HDFC Life Insurance Company Limited (HDFCLIFE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the H1 FY '27 Earnings Conference Call of HDFC Life Insurance Company. [Operator Instructions] I now hand the conference over to Ms. Vibha Padalkar, MD and CEO of HDFC Life. Thank you, and over to you, maam.

Thank you, [indiscernible]. Good evening, everyone, and thank you for joining our earnings conference call for the half year ended September 30, 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 on 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 Chief Actuary; and Kunal Jain, Head, Investor Relations, Business Planning and Strategy. Let me begin with the broader environment. In its latest policy, the Reserve Bank of India raised its FY '27 growth projection to 7.1% from 6.7%, reflecting continued resilience in domestic economic activity while the fiscal position remains well managed. At the same time, the RBI is the policy repo rate by 25 basis points to 5.5% and move to a stance of calibrated tightening given elevated energy prices and a below normal monsoon, which remains the key risks to inflation. Broadly, we expect macro conditions to remain stable, which in turn should support steady growth for the life insurance industry. Moving on to business performance. In quarter 2, individual weighted received premium grew 11% ahead of the private industry at 10%, with market share improving 10 basis points to 16.2% in quarter 2. This took H1 individual APE growth to 9%. Overall APE grew faster at 13% in quarter 2 and 11% in H1. The number of insurance policies grew 9% in H1 ahead of the industry. We expect to sustain this momentum and grow in line with the industry in FY '27. Growth was broad-based across channels. Individual APE sourced by HDFC Bank grew 12% in quarter 2, slightly ahead of company growth. We have sustained counter building on the momentum we saw late in quarter 1 and supported by deeper engagement with the bank across branches, products and processes, and we expect our share to steadily improve going forward. Other banca partnerships also grew well, delivering a year-on-year growth of 13% in quarter 2. We're pleased to announce our new bancassurance partnership with J&K Bank, and we look forward to scaling the relationship, deepening our presence across its network and attending our reach to a wider customer base. Other nonbank corporate alliances clocked robust growth in quarter 2 of 13%. Agency continues to grow faster than the company and the broader agency market at 13% in H1, and our position in this channel has strengthened. Investment in expanding our branch network is yielding good results. Branches opened over the last 30-odd months now contribute about 17% of Agency business versus 12% a year ago. Agent additions and activation remain healthy and frontline productivity has improved. The channel mix is also strengthening with protection and annuity together, contributing about 30% versus 15% in the previous period. Even as we continue to perform well across our partner channels, investing in and building our proprietary channels remains a key priority. Next on product mix. In H1, unit-linked products come to 45% of individual APE. [indiscernible] savings annually 12%, participating products, 13% and retail protection [indiscernible]. Retail Protection grew 33% in H1, a 2-year with growth broad based across geographies and customer cohorts. Its share of individual APE grow close to [ 8% ] from about 7% last year. Title attachment also continues to be healthy and protection and riders together now account for 11% of [indiscernible]. The second half of last year projection [indiscernible] is following the GST lesion. This year, we expect [indiscernible] to normalize as the day starts and remain strong on a [indiscernible] CAGR basis. Our retail summer showed by 21% in H1, with market share increasing by 30 basis points to 15.4% [indiscernible] Credit protect 19% in H1 with both broad-based across [indiscernible]. [indiscernible] an annuity [indiscernible]. With interest rates at elevated levels is an opportune time for customers, talking long-term guarantees, in line with our focus on driving still we'll continue to using the current interest rate environment to sharpen the value we offer customers across all segments. Unit link demand remains resilient despite in market [indiscernible] Moving on financial and operating metrics. Value of new business for H1 was INR 2,037 crores per [indiscernible] 12% ahead of APE. PV growth for [indiscernible] 15%. New business margin was 24.7% compared with 24.5% in H1 FY '26. The improvement was driven by a strong product mix and the continued mitigation of the GST impact we absorbed last year. Embedded value at [indiscernible]cores with rolling 12-month operating ROE of 14.9%. Profit after tax for H1 was [ INR 1,119 crores ] , a growth of 13%. Assets under management stood at INR 4.1 trillion, up 14% year-on-year. Our 13 fund persistencies stood at 83% and 61st month at 66%. Persistency was softer on renewal collections in our unit [indiscernible] amidst [indiscernible] and in a specific cohort of nonpar business [indiscernible]. We are working closely with our distribution partners and expect some recovery by the [indiscernible] Our solvency ratio stood at 180% as of September 30, 2026, well above the regulated requirement of one. The Board has a [indiscernible] subordinate which we expect to complete during the current quarter, further strengthening our capital position as the investor. Moving on to subsidiaries and ESG. The Pension business continues as with assets under management of INR 1.85 crores as of September 30, up 28% year-on-year. We also continued to see an attractive onto for U.S.-denominated insurance section. On ESG, our MMI ESG rating was upgraded [indiscernible] from them. This reflects our initiative governance and the progress we have made across each [indiscernible]. Finally, on the regulatory front, our idea has released consultation papers on the economics of insurance, which performed significant changes for the interest. The regulator has encouraged industry part and share in fact supported by data and keeping policy holder interest at the center of competition. As an industry, our shared goal is insurance for all by 2040. [indiscernible] require wing each building data [indiscernible] affordable for customers, more attractive products and institute partners in advice, service and reach transit remain stent. Our business has been built around many of the compensation emphasizes diversified distribution is going from [indiscernible] calibrated expert model and a long-standing focus on quality of business. This positions us best, keep investing in invite the consultation still underway and the industry engaging with the era, we will be better placed to comment on it once the framework is finalized. To conclude momentum is building across our [indiscernible] ahead of the industry [indiscernible] both are cross channels are investments in agency conditioner and our VMP has been acted on [indiscernible] We remain confident in the long-term opportunity for the industry and in our ability to further strengthen our position within. For a more detailed presentation -- a more detailed discussion on our performance and output, please refer to the investor presentation. We will now be happy to take your questions.

