Bajaj Finserv Ltd. (BAJAJFINSV) Earnings Call Transcript & Summary

All right, sir. So good afternoon, everyone, and welcome to the GM Financial BFSI Conference. We have with us today the senior management of Bajaj Finserv headed by Mr. Sreenivasan. I would request Sreeni to take us, to give us an update on the company industry, post which we can open the floor for Q&A. Over to you, sir.

What I would like to do is since all our familiar investors, maybe we start with Q&A straight away.

[Operator Instructions]

There's Bharat Shah.

Sorry, I missed it.

Sorry, am I audible now?

Yes, yes. You're audible.

Sir, just can you run through our general insurance business? How, of course, this last 9 months because of health care as well as motor policy was coming down as well as number of accidents also improved -- has gone up? So how do we see this from next year's perspective, Q4 and broader view, if you can give it?

I'll give a broad view and then I'll let Ramandeep, CFO of General Insurance Company, take it forward. I think last 2 years, if you look at the general insurance industry, historically, it does well when the economy is doing well. Normally, it grows at about 2% to 3% better than the dominant GDP growth rate. And some companies do a little bit better than that and some do worse. For us, we have been underwriting focused company because last 2 years, I think the first part of the lockdown post COVID, low frequency, there was obviously lower claims. But as we said before in the call, we did anticipate that things will come forward, and we were focused on maintaining a prudent approach towards both underwriting and reserving, and that is well documented both on health and motor third party, we had mentioned that very clear. Auto sales is down for quite a long time. And therefore, this has an impact on the industry. We are a very large company now. Today, I mean, motor, I think, accounts for less than 30% of our business. Motor is a depreciating asset. Obviously, it brings you a lot of customers of the profile that you want. It brings a lot of mass affluent and above customers, which is very good, and it's the easiest -- I mean it is one which people buy because of the compulsory insurance. So we have been, within motor, we have been focused on commercial vehicles, on private cars and on 2-wheelers in different ways. During the COVID period and even until now the commercial vehicles, our preferred segments, have not grown well. So we're not really worried about it, except that now things are starting to pick up. Secondly, there is intense price discounting in the market, and we are not really worried that we are losing market share, we would be worried if we lose profit share. And I think we -- if you can see the results of the companies have started pouring in. You see our combined ratio remains among the best. We are not going to -- in insurance, you can't take, ensure and where you know fully well that you have to pay more than the claim more than the premium as the claim, right? So that way, our underwriting policies are very well structured. Now as growth returns to the economy with greater investment in infrastructure, we think the cycle for general insurance is likely to turn over the next 2 to 3 years, we are very, very optimistic. Clearly, as a company, we will continue to be multichannel, multiproduct. We will -- we are into all retail lines. We are very strong in corporate. Our distribution strength is not just motor dealers, MISP, we have very formidable bank assurance. We have a very strong agency, which we are now trying to take it to the next level, actually over the next couple of years. We are also looking into expanding our geography because now the conditions seem to be right to move away -- move into growth again. Clearly, over this quarter, it's very difficult to say. We are already halfway through the quarter. And things may not turn out very great in this quarter from a growth perspective. In terms of next year, again, as we grow, in general insurance, you have to write off all your expenses upfront, your commission, acquisition expense, management expense, you are not allowed to carry forward. The premium gets earned over time. There could be a couple of quarters of pressure on that. But if we get our growth strategy, right, I think we would have done a great job. Raman, would you like to add to that?

On the health side, if you can give -- what is our strategy?

Yes. Health side, we have set up what is called an internal company within the company. They did that about 2 years ago, but it did not scale up the way we wanted. Obviously, COVID had an impact. The first 6 months, there were a lot of this COVID-specific policies. We want to be conservative there. We did do quite a bit of those. But going forward, we will be -- if you look at it, all those who are very aggressive, the loss ratios are very, very high in terms of COVID. We have a disproportionately high share of losses some companies are having. We were quite conservative on group health. And on retail health, we are doing a calibrated approach. Now we have strengthened the team. We have hired a new Head of Health, who comes from the SAHI industry, and we are strengthening the team. And over the next 2, 3 years, we will be investing into that business. Maybe the health line may not make money for us next 2 years, but if we get the volumes right significantly growing above the composite company industry growth rate and closer to stand-alone company growth rate, we would have done a good job. Raman?

