding single premium and fully paid up policies Based on Individual APE Par: Product Mix² 58% Non-par: 29% Protection: 6% 7% Solvency Sep 30, 2022: 216% Mar 31, 2022: 217% ULIP: HDFC Life#25Integration - Focus areas 25 Accelerating revenues Realizing cost savings ... Augmenting proprietary growth channels Adoption of best practices and re-aligning key result areas across teams Access to wider distribution network with focus on priority micro markets Footprint enhanced to include 90+ new locations Access to wider product portfolio for sales force Erstwhile Exide Life channels enabled to access HDFC Life products from date of merger • Multiple Exide Life products to be made available to HDFC Life by end of FY23 Enhancing customer experience and sales productivity through digital tools Digital servicing suite of HDFC Life extended to cover all erstwhile Exide Life policyholders • Optimizing nation-wide geographic presence (offices, branches, hubs) 80+ branches to be merged across geographies 1 Rationalizing overlapping/ redundant spends Driving scale benefits for integrated entity ◉▪ Embedding digital operating model at scale Aspiration to close NBM gap in FY24 HDFC Life#26Exide Life transaction timelines 26 Milestones Milestone 1: Announcement of transaction Milestone 2: Shareholders' approval for issuance of shares Milestone 3: Receipt of approvals from IRDAI and CCI for acquisition, ongoing interactions. Exide Life becomes 100% subsidiary of HDFC Life Date Completed Sep 3, 2021 Sep 29, 2021 Jan 1, 2022 Milestone 4: Approval obtained from NCLT for triggering the merger process, Jun 27, 2022 including intimations to various regulatory authorities and related NOCS Milestone 5: Completion of merger Oct 13, 2022 Completion of acquisition and merger within 14 months of announcement of transaction HDFC Life#27Agenda 1 Performance Snapshot 2 Our Strategy 3 Exide Life Transaction Update 4 Our approach to ESG 5 Annexures 6 Life insurance in India#28ESG at a Glance 28 Ethical Conduct & Governance ETHICS ESG Focus Areas Responsible Investment Diversity, Equity and Inclusion Holistic Living Sustainable Operations (DE&I) HDFC Life#29Ethical Conduct & Governance Governance structure & Compensation Framework О STANDARDS COMPLIANCE POLICIES REGULATIONS RULES Corporate governance policy Commitment to ethical business practices о Includes Corporate structure and stakeholder management Board Diversity policy Board evaluation & independence 。 Five independent directors 'Fit and Proper' as per regulation Risk management and BCM strategy accept RISK MANAGEMENT reduce transfer Enterprise risk management (ERM) framework 'Three Lines of Defense approach' Reviewed and approved by the Board mitigate avoid control Risk oversight by Board of Directors Review in multiple management forums Information/Cyber Security Information/cyber security ISO 27001:2013 and ISMS assessment program; Data Privacy Policy ① Fraud risk management Values program; Disciplinary Panel for Malpractices; Fraud monitoring initiatives Business ethics and compliances STOP 30% women as on 31st March, 2022 Performance Management System based on the principles of balanced scorecard О Remuneration policy Seeks to balance the fixed and incentive pay Disclosed in the annual report Corporate Governance Award Best Governed Company in listed segment: Large category at ICSI¹ National Awards for Excellence in Corporate Governance о 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. ICSI: Institute of Companies Secretaries of India 2. PRSH: Prevention and Redressal of Sexual Harassment 3. BRR: Business Responsibility Report 45 4. 