[Operator Instructions] The first question is from the line of Prayesh Jain from Motilal Oswal Financial Services.

Congrats on the [indiscernible] of numbers and happy to see the growth coming back at HDFC Bank. What has changed in HDFC Bank because we had seen a slow phase in the last few quarters, and the growth seems to have come back in the last couple of months. So what has changed and how it is sustainable? And second question is on the consultation paper. We have a decent share of Credit Life business. How do you see that being impacted if the regulations are implemented as it is -- how do you see that part of the business kind of playing out? Yes. So those two questions and probably a third one I'll ask.

Yes, as far as the bank is concerned, we've done a lot of granular work and there are many aspects to it rather than one. And it's -- I would just say that it is a lot more bottoms-up in terms of engagement at a branch level, a very, very granular level of engagements. And we expect this momentum to continue to build. And also, I think the interest rate environment is helped the underlying product protection has grown very well. So it's a multifold effort, our own populating our people in terms of which branches are very, very nuanced. So many small and big things that have continued to work for us. Vineet, do you want to add anything on [indiscernible]

Not much to add. I think it's also -- I think, a macro level, there was -- last year, there was tied about July, August, there were some additional incentives and contracts running, which was around about a year back in the HDFC Bank and now that on full year has passed, the entire momentum of insurance is also coming back into the full growth for the bank channel. Along with that, like we have mentioned, a lot of small, small corrections and challenges around credits and people and everything else has been taken in this year, especially in the last 3, 4 months, which has now stabilized, and we can see the momentum coming back. Looking at where we are, we do believe that we should continue to see reasonable growth in the HDFC Bank channel.

As regard the second question on consultation paper and credit life in particular. So this is a consultation paper early days we have made representations collectively at different forums and so on. We are also serving and understanding where the regulator is coming from. I think the objective remains the same as to how do we give the best value for each customer. However, as far as Credit Protect is concerned, the need for protection at the bottom of the pyramid continues. I think that point is well taken, and we have made those points as well. And how do we make insurance a lot more inclusive and credit line very effectively does that. So I think things will evolve. The need for production doesn't go away. So in some of that or the other, I think it will definitely be there in the similar kind of a quantum, but a little bit early in the day to say as to what's the final form of shape.

