HDFC Life Insurance Company Ltd (NSE: HDFCLIFE) Q4 2025 Earnings Call dated Apr. 17, 2025
Corporate Participants:
Vibha Padalkar — Chief Executive Officer
Niraj Shah — Chief Financial Officer
Vineet Arora — Executive Director and Chief Business Officer
Eshwari Murugan — Executive Vice President and Appointed Actuary
Analysts:
Avinash Singh — Analyst
Madhukar Ladha — Analyst
Nidhesh Jain — Analyst
Dhaval Gada — Analyst
Dipanjan Ghosh — Analyst
Shreya Shivani — Analyst
Supratim Datta — Analyst
Sanketh Godha — Analyst
Nitin Jain — Analyst
Aditi Joshi — Analyst
Prayesh Jain — Analyst
Neeraj Toshniwal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Q4 FY ’25 Earnings Conference Call of HDFC Life Insurance Company Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Ms, Vibha Padalkar,, MD and CEO. Thank you, and over to you.
Vibha Padalkar — Chief Executive Officer
Thank you, Yashishri. Good evening, everyone, and thank you for joining us for our earnings conference call for the year ended, 31, 2025. Our results, along with the investor presentation, press release and regulatory disclosures have been made available on our website and the stock exchanges. Joining me on this call are Niraj Shah, Executive Director and CFO; Vineet Arora, Chief Business Officer, Distribution Data and Technology; Eshwari Murugan, our Appointed Actuary; and Kunal Jain, Head, Investor Relations and Business Planning.
I’m pleased to share that the Board of Directors at their meeting today have approved the appointment of Vineet as a Whole-Time Director effective May 1, 2025. I request you to join me in congratulating him in his expanded role as a fellow Board member. Section one on macroeconomic context. India has continued to demonstrate resilience amidst global volatility supported by steady domestic demand, improving rural sentiment and a strong services sector. While near-term risks such as geopolitical tensions and tariff wars loomed large, India’s stable macroeconomic foundation offers a buffer. We remain watchful of how these factors may influence household savings and overall demand for long-term financial products.
Recent GDP forecast suggest a moderation in growth for FY ’26 and increased turmoil in global trade flows, leading to potential uncertainty in the near-term. While we do not see any immediate signs of a material slowdown in insurance demand, we remain watchful and will continue to evaluate developments as they unfold quarter-by-quarter. In this environment, a softening interest rate cycle and volatile equity markets might lend support to traditional savings product offerings. Also, the revised tax thresholds announced in the Union Budget could provide a measured boost to both discretionary consumption and long-term financial savings.
Moving on to section two on business performance. FY ’25 was a year where we deepened our reach, continued sharpening our value propositions and demonstrated the resilience of our business model. Moreover, aligning with our stated aspirations, we have nearly doubled all key metrics between FY ’21 and FY ’25. As we step into our 25th year of operations, our focus remains clear; to build a future-ready life insurer that grows sustainably, serves responsibly and innovates purposefully. We are happy to report an 18% growth in individual APE for FY ’25, in-line with our stated growth aspirations for the year. This growth was broad-based, driven in equal measures by an increase of 9% in policies written and an increase of 9% in average ticket size.
The life insurance sector too demonstrated steady momentum during the year, outperforming several other segments within the NIFTY 50, a reflection of its inherent resilience and growing role as a trusted pillar of long-term financial planning. Within this context and based on available 11-month industry data, we outperformed both the private and overall sector. Our overall industry market-share expanded by 70 basis points to 11.1% and by 30 basis points to 15.7% within the private sector. Notably, our policy count grew faster than the overall and private sector. Almost three-fourths of our new customers onboarded in FY ’25 as first-time buyers from HDFC Life, reflecting our expanding reach across Tier 1, 2 and 3 markets. In total, we insured about 50 million lives in FY ’25.
Moving on to next section on product mix. The composition of our individual APE was ULIPS at 39%, non-Par savings at 32%, participating products at 19% and term and annuities at 5% each. ULIP demand remained strong despite market volatility in quarter four, while participating products saw strong traction led by the launch of Click 2 Achieve Par. Non-Par savings also posted robust growth of 25% for the year. We expect additional products to perform well in FY ’26, aided by lower interest rates and equity market uncertainty. Retail protection continued to show growth momentum with APE growth of 25%. Credit protect growth remained muted due to subdued disbursement trends, particularly in the MFI space.
Despite that, we retained our market leadership in this segment with a well-diversified partner base. Rider attachment rates improved further across retail and group products. Annuities grew faster than the industry in 11 month FY ’25 and combined with protection, these segments contributed 41% of our total new business premium. Retail sum assured grew by 18% year-on-year and by 32% on a two-year CAGR basis. We continue to outpace the industry on this metric over a two-year horizon and maintain our leadership in overall sum assured. We remain on the forefront of product innovation with industry-first launches like Click 2 Achieve Par Advantage and Sanchay Aajeevan Guaranteed Advantage or SAGA in the pension space.