29 5. DEI: Diversity, Equity and Inclusion AML: Anti Money Laundering Code of Conduct Whistle blower Policy PRSH² BRR³ & Stewardship Code AA COMPLIANCE 8 DO Privacy Anti Bribery & Corruption Policy Human Rights & DEI4 AML5 Policy HDFC Life#3030 30 Responsible Investment Responsible Investment Policy Objective To generate optimal risk adjusted returns over the long term RI framework RI and stewardship policy in place Applicable to all major asset classes Head of Research ensures that ESG is incorporated into overall Research and Investment process Sustainable Equity Fund What is Sustainable Equity fund & why invest in it? This fund shall seek to generate returns from investing in companies with high ESG standards and commensurate score, create value for all stakeholders with lower risks & generate sustainable long-term returns. " ESG issues covered in voting process Bolstering commitment towards Responsible Investment Became signatory to United Nations supported Principles for Responsible Investment (UN-PRI) PRI Principles for Responsible Investment Responsible Investment Governance A ESG Governance Committee at the investment team level comprises of Chief Investment Officer, Head of Fixed Income, Head of Research, Fund Manager of ESG Fund and dedicated ESG research analyst Exclusion criteria included in the RI Policy Companies engaged in the business of tobacco, alcohol, controversial weapons and gambling shall be excluded from the Sustainable Equity Fund Exclusion criteria aligned with the exclusion policy followed by Nifty 100 ESG Index HDFC Life#31Employee Engagement & Diversity, Equity and Inclusion (DEI) Special Recognition Great Places to Work о top 100 Best Places 39th amongst о Best workplaces for Women 2021- Great Place to Work Institute Avtar top 100 Places о о Best Workplaces for Women 2021 Economic Times Employee diversity, equity & inclusion Promoting DEI ally ship: leadership development, communication, strengthening policies, aligning workforce through Celebrate YOU program of the Company Celebrate YOU Brandon Hall awards - Learning Strategy, Simulation training, & Social Talent Acquisition Attracting talent Employee engagement Emotional and well being assistance program for employees and their families Doctor on Call: Unlimited free consultation E-Sparsh: Online query & grievance platform о Hybrid work model and flexi hours to attract gig workers O Family integration programs Platform for employee engagement: CEO Speaks, HDFC Life Got Talent, e-appreciation cards In-house fitness and wellness app Click2Wellness - о о 26% women employees Promoting diverse talent pool (work profiles for second career women, specially-abled) - #MyJobMyRules Launched official DEI page on our website highlighting various initiatives Gender transition surgery covered under mediclaim policy О о ○ о Robust employee referral schemes (>50%) Hire-train-deploy model through tie-up with reputed learning institutions HR tech: in-house application tracking system Training & development Career coaching and development interventions; woman mentoring Mobile learning app for self-paced learning O Training for all including employees, contractors, channel partners / Virtual product training ○ о Skill Up: Curated online training programs from reputed universities Average hours per FTE of training and development: 86 hours 1. ESOPS: Employee Stock Options 31 Talent management/retention Special programs for campus hires; Talent development interventions for leadership Career microsite, job portal Internal Career Fair for employees Long term incentive plans in the form of ESOPs¹ and cash to attract, retain and motivate good talent Elaborate succession planning for Key