ICICI Life Insurance Limited (ICICIPRULI) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the ICICI Life Insurance Limited H1 FY 2027 Earnings Conference Call. [Operator Instructions] I now hand the conference over to Mr. Anup Bagchi, MD and CEO of ICICI Life Insurance Limited. Thank you, and over to you.

Thank you very much. Good afternoon, and welcome to the results call of ICICI Life Insurance Limited for the half year ended September 30, 2026. I have several of my senior colleagues with me on this call, Siddhartha Mishra, Chief Operating Officer; Amish Banker, Chief Distribution Officer; Dhiren Salian, Chief Financial Officer; Chief Service Delivery; Manish Kumar, Chief Investment Officer; Souvik appointed Actuary; and Dhiraj, Chief Investment Relations Officer. As you are aware, the Board has appointed Siddhartha as the MD and CEO of ICICI Life for a tenure of 5 years beginning October 14, 2026, subject to the requisite approvals. He has already assumed the role of CEO from October 6, 2020. As my tenure as MD and CEO comes to an end today, I want to sincerely thank each 1 of you for the trust and support we have extended to me, not just at ICICI Life, but also over more than 3 decades with the ICICI Group. I also extend my best wishes for my colleague Siddhartha and I'm confident that he lead the company to continued success. Thank you very much. Now over to you, Siddhartha.

Good afternoon, everyone. Thank you, Anup. It is truly privilege to lead ICICI Life. Having spent over 28 years within the ICICI Group, the group's values and DNA are deeply ingrained in experiences across diverse businesses over the years. ICICI Life is a resilient organization supported by a strong leadership team with deep domain expertise and a disciplined approach to steer the business. Customer centricity has always been ICICI Life [indiscernible] approach, and this unwavering commitment will continue to guide every action we take. Our strategy remains unchanged, delivering sustainable VNB growth while balancing business growth, profitability and risk and prudence. Protection and annuities, they're central to our strategy, addressing significant underpenetrated needs in India. [indiscernible] protection business, we will continue to focus on increasing the sum assured in a sustainable manner. Our customer-focused product suite, well-diversified distribution network, innovative and customer-first sales and service practices, industry-leading quality parameters and strong risk and capital metrics position as well to capture emerging opportunities. I'm stepping into this role at an important milestone. The company will rename ICICI Life Insurance Limited strengthening our identity with brand ICICI that millions of Indians associated with trust, strength and easy access to financial services. As we open this new chapter, our promise of making [ Her Kal Aasaan ] is firmly rooted in our customer-first philosophy. My endeavor will be to further strengthen the franchisee, accelerate our momentum and enhance value for all our stakeholders. I look forward to working closely with all of you. With that, I hand it over to Anish to take you through our business performance.