Thanks, Sreeni. So I'll just add a bit to what Sreeni said. I'll try to get a little more granular. So if you look at the year gone by despite the fact that the base which was the year prior was a very low base given the pandemic. This year expectedly would have been a better year. But I think for some reasons, it's not been as good a year as what other people would have envisaged. If I break the problem into multiple parts, if you look at motor, for example, while we started the year on a positive note after the wave 2 was subsiding, growth really started coming back. But thereafter, the growth was largely in the 4-wheeler space, which is private vehicles, but then we got stuck with the semiconductor issues, and they don't seem to be settling in the coming quarter as well. So maybe in the quarter 1 of next year is what we envisage, this issue will start smoothing out. And then obviously, you could see a pent-up demand and numbers should start talking from there. On 2-wheelers, however, unfortunately, the growth has been in a single-digit number. And when I'm saying growth here, I'm talking about new 2-wheeler sales. There, the growth has been muted, and that's an area of concern. Unfortunately, for us, that's also been our handicap because there is a brand consolidate which people look at it as from the Bajaj logo perspective. We are unable to exploit some of the OEM relations the way the others have been able to do. But that, to some extent, has got subsided a little because after the IDA intervention, where they told the OEMs that they should be offering enough choice to the customers and this happened through some penalties [ idea ] had leveraged a few years back. After that, at least they have started talking to us, and we could break ice, for example, with Royal Enfield last year, in fact, early this year. And some of the other larger players where we don't have OEM tie up, at least they've been talking to us now. So we are hopeful that one more relationship, we will try to get on more in the coming year. So that's on 2-wheeler. On commercial vehicles, while goods carrying commercial vehicles, the growth has come back. But the more profitable, which is what Sreeni was referring to our preferred choice is passenger carrying commercial vehicles, which is largely school buses. There, for obvious reasons, the growth has not yet come back. So motor has given it's 30% to 40% of the business for most of the companies. It has been a challenging time. So overall, if you see the growth for the industry has become a single-digit growth because of this reason, despite a smaller base. And this growth, I'm saying YTD, if I take quarter 3 growth, it's even lesser than this. So that's been the challenge. Retail health, while it picked up significantly, everybody was clocking double-digit growth, that's something which again has started tapering off. But we all believe that this is one of the growth drivers for the period to come, and that's something we will try to capitalize on. In terms of other commercial lines, if you look at whether it's fire or engineering or whether it's the liabilities business or marine even for that matter, they have been doing pretty well despite a very good base because there, if you recall on fire, they were repricing which was the time last year and everybody almost in the industry was clocking 30%, 40% growth. Despite that, people would have expected the growth to get muted. But even after that, the growth has been pretty decent. The commercial lines are doing decently well. So this is how the industry is shaping up. Now if you look at our own position in the next 2 quarters, which Bharat you asked about, I think this quarter, nothing much is going to change because we have already completed January and we are in the middle of February. I don't think much is going to change in the last quarter of this year. We only hope is that on the motor piece, things should start looking positive if the semiconductor issue is behind us. I haven't spoken to some of the seniors in the motor dealer channel, the indication the OEMs are giving is that quarter 1 onwards, we will start seeing things easing out and the demand-supply gap should start narrowing out. So if their -- that's indeed the situation, then quarter 2 onwards, we believe that motor piece should at least, 4-wheeler side, start picking up. On CPPs also with the pandemic easing out, schools opening up I think the issue on school buses also should be behind us. So I think from a motor perspective, next year, at least what we should have expected this year is being rolled forward to next year, and you should see growth get reinstated. However, it's all subject to the semiconductor issue being sorted out and also the pandemic easing out. On health, like Sreeni rightly said, the SAHI companies have been doing pretty well there. And they are trying to actually replicate that model. We've hired a senior person from one of the SAHI companies, and he's helping us bring this team in place so that we can replicate the model and also try to get the growth, which some of these companies are really able to clock. For us, one challenge has been that last 3 years has been a period of consolidation for us. If you'll see -- to give you some numbers, in our peak 3 years back, we used to have 12,500 employees with 250 branches. Now that's down to about 8,000 employees -- close to 8,000 employees and about 150 branches. And I think while it's done in a manner which we did at a pretty fast pace, but it helped us because in the period of the pandemic we were still able to deliver bottom line much better than everybody else. So I think one of the reasons why we, for obvious reason and quality of our portfolio has always been better. But because we did a lot of work on expense rationalization in the last 2 years, I think that's helped us also as against what we see the industry players struggle on bottom line given the pandemic. Like Sreeni said, however, year on, we will now start expanding because we are seeing a lot of green shoots motor, like I said, retail health, we spoke about 2-wheeler, which was our weakness, there things should start looking positive. So given this, we have decided to now start expanding again. And so you will probably -- if things turn around the way we are envisaging, you may see growth come back. Bottom line obviously may get stretched a little because we will be investing in people, we'll be investing in infrastructure. While we don't do too much of expansion physically now, but there will be some stress coming on bottom line because of that. And the other piece we've spoken about in the past is also be investing a lot of technology so that the new policy admin system will go live full-fledged, I mean, when I say full fledges, all the verticals going live another 1.5 years from now. So until then, we will continue to invest. So this is where we stand, Bharat.

