#1FASHION HOUSE Investor Presentation - Q1 FY22 FASHION i ◉ HDFC Life Sar utha ke jiyo!#2Executive summary: Q1 FY22 Revenue trends Individual WRP HDFC Life 22% growth% Industry 16% $ Individual WRP Rank Market share 2 17.8% Profitability New Business Margin (%) Q1 FY22 26.2% Q1 FY21 24.3% FY21 26.1% Rs bn 4.1 VNB growth 40% Claims ■ Settled over 70,000 claims in Q1. Gross and net claims provided for amounted to Rs 16 bn and Rs 10 bn respectively ■ Peak claims in Wave 2 (Q1 FY22) at 3-4X of the peak claim volumes in Wave 1 (Q3 FY21) + Renewal premium Rs bn 3.0 growth 20% (₹) PAT growth -33% Reserves as on Mar 31, 2021 were sufficient to cover claims received in Q1 % Q1 FY22 90% Jun 30 203% 13M Persistency Solvency¹ (2021) Q1 FY21 87% Mar 31 201% Excess mortality reserve (EMR) of Rs 7 bn created based on current expectation of extra claims to be received in future Protection/Annuity 1. 2 Annuity growth% HDFC Life 61% Industry 22% Credit protect growth% Q1 FY22 204% Q1 FY21 -74% Excludes impact of proposed final dividend of Rs 4.1 bn, to be paid in Q2 FY22 (subject to shareholders' approval) HDFC Life#31 Performance Snapshot 2 Our Strategy 3 Managing Covid-19 4 Customer Centricity 5 Annexures 6 India Life Insurance Agenda#4Performance Snapshot Our Strategy Managing Covid-19 Customer Centricity Annexures India Life Insurance 1 2016 10000 1000 25314 3541.68 017 2018 2019 2020 2021 2022 2023 2023 10 Performance Snapshot 2013 Onte 2018 2019 2020 2021 2022 578744#5Demonstrating resilience in the current environment (1/2) Steady Individual WRP trends Mkt share 17.5% Growth Strong, sustainable growth¹ 18.5% 17.8% Growth 63% -19% 22% Q1 FY22 22% HDFC Life Pvt sector Industry 26% 16% 2 yr CAGR -1% -1% -2% 13.2 13.1 10.7 3 yr CAGR 17% 6% 3% Q1 FY20 Q1 FY21 Q1 FY22 Balanced product mix Individual APE 5 27% 5% 8% 29% 32% Par Non Par Savings ULIP Non Par Protection Continue to maintain balanced product portfolio 61% growth in annuity (individual + group) 1. Based on Individual WRP; 2. Based on Credit Protect NBP Annuity Rs bn Improvement in CP² volumes on the back of higher disbursements 204% 9.2 -74% 7.3 2.4 Q1 FY20 Q1 FY21 Q1 FY22 YoY Growth HDFC Life#6Pending#7Performance Snapshot Our Strategy Managing Covid-19 Customer Centricity Annexures India Life Insurance 2 Our Strategy#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 Q1 FY21 Q1 FY22 New business Margin 24.6% 25.9% 26.1% 24.3% 26.2% Value of new business 15.4 19.2 21.9 2.9 4.1 Profit after tax (PAT) 12.8 13.0 13.6 4.5 3.0 Underwriting profits 9.0 10.9 7.3 3.5 0.42 Shareholders' surplus 3.8 2.11 6.3 1.0 2.6 32.3 29.9 25.5 8.8 6.5 Underwriting profits breakup -5.4 -6.1 -16.5 -19.1 -25.0 Lower due to additional claims reserves Rs bn growth Profitable Diversified distribution mix leading Market- Reimagining Quality of insurance innovation management Board and FY19 FY20 FY21 Q1 FY21 Q1 FY22 ■Backbook Surplus ■New Business Strain HDFC 1. FY20 shareholder surplus: Post accounting for impact of Yes Bank AT1 bonds write-off 2. Q1 FY22 underwriting profits: Post accounting for impact of excess mortality reserve (EMR) of Rs 7 bn Life 9#10Analysis of change in IEV1 10 Pre-EMR1 EVOP: 10.3 EVOP2% 16.5% 5.5 266.2 4.1 0.7 5.5 1.8 0.5 Unwind VNB Operating variances³ Excess mortality Economic variances ESOP exercises reserve 176.3 89.8 IEV at Mar 31, 2021 Post-EMR EVOP1% 14.4% Adjusted Net worth (ANW) Value of in-force business (VIF) Excess claims received in Q1 FY22 absorbed by the reserve created at the start of the financial year Additional reserve of Rs 7 bn created for expected claims intimation 1. EMR: Excess mortality reserve 2. EVOP% calculated as annualised EVOP (Embedded