HDFCLIFE HDFC Life Insurance Co Ltd · Life insurance Q4 FY26 · concall

Pattern: hdfc bank channel competitive

GST taper 300->190->110 bps delivered.

Hdfc bank channel competitive — answer hedged.
Fy23 fy26 vnb cagr — answer hedged.
Vnb below industry benchmark — answer hedged.

1 deflection · 11 weak · 16 clean — pushback across 12 of 28 Q&A turns

Focused evidence 12 of 28

Avinash Singh · Emkay Globalweak

On growth and factors affecting growth in HDFC Bank channel - competitive intensity or irrational pricing. How has wallet share within HDFC Bank channel behaved in Q4 vis-a-vis nine months? What steps are you taking, what are you seeing competitors do, that gives confidence things will normalize back to past levels in FY27?

I'll take the HDFC Bank question and then pass it on to Eshwari on par questions. On HDFC Bank, I would be more worried if there were some very different product innovation or some massive digital, great technology initiative. Really on competition on price point, we don't believe that that is sustainable on a long-term basis, whether it's aggression on pricing and/or on underwriting. And clearly, it is visible on ground. So what will change? IFRS is a good segue because onerous contracts start becoming very apparent. Also given that RBC possibly has now taken a back seat to IFRS, what all of us thought that RBC would get rolled out first, but if it gets delayed all of this aggression does consume capital as well. So there's only so far that some of this can be bankrolled. Plus, we haven't stayed quiet. We have introduced products such as our AGNI product (variable annuity), some of the tweaks that we have done on even non-par. Also, we are very granular in terms of discussions with our parent in terms of which are the branches wherein our share is lower than what might be at an acceptable level. The correlation is fairly strong that where our manpower share is lower than 50% our counter share goes down. Vineet Arora added: We knew exactly where we let go of business and we know what price point works for us. We do feel that aggression, now that the GST burden on the margin and the cost is also more or less absorbed, it will be easier for us also to come back and have better price points. We feel that we will also be more competitive and we should be able to garner more share from these branches that we might have let go of earlier.

Suresh Ganapathy · Macquarieweak

In FY23, if you were to make a business projection of your VNB growth, you would have said 15% plus CAGR for the next three years. Looking at FY26 number, your CAGR has been just 3%, FY26 over FY23. It's actually not grown at all in three years' time. Are you confident that with the GST cut, whether it is protection, the next three years will not see a single-digit VNB CAGR?

First, I'll give you the CAGR, but FY25 to FY26, FY25 we were at 25.6%, and if I were to back out GST and SSV, the surrender value impact, then my starting point would have been 24.3%. Against, 24.3%, I was at a similar kind of a number, 24.2%. Now to your more philosophical question, because of three very large ticket things that have happened, which is starting from the 5 lakh and above being taxed, followed by surrender charges, followed by GST, business model changes have happened unfortunately with alarming regularity and fairly material. I have high level of confidence in the medium term. However, here and now in one year or so, a little bit more difficult to say. However, the growth over the four-year period of 1.8x to 2x, I think that is still something that we will be gunning for. To summarize, on a normalized three-year VNB CAGR would be around 9%, 10%, and there I am adjusting about INR1,000 crores between this FY23 and the GST impact in FY26.

Suresh Ganapathy · Macquarieweak

Even adjusting for that, that is still way below your industry standard. If I look at FY10 to FY21-22, you were the bellwether on the industry benchmark. Even normalizing, your VNB growth has been weak, and competition is not going away. People are going to be aggressive. There is no compulsory listing. So, we are in a tough industry both from a competition angle as well as from a regulatory angle.

On competition, with IFRS, it's going to dramatically change the way and bring discipline - it's a proxy for listing in a way because listing or disclosures, unfortunately, if I was a bank then most of my competition is listed and there's only that much aggression one can exercise and that will be contained. But IFRS, regardless of whether you're going to be listed or not, there are going to be segment-level and even further nuanced disclosures that will very clearly show ab initio what are the loss-making or onerous contracts. So this is going to be a tectonic change in how companies look at their business. It might not happen in FY27 because of most companies asking for forbearance, but certainly a year down the line, it should happen. Niraj Shah added: You spoke about period from FY23 to FY26. Unfortunately, both the opening as well as the closing year had a lot of distortions. If you were to just dial back one year say the period from FY20 to FY24, the numbers fairly healthy at 15%-odd. Just from a business cycle perspective and everything that is coming in the next three to five years, we absolutely have no doubt as to why the sector and us within the sector not be able to get back to that compounding story.