Managerial Personnel, critical senior roles Gender neutral Use of Dress code policy Maternity policy terms like primary and secondary caregiver instead of using terms like parents, mother/father, man/woman HDFC Life#32Holistic Living: Inclusive Growth FY22 Sector-wise budget break-up 3% Customer Highlights Claim settlement ratio (individual & group) 99.6% Customer Satisfaction Score for March'22 88.9 % Persistency ratio (13th month) 87% (excluding single premium and fully paid up policies) COVID claims (net) Rs. 818 crore, Count 15,293 CSR Numbers Number of lives covered 5.4 crore Rural sector 1,89,147 Social sector 1,00,87,909 MFI lives covered under CP 3,14,55,858 States and UT's covered 23 21% 24% 52% ■ Education and Livelihood ■ Health care and Sanitation ■ Environmental Sustainability ■ Others Sustainable Development Goals covered 12 CSR Spends Rs. 17.4 crore CSR beneficiaries* 4.6 lakh |32 *CSR beneficiaries include 1.60 lakh beneficiaries impacted in completed projects and 3.07 lakh beneficiaries from on-going projects HDFC Life#33Holistic Living: Delivering superior customer experience 33 1. Customer Centricity Journey simplification - frictionless sales and service Simplifying buying journeys through platforms like LifeEasy (online term purchase) Online claim processing for eligible customers via EasyClaims platform Contactless services- new normal OCR: Optical Character Recognition Document simplification & elimination 0 OCR: Enabling digital document submission and verification Straight through processing of maturity payouts for verified accounts Leveraging advanced technologies for personalization and better customer experience (CX) NEO - Cognitive bots policy queries answered within 2-3 clicks Personalization - Pre-approved sum assured for customers based on risk profile Digital Life Certificate for collecting survival proof from senior citizens Contactless branches by leveraging face recognition technology Customer Satisfaction Score (%) as on 30th September 2022 - 91.1 HDFC Life#34Sustainable Operations 34 Energy and water 。 Since 2014 only 3 or 5 star rating air - conditioners used 。 94% of branches use LED based lighting system o Use of sensor based urinals and water taps o Total purchase of energy from renewable sources: 2,39,788 kWh during FY 2021-22 25 new water purifiers installed in FY 2021-22 to replace bottled drinking water De-carbonization roadmap and way forward Key initiatives & action points for FY23: 。 TCFD (Task Force on Climate-Related Financial Disclosures) 。 SBTI (Science Based Targets initiative) 。 Carbon neutrality strategy & roadmap Digitization - Reduction of Paper Usage Introduction of E-business cards & ID cards О О Online /e-forms for customers о Annual report FY20 & FY21 digitally communicated O Demat i.e. digital policy accounts for 38% of our new business Bio-diversity 11 city forests created using Miyawaki method; 69,603 trees planted in total (27 city forests in total till date) GHG inventory o Scope 1 emissions CO2e o Scope 2 emissions ton. CO2e o Scope 3 emissions CO2e - 63.33 met. ton. 10,134.62 met. 746.38 met. ton. о Waste management RECYCLE REUSE REDUCE 25,850 Kgs of e-waste recycled/ refurbished/disposed in FY22 ○ 301.5 Kg of paper cups & paper disposed for recycling FY 2021-22 о No single-use plastics ☐ Bio-degradable garbage bags Cafeteria with reusable plates, cutlery, wooden stirrers etc. Procurement of plastic water bottles discontinued at Pan-India locations HDFC Life#35Agenda 1 Performance Snapshot 2 Our Strategy 3 Exide Life Transaction Update 4 Our approach to ESG 5 Annexures 6 Life insurance in India#36Improvement in overall persistency trends - Pre-Merger basis¹ Across key channels (%) 91 82 76 Agency 62 67 60 Across key segments (%) 90 82 75 86 76 71 49 64 53 53 90 90 83 70 0 63 56 Banca Direct ■13th month 25th month 37th month 49th month 61st month 81 69 19 68 65 61 59 48 Savings (Traditional) Savings (UL) 94 44 88 82 76 70 10 Protection ■13th month ■25th month ■37th month ■49th month ■61st month 1. For individual business; Excluding single premium and fully paid up policies 36 CY (H1 FY23) 88 79 72 64 54 86 Company PY (H1 FY22) 76 66 63 52 62 Company HDFC Life#37Persistency trends for HDFC Life Across key channels (%) 88 77 70 61 51 Agency Across key segments (%) 89 80 37 14 71 59 53 Savings (Traditional) 86 76 71 64 53 Banca ■13th month 25th month 80 69 68 8 65 55 48 - Post-Merger basis¹ 89 82 69 69 62 62 53 Direct 37th month 49th month 61st month 93 85 79 76 69 69 Savings (UL) Protection ■13th month ■25th month ■37th month ■49th month ■61st month 88 87 CY (H1 FY23) 77 70 70 Company 63 PY (H1 FY22) 51 51 86 76 66 63 52 Company HDFC 1. For individual business; Excluding single premium and fully paid up policies. Previous year numbers without Exide life business, hence numbers are not comparable Life#38Improving VNB trajectory 16% 1.4 0.5 0.3 12.9 12.6 1.2 0.4 10.9 H1 FY22 Impact of higher APE Change in New Business Fixed cost assumptions Profilę absorption H1 FY23 (Pre-Merger) Exide NBM% 26.4% 38 -0.8% 3.1% VNB Growth -1.1% 27.6% 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 H1 FY23 (Post-Merger) 26.2% Rs bn HDFC Life#39Sensitivity analysis - H1 FY23 (Pre-Merger basis) Analysis based on key metrics Scenario Change in Change in VNB Margin 1 % Change in EV Increase by 1% -1.4% -2.3% Reference rate Decrease by 1% 0.7% 1.9% Equity Market movement Decrease by 10% -0.2% -1.4% Increase by 10% -0.5% -0.4% Persistency (Lapse rates) Decrease by 10% 0.5% 0.4% Increase by 10% -0.5% -0.8% Maintenance expenses Decrease by 10% 0.5% 0.8% Increase by 10% -4.2% ΝΑ Acquisition Expenses Decrease by 10% 4.2% ΝΑ Increase by 5% -1.5% -1.0% Mortality/Morbidity Tax rate² Decrease by 5% 1.5% 1.0% Increased to 25% -5.0% -8.4% 39 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#40Capital position 40 40 201% 184% 210% 139.8 176% 40.1 97.7 94.3 14.3 24.0 33.2 70.8 27.8 13.1 23.4 19.2 38.5 46.9 Mar 31, 2020 Mar 31, 2021 66.4 55.6 Mar 31, 2022 ASM1 RSM @100% Incremental RSM @150% Surplus Capital Successfully raised Rs 20 billion of equity share capital in H1 FY23 1. ASM represents Available solvency margin and RSM represents Required solvency margin Sep 30, 2022 (Post-Merger) Solvency margin Rs bn HDFC Life#41Assets under management Debt: Equity 62:38 71:29 64:36 68:32 UL:Traditional 50:50 43:57 43:57 36:64 1% 37% NM* 17% 2,249 2,042 1,738 1,272 Mar 31, 2020 Mar 31, 2021 Mar 31, 2022 YoY Growth 30th Sep 2022 (Post-Merger Basis) Over 99% of debt investments in Government bonds and AAA rated securities as on September 30, 2022 * Not meaningful as previous year numbers are not comparable 41 Rs bn Actuarial Financial ESG HDFC Life#42Agenda 1 Performance Snapshot 2 Our Strategy 3 Exide Life Transaction Update 4 Our approach to ESG 5 Annexures 6 Life insurance in India#4343 2020 69.3 2040 Hong Kong Taiwan Singapore 14.0% 7.6% Japan 5.8% Malaysia 4.0% 3.4% 3.2% 2.4% Thailand 8,983 Growth opportunity: Under-penetration and favorable demographics 19.2% 1 Life Insurance penetration ¹ (FY 2021) Life Insurance density US$ 2 (FY 2021) Life expectancy (Years) India China Hong Kong Singapore Taiwan 4,528 3,861 2,329 415 244 241 59 50 Japan Malaysia 1.4 1.6 1.7 76.1 7% 11% 17% 73.1 2060 Population composition (bn) 58% 61% 60% 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) 