FY2019
Performance Review
Agenda
• Company Strategy
• Financial Performance
• Industry Overview
Agenda
• Company Strategy
• Financial Performance
• Industry Overview
Strategy: Market leadership + Profitable growth
Leverage our strong brand, competitive advantage and broad network of
Leverage and Enhance
distribution partners
market leadership Expand customer base and offerings
Focus on agency channel, retail health segment, SME insurance market and
Enhance product offerings
cross sell opportunities
and distribution channels Continuous innovation to introduce new products and value added services
Expand footprint in small towns, rural areas
Capturing new market Increase penetration in the digital Eco system
opportunities Monitor emerging risk segments
Improve operating and Reduce Combined ratio using risk selection and data analytics
Maintain robust reserves
financial performance
Increasing distribution and servicing capabilities without human intervention
through investments in Increase operational efficiency using artificial intelligence and machine
technology learning techniques
4
Key Highlights
Particulars FY2017 FY2018 FY2019
(` billion) Actual Actual Actual
Gross Written Premium 109.60 126.00 147.89
Gross Direct Premium Income (GDPI) 107.25 123.57 144.88
GDPI Growth 32.6% 15.2% 17.2%
Combined Ratio 103.9% 100.2% 98.5%
Profit after Tax 7.02 8.62 10.49
Return on Average Equity 20.3% 20.8% 21.3%
Solvency Ratio 2.10x 2.05x 2.24x
Book Value per Share 82.57 100.04 117.11
Basic Earnings per Share 15.66 19.01 23.11
5
Comprehensive Product Portfolio
Product Mix
9% 9% 9%
20% 19% 17% Others
3% 3%
3% Crop
7%
7% 7%
Marine
19%
19% 19%
Fire
17% 18% 21% Health & PA
Motor TP
25% 25% 24% Motor OD
FY2017 FY2018 FY2019
Diversified product mix– motor, health & personal accident, crop, fire, marine insurance
SME business growth was 26.7% for FY2019
Source: Company data 6
Comprehensive Product Portfolio ` billion
7 8 .9% 7 7 .4% 7 3 .8%
9 .4% 1 5.6% 2 2.4%
Private car, Two wheeler and Commercial Vehicle
contributed 50.0%, 27.2% and 22.8% respectively of
Motor
Motor GDPI for FY2019 and 51.3%, 30.5% and 18.2% 30.6
34.1
30.2
27.6
21.9
respectively of Motor GDPI for FY2018 17.8
Loss cost driven micro-segmentation resulting in focus on FY2017 FY2018 FY2019
relatively profitable segment Loss Ratio Growth OD TP
9 0 .2% 6 8 .3% 7 6 .5%
1 3.7% 2 1.5%
Retail, Group (includes corporate and others) and mass 2 1.8%
Health & PA
contributed to 38.3%, 61.3% and 0.4% respectively of
Health & PA GDPI for FY2019 and 51.6%, 46.6% and 1.8% 28.0
23.0
20.3
respectively for FY2018
Retail indemnity new business grew by 38.8% for FY2019
FY2017 FY2018 FY2019
Loss Ratio Growth
7
Source: Company data
Comprehensive Product Portfolio ` billion
6 7 .7% 5 1 .4% 6 2 .5%
Property & Casualty
1 9 .1% 2 1 .3% 1 5 .7%
Underwriting of small risks for portfolio diversification
and pricing
28.2
24.3
Focus on risk mitigation through value added services 20.1
FY2017 FY2018 FY2019
Loss Ratio Growth
8 4 .2% 135.0% 106.5%
Covered farmers in 4 states and 30 districts in Kharif
263.0% 1 0.2% 3 .4%
season FY2019 compared to 7 states and 56 districts
in Kharif FY2018
Crop
Covered farmers in 2 states and 14 districts in Rabi 23.7
24.5
season FY2019 compared to 6 states and 57 districts 21.5
in Rabi FY2018
FY2017 FY2018 FY2019
Loss Ratio Growth
Source: Company data 8
Digital Drive: Enabling business transformation
Risk Selection
Robotics / Chat BOTs
Claims management
Artificial Intelligence & File processing
Machine Learning Lean Fraud detection