Thank you, Siddharth. H1 FY 2027 was marked by global macroeconomic uncertainty driven by geopolitical tensions. While the Indian economy remained relatively stable, risks persisted from supply chain disruptions and elevated inflation. As a result, equity markets stayed under pressure with FIIs continuing to sell. Despite this external volatility, we delivered a strong and resilient performance with VNB growing by 22.3% to INR 12.83 billion in H1 FY 2027 and margins stood at 26%. Total premium grew by 15.3% year-on-year to INR 245.05 billion. New business premium grew by 25% year-on-year to INR 118.21 billion, driven by 10.6% growth in the number of policies, reflecting the continued expansion of our customer base. Our business model is built on 2 pillars: protection business, which provides risk coverage and savings business, which creates value through long-term management of customer funds. In H1 FY 2027, our sum assured grew by 30.1% to INR 8.81 trillion, supported by a strong 39.5% year-on-year growth in protection APE. Our sum assured market share stood at 11.5%. Retail sum assured increased by 34.9% to INR 2.32 trillion, driven by robust year-on-year growth of 47.2% in retail protection. Recently, our flagship term plan, iProtect Smart Plus has been awarded Product of the Year 2026-'27 through Nielsen IQ's Consumer Research, a reflection of our commitment to serve innovative and customer-centric products. The overall protection mix increased from 19.3% in H1 FY 2026 to 23.4% of APE in H1 FY 2027. Consequently, the savings business mix moderated from 80.7% in H1 FY 2026 to 76.6% in H1 FY 2027. In the savings business, APE stood at INR 37.79 billion in H1 FY 2027, registering a growth of 9.3% year-on-year. Within savings, annuity segment grew strongly by 50% year-on-year. Linked business grew by 6.6% year-on-year in H1 FY 2027. This segment witnessed some softness, especially in the later half of Q2 as uncertain equity markets impacted investor sentiment. Our strategy in this segment continues to be on offering wealth creation solutions, which help navigate market volatility while achieving financial goals of the family. The non-linked savings business declined by 4.5% year-on-year in H1 FY 2027. However, this business segment has seen a sharp recovery with Q2 business being at a similar level to last year. Within the non-linked category, non-par mix has increased in Q2 as compared to Q1 FY 2027. Group funds business grew by 48% year-on-year in H1 FY 2027. Let me now take you through the channel-wise performance. Agency channel grew by 3.3% year-on-year in H1 FY 2027 to INR 11.02 billion. The channel is on an improving trajectory with Q2 growth at 4.1% year-on-year. Direct channel grew by 10.9% year-on-year in H1 FY 2027 to INR 6.79 billion. Together, these channels contributed 46.1% to retail business in H1 FY 2027. As a strategic priority, within the agency channel, we continue to optimize product mix, which improves profitability and supports sustainable growth. By equipping agents with tools and analytics to automate administrative tasks, they can pivot their focus towards productive activities. As we go deeper into the micro markets, leverage data analytics and technology, we aim to drive higher productivity while ensuring our cost structures remain aligned with our evolving business mix. In the direct channel, our focus remains on scaling online business through differentiated customer offerings and digital capabilities and deepening our presence in the NRI segment through GIFT City. Bancassurance channel grew by 4.6% year-on-year in H1 FY 2027 and contributed 27.4% to APE. Partnership distribution channel grew by 34.1% year-on-year in H1 FY 2027 and contributed 14.8% to APE. Across both our bancassurance and partnership channels, we remain focused on strengthening existing relationships and securing new alliances. Our strategy is to build on high-quality business using mortality and persistency as core metrics to ensure long-term sustainable value. Group business grew by 39.2% year-on-year in H1 FY 2027 and contributed 21.6% to APE. Today, we have the strength of 2.41 lakh plus advisers, 52 bank partnerships with access to more than 27,000 bank branches and 1,600-plus nonbank partnerships. To summarize, our focus will remain on leveraging our core strengths, a customer-centric innovative product portfolio and a well-diversified distribution architecture enabled by strong sales and service capabilities. We will continue to strengthen the proprietary channel, execute our micro market strategy and enhance both depth and breadth in multi-partner shops. Combined with our resilient business model, these initiatives will enable us to deliver sustainable long-term growth through varying market conditions. I will now hand it over to Dhiren to take you through the regulatory and financial updates.