Madhukar Ladha · JP Morganweak

If I compare the IRRs on the non-par product in the principal HDFC Bank channel offered by your competitor, the difference is quite substantial. If you were to offer higher IRRs, what would be the impact on your margins? Why can't we sort of offer a more competitive product and capture that counter share? Can you quantify the operating variance and assumption change between elements like persistency, mortality, expenses?

On the question on IRR, there are two things. One is that in certain categories and variants of products the difference is fairly substantial. And since we introduced this category to the market six or seven years back with multiple product innovations, the easiest thing to do is to offer a rate. So if we could offer a rate which is the highest in the market at the economics that are making sense to us, we would have done that. So if we are not doing that, it basically tells you that the dilution on the economics is not acceptable at the prevalent rates that some of the peers are choosing to offer. The equally important thing is that given our position in the market if we end up doing something which is let's say very aggressive or irrational, it unfortunately vitiates the entire environment and it forces peers to do the same. So, then you get into a downward spiral from which the industry will never recover. Vibha Padalkar added: I could give 70 basis points higher on non-par. But no one really knows, is this lapse-supported product? Which means that you're hoping that customers don't pay their premiums down the line. So some of these things will start becoming a lot more apparent under IFRS. It can either be bankrolled by the shareholder or wherein something else is there where corners cut. These are the only two possibilities.

Madhukar Ladha · JP Morganweak

On margins, on a Q-o-Q basis we were expecting about a 100 basis points improvement because every quarter we were trying to lower the GST impact. That has not played out this quarter. Given negative expense drag and negative assumption change, how should one see margins shaping up in FY27 and beyond? I believe it is probably going to be difficult to maintain the earlier sort of guidance of 25.6%.

If we were to just go back to what we said three months back in terms of what the GST impact is likely to be. We started with 300 basis points, brought it down to 190 and now we are standing at 110 basis points. So that is moving exactly in line with what we had spoken about. And by the time we finish the first half of next year, we should be done with the GST impact and completely absorb it in our business model. Now coming to whether we can get back to the levels that we spoke about at the beginning of the year of about 25.5%, we can get to it. Are we in a tearing rush to get to that at the cost of growth? We are not. Our objective will be to get to faster than industry growth and maintain VNB in line with that. So we are not too concerned about the additional impact that we saw in Q4 on VNB growth and consequently on the full-year margins. We should be able to recover as the growth normalizes next year. If we're talking about a 3-year perspective, clearly there is room for margin expansion. Vibha Padalkar added: If you see Slide 13 of our investor presentation, if I ignore the GST, the one-time GST and surrender charge impact, we were very close to the same 25.6% of last year. The drop is only because of these items. So it was almost like margins were being held and the starting point is anyway 25.5%.

Nischint Chawathe · Kotak Institutional Equitiesdeflection

At the beginning of last year, you budgeted for around 14% APE growth. Destiny had other plans, but when you start this year given the uncertainties, how do you budget for FY27 growth? What would be your starting point?

So exactly like you said Nischint, a 14% I think it was actually we had said 12-13%, but okay, I think low double-digit growth is what we had said. Now with all this uncertainty and we have been here before in terms of when COVID was there and so on. I think we will just take it a month at a time in terms of planning. It is really volatile. What we will attempt to do is grow slightly faster than the sector and while doing that focus on some of the headwinds that we have on protection. We talked about some of the products like AGNI. We will really focus on maximizing Tier 2 and 3 as well. So that's what we will focus on rather than trying to put a number, because a number means that you're going invest resources and so on up front. I think it's a little bit too volatile a situation.

Nischint Chawathe · Kotak Institutional Equitiesweak

Do you think that this is the right environment for non-par to pick up over ULIPs given the way the bond yields have moved and, you could probably leverage that in terms of offering higher IRRs? But do you think the demand is elastic to IRRs?

