Bajaj Finserv Limited (BAJAJFINSV) Q4 FY23 Earnings Concall Transcript

Bajaj Finserv Limited (NSE:BAJAJFINSV) Q4 FY23 Earnings Concall dated Apr. 28, 2023.

Corporate Participants:

S. Sreenivasan — Chief Financial Officer

Ramandeep Singh Sahni — Chief Financial Officer

Ashish Panchal — Chief Executive Officer

Devang Mody — Chief Executive Officer

Tarun Chugh — Chief Executive Officer

Bharat Kalsi — Chief Financial Officer

Analysts:

Dhaval Gada — DSP Mutual Fund — Analyst

Sanketh Godha — Avendus Spark — Analyst

Uday Pai — Investec India — Analyst

Shreya Shivani — CLSA — Analyst

Nischint Chawathe — Kotak Securities — Analyst

Anand Bhavnani — White Oak Capital Management — Analyst

Akshay Jain — JM Financial Institutional Securities Limited — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to Bajaj Finserv Limited Earnings Conference Call, hosted by JM Financial. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Sameer from JM Financial. Thank you. And over to you, sir.

Sameer Bhise — Analyst

Thank you, Viko. Good morning, everyone, and thank you for joining this call today.

First of all, I would like to thank the management of Bajaj Finserv Limited for giving us the opportunity to host this call.

From the management team, we have Mr. S. Sreenivasan, CFO of Bajaj Finserv Limited; Mr. Tarun Chugh, CEO of Bajaj Allianz Life Insurance; Mr. Bharat Kalsi, CFO of Bajaj Allianz Life Insurance; Mr. Ramandeep Singh Sahni, CFO of Bajaj Allianz General Insurance Company, and we are also being joined by leadership from Bajaj Finserv Direct Mr. Ashish Panchal, the CEO, and Bajaj Finserv Health, Mr. Devang Mody, the CEO.

Without much ado, I would want to hand over the floor to Mr. Sreenivasan for his opening comments and then we open for Q&A. Over to you, sir. Thank you.

S. Sreenivasan — Chief Financial Officer

Thank you, Sameer. Good morning, everybody. I welcome everyone to this conference call to discuss the results of Bajaj Finserv Limited for Q4 of FY ’23 and the full-year FY ’23.

Let me welcome my colleagues from our newer ventures, Ashish Panchal, CEO of Bajaj Finserv Direct or Bajaj Markets, and Devang Mody, CEO Bajaj Finserv Health.

As before, let me first clear up some hygiene points. As before, in this call, we will largely be concentrating on the consolidated results, as well as the results of our insurance operations through Bajaj Allianz General Insurance, BAGIC and Bajaj Allianz Life Insurance, BALIC, and where material, the standalone results of our company, BFS.

Bajaj Finance, BFS, which is another major subsidiary of ours, has already had its conference call. However, if there are any high-level questions on BFS, we would be glad to take that as well. We will not be taking any questions on the status of Allianz’s stake in our insurance companies, except to state that the status has remained the same as at the end of the previous quarter and there is no change.

Any statements that may look like forward-looking statements are just estimates and do not constitute an assurance or indication of any future performance result. Remarks on Ind-AS. As required by regulation, BFS prepares its financials in accordance with Indian Accounting Standards or Ind-AS. The insurance companies, however, are not yet covered under Ind-AS. They have prepared Ind-AS compliant financials only for the purpose of consolidation. Accordingly, for BAGIC and BALIC, any standalone numbers reported below are based on the non-Ind-AS accounting standards, Indian GAAP, as applicable to insurance companies. Our results, the press release accompanying the results, and our investor deck have been uploaded on our website yesterday evening.

Let me now get to the main briefing on the results for the quarter and the year. I’ll start with the disclosures on our investor presentation. Being the year-end, we have enhanced the disclosures of EV, including the EV walk for BALIC and the claims reserving triangle for BAGIC. We have also increased our disclosures in respect of Bajaj Finserv Direct and Bajaj Finserv Health.

As mentioned in earlier calls, we had indicated that when the new businesses have reached some level of maturity and the path is clear, we would invite the respective CEOs to attend this call. Bajaj Finserv Direct has started its digital technology services business under the brand of SKALEUP, while my colleague Ashish and I will be pleased to take any questions you may have on Bajaj Markets or Bajaj Finserv Direct.

In Bajaj Finserv Health, we have added slides indicating their business model and how their network and wellness stacks are building up. My colleague, Devang, and I will be pleased to take any questions you may have on these. I must caution, however, that these are still in start-up mode, and you may see more frequent changes in business models and scaling up as we go forward. During the quarter, our AMC received the final approval for starting their mutual fund business. The Bajaj Finserv AMC is expected to launch their first suite of products during Q2 of FY ’24.

Now coming to the update for the performance for the quarter and the year. Q4 of FY ’23 has been a very good quarter with all our businesses performing very well. Robust discretionary spending, strong auto sales and very positive uptake of long-term savings combined to result in our businesses doing exceptionally well.

Let me start with BAGIC. For the quarter, BAGIC reported a growth of 14% in gross domestic premium income as against the private sector growth of 16.5% and industry growth of 16.2%. Excluding the tender-driven businesses, which are crop insurance and government health schemes, GDPI growth for the quarter was 16.4%, and for the full year, was 15.1%. During the quarter, BAGIC signed up with Axis Bank as a bancassurance partner, thereby, further strengthening their bancassurance channel. BAGIC also launched surety bonds in the quarter, the first company to do so in the Indian market.

Looking back at the year gone by, you may recall that we had a spike earlier in the year in the frequency and severity of claims in motor due to post-COVID increase in traffic density and in health claims as customers chose to undergo elective treatments, which were postponed due to COVID.

BAGIC, with its focus on strong underwriting, had reviewed these businesses in detail and taken corrective action, the results of which have started showing up in Q4. As a result of these actions, we saw a sequential quarter-on-quarter reduction in claim ratios. This approach of balancing growth with profitability is at the heart of what BAGIC does.

In Q4, BAGIC saw strong growth in both motor and retail health businesses. Growth in GDPI in Q4 was driven by motor 13.3%, retail and group health 16.4% and 29.8%, respectively, commercial lines which is fire, engineering, marine and liability 15.2%, and travel or overseas mediclaim at 54.5%.

Overall, in Q4 FY ’23, BAGIC’s motor growth of 13% was driven by two-wheeler segment, growing at 26%, private car segment growing at 18%, and the CV segment growing by 1%. The growth in commercial lines was aided by BAGIC’s strong bancassurance network and multi-line agency channels, supported by strong underwriting and excellent reinsurance capacity for covering large risks. BAGIC continues its robust performance across retail, commercial and industrial risk categories.