Extending the last piece of what you -- how are we -- digital reach for them. I think it is artificial interactions for the quality of underwriting. So if you can say some, what state we are in? How do we see in 2 years?

Yes. So I think while we are a highly technology-driven company. If you look at my policy issuance, 85% upwards is digital, my distributor onboarding process is completely digital. So you look at any of the parameters, we are very highly digitally enabled company. I think now it's a time how we take it to the next level. So another year or 2, our endeavor is to take it to a different level. So when I said we will be expanding, none of our expansions will happen through physical brick-and-mortar models. We will use our existing assets and put forth newer assets so that the expansion is done in a very, very efficient manner. Now as far as our underwriting capabilities are concerned, so a lot of -- see we currently also, the way we underwrite, and we are a little different from the others on that because we go to a lot of granularity of data when we decide our underwriting policies. So for example, when I'm deciding which segment of business is preferred or not so preferred, we call it decline. We do that basis, a lot of data, which we have got from our own experience over the last 2 decades. And we go to the granularity of the -- first is obviously the experience from our own existing customer base. Then we get into a lot of churning of data to see at geography level. We go as low as a pin code level, how has been my experience from an underwriting perspective? What are the red flags there? We look at data as granular level as when I'm writing a motor policy, which OEM that motor belongs to, which model of that, whether it's -- so for example, Maruti, I will look at which model of Maruti car is it, I will see, whether it's diesel or petrol, then, like I said, geographically, if there are any red flags, we look at vintage of the vehicle. So these are the things we've been looking at. Now we are going to add -- this is based on our own experiences of the past. Now we are -- going forward, what we're trying to do is get a lot of external data also, while some data we've been using externally, but there have been challenges on that data. And now we're trying to get data from the market, there are some sources from which we can get data for the customer experience, and now also marry that in our underwriting practices. So there are -- I'll just give you an example. IIB is the Insurance Information Bureau, which has a lot of data about the insurance industry, both on life and non-life side, and that data can be used to some extent. Then there is data points which we can get from the OEMs. So all those kinds of things now we've started working on. I think next 2 years, a lot of this external data will now be brought on board and try to give -- also try to give tailored pitches to the customer, which we've not been doing very successfully until now. So this is the endeavor going forward. The other piece from a data perspective has been on direct -- while we've -- on the life company side, we've seen some traction. They've been doing upselling in pretty decent numbers. But from a GI company perspective and even the GI industry perspective, up-selling and cross-selling has been -- it's not been a very successful practice. And so there now, we're trying to capitalize. We've set up a dedicated direct team backed by a call center and data being provided to them even at a group level. So in the past also, we've spoken about this unified customer ID where we know at a group level what exposure the group has with any customer. So now we are trying to capitalize on all those things in the coming periods. And with that intent, we've set up this direct team. So these are some of the things using data and technology, we will work on in the coming periods particularly.