Yes. I'll just add one more point there that the credit level also services a lot of social sector where there is this MFI sector and the and people who have earned less than maybe INR 2.5 lakhs to INR 3 lakhs of income, which are not accessible to retail. So -- and we have shared all this data, and we'll be sharing as the repreciation continues. And we do look forward to how things can evolve when the draft comes.

And last point here is if I were to look at the number of lives. The number of lives is almost 5x or thereabouts, if not more, than the retail number of lives. So getting to insurance for all by 2047, without the reach of credit life could be quite difficult. And so those are the sorts of representation that not just us, but at a sectoral level, also we'll make.

A follow-up on the first one, there was competitive intensity in the channel on HDFC Bank, the other commissions. So have we done any correction in the IRRs that we are offering or commissions that we are offering that is in the large few months, which has kind of led us to some bit of improvement in the trajectory. And last question will be on VNB margins. How do you see this now given that your product into moving favorable growth is coming back, will you still continue to invest in the business to kind of maintain margins? Or it would be more in the second half that we can expect some margin expansion here?

I'll take the first question on HDFC Bank. So I think to your point, no, we haven't made any significant changes, but we have continued with the addition of making sure that our rates are competitive and in par with what the industry and the economics allow. It has been helped because of the rates in the increase in yields also that has helped us give those kind of rates also to the customer. And that has been in getting that share of non-par back. But the growth is not only in one par, growth is across products. So this IRR intensity could justify the non-par growth. But like I said earlier, a lot of other granular work has also happened, which has ensured that the growth is more broad-based across products. There is no change in commercial payout.

And VNB margin, I think our approach is fairly clear, and we will stay with that, that we'll want to maximize VNB growth and margins will be an outcome of everything that we see on the whether it's product mix or the competitive environment. We have managed to expand margins even after absorbing the entire impact of GST, which now gets baked into the business model from second half of the year. As the scale kind of comes back towards where we are capacitized, we should start seeing some of those benefits coming into the margin. But like you said, I think most of it will be plowed back into business. We see that there is a very good opportunity to continue expanding our reach whether through it's through a proprietary distribution or through our partnerships, new partnerships like J&K Bank, for example, or any of our existing partnerships as well. So we will continue to investment our the entire architecture on the technology side also now starts paying out from a customer-facing perspective, partner-facing perspective. So those investments will continue. And we will continue with the objective of delivering VNB growth in line with or slightly ahead of it.

The next question is from the line of Shreya Shivani from Nomura.

I have two questions. My first question is on the annuity product movement. I think it's been quite strong in this quarter. So any color on any flavor that you can give around here? Is this a segment that becomes -- it's gone into double-digit mix now. So this versus par, are we preferring 1 product over the other? That's my first question. My second question is on the VNB walk and the EV walk, I know these are small numbers only, but if you can explain that in the EV walk, what is the operating variance? Is it still from persistency? And in the VNB walk, what is the change in assumption that we've made?

Over to you, Niraj.

Yes. So the annuity focus has been fairly strong for many of us now. And with ideas -- they have given us this opportunity to expand this segment by allowing us to launch variable energy products, which we've done at the end of last year. That has now started catching significant [indiscernible] interest from varied customer segments. And that's the reason why you're seeing annuity mix as a 3x or [indiscernible] at the same time last year. It's a combination of multiple products. It's a single premium products as well as regulatory products, immediate as well as deferred. So all of these constituents within the product segment are becoming larger and larger. And as we become more mature as customers in terms of looking at our retirement needs, this product segment will continue to gather scale. So that's really our thought process on that. As far as the VNB work is concerned, Yes, the operating variance is primarily -- on the persistency, we speak about it in the opening comments as well that we have seen some pressure on unit-linked collections given the market sentiment and also the residual impact of one of our products within the non-par segment. So that's kind of running off now. But that's really the gap that you see in the operating variance on the -- and the embedded value. As far as engine assumptions are concerned, the same thing. We had spoken about it last time opening the assumptions were largely to bake in the persistency change that we were foreseeing into our Ev and VNB.

Right. And sir, the investment variance, any breakup, if you can give us equity debt?