Value Operating Profit) to Opening EV 3. Mortality variance: 0.03, Persistency variance: 0.5, Expenses and Others: 0.2 273.3 183.4 89.9 Rs bn IEV at Jun 30, 2021 growth Profitable distribution mix Diversified leading Market- insurance Reimagining Quality of innovation management Board and HDFC Life#11Diversified distribution mix enabled by multiple levers Enhancing and expanding proprietary¹ channels share increased from 32% in FY21 to 38% in Q1 FY22 Strong partnerships HDFC BANK We understand your world Tapping new generation of customers through Online channel Expanding geographical reach via Online channel Engage-Enable-Earn Agency Life Focus on building a skilled and structurally solid Agency channel along with increasing agent productivity Leveraging analytics for upsell and cross-sell via Direct channel b RBL BANK Chola Bandhan Bank YES Saraswat Bank The Blue Bark Ltd (AB TATA CAPITAL pnb Housing Finance Limited Utkarsh Small Finance Bank Aapki Ummeed Ka Khaata HDFC securities BAJAJ FINANCE LIMITED JUJJIVAN UJJIVAN SMALL FINANCE BANK Better Banking. Better Living. Integrated Insurance Simplified IBLUECHIP ROBINHOOD INSURANCE BROKER KNOWLEDGE ON YOUR SIDE EXPERT ADVICE. EASY INVESTING. AXIS BANK SURYODAY A BANK OF SMILES Capital Small Finance Bank ¦¦¦ BANK equitas Small Finance Bank HDB FINANCIAL SERVICES IDFC FIRST Bank Bajaj Capital NWEALTH P Probus Insurance Apollo Health and Lifestyle Ltd realme payसा Emerging ecosystem HOME CREDIT InsuranceDekho fisdom Paytm Clix LENDINGKAT MARUTI SUZUKI Justdial Capital AXIS ASSET MANAGEMENT 1. Proprietary channels include Agency, Direct and Online 11 TVSCREDIT ICICI Securities G GEOJIT 250+ traditional partners New Partnerships: ICICI Securities and TVS Credit Profitable distribution Diversified growth mix innovation leading Market- Quality of insurance Reimagining management Board and HDFC Life#12Bancassurance powered by technology, partner engagement and people İnsta Tech enablement Insta mobility enabling front-line to generate leads and close sales from any location Mix MSD G2 Insta Insta Insta Verify FR INSTAIN sure ■ Document elimination for low-risk segments Cloud Telephony ■ Analytics driven upsell, cross-sell and need-based selling ■ Cloud based customer calling solution for sales 12 Insta Quote ■ One stop solution for generating illustration Partner engagement InstaPlan Platform to engage across bank's hierarchy JOY of Giving ■ Joint CSR initiatives that strengthen relationships Spread the smile Upskilling workforce ■ Learning on the go: mobile nuggets for skill enhancement TnstA ■ Virtual assistant for answering customer/sales queries #My Resolution For A Secure Future Life insurance education and awareness campaigns Y UNite Comprehensive engagement and training programs for sales teams - Tips from InsurExpert InsurExpert product and process knowledge series Geared to tap growing potential of Indian banking ecosystem Profitable distribution Diversified growth mix innovation leading Market- Quality of insurance Reimagining management Board and HDFC Life#13Pending#14Pending#15Our approach to retiral solutions 1. NPS Opportunity to grow the retiral corpus¹ by 3x between FY21-25 Retiral corpus as a % of total AUM² has increased from 19% in FY17 to 30% in Q1 FY22 2. Individual income plans 3 R Ranked #1 in Retail and Corporate NPS segment, with AUM of Rs 186.7 bn Registered strong AUM growth of 87% in Q1 FY22 3. Immediate / deferred annuity ■ Largest player in the private sector ■ Servicing 130+ corporates and >5,000 lives covered in Q1 FY22 Providing long term retiral solutions Catering across age brackets & premium frequencies 4. Group superannuation fund Managing funds for 150+ corporates under superannuation scheme 2. 