Investor Presentation – 12M FY21

Agenda

1 Performance Snapshot

2 Our Strategy

3 Managing Covid-19

4 Customer Insights

5 Annexures

6 India Life Insurance

Page 2
 Performance
Snapshot

Our Strategy

Managing Covid-19

Customer Insights

Annexures

India Life Insurance

1 Performance Snapshot

Page 3
Executive summary: 12M FY21

Scale Profitability & Cost Customer & Capital

Rs (Bn.) 71.2 New CY 26.1% CY 90%

Individual Business 13th month
APE Margin PY 25.9% persistency
Growth 16% PY 88%

CY (%) 15.5 Rs (Bn.) 21.9 Overall 99.4%

Market Claim Settlement
VNB Ratio
Share1 Individual 98.0%
Growth 130 bps Growth 14%

Rs (Bn.) 13.6 CY 201%

Rs (Tn.) 1.7 Profit After
AUM Solvency
Tax PY 184%
Growth 37% Growth 5%

IEV Rs (Bn.) 266.2 CY 12.0% CY 35

Operating Complaints per
Exp. Ratio 10k policies PY 47
EVOP Growth 18.5% PY 13.1%

1. Based on Individual WRP

4
Demonstrating resilience in the current environment (1/2)
Rs Bn.
Improving QoQ business trends1 Faster than industry growth1

-19% 22% 19% 40% 17%

Growth HDFC Life Pvt sector Industry
63% 17% 24% -3% 19%

FY21 17% 8% 3%

FY20 19% 5% 6%
70.0
59.7
2 years
18% 6% 5%
13.2 10.7 14.3 17.4 15.1 18.0 17.1 23.9 CAGR

Q1 Q2 Q3 Q4 FY21
PY CY CY Growth PY Growth

Optimizing product mix Improvement in CP2 volumes with pickup in disbursements

Individual APE -19%

-74% -36% -5% 26%

7% 5%
 Maintained balanced
34% product mix
24%  46% growth in 34.2

annuity
14.8
7.0 10.0
2.4
31% Q1 Q2 Q3 Q4 FY21
CY Growth
Par Non Par Savings ULIP Non Par Protection Annuity

1. Based on Individual WRP; 2. Based on Credit Protect NBP

5
Demonstrating resilience in the current environment (2/2)
Rs Bn.
Focus on diversified channel mix1 Steady expansion in VNB margin

19% 22% 19% 20%

13% 14% 13% 15%

4% 7%
9% 7%

24.6% 25.9% 26.1% 25.6% 26.4% 27.0%

64% 24.3%
55% 61% 58%
_

FY19 FY20 FY21 Q4 FY21 FY19 FY20 FY21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21
Bancassurance Brokers and others Agency Direct

Strong growth in renewal premium Healthy solvency position and consistent growth in PAT

Solvency margin Profit after tax

 Positive impact of Dividend2:

long-term savings Rs 4.1 bn

products sold in
previous year
184.8 19% 201%
154.7 13.6 5%
 Continue to remain 184% 13.0

cautious on UL
persistency
FY20 FY21 Mar 31, 2020 Mar 31, 2021 FY20 FY21

1. Basis Individual APE

2. No dividend announced in FY20, in line with IRDAI circular on capital conservation; Proposed final dividend of Rs. 2.02 per share approved in Board meeting on
6 26th April 2021, this is subject to shareholders’ approval
 Performance
Snapshot

Our Strategy

Managing Covid-19

Customer Insights

Annexures

India Life Insurance

2 Our Strategy

Page 7
Key elements of our strategy

1 2 3 4 5

Focus on profitable Diversified Market-leading Reimagining Quality of Board

growth distribution mix innovation insurance and management

Ensuring Developing multiple Creating new Market-leading Seasoned

sustainable and channels of growth product digital capabilities leadership guided
profitable growth to drive need-based propositions to that put the customer by an independent
by identifying and selling cater to the first, shaping the and competent
tapping new profit changing customer insurance operating Board; No secondees
pools behaviour and needs model of tomorrow from group
companies

“Our continuous focus on technology and customer-centricity has enabled us to maintain

business continuity through FY21”

8
Focus on profitable growth

FY18 FY19 FY20 FY21 Rs Bn.

Profitable
growth
New business Margin 23.2% 24.6% 25.9% 26.1%
Economic
Profit

Value of new business 12.8 15.4 19.2 21.9

distribution mix
Diversified
Profit after tax (PAT) 11.1 12.8 13.0 13.6
Accounting

Underwriting profits
Profit

8.5 9.0 10.9 7.32

Shareholders’ surplus 2.6 3.8 2.11 6.3

innovation

Market-
leading
Reimagining
32.3 8%

insurance
29.9
25.5
19.1

Underwriting profits breakup -10.6

-16.5 -19.1

management
-25.0

Board and
Quality of
FY18 FY19 FY20 FY21

Backbook Surplus New Business Strain

1. Post accounting for impact of Yes Bank AT1 bonds write-off

2. Post accounting for impact of assumption changes including additional Covid reserve
9
Analysis of change in IEV1
EVOP – 38.3 Rs Bn.
EVOP1% - 18.5%

Profitable
growth
20.6 0.8 266.2

21.9 0.8 ESOP

exercises
17.4 -1.8 Economic
Operating
variances
206.5 variances3

distribution mix
VNB

Diversified
Change in
Unwind Operating
assumptions2
176.3 31%

134.6 Adjusted Net worth (ANW) Value of in-force business (VIF)

innovation

Market-
leading
Reimagining
insurance
89.8 25%
71.9

IEV at 31st Mar 20 IEV at 31st Mar 21

management
Board and
Quality of
 Negative mortality variance on account of excess Covid claims, offset by positive variance on persistency and expenses

1. EVOP% calculated as annualised EVOP (Embedded Value Operating Profit) to Opening EV; Covid reserve included as part of assumption changes
2. Creation of Covid reserve of Rs. 1.65 bn for FY22, in anticipation of elevated covid related mortality
3. Mortality variance: -0.5, Persistency variance: 0.3, Expenses and Others: 1.0
10
Diversified distribution mix enabled by multiple levers

Enhancing and expanding proprietary channels Strong partnerships

Profitable
growth
Tapping new generation of customers Expanding geographical reach

distribution
Diversified
through Online channel via Online channel

mix
Agency Life

innovation
Focus on building a skilled and structurally Leveraging analytics for upsell

Market-
leading
solid Agency channel along with increasing and cross-sell via Direct
agent productivity channel

Emerging Ecosystem 250+ traditional partners

Reimagining
insurance
• Deepening partnership with existing banca partners
including HDFC group entities, Bandhan Bank, IDFC
First, amongst others

management
Board and
Quality of
• Partnerships with Yes Bank, SBI Capital Markets, State
Bank of Mauritius, Doha Bank, Edelweiss in FY21
50+ emerging ecosystem partnerships