Fire, marine and liability segments continued their growth momentum from the previous quarter. Overall, commercial lines continued to do well with Q4 and FY ’23 growth of 15% and 15.2%, respectively, against the industry growth of 12.3% and 13.9% respectively.

Health insurance performance has improved in Q4 as compared to the previous quarters of FY ’23. Overseas medical or travel insurance continued its momentum, ending the year with a 54.5% growth, while BAGIC’s growth in retail health at 16.4% was better than the market of the private and PSU players’ growth of 11%.

Similarly, in group health, BAGIC witnessed a growth of 29.8% in Q4 versus industry growth of 23.8%. For the overall industry, including standalone health insurance or SAHIs, in Q4 ’23, retail health growth was 16%. So BAGIC has grown a bit faster than that, while group health growth stood at 28.1%.

In Q4 of FY ’22, that’s about a year ago, BAGIC had grown the Health Prime rider, which is an OPD attachment to its health policies. I’m glad to report that during FY ’23, BAGIC sold 8.8 lakh riders. Much of this is serviced by Bajaj Finserv Health. For Q4 FY ’23, the loss ratio was 66.4% as against 68.8% in Q4 of FY ’22. The decrease was attributable to lower claims in motor, health and some commercial lines.

The combined ratio for Q4 was a healthy 97.3%, and for the full year, BAGIC ended with a combined ratio of 100.5%. We expect this will be among the best among the composite general insurance companies of comparable size. In a market which is intensively price competitive, this result, we believe, displays BAGIC’s commitment to a balanced and profitable growth on the back of strong sourcing and claims management. As a result, profit after tax of BAGIC grew 30% Y-o-Y and stood at INR322 crores in Q4 FY ’23. For the full year, BAGIC reported a slightly higher profit than FY ’22 at INR1,008 [Phonetic] [23:25] crores.

BAGIC’s AUM grew by 13% to INR27,809 crore as at 31 March, 2023. The float generated represented by increase in AUM was INR3,176 crores, which includes advanced premium at 31 March. ’23 at INR1,448 crores. The increase in advanced premium was 30% Y-o-Y.

One point I would like to highlight with respect to BAGIC is that BAGIC continues to be a — contribute a significant proportion of the industry’s profit. I would also like to mention that in respect of the claims triangles, which we have uploaded and which we do every year, we have seen that the revised ultimate expected losses for BAGIC is higher than the original expected ultimate losses by a reasonable margin about 7.6%. This is higher than the 6.8% buffer that we had at the end of last year. Therefore, BAGIC continues to remain well reserved in terms of its IBNR and IBNER.

In summary, it was a quarter of intense competition and BAGIC has chosen to hold its own with a very good combined ratio, not only for the quarter, but also for the full year.

Let me go to BALIC next. During the quarter, BALIC continued its month-on-month growth trajectory, reported an industry-leading individual rated premium growth of 48% against industry and private players’ growth of 24% and 35%, respectively. Similarly, in FY ’23, BALIC’s individual rated new business grew 41% against industry growth of 19% and private players’ growth of 24%.

In fact, in FY ’23, BALIC was the second fastest-growing life insurer among the top 10 private players and BALIC’s three-year CAGR of 39% in FY ’23 is the highest in the industry. BALIC improved its market share of IRNB from 6.7% to 7.6% among the private players in FY ’23.

The total number of policies for BALIC grew a healthy 24% to 2.05 lakhs in Q4 FY ’23, and the overall IRNB mix stood at par 15%; non-par savings, 52%; term, 3%; annuity, 5%, and ULIP, 25%. So predominantly, it was non-par savings followed by ULIP, par and then annuity and term.

Most lines have shown growth in absolute terms. The visitors mix changes reflect only relative differences in growth and hence, are not a matter of concern for us in the short term. During the quarter, growth was driven by all our main channels, with agency, institutional business and BALIC Direct, growing at 65%, 39%, and 38%, respectively.

Another point I would like to highlight is the various initiatives undertaken by BALIC to improve persistency across most cohorts, especially in the later buckets. 13-month persistency has now increased to 83%, and the 49th and 61st month persistency has improved to 64% and 50%, respectively. The increase in persistency helped deliver a strong growth of 26% in renewal premium in Q4 of FY ’23.

The new business value, net of expense overruns, the key metric of profitability, increased by 35% from INR308 crores in Q4 FY ’22 to INR415 crores in Q4 of FY ’23. For the year ended 31 March, the NBV was INR950 crores, which is a growth of 53%. Overall, a good balanced quarter for BALIC, with a strong focus on distribution growth with profitability.

Another point I want to talk about is the introduction of IRDAI’s revised regulations on the expense of management and commission. We believe this is a welcome change for the industry. With the increased flexibility and long-term focus of these regulations, it will help improve the insurance penetration as well as improve the ease of doing business in the country. Both BAGIC and BALIC are operating well within the prescribed guidelines as of the FY ’23 numbers. And together with our partners, we shall continue to seek a strong balanced growth in accordance with the framework that the IRDAI has provided.

Finally, more insurance companies are financially among the most solvent. BALIC with 516% solvency and BAGIC with 319%, and hence, are well poised to weather any external adversity. Needless to say, both BAGIC and BALIC are dividend-paying companies and both have increased the dividend payout in this year from the previous year.

All our businesses, insurance businesses have further augmented their digital capabilities, which, along with greater digital acceptance by the customers, should we hope, help create the foundation to deliver a strong performance in the coming year. Both BAGIC and BALIC have seen an increase in the utilization of their digital properties by customers and intermediaries.

Further details of BAGIC and BALIC’s digital capability are covered in the investor deck uploaded on the website. A short word on our lending businesses, BFL and BHFL. BFL, as mentioned in their conference call, had an excellent Q4 and full-year FY ’23 too was very good, as the company delivered on all its long-term financial guidance metrics; AUM, profit growth, return on assets, return on equity and gross and net NPAs.

Continuing on its growth story, BFL acquired 31 lakh new customers in Q4 and 1.16 crores new customers in FY ’23, which is the highest ever customer franchise addition in a year for BFL. Building on this customer franchise, the number of new loans booked in Q4 FY ’23 increased 20% from 62.8 lakhs to 75.6 lakhs.

The company’s diversified model has enabled it to record strong AUM growth, as seen from the total AUM standing at INR247,000 crores odd versus INR192,000 crores on 31 March. It continues to maintain a management overlay provision of INR960 crores at a consolidated level as of 31 March.