Yeah, absolutely. We've been waiting Nischint, but it's not happened given the flows continue on the equity side, which is again we have no problem with that, we'll take all the growth that comes in unit-linked as well given that we now have an operating model that works. It's a bit puzzling to us as well that given the environment and given the uncertainty and the returns on the equity side in the short-term, customers are still ignoring asset allocation. We are ready with multiple product options for customers and we absolutely believe this year I think the non-par take-up should be higher than what it was last year. On elasticity to IRRs - No, we do not believe so. To some extent, yes, where in an extreme situation. But the thing is if within a band of like in protection 15%-20% up and down, it is not elastic, it is driven by multiple things including brand preference and as long as we're in the zone we are okay. On non-par, maybe barring one or two players, you find everyone from a mix perspective being anywhere between 15% to 20% of their product mix is non-par. So once you're in a range, then multiple other things take over.

Sanketh Godha · Avendus Sparkweak

Given the capital will come in and maybe sub-debt raise, will it give a bit of little more comfort or gunpowder to be little more competitive compared to what you were in the current year? Maybe there was a border case business you missed, you chose to not to do it, but with the capital, will that thought process might change at the fringe level?

I think we have enough gunpowder to be competitive, but for different reasons, not necessarily because capital has come in. Capital has come in for growth in the normal scheme of things because RBC is likely to come after IFRS rollout has happened. So it's more to tide over that. There are quite a few things exactly like we did in the case of protection, which was really being nuanced on driving the narrative rather than being forced into doing things that we are not comfortable doing or don't see the end game in doing all those things. So you will have to just wait and watch because again not everything can be disclosed on a call like this. But yes, we are not just sitting and waiting until the whole thing blows over, but yes, there are at least three or four things up our sleeve to manoeuvre the narrative in a direction that we want to.

Vinod Rajamani · Nirmal Bangweak

On retail protection - what proportion of buyers would you say on retail protection are first-time buyers? Is there any sense that you're getting that the addressable new-to-insurance kind of pool, that pool is kind of thinning or is that getting a little saturated? And what is the kind of sustainable quarterly protection growth rate into FY27?

It is very encouraging to see that post-GST about 80% of the protection business is new to HDFC Life customers that we saw. We're basically seeing fair bit of demand across different customer segments. And also in terms of the choices that they're making in terms of taking full advantage of the GST cut to either buy more sum assured. So that's a very good sign. With all of this as well, in spite of all of this, we are still fairly under-insured as a country and the customer segments that we believe require more insurance. So we're far from saturated. Customers are taking making different choices to buy protection. But a lot of young customers are taking pure protection products and the GST change has been a fairly big catalyst there.

Manjeet Buaria · Saamya Advisors LLPweak

Why did we not revisit our dividend policy and skip about INR 450 crores of dividend payout when we are simultaneously looking to raise INR 1,000 crores in a primary issue?

We do have a lot of retail investors, close to 9-10 lakhs of retail investors on an average, there are pension funds also. When you look at banks, banks come to the market to raise capital all the time, and they pay dividend. So it's no different; it's just that in life insurance, the back book so far has largely funded normal growth. Now, protection here has been a lot higher than in the past 17-18 years. That's a good problem to have, however it requires capital. So this is growth capital. If there was an issue in terms of some hole that is caused because of some inefficiencies or something like that, then maybe what you're saying could be considered. But this is growth capital, no different from any other sector, and this is business as usual as far as existing shareholders are concerned, especially the retail shareholders. So we've tried to balance the two objectives.

Nidhesh Jain · Investecweak

On margin - this year we had a negative impact of 110 basis points because of GST and 20 basis points of surrenders. So that should not recur next year. So, should our starting margin be higher than almost 130 basis points what we have shown in FY26?

Nidhesh, yes, the GST impact is something that we will neutralize in the first half of next year. Post that, it is completely baked into the business model and after that whatever delivery happens should be on that basis. Before GST, or rather end of quarter three we did mention that we'd like to get back to the levels of FY25 in the 25-plus percent range. Can we get to it? We possibly can, but that's not something we're going to prioritize. What we're going to prioritize is to get the growth back to the handle that we are comfortable with and deliver VNB growth at least in line with that. And if there is any potential and scope to expand margins beyond that, absolutely we will try and do that. But the priority will be to get growth back to where we would like it to be.

▸ Other Q&A (16)

Avinash Singh · Emkay Global

On the participating group and pension - in your GAAP filing, there is a sizable negative surplus or deficit in that par segment, even though the business size is very small. What exactly is the nature of this and why is there such a big deficit?