1. Proprietary channels include Agency, Direct and Online

11
Tech-led Agency

Profitable
growth
Onboarding Skilling & Engagement Enablement Support & Servicing

distribution
Diversified
InstaPRL a simple,

mix
paperless and hassle- Digital platform for
free FC onboarding sales hierarchy for
platform effective engagement
and partner
Pre approved sales opportunity for
dashboarding
existing customer base
Digital Learning & Skilling
End to End digital training platform benefitting ~8,000

innovation

Market-
leading
platform for Agency agents daily
prospects Dedicated platform for FCs
Data mined opportunity to increase giving business insights as Partner
IC 38 Virtual Training customer wallet share well as fulfilling customer
service requests Portal
24*7 Mobile
learning eco-system Nudge based engine

Reimagining
for entire Sales & powered by AI/ML to

insurance
Distribution teams enhance partner
engagement and
productivity
Insta Mobility Suite for effective
management of leads, adherence of SMP
Customized content
Virtual Assistant and efficiency in sales processes and
to Top FCs on their
servicing

management
at your fingertips social media & communication platforms

Board and
Quality of
1. FC: Financial Consultant (agent)
2. SMP: Sales Management Process
12 3. AI/ML: Artificial Intelligence/Machine Learning
Digital flywheel – powering the Online channel

Continue to find new niches

Profitable
growth
Product
Innovation

distribution
Diversified
mix
Customer
Brand

innovation
Value

Market-
leading
Stand Up & Salience
Management
Analytics backed digital
Learning Be a ‘top-of-the-mind’
hourenablement solutions
brand
Online

Reimagining
insurance
management
Board and
Quality of
Customer Technology
Improved Customer Experience Experience Integration Bespoke partnership integration
(CX) on digital assets capabilities

13
 Addressing customer needs at every stage of life
<25 years 25-35 years 36 – 50 years 50+ years
Risks
Addressed

Profitable
Objective Simple Savings Borrowing Investments Asset Drawdown

growth
Pay off
mortgage Mortality

distribution
Diversified
Medical care

mix
Morbidity

First Job Medical care

Net Worth
Needs
Longevity

innovation
Get married Plan for

Market-
leading
retirement Retire
Medical care Medical care
Buy new car Interest Rate
Child’s
education

Reimagining
insurance
Buy Home

Product Product mix across age categories1

Offerings

management
Board and
Quality of
UL 31% 27% 25% 20%

Par 38% 30% 31% 40%

Non par
26% 29% 35% 27%
savings
Protection 5% 13% 8% 1%

Annuity 0% 0% 2% 12%

14 1. Based on Individual WRP for FY21

Expanding market through consistent product innovation
Group Poorna Suraksha
Guaranteed returns, with Comprehensive protection plan

Profitable
growth
Retirement option for life long income offering multiple choices of
& pension benefits under group platform
Woman

FY15 FY17 FY18 FY19 FY20 FY21

distribution
Diversified
mix
Click2Protect Life
Lifelong regular income A term plan that provides
with payout flexibility and flexibility to auto balance death
Youngstar whole life cover and critical illness cover or receive

innovation
income payouts from age 60

Market-
leading
Balanced product suite helps in managing Calibrated growth in protection 2
(Rs Bn.)
business cycles 1 Ind Protection:
6% (PY 6%) -21%

Reimagining
2% 4% 4% 5%

insurance
11% Group Protection:
17% 17% 13% 7% (PY 11%)
5%
6% 6% 6% 7%

25% 13%
26%
34% 43.3
15% 37.1
4% 34.4
27.1

management
29%

Board and
Quality of
16%
51% 46% 2.5 3.5 4.7 4.8
23% 20%
FY18 FY19 FY20 FY21
FY18 FY19 FY20 FY21
Ind Protection Group Protection
Savings Protection

CY Growth
UL Par Non Par Group Term Annuity

1. As a % of Total APE
15 2. Individual protection numbers are based on APE and group protection numbers based on NBP. Group protection includes Credit protect, GTI, GPS and Group Health
Our approach to retiral solutions

Opportunity to grow the retiral corpus1 by 3x between FY21-25

Profitable
growth
1. NPS 2. Individual income plans 2

▪ Ranked #1 with AUM of Rs 163.8 bn amongst ▪ Providing long term retiral solutions
private owned Pension Fund Managers ▪ Catering across age brackets & premium
▪ Registered strong AUM growth of 98% in FY21 frequencies

distribution
Diversified
mix
3. Immediate / deferred annuity 4. Group superannuation fund

▪ Largest player in the private sector ▪

innovation
Managing funds for about 150+ corporates

Market-
▪

leading
Servicing 130+ corporates and >40,000 under superannuation scheme
lives covered in FY21

Increasing retiral corpus1

Reimagining
insurance
Rs Bn. 33%

management
Board and
Quality of
546

357
287
176 213

FY17 FY18 FY19 FY20 FY21

1. Includes NPS, Annuity, Group superannuation fund and long term variant of Sanchay Plus and Sanchay Par Advantage
2. Comprises long term income and life long tenure options offered in Sanchay Plus and Sanchay Par Advantage
16
Our protection philosophy

Protection is a multi-decade opportunity that we plan to address prudently with continued innovation

Profitable
growth
Our Focus Areas

Supply side
considerations

distribution
Strengthening underwriting practices

Diversified
mix
Demand side and use of deep learning underwriting
considerations models

innovation
Growth in Credit Protect on the back of

Market-
leading
rise in loan disbursals and wider
distribution

 Huge protection gap  Insurers moving beyond

and under-penetration top 10 cities and salaried Product innovation catering to varying

Reimagining
insurance
segment customer needs
 Customers valuing
brand, on boarding  Continue to be calibrated
experience and track in underwriting new
record apart from the business; robust claim Leveraging available market & industry

management
Board and
platforms e.g., central medical repository

Quality of
price settlement ratio
for faster turnaround and greater
 Adverse mortality underwriting precision
experience (risk of
worsening due to
ongoing pandemic)

17
Product mix across key channels1

Segment FY18 FY19 FY20 FY21 Segment FY18 FY19 FY20 FY21
UL 33% 26% 12% 10%

Profitable
UL 64% 64% 32% 27%

growth
Par 48% 40% 34% 37%

Agency
Par 25% 13% 18% 37%
2
Banca

Non par savings 8% 17% 44% 30% Non par savings 5% 17% 40% 39%
Term 3% 4% 4% 4% Term 11% 12% 12% 11%
Annuity 1% 3% 2% 2% Annuity 3% 5% 3% 3%

distribution
Diversified
mix
UL 58% 50% 33% 29% UL 57% 62% 44% 39%
Par 17% 8% 14% 17% Par 1% 2% 1% 1%