Thanks, Amish. Let me start with the regulatory development. IRDAI has released a public consultation paper on recalibrating economics of insurance distribution. This paper lays the groundwork for greater efficiency, fostering healthy competition and enhanced transparency across the insurance sector. Importantly, it places policyholders at the center of the reform agenda, aligning the insurance sector with the broader national vision of Viksit Bharat. Overall, the paper aims to strike a balance between expanding business opportunities and driving greater efficiency and productivity across the ecosystem. A key element in the is the recalibration of the expense of management framework with revised limits and a phased flight path to instill stronger cost discipline. As a company, we have been on our own efficiency journey over the last few years. We have consistently leveraged technology, digital tools and AI-driven initiatives to improve productivity and make our cost structure leaner and better aligned to the evolving product mix. Our operating expenses, excluding GST and stamp duty, have reduced at a CAGR of 8% over the last 3 years, an absolute 22% reduction in FY '26 compared to FY '23, which reflects the steady and deliberate progress that we have made. In the distribution space, the paper proposes an efficiency-oriented approach with differentiated commission caps. Becoming the most partnerable insurer has been a key strategic priority for us, and we will continue to leverage our proprietary partner stack platform to collaborate closely with our partners as these reforms take shape. We view these policyholder-focused reforms as a catalyst for growth and long-term value creation for all stakeholders, policyholders, distributors and our company. With a strong and resilient business model, we are well positioned to benefit from the significant insurance opportunity ahead. As these recalibrations take place, we expect the company to emerge even stronger, more policyholder-friendly, more productive and significantly more efficient. Now let me get to the financial update. Starting with efficiency metrics. In H1 financial year 2027, 54% of our savings policies were issued on the same day, reflecting the progress we have made in straight-through processing and automation. Our cost to premium ratio, excluding GST, reduced by 30 basis points year-on-year to 18.3% in half year 2027, and the savings cost to premium ratio, excluding GST, reduced by 90 basis points year-on-year to 11.6% over the same period. This improvement is a direct outcome of productivity enhancements and disciplined cost management. Our claim settlement ratio remained industry-leading at 99.3% in half year 2027 with an average turnaround time of 1.1 days for non-investigated claims. Our early claim ratio stood at 23%, which is the best-in-class in the industry, highlighting the high quality of business we have consistently sourced over the years. During H1 2027, we settled INR 26.27 billion of debt claims and paid INR 86.34 billion in maturity and survival benefits, underscoring our continued commitment to delivering timely financial protection and peace of mind to our customers. Customer retention also remained healthy with 13-month persistency at 84.5% in H1 2027. Our solvency ratio continues to be strong at 229.9%, and assets under management stood at INR 3.29 trillion at September 30, 2026. We continue to maintain a track record of not having a single NPA since our inception. ICRA has reaffirmed the rating of our existing INR 26 billion sub debt program as ICRA AAA stable. Profit after tax grew by 26.5% year-on-year to INR 7.6 billion in half year 2027. Our focus is on growing the absolute VNB, which has been demonstrated with the 22.3% year-on-year growth in half year 2027 to INR 12.83 billion. VNB margin stood at 26.0%, an expansion of 130 basis points from the full year margin of 24.7% last year. As compared to full year 2026, our product mix has moved favorably towards the protection business with sum assured registering a strong growth of 30% year-on-year in half year, thereby supporting value creation. Additionally, we kept working towards improving the profitability of each line of business through longer tenure policies, higher sum assured multiples and increasing rider attachment. Our embedded value grew by 12.2% year-on-year to INR 566.69 billion at September 30, 2026. Within the EV, the value of in-force business grew by 12% year-on-year to INR 423.89 billion. Thank you, and we're now happy to take any questions that you may have.

[Operator Instructions] We'll take our first question from the line of Swarnabha Mukherjee from 36 ONE Capital.

Three questions from my side. First of all, just wanted to understand the VNB movement. So if you could give some color in terms of, both on year-on-year comparison as well as on a quarter-on-quarter comparison that say, year-on-year, how much product mix has helped the VNB movement vis-a-vis cost structure, et cetera, as well as the yield curve, how it has shaped up? And similar on a quarter-on-quarter basis, if you can highlight because I think on the overall protection - protection side on a quarter-on-quarter basis, there was some soft if you could throw some color on that. And also on the cost to total premium number, sir, I think I observed that when you look at the number inclusive of GST, it has gone up, while of GST, the number has actually improved -- so is there any added element related to the GST changes that has kind of gotten factored in this number in this current quarter, if you could highlight that? So that would be my first question. Second is, sir, wanted some further clarity in terms of the draft regulation. I mean when you are talking to your distributors and particularly given partnership distribution is one of our primary growth engines right now, what are the initial feedback you are getting in terms of how would the evolving landscape be what people are thinking in terms of business growth, et cetera, if the regulation comes in? Some comments on this would be fair. And lastly, you give the split between par and non-par in the mix.

Thanks, Swarnabh. Let me cover the first question that you placed on the VNB margin movement. The right way to look at it is from financial year '26 numbers, which we closed the year at a margin of 24.7%, and we closed H1 this year at 26%. As we had discussed at the H1 call, a large portion of this movement fundamentally is the product mix and that continues from quarter 1 all the way to quarter 2 as well. So not much is the product mix that is playing out from what's happened through this last half year. And you see clearly that the mix is geared more towards protection, and that is what is helping us deliver the margins at this point. You also spoke of cost to premium metrics. And the reason why we've called out cost to premium ex GST is because last year, there was no challenge around GST input tax credit. If you recall, back in September '25, that is when the input tax credit challenge came about from -- post the GST changes. While that was -- that gave a fillip to retail protection growth and to general -- and to insurance in general, it did create an input tax credit challenge. And so to give the reader a perspective of a like-to-like basis, we have called out the GST number this time. Of course, as we go through to the end of the year and into next year, we will obviously have to look at gross of GST as well. Coming to your second question on the consultation paper, I mentioned this in my comments as well. I think it's a consultation paper at this point. It's not a draft regulation. The regulator has set a time towards the end of this month to collect feedback from all stakeholders, including the general public with the objective that it is customer-centric and it is a policyholder at its core. And the whole idea being that you are looking at creating a foundation which provides for greater efficiency, healthy competition and transparency. That's been the objective with which this particular paper has been set out. There are a set of thoughts that are running within the industry as well. But I think people still have to firm it up and provide their inputs to the regulator by the end of the month. So there are a lot of conversations. Nothing has come to closure at this point. Coming to your third...