SAGA combines dual guarantees, joint life benefits, liquidity options and tax advantages with a simplified issuance process. Retirement remains a core focus aligning with our brand promise of Sar utha ke jiyo. We see this segment as a long-term structural opportunity driven by increasing life expectancy, changing socioeconomic dynamics and rising awareness around retirement planning. We are committed to innovation while maintaining a disciplined approach to risk management. This includes appropriate product pricing, prudent underwriting practices and effective hedging mechanisms, all of which underpin our ability to deliver sustainable customer-centric solutions across market cycles. This balanced approach has enabled us to navigate regulatory changes, macroeconomic volatility and evolving customer expectations, while continuing to grow faster than industry. Also maintaining consistency and quality of business underwritten.
Moving on to Section four on financial and operating metrics. Value of new business for FY ’25 stood at INR3,962 crores, INR3,962 crores, reflecting a 13% growth. New business margins for the year were at 25.6%. We have successfully managed to contain the impact of the new surrender charge regulations as well as continued preference for Unit Linked products. Embedded value rose to INR55,423 crores with an operating return on embedded value of 16.7%. We raised INR2,000 crores of sub-debt in two tranches during the year, thus improving solvency by 20%. We closed the year with a solvency ratio of 194%.
Profit-after-tax rose by 15% to INR1,802 crores, driven by strong growth in back-book profits of 18%. The Board has recommended a final dividend of INR2.10 per share, in-line with our payout policy aggregating to a payout of INR452 crores. We have consistently delivered positive and range-bound operating variance over the past nine years, excluding the COVID years, thus underscoring prudent risk management, disciplined execution and strong fundamentals. Renewal collections grew by 13% year-on-year. Persistency metrics strengthened further with 13th and 61st month at 87% and 63%, respectively. We saw a steady improvement in 13-month persistency across customer cohorts and geographies despite the expansion of our footprint into newer segments and markets. 61st month persistency rose by over 1,000 basis points, aided by the positive impact of the long-term savings products that were introduced around financial year ’20.
Moving on to the next section on distribution highlights. All channels registered double-digit growth. Our account to share within HDFC Bank has remained steady at about 65%. Our priority is to enhance the profitability of HDFC Bank channel through a multi-pronged approach, encompassing product mix optimization, heightened focus on cross-selling and upselling initiatives, strategic leveraging of the bank’s digital resources and a commitment to superior customer service. Our agency channel recorded a healthy growth of 15%. Term business within agency channel registered an outstanding growth of over 50% versus last year. We also ranked number one in the private sector in terms of total agent count as of February 2025 with close to 30,000 new agents added during the year.
We continue to invest in-building the agency franchise, adding over 200 branches in the last 24 months, of which 117 branches were added in financial year ’25. Our pan-India branch count now stands at 650. We successfully onboarded around 40 new partners during the year, including prominent names such as Sundaram Finance, Aditya Birla Finance, Home First Finance, Northern Arc, Repco Home Finance, Manappuram, Mirae Asset Sharekhan and Peerless, amongst others. Our focus remains broad-basing our distribution footprint and finding newer and more efficient ways to reach and serve our customers.
Next, focusing on customer experience. Our endeavor is to enhance customer experience through intuitive digital platforms with over 90% of service requests now handled via self-serve. Turnaround times have shown steady improvement and key experience metrics such as customer satisfaction scores and first-time resolution have shown continued gains. We proactively refine our practices and processes, often going beyond regulatory expectations. This is to ensure transparency, ease and trust. In parallel, we continue to strengthen right selling practices through focused training and tools and processes so that customers receive solutions aligned to their needs.
To stay ahead on customer experience, we have invested in data analytics and innovation labs to proactively identify early indicators across the value chain. Given the diversity of our customer segments, we remain focused on staying relevant across both physical and digital touch points. In-line with this, we are undergoing a technology transformation aimed at building real-time seamless service capabilities, moving us closer to insta service delivery.
Next on Project Inspire, it’s our technology transformation initiative and is progressing steadily with incremental tech assets being rolled-out through the course of the year. While the coexistence of legacy and new systems might lead to a temporary rise in costs, this transition is designed to unlock meaningful efficiencies, elevate customer experience and strengthen our path forward towards long-term digital leadership.
Next on subsidiaries, HDFC Pension continues to maintain its market leadership position in the private pension fund management space with a market share of 43% and assets under management exceeding INR1.15 lakh crores. Its consistent outperformance and rapid scale-up further reinforce our presence in the retirement solutions space, a segment we believe holds long-term structural opportunity. HDFC International also retained its strong credit rating with a BBB insurer financial strength rating from S&P Global Ratings and a B++ rating from AM Best.
Other updates. We were recognized as a Great Place to Work and amongst top-50 companies in India for building a culture of innovation. On the strategic outlook, as we enter our 25th year of existence, our aspiration remains against a backdrop of a stable regulatory regime to consistently outpace sector topline growth, deliver VNB growth in-line with APE growth and double key metrics every four to 4.5 years. FY ’25 was characterized by front-end delivery on topline and VNB with a 31% growth in topline and a 17% growth in VNB in the first half, followed by a relatively softer second half. As we step into FY ’26, this base effect is likely to result in a moderate first half with growth momentum expected to pick-up in the second half, leading to a more balanced full year outcome.