Online3
Direct

Non par savings 9% 12% 20% 16% Non par savings 0% 1% 18% 29%
Term 5% 6% 4% 3% Term 42% 35% 37% 30%
Annuity 11% 24% 29% 35% Annuity 0% 1% 1% 2%

innovation

Market-
leading
Segment FY18 FY19 FY20 FY21
UL 57% 55% 28% 24%
Company

Par 28% 18% 19% 34%

Non par savings 7% 15% 41% 31%

Reimagining
insurance
Term 5% 7% 8% 7%
Annuity 2% 5% 4% 5%

management
Total APE FY18 FY19 FY20 FY21 Total NBP FY18 FY19 FY20 FY21

Board and
Quality of
Protection

Term 11% 17% 17% 13% Term 26% 27% 27% 20%
Annuity 2% 4% 4% 5% Annuity 9% 17% 16% 20%
Total 13% 21% 21% 18% Total 35% 44% 43% 39%

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. Nos. for previous years have been restated in line with revised classification
3. Includes business sourced through own website and web aggregators. Nos. for previous years have been restated in line with revised classification
18
Aligned to make life simple for the customers in a turbulent environment
Solving for the customer’s needs..

1 3 5

Profitable
growth
Give me a
Accelerate SERVICE
Give me PLATFORMS
simple journey
JOURNEY SIMPLIFICATION
frictionless Nudge me in my
independent

distribution
Diversified
from purchase
SIMPLIFICATION for connect and world /
buying
service

mix
across channels
to payout personalization servicing

Give DATA LABS

Fast me an
track Personalize my
ECOSYSTEM
integrated
PARTNER
experiences
for decision

innovation

Market-
experience
INTEGRATION

leading
making

2 4

Reimagining
insurance
Building resilience..

6 7 8 9

management
Connecting with Create a digital Enable a hybrid Strengthen

Board and
Quality of
startups through scalable efficient Work From Home Cyber Security for
Futurance1 Architecture environment post-Covid world

1. Futurance: A program to collaborate with startups for harnessing cutting-edge technology

19
1. Journey Simplification – Short journeys for specific requirements

Profitable
growth
distribution
Diversified
mix
innovation

Market-
leading
InstaSIP – POSP LifeEasy1– Voice

Reimagining
WIP

insurance
ULIP Journey Journey Protection Journey
Journey

>99%
policy <4 hrs. Faster ~7 mn offers 51%
overall medical and

management
issuance rolled out Online

Board and
Quality of
journeys policy policy through business 5-
fulfilled issuance issuance via PASA4 year CAGR5
digitally TAT2 WISE3

1. LifeEasy: Online customer intimation portal for Life claims

2. Policy issuance TAT calculation starts post submission of all required documents
3. WISE: Video sales platform
4. PASA: Pre-Approved Sum Assured
20 5. Online includes business sourced through own website, online business sourced through banks / corporate agents and web aggregators
2. Partner Integration– Different partners, different solutions

Profitable
growth
distribution
Diversified
Life Next1 Insta PRL2

mix
HDFC Bank Paytm

innovation

Market-
leading
Reimagining
insurance
Airtel Partner Portal3

Multiple End-to-end Straight ~98K <1sec

partners servicing of through digital policy

management
partner processing agent issuance

Board and
digitally

Quality of
integrated requests on module for recruitment TAT on
Partner Group– Life - InstaPRL Airtel
Portal Next

1. Life Next: Module for transaction and Further Requirements processing for group credit life policy
2. Insta PRL: application for onboarding agents
3. Partner Portal: MIS dashboard, value-added services, contests etc. for partners
21
3. Service Simplification– Through 24*7 digital offerings

24*7 accessibility Instant branch experience Frictionless journey

Profitable
growth
ETTY- ELLE 2.0- ELSA- Alexa

distribution
Diversified
Whatsapp Chatbot bot Insta Serv1– Life Certificate –

mix
Assisted Policy Insta Receipt2 Customer App Video Life
Servicing Certification

SPOK- Email ZOEY- Digital EZRA- Google

innovation
bot Avatar Assistant bot

Market-
leading
Video service for
Insta Revive3 Life Easy – 3 click Quick Register – 3 sales – Text/video
claim process click auto debit messaging

Reimagining
NEO- Twitter

insurance
ELLA- FB bot bot

280+ 3.2X 95% 89% 95%

management
bots across increase in electronic interactions chats

Board and
Quality of
26 mobile app renewal via self- closed via
functions usage serve self-serve
modes chatbot

1. Insta Serv: Mobile app for service teams

2. Insta Receipt: Instant Receipting of application
22 3. Insta Revive: Instant Revival of lapsed policy
4. Data Labs– Creating a data led ecosystem and scaling AI

Deep learning model Vision AI Voice AI

Profitable
growth
AgeTymer
UW engine (Face (Face ageing)
(automated recognition)
underwriting)

distribution
Diversified
(INDUSTRY FIRST;

mix
HealthProfiler Bodmeter Manages end-to-
(BP and Heart (Face BMI) end renewal call)
Text AI Monitor)

True Cue Emolyzer

Machine Learning/Analytics (Emotion based

innovation
Sentilyzer (Voice

Market-
leading
(Sentiment authenticator) analysis of voice
analysis of data)
(Virtual assistant for RAG &
sales and service) chats & mail)
Persistency
Model
NLP engine (Advanced ML (Persistency

Reimagining
based model) prediction)

insurance
(Interpretation of chat)

Risk+: 98% 99% ~1.6 mn 98%

helps precision – instA monthly NLP1

management
Board and
Quality of
predict and Facesense accuracy queries on engine
avert early instA comprehension
claims rate2

1. NLP: Natural Language Processing

23 2. NLP Engine comprehension rate: % cases where meaning of the text based chat is correctly inferred
5. Platforms and Ecosystem
Life 991: Ecosystem for retirement and pension segment

Profitable
growth
distribution
Diversified
National Gratuity and Employee Public Provident Annuity Consolidated

mix
Pension System Superannuation Provident Fund Fund Portfolio View

innovation

Market-
leading
Simulation Tax Services Third-Party Health and Knowledge Advisory Retiree
Financial Services Wellness Corner

Reimagining
insurance
85K+ 8K+ ~11K ~Rs 250 mn 650+
registered Monthly NPS of annuity corporates

management
Board and
Quality of
users active accounts cover sold onboarded2
users opened

1. Life99: A platform under HDFC Pension Management Company

24 2. Count includes only those corporates which have minimum one user account registration
Leveraging technology to build resilience

Architecture Resilience – Scalability and Efficiency

Profitable
growth
Modular Low Code

distribution
Diversified
architecture Custom APIs Data Lake Platforms Cloud

mix
Workforce Resilience – Hybrid Working Environment

innovation

Market-
leading
Virtual Work From Re-imagine Digital Re- Morale and
Workspace Anywhere Process skilling Productivity