Yes. If I may. So I mean, just if I were to look at it in terms of how the evolving structure has been in the paper and even if there are some changes, I mean, would you expect that from a manufacturer standpoint that in the shorter term, there can be a volume impact coming because of the delta in the structure?

It's too difficult to call, Swarnab. The way you also look at this is that there is sufficient space that the regulator set out in terms of renewal commission. So in terms of alignment of interest between all 3 parties, which is the distributor, customer and company, the allowance around renewal commission, which is significant at this point, does give us comfort that those entities who are interested in providing value to all stakeholders will continue to distribute. I don't see a challenge on that front. But like I said, it is too early to take a call. Let us provide our comments, let the regulator put everything together and come up with the draft regulation. And they're more than willing and you've seen the authority go out of their way to reach out to the general public and explain what they're doing. And at the same time, also show that they're willing to take in feedback and put their final thoughts together in the form of a draft regulation. So we'll have to wait for that to come through, Swarnab. A little too early to call. Coming to your question on par, non-par, last year, the mix was geared more towards par. So this year, for instance, has started to move towards non-par. And specifically in the last quarter, the mix is broadly in the range of 60-40 par to non-par.

Next question is from the line of Supratim Datta from Jefferies.

My first question is on the bancassurance channel. So just wanted to understand that whether the ICICI Bank proportion is still around that 13%, 14%. Because what I see is this channel, the growth has been slowing down. And if ICICI Bank proportion is largely similar, then that would mean the non-ICICI Bank part is slowing down. Then could you help me understand that what would be driving that? And moving to the agency bet, that has been another channel where despite the investments, the growth has been soft. Just wanted to understand how are you looking at that channel? What would really help accelerate the growth in this channel? If you could give us some color here, that would be helpful. And then moving to the regulation bit, I do understand that it's draft regulation. But if you could give us some understanding around if this paper comes as is, which products and which channels would you have to manage the most? Those would be my 3 questions.

So if you look at Banca, that grew about 5% in the half year. And roughly half of this banca business is from ICICI Bank, which is broadly stable in the range INR 100 crores, INR 110 crores, INR 120 crores. -- so -- and which is again focused completely on ULIP and protection. So in that sense, you have one part of the business, which is broadly steady at the INR 100 crores, INR 120 crore mark. And then you have growth coming in from other channels. So when you're looking at the overall, you will still see that average play-through between ICICI Bank versus non-ICICI Bank business. And that's what explains the growth that you -- the average growth that you see for 5% there. Coming to your question on agency, I think if you track the growth of agency across the last few quarters, you will see that there's been a fair turnaround from what was the deep negative numbers that we've seen in last year to now positive numbers across both of these quarters for this current financial year. Structurally also, what we have done in agency is to work on the micro market-led approach, again, with the use of technology analytics. And structurally, we have also ensured that they're looking at products that enhance the business quality, improve profitability and sustain and provide sustainable growth. So you're seeing the mix also shift within the agency business itself. So the idea being, again, endeavor is agency to deliver better growth than company over the medium term. And you're starting to see the shift in agency over these last few quarters come through at this point. Your third question on the consultation paper. Again, as I repeated -- as I mentioned in the previous answer, it is a consultation paper, very early to call. I think the regulator is very mindful of what the partners in the ecosystem are or the players in the ecosystem are and is looking at feedback from all participants, including the general public. And whatever they produce as the final -- or rather the draft regulation will take all of these into account.

Next question is from the line of Shreya Shivani from Nomura.