Innovation
Operations
Data Driven decision Technology Customer portal
Dashboards
making for service Intermediary app
& Analytics
excellence
Advanced Insights Customer OneView
through analytics Garage App
9
Strategy: Market leadership + Profitable growth
Predictive ultimate loss model to improve risk selection
Diversified exposure across geographies and products
Underwriting Historically lower proportion of losses from catastrophic events than overall
market share
Spread of risk across panel of quality re-insurers
Reinsurance Current panel of reinsurers* rated ‘A-’ or above**
Conservative level of catastrophe (CAT) protection
Tighter internal exposure norms as against regulatory limits
Investments Invest high proportion of Debt portfolio (80.6%) in sovereign or AAA rated
securities***
IBNR utilization improving trend indicates robustness of reserves
Reserving
Disclosing reserving triangles in Annual report since FY2016
* Except domestic & select coinsurance follower reinsurance placement
**S&P or equivalent international rating
*** domestic credit rating 10
Agenda
• Company Strategy
• Financial Performance
• Industry Overview
Robust Investment Performance ` billion
1
Realised
RealisedReturn
Return(%)
(%) In vestment Book Investment Leverage
10. 0% 9. 7% 9. 4% 3.88x 3.90x 4.09x
222. 31
181. 93
149. 50
FY2017 FY2018 FY2019 FY2017 FY2018 FY2019
Investment portfolio mix2 at FY2019 : Corporate bonds (52.1%), G-Sec (30.3%) and equity (12.4%)
Strong investment leverage
Unrealised gain (net) at ` 2.73 billion as on March 31, 2019
Unrealised gain on equity3 portfolio at ` 3.38 billion
Unrealised loss on other than equity portfolio at ` 0.65 billion
1 Totalinvestment assets (net of borrowings) / net worth
2 Investment portfolio mix arrived at considering Equity & mutual funds at market value
3 Equity includes mutual funds
Source: Company data 12
Financial performance
C ombined ratio (%) Retu rn on average Equity (ROAE) (%)
20. 3% 20. 8% 21. 3%
103. 9% 19. 1%
17. 5%
100. 2% 99. 5%
98. 5% 98. 0%
FY2017 FY2018 FY2019 Q42018 Q42019 FY2017 FY2018 FY2019 Q42018 Q42019
` billion ` billion
Profit before Tax (PBT) Growth Profit after Tax (PAT) Growth
22.8% 21.8% 7.5%
31.4% 33.6% 20.3%
15. 98 10. 49
8. 62
11. 96 7. 02
9. 10
2. 87 3. 45 2. 12 2. 28
FY2017 FY2018 FY2019 Q42018 Q42019 FY2017 FY2018 FY2019 Q42018 Q42019
Solvency ratio at March 31, 2019 was 2.24x against regulatory minimum solvency requirement of 1.50x
PBT and ROAE for Q4 FY2019 includes upfront expensing of acquisition cost related to the GDPI growth
(excluding crop) of 29.4% whereas the full benefit of earned premium will be realized over the policy period
PAT for Q4 FY2019 & FY2019 includes effect of higher effective tax rate resulting from change in income tax
regulations taxing long-term gains on sale of investments 13
Agenda
• Company Strategy
• Financial Performance
• Industry Overview
Industry has witnessed steady growth
` billion
Growth
12.9% 1,701
1,507
17.7%
15.5% 482
271
FY2007 FY2011 FY2018 FY2019
Industry has grown at CAGR of 17.0% in the last 18 years
Source: Latest IRDAI and GI Council 15
India Non - life Insurance Market - Large Addressable Market
Significantly underpenetrated
(%)
Premium as a % of GDP (CY17) (US$)
4th largest non-life insurance 5.00
4.28
World: 2.80
market in Asia 2.74
2.36 2.34
1.89 1.77
1.04 0.93
Non-life Insurance penetration 0.46
in India was around 1/3rd of
Global Average in 2017
Non-Life Insurance Density (US$)
Operates under a “cash before (Premium per capita) (CY17)