On the participating fund, there are three, four things that have happened during the year. One is the impact of GST, which is split into existing business and new business. On existing business, because there will be no ITC on the renewal commission and the expenses incurred for the maintenance of the policies, that impact has been taken into the reserves and that is having a negative impact in both life and pension. On new business as well, because there is no ITC on the GST, that has been absorbed given that we are still looking at the design and the pricing of the par products in the context of the new GST law. The third is, given the changes to the surrender value regulations from October '24 onwards, for all the participating policies regardless of whether they are going to surrender or not, we hold a surrender value reserve, which is also increasing the prudence. Some of this will get released into the FFA going forward, but it has been a one-time impact all coming together in the same period. That is why we see a deficit in the participating fund. Vibha Padalkar added that we have plans to start contributing back to par FFA to grow that over the next couple of years.

Avinash Singh · Emkay Global

On the back book surplus growing 14% and new business strain - given strong growth in individual protection but non-par savings giving way to par where typically new business strain would be lower, the overall new business strain at company level is growing very strongly. Is it something to do with cost structure still remaining unfavourable?

On the back book surplus, the EB surplus has grown by a lower amount due to the same reasons. We have allowed for the loss of input tax credit on renewal commission and maintenance expenses on all lines of business. That has resulted in a lower EB surplus growth. On the new business, yes, the new business strain should have been lower given that we have done lower non-par. But if you look at the growth in protection business and the credit protect business, that has resulted into a higher strain. And also, on the unit-linked, we are writing with higher multiples and also higher rider attachments, that has got a higher reserving requirement and all of these have resulted in the new business strain growth being higher than the earlier years. And the GST impact is there in both new business and EB. That is also one of the reasons for the new business strain being higher. Vibha Padalkar summarized: GST impact and a good problem to have in terms of protection.

Suresh Ganapathy · Macquarie

Just one last question on Vibha, your tenure and the IRDA rule. Bit confusing. Can you just clarify when it ends? Is it a 15-year rule applicable to you?

When these regulations came in 2023, we had written to the regulator and we had received clarification then that the 15 years starts from when I became the MD and CEO. My tenure, this current tenure ends in September of this year, and the Board will take a suitable call closer to that date. I will be completing a term of three plus five, so eight years by the time I finish in September. The interpretation is that it's 15 years from when you get into the saddle as MD and CEO. That is what we had received clarification when we wrote to them in 2023. On whether the regulator can change their mind - I think that will be a question for the regulator.

Madhukar Ladha · JP Morgan

And the assumption change and variance break up if you could give that?

The assumption change is mainly on the persistency, the 13th month persistency had dropped during the year and this has been reflected in the assumptions both in embedded value and new business. So it's mainly coming from persistency and that too 13th month persistency. All other cohorts we don't have any material impact either in the assumption change or in the variance.

Dipanjan Ghosh · Citi

On the Banca channel specifically on the non-HDFC Banca channels, what's the direction or strategy when you think of these channels? Is it more growth-focused or focus on VNB counter share? On the product pipeline and AGNI, you mentioned strong traction initially - if you can quantify or give colour? And in terms of refinements on the non-par products and product pipeline on non-par and annuity side?

I'll take the question on the non-HDFC Banca channels. The focus for all channels for us is very clear that it is to go for growth subject to a certain VNB. And below a certain VNB, we choose at times not to participate in a certain segment or particular channel also. So the focus remains same across channels and that is the reason why you would see that certain parts in Q4 we did slowdown in certain channels. Same is the reason why you see a higher focus on our agency and the proprietary business where we have seen faster growth coming in. Niraj Shah added on products: AGNI was basically the first variable annuity product that was introduced and it's absolutely contributed to our share of annuity mix increasing meaningfully in this period. It was launched towards in the last quarter, so we expect that to become a full-stream product going into FY27 and beyond. We have launched this product at a ticket size of 25 lakh and above to ensure that the customer clearly understands what they are buying and it's not a completely guaranteed product. As far as non-par savings is concerned, we are basically looking to add to our flagship Click 2 Achieve series and a large part of it is to do with giving more flexibility to customers, looking at customer segments a little more granularly.

Dipanjan Ghosh · Citi

This variable annuity product propositions, how are the margins in this product compared to industry or company-level margins?

It will be higher than company-level margins.

Shreya Shivani · Nomura

Shouldn't the GST and Labour Code impact be an assumption change because it is a permanent change rather than a variance? Comparing to one of your peers, there is no impact of the yield curve movement on your VNB walk - what is the thought process? Has the persistency assumption changes caused a sharp movement in your persistency sensitivity?