15 3. 123 1. NPS AUM FY17-21 CAGR: 94% Annuity portfolio FY17-21 CAGR: 72% Retiral corpus¹ Rs bn FY17-21 CAGR: 33% 546 593 187 164 116 129 287 12 52 13 54 176 FY17 FY19 FY21 Q1 FY22 FY17 FY19 FY21 Q1 FY22 FY17 FY19 FY21 Q1 FY22 Includes NPS, Annuity, Group superannuation fund and long term variant of Sanchay Plus and Sanchay Par Advantage AUM includes HDFC Life and HDFC Pension AUM Comprises long term income and life long tenure options offered in Sanchay Plus and Sanchay Par Advantage Profitable distribution Diversified growth mix innovation leading Market- Quality of insurance Reimagining Board and management HDFC Life#16Our protection philosophy Protection is a multi-decade opportunity that we plan to address prudently with continued innovation Demand side considerations Supply side considerations Our Focus Areas Strengthening underwriting practices and use of deep learning underwriting models ✓ Huge protection gap and under-penetration Customers valuing brand, onboarding experience and track record, apart from the price ✓ Adverse mortality experience Recalibration by reinsurers Need for calibrated underwriting ✓ Sustaining robust claim settlement ratio Insurers moving beyond top 10 cities and salaried segment all Continue to address protection opportunity through group platform (Credit Life) apart from retail business Product innovation catering to varying customer needs Leveraging available market & industry platforms e.g., central medical repository for faster turnaround and greater underwriting precision 16 Profitable growth mix distribution Diversified innovation leading Market- Quality of insurance Reimagining management Board and HDFC Life#17Multi-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 17 Distribution partners Adherence to best practices and continuous monitoring of risk Profitable distribution Diversified growth leading Market- Quality of insurance Reimagining mix innovation management Board and HDFC Life#18Protection Direct Banca 2 Product mix across key channels¹ Segment FY19 FY20 FY21 Q1 FY22 UL 64% 32% 27% 30% I Par 13% 18% 37% 34% I Non par savings 17% 44% 30% 29% Term 4% 4% 4% 5% Annuity 3% 2% 2% 2% ¡UL 50% 33% 29% 27% ¡Par 8% 14% 17% 13% I Non par savings 12% 20% 16% 22% I ¡Term 6% 4% 3% 4% !Annuity 24% 29% 35% 34% Company FY19 FY20 FY21 Q1 FY22 Basis APE 17% 17% 13% 16% Basis NBP 27% 27% 20% 22% L Online3 Agency Segment FY19 FY20 FY21 Q1 FY22 ¦UL 55% 28% 24% 27% Par 18% 19% 34% 29% Non par savings 15% 41% 31% 32% Term 7% 8% 7% 8% 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 18 Annuity Segment FY19 FY20 FY21 Q1 FY22 ¡UL 26% 12% 10% 13% | Par 40% 34% 37% 29% Non par savings 17% 40% 39% 41% Term 12% 12% 11% 13% Annuity 5% 3% 3% 3% UL 62% 44% 39% 39% Par 2% 1% 1% 1% I Non par savings 1% 18% 29% 29% Term 35% 37% 30% 29% I Annuity 1% 1% 2% 2% FY19 FY20 FY21 Q1 FY22 Basis APE 4% 4% 5% 6% I Basis NBP 17% 16% 20% 26% HDFC Life Profitable growth mix distribution Diversified leading Market- Quality of insurance Reimagining Board and innovation management#19Aligned to make life simpler for the customers in a turbulent environment 19 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#20Journey Simplification - Enabling pre and post sales efficiency InstaMix Home Life Solutions 20 20 HDFC Life Insta Quote o Sanchay Maximiser ique solution with aranteed yearly me and high lump maturity benefit o My Own Mix Plan Presentation o Single Plan Presentation. A unique combination wealth creation, life cover & cancer cover. Logout y Own Mix c HDFC Life Sarutha kejujo! InstaPLAN Select your plans to get started Protection Plans