Really, I'm a big fan of the Finserv Group. My question is more on forward-looking. Could you please tell us when will BAGIC and BALIC will be listed, and what benefit will we have for the Finserv shareholders?

We have no intention of listing either company because both of them, as you have seen, compared to pre-pandemic their solvency positions are much stronger. We have started paying dividends and they are slowly increasing it as well. Currently, the companies do not require money, and we see no reason why we should -- both Allianz and as we have discussed it. We have no intention of in the near term to list either of the 2 companies. As we go along, we will see. Maybe if you ask me next 3 to 5 years, I see a better chance of us listing. But that's something we keep evaluating every year, and then we will take a call at the right time. [ Raji ], you want to continue your question, in case nobody else has any questions because I can't see any hands being raised? Bharat is also here from the life company in case anybody has questions on the life company also. Any other questions?

So sir, I mean, you explained very beautifully about this general insurance. On life insurance also COVID has [ differentiated ] and particularly on the protection side, term insurance, the price hike that has affected the whole thing. How are we seeing whole life piece again?

Okay. Let me give a -- I mean, we have been, obviously, as you can see, compared to pre-pandemic and now, we are the fastest growing company in the private sector, and we continue to grow. Predominantly, the growth has come from savings products, although in the first half of last year, we did see growth in the term insurance there was a demand. However, with that has come significant losses for the industry as well. We had our share of losses. We had about INR 300-odd crores of COVID claims. These are not priced in. And in life insurance, you should remember that once you enter into a contract, it is for very long periods. So whatever claims come, you have to pay. Having said that, the reinsurers have lost a lot of money because the reinsurers not only asked but across the industry. And therefore, they have tightened the range quite a lot. Unlike general insurance business here, it's a financial gain for the policyholders' family. If a policyholder dies, it's a very small amount of premium. You can get a very large payout. So the chances of adverse selection is very high. That means somebody who is in bad health, wanting to take life insurance is very common, and that's something we have to guard against what we call adverse selection. Having said that, our individual term assurance is not necessarily the pillar of our growth. It is very profitable. And we are redefining how we want to do. We have increased our retentions this year, which means that we have greater pricing control without checking with reinsurer, but we'll also be tightening our underwriting as we go along. As we stand now, we are not taking a full call whether the third wave is completely behind us. COVID is definitely not behind us. As we stand now, we are not taking a full call whether the third wave is completely behind us. The COVID is definitely not behind us. The third wave seems to have subsided. And what we would like to see is a calibrated approach. So in the first half, you will see us looking at this new retention increase and growing gradually. And depends on how it comes, we will grow. On the group term side, we are anyway have been a strong player for years now, and we will continue to look at profitable opportunities and continue to grow. Otherwise, on the product front, our annuity product has been a big success. Our unit linked is doing very well. Our power products have also grown quite well. There is definitely a little bit of shortage of demand for non-power guaranteed savings. Because typically, what happens in the retail customer is when the risk environment is good. That means stock markets are doing well, expectation, equity markets is high, they don't want guarantees. They want to take risk. So the last 2, 3 years, we were saying people wanted guarantees because there were a lot of uncertainties, especially after COVID. But now that has gone off when people want to take more risks. It means more people are buying UL and less people are buying non-power guaranteed savings. But that is compensated by our growth in annularity business. Largely, this is where we are. We've continued to drive a balanced product mix. We will want to grow our NBV. That is the new business value at a healthy rate. And we will continue to focus on growing our EV, subject, of course, to the excess capital that we have. Bharat Kalsi, you have anything to say?