During the 6 months, the equity performance has been lower than expected. It's gone up around 3%, 3.5%, whereas the expectation in the range of 5%. So a negative area. And in the -- on the yield curve at the short end, the yield curve is resulted by around 25, 30 basis points, and that has a negative impact on the shareholder assets as well as the [indiscernible] is on the policy liabilities. So this is again, given a negative impact and the credit spreads have widened. So this has also resulted in a negative impact. So overall, these three put together and got a negative investment variance on the EV. All these are macroeconomic conditions, that's why [indiscernible].

And you will be able to triangulate this from sensitivities that we share from a regular basis. I mean, for us as well as for anybody else.

Next question is from the line of Nidhesh Jain from Investec.

Two question. One is our capital consumption has been quite high. we raise capital and again, the solvency has come down to 180. So how do you see kind of consumption going forward? And what is leading to this high capital consumption? Second is, how do you see the behavior change at the distribution level with the new proposed commercial commission limit specifically, if you can talk about agency, banca and partnership distribution, each segment, how do you see changing because in some of the segments, the commission -- revised commission proposed are pretty low versus the current limits?

So on the capital consumption, as we write long-term products, the capital gets locked in under the current regime, which is quite prudent. And that's why the movement or transition to risk-based capital framework will be helpful. But until the time that risk-based capital framework is in place, we will continue to have capital consumption, mainly because we're writing profitable but long-term contracts where the requirement is the same and it doesn't come down even if the risk is getting reduced. So that's the main reason for the solvency getting consumed or getting reduced when the capital is getting consumed. But we hope that by next year or so, there will be some discussion and some time line on the movement to RBC, which should help improve the ratio.

So the INR 500 crores of subdebt, you should be okay till next year or...

Should be comfortably above the regulatory minimum of 150% and what we target internally as well. So until the end of financial year, we should be comfortable.

On the impact of the distribution paper, see, like Vibha said in the beginning that this is right now the consultation phase. And until the time the draft regulations come out, it is still open to a lot of changes that might come in, based on the feedback that is coming from the industry and distribution partners, et cetera. But just at a high level, I can maybe just categorize the impact across channels in high medium door kind of segment. So given the limits in the paper, the agency channel would be least impacted. There would also be an impact on agency channel, but at least impacted. The banks would be maybe the next in line and the brokers and the [indiscernible] would be the highest impacted in that line of order. But like I'm saying that there could be variations to this and a better time to discuss this would be once the draft is out.

Next question is from the line of Manas Agrawal from Sanford Manson.

I have two questions. One is on the bank sales. I think we've seen some momentum come back. And maybe too early to ask, but do we have a clarity on what the new CEO stance is going to be on sales for insurance? And from a regulatory perspective and from a new CEO perspective, how should we think about Contrashare? Because the differential in commissions will go away versus the other players on the counter? So that is one. Second on EOM, assuming the things are going to remain what the draft says, how much of the bridge from commission cuts gets passed through? And how much is left, which you need to work towards?

I think on the bank front, it's too early for us to say and it's not even our site to say what those stances. But I mean, given the way things are right now, we are reasonably confident how the rest of the year looks like.

On the EOM front, our expense ratios today are around 21-odd percent as you can see. And our last part of that is obviously flowing through commissions, more than half of it. So if the commissions stay at the level which will be proposed in the discussion paper that goes down to half or less than half. So I mean if you do the math, just 15% is something that we will achieve just mathematically. But then, of course, there are nuances around what happens to business, scale, et cetera, and so on and so forth. But from EOM perspective, it's not something that would be a big challenge from achieving that number. And then, of course, the glide path is also something that we need to kind of look at. But just mathematically, I think the numbers are out there, so it's reasonably straightforward.

Understood. And on the counter share, setting aside what the new CEO may do at the bank, the paper should make it easier for the subsidiaries everywhere across the industry. Is that fair to say?