Reimagining
insurance
Cyber Resilience – Strengthen Cyber Security for post-covid world

management
Board and
Quality of
Access Secure Face
Zero Trust Enhance SOC Control Devices Recognition

1. SOC: Security Operations Center

25
Governance framework

Board of Directors

Profitable
Independent and experienced Board

growth
Committees

Corporate
Board

Risk Policyholder Nomination & Stakeholders’

Audit Investment Social With Profits
Management Protection Remuneration Relationship
Committee Committee Responsibility Committee
Committee Committee Committee Committee

distribution
Diversified
Committee

mix
Whistleblower Committee
Investment Claims Review

innovation

Market-
leading
Risk Council Committee
Management Standalone councils
Committees/Councils

Compliance
Council
Council
Grievance
ALCO Credit
Management

Management Business and Innovation

Council

Reimagining
Committee

insurance
Information &
Cyber Security Product Technology Persistency
Council Independent and Experienced Board
Council Council Council

Management
Disciplinary

Board and
Quality of
Panel for
Malpractices

Prevention of
Sexual
Harassment
Additional governance through Internal, Concurrent and Statutory auditors

26 The above list of committees is illustrative and not exhaustive

Financial risk management framework

Natural hedges Product design & mix monitoring

▪ Protection and longevity businesses ▪ Prudent assumptions and pricing approach

▪ Unit linked and non par savings products ▪ Return of premium annuity products (>95% of
annuity); Average age at entry ~60 years
▪ Deferred as % of total annuity business < 30%, with
limited deferment period (<4 yrs)
▪ Regular monitoring of interest rates and business mix

Managing
ALM approach Risk Residual strategy

▪ Target cash flow matching for non par savings ▪ External hedging instruments such as FRAs, IRFs,
plus group protection portfolio to manage non Swaps amongst others
parallel shifts and convexity
▪ Reinsurance
▪ Immunise overall portfolio to manage parallel
shifts in yield curve (duration matching)

FY20 FY21

Sensitivity Overall Non par 1 Overall Non par 1 Sensitivity remains range-bound on the back of
calibrated risk management
VNB VNB VNB VNB
Scenario EV EV EV EV
Margin Margin Margin Margin
Interest Rate +1% (1.2%) (0.7%) (1.3%) (2.0%) (2.2%) (1.5%) (2.3%) (2.9%)

Interest Rate -1% 0.6% 0.2% 0.0% 1.7% 1.6% 0.9% 1.2% 1.8%

27 1. Comprises Non par savings (incl Annuity) plus Protection

Performance of wholly-owned subsidiary1 companies

HDFC Pension AUM, Rs Bn. HDFC International

Life and Re

163.8

82.7
51.6

11.6

Mar'17 Mar'19 Mar'20 Mar'21

 HDFC Pension continues to be the largest PFM (Pension Fund Manager)  Registered growth of 81% in gross reinsurance premium in FY21
in Retail and Corporate NPS AUM segment
 Forayed into Kingdom of Saudi Arabia (KSA) and Qatar, both being
 Fastest growing PFM (Pension Fund Manager) under the NPS strategically important (re)insurance markets
architecture (YoY growth of 98% in AUM)
 Despite challenging external environment, momentum of growth
 Market share grew from 31.1% in Mar’20 to 34.4% in Mar’21 amongst trends and new opportunities remains positive
all PFMs
 S&P Global Ratings has reaffirmed its long-term public insurer financial
 Company has over 7.6 lakh customers - ~5.1 lakh in retail segment strength rating of “BBB” with “Stable” outlook in Dec 2020
and ~2.5 lakh in corporate segment

 #1 POP in new Corporate NPS business

1. Investment in subsidiaries not considered in Solvency Margin

28 2. POP: Point of presence for enabling opening of accounts on a platform

 Performance
Snapshot

Our Strategy

Managing Covid-19

Customer Insights

Annexures

India Life Insurance

3 Managing Covid

Page 29
Dynamic approach to manage impact of the COVID-19 outbreak

Accelerated digital Digital Servicing Employee Engagement/

selling Facilitation

• Focus on selling products • Communication to customers • Initiatives to keep employee

with end to end digital about digital touch-points for morale high; infrastructure
customer journeys claims, renewal collection enablement and collaboration
and customer queries tools for WFH option

Prioritizing areas of Responsive operating

focus measures

• Dynamic review and • Regular branch operations

assessment, strengthening being sustained with daily
operating assumptions, tracking of employee and
heightened focus on cost agent safety

30
 Emphasis on ‘digital’ across customer touch-points

New business / Customer Employee / Partner

Policy servicing
purchase interactions engagement

▪ Digital sales journey - End-to-end

▪ Digital Renewal collections -
87% based on renewal premiums ▪ Seamless support experience - ▪ e-learning platform – 7,000+
digital sales, from prospecting till agents attending training programs
and 95% based on no. of policies; ~1.6 mn monthly queries handled
conversion, including customer daily through mLearn / VC Platform
SVAR (voice bot for renewal calling) by instA (virtual assistant)
interactions
and use of Cloud telephony

▪ Chat PCV and eCCD - No

▪ Maturity payouts - Email,
dependence on salesperson or call ▪ Gamified contests - Launched to
eCCD center. ~51% digital pre-conversion
Whatsapp and customer portal 'My ▪ Use of mobile app – Over 3.2x drive adoption of digital
Account‘ enabled to upload increase in mobile app usage engagement initiatives
verification (through chat and
necessary docs
eCCD)

▪ LifeEasy - Simple '3 click claim'

▪ Agent on-boarding - Insta PRL
▪ Telemedicals – 42% of the process (~100% eligible claims ▪ InstaServe - OTP based policy
enabling digital on-boarding of
medicals done through tele- settled in 1 day). Claims initiation servicing tool to handle customer
agents – ~98,000 applicants since
medicals process also enabled through queries
launch in mid March
Whatsapp

▪ Uninterrupted customer ▪ Employee engagement - VC

assistance - Work from home
▪ RPA –Robotic Process automation ▪ 24*7 self-service options - based skill building sessions with
handled more than 280 processes ~95% of chats are self-serve via digital partners (Twitter, Google,
enabled across the organization;
remotely chat-bot Facebook)
Access to Microsoft Teams, Citrix

▪ InstaInsure - Simplified insurance ▪ Contact centres - Branch staff ▪

buying through a 3-click journey replacing call centre agents
▪ Branches - Daily tracking of Partner trainings - Conducted via
employee and agent safety digital collaboration tools
servicing customers

New initiatives launched to manage volatile business environment due to the Covid-19 outbreak