35% 28% 23% 2020 2040 2060 Less than 20 years 20-64 years ■65 years and above Thailand 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#44Low levels of penetration 1.7 mn 172 mn 68 mn - Life protection 83.0% Protection gap 2 (2019) 76.0% 74.0% 71.0% 70.0% Urban Working Population Addressable Market Annual Policy Sales (excl blue collared) Only 1 out of 40 people (2.5%) who can India afford it, is buying a policy every year¹ 24 17 Even within the current set, Sum Assured as a multiple of Income is <1x 12 3. Kotak institutional equities 44 1. Goldman Sachs Report, March 2019 2. Swiss Re (Based on respective financial year of the countries) Indonesia Malaysia Thailand China Japan Singapore 61.0% 55.0% 55.0% 54.0% 41.0% South Korea Trend of retail loans 3 (Rs Tn.) 34 FY12 FY14 FY16 FY18 FY20 FY22 53 44 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 Retail credit has grown at a CAGR of 16% 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#45Macro opportunity - Retiral solutions India's pension market is under-penetrated at 9.3% of GDP 21.2 9.3 54.3 50.6 96.8 131.7 India Japan South Africa Hong Kong USA Australia Elderly population is expected to almost triple by 2060 Ageing population 7% 11% 17% 67% 68% 66% 26% 21% 17% 2020 2040 2060 Age <15 Yrs Age 15-64 Yrs Age >64 Yrs Improvements in life expectancy will lead to an average post retirement period of 20 years Life expectancy at age 60 19 18 18 17 17 16 15 20 20 1995-2000 2005-10 2015-20 2030-35E 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 HDFC 45 Source: Milliman Asia Retirement Report 2017; Survey by NSSO, Ministry of statistics and Programme implementation Crisil PFRDA, Census of India, UN Population Estimates Life#46Government bond auctions Government Bonds - Tenorwise Issuance 100% 90% 80% 70% 65% 62% 65% 65% 71% 73% 72% 73% 60% 79% 50% 40% 30% 20% 35% 38% 35% 35% 29% 27% 28% 27% 10% 21% 0% FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 H1FY23 |<=15yrs 3,86,000 3,66,500 3,73,525 4,97,579 3,82,941 4,44,000 10,01,835 8,48,000 5,92,000 ■>15yrs Total 2,06,000 2,25,000 1,54,520 1,80,529 2,04,000 2,38,000 2,65,575 3,31,000 2,21,000 5,92,000 5,91,500 5,28,045 6,78,109 5,86,941 6,82,000 12,67,410 11,79,000 8,13,000 Auction of >15 year maturity bonds has been ~25-30% on an average facilitates writing annuity business at scale Source: CCIL & National Statistics Office, Union Budget, RBI 46 Rs cr HDFC Life#47Life Insurance: A preferred savings instrument Household savings composition Financial savings mix 22% 18% 20% 22% 3% 8% 12% 15% 22% 19% 18% 19% 23% 47% 17% 68% 65% 60% 17% 17% 32% FY13 40% 35% 67% 56% 50% 53% 38% FY16 FY19 FY21 ■Financial savings ■Physical savings Household savings as % of GDP FY13 FY16 ■Currency & deposits Life insurance 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 Source: DBIE-RBI Statistics, RBI Annual Report, Economic Survey, CSO, www.pmjdy.gov.in 47 FY19 FY22 ■Provident/Pension fund ■ Others HDFC Life#4848 188 Industry new business trends¹ Sensex Private Players ■LIC Individual WRP in Rs bn 288 304 292 285 273 262 230 200208 227 214 175 178 172 452 420 401 357 551 325 315 305 287 291 278 245 255 148 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 H1 FY23 Private players Market share 52% 46% 37% 38% 38% 49% 52% 54% 56% 58% 57% 60% 63% 63% Growth % Private 7% -20% -24% 2% -3% 16% 14% 26% 24% 12% 5% 8% 22% 21% 29% 4% 11% -4% -2% -27% 3% 15% 13% 5% 8% -3% 7% 15% LIC 17% -9% -5% -2% -3% -11% 8% 21% 19% 9% 6% 3% 16% 19% Overall Private sector remained at higher market share than LIC FY16 onwards Amongst private insurers, insurers with a strong bancassurance platform continue to gain market