I think you covered most of the things. Should there be any specific question, I'm happy to answer.

Okay. No, fair. I mean so how do we see -- I mean, and the cost overrun issue will hit us for how many quarters?

See, we are now declaring what is our net margin. Our net margin, we will continue to grow. And quite a lot of factors are there, the business mix, the type of products you sell, the type of channel mix you have, every channel does not give exactly the same profit. Some are more expensive. Some are less expensive. But the ones which are more expensive, will give you more growth. Some are volume drivers. But our intention is to take it up every year over the next 3 to 4 years and drive the new business value. The new business value and margins are 2 different things. Margin is just a number that if I sold under rupees of Hindi, what is a margin a year. But new business value captures both growth and margin. So if you have a low-margin product with very high volume, you can still grow your NBV, and we will continue to do that. The luxury that we have is, of course, our solvency surplus. So if some of the products require higher risk capital to be allocated, we have enough capital available. Bharat?

I think you covered most of the things. So anyway, we have declared a number that on a 9-month basis also, which you know that this business has a lot of seasonality towards quarter 4 also. With that also, we have reported a number of around 11.3% for the 9 months, which is a very strong 121% growth in the net NBV, what Sreeni was referring to, maybe the NBM may not look like as similar growth what an NBV can show and the real value is in the NBV. So we track both the numbers very closely.

Raman. Sorry, again, back to this general insurance or to Mr. Sreenivasan. Sir, I mean, on health, you said that within the company, we have created a separate company. So our focus is more on what I mean, [ give it a rest ] or group insurance? And when we are making -- I mean, currently losing money, and how do we see this investment will play out over the next 2, 3 years?

See, the company we have set up is not a health insurance company. It provides -- connects doctors, hospitals and providers of health care with the users of health care through a digital platform. So this includes doctors, diagnostic centers, pharmacies and hospitals, mid users of health care. We only provide a digital platform to do that. In the process, we are selling -- I mean, we already have tying up with a lot of doctors. We already have tied up with a large number of doctors. We have also started using our services for consulting. Everything is web based. And at the back end, those who won't, we provide insurance through BAGIC and also provide financing through Bajaj Finance. So these cards are being sold. These are mostly for noninsured health care needs. Healthcare -- typically, insurance covers only hospitalization now. And for the first time, we have now launched a unique product, which is the BAGIC health product attached to our Finserv Health Prime rider . So it provides teleconsultation. It provides doctor consultation. It provides diagnostics, which otherwise insurance won't cover. So it is an OPD-come hospitalization cover, but it's attached to a BAGIC policy. So this is the first step. Over time, we will have more product offerings, which is allowed by now IRDA guidelines on wellness. And therefore, we want to play that. At the same time, they will also do their own products to the mass at large through -- for example, customers of BFL because BFL is a distributor for the health products of, yes, things of health. And they will also get my business directly digitally from the market.

And if you can give color on our mix of private and group insurance? Anything?

Raman?

Sorry, sorry, what was the question? Mix of...

Differences in group and private insurance mix.

What is our focus now from year and which product is better money for us?

See, obviously, retail has always been a profit driver. But leaving apart the last 2 years because of the pandemic, everything was bleeding, right? But if you will recall, we had become the, "GMC space," in the past. But prior to the pandemic, we started tapering down on that because that was an area which was not making too much of money, right? So if you look at the way we write business now, we don't do it for a top line perspective. We do it only if it makes commercial sense. So GMC, as far as it is available at our pricing, we will write it. So given the way the market has been moving, you will not see too much of growth on GMC maybe after this year. This shows an exception because of the pandemic. There was a lot of repricing which has happened. Plus a lot of the employers have also changed their programs, right, because they've realized after the pandemic that the limits which they had set on the GMC platform for their employees or the kind of coverages they had were not sufficient, which really got exposed during the pandemic. So because of these 2 reasons, obviously, this year, almost everybody seems to be having a double-digit growth on GMC. But that, maybe going forward, may not be sustainable. And like I said, we will write it only if it makes commercial sense for us, because you are the kind of undercutting that happens there, especially from some of the more -- larger players. On the PSU side, we obviously can't be in that game. So retail is where you people try to deliver better numbers, and that's going to be our primary area of focus.

