Here's How Bajaj Finserv's Insurance Subsidiaries Performed In Fiscal 2023

Bajaj Group's insurance arms, Bajaj Allianz Life Insurance Co. and Bajaj Allianz General Insurance Co., reported growth in financial year 2023.

The life insurance arm ranked fourth among private peers in terms of market share, while the general insurance company ranked third, as of March 2023.

The two companies disclosed their financial performance as part of the public disclosures of their listed parent, Bajaj Finserv Ltd., on April 27.

• After-tax profit rose 20% to Rs 390 crore.

• Value of new business—the present value of the future profit associated with new business written during the period—stood at Rs 950 crore, up 53%.

• Value-of-new-business margin was 15.5% versus 14.2%

• Solvency ratio stood at 516%.

• Return on embedded value was 14.4%.

• Market share in the life insurance industry stood at 2.9%, ranking fourth after the three listed peers—SBI Life Insurance Co., HDFC Life Insurance Co. and ICICI Prudential Life Insurance Co. It has overtaken Max Life Insurance, which has a market share of 2.42%.

• The 13^th-month persistency ratio—or customer retention—rose by 100 basis points to 83% and for the 61^st month, it rose by 200 basis points to 50% from 48%.

• Asset under management rose 6% to Rs 90,584 crore.

• Share of unit-linked insurance policies was 31% in the product mix. Annuity was 7%, individual non-par savings 42%, non-par protection 3%, and participating products stood at 17%.

Share of individual non-participating products went up from 27% in the fiscal 2022 to 42% in FY23.

This unusual hike could be attributed to high-ticket policy sales—non-par policies with premium contributions exceeding Rs 5 lakh—whose payouts were made taxable for purchases after April 1, except in cases of death, according to the Union budget 2023 announcement.

• After-tax profit rose 1% at Rs 1,348 crore.

• Net premium earned increased 3% to Rs 8,019 crore.

• The combined ratio, calculated by adding incurred losses and expenses and dividing them by the premium earned, was at 100.5% as against 99.6%.

• Solvency ratio stood at 391%.

• It had a market share of 6.29%, standing third among private general insurers after the listed ICICI Lombard General Insurance Co. and HDFC Ergo General Insurance.

• Return on equity was 15% versus 17.3%.

• Product mix comprises 35% retail motor, 6% retail health, 12% group health, 18% crop insurance, 19% property, liability, engineering and the remaining 10% from others.

• Its distribution mix has the highest share from brokers with 48%, 25% from direct business and 15% from individual agents.

• Asset under management stood at Rs 27,809 crore, up 13%.

"As an organisation, we crossed yet another milestone by registering our highest ever gross written premium of more than Rs 15,000 crore and a profit after tax of Rs 1,348 crore," Tapan Singhel, chief executive officer at Bajaj Allianz General Insurance, told BQ Prime.

According to Singhel, the company maintained "one of the least grievance ratios" in the industry.

Their exchange filing said that the grievance ratio for fiscal 2023 was 0.92 per 10,000 policies issued—which is expected to be among the best in the Industry.

Singhel said the previous financial year was "interesting", with the regulator taking several industry-changing steps. The insurance industry has also picked up well after two pandemic-affected years, he said.

"With a future-centric and industry-focused regulator at the helm of affairs, who is taking the industry in the right direction, we will see the sector transitioning from a product-focused approach towards a solution-centric one," Singhel said.

Queries addressed to Bajaj Allianz Life Insurance were not yet responded to at the time of publication.