share 1.Based on Individual Weighted Received Premium (WRP) Source: IRDAI and Life Insurance Council Sensex HDFC Life#49Private industry: Product and distribution mix 1 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% 60% 9% 10% 10% 12% 14% 16% 16% 15% 56% 3% 10% 20% 3% 3% 3% 20 3% 3% 3% 3% 3% 3% 3% 46% 43% 44% 39% 40% 47% 52% 54% 54% 55% 53% 55% 55% 36% 32% 30% 28% 25% 25% 23% 23% FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY 22 ■ 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 49 49 1. Based on Overall WRP (Individual and Group); 2. Based on Individual New business premia for all private players Source: IRDAI and Life Insurance Council HDFC Life#50Appendix HDFC Life#51Financial 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) 1. Comprises share capital, share premium and accumulated profits/(losses) 51 H1 FY23 (Pre-Merger) H1 FY22 Growth FY22 FY21 H1 FY23 (Post-Merger) Rs bn. 109.2 103.6 5% 241.5 201.1 113.2 108.0 89.2 21% 218.1 184.8 120.1 217.2 192.9 13% 459.6 385.8 231.9 37.9 34.3 11% 81.7 71.2 41.1 45.5 41.1 11% 97.6 83.7 49.1 55.1 53.6 3% 125.1 100.3 55.6 6.8 5.8 18% 12.1 13.6 6.9 4.7 1.3 257% 4.4 7.3 4.5 2.1 4.4 -13% 7.7 6.3 2.4 3.6 4.1 -12% 4.1 3.6 2,043.9 1,912.1 7% 2,041.7 1,738.4 2249.1 330.2 287.0 15% 300.5 266.2 360.2 (1) 177.5 86.9 104% 154.0 84.3 122.8 28.3 20.0 41% 54.1 39.8 28.5 376.6 409.1 -8% 915.3 982.0 434.7 HDFC Life#52Financial and operational snapshot (2/2) H1 FY23 H1 FY23 H1 FY22 FY22 FY21 (Pre-Merger) Overall New Business Margins (post overrun) Operating Return on EV Operating Expenses / Total Premium 27.6% 26.4% 27.4% 26.1% (Post-Merger) 26.2% 17.7% 16.1% 16.6% 18.5% ΝΑ 14.3% 12.0% 12.3% 12.0% 14.7% Total Expenses (OpEx + Commission) / Total Premium 18.5% 16.3% 16.5% 16.4% 19.3% Return on Equity (1) ΝΑ 13.5% 10.1% 17.6% 12.4% Solvency Ratio 210% 190% 176% Persistency (13M / 61M) (2) 88%/54% 86%/52% 87%/54% 201% 85%/49% 210% 87%/51% Market Share (%) - Individual WRP - Group New Business - Total New Business Business Mix (%) 14.8% 16.2% 14.8% 15.5% 16.1% 22.8% 28.1% 27.9% 19.1% 22.3% 21.0% 27.6% 21.5% 23.0% 19.8% - Product (UL/Non par savings/Annuity/Non par protection/Par) (3) - Indl Distribution (CA/Agency/Broker/Direct) (3) - Total Distribution (CA/Agency/Broker/Direct/Group) (4) - Share of protection business (Based on Indl APE) 23/37/7/4/29 61/15/7/17 24/6/2/16/50 4.3% - Share of protection business (Based on Overall APE) 15.5% 26/32/5/7/30 60/13/6/21 23/6/2/17/52 6.6% 13.9% 26/33/5/6/30 24/31/5/7/34 21/37/6/4/31 60/14/6/19 61/13/7/19 57/18/8/17 24/6/2/16/52 25/6/2/17/50 24/8/3/16/49 5.6% 6.8% 4.4% 13.6% 12.8% 15.6% - Share of protection business (Based on NBP) 32.3% 21.4% 24.0% 19.6% 31.7% 1. Calculated using net profit and average net worth for the period (Net worth comprises Share capital, Share premium and Accumulated profits). Opening networth for FY23 has been adjusted in line with the scheme of merger approved by the court 2. For individual business, excluding single premium and fully paid up policies 3. Based on individual APE. UL: Unit Linked, Trad: Traditional, Par: Participating & CA: Corporate Agents. Percentages are rounded off HDFC Life 4. 