31
 Performance
Snapshot

Our Strategy

Managing Covid-19

Customer Insights

Annexures

India Life Insurance

4 Customer Insights

Page 32
Customer Insights – Customer Behaviour/Preferences
Personalization takes Human+Machine model Catering to changing
centre stage – Maintaining right customer demands
balance is the key
Consumers are looking for Different generational
customized experiences 34%
Customers are willing to segments look for different
specially when it comes to benefits in a product - one
servicing open new account on
mobile app/website, product, multiple
benefits can help serve
 No template-based however 49% customers wider customer base
responses also say that they place
 On demand access more trust in human
 Re-inventing behavior advisors
based offerings

Customers willing to Sustainability – Demand What strategies can

share personal data of the younger insurers adopt?
with trusted brands generation
 Investing in digital capabilities
71% to meet the needs of
69% generational segments
Customers say that they of millennials and younger
would share data on health, consumers say that they
expect insurers to adhere  Re-inventing behavior based
exercise and driving habits offerings/products
in exchange for lower to ethical and sustainable
pricing business practices
 Digitally enabling sales
channels to maintain right
balance between
human/machine touchpoints

33 Source: Accenture Global Insurance Consumer Study 2021, Nielsen Syndicated U&A
 Customer Insights – Customer Behaviour/Preferences

Top reasons to buy Life insurance Customer behaviour / trend

2019 rank 2013 rank
 The future intent to buy Life Insurance is the highest
Protect family in case of death 1 1
amongst financial products driven primarily by 21-40
To secure child’s education/marriage 2 2 year olds
Old age security/retirement 3 3  Within LI, the intent to buy traditional policies was
For disciplined saving 4 8
highest, particularly by people in the ages of 41-50

Good returns 5 4

Safe investment option 6 7  The intent to buy term insurance was driven
Additional investment option 7 4 primarily by people in the age group of 22-30

Dual benefit of investment and insurance 8 9  The key differentiating factors for consumers were
safety of investment and maturity value
Tax Saving 9 4

To meet additional life cover 10 10

 Major reasons to buy Life Insurance continue to be protection for

family, securing child’s needs and retirement planning over last 6  There has been significant pickup in intention to buy
years term products in metros

 Tax saving is the 9th reason to buy Life Insurance, compared to  Online mode for premium collection shows an
4th in 2013 increasing trend across geographies

34 Source: Nielsen Syndicated U&A

 Performance
Snapshot

Our Strategy

Managing Covid-19

Customer Insights

Annexures

India Life Insurance

5 Annexures

Page 35
Individual persistency for key channels and segments1

Across key channels (%) CY (FY21)

91 94
86 89 90
86
79 80 81
75 77 77
68 69 71
65 67
64

Actuarial
53
48

Agency Banca Direct Company

Financial
13th month 25th month 37th month 49th month 61st month

Across key segments (%) PY (FY20)

93 90
87 88
80 83
74 74 77 76
70 73 71
67 69 69 66
64
54

ESG
45

Savings (Traditional) Savings (UL) Protection Company

13th month 25th month 37th month 49th month 61st month

1. Calculated as per IRDAI circular (based on original premium) for individual business
36
VNB and NBM walkthrough
Rs Bn.

-0.59 1.22 -0.47

21.85
2.50
19.19

Actuarial
Financial
FY20 Impact of higher Change in New Business Fixed cost FY21
APE assumptions Profile 1 absorption

ESG
NBM% 25.9% 0.0% -0.7% 1.5% -0.6% 26.1%

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

37
Sensitivity analysis – FY21

Change in VNB
Analysis based on key metrics Scenario % Change in EV
Margin 1
Change in
Increase by 1% -1.5% -2.2%

Actuarial
Reference rate
Decrease by 1% 0.9% 1.6%
Equity Market
Decrease by 10% -0.1% -1.5%
movement
Increase by 10% -0.3% -0.6%
Persistency (Lapse rates)
Decrease by 10% 0.3% 0.5%

Financial
Increase by 10% -0.5% -0.8%
Maintenance expenses
Decrease by 10% 0.5% 0.7%

Acquisition Increase by 10% -3.1% NA

Expenses Decrease by 10% 3.1% NA

ESG
Increase by 5% -1.0% -0.8%
Mortality / Morbidity
Decrease by 5% 1.0% 0.8%

Tax rate2 Increased to 25% -4.8% -8.3%

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
38 allow for the benefit of policyholder surplus being tax-exempt as was envisaged in the DTC Bill.
Assets under management
Assets Under Management Change in AUM 1 Rs Bn.

Debt: Equity 61:39 62:38 71:29 64:36

17 466
UL:Traditional 54:46 50:50 43:57 43.57

Actuarial
37% 232

18%
1,750

1,550 16% 1% 131

1,350
95
1,150 67 104

Financial
950
1,738
(145)
1,272
1,256
750

1,066
550

FY20 FY21
350

Net Fund inflow Net investment income Market movements

150

31st Mar 2018 31st Mar 2019 31st Mar 2020 31st Mar 2021
Net change in AUM1
AUM in Rs bn Growth

ESG
 Over 98% of debt investments in Government bonds and AAA rated securities as on Mar 31, 2021

1. Calculated as difference from April to March

39
 Stable capital position
Rs Bn.
Dividend paid 3.3 4.0 - -

NB premium growth 32% 32% 15% 17%

201% 210%
192%

Actuarial
120.0 188%
184% 190%

94.3
100.0
170%

70.8
80.0 62.7 24.0 150%

52.1 13.1 130%

Financial
60.0
12.7 23.4

11.3 19.2 110%

40.0 16.7
13.6 90%

46.9
20.0
33.3 38.5 70%
27.2

- 50%

Mar 31, 2018 Mar 31, 2019 Mar 31, 2020 Mar 31, 2021

ESG
ASM1 RSM @100% Incremental RSM @150% Surplus Capital Solvency margin 2,3

 Stable solvency ratio, augmented by steady accretion to backbook

1. ASM represents Available solvency margin and RSM represents Required solvency margin
2. Investment in subsidiaries not considered in solvency margin
3. Final dividend of Rs. 2.02 per share has been approved in the Board meeting on 26th April 2021; Final payout is subject to shareholders’ approval in upcoming AGM and
40 post payout, solvency ratio would be reduced to the extent of dividend paid
Governance - Promoting responsible behavior

Governance structure Information / Cyber Security Risk Management and BCM

Actuarial
Corporate governance Board Board Risk management Mitigating & Managing
ISO 27001:2013 and Data Privacy Policy
policy Diversity evaluation & policy Risk
ISMS assessment o Applicable to
policy independence
o Commitment to ethical program customers, o Risk oversight by o Modes of Risk
business practices o 27% women o Six o Controls validated and employees & service Board of Directors awareness
o Multiple independent certified by providers
o Includes Company’s nationalities directors Independent auditors  Trainings, E-mailers,
corporate structure, & ethnicities o ‘Fit and Proper’ and IRDAI auditors o Disciplinary action is o Review in multiple Seminars,
culture, policies and as per management Conferences, Quizzes