Corona kavach & Term Combi Plan BANCAWON PREMIER LEAGUE 2020 Bonus Runs - Score between 11th to 20th August Activate 90% of Type 3A & 80% of Type 3BSP and score: 6 runs (Chakkal) on achieving target for both segments; 4 runs (Chauka!) on achieving target for at least 1 segment FLS with 0% overall SP Activation till 20th August gets negative 2 runs (Hit Wicket!) Illustration- FLS "A" has 10 SPS mapped to him. 2 of them are Type 3A & rest 8 SPs are Type 3B. For 6 runs-"A" must activate 2 Type 3A & 7 Type 3B SPs For 4 runs- "A" must activate either 2 Type 3A SPs or 7 Type 3B SP Happy Activation!! "Kund of so the largeunter "Min 15K prem HDFC Life Sarutha kejujo! ₹ Savings & Investment Plans Retirement Plan Plans Bank Rhythm Sales Support Message Control Call Activity Children's Plans ULIP Plans + Bank Meetings My Day Coming Soon SMP Summary + growth Profitable mix distribution Diversified innovation leading Market- insurance Reimagining Quality of management Board and InstaMix Integrated seamless journey Pre approved popular plan combos InstaQuote Offline quote calculator for sales 15,000+ daily quote generation InstaPlan Digital tool for sales activity management 5,000+ active users HDFC Life#21Pending#22Governance framework Board Committees Management Committees/Councils 22 22 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 Compliance Risk Management Investment Council Claims Review Committee Council Council ALCO Credit Council Grievance Management Committee Information & Cyber Security Council Product Council Disciplinary Panel for Malpractices Prevention of Sexual Harassment Standalone councils Business and Innovation Technology Council Persistency Council Capital Raising Committee Profitable growth mix distribution Diversified innovation leading Market- insurance Reimagining Management Board and Quality of HDFC Additional governance through Internal, Concurrent and Statutory auditors Life The above list of committees is illustrative and not exhaustive#23Financial 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 Q1 FY22 I Sensitivity Overall Non par 1 Overall Non par 1 Sensitivity remains range-bound on the back of calibrated risk management Scenario EV Interest Rate +1% Interest Rate -1% (2.2%) 1.6% VNB Margin (1.5%) (2.3%) 0.9% 1.2% EV EV VNB VNB VNB Margin Margin Margin (2.9%) (2.2%) (1.6%) (2.5%) (2.9%) 1.8% 1.9% 1.1% 2.1% EV 2.0% 23 1. Comprises Non par savings (incl Annuity) plus Protection HDFC Life#24Pending#25Pending#26Pending#27Performance Snapshot Our Strategy Managing Covid-19 Customer Centricity Annexures India Life Insurance 4 Customer Centricity 10#28Pending#29Pending#30Individual persistency for key channels and segments¹ Across key channels (%) 92 85 81 75 64 Agency Across key segments (%) 86 77 70 0 65 50 95 90 90 Banca ■13th month 25th month 37th month 93 88 78 81 74 67 70 68 63 Savings (Traditional) 46 82 82 76 Direct 49th month 61st month 92 22 83 83 79 70 10 99 66 73 CY (Q1 FY22) 90 82 73 67 53 87 77 Company PY (Q1 FY21) 69 69 Savings (UL) Protection ■13th month ■25th month ■37th month ■49th month ■61st month Company 1. Calculated as per IRDAI circular (based on original premium) for individual business 30 65 53 Actuarial Financial ESG HDFC Life#31Improving VNB trajectory 40% 0.31 0.10 4.08 0.11 0.88 2.91 Q1 FY21 Impact of higher APE Change in assumptions New Business Profile¹ Fixed cost absorption Q1 FY22 I VNB Growth NBM% 24.3% 0.0% -0.7% 31 2.0% 0.6% 26.2% 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#32Sensitivity analysis FY21 - Analysis based on key metrics Scenario Change in Change in VNB Margin 1 % Change in EV Increase by 1% -1.5% -2.2% Reference rate Decrease