I have 2 questions. First is on the credit life business. If you can help us understand how was the APE growth in this quarter on this? And just a follow-up on this. Any conversations that we have had with the regulator on this product because that's where the commission cuts have been drastic. My second question is on the non-par product. Now we are in a rising rate environment. So as Siddharth Mishra sir was mentioning that agency -- sorry, annuity and protection will be a focus area. How much focus will be putting on non-par products given it is effectively annuity but for younger age group. So any plans around new product launches or any color that you can give on that?

So the growth in credit life has been quite in line with what you're seeing in the protection growth for this quarter as well. So it's a fairly decent growth that we're seeing at this point. In terms of the -- the consultation paper, you're right, it does propose a fairly significant cut. But you see structurally, right, you have to look at credit life from a different perspective. See, credit life is as a protection product, it provides a very important societal need in the country. It elevates the stress of any asset repossession in case of any untimely death or breadwinner. And very specifically, when you look at low income -- low per capita income groups, where there may not be an asset backing the loan, then the need for credit life becomes even more acute to avoid any severe social fallout and also any repayment pressure that may come about. On top of this, a substantial number of lives are covered by credit life, which currently helps furthering the cause of Viksit Bharat. So like I said, this is a consultation paper. The regulator is taking feedback from various stakeholders. And we believe that the regulator will take these points into account as they put up the draft regulations. Yes. Coming to non-par, this is -- yes, so non-par has done quite well in the half year so far. The rates are good. We have also modified some of our offerings to customers to provide as best as we can in seeing these numbers come through at this stage. We will continue to push on non-par. Again, the whole point is not to force it products to customers. The idea is to understand what are the customer needs and offer these products that are relevant for those sets of customers. As you rightly put it, those set of customers who are slightly on the younger side, who may be looking for guaranteed income products or guaranteed return products will find our non-par products quite attractive in their IRRs.

Right. So just sorry, I missed the part. Did you already reprice your non-par product or you're going to do? What did you mention there?

So we have repriced. This is a continuous exercise for us. We look at what are the yields that are available in the market, and then we offer that to customers. It is a continuous process, Shreya.

Next question is from the line of Samant Singh from PhillipCapital India.

First, in terms of the retail savings, which is like linked portion has grown by almost 7 percentage points in this quarter and non-linked is like flat. Retail savings fell by around 2% in September. So what is holding back retail savings? I understand you provided some color on the opening remarks, but you can sort of -- if you can give more sort of points to it. And how is October trending? So that is the first question. Second, coming back to the credit life and the caps. So how much of the credit life business comes from ICICI Bank and group companies versus, let's say, NBFCs? And is the premium that is financed within the loan today? Also, if you can provide that attachment rate to home loans and educational loans -- and the third part to this question is, under the 2% cap with no bundling, what volume response can you expect on the credit line business? And the third question is on persistency. So 25th month persistency is like 76.2%, which has fallen from June 77%. So which cohorts are driving it? And should we expect a negative persistency variance in the FY '27 EV book? So yes, these are the 3 questions.

So if you look at the savings, yes, Link sitting at about 7%. I think the market volatility, as Amish also pointed out in his comments, has had an impact in this quarter. And we'll have to wait to see how that plays out because to some degree, the market volatility does impact Link business. But within the non-linked business, we've seen a big pickup in the nonparticipating side. And most so you've seen this pickup on the annuity side, which has grown by 3% in the quarter. So coming back to the way we look at product, it's a question of what the customer wants at that point in time that we offer. So between the savings product, we are agnostic to the product mix and allow the environment to pick what is relevant for that customer there. October, too early to call. It's just been about 10, 12 days, too early in the quarter to call this out. Coming to credit life business, we do have a wide diversity of partners within the credit life business. A fair share of the business also comes in from the parent bank. We have not called out the split between our various partnerships here, but we do have a fair degree of diversity within the credit life business. Your hypothetical question of if the commission rates were to go to 2%, I think we'll have to wait until we get the draft regulations. It's a little too early to call. Structurally, like I mentioned earlier in response to another question, this is fundamentally a protection product that serves a very, very societal need and more specifically when you look at the lower per capita income groups, right? So I think these are some of the points that the regulator will take into account as they firm up the draft regulations. Your question on 25th month persistency, the same set of challenges that we have seen in 13 month last year, they flow through. Essentially, this will move from the 13th to the 25th, 25th to the 37th, 37, then on year after year. So we're not seeing anything unusual there. This is in some way expected.

Next question is from the line of [ Tejas Dikuna ] from Aditya Birla Capital.