So we'll have to wait and see, jump the gun. But yes, I think, clearly, the regulator is a tad inclined towards probably closed architecture and is giving -- I just want to leave it there in terms of without second-guessing what the regulator is thinking of, but the report seems to suggest that. And we'll see as so does it finally what the controls are and whatever they are, I think we will -- overall, I'm not saying only about HDFC Bank, but overall, I think we should be better off once things start falling in place and where we are today. And this I'm again mentioning from a including the customers' point of view because I think what's lost in all of this is that the pie also should grow. And we've seen that resounding when GST cuts happened. So yes, like with any material change, there will be disruption. But I remain extremely optimistic once the disruption is digested by all market participants and the new norm emerges. When the new norm emerges, I do think that we will be in a position that is stronger than today.

Next question is from the Lisama from JPMorgan.

This is Madhukar Ladha from JPMorgan. Two questions from my side. First, when I look at your product mix, which sees a shift away from par and more towards annuity, can you explain what is early driving that? And second, I think a lot of investors are concerned, especially, I would say, on the banca channel and the way is that given the reduced commissions, does this worry make it attractive enough for banks to really go out and sell insurance? Would insurance fall off the radar or go lower on the scorecard for relationship manager. How would you address that? Yes, those would be my two questions.

Yes. Madhukar, I'll take the second question first and then hand over the product mix to Niraj. I absolutely, like I said earlier -- the earlier caller that, yes, there will be some short-term disruption like we had in the 5 lakh withdrawal happen and all that we were talking about and discussing was a withdrawal. Today, just about 3, 4 years down the line, no one mentions it anymore. So I absolutely think that's how this is going to get get going down the line. And just to remind, for those who have not been associated with the insurance sector by just a few years, around 2017 -- since '17, we were largely still in HP LIBOR and closed architecture. The commissions at that point in time were not very different from where the commissions that this particular version of the consultation paper or some such a par will finally end. And the growth in bancassurance was not very different than where it is today. So that is what gives us a lot of confidence that it still makes eminent sense the commercials are not -- will not be trivial, and the back end has increased. Also, there's been an increase in certain segments like protection. So I think all of that put together, hopefully, this will give rise to more longer term sale of insurance policies, which is how it should be more protection focused, retail protection focus, which is also -- you'll agree that it's a good outcome. So all of that put together, we remain absolutely optimistic that bancassurance, the agency, of course, Niraj has spoken about should not be an impacted, but the bancassurance channel, we don't believe will lose interest.

Got it. And the product mix?

So product mix, a couple of things. One is, I mean, we just discussed when Shreya also asked on the annuity front, maybe a couple of things. One is that new product category and also I talked about all the segments within that, which has resulted in the annuity mix on an APE basis, looking very elevated at 12% versus 4%, 5% in the previous period. But if you see on a new business premium basis, again, as we highlight, has been growing from 14-odd percent to 17%. But I think that would be a fair measure of looking at how the segment is building nicely, but on a more granular basis rather than just looking at difference at this point in time because of the regular premium mix increasing in the past 6 months. So that segment continues to grow. Non par, as we discussed earlier on the call as well is something that, given the way the asset allocation conversation is becoming a little more understood now, and the mix on non-par has also gone up from 18-odd to 22%. Protection has started, I mean, inching up very meaningfully from 7% to 8% over the last -- on a Y-o-Y basis. So each of these have actually contributed to the mix shifting. Unit link continues to be at similar levels to last year. It has been inching up, yes, by about 2% to 3%. And that is something that is I guess, here to stay, unless there is some reversal and thought process that happens. We haven't seen that yet. But UniLink is likely to continue on this path. So I think, it's more probably in this environment, more appreciation either for the equity story or the more clear story on guarantees, whether through annuities or of non-par savings. So that's broadly what is happening on the product mix front. No specific design on our part to try and reduce par in any way. We have fairly strong propositions on the participating side as well, and we could probably see some within that segment going forward as well.

The next question is from the line of Rishi Jhunjhunwala from IIFL.

One question is in your interactions with the regulator, while it has not been categorically said in the distribution paper. But is it -- does it seem like they want the entire benefit of reduction in distribution costs to be passed on to the consumer? And if that were to be the case, how do you think that changes dynamics, especially on the savings side, right? I mean, on the traditional plan like a non-par where, one, the bond yield are higher on top of that, if something like this has to be passed on, do you think that could make it significantly attractive?