by 1% 0.9% 1.6% Equity Market movement Decrease by 10% -0.1% -1.5% Increase by 10% -0.3% -0.6% Persistency (Lapse rates) Decrease by 10% 0.3% 0.5% Increase by 10% -0.5% -0.8% Maintenance expenses Decrease by 10% 0.5% 0.7% Acquisition Expenses Increase by 10% -3.1% ΝΑ Decrease by 10% 3.1% ΝΑ Increase by 5% -1.0% -0.8% Mortality/Morbidity Tax rate² Decrease by 5% 1.0% 0.8% Increased to 25% -4.8% -8.3% Actuarial Financial ESG |32 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#33Pending#34Rs bn 32% 15% 17% 44% 203% 201% Stable capital position NB premium growth ■ 34 188% 184% 98.6 94.3 25.9 24.0 70.8 62.7 13.1 24.2 23.4 12.7 19.2 16.7 33.3 46.9 48.5 38.5 Mar 31, 2019 Mar 31, 2020 Mar 31, 2021 Jun 30, 2021 ASM1 RSM @100% Incremental RSM @150% Surplus Capital Solvency margin² Stable solvency ratio, augmented by steady accretion to backbook Actuarial Financial ESG 1. ASM represents Available solvency margin and RSM represents Required solvency margin 2. Investment in subsidiaries not considered in solvency margin; Excludes impact of proposed final dividend of Rs 4.1 bn, to be paid in Q2 FY22 (subject to shareholders' approval) HDFC Life#35Focus 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 35 Actuarial Financial ESG HDFC Life#36Environment •Social Governance 5 pillars of ESG Governance structure Risk management and BCM E 回 Corporate governance policy Ethical Conduct о Commitment to ethical business practices о Six independent Board evaluation & independence Board Diversity policy ○ O Includes Corporate structure and stakeholder management Compensation framework directors Risk management policy Enterprise risk management (ERM) framework 'Three Lines of Defense approach' О Risk oversight by Board of Directors о Review in multiple management forums О 'Fit and Proper' as " per regulation o 27% women as on 30th June, 2021 Reviewed and approved by the Board Responsible Investment Diversity, Equity & Inclusion Holistic Living Remuneration policy Seeks to balance the fixed and incentive pay STOP REPORT Performance Management System based on the principles of balanced scorecard Business ethics and compliances AA BRR² & Human Stewardship Rights Code Sustainable Operations Code of Whistle blower PRSH¹ Conduct Policy 1. PRSH: Prevention of Sexual Harassment 2. BRR: Business Responsibility Report 36 3. AML: Anti Money Laundering $ Disclosure of managerial remuneration in the annual report COMPLIANCE DO о 466 Mitigating & Managing Risk 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 Information/Cyber Security Responsible Investment (RI) о Anti Bribery & Corruption Policy AML3 Privacy Policy ISO 27001:2013 and ISMS assessment program О Data Privacy Policy 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 HDFC Life#37Environment •Social Governance 5 pillars of ESG Attracting talent Ethical Conduct о Virtual hiring and on-boarding process without compromising on quality Robust employee referral schemes (>50% of the hiring through referrals) Flexi job program and flexi hours to promote WFH, attract gig workers Hire-train-deploy model through tie-up with reputed learning institutions Responsible Investment О Diversity, Equity & Inclusion Training & development Employee engagement Talent management/retention О Online yoga, meditation sessions, fitness challenges (Walkathon, Fit by Bit), Click2Wellness app о ○ Emotional and well being assistance program for employees Fast track growth path for special categories of employees Management Trainees & Graduate Trainees, etc. о о Engagement programs for employees and their families Potential review and talent development interventions for leadership О Talk to Doctor for