The gross and net NPAs have shown further improvement, with the gross NPA being below 1% at 0.94% as against 1.6% last year. And the net NPA is 0.34%, 34 basis points as against 68 basis points in the previous year. As a consequence of these, BFL ended the quarter with a profit after tax of INR3,158 crores, which is 30% higher than the same quarter of the previous year. The capital adequacy remains strong with a 25% overall capital adequacy.

Bajaj Housing Finance, the 100% mortgage subsidiary of BFL, continues to do well. The AUM grew 30% to INR69,228 crores. The profit after tax grew 52% to INR407 crore in Q4. And for the full year, the PAT grew 77% to INR1,258 crores. So welcome to the INR1,000 crores club to Bajaj Housing Finance Limited. The capital adequacy ratio continues to be strong at 22.97%, a strong and a very good quarter for both BFL and BHFL.

Now to give an update on our newer companies, Bajaj Finserv Direct or Bajaj Markets and Bajaj Finserv Health. During Q4 of FY ’23, Bajaj Markets attracted 1.06 crore consumers on its digital platform. These are people who visit our digital property, of which 200,000 became customers, which is a growth against last year’s numbers of 84 lakhs and 1.9 lakhs, respectively.

BFSD’s lending operation, unsecured and secured, both BFL, as well as outside partnership disbursements stood at INR1,313 crores as against INR1,175 crores. It sold 65,167 cards as against 61,027 credit cards in the same quarter of previous year. As of 31 March ’23, BFSD has attracted 3.4 crore consumers on its digital platform, of which 7.5 lakhs have become customers. The total revenue for FY ’23 stood at INR391 crores, which grew 89% Y-o-Y over FY ’22.

Coming to Bajaj Finserv Health Limited. It carried out 11.5 lakhs health transactions, having 3.34 lakhs plus monthly active users. For the quarter, eBH had or Bajaj Finserv Health had 9.67 lakh paying users with 3.5 lakh users having renewable products. Bajaj Finserv Health is also expanding its provider network, which includes 1.2 lakh plus doctors, 6,000 plus lakh touch points and 1,800 plus hospitals and clinics.

Utilizing the network strength, Bajaj Finserv Health is powering OPD services of BAGIC as well and recorded a gross premium of INR82 crores for BAGIC in FY ’23. I would like to point out that owing to the strong performance of most of our major subsidiaries throughout the year, BFS has recorded highest ever consolidated PAT of INR6,417 crores in FY ’23, which is a growth of 41% as compared to FY ’22.

To summarize, consolidated total income for Q4, 25% increase at INR23,625 crores. Consolidated profit after tax, 31% increase at INR1,769 crores. And for the full year, the consolidated total income was up 20% to INR82,072 crores, and the consolidated profit after tax 41% higher at INR6,400 crores.

Just to highlight, the consolidated profit is after absorbing mark-to-market gains and losses on the equity securities portfolio held by the insurance companies, which is required to be mark-to-market under Ind-AS to the extent they are held through profit and loss account. And this — the total impacts were a loss of INR328 crores in FY ’23 and a gain of INR2 crores in FY ’22. Excluding this volatile impact of MTM losses, the profit after tax would have increased by 28% in Q4 FY ’23 and 48% for the full year.

Before we open for questions, considering the limited amount of time, I would request the audience to kindly keep their questions brief. And I would also request please do not ask questions, which have already been covered by an earlier participant.

With this, I invite questions from the audience. And we have the full management team here to take any questions you might have. Thank you.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions] The first question is from the line of Mr. Dhaval from DSP. Please go ahead.

Dhaval Gada — DSP Mutual Fund — Analyst

Yeah. Hi, Sreeni. Hi, everyone. Thanks for the opportunity. So three quick questions. One is on BAGIC. So overall, we’ve seen combined ratio now settle between 99.5% to 100.5%. And historically when the environment was more favorable, it was about 95% to 97% kind of combined. So when do you think we are at the peak and maybe in the next couple of years we move back in that direction? So some sense around the landscape and how do you think about the combined ratio? So that’s the first question. Yeah. Go ahead.

S. Sreenivasan — Chief Financial Officer

Yeah. You can mention your other questions as well, Dhaval.

Dhaval Gada — DSP Mutual Fund — Analyst

Okay. Thanks. So the other quick ones on Finserv Direct. So if you could — sir, last time I remember you said 80-20 is the broad split between lending and non-lending revenues. So for the full year, if you could just provide a broad breakup between lending, cards and others, that would be very useful. And in terms of — what I observed was our visits and transacting customer base has been flattening over the last few quarters now. So any changes that we’re doing in the operating model. So if you could talk a little bit around, that would be useful.

And the final question was on the Bajaj Health side. So, I think what — if I go to Slide 54, so basically the growth rates have started to taper down in terms of active user engagement. So the MAU has come down and even the prime retention seems to be tapering. So any comments around that would be useful, especially on the transacting user part. Yeah.

S. Sreenivasan — Chief Financial Officer

Okay. Thank you, Dhaval. I’ll take the first question first and hand it over to Raman briefly. You had a question about combined ratio and where do you think it will taper. I think the combined ratio that you see is actually weighted average of multiple lines of business done across multiple channels. And the company, as you know, works on a very granular basis and there is a continuous activity of managing combined ratio by weeding out losing relationships and looking at profit pools and etc. If you recall the first quarter, we had a pretty high combined ratio of 105% and then quarter-on-quarter, we went into correction mode and we have brought it back to about 100%.

Raman will take it on. Raman?

Ramandeep Singh Sahni — Chief Financial Officer

Yeah. Thanks, Sreeni. Hi, Dhaval. So I’ll just add to what Sreeni said. I think what’s important here, Dhaval, is to understand there are so many moving parts at this stage. As we know, there is a big impact expected from the motor vehicle act. If you know, on the TP side, if we end up getting early reporting as we envisage, then things could look very different from where we stand today.

The second one is the impact of the new EoM regulations. Given that the industry is 55% to 60% of the players above the 30% limit, if the commercials are also expected to come down, I think both of these could play a big impact on how the core [Phonetic] is expected to emerge going forward. So to your point, at this stage maybe it will be very difficult to predict because if both of these work in a direction as we feel that early reporting starts and people start getting more rationale about commercials, then maybe going back to earlier levels of 97%, 98% may not be a big challenge.

But if things continue the way they are, then obviously closer to 100% is where things could emerge. But like Sreeni rightly said, our endeavor is to be always be below 100%. And in the most of the scenarios, maybe this year could be one of them. We’ve been able close that close to 100%, whereas the entire industry for nine months was at 122%. It’s moved up, in fact, compared to last year. So our endeavor will be to be less than 100% is where we stand today.