One and it's too early. I think the draft is a consultation paper. And things will evolve over a period of time. Even after GST, both the government and the regulator have do understand there are market dynamics, product change, economic factors change, many thing, mortality experience changes. So there are at least 5 or 6 things that go into the pricing of a product. So too early to say.

Secondary, just directionally, I think as -- if the products start becoming more attractive, which they should anyway with scale and getting to more customer segments through wider reach, I think as customer proposition as products are becoming more attractive. That benefit will anyway get tapered to customers from from that perspective. Interest rate environment is always very dynamic. So we do take that opportunity from time to time to pass on that benefit to customers and also utilize that to reinvest back into growth, as we've discussed. So that is a continuous journey in any case. And lastly, if from an efficiency perspective, if companies start managing their costs better than what they have in the past. Of course, some of that benefit will flow through the customers in any case.

Yes. And last point is, see, we are in an intensity of competitive competitive dynamics. And so whether the regulator something or not. We will have to also see how we priced vis-a-vis others like we do all the time. We are not in a captive -- we're not a captive insurer. And so those -- any way market forces are at play and we have to see all aspects is that down the line.

Understood. The reason why I was asking and was that when the GST exemption has happened, I think the government was quite clear in suggesting that almost entirely the benefit should pass on to the consumers. Here, at least in the paper, there isn't any explicit suggestion around that? So that's where I was coming from, whether in your conversations, has anything of that being discussed.

The regulator government have been very reasonable in the expectation when the GST change happened because it was very, very clear and visible to the customer that if you are paying INR 118, now you won't pay INR 100. So 15-odd-percent reduction in cost, customer can actually see that whether it's being passed on or no. When you talk on categories like non-par or savings, because of the dynamic nature of the product in terms of pricing, it's difficult to assess at what point in time any of those benefits are in what form and shape they get passed on to the customer. There, I think what -- while, of course, that holds through for protection as well, the market dynamics will play out, and we we'll need to compete in any case. The passing on the benefit or quantifying the benefit in the first place for savings products becomes that much more difficult and indirect. So if you go to extend the same analogy in this environment, I think I would suspect the same situation would hold because different companies are at different cost structures and they will take their own call in terms of how they want to really operate in the marketplace. And ultimately, all of us will try and compete for the customers' wallet. And we will -- that is the ultimate truth. So I think we will have to wait and see how that pans out on the ground.

The next question is from the line of Sanketh Godha from Avendis Spark.

Niraj, probably the pressure what we see in ULIP persistency, is it predominantly seen in ULIP or more normal ULIP? Because in a market correction mode because you typically put more on mortality on TULIP -- so the returns looking a little softer. Is the pain more seen there? Or do you think it's spread across the products [indiscernible]?

No. So it's not limited to any segment. It is more uniform. And I think a lot of it is something that we are reasonably confident of being able to recover with efforts. It is overall market sentiment, which is kind of causing this dichotomy where we are seeing new more new business coming into unit-linked, but at the same time, customers who have already invested in the past are taking their time to kind of come through with renewal premiums. So I think that's something that we should be able to address. It's not limited to any one product category. In fact, the category that you mentioned is relatively more recent. So we aren't seeing any differentiated trends in any segment within ULIP.

No. The reason why I ask is that because the second month efficiency saw the most correction, and TULIP, we started doing maybe 12, 18 months back a little aggressively. So just wondering whether there is any correlation there or not. But if it is not, it's fine. This just was asking from that perspective. And Yes. Understood. Understood. And just an reconfirm. The assumption change negative thing with respect to VNB is predominantly with respect to the par product, not anything to do with the ULIPs, where you have seen persistency correction?

The assumption change that is seen in both the EV walk and the new business margin work is the impact of the other one at the end of the financial year. If you recall, as we have been explaining, we look at the experience once a year before the year end and based on the experience trends, the [indiscernible] has a revised whatever division was done at the end of last year pertained to the lower persistency we were seeing in one of the non-par products. And that is what we've seen as a component in the work because you're comparing the NBM of last H1 with this is coming as one of the movement. The persistency variance that you're seeing in the EV is more a recent phenomenon, which we seeing on unit-linked products. So last year, when we changed the assumptions, the unit-linked persistence was holding up based on the expectations. It's only the recent trend that's captured in the variance, which we hope to recover most of it by end of the year.