unlimited free consultation Strong Reward and Recognition framework Employee diversity Robust, transparent and objective performance management system Career microsite, job portal to educate employees on career opportunities within the company о Higher increments, bonuses for those exceeding expectations Holistic Living Sustainable Operations о Mandatory and optional learning programs for employees, contractors, channel partners о Mobile learning app for self-paced learning о Virtual training of employees during Covid Access to curated online training programs from reputed universities Career coaching and development interventions О О о Actively promoting diversity and inclusion 25% women employees (maternity transition program, mentoring program for women, Economic Times Femina Best Workplaces for women) Promoting diverse talent pool (work profiles for second career women, specially-abled) LGBTQ+ friendly organisation Promoting diverse talent pool - #MyJobMyRules 37 о о 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 HDFC Life#38Pending#39Environment • Social Governance 5 pillars of ESG Energy and water Ethical Conduct о Energy efficiency and water conservation initiatives Use of 3/5 star rated appliances with regular maintenance Digitization Waste management Reduction of Paper Usage Online /e-forms for customers Annual report FY21 digitally communicated to all stakeholders Printers configured with default double side printing о 310 Kgs of e-waste was recycled/ refurbished/disposed in an environmentally controlled manner, conforming to the guidelines of E-Waste (Management) Rules, 2016 о Donated old IT assets to recycling agencies for helping under-privileged sections of the society о О 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 о Responsible Investment О 69% of branches use LED based lighting system Use of sensor based urinals and water taps Diversity, Equity & Inclusion Holistic Living О 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), leading to decrease in electricity bill units by 14% in FY21 。 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 。 Installation of sensor-based taps at corporate office and other select office locations Business travel о О CSR initiatives CSR Sustainable Operations о 40+ video conferencing rooms setup to reduce travel 39 о 17 city forests in over 45,000 sq.ft. area using the Miyawaki method. Over 50 different native species used о Over last three years, 41,695 trees have been planted ○ Plans to expand to support solar on schools and water rejuvenation projects HDFC Life#40Pending#41Pending#42Low 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% 55.0% 55.0% 54.0% 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 1 222 3. Kotak institutional equities 42 India Indonesia Malaysia 24 17 Even within the current set, Sum Assured as a multiple of Income is <1x 12 8 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 4 Australia Hong Kong 41.0% 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#43Macro 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 India Hong Kong South Africa Japan USA Australia India Hong Kong South Africa ■Japan USA Australia Elderly population is expected to almost triple by 2050 Ageing population 7% 9% 14% 67% 68% 68% 26% 23% 19% 2020 2030 2050 Age <15 Yrs Age 15-65 Yrs Age >65 Yrs 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 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 HDFC 43 Source: Milliman Asia Retirement Report 2017; Survey by NSSO, Ministry of statistics and Programme implementation Crisil PFRDA, Census of India, UN Population Estimates Life#44Government bond auctions ☐ Government Bonds - Tenorwise