Financial
in line with the
stakeholder management regulation malpractice matrix forums and Special
awareness Drives

o Enterprise risk
management (ERM) Sensitivity analysis and
Business Ethics/
o
Compensation Framework framework stress testing
Compliances
 ‘Three Lines of
Defense o Business Continuity
approach’ Management (BCM)
 Reviewed and

ESG
 Creation of a
approved by the recovery plan for
Remuneration policy Performance Disclosure of Code of Whistle blower PRSH1 BRR2 & Board critical business
o Seeks to balance the Management managerial Conduct Policy Stewardship Code
activities of a
fixed and incentive pay System remuneration function
based on the in the annual
o Reflects the short and
principles of report
long-term performance
objectives of the balanced scorecard
Company Human Anti Bribery &
AML3 Privacy Policy
Rights Corruption Policy

1. PRSH: Prevention of Sexual Harassment

2. BRR: Business Responsibility Report
41 3. AML: Anti Money Laundering
Social initiatives - Culture of care and giving

Inclusive growth Customer centricity

Actuarial
CSR Financial COVID-19 Leveraging technology Customer Satisfaction
Inclusion Response
o The Corporate Social o To simplify life insurance for o Grievance Redressal Policy
Responsibility wing is Insured 21 million o Contribution to PM Cares customers through their journey
aligned with the UN lives through Fund across issuance, claims, servicing, or o Complaints per 10K
Sustainable Development microfinance any other engagement reduced from 47 in FY20

Financial
Goals (SDGs) with focus on institutions in FY21 o Medical supplies, to 35 in FY21
Education, Health, nutritional meals for  Artificial Intelligence (AI)
Environment, Livelihood & frontline healthcare for text and speech o 13th month persistency
Disaster Relief workers recognition; improved to 90%
 Machine Learning (ML) to
 FY21: 22 CSR o Distribution of Happiness improve persistency; o Improvement in overall
projects across 24 Box consisting of  Cognitive bots (software Customer Satisfaction
states and 3 Union immunity boosting robots) for 24x7 customer (CSAT) Scores
Territories impacting supplements, hygiene service; and
>233K beneficiaries support material and  Alternate data to enhance

ESG
in India educational workbooks underwriting
for underprivileged
school children

42
Social initiatives – Human Capital Development

Attracting talent Employee engagement Talent management/retention

Actuarial
o Online yoga, meditation sessions, fitness challenges
o Virtual hiring and on-boarding process without
(Walkathon, Fit by Bit), Click2Wellness app
compromising on quality o Fast track growth path for special categories of
o Emotional and well being assistance program for employees - Management Trainees & Graduate
o Robust employee referral schemes (>50% of the
employees Trainees, etc.
hiring through referrals)
o Engagement programs for employees and their o Potential review and talent development
o Flexi job program and flexi hours to promote
families interventions for leadership
WFH, attract gig workers

Financial
o Talk to Doctor for unlimited free consultation o Robust, transparent and objective performance
o Hire–train-deploy model through tie-up with
management system
reputed learning institutions o Strong Reward and Recognition framework
o Career microsite, job portal to educate
employees on career opportunities within the
company

Focus on training and development Employee diversity o Higher increments, bonuses for those exceeding
expectations
o Long term incentive plans in the form of ESOPs
and cash to attract, retain and motivate good talent

ESG
o Mandatory and optional learning programs for o Elaborate succession planning for Key Managerial
employees, contractors, channel partners o Actively promoting diversity and inclusion Personnel, critical senior roles
o Mobile learning app for self-paced learning o 24% women employees (crèche facility, maternity
o Virtual training of employees during Covid transition program)
o Promoting diverse talent pool (work profiles for
o Access to curated online training programs from
second career women, specially-abled)
reputed universities
o LGBTQ+ friendly organisation
o Career coaching and development interventions

43
Environmental initiatives - Creating a better environment

Energy and Water Digitization Waste Management

Actuarial
Energy efficiency and water conservation Reduction of Paper Usage o Segregation and proper disposal of waste -
initiatives dry and wet
o Online /e-forms for customers
o Use of 3/5 star rated appliances with regular o Annual report FY’20 was digitally o No single-use plastics
maintenance communicated to all stakeholders
o Use of LED based lighting system o Printers configured with default double side  Use of bio-degradable garbage bags
Use of sensor based urinals and water taps printing  Cafeteria with reusable plates, cutlery,

Financial
o
o 12 water dispensing units installed in wooden stirrers etc.
villages to provide clean drinking water  Conference / meetings rooms with glass
bottles and cups
 Employees encouraged to bring their own
CSR initiatives Business Travel mugs/glass

o Compliant under the Hazardous and Other

Wastes (Management and Tran-boundary
Movement) Rules, 2016 and E-waste
(Management), Rules, 2016

ESG
Reducing operational footprint through CSR
activities o 40+ video conferencing rooms setup
o 17 city forests created by planting 22,269 to reduce travel
trees in 45,900 sq.ft. area using the Miyawaki
method. Over 50 different native species used

44
 Performance
Snapshot

Our Strategy

Managing Covid-19

Customer Insights

Annexures

India Life Insurance

6 India Life Insurance

Page 45
 Growth opportunity: Under-penetration and favorable demographics
Life Insurance penetration 1
Life Insurance density US$ 2

(2019) (2019)
18.3%  India remains vastly under-insured, both in
16.5%
8,979 terms of penetration and density

 Huge opportunity to penetrate the

underserviced segments, with evolution of
6.0% 6.7% 4,129
3,244
2,691 the life insurance distribution model
3.3% 3.4% 2.8% 2.3% 380
256 230
58
Hong Kong

India
Japan

Thailand
Taiwan

Singapore

Malaysia

China

Hong Kong

Japan

India
Taiwan

Thailand
Singapore

Malaysia

China
Life expectancy (Years) Population composition (Bn.)  India’s insurable population estimated to be
at ~1 bn by 2035
1.3 1.6 1.7
 Emergence of nuclear families and
6% 9%
75.0
15% advancement in healthcare facilities lead to
increase in life expectancy thus facilitating
71.9 56%
61% need for pension and protection based
60%
67.6 products

38%
30% 25%

2015 2035 2055 2015 2035 2055

Less than 20 years 20-64 years 65 years and above

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)
46
Low levels of penetration – Life protection

172 mn 68 mn 1.7 mn Protection gap 2

(2019)
83.0%
76.0% 74.0%
71.0% 70.0%  India has the highest protection gap in
61.0% the region, as growth in savings and life
55.0% 55.0% 54.0%
insurance coverage has lagged behind
41.0%
economic and wage growth