And what are the challenges over here on the retail side?

I say that there...

I will take that, Raman.

Yes, sure.

There are 2 challenges in health insurance retail. The first is the pricing is based on a brochure, which is approved by RDA. And you cannot change the price, maybe once in 3 years, they allow. But progressively, they will not allow you that much price increase. So what happens in retail and the insurance is you acquire a set of customers. The first 2, 3 years, the claim ratio is low. First year particularly is very low. But after the fourth year, the claims start mounting. By the time the 5th or 6th year happens, the claim ratio is based on the old pricing which is your 55% years ago, actually turns out to be 95% to 100%. This is across the industry. So the whole game has been on getting fresh customers and increasing the number of fresh customers to renewal customers because you can't say no to renewal. And it's a very high retention product because changing health insurance is not like changing motor insurance. There are a lot of conditions attached and all that. So people want to continue with the same insurer. So this is one big challenge. How do you beat inflation on medical insurance when your price cannot be changed as often as you wish? This is for the industry. I'm not talking only about BAGIC. Although we are -- the second area is the stand-alone companies historically have had an advantage. They can take any agent in the market without a license. It means they already have a license. These guys get just hired, and from tomorrow, they start producing business. That's how they build their business. This facility is not available to composite companies like us. We have to take them through training, get them through 50 hours. And finally, after 120 days, they will get licensed. In the process, some people drop out also, so our pipeline to expand distribution is longer. How we plan to tackle that, one is obviously our focus, quite at large, is going to be on Tier 2, Tier 3 towns now and areas relatively underpenetrated segments of the market. Raman?

Yes, I think you got it right, Sreeni. This is what I was going to talk about. That there's a balance between the new sales and the renewals that has to be maintained. And the other one I was going to talk about is going deeper into the country. Because if you see, largely, the top players, the focus has been on the top cities. Even for us, as a company, majority of our business come from the top 50 cities. So that's the other issue which we are trying to address. And when I spoke about expansion earlier, this is one of the endeavors with which we will be expanding.

And I think one thing the pandemic has shown that all the investments we have made in service, especially in our health administration, we still stand tall in terms of the speed at which we settle claims, speed at which we approve claims, and it is a benchmark in the market. There's no doubt about it. I mean many competitors also acknowledge it. So that is something now as we go forward, we believe will get accepted by a lot more customers, especially on the health side. And we are further investing in digital and other properties. For example, we have around the spot for health. We were the first to launch it, which means that small claims up to reimbursement claims up to, I think, INR 20,000, you can do it on a WhatsApp to us. So the speed will be very, very quick in terms of settlement. We are also investing in several technologies at the background to be able to get granular details of the bills to be able to investing in fraud management because fraud is pretty big in the health insurance, and you have to avoid that kind of risk in faster underwriting and faster policy issuance. So these things, I think a combination of all this over the next 2, 3 years will play out.

Sir, can you give any thoughts on the Banka channel? Like how much percentage of the contribution comes from the access, right? And if I look at last 3, 4 years' trend, Banka has been steady at 12%. Is it -- are we seeing that this proportion can increase, like, we can get more business from the Banka?

Let me, again 2 parts. I think the first question was related to Axis that is in relation to life insurance. That 12% you must be referring to is the general insurance?

Yes, yes, yes, Sorry, sir. Yes, sorry.

I think I'll let Bharat take it because a few years ago, the question was, why don't you have Banka [ on-shore ], now you are saying you are too much of it. Anyway, Bharat?