Issuance 21% 29% 27% 28% 35% 35% 79% 71% 73% 72% 65% 65% FY17 FY18 FY19 FY20 ■>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 Total 5,28,045 6,78,109 5,86,941 6,82,000 FY21 2,65,575 10,01,835 12,67,410 Q1FY22 96,000 2,52,000 3,48,000 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 Source: CCIL & National Statistics Office, Union Budget, RBI 44 Rs cr HDFC Life#45Life Insurance: A preferred savings instrument Household savings composition Financial savings mix 45 25% 22% 18% 19% 3% 11% 8% 12% 15% 13% 19% 18% 20% 52% 26% 17% 68% 65% 60% 14% 48% 32% 35% 67% 56% 51% 50% 40% FY10 FY13 FY16 FY20 ■Financial savings ■Physical savings Household savings as % of GDP FY10 FY13 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 FY16 ■Provident/Pension fund FY20 Others HDFC Life#46Industry new business¹ trends Individual WRP in Rs bn Sensex ■Private Players LIC 452 420 401 357 315 304 288 292 285 269 273 262 230 305 287 291 278 245 203 200208 227 214 175 178 172 73 50 Sensex FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Q1 FY22 Private players Market share 20 57% 52% 46% 37% 38% 38% 49% 52% 54% 56% 58% 57% 60% 59% Growth % Private 1% 7% -20% -24% 2% -3% 16% 14% 26% 24% 12% 5% 8% 26% LIC -22% 29% 4% 11% -4% -2% -27% 3% 15% 13% 5% 8% -3% 4% -10% 17% -9% -5% -2% -3% -11% 8% 21% 19% 9% 6% 3% 16% Overall 46 46 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 HDFC Life#47Private industry: Product and distribution mix 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% 46% 63% 9% 10% 10% 12% 56% 14% 16% 17% 3% 703 20% 3% 3% 3% 20% 3% 3% 3% 3% 3% 3% 44% 37% 47% 52% 54% 54% 55% 53% 54% 36% 32% 30% 28% 25% 25% 23% FY15 FY16 FY17 FY18 FY19 FY20 9M FY21 FY15 FY16 FY17 FY18 FY19 FY20 9M FY21 47 47 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, while share of Agency has been constant in the last few years 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#48Pending#49Financial 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 Q1 FY22 Q1 FY21 Growth FY21 FY20 FY19 CAGR Rs bn. 37.7 26.2 44% 201.1 172.4 149.7 16% 38.9 32.4 20% 184.8 154.7 142.1 14% 76.6 58.6 31% 385.8 327.1 291.9 15% 13.1 10.7 22% 71.2 61.4 52.0 17% 15.6 12.0 30% 83.7 74.1 62.6 16% 19.0 10.6 78% 100.3 87.8 73.3 17% 3.0 4.5 -33% 13.6 13.0 12.8 3% 0.4 3.5 -87% 7.3 10.9 9.0 -10% 2.6 1.0 148% 6.3 2.1 3.8 29% (1) NA 4.0 ΝΑ 1,812.7 1,399.7 30% 1,738.4 1,272.3 1,255.5 18% 273.3 225.8 21% 266.2 206.5 183.0 21% (2) 87.8 74.5 18% 84.3 69.9 56.6 22% 7.4 2.7 173% 39.8 61.3 51.4 -12% 170.5 194.5 -12% 982.0 896.3 995.0 -1% Assets Under Management Indian Embedded Value Net Worth NB (Individual and Group segment) lives insured (Mn.) No. of Individual Policies (NB) sold (In 000s) 49 49 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#5050 50 Financial and operational snapshot (2/2) Q1 FY22 Q1 FY21 FY21 FY20 FY19 Overall New Business Margins (post overrun) 26.2% 24.3% 26.1% 25.9% 24.6% Operating Return on EV (1) 16.5% 15.8% 18.5% 18.1% 20.1% Operating Expenses / Total Premium 12.5% 11.5% 12.0% 13.1% 13.1% Total Expenses (OpEx + Commission) / Total Premium 16.4% 15.6% 16.4% 17.7% 17.0% Return on Equity (2) 14.1% 25.0% 17.6% 20.5% 24.6% Solvency Ratio 203% 190% 201% 184% 188% Persistency (13M / 61M) (3) 90%/53% 87%/53% 90%/53% 88%/54% 84%/51% Market Share (%) - Individual WRP - Group New Business - Total New Business Business Mix (%) 17.8% 18.5% 15.5% 14.2% 12.5% 25.9% 20.7% 27.6% 22.3% 20.7% 21.5% 29.0% 21.5% 28.4% 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) 27/32/5/8/29 27/28/5/11/30 56/15/6/23 59/12/5/24 22/7/3/18/50 27/7/2/23/41 8.3% 10.5% - Share of protection business (Basis Overall APE) 15.7% 13.1% 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) 22.4% 13.6% 19.6% 27.6% 27.0% 1. 