On the EV walk, the GST impact is the impact on the existing business because there is no input tax credit on the renewal commission and the maintenance expenses. So that is a one-time impact and it is external environmental impact, that is why it is shown as another operating change or variance. The loss of input tax credit on the new business, which is part of the business model, is captured in the VNB. The thought process is that whatever is not within the internal environment or the business model of the company, that should be captured as a one-off operating variance. Niraj Shah added: And next year, all of this will sit in the VNB for next year. So it will become part of the business model entirely. Eshwari continued: In the NBM or the VNB walk, the net impact of changes in interest rate, changes in product pricing, product features, other assumptions etcetera is captured in the product profile. The reason we don't call out economic assumption change separately is that it is not that during the entire year we will not do anything if the changes are in the interest rates are going up or down. On persistency sensitivity, there are two things which is resulting in a higher sensitivity. One is the proportion of ULIP has gone up compared to last year. Hence, higher sensitivity. And also because of the changes in surrender value regulations, even in the non-linked products, the persistency will have an impact on the EV or the margin.

Shreya Shivani · Nomura

One way of dealing with the competitive landscape is going granular. However, expanding beyond our obvious markets, expanding into deeper pockets or markets where only few players operate, isn't that something which we would be focused on from a long-term period? Shouldn't that be one of your strategies in next 5 years, knowing that the competitive landscape can be quite volatile in the urban Tier 1 markets?

To take your question on getting deeper into interior India, that's exactly what we're doing. And to remind you that one of the reasons for us to have acquired Exide Life was just that. Because we felt that that was not expressly our core competency. But we formulated an entire go-to-market strategy in Tier 2 and 3. And I'm happy to share that more than 72% of our customers acquired in this financial year, FY26, they were new to HDFC Life. And if I were to look at Tier 2 and 3, they grew faster than Tier 1. Our marketing collaterals, using of AI so that every local language and dialect is possible right from training to servicing. We are now in a position of reasonable amount of confidence that within Tier 2 and 3, what are the profiles that we are comfortable underwriting. Another data point is that we've been opening branches, you know over 200-plus branches over the past 24 to 36 months, and happy to share that in our agency channel, 13% of the business now comes from the branches that we opened in that time frame. Niraj Shah added: We are aware as we step into these smaller markets that the time for the branches to get as productive as in the larger markets is a lot higher, maybe 1.5x more. But we've not shied away from making all these investments.

Supratim Datta · Jefferies

On rider attachment - could you let us know what is the current rider attachment rate that you have, and how much further can this be increased? If the ULIP demand comes off and that's replaced by non-par, could you do the same thing as increasing the sum assured with non-par products? What proportion of the ULIP policies currently has this higher sum assured?

We have it highlighted in our investor presentation as well, about one-fourth of the unit-linked business that we sell comes with higher sum assured. And we started our rider journey about maybe 3 years back with a lot of education internally and putting our systems and processes in place to ensure a seamless experience for customers. Even far back as a year ago, year and a half back, the rider APE was less than 1% of unit-linked premiums. Today it's at least 5x to 6x times that. On the savings and non-par products, we have not seen a very significant take-up of riders yet, because the thought process there is a little more different compared to when someone is looking to buy a unit-linked product. We are trying to see how we can improve our attachment ratios on other than unit-linked products as well, but that's still work in progress. On standalone protection, there is a fairly significant uptake of pure or non-return of premium products this year given the GST change.

Supratim Datta · Jefferies

At the overall APE level what would be the proportion of riders?

So, again, we have, I think spoken earlier and, on the call, 7% is our pure protection by itself in individual business, and adding riders it comes to 10%. So I think you can attribute about three-odd percent of our APE to that.

Prayesh Jain · Motilal Oswal Financial Services

Whether commission that the competitors are paying to HDFC Bank, does that come into equation where the share has come down for us? When you say capital raise will give you additional solvency of 900 basis points, do you also build in the additional debt that you can raise via the bonds? On commission regulations if any that comes through, then how would things play out with your primary partner, HDFC Bank?