 Protection gap growth rate is predicted

to grow at 4% per annum

India

Hong Kong
Thailand

Japan

South Korea
Malaysia

Singapore
Indonesia

China

Australia
Trend of retail loans 3 (Rs Tn.)  Retail credit has grown at a CAGR of
Urban Working Addressable Annual Policy 18% over last 10 years
Population Market Sales 42
(excl blue collared)  Increasing retail indebtedness to spur
34 need for credit life products
 Only 1 out of 40 people (2.5%) who can 24  Immense opportunity given:
afford it, is buying a policy every year 1 17  Increasing adoption of credit
 Even within the current set, Sum Assured as 8
12
 Enhancement of attachment rates
a multiple of Income is <1x
 Improvement in value penetration

FY10 FY12 FY14 FY16 FY18 FY20  Widening lines of businesses

1. Goldman Sachs Report, March 2019

2. Swiss Re (Based on respective financial year of the countries)
3. Kotak institutional equities
47
Macro opportunity – Retiral solutions

India’s pension market is under-penetrated at Improvements in life expectancy will lead to an average post
4.8% of GDP retirement period of 20 years

Pension Assets / GDP Ratio Life expectancy at age 60

130.7 22 22
120.5 20
19
18 18
17
16

56.4 60.8
43.2

4.8

India Hong Kong South Africa Japan USA Australia

India Hong Kong South Africa Japan USA Australia

1995-2000 2000-05 2011-12 2030E
Males Females
Elderly population is expected to almost triple by 2050

Ageing population
 Average household size has decreased from 4.6 in 2001 to 3.9 in 2018

7% 9% 14%  Total Pension AUM is expected to grow to Rs 118 Tn by 2030 (about

1/4th accounted by NPS)
67% 68% 68%
 Mandatory schemes to increase coverage for both unorganized and
26% 23%
organized sectors
19%
2020 2030 2050
Age <15 Yrs Age 15-65 Yrs Age >65 Yrs

Source: Milliman Asia Retirement Report 2017; Survey by NSSO, Ministry of statistics and Programme implementation Crisil PFRDA, Census of India, UN Population Estimates
48
Government bond auctions

Government Bonds – Tenorwise Issuance Rs Cr

27% 22%
29% 35% 35%

73% 78%
71% 65% 65%

FY17 FY18 FY19 FY20 FY21

>15yrs 1,54,520 1,80,529 2,04,000 2,38,000 2,65,575
<=15yrs 3,73,525 4,97,579 3,82,941 4,44,000 10,01,835
Total 5,28,045 6,78,109 5,86,941 6,82,000 12,67,410

 Auction of >15 year maturity bonds has been ~25-30% on an average facilitates writing annuity business at scale
 Budget estimate plan for government borrowing for FY22 at Rs. 12 trillion on gross basis

Source: CCIL & National Statistics Office, Union Budget, RBI

49
Life Insurance: A preferred savings instrument

Household savings composition Financial savings mix

25% 22% 18% 18%

3% 8%
11% 16%
12%
13% 19%
18% 21%
26% 17%
52%
68% 65% 65% 16%

67%
50% 56%
47%
48%
32% 35% 35%

FY10 FY13 FY16 FY19 FY10 FY13 FY16 FY20

Financial savings Physical savings

Currency & deposits Life insurance Provident/Pension fund Others
Household savings as % of GDP

 Increasing preference towards financial savings with increasing financial literacy within the population
 Various government initiatives to promote financial inclusion:
 Implementation of JAM trinity
 Launch of affordable PMJJBY and PMSBY social insurance schemes
 Atal Pension Yojana promoting pension in unorganized sector

50 Source: DBIE-RBI Statistics, RBI Annual Report, Economic Survey, CSO, www.pmjdy.gov.in
 Industry new business1 trends

Individual WRP in Rs bn

Sensex
Private players 57% 52% 46% 37% 38% 38% 49% 52% 54% 56% 58% 57% 60%
Market share
1% 7% -20% -24% 2% -3% 16% 14% 26% 24% 12% 5% 8%
Growth %

Private
LIC -22% 29% 4% 11% -4% -2% -27% 3% 15% 13% 5% 8% -3%

Overall -10% 17% -9% -5% -2% -3% -11% 8% 21% 19% 9% 6% 3%

 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

51
Private industry: Product and distribution mix

Product mix 1
Distribution mix 2

Individual Agents Corporate Agents - Banks Corporate Agents - Others Brokers Direct Business
Unit Linked Conventional

63%
57% 9% 10% 10% 12% 14%
56% 3% 16% 17%
54% 5% 4%
52% 51% 51% 3% 3% 3% 3%
48% 49% 49% 3% 3% 3% 3%
46% 3% 3% 3%
43% 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

 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

52
Appendix
Financial and operational snapshot (1/2)
CAGR Rs Bn.
FY21 FY20 YoY Growth FY19 FY18
(3 yrs.)
New Business Premium (Indl. + Group) 201.1 172.4 17% 149.7 113.5 21%

Renewal Premium (Indl. +Group) 184.8 154.7 19% 142.1 122.1 15%

Total Premium 385.8 327.1 18% 291.9 235.6 18%

Individual APE 71.2 61.4 16% 52.0 48.9 13%

Overall APE 83.7 74.1 13% 62.6 55.3 15%

Group Premium (NB) 100.3 87.8 14% 73.3 54.1 23%

Profit after Tax 13.6 13.0 5% 12.8 11.1 7%

- Policyholder Surplus 7.3 10.9 -33% 9.0 8.5 -5%

- Shareholder Surplus 6.3 2.1 201% 3.8 2.6 34%

(1)
Dividend Paid - - NA 4.0 3.3 NA

Assets Under Management 1,738.4 1,272.3 37% 1,255.5 1,066.0 18%

Indian Embedded Value 266.2 206.5 29% 183.0 152.2 20%

(2)
Net Worth 84.3 69.9 21% 56.6 47.2 21%

NB (Individual and Group segment) lives insured (Mn.) 39.8 61.3 -35% 51.4 33.2 6%

