Project Inspire: 'Future Proofing' HDFC Life

Financial risk management framework Natural hedges Protection and longevity businesses Unit linked and non par savings products Broad-basing of counter-parties for FRAS Product design & mix monitoring Prudent assumptions and pricing approach Return of premium annuity products (>95% of annuity); Average age at entry ~58 years Deferred as % of total annuity business < 30% with average deferment period <4 yrs Regular monitoring of interest rates and business mix 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 Residual strategy External hedging instruments such as FRAS, IRFs, swaps amongst others Reinsurance FY23 Q1 FY24 Sensitivity Scenario Overall EV EV EV Interest Rate +1% Interest Rate -1% (2.4%) 2.1% Non par 1 VNB VNB VNB VNB Margin Margin Margin Margin (1.5%) (2.2%) (2.2%) (2.3%) (1.5%) (2.1%) (2.3%) 0.7% 1.4% 0.9% 2.0% 0.7% 1.4% 0.8% Sensitivity remains range-bound on the back of calibrated risk management Overall Non par 1 EV Around 99% of debt investments in Government bonds and AAA rated securities as on June 30, 2023 18 1. Comprises Non par savings (incl annuity) plus protection Profitable distribution Diversified Customer management Risk Technology, digital & growth first mix & governance Analytics HDFC Life

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