On commissions, everything is identical over here. We do calibrate product mix. So we will choose the segments in which we want to be materially present. To give you an example, if unit-linked at a low sum assured multiple is the name of this game or lower premium payment term, then we might take a back seat like we have done. So it's not that the headline commercials are different, no they're identical. However, it's some of the nuances of products that could vary. And as regards the outlook in terms of commission regulations and so on, I think we will have to wait and watch. We have had, since you're asking specifically about our primary partner, it is not that we haven't been having conversations on what-if scenarios and they're fully aware, and they also sit at the Board. The demand for insurance is not a figment of our imagination. Exactly like the way demand really took off with this GST cut as far as protection is concerned. So that demand is certainly there. How one taps it through what kind of products in a new environment, if there is one, is something that we will quickly look at and collaborate with our partners for it to be a win-win.

Prayesh Jain · Motilal Oswal Financial Services

So together these two capital raise options could positively impact solvency by 1,300 bps, right?

And Prayesh, if I could just quickly repeat your question on that solvency. You asked about whether there is capacity to raise sub-debt? Answer is yes. We could raise on the back of INR 1,000 crores of equity, INR 500 crores sub-debt, which will give us an additional 4% as and when we believe it would be required or we want to just exercise that option. That's correct. 1,300-1,400 bps, yes.

Vinod Rajamani · Nirmal Bang

On the HDFC Bank channel - is the bank trying to kind of deprioritize non-par savings? If it's a trend visible in terms of the fact that ULIP share has been increasing, so does the bank kind of see it as competing with deposit holders? Is that something which is being felt?

No, we haven't seen this kind of a let's say a completely deliberate kind of a move towards one particular product mix. The ULIP mix is mostly coming in from the demand from the customers and more of an easier sale, especially certain segments like we spoke about when you're able to configure a shorter pay etcetera in ULIPs for certain insurance companies. So I think that's the reason why you've seen maybe a larger skew happening in the ULIP side in HDFC Bank. I have not really seen the reason that this might be competing with a deposit. And also, we have always focused on long-term guarantees, long-term products, which do not really fall into the bank's competing foray.

▸ Prepared remarks (4 blocks)

Good evening, everyone, and thank you for joining our earnings conference call for the year ended March 31st, 2026. Our results, along with the investor presentation, press release, and regulatory disclosures are available on our website and with the stock exchanges. Joining me today's call are Niraj Shah, Executive Director and Chief Financial Officer; Vineet Arora, Executive Director and Chief Business Officer; Eshwari Murugan, Appointed Actuary; and Kunal Jain, Head, Investor Relations, Business Planning, and Strategy. On the macroeconomic front, let me begin with the broader macroeconomic context. The global environment has become more uncertain in recent months, with heightened geopolitical tensions and disruptions in energy markets and global supply chains creating near-term headwinds. In such an environment, while near-term demand might be impacted, we believe the life insurance sector remains relatively well positioned given the essential role of long-term savings, protection, and guaranteed outcomes, especially during periods of uncertainty. Moving on to business performance. During FY26, we continued to maintain our position amongst the top three insurers by individual WRP. Our private sector market share stood at 15.2% for 11 months FY26. We outperformed the industry in two key focus areas. The first one being retail protection, which grew 43%, and the second one being our agency channel, which also grew ahead of the sector. Retail sum assured growth for 11 months was higher than the industry, reinforcing the quality of our business mix. Credit protect saw a healthy rebound in the second half of the year, driven by recovery in the MFI segment and robust credit growth, with the company retaining its leadership position in this segment. From a top-line perspective, FY26 closed below our original expectation. Let me deconstruct this and outline our confidence in the medium-term trajectory. H1 growth for us was ahead of the industry, and quarter three was broadly in line with expectation. The slowdown was largely concentrated in quarter four, driven by unabsorbed GST, temporary softness in bancassurance and deferment of demand in March due to global uncertainty. However, our proprietary channels bucked the trend, delivering a healthy growth of 15% - 16% in quarter four as well as in FY26, and we thus delivered a full-year individual APE growth of 7% year-on-year. Our confidence to bounce back also stems from our customer acquisition metrics that remain healthy, with over 70% of new customers onboarded during the year being first-time buyers of HDFC Life policies, and that we insured over 46 million lives during FY26. Next, on product mix - Our individual APE composition for FY26 was unit-linked at 44%, non-par savings at 18%, participating products at 25%, term at 7%, and annuity at 5%. As in prior periods, product mix remained an important driver of outcomes during the year. You will notice that our term was 7% versus 5% of last year. Unit-linked demand remained resilient through most of the year, supported by customer appetite for market-linked participation. Importantly, the quality of our unit-linked business continues to improve with higher protection multiples and better rider attachment supporting margins. The 13th month persistency over the past two years has also improved. Both these metrics remain a deliberate strategic focus for us. At the same time, non-par demand was softer than our expectations. We have maintained pricing discipline in this segment, and while this has had a near-term impact on volumes, it positions us better from a long-term value and margin standpoint. We have undertaken selective product refinements to improve competitiveness, and with a more favourable yield curve environment, we expect non-par savings to gradually recover. Protection was a clear highlight during the year, with a growth of 43% supported by lower prices post-GST and a strengthened product portfolio. And this continued even in quarter four, when protection growth was 46%. Retail protection mix expanded by nearly 200 basis points YoY to 7.2% in FY26, and including riders, protection now contributes nearly 10% of our retail business. We also saw an improvement in ticket sizes post-GST with customers opting for higher levels of sum assured. Retail sum assured grew by 28% YoY, and we also maintained our leadership position on overall sum assured, reinforcing the quality of our business mix. Annuities were another area of meaningful progress. During quarter four, we launched Ajeevan Growth Nivesh and Income (AGNI), an industry-first variable annuity plan that combines lifelong guaranteed income with growth potential linked to the Nifty 50 Index. We believe this kind of product innovation opens up new customer segments, and we are encouraged by early traction. Annuity mix increased by almost 300 basis points YoY to around 8% of individual APE in Q4 FY26. Looking ahead, we expect a gradual shift in the product mix as customers rebalance towards long-term savings and protection in an environment of greater uncertainty. We anticipate non-par savings to gain share relative to FY26, with protection and annuities continuing to grow ahead of the company average. Moving on to financial and operating metrics. For FY26, value of new business stood at INR 4,034 crores, representing growth of 2% YoY. Value of new business growth, excluding the impact of GST and surrender regulations changes (SSV), would have been broadly in line with overall APE growth. New business margins for FY26, excluding impact of GST and SSV, would have been flat at 25.5%. Post-GST and SSV impact, they were at 24.2%, a decline of 140 basis points versus FY25. This margin drop was driven by three key factors. First, the impact of GST and surrender value of 130 basis points. Second, the fixed cost absorption impact of 90 basis points arising from softer than expected top-line growth, particularly in Q4. And third, 40 basis points on account of strengthening of the persistency assumptions in line with the experience that we had disclosed in Q3. I'm happy to share that our experience in Q4 on persistency was better than what we had mentioned in Q3.