No. of Individual Policies (NB) sold (In 000s) 982.0 896.3 10% 995.0 1,049.6 -2%

1. Including dividend distribution tax (DDT); Proposed final dividend of Rs. 2.02 per share approved in Board meeting on 26th April 2021, this is subject to shareholders’ approval
54 2. Comprises share capital, share premium and accumulated profits/(losses)
Financial and operational snapshot (2/2)
FY21 FY20 FY19 FY18
Overall New Business Margins (post overrun) 26.1% 25.9% 24.6% 23.2%
(1)
Operating Return on EV 18.5% 18.1% 20.1% 21.5%
Operating Expenses / Total Premium 12.0% 13.1% 13.1% 13.5%
Total Expenses (OpEx + Commission) / Total Premium 16.4% 17.7% 17.0% 18.0%
(2)
Return on Equity 17.6% 20.5% 24.6% 26.0%
Solvency Ratio 201% 184% 188% 192%
(3)
Persistency (13M / 61M) 90%/53% 88%/54% 84%/51% 83%/50%
Market Share (%)
- Individual WRP 15.5% 14.2% 12.5% 13.3%
- Group New Business 27.6% 29.0% 28.4% 28.5%
- Total New Business 21.5% 21.5% 20.7% 19.1%
Business Mix (%)
(4)
- Product (UL/Non par savings/Non par protection/Par) 24/36/7/34 28/45/8/19 55/20/7/18 57/9/5/28
(4)
- Indl Distribution (CA/Agency/Broker/Direct) 61/13/7/19 55/14/9/22 64/13/4/19 71/11/5/14
(5)
- Total Distribution (CA/Agency/Broker/Direct/Group) 25/6/2/17/50 22/7/3/17/51 26/7/2/16/49 33/7/2/10/48
- Share of protection business (Basis Indl APE) 6.8% 7.6% 6.7% 5.1%
- Share of protection business (Basis Overall APE) 12.8% 17.2% 16.7% 11.3%
- Share of protection business (Basis NBP) 19.6% 27.6% 27.0% 25.9%

1. During FY18, there was a one time positive operating assumption change of Rs 1.4 bn based on review by an external actuary as part of the IPO process. Excluding this one
time adjustment, Operating return on EV would have been 20.4% for FY18
2. Calculated using net profit and average net worth for the period (Net worth comprises of Share capital, Share premium and Accumulated profits)
3. 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
55 5. Based on total new business premium including group. Percentages are rounded off
Revenue and Profit & Loss A/c
Revenue A/c Profit and Loss A/c Rs Bn.
FY21 FY20 FY21 FY20
Premium earned 385.8 327.1 Income
Reinsurance ceded (4.6) (4.8) Interest and dividend income 4.4 3.6
Income from Investments 326.8 (33.1)
Net profit/(loss) on sale 2.1 0.8
Other Income 1.6 2.1
Transfer from Policyholders' Account 9.9 11.9
Transfer from Shareholders' Account 2.6 1.1
Other Income - 0.2
Total Income 712.1 292.2
Commissions 17.1 14.9 Total 16.4 16.5

Expenses 45.9 42.7 Outgoings

GST on UL charges 3.6 3.5 Transfer to Policyholders' Account 2.6 1.1

Provision for taxation 2.7 1.5
Expenses 0.4 0.3
Provision for diminution in value of
(1.9) 5.7 Interest on Non-convertible
investments 0.3 -
debenture
Benefits paid 217.5 181.4
Provision for diminution in value of
(0.4) 2.0
Change in valuation reserve 408.3 24.4 investments

Bonuses Paid 7.9 8.5 Provision for Taxation (0.1) 0.2

Total Outgoings 701.2 282.5 Total 2.8 3.5

Surplus 11.0 9.7 Profit for the year 13.6 13.0

Transfer to Shareholders' Account 9.9 11.9
Funds for future appropriation - Par 1.1 (2.2)
Total Appropriations 11.0 9.7

1. Numbers may not add up due to rounding off effect

56
Balance sheet
Mar 31, 2021 Mar 31, 2020
Rs Bn.
Shareholders’ funds
Share capital (including Share premium) 25.0 24.2
Accumulated profits 59.3 45.7
Fair value change 2.1 (1.9)
Sub total 86.4 68.0
Borrowings 6.0 -
Policyholders’ funds
Fair value change 25.6 0.5
Policy Liabilities 855.2 652.7
Provision for Linked Liabilities 709.6 508.4
Funds for discontinued policies 38.0 33.4
Sub total 1628.4 1,195.0
Funds for future appropriation (Par) 9.9 8.8
Total Source of funds 1,730.7 1,271.9

Shareholders’ investment 85.4 58.6

Policyholders’ investments: Non-linked 905.4 671.9
Policyholders’ investments: Linked 747.6 541.8
Loans 4.2 3.0
Fixed assets 3.4 3.3
Net current assets (15.4) (6.7)
Total Application of funds 1,730.7 1,271.9
1. Numbers may not add up due to rounding off effect
57
Segment wise average term and age1

Average Policy Term excluding annuity (Yrs) Average Customer Age excluding annuity (Yrs)

FY21: 24.7 (FY20: 19.6) FY21: 35.8 (FY20: 37.2)

UL 12
UL 37
12 37
Par 42 33
27 Par
35

Non-par Health 24 Non-par Health 33

18 33
12 Non-par Savings 36
Non-par Savings 38
11
40 Non-par Protection 34
Non-par Protection 34
39
Non-par Pension 55
Non-par Pension 11 57
11

FY21 FY20 FY21 FY20

 Focus on long term insurance solutions, reflected in longer policy tenure

 Extensive product solutions catering customer needs across life cycles from young age to relatively older population

58 1. Basis individual new business policies (excluding annuity)

Summary of Milliman report on our ALM approach
Scope of review Portfolios reviewed

• Assess appropriateness of ALM strategy to manage

 Portfolio 1: Savings and Protection – All non-single premium
interest rate risk in non-par savings business
non-par savings contracts and group protection products
• Review sensitivity of value of assets and liabilities to
 Portfolio 2: All immediate and deferred annuities
changes in assumptions

Description Stress scenarios tested Net asset liability position

Parallel shifts/ shape changes in yield curve within +- 150 bps

Interest rate scenarios Changes by < 4.5%
of March 31st 2020 Gsec yield curve

Interest rate + Interest rate variation + changes in future persistency/

Changes by < 7%
Demographic scenarios mortality experience

100% persistency and 100% persistency with interest rates falling to 4% p.a. for
Still remains positive
low interest rates next 5 years, 2% p.a for years 6 -10 and 0% thereafter

Opinion and conclusion

ALM strategy adopted for Portfolios 1 and 2 is appropriate to:

 meet policyholder liability cash flows
 protect net asset-liability position thereby limiting impact on shareholder value

1. Opinion issued by Milliman Advisors LLP on ALM strategy (for non par business) basis FY20 disclosures
59
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.

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Indian 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.

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Embedded Value: Economic assumptions1

Forward rates % Spot rates %

Years
As at Mar 31, 2021 As at Mar 31, 2020 As at Mar 31, 2021 As at Mar 31, 2020

1 3.95 4.69 3.87 4.58

2 5.31 5.69 4.52 5.06

3 6.27 6.52 5.04 5.48

4 6.95 7.04 5.46 5.81

5 7.42 7.29 5.80 6.06

10 7.97 7.18 6.71 6.55

15 7.52 7.03 6.95 6.64

20 7.06 7.00 6.96 6.67

25 6.76 7.00 6.90 6.69

30 6.59 7.00 6.82 6.70

62 1. Forward rates are annualised and Spot rates are continuous

 Glossary (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

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 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

64
 Disclaimer

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.

65
Thank you