52 Based on total new business premium including group. Percentages are rounded off#53Revenue and Profit & Loss A/c Revenue A/c₁ H1 FY23 H1 FY22 (Post-Merger) Profit and Loss A/c¹ H1 FY23 (Post-Merger) Rs bn H1 FY22 Premium earned 233.3 192.9 ¡ Income I Reinsurance ceded (3.7) (3.0)| I ! Interest and dividend income 2.9 2.5! I Income from Investments 64.8 158.4 I Net profit/(loss) on sale (0.1) 2.1 I I ! Other Income 1.1 0.5 I ¡Transfer from Shareholders' Account Transfer from Policyholders' Account 4.7 3.3 ¦ 0.2 2.0 I Other Income Total Income 295.7 350.7 Commissions Expenses 10.8 8.1 Total 7.5 7.9 I 34.0 23.0 Outgoings I I I GST on UL charges 1.8 1.8 Transfer to Policyholders' Account 0.2 2.0 I I I Provision for taxation 0.4 0.1 I Expenses 0.3 0.2 I Provision for diminution in value of investments 0.3 (2.4) I Interest on convertible debentures 0.3 0.2¦ Benefits paid 181.8 134.7 I I Provision for diminution in value of investments (0.2) (0.3)¦ Change in valuation reserve 54.0 176.6 I I i Provision for Taxation 0.0 0.1 i Bonuses Paid Total Outgoings 8.1 6.6 291.1 348.5 Total 0.6 2.1 Surplus ! Transfer to Shareholders' Account 4.6 2.2 Profit for the year as per P&L Statement 6.9 5.8 4.7 3.31 I Funds for future appropriation Par (0.1) (1.0) Total Appropriations 4.6 2.2 1. Numbers may not add up due to rounding off effect HDFC Life 53#54Balance sheet I Shareholders' funds Share capital (including Share premium) Accumulated profits Fair value change Sub total ¦ Borrowings I Policyholders' funds Fair value change Policy Liabilities Sep 30, 2022 (Post-Merger) Sep 30, 2021 March 31, 2022 Rs bn 58.6 25.9 86.7 I 64.2 61.0 67.3 I 0.6 2.3 0.8 123.5 89.2 154.8 9.5 6.0 6.0 19.9 30.0 1,277.4 947.9 21.7 1,043.4 I I Provision for Linked Liabilities 773.6 789.8 765.2 Funds for discontinued policies 41.8 41.8 41.0 Sub total 2,112.7 1,809.4 1,871.3 Funds for future appropriation (Par) 13.3 8.9 I 9.4 Total Source of funds 2259.0 1,913.5 2,041.6 I Shareholders' investment 124.8 86.3 152.4 I Policyholders' investments: Non-linked 1,308.9 994.3 1,083.1 | Policyholders' investments: Linked 815.4 831.5 806.2 I Loans 14.4 5.4 Fixed assets 3.6 3.3 I Net current assets (8.1) (7.4) (10.0) Total Application of funds 2,259.0 1,913.5 2,041.6 Note: Numbers may not add up due to rounding off effect 54 6.4 3.4 HDFC Life#55Segment wise average term and age - Pre-Merger basis¹ Average Policy Term excluding annuity (Yrs) H1 FY23: 23 (H1 FY22: 23) UL 12 12 39 41 Par 17 Non-par Health 222 12 Non-par Savings 12 33 Non-par Protection 38 Non-par Pension 14 12 H1 FY23 H1 FY22 Average Customer Age excluding annuity (Yrs) H1 FY23: 35 (H1 FY22: 36) 37 UL 36 33 Par 33 32 Non-par Health 32 33 22 Non-par Savings 33 38 37 Non-par Protection 33 34 34 44 Non-par Pension 55 54 55 H1 FY23 H1 FY22 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 55 1. Basis individual new business policies (excluding annuity) HDFC Life#56Summary of Milliman report on our ALM approach - FY20 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 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 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 HDFC 1. Opinion issued by Milliman Advisors LLP on ALM strategy (for non par business) based on FY20 disclosures 56 Life#5744 57 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#58Indian 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. 58 HDFC Life#59Embedded Value: Economic assumptions (Post-Merger Basis) 1 Years Forward rates % Spot rates % As at Sep 30, 2021 As at Sep 30, 2022 As at Sep 30, 2021 As at Sep 30, 2022 1 3.95 6.66 3.87 6.45 2 5.17 7.49 4.45 6.84 3 6.02 7.74 4.92 7.04 4 6.68 7.78 5.31 7.15 5 7.17 7.75 5.63 7.22 10 10 8.19 7.61 6.63 7.30 15 8.10 7.65 7.04 7.31 20 7.78 7.75 7.18 7.34 25 7.49 7.88 7.21 7.38 30 7.28 7.98 7.19 7.42 59 1. Forward rates are annualised and Spot rates are continuous HDFC Life#60Glossary (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 HDFC 60 60 Life#61◉ ◉ ■ ◉ ◉ 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 10 61 Life#62Disclaimer 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. 62 62 HDFC Life#63Thank You 21 YEARS Protecting India with Pride ◉ HDFC Life