Understood. Understood. And lastly, one question on Credit Life. Just wanted to understand the motor operandi, how it operates. In most of the Credit Life for the disburse we attach along with the disbursements. Is the premium bundled in the loan itself and that's why it's part of the EMI or the practices of collecting separately from the borrowers. So because it's clearly called out in the regulation, I just wanted to understand how it typically works for us.

So there are mix of various models available. And depending on the partner bank or NBFC, they could have different ways of doing this. It is also bundled in certain products in certain cases, it is also two separate accounts, which are set up at their end, two separate loan accounts also in the category. So there are ways -- models available and people use different kind of models depending on their own dynamics.

And can you quantify the mix if you're comfortable doing it, how much is bundled and how much is -- a broader number, I need to say.

No. I don't think that this will be possible because for us, the money comes as as the payment for credit life. And we would not be fully aware of whether what they are doing. This is more of a situation of what we know on the ground that different people follow different models. And they exist.

Okay. And lastly, on Agency channel, I mean, we saw a pickup in 1Q, but somehow in 2Q, the growth seems to be a little soft. Anything to read or you expect that to improve back in subsequent quarters.

I think it's largely a base effect from our side, all the fundamentals and everything else is moving similarly. We saw this stand out more in July. And then as the base corrected towards August, September, the growth was higher and in line with what we were expecting.

Next question is from the line of Shobhit Sharma from Elara Securities.

I have two questions. First is on the product mix on the banca channel. Like if you look at the product mix in take materially towards the ULIP segment. And usually, we see -- because of the seasonality H2, we have a higher ULIP mix all across the years when we look at it. You mentioned that we will see continuous momentum on the Banca side. So should we have a further scope of ULIP is going up at the Banca channel and both on the company side. And because the ULIP go up, do you see further stress on our oral mines because of the higher APE growth, which we want to chase as of now? And secondly, on the nut side, can you give us some color around the kind of offering it is? Is this a shorter pay annuity where we have seen a traction or is there something else? Lastly, we don't know when the final notification of the distribution reforms will be rolled out, later wants it to be implemented ASAP. So in case if it has to be rolled out from 1st of Jan, how prepared are we for that?

So on the product mix for bank assurance, unit-linked mix has been steadily going up for the last couple of years, and that's largely to do with the macro environment and the customer preference. We're seeing that at a very broader level with flows for the equity segment in any case. And that's something that's cascading to insurance as well. So well, bancassurance leads that change for insurance companies. But at an overall level, also, I think we are seeing that unit-linked mix is kind of fairly steady across all channels. So we are not really too concerned about that elevated mix. There was a point in time when we were obviously, looking at the category differently, more from a balanced product mix perspective. But in the last couple of years, we have sold for a few things. Persistency today is a lot better in spite of the short-term challenges that we just spoke about on unit linked now compared to what it was 3 to 5 years back? Also the amount of coverage that we are offering on uniting products, either in the base product as well as through riders is a lot higher than what it used to be 3 years back. So, if the customer is looking for the product, we definitely don't want to have any artificial barriers in the way of that. We just want to ensure that the customer understands that it's a long-term product and their best -- their needs are best served if they continue paying premiums for a longer period of time. So that's the only thing that you want to really be sure of. Otherwise, as such, the mix is, in some sense, dictated by how the macros are evolving. There could be calibration in that category over a period of time if volatility continues and the preference for more organic products could increase. We've seen that in the last few months, that could probably accelerate as we go forward depending on how the overall macros are panning out. As far as energy is concerned, I think I did mention that to the couple of callers, it is more broad-based growth, of course, enabled by the new product launch end of last year, variable annuities. Is there a limited pay product as well? Yes, there is. But -- 70-odd percent of the new business premium that you see is across multiple sources of business, whether it's coming through the NPS customers buying annuities or it's coming through people who bought pension plans in the past and are annuitizing that now or using the discretionary income to buy immediate or deferred annuity products. But yes, off late, the shorter pay annuity products are definitely playing a part.