These three negative items were offset by a better product profile that contributed 120 basis points. On GST, the headwind on margins has been moderating in line with our guidance. The impact in Q4 was approximately 110 basis points, and we expect this to taper off further and be largely neutralized as we move into FY27. At a product level, underlying margins remain supported by improvements in product profile, including higher protection and annuity contribution and better rider attachment. The annual assumption review was undertaken in quarter four, as has been the past practice, which makes the Y-o-Y impact of 40 basis points more visible in that quarter. From a structural standpoint, the key levers for margin improvement remain intact: continued growth in protection, higher rider attachment, recovery in non-par savings, further enhancement in ULIP protection mix, lower fixed costs per policy, and operating leverage as growth normalizes. Based on these factors, we expect margins to improve. Renewal collections saw steady growth at 15% during the year, reflecting the continued stability of the in-force book. On persistency, the 13th month ratio moderated by 200 basis points during the year, broadly in line with the evolving business mix. As mentioned in quarter three, this was driven by specific cohorts and does not reflect a broad-based shift in portfolio quality. We have taken necessary actions, as I had mentioned, and we are pleased to share that trend have stabilized in Q4. The 61st month persistency remained robust at 64%, improving by 100 basis points YoY, reflecting the continued strength of the long-duration savings book. Embedded value stood at INR 62,139 crores. Operating return on embedded value for the period was 15.0%, and this would have been 15.4% on a normalized basis. Profit after tax for the period stood at INR 1,910 crores. PAT excluding GST and labour code impact would have shown a growth of 16%. The board has recommended a final dividend of INR 2.10 per share in line with our dividend payout policy, aggregating to a payout of INR 456 crores. Our solvency ratio stood at 177%. While we await clarity on the transition timeline to the risk-based solvency framework, we have taken board approval to raise up to INR1,000 crores by way of a preferential issue to our parent, HDFC Bank. This will add 900 basis points to our current solvency. Over the medium term, the move towards a risk-based solvency regime should ensure better alignment of capital with underlying risks and is likely to be beneficial for diversified franchises such as ours. Moving on to distribution highlights. The ongoing build-up of our agency channel was a strong story for the year. Agency grew ahead of the company by 500 basis points, maintaining a strong protection mix. The channel is now beginning to deliver the returns on the multi-year investments we have made in branch expansion, talent acquisition, and investment in bespoke products and training, and this has helped improve our relative positioning within the industry. We have added more than 250 branches over the last 30 months, with business from these contributing to approximately 13% of the agency channel's top line. Our focus is now firmly shifting from expansion to productivity, activation, and the branch-level profitability. This should support a more sustainable and higher quality contribution from the channel going forward. On the other hand, partnership channels experienced elevated volatility during the year, primarily driven by heightened competitive intensity. In response, we exercised fiscal discipline by stepping away from unviable business. Overall, while near-term growth has been influenced by the factors discussed, we believe our focus on continued investments in distribution, product competitiveness, partner engagement, and pricing discipline positions us well to deliver more sustainable and profitable growth as the environment normalizes. Moving on to regulatory and industry developments. The industry continues to evolve in a direction that supports greater transparency, stronger conduct, and more sustainable long-term growth. We view the transition towards Ind AS based reporting as a positive structural development. Over time, this should enhance comparability, improve market discipline, and further align business models with long-term value creation. With respect to Ind AS, we have approval from our board to seek forbearance for FY27. We will be applying to the regulator and are working towards full adoption from FY28. We believe this approach allows for a more calibrated transition, both operationally and from a reporting standpoint. Overall, the direction of regulatory evolution remains constructive, and we believe well-diversified and disciplined players are well-positioned to operate effectively within this framework. Moving on to our subsidiaries. Our wholly-owned subsidiary, HDFC Pension Fund Management, continued to strengthen its leadership position with a market share of 43% and assets under management exceeding INR 1.5 lakh crore. Our other subsidiary, HDFC International Re, continues to deliver steady reinsurance performance while scaling its GIFT City presence. To conclude, we enter FY27 with the GST transition that is largely complete, the yield curve which is supportive for non-par, our agency channel is stronger today than it was a year ago in terms of reach, productivity, and quality of business. Protection portfolio is structurally larger and more meaningful than any other prior point in our journey. As a result, our embedded value continues to reflect the compounding strength of a high-quality in-force book. Our aspiration to outpace industry new business and VNB growth remains unchanged. For a more detailed discussion of our performance and outlook, please refer to the investor presentation. We will now be happy to take your questions.