Thank you, Sreeni. So see Axis -- let's see in 2 parts. So what has happened with Axis, we started only in the liability sales and during the year, we started on the branch banking also. So as of now, we were not there present in all the aspects of the bank itself. And now as we are starting develop, there will be an initial base effect, which will start kicking in. So if I -- considering that our current exposure with Axis Bank in terms of our top line is around 23% to 24% on a YTD, say, December basis or January basis, that's where we are. The other smaller banks, which we have started with IDFC with KBB, RBI and all, they will always see our book size for the first 9 months is somewhere around [ 24% or more ]. So they will always be lesser than 1% or 2% kind of a number, but they put together contributories in the middle of the number, so they may be contributing another 5% to 6% or 7%. So a Banka mix of 30% to 35% is what realistically looks like because our agency still has the lion's share of around 40% plus and our BALIC Direct is around 10% plus. So all those things are how it has gotten up.

Secondly, on the retail held currently, I think loss ratio for the industry as well as for us, it's really elevated. So currently, it's at 87% for the overall health. Going forward, how do I look at the growth from the retail side? Are we going to wait for the loss ratios to come down to at a reasonable level before we start with our growth panel again? Or we'll continue to grow at a similar pace which we were doing earlier, just wondering. Also, when the price increase is substantial, that could decelerate the growth in the retail segment?

Okay, Raman?

Yes. So I think from a growth perspective, not that we have pulled the plug now. See, there was a point in time after the wave 2 where we actually intentionally slowed down, and it worked in our favor because the impact for us was far lower than anybody else in the market. So that strategy worked in our favor. But now we believe that the pandemic is behind us, and we are not pulling back the sales teams to not sell health products, barring some products which are very specific like COVID-specific product. So those are some things which we are controlling. But otherwise, we are going full log on retail expansion. So there, I -- you will see that your numbers will start locking there. On the pricing part, for us at least, we had the early mover advantage that we had already filed some of our products for repricing immediately before the pandemic and during the pandemic, we've got the approval for that. So some of those are already sitting in my base. Some products, I think about 75% of my retail health portfolio, the repricing was done. 25%, I think, will happen in this quarter and the coming quarter. So for us, the base effect we'll have in this year and maybe a few quarters there after that it's start tapering off.

Just a small update. I also -- if I look at Bandhan Bank, this is also a large partner for us. If I add that, that will also be another 5% to 7% of our top line. So what I mentioned is other than Bandhan. Bandhan is another 5% to 7%.

Over the next couple of years, we would like to diversify our Banka our portfolio. And we already have, in the last 2 years, added RBL, we added IDFC first. We added IPPB, Karur Vysya Bank. That effort will continue in BALIC. In BAGIC, I think we have a significant number of Banka partners and any 1 of them does not contribute more than, say, 5% of our premium.

Sreeni, sir, I have a question with the RBI allowing possibly to NBFCs to issue their own credit cards. So what is going to be our strategy? Are we still going to continue with the co-branded? That is one.

That we will -- sure, carry on.

Sorry. Second, I have a request in terms of BFS, and how is it doing? You told in the last con call, it's doing very well in terms of addition of customers. So could you please share some more information in the Q4 presentation when it comes to...

BFS Direct or financial securities you're talking about?

Securities, sir.

Yes. Securities is a BFL subsidiary. So I think they made some disclosures there. Because for us, at a holding company level, it is still not material. So they will be giving more flavor in their presentation. Your first question was on the credit cards. At some point, at one point, we had approached RBI. That time, RBI did not have a policy to allow NBFC to issue credit cards. Now they have said they are considering, they are not brought out a guideline yet. Clearly, we have already, I think you must have following Bajaj Finance, you'll know that already, Bajaj paid. They have launched as a product to increase velocity and the engagement of their customers across multiple payment types, whether it is wallet, whether it is UPI, whether it's EMI card or credit card, through a single card. Obviously, having our own card will be of use to us. We have not taken a view on it. We'll await RBI guidelines. But we will see as it comes, whether we will do it ourselves or we will do both, most likely we'll do both for some time.