2. 3. Pre excess mortality reserve (EMR) EVOP% is 16.5%; Post accounting for EMR, EVOP% stands at 14.4% Calculated using net profit and average net worth for the period (Net worth comprises of Share capital, Share premium and Accumulated profits) 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 HDFC Life#51Revenue and Profit & Loss A/c Revenue A/c¹ Q1 FY22 Q1 FY21 Profit and Loss A/c¹ Rs bn Q1 FY22 Q1 FY21 i Premium earned I 76.6 58.6 ! Income I I Reinsurance ceded (1.2) (1.4) Interest and dividend income 1.2 0.9 I Income from Investments 69.6 87.5 | Net profit/(loss) on sale 1.3 0.0 I Other Income 0.2 0.3 Transfer from Policyholders' Account 1.2 3.5 I Transfer from Shareholders' Account I Other Income I Total Income 146.0 145.0 Total 4.4 3.8 Commissions 3.0 2.4 I ! Outgoings | Expenses 9.5 6.7 ¦ I I I Transfer to Policyholders' Account 0.8 GST on UL charges 0.9 0.8¦ I I I Expenses 0.0 0.1 ■ Provision for taxation (0.0) 0.3 I I ¡ Interest on convertible debentures 0.1 i Provision for diminution in value of investments (2.0) (0.6) I I I I Benefits paid i Provision for diminution in value of investments 55.5 26.4 (0.2) (0.1) I I Change in valuation reserve 76.1 104.9 I ¡Provision for Taxation 0.0 0.0¦ I Bonuses Paid 2.6 1.5 Total 0.8 (0.1) Total Outgoings 145.4 142.5 Surplus Transfer to Shareholders' Account Funds for future appropriation - Par Total Appropriations 0.6 2.5 Profit for the year as per P&L Statement Interim Dividend paid (including tax) 3.0 4.5 1.3 3.5 Profit carried forward to Balance Sheet 3.0 4.5 (0.7) (1.0) | 0.6 2.5 1. Numbers may not add up due to rounding off effect ◉ HDFC Life 51#52Balance sheet Jun 30, 2021¹ Jun 30, 2020 Mar 31, 2021 Rs bn Shareholders' funds Share capital (including Share premium) Accumulated profits Fair value change I Sub total Borrowings Policyholders' funds Fair value change Policy Liabilities 25.4 24.3 25.0i 62.3 50.2 59.3 1.8 (0.6) 2.1 89.7 73.9 86.4 6.0 6.0 23.4 8.1 25.6 897.2 684.2 855.2 Provision for Linked Liabilities 740.2 581.1 709.6 Funds for discontinued policies 41.5 34.2 38.0 Sub total 1,702.3 1,307.6 1628.4 I Funds for future appropriation (Par) 9.2 7.9 9.9 Total Source of funds 1,807.1 1,389.4 1,730.7 I Shareholders' investment 89.7 63.0 85.4 I I Policyholders' investments: Non-linked 941.3 721.5 905.4 Policyholders' investments: Linked 781.8 615.3 747.6 Loans 4.8 3.0 4.2 Fixed assets 3.4 3.3 3.4 I Net current assets (13.8) (16.7) (15.4) Total Application of funds 1,807.1 1,389.4 1,730.7 1. Numbers may not add up due to rounding off effect 52 HDFC Life#53Segment wise average term and age¹ Average Policy Term excluding annuity (Yrs) Q1 FY22: 24.0 (Q1 FY21: 25.7) UL 13 14 41 Par 39 Non-par Health 26 24 12 Non-par Savings 12 22 Non-par Protection 39 40 Non-par Pension 12 11 Q1 FY22 Q1 FY21 Average Customer Age excluding annuity (Yrs) Q1 FY22: 36.0 (Q1 FY21: 34.2) 36 UL 33 33 Par 33 33 Non-par Health 32 37 Non-par Savings 35 Non-par Protection 33 34 Non-par Pension 34 54 56 Q1 FY22 Q1 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 53 1. Basis individual new business policies (excluding annuity) HDFC Life#54Pending#55Indian 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. 55 HDFC Life#56Indian 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. 56 HDFC Life#57Pending#58Glossary (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 58 Life#59◉ ◉ ■ ◉ ◉ 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 59 Life#60Disclaimer 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. 60 60 HDFC Life#61Thank you MLILING Superbrands 2021 20 YEARS Protecting India with Pride HDFC Life