S. Sreenivasan — Chief Financial Officer

Now, I’ll ask Ashish to take the next question. Your question was on whether the number of visiting consumers and the active customers are slowing down. And you mentioned that, I said 80-20 split of revenue. I think I will make a small correction. What we mentioned last time is between the Bajaj Finance business and the open access business, the split was about 80-20 across cards and loans.

I’ll now pass it on to Ashish.

Ashish Panchal — Chief Executive Officer

Hello. Thank you for the question. For Bajaj Finserv Direct, there are two lines of businesses. One is our open architecture marketplace and the other is, we are also a technology services provider, both to some of the group companies and non-group companies. So let’s call it as technology services business. The revenue split between the marketplace and the technology services businesses was 76:24.

So out of INR357 crores of total revenue, INR273 crores came from marketplace businesses, which are lending, cards, insurance, and investments. And INR85 crores came from technology services business. Further splitting the marketplace revenue, out of the 76% of the total revenue that came from marketplace, 66% came from lending and 8% from cards and 2% from insurance and investments.

S. Sreenivasan — Chief Financial Officer

Now, I will give it to Devang for question on Bajaj Finserv Health.

Devang Mody — Chief Executive Officer

Thank you, Dhaval, for question and you’re absolutely right that our MAU has started flattening. I’ll give you the rationale of that. A few things. We set up a network of providers, which is doctors, laboratories, as well as hospitals. As we set up the network, it’s imperative for us to give them transactions. Our product sales, either through BAGIC’s Health Prime rider or other product sales catches up after our network is well equipped to service the transaction. And hence, if you see in last quarter — quarter four of last financial year, quarter one, quarter two, we had significantly higher traffic, primarily driven by paid traffic. That we have started weaning off. Rather we are now not spending any money in getting paid traffic.

What we are focused on as far as the growth metrics are concerned, which is the very important attribute for us to build the ecosystem around OPD is how many transactions we are doing. And if you see, most of the category of transactions, which we have started publishing now, doctor transactions have become 6 times. Diagnostic transactions have become 5 times in last one year. So as we go forward, our focus is to get more transactions done rather than getting more traffic done. Most of these transaction happens from customers, which are our paying users. Our level of paying user was significantly less last year. So, we had to complement it with paid traffic to drive some relevance with network, which we enroll. And hence, there is a drop in the MAU.

I hope I have been able to answer your question, Dhaval.

S. Sreenivasan — Chief Financial Officer

Dhaval, just to add to this, I think both these companies — I think there are two aspects to it. One is we continue to build capabilities both on tech side, on people side and network and partner side. So that is going on. And as they grow, I think we expect more and more consumers will come to us. What is very heartening for us to see is the number of consumers who are actually coming and spending time in our ecosystem, which is the sort of vision that we had when we set up this open architecture business and the health care business. And all these are potential customers for any of our manufacturing operation, whether it’s insurance, or lending or maybe in future, the mutual fund as well.

Dhaval Gada — DSP Mutual Fund — Analyst

Got it. Thanks. And I’ll come back in the queue. Thanks.

Operator

Thank you. Our next question is from the line of Mr. Sanketh Godha from Avendus Spark. Please go ahead.

Sanketh Godha — Avendus Spark — Analyst

Yes. Thank you. Thank you for the opportunity. Sir, my first few questions on BALIC and a few on BAGIC. So the first one is on BALIC. Basically, if you look at high-margin products, which is including non-par protection and annuity, which was last year 41% of the total individual AP, today it is 52%, but the margin expansion seems to be very limited from 14.2% to 15.5%. Just wanted to understand, is it the spreads in the non-par business has come off meaningfully or the acquisition cost has been on the higher side, leading to that margin compression, is my first question on margin.

And the other question, which I had was with respect to BALIC. If you can quantify the way we have quantified when the budget announcement came, how much high-ticket non-ULIP contributed for FY ’23 — fourth quarter FY ’23 and March ’23. If you can give the figures, it will be very useful.

And last one. There seems to be some weakness in annuity and group protection business, because — despite very strong growth, these two businesses seems to be little weak in FY ’23 and fourth quarter. I just wanted to understand how you see these business should do going ahead. That’s on BALIC.

S. Sreenivasan — Chief Financial Officer

Yeah. I will let Tarun and the team take the questions. Largely, your questions were on the non-par savings segment being significantly higher than last year and being a high-margin product, why the margins have not grown in proportion to business. And the second question was on why group protection and annuity you think that have not done — could have done better based on what you see in the market in terms of loan growth and demand growth.

Sanketh Godha — Avendus Spark — Analyst

Yeah. And last one is, how INR5 lakh plus ticket size, what was the contribution?

S. Sreenivasan — Chief Financial Officer

Yeah. That I don’t know whether we want to disclose that or not, but I’ll leave it to Tarun and team to take that question. Thank you, Sanketh.

Tarun Chugh — Chief Executive Officer

Yeah. So we’ll — thanks, Sanketh. I’ll ask Bharat to answer the margin question and then I’ll take the rest.

Bharat Kalsi — Chief Financial Officer

Yeah. Thank you, Tarun. See, Sanketh, there are two, three things. One, if you look at that, what has changed in the margin, so as we always said that we look at more on NBV growth rather than on margin growth and we have a very strong growth of NBV of 53%. Margin is a factor of multiple things. So NBV has actually reflected the change in the product mix. Specifically, to your high-ticket size in the non-par savings, see, what happens, when you sell a — today even if you look at our product of INR5 lakh and above ticket size, the customer gets typically anything between 10 basis point to 20 basis point higher IRR, which in turn means the margin on a higher ticket size per unit is lesser. This year, when higher ticket has actually gone up significantly, the same business because it is — a significant portion was above INR5 lakh would have resulted in a relatively little lower margin. That is one that is reflecting in the NBM per se, but as I said, NBV is still up by 53%. That’s the first answer.

Secondly, if you look at our group protection, that has not grown in the quarter four or it has only grown 4% in the full year. What has happened are, we have two, three major large partner whom we work with. Those are the banks and all that. Their own disbursements has not been growing as fast as the industry players. And because it’s a — group protection is an attachment product, when their disbursement or credit offtake doesn’t go up, our business also doesn’t go up. And our group is typically a higher margin because of the one-tenth in A&P logic. In absolute term, it may be a 6%, 7%, 8% margin, but when it comes to our NBM, it goes into 60%, 70%, 80%. So if that doesn’t grow, it also reflects in the NBM part. That was the question overall on the margins.

If you still have any question, I’m happy to answer.