2542
cover” model
1523
938 901
174 159 167 113 18 18
Source: Sigma 2017 Swiss Re 16
Thank you
Annexure
Loss Ratio
Particulars FY2017 FY2018 FY2019 Q42018 Q42019
Motor OD 64.2% 53.7% 59.2% 48.7% 61.5%
Motor TP 97.4% 107.1% 90.8% 112.6% 90.5%
Health 97.9% 77.6% 85.0% 76.7% 79.2%
PA 41.3% 23.9% 35.8% 4.0% 28.3%
Crop 84.2% 135.0% 106.5% 211.4% 69.6%
Fire 68.4% 43.1% 83.2% -6.5% 83.1%
Marine 83.9% 54.2% 84.0% 17.7% 74.1%
Engineering 53.3% 24.0% 37.1% -35.5% 26.0%
Other 62.1% 57.3% 49.3% 57.4% 32.4%
Total 80.4% 76.9% 75.3% 78.5% 71.7%
19
1
Reserving Triangle Disclosure – Total
Incurred Losses and Allocated Expenses (Ultimate Movement) ` billion
As at March 31, 2019 Prior AY 10 AY 11 AY 12 AY 13 AY 14 AY 15 AY 16 AY 17 AY 18 AY 19
End of First Year 39.01 15.13 20.66 22.53 27.97 35.96 34.16 39.13 49.49 52.41 65.27
One year later 39.86 15.23 20.44 21.97 27.02 34.63 33.95 38.58 49.20 51.10
Two years later 39.88 15.39 20.41 21.74 26.52 34.37 33.53 38.07 48.84
Three years later 40.49 15.52 20.36 21.85 26.40 34.29 32.91 37.78
Four years later 41.18 15.55 20.47 21.83 26.46 33.85 32.73
Five years later 41.30 15.66 20.48 21.81 26.21 33.73
Six years later 41.88 15.91 20.53 21.83 26.18
Seven Years later 42.11 15.96 20.67 21.83
Eight Years later 42.23 16.02 20.67
Nine Years later 42.38 16.05
Ten Years later 42.42
Deficiency/ (Redundancy) (%) 8.8% 6.1% 0.1% -3.1% -6.4% -6.2% -4.2% -3.5% -1.3% -2.5%
Unpaid Losses and Loss Adjusted Expenses
As at March 31, 2019 Prior AY 10 AY 11 AY 12 AY 13 AY 14 AY 15 AY 16 AY 17 AY 18 AY 19
End of First Year 7.74 5.31 7.18 7.98 12.01 17.32 17.10 20.44 26.84 32.58 37.37
One year later 3.85 1.83 2.67 3.33 6.11 9.70 11.58 14.06 16.86 18.03
Two years later 2.67 1.34 2.00 2.46 4.72 7.92 9.61 11.46 13.04
Three years later 2.40 1.15 1.58 2.12 3.84 6.73 7.80 9.69
Four years later 2.44 0.96 1.39 1.76 3.39 5.58 6.77
Five years later 2.06 0.90 1.13 1.47 2.77 4.82
Six years later 2.22 0.83 1.00 1.28 2.42
Seven Years later 2.08 0.76 0.97 1.08
Eight Years later 1.89 0.69 0.84
Nine Years later 1.74 0.63
Ten Years later 1.53
1Asof March 31, 2019; Losses and expenses in the above tables do not include the erstwhile Indian Motor Third Party Insurance Pool (IMTPIP) 20
AY: Accident Year Source – Company data
Reserving Triangle Disclosure – IMTPIP
Incurred Losses and Allocated Expenses (Ultimate Movement) ` billion
As at March 31, 2019 AY 08 AY 09 AY 10 AY 11 AY 12 AY 13
End of First Year 2.71
One year later 3.85 2.72
Two years later 4.49 3.85 2.73
Three years later 5.81 4.49 3.98 2.73
Four years later 6.16 5.81 4.63 4.12 2.74
Five years later 2.61 6.16 5.85 4.67 4.41 3.16
Six years later 2.61 6.46 5.96 4.99 5.12 3.17
Seven Years later 2.86 6.55 6.05 5.45 5.12
Eight Years later 2.95 6.69 6.55 5.45
Nine Years later 3.00 6.98 6.55
Ten Years later 3.09 6.98
Eleven Years later 3.09
Deficiency/ (Redundancy) (%) 18.4% 13.2% 12.9% 21.3% 32.8% 16.7%
Unpaid Losses and Loss Adjusted Expenses
As at March 31, 2019 AY 08 AY 09 AY 10 AY 11 AY 12 AY 13
End of First Year 2.67
One year later 3.41 2.30
Two years later 3.14 2.57 1.87
Three years later 3.17 2.38 1.98 1.37
Four years later 2.67 2.51 1.84 1.51 0.98
Five years later 0.86 2.05 2.03 1.32 1.22 1.13
Six years later 0.63 1.89 1.56 1.19 1.63 0.91
Seven Years later 0.72 1.50 1.26 1.31 1.29
Eight Years later 0.65 1.23 1.39 1.03
Nine Years later 0.55 1.19 1.07
Ten Years later 0.52 0.89
Eleven Years later 0.43 21
As of March 31, 2019 - IMTPIP: Indian Motor Third Party Insurance Pool AY: Accident Year Source – Company data