Moving on to financial and operating metrics. For FY26, value of new business stood at INR 4,034 crores, representing growth of 2% YoY. Value of new business growth, excluding the impact of GST and surrender regulations changes (SSV), would have been broadly in line with overall APE growth. New business margins for FY26, excluding impact of GST and SSV, would have been flat at 25.5%. Post-GST and SSV impact, they were at 24.2%, a decline of 140 basis points versus FY25. This margin drop was driven by three key factors. First, the impact of GST and surrender value of 130 basis points. Second, the fixed cost absorption impact of 90 basis points arising from softer than expected top-line growth, particularly in Q4. And third, 40 basis points on account of strengthening of the persistency assumptions in line with the experience that we had disclosed in Q3. I'm happy to share that our experience in Q4 on persistency was better than what we had mentioned in Q3. These three negative items were offset by a better product profile that contributed 120 basis points. On GST, the headwind on margins has been moderating in line with our guidance.

The impact in Q4 was approximately 110 basis points, and we expect this to taper off further and be largely neutralized as we move into FY27. Renewal collections saw steady growth at 15% during the year, reflecting the continued stability of the in-force book. On persistency, the 13th month ratio moderated by 200 basis points during the year, broadly in line with the evolving business mix. The 61st month persistency remained robust at 64%, improving by 100 basis points YoY, reflecting the continued strength of the long-duration savings book. Embedded value stood at INR 62,139 crores. Operating return on embedded value for the period was 15.0%, and this would have been 15.4% on a normalized basis. Profit after tax for the period stood at INR 1,910 crores. PAT excluding GST and labour code impact would have shown a growth of 16%. The board has recommended a final dividend of INR 2.10 per share in line with our dividend payout policy, aggregating to a payout of INR 456 crores. Our solvency ratio stood at 177%. We have taken board approval to raise up to INR1,000 crores by way of a preferential issue to our parent, HDFC Bank. This will add 900 basis points to our current solvency.

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