Sanketh Godha — Avendus Spark — Analyst

No, sir. And maybe if you can touch upon annuity. I don’t know if Tarun can touch upon this. [Speech Overlap]

Bharat Kalsi — Chief Financial Officer

I’ll touch on that also. And just to add on to my previous thing, one, I’ll further update you. What has happened in that, in the non-par saving in the higher ticket size, see, typically, our average PPT on our non-par saving could be range of eight years to 10 years. But in this period, people have went for a smaller ticket — smaller PPTs like a five years, six years and seven years. And as you know, the longer the products, the higher the margin. And because in this year, people have gone for a shorter PPT also. That also reflects in the margins. Again, it is all value-accretive. 53% NBV growth is what it reflects in. That’s the question.

Can you just repeat your question on the annuity? What exactly you wanted to know?

Sanketh Godha — Avendus Spark — Analyst

No, there seems to be some weakness. Is it because of the competition? Because the regulatory deferred annuity was — now is launched by every insurance company. We were first to introduced it. But since then, when the competition has launched, we have seen a weakness in this particular product. So just wanted to know.

Tarun Chugh — Chief Executive Officer

So thanks, Bharat. Bharat answered your questions on margins. Let me give you the data. I’m okay sharing the data with you on the high-ticket and the impact that is going to your excel sheets. And Sanketh, we really value the way you look at life insurance. So just to let you know that till the last year January, our high-ticket above INR5 lakhs is about 9%. February and March, for those two months, it went up to 24%, okay?

Sanketh Godha — Avendus Spark — Analyst

Okay.

Tarun Chugh — Chief Executive Officer

Yeah. On the normal year, a normal year which was not last year, our dynamic equilibrium is in the range of 8% to 9%, if I look at FY ’22, if I look at till January ’23. Of course, we all know that last two months of the year were more because of the tax benefits and hence, that’s not going to be repeated. And we expect this to remain in the 8% to 9%. So, I think the abnormal growth that we had because of high-ticket is something, which the sector should not really expecting any further.

So that is just on the data itself. And just to answer that, we’ll be in the 8% to 9%, which is what we are comfortable with. In any case, Bharat has told you that very clearly that when we go for high value, the margins also get to be lower because this is totally a customer who is looking at investments really more than the insurance cover. So that has stabilized. Group protection, Bharat also already answered on the past that, yes, we basically had two, three very large carriers. And because of them not growing much their asset business, that kind of came down and didn’t really grow, I would say. 4% is hardly growth, I would say.

I think we are back in spending that business. We want to be sure on whatever is coming out in the EoM guidelines and based on that, maybe take a call for this year. And going forward, we’ve always been in the past as well strong in the group protection. We shall go back and wrestle our market share back and that remains. On annuities too, you are right. We’ve been a leader. We’ve been — the first deferred annuity plan was ours, the GPG. And it still has a lot of traction in the market.

What had happened last year was that the — given the INR5 lakh and above benefit that was coming through in February, March, our share of annuities particularly has come down to near single digits during the last quarter. We remain very bullish on the annuities, in fact, now with the INR5 lakh and above market and particularly the 45-year and above customer. We expect to start getting back into the deferred annuity space. It’s a very good space to be in the product also, is beneficial in various ways. It is the only product in the entire life insurance — what life insurance, entire financial services, which handles the risk of longevity. And that is what India doesn’t have. I think there is a natural market for it. You would see the share grow and our focus grow in that as well.

Sanketh Godha — Avendus Spark — Analyst

Got it, sir. Thanks for answering. And probably if I can ask two questions on Bajaj General. Sir, on Bajaj General, the question, which I had was that, if you look at (Technical Issues) and motor TP, which is 64% and 61%, respectively, seems to be very, very, very good compared to the kind of competition that is there in the market. So, you believe that you have already made all those kind of corrective measures and expect these kind of loss ratios to be demonstrated going ahead because full-year numbers are very different from the fourth quarter. So just wanted to understand that part a little better, how we see ’24 with respect to motor business?

And last one. And last one on BAGIC is that, see, expense of management, it is believed to have a material impact on commercial lines because many companies, as you highlighted, 60% to 65% of the companies are not compliant with 30%. They might try to chase commercial businesses to improve their loss — to improve their expense ratios. And this business was the most profitable business probably in FY ’23. So, sir, just wanted to understand the EoM guidelines and even the reinsurance hardening. Do you think commercial lines will see an immense pressure in FY ’24?

S. Sreenivasan — Chief Financial Officer

I will briefly take the first question, and then I’ll hand over to Raman to expand on it and also answer the second question. I think with the way BAGIC works, as you have seen, when things are going good — I mean, the loss ratio is a function of sourcing as well as pricing. Pricing is decided by the market. Sourcing is controllable by the company. Now, when you do an experience-based pricing or a selection, underwriting, as we see in insurance, you write a lot of business. You do it through partners. And when you write new cars, you are tied up with dealers and whatever car they write, you try to take a share out of it, depending on whether they are exclusive or not.

Now, later on, as you gain experience, find out where you read out and where you focus on. The same applies to all other channels, like multi-line agency or bancassurance, which also do motor business. So this is the factor. In Q1, we saw there was a spike in frequency and severity, which led to high claim ratio, high combined ratio. And then we announced at the time that we are now going into correction mode and this is not the first time we have done it. If you go back three years, four years, you will find the same commentary in our investor calls that Q1 was not good, so we have repelled. Commercial lines are different. Commercial lines loss ratios come from catastrophes and other events also.

But I’ll now let Raman expand on this, as well as take the second question, which you had on the EoM.

Ramandeep Singh Sahni — Chief Financial Officer

So thanks, Sanketh. So, I think on the loss ratios, like Sreeni directly articulated, this year has been a unique year because quarter one, we had a big spike coming because of the revenge travel, as everybody called it. And so that really took up the loss ratios to upwards of 85% for us, and I think similar ratios for the industry. And we know that quarter four is normally an aberration because a lot of true-ups were done in quarter four, assumption changes and so on and so forth. So maybe to answer your question, the levels of 63% and 65% obviously are not sustainable. But I think in the long term, OD, as we believe, 65% to 67% is what we’ve experienced, and that’s where we will probably end up.

One change, however, what we’ve seen is, Sanketh, as we know, our mix of two-wheeler used to be low and there we are scaling up. So the impact of that on the overall motor loss ratios, we’ll have to wait and figure out. But I think as we stand, between 65% to 67% on OD is something which throughout we can expect. On TP, like I mentioned earlier to Dhaval also, I think it’s a big take from what happens in the outcome of the Motor Vehicle Act.

As we all know, we are expecting early reporting to start. There are some green shoots, which we have seen, but nothing significant at this stage to start taking benefit of that. If that was really to come, then anywhere between 70% to 75% would be a decent number to expect otherwise, I think as the industry rebuilds further because of the impact of inflation that we’ve seen in the past. That’s where I believe the loss ratios will pan out to be.