This is Saurav. Sir, just wondered, how much of -- what would be share of that, when we do get this, like, Policybazaar and others also? And can you comment on how -- over long, medium term, how this will pan out. Is there -- there is a specific policy which we're trying to focus there?

Which one? Which business are you...

On the aggregators, the revenue for aggregators.

Revenue with aggregators, okay, okay. I think it varies according to BAGIC and BALIC. Bharat, Raman, would you like to add to that? What is our approach towards sales to aggregators?

I can take it first, Raman. For us the web aggregator total stock is less than 4% for our business. And there, we have a very balanced way of depending under the how the -- so let's take an example what you said policy to that. There are multiple work streams, which is work on piece, which is work on, say, investment products more, which is unit-linked and the other things, sales more on the combinations of the product or our small ticket products, and there is 1 more which works more on the term side of the business, so it is well-balanced. It is not like they are pushing 1 product line, but obviously, term has always been safer. Web aggregator has always been a preferred route. But otherwise, it is a very balanced in terms of saving as well as term protections and bulk. Raman, do you have...

For us, the product segments, which we largely work on is 2-wheeler and the retail end portfolio. And as also, the mix is less than 3% closer to 2% of our total GWP. And so there is no product segment per se or a product where the large focus has been. But I think the ones which are easier to sell, which is largely a 2-wheeler and retail health is what the Andhra are largely working on, most of them.

Okay. And what would be -- any specific advantage or disadvantage you see when you work through aggregators?

You see there are 2 things there. One is that we have very commoditized type of products where there is a price comparison. I don't think BAGIC, for example, is a serious competitor there because all -- as well, going to choose on price. We are not in the market, where we will just compete on prices to get the customer at any cost. But there are also segments where customers look for value, which is health insurance, and where you can quickly issue a policy, which is like 2-wheeler is a focus area for us, so we want to focus on that. So there are products like that where we will work with aggregators and create value-added products. Because our experience with free Policybazaar has been, while they were very aggressive, or I mean very strong on term assurance. We were the first to get into the investment side with a return of modality charges product, if you recall 2 years ago, and we got a good share of their investment linked business. So our approach for different aggregators will be based on that. And all aggregators are also looking to add value-added partners apart from price comparisons. So both sides will work, and we will work with mostly the value-add side. As we said today, it's not a material part of our business, but this is a growing area, and we will be actively engaged with all of them.

And in the future, is there is a possibility like you can create customized, like, in the marketplace for normal prod data, specific brand launch segment specific to online.

We already have Bajaj Finserv Markets. As of now, they are tied up with multiple partners on the loan side and credit card side. They will work only on a corporate agency model because in IRDA, if you go for full marketplace, you need to be a broker, which means you can't do any other business under that umbrella. And that is not in our horizon. So they'll work with 9 partners of which BAGIC and BALIC will be essential partners on the life and GI side. So once the loan business has picked up some scale, we will look at developing the insurance vertical. Today, insurance works both ways because this is only platform where people come to buy insurance as well as loans, and we are having on the side investments as well. So that is growing. But to reach a significant scale, it will take us 3, 4 more years. We are on a price comparison. Policy bazaar started by being a price comparator. We are web aggregator, as they call it in IR departments. So we are not in that business. We give specific products with specific partners. We will add value. We'll present that to the customer and customer will make a choice. And our objective is where BAGIC, BALIC want to compete where they see the profit pool where they see their strengths, they will be quite aggressive. And where they feel they don't need that business, they will not. So it's an open marketplace. So we may do things that [ dowry ] insurance companies or lending company are not interested in, but Finserv markets will do that as well. So our job there is to attract more customers and give them a choice of blenders and insurers. And over time, our companies will also compete and get a share of the business.

So we've taken our last question. I think our -- so very interesting and insightful group meeting. I would like to thank the senior management of Bajaj Finserv and the and all the participants. Thank you, and have a good evening.

Thank you. Thanks, all. Bye.

Good day, thank you.