So this would be a follow-up question to the credit life questions that we have seen earlier. And with the regulator intent of prohibiting bundling, it is likely to boost the group term life product. And even the regulator has mentioned that group term life can be sold as a bundle and alternative to credit life business. So my question is, what is the current contribution of group term life to the protection business? And with this intent that we have seen, how will it benefit Bank products from ICICI Bank into getting more business into the group term life portfolio?

So Tejas, just to tackle that point on bundling, see, all our products are sold with the consent from customers and customers are given a choice of how to fund the premium. And we believe that with all of our distribution partners, which is the banks and NBFCs, they follow a very transparent process in making this clear to the customer. Having said that, again, this is a consultation paper. We're going through the details. The regulator is picking up feedback, and they'll come up with their draft regulations.

Sure. Any comments on the group term life?

Very early to call. Like I said, the regulator is taking feedback from all constituents. You're presupposing that, that will be the only way to ensure that loans are covered. We'll have to wait and watch to see what the draft regulations say, Tejas.

We'll take our next question from the line of Madhukar Ladha from JPMorgan.

Just 2 data keeping points. First, you -- what is the share of non-par in non-linked business, right, in the first half? And similarly, what is Credit life share? Second, see, I know historically, you've not given a growth guidance for some time now. But I would still want to go and ask this question, what do you think H2 could look like for retail APE growth? -- especially we continue to see sort of variations in growth trends on a month-on-month basis. So some sort of guidance on how we see the business panning out in the second half. I think next year will be a completely different ball game depending on how the regulation shape up. But probably for the second half, if you could point us some direction.

Madhukar, Dhiren here. So I answered this point earlier in terms of the par non-par split. This is -- at the -- at this point, it's a 60-40 split between par and non-par.

Par is 60...

Par is 60%.Non-Par is 40%. In terms of credit life, you've seen the share of overall protection sit at about 23%, 24% of the total APE. And we've given you the split between retail protection, trade life and group term in the full year pack. It broadly is the same share at this point, roughly about 1/3. And yes, I see your point on guidance. Again, we don't provide guidance. We can give you what we should look at from the medium term. Short term, I think also it is quite difficult when you look at month-to-month variation because each month, there will be multiple factors that play out, including what happens with each of our distribution channels. And every insurer in this space has got a different mix of distribution channels. So what you see is the net outcome of all of them. Difficult to call what it is. We are very clear when we look at the business. There is the savings business, which also includes the annuity. and protection business. The focus is to be able to grow protection. The focus is to be able to grow annuity and to grow the rest of savings, offering whatever product that the customer chooses depending upon the environment.

Next question is from the line of Vinod Rajamani from Nirmal Bang.

So I have 2 questions. One is the new CEO is -- he ran ICICI Bank's digital channels and partnerships. So is his focus or his remit at Ipru-life also going to be centered on trying to expand the share of the digital app and digital journeys post his transition to Ipru Life? That's question number one. Question number two is, as far as retail protection is concerned, I mean, the numbers are strong, but post this -- now it's almost a year -- it's been a year post the GST removal and so on. But what do you see -- are you seeing the trend still holding up strong? Or do you see some softness going forward? Just some color on how retail protection is doing. These are the 2 questions I had.

So Siddharth has done more in digital. We've run the distribution channels at the bank and his last assignment, of course, included digital. As we pointed out in the opening comments, no change in our strategy. We have spoken about our channels earlier as well. The focus is to be able to grow proprietary channels. This includes agency. This includes direct. This also includes our website. So very clearly, the way we've set this out is to grow proprietary and leverage the opportunities that we see from a micro market perspective to be able to take advantage of opportunities in India across both protection and savings. Coming to your point on retail protection, yes, it's been 4 quarters of, I should say, elevated growth on retail protection and other parts of protection as well, very clearly because of the impetus that we got on insurance in the September '25 last year. The expectation is that as you get into H2 of this year, those growth numbers should taper down from the 40%, 50% that we've been seeing to more moderate levels. Our objective is that now that we've attained these levels, we work from these levels upwards and look to deliver growth. That's the perspective that we carry as we step into the second half of the year. I trust that gives you a sense.

Next question is from the line of Prayesh Jain from Motilal Oswal Financial Services.