On the EoM, again, like I mentioned earlier and like you rightly articulated, 60% of the industry seems to be higher than 30%. So obviously, there will be a lot of plays on how the commercials start playing out here on. At this stage, it is too early to predict. Maybe after the end of first quarter, there’ll be more clarity. But I personally believe that given the way the industry has been operating at 122% loss ratios and 60% of the — sorry, 122% combined ratio and 60% of the industry being upwards of 30% of GWP on cost, it has to get normalized. So, I personally believe that the commercials will start coming down going forward. But like I said, let’s wait for quarter one to end and maybe we can then discuss in more detail.

Sanketh Godha — Avendus Spark — Analyst

Got it, sir. Perfect.

S. Sreenivasan — Chief Financial Officer

Just to add to what Raman said on the EoM. See, basically a regulator has given a budget of 30%. As a company, each company has to decide do I pay 30%, 30% and reach 100% combined ratio, 70% loss ratio, expected loss ratio. I mean, you never know what the actual loss ratio till you have actually experienced it or somebody might say that, okay, I will go for 40% expense ratio. They can’t do that. So, they will have to either then look at selecting customers with a higher loss ratio and they will run with a higher combined ratio. So, I think that math will play out over the next few months and let us see how it goes.

Sanketh Godha — Avendus Spark — Analyst

Got it, sir. Thanks. Thanks for answering my questions.

Operator

Thank you. Our next question is from the line of Mr. Uday Pai with Investec. Please go ahead.

Uday Pai — Investec India — Analyst

Hello. Thank you for taking my question. Just one question from my side. What was the share of Axis Bank channels in BALIC?

S. Sreenivasan — Chief Financial Officer

Bharat? Tarun?

Tarun Chugh — Chief Executive Officer

Yeah. Sorry, I was talking on mute actually.

S. Sreenivasan — Chief Financial Officer

Axis share in Q4 is the question.

Tarun Chugh — Chief Executive Officer

So, Axis share has been at 25% for us, for entire business. And with the growth rate in other businesses growing faster, we expect this to remain in this broad range and not really go beyond that. And that’s the way we were always comfortable. I maintained for the last three years that unlike our peers, we are very clear that there is not one bank or one distributor, who should have more than a certain percentage. Hence, the risk of the — and it’s even healthy for the banks honestly if that’s the way the insurance providers are. Good thing is we’ve added a lot many banks last year and we expect them to top up our business in the coming year.

Uday Pai — Investec India — Analyst

Okay. Thank you.

Operator

Thank you. Our next question is from the line of Shreya Shivani from CLSA. Please go ahead.

Shreya Shivani — CLSA — Analyst

Hi. Thank you for giving me the opportunity. Sir, I have a basic question on BAGIC. I was trying to understand while you’ve given us the growth in the private car, two-wheeler and CV segment, if you can help us understand what is the mix of your motor book across these segments and how has it moved over the years and are you targeting one particular segment or how are you looking at this business segment wise?

S. Sreenivasan — Chief Financial Officer

Yeah. Shreya, thank you for your question. I think in motor, the way outside it looks like one line of business. It is many, many lines of business. There is private cars. There is own damage, TP, combination of the two. There is two-wheelers, which are new two-wheelers, the older two-wheelers, which have a higher proportion of TP premium because OD premiums are very low in two-wheelers. And you have many types of commercial vehicles, where, in some areas, BAGIC does not compete. Some others may compete more aggressively. So it’s very difficult to put a target or a mix. If you have seen the commercial vehicle growth has been low because we have been focused only on a segment, which historically has been profitable for us.

Raman, would you like to expand on that?

Ramandeep Singh Sahni — Chief Financial Officer

Yeah. Thanks, Sreeni. Shreya, I’ll just try to summarize. See, while we don’t share so much of granular information because, like Sreeni said, there are too many breakdowns, which are available. So what I can summarize is, see, if you look at the overall motor segment, there are three large parts; two-wheeler, four-wheeler and CV, as we know. Two-wheeler, I’ll just try to give you a flavor where we stand. So two-wheeler, as you know, we used to have a handicap earlier and our market share on new two-wheeler sales used to be sub-4%. And as we’ve highlighted in the recent calls, we have started tying up with OEMs.

The issue of the brand conflicts seems to be behind us except for Hero and almost all other tie-ups like Suzuki, TVS, Royal Enfield, Yamaha, we’ve been able to break the ice there. And our market share has now moved up to close to 9%. Similarly, four-wheeler, our market share on new sales is close to 9%. And these are two segments where we really focus a lot except Maruti, where we know that there is this issue of open market and high amount of discounting going on. So, our endeavor is to focus more on the new two-wheeler sales, barring Maruti where there’s issues there and try to garner a good share of the profitable business.

CV is something which — and just to give you a flavor, we’ve grown 26% on two-wheeler, which is after a very long time we’ve seen this kind of growth. And four-wheeler also, the growth is pretty healthy at about 18% for the quarter. CV is something which we are less focused on this year. I don’t know if you’ve been tracking us as a company. Last few years, we’ve been kind of leaders on the CV space because that is one of the profit pools we had identified for ourselves and we had garnered a great share of the school bus business, especially because it is highly profitable. But after seeing the profit pools being exploited by us, I think now the market has got overcrowded and that’s why we are diversifying away from that. And hence, our growth in CV this year has been marginal, I think 2% or something for last quarter. So that’s where we stand just to summarize.

Any more details, maybe we can take it offline.

Shreya Shivani — CLSA — Analyst

No. This is quite useful, sir. Thank you. That answers my question.

Operator

[Operator Instructions] Our next question is from the line of Nischint Chawathe from Kotak. Please go ahead.

Nischint Chawathe — Kotak Securities — Analyst

Hi. This pertains to the claims ratio in the health business. There has been a fair amount of volatility and in fact, a significant increase on a sequential basis. So maybe if you can you help us understand the trends?

S. Sreenivasan — Chief Financial Officer

Yeah. Raman? See, one point I’d like to make is on group health, I think we are doing exceptionally well. We have always been saying that group health is not a business we are either aggressive or conservative, but we do business on our own terms where we see possibility of profit. And BAGIC has a combined ratio below 100% in group health, which is, I think, maybe multi-year best performance and despite growing at close to 30%.

Raman, would you like to add on the volatility in claim ratios of health?

Ramandeep Singh Sahni — Chief Financial Officer

Yeah. So, I think this year has been a little stressful as far as the health loss ratios are concerned. So actually, the first half of the year, we see a lot of increase on the severity of health claims and a lot of these were coming because of the impact of inflation. Now, I think — but it’s trying to taper down. Also we saw some amount of fraud getting reported, especially in pockets — some states in the country. And that is something which we’ve addressed very significantly in second half of the year.

While I must admit that while our anti-fraud controls were very good as far as motor was concerned, but we were less focused on the other lines of business because the frauds were not that many there. But recently after the pandemic, we’ve seen that the number of frauds now getting reported on the health lines of business, and not only retail health, even on the GMC side have gone up significantly. And fortunately, we caught it early and we’ve invested a lot in that team. So that is one reason, Nischint, that our loss ratios were higher for some part of the year. But I think hereon, they will start tapering down at least for retail health.

Overall, I think they are looking a little higher this year. Also because our proportion of group health has gone up. As you would have seen, the growth is significantly higher there compared to — and this is GMC, I’m talking about. There the growth is significantly higher compared to retail health. So, that’s why overall you are seeing that the loss ratios are looking on the higher side. But I must admit that overall GMC is looking profitable, after a very long time that is.

As you would have heard from us in the past that we had slowed down on GMC significantly because of the impact on profitability, but now whatever we are writing is only the profitable one and hence, the growth is pretty decent there. So that’s where we are on health. So like this year, I believe, is an aberration. Maybe quarter one onwards, you’ll start seeing the real loss ratios emerge for retail health is where I will commit.

S. Sreenivasan — Chief Financial Officer

I’ll just add to what Raman said, Nischint, is that health is a very high level of engagement business and very service-oriented. It’s not a business where people change insurers every year. And one of the things I will urge everybody to look at is the repudiation ratio, which is published every quarter in the public disclosures. For the market, this year has been varying from 5% to 20%, and we are at the lower end of that. And probably in claim servicing, we continue to take pride that we are among the best. There is some news that within the industry, they have collaborated and the indications are that the incidence of frauds are in double-digits for the industry. These are suspected frauds through the information bureau further work will be done.

But one of the downsides of the pandemic was suddenly the fraudsters have also realized that this is one more area where we can now make a bit of money through reimbursement claims of various types of frauds have been noticed there across the industry. I think you can check with many other participants also. I think they will also confirm this. But the industry is very seriously addressing this. The regulator is very much on top of it and we think in about a year or two, this will get sorted out.

Nischint Chawathe — Kotak Securities — Analyst

You somewhere mentioned that inflation is [Speech Overlap]

S. Sreenivasan — Chief Financial Officer

Yeah, Nischint. Sorry, sorry. Go ahead.

Nischint Chawathe — Kotak Securities — Analyst

Sir, you somewhere mentioned that inflation is controlled now. So is it meaning that your kind of — the cost is going down? Or does it mean that within your base tariffs [Phenetic]?

S. Sreenivasan — Chief Financial Officer

Sorry. Raman, you take it.

Ramandeep Singh Sahni — Chief Financial Officer

Yeah. So, I think the impact of inflation, the way after the pandemic it emerged is, as you know, during the pandemic, everybody was charging much higher for not only the COVID-related treatments, but otherwise also. And that I think sustained for a period of time after the pandemic also. But we’ve gone back to the hospitals, renegotiated quite a few of the rates, put pressure on them to rationalize the rates. And because of that, we’ve seen that the severity has started coming down a little compared to what we had seen in the earlier part of the year.

One more thing I didn’t mention earlier, Nischint, is the other reason for volatility in our retail health loss ratio also is the fact of the proportion of fresh health business as we know that the first half of the year, we were not doing as well. And specifically, we even had a discussion and I told you that we will focus a lot more on retail health and you would have seen that now for the last quarter, our retail health growth is higher than the rest of the industry. So with the proportion of retail health also going up, you will start seeing that the loss ratio is well normalized compared to some of the other players in the market.

Nischint Chawathe — Kotak Securities — Analyst

And you would have raised tariffs in the retail health?

Ramandeep Singh Sahni — Chief Financial Officer

Sorry, sorry. Can you just — what was it?

Nischint Chawathe — Kotak Securities — Analyst

Have you taken a tariffs hike on the retail side?

S. Sreenivasan — Chief Financial Officer

Tariff hike, no. We just — before the COVID, we will review it towards the end of this year.

Ramandeep Singh Sahni — Chief Financial Officer

Yeah. So we did it immediately before the pandemic, as you will remember. And normally, our experience has been once in three years is what is largely acceptable to the public at large and hence, we end up following that rate. So maybe sometime during the year or towards the end of the year is what we expect the next round of hikes to happen.

Nischint Chawathe — Kotak Securities — Analyst

Sure. Sure. Thank you. Just one small question on life. There is some increase — sorry, let me come offline, sorry. Thank you.

S. Sreenivasan — Chief Financial Officer

Thanks.

Operator

Thank you. Our next question is from the line of Mr. Dhaval from DSP. Please go ahead.

Dhaval Gada — DSP Mutual Fund — Analyst

Yeah. Thanks for the opportunity again. Just quickly on the return ratios for BAGIC. So maybe question for Raman. Overall, when do you see the business move back to 17%, 18% full-year ROE? And is that a sustainable level of return that we are targeting? Or is there a possibility we move back to 19%, 20% ROE as well? Any thoughts and broad sort of timeline, that would be very useful.

S. Sreenivasan — Chief Financial Officer

Raman, you want to take that?

Operator

Sir, the line from Mr. Ramandeep has [Speech Overlap]

S. Sreenivasan — Chief Financial Officer

Okay. I will like take that, Dhaval. I think it used to be 20% plus for several years. Thereafter, what we have seen is because our focus on profitability, we are generating capital over the last few years. Although we are paying dividends, our solvency margin is increasing quarter-on-quarter. So to that extent, the equity is somewhat high, and therefore, the ROEs have come down.

Secondly, the business mix has also changed, more commercial business, extensive price discounting in motor, which is only — the real float generated is only from motor third-party. To that extent, the investment leverage has come down a little bit. So if you ask me today, we would be more comfortable with the 15% to 18% ROE range as compared to, say, the earlier range of maybe 18% to 22%.

The other point is, the way we do accounting here on standalone Indian GAAP is we do not defer acquisition costs. We do — so there is a big impact of that as your premium gets earned over time, but your costs are written off upfront. And secondly, we also have seen that we are somewhat conservative on reserving. If you look at our ULR triangles, it’s pretty clear that we hold about 7.5% more than what the original ULR. Our original ULR is about 7.5% higher than our revised ultimate loss ratios. So overall, I think these are some hidden things which are, if you were to compare this to another company internationally, a 20% ROE, if you adjust for these, it will probably be closer to 20%, I presume. We have not done the math, but I think it will be higher than where it is anyway.

Dhaval Gada — DSP Mutual Fund — Analyst

Sure. And Sreeni, you expect this business to move to higher ROEs, let’s say, 16%, 17%, 18% from hereon, the bottom has been made?