Just a few questions. Firstly, on the margin trajectory, could you explain as to how much is actually from just the mix change? And also how much is from the, say, the higher profitability that you would have got from in the non-par business because of the yield curve, while you kind of mentioned that you do a continuous realignment, but whether you were able to get some gains out of it and post the realignment, the margins are kind of normalizing? Or how would you see that? I think that's my first question. Second is on your expenses, right, and particularly again on profitability, while we're not seeing that kind of growth that we would love to see, -- but do you see scale benefits yet to accrue and the margins can further expand if we say start doing much better growth profile from here? Because in the last year, I think a decent part of it was -- the margin pressure was on account of operating deleverage. Do you see that behind now and expansion can come not just from product mix and also because of scale benefits that can -- and this is more from a forward-looking standpoint.

Prayesh, so to explain the margin, it's largely the product mix shift that explains the margin. Again, the right point to look at is full year margins, of course. So when we closed the year last year to -- as we stand today at the 26%, the mix broadly explains it. And at this point, let me just try and explain the way we look at the non-par business also. The idea is when you're looking at what we're able to pick up in the market, I don't think we want to keep all of the advantage that we get out of it. idea is to be able to pass on to the customer because clearly, you should be able to create demand. If your product is a rupee cheaper than the next competitor, then it clearly helps propel the demand. That's the perspective that we carry. And when you see that improved profitability, a lot of it comes from the second point that you pointed, which is the improving OpEx ratios. Again, savings business is very clear, right? It's either a spread or a fee-based business. And what you're able to save by way of OpEx, you're able to fund that back into -- some bit into margin and most of it into customer price. So the consistent work that we've been doing on OpEx actually is giving us these leverage elements here. Now -- so it's not a question of just creating margin for the sake of creating margin and keeping that ideas to be able to deliver on value for the customers and which in turn will propel demand. That's the way we look at this business, and we'll continue this path.

Got that. I'm again taking that liberty to ask you a question on consultation paper. But not just consultation paper, if you actually think about the regulatory environment, you have a consultation paper that changes the dynamics of distribution and products. You have IFRS, which kind of changes the way you report financials. You have RBC, which kind of changes the entire solvency structure. Now FY '28 comes and we see a large disruption across all these things. what are the implications that we should think about as analysts about all these 3 things, right? Consultation paper can be a disruptive to products and distribution, finance reporting will be very different under IFRS. How things -- how are you guys thinking about all these changes?

Yes. So I give you my thoughts on the consultation paper. It's still too early, and the regulator will take all feedback into account when they bring out the draft regulations. You're right about IFRS, that's going to be a reality as we get into April. But for most of you guys who have been used to looking at VNB and EV, I don't think that's any large departure. -- because the current stat P&L is not conducive for valuation of companies. The VNB EV metric gives you a far more clearer sense. And a lot of it is just a carry-through when you look at the fundamentals of it is just a carry-through when you look into IFRS or Ind AS. Of course, then that becomes the statutory P&L when we go into next year. So you will see a lot more color coming through from each of the insurance companies, not just the listed ones, but you'll be able to see this for the whole market as well. And that will give you a clear sense of how each company is managing their business. What are the pluses and minuses, what are the strategies that they're playing out. It will all become a lot more clearer to the reader. We welcome RBC. I think it's -- we've gone through 2 quantitative impact studies. The regulator has taken feedback from the industry as well on that. And I expect them to come up with the final form of RBC soon. And we will look forward to that because when I think of this from an external participant's perspective, you're seeing 2 fundamental changes come about from the financial side. You're seeing the implementation of a more modern financial statement, which is the Ind AS, which is also then supported by a more advanced capital standard. The consultation paper, of course, is the regulator's way of looking at delivering value to customers and ensuring that the industry stays focused on cost discipline. That's the way we're looking at it. And when you look at our set of numbers, for instance, we're comfortable with the way that the IFRS numbers are stacking up. We're comfortable with RBC. And in terms of the consultation paper, I think you should just look at our cost to premium metrics, and you will see that we're very well placed even when you look at the full year numbers net of GST. It gives you a fairly clear sense of where people stack up at this point. So we think that this is a good initiative for the industry. It should instill a lot of confidence back into the general public. And importantly, it places the policyholder at the center of the entire reform agenda. Again, this is all aligned with the Viksit Bharat vision. I think this is quite positive from that sense, and we are well capitalized to take advantage of this.