S. Sreenivasan — Chief Financial Officer

That is tough. See, we have to make investments in business also. There are lot of regulatory changes happening. There is this Bima Sugam, Bima Vistaar. All these require investments. We are also investing into what we call our GEO framework, which is G-E-O, not J-I-O. And we are investing in a lot of Tier-3, Tier-4 towns because we see that we have the brand strength, we have the expense allowance and we have the capability to deliver. We started that last year and this year we expect that to grow very well as well. So there are investments required.

We need to continue to invest in capability on the health side, whereas on the commercial and other lines, we have been doing very well, but there is an element of — catastrophes and other sources of volatility in those businesses. Having said that, the reinsurance market is a bit hard this year. We still have come out with pretty good terms for the rest of the year. So FY ’24 at least looks reasonable for the commercial side in terms of opportunity.

Dhaval Gada — DSP Mutual Fund — Analyst

Got it. Thanks. And all the best.

Operator

Thank you. Our next question is from the line of Mr. Anand Bhavnani from WhiteOak Capital. Please go ahead.

Anand Bhavnani — White Oak Capital Management — Analyst

Yeah. Thank you for the opportunity. On Finserv Health, I see losses widened in this year to INR188 crores versus INR129 crores. So if you can give us a broad sense three years to five years out, how are we thinking of this business? What’s the potential here? And is there a thought process on breakeven here?

S. Sreenivasan — Chief Financial Officer

You see, last time, I think I mentioned that we had invested about INR450 crores by end of the year. Over the next two years, three years, we — because this is a new business, and we will have to continue to invest, we think we will make an equal investment over the next three years, four years.

Devang, would you like to add that?

Devang Mody — Chief Executive Officer

See, at this point of time, our focus is to get more health transactions done. So as you are seeing, what we have started publishing is cohort wise transactions. Priority for the company at this point of time is to build out more and more service, like we are investing deeply in technology, as well as network as far as dental network is concerned. And that’s where you will see transactions going up in coming years and to create a product framework. And after that, we have lined up more services to be covered.

So at this point of time, our priority is to get more and more health transactions done and to play larger and larger role in consumers’ healthcare management. I think that is how we define success at this point of time. Obviously, we’ll refine the spend, as one of the participants asked question. Now we are not spending in getting traffic. We are just servicing our customers and getting transaction done. So, we believe we will invest where it is required, which is to build out network and to build out technology services.

S. Sreenivasan — Chief Financial Officer

Yeah. Let me give you one view from BFS side. If you see our record profit is after absorbing 100% of these losses because it’s a wholly-owned subsidiary, therefore, we have businesses with multiple levers. They behave differently under inflation. Inflation is bad for BAGIC with a bit of lag. It is generally good for BFL and it’s pretty good for BALIC because the guaranteed rates do not increase with a lag. We also have this ecosystem, which has — we have open architecture under Finserv Markets. We have the healthcare ecosystem, which is a population business.

So if I look, say, 10 years, 15 years, it’s a business where you have to hang on and create the capability and become a player with a large brand, which can operate all over India with operational excellence. I mean, that’s what this business is about. And we have to get more and more customers to use our products and services and keep expanding the network and the products and services. So when you add up all these together is what you have as BFS.

So it’s not an investing holding company that we put in financial markets and carry huge amount of surplus. It’s a company where we continue to invest in the ecosystem of our customers, which today is largely middle class, mass affluent and above. But over time, some of the businesses like insurance and health will also go into the mass markets in a bigger way because the businesses are like that and that’s where the market is.

Anand Bhavnani — White Oak Capital Management — Analyst

Got it. And second question is on Bajaj Markets. There we see a lot of traffic. In terms of monetizing that traffic, particularly on the insurance side, which is a push product, how are you thinking? Like there are dedicated players who have this pricing discovery platform and then they call the customers and push the insurance products. So do you think you would explore that kind of option, having a dedicated call center to push through the insurance products from the leads on markets are?

S. Sreenivasan — Chief Financial Officer

Let me first take that and then hand over to Ashish. I think if you look at insurance, both companies — our insurance companies have very solid distribution, very broad and deep distribution across channels, whether it is individual agents, whether it is banks, whether it is brokers. And Finserv Markets is an open architecture platform and to start with the first few years, the focus has always been on loans. Therefore, I think as a group distribution, we are much bigger and better than what we were last year.

Now in terms of products that they will serve, I think Ashish will expand on how they want to look at products from a Finserv Markets perspective.

Ashish Panchal — Chief Executive Officer

Sure. So answering specifically for insurance, while as I mentioned, loans and cards are the bigger revenue generators on the marketplace for us, as far as insurance is concerned, A, we have a corporate agency license as an entity, and therefore, we have tied up with insurance manufacturers on life, general, and health side to offer their products.

We have a marketplace — insurance marketplace that is embedded inside the overall app and web digital properties that we have where customers can choose products, they can compare and they can do end-to-end buy journey, either assisted or unassisted in a DIY format. In addition, we have about 400 innovative tech products, which are insurance/value-added products, which cover various aspects of life, both arising out of insurance needs as well as otherwise. And that is the entry point for the customer into the insurance product.

S. Sreenivasan — Chief Financial Officer

Let me just add one more point here. I think when you look at Bajaj Finserv Markets and open architecture and over time, we have now been able to demonstrate neutrality. So, they will have multiple partners. The customer will make a choice. So it’s a customer-centric organization. In that BAGIC and BALIC will participate in those businesses, which, as a manufacturer, given their risk profile and their profitability needs, they feel they need to compete. But the other partners will also compete, and so we have the distribution revenue pool from all the partners and our own companies may compete on certain segments of the manufacturing profit pool where they feel comfortable. But it’s a process, I think there is a multi-stage thing.

The first is to acquire customers, the pocket products that Ashish talked about. They are bringing us a lot of customers. Many customers will buy it. They will use the app. They will find the value in the app and they will also take other products from our ecosystem because they are in the ecosystem. Next time, they want to buy something, they will first come and check us out. I mean, that is the first step. Once they do that, over time, I think we will be able to grow the market.

Anand Bhavnani — White Oak Capital Management — Analyst

Sure. Thank you. And all the best.

Operator

Thank you. That was the end of our question-and-answer session.

I now hand the conference over to Mr. Akshay Jain from JM Financial for closing comments. Over to you.

Akshay Jain — JM Financial Institutional Securities Limited — Analyst

Thank you all for joining the call, and thank you to the management of Bajaj Finserv Limited for giving us the opportunity to host this call. Thank you.

S. Sreenivasan — Chief Financial Officer

Thank you.

Operator

[Operator Closing Remarks]