While the evolving product mix might be margin accretive, we remain focused on investing in distribution and technology with a three- to four-year perspective to strengthen long-term capabilities. This strategic choice might result in margins to remain range-bound in the short-term, but we believe it positions us well for sustainable quality growth.
To sum-up, as with any evolving industry in the BFSI space, regulatory change is an inherent feature and we believe that disciplined strategy, ability to reimagine business models, coupled with execution strength enable us to adapt and emerge stronger. Our track record of navigating a dynamic, regulatory and macroeconomic environment reflects our institutional resilience and agility. Looking forward, we expect to operate in a more stable policy regime, offering greater clarity for long-term planning and sustainable growth. Behind our numbers lie the focused efforts of over 37,000 employees, 2.4 lakh financial consultants and thousands of partner staff, all united by a shared mission to provide financial protection to every Indian household. We remain confident in our ability to deliver consistent high-quality growth as we continue to build for the long-term. For a detailed overview of our results, please refer to our investor presentation.
We are now open to any questions from participants.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] We’ll take our first question from the line of Avinash Singh from Emkay Global. Please go-ahead.
Avinash Singh
Yeah, hi. Good evening. Thanks for the opportunity. A couple of questions. First one is more of a data question. In that EV walk, if you can just provide the breakup further of operating assumptions and variances between the two and within that, I mean the key category like the expenses, persistency and mortality. So that will be the first.
The second one more on the growth side. I mean, of course, needless to say that you have ended this year well, particularly on the retail side, but looking-forward, I mean, the thing is that I mean in the past, if I look for the medium-term, typically the industry and even you have grown on the back of some of white space in the product or distributional field, like I mean, whether it’s a retail protection at some point, Sanchay plus or banks are getting opened up or some kind of external event like [Indecipherable] happening. Now in this backdrop, we at this point we see particularly the white space in the product and distribution space is almost absent at least and we cannot bank on kind of externality. In this backdrop, what kind of a growth do you see sort of on the retail side, particularly the next year? And what channel, if at all is — or what product you see that, okay, that could be more supportive of that growth? So that’s the second question.
And thirdly, if at all, anything that you talk discussing around industry regulation around any sort of a regulation cap, anything coming on the bank as well as partnerships? Thanks.
Vibha Padalkar
For the impact of operating variance and assumption change, the most of the operating variance is coming from persistency and expense, mortality is close to zero and we have a small non-material impact of the assumption changes based on the review of the experience during the year.
Avinash Singh
So variances and assumption changes both are in positive you mean to say?
Vibha Padalkar
Yeah. Both are positive, yes.
Niraj Shah
Yeah, Avinash, in terms of the questions in terms of what is likely to support growth, what happened in this quarter and what’s likely to happen going forward as well. We’ve seen a few shifts. Unit linked has continued to be elevated, but we continue to attach more and more levels of protection on that. That is absolutely helping. Also, the persistency levels have become stronger and event linked in this period. Participating products have done extremely well in this quarter, has grown upwards of 40-odd percent in this period. We had — we’ve spoken about a new product launch in the previous quarter that started to take-off in this quarter. And on a run-rate basis, the product mix on participating products has moved to the early-to-mid 20s. We expect some of that to continue in FY ’26 as we continue to see more and more volatility in the equity environment.
We can see some sort of moderation on unit linked products in the next 12 months. We’ll wait-and-see, but we do expect that on a base case. As far as non-par products are concerned, that’s been fairly steady in the early 30s. That continues to be the case as we speak and we expect that to continue going forward as well as the interest rate environment becomes more conducive to that, while that’s not been the issue for us in the past when this interest rate — across various interest-rate environments, the non-par mix has been in the early to mid-30s. So a conducive rate environment will definitely help more demand in this in this segment. So we do expect that to pan-out in that manner in the next 12 months. Protection has grown at about 25-odd percent in the last couple of years. We expect that to continue growing faster than the overall company growth next year as well. So that’s broadly our thought process in terms of how products would support growth as we go forward. New launches from time-to-time have helped us in this year and we expect that journey to continue next year as well.
Avinash Singh
Can you maintain — I mean, is there confidence of maintaining the correct growth level in retail, I mean, the FY ’25 levels ballpark in FY ’26?
Niraj Shah
So that’s…
Vibha Padalkar
Yeah, no, I’ll take that. See, time and again, we are asked this question, but time and again, we have demonstrated that every year we do grow faster and this year also, whether it is for the year — I mean here, in the set the 11 months data is out or if you look at the quarter. In fact, for the quarter, we did exceptionally well, wherein both in terms of our overall industry market share and in the private space was even higher than what it was for the 11 months. So growing faster than the market from the — than the sector, I think that’s something that has become par for the course.
And I just want to take your point about white spaces. In fact, if you look at slide 18 of our presentation, we have all the product innovations. Sanchay Plus was ahead of its time and also because possibly acceptance of the understanding and acceptance of the product was — took a fair bit of time. Now whatever products we launch, usually, there is a — only that much of lead-time which I buy. Also some of the use and file regulations, especially on unit linked and term, I think that also has reduced when us being just a market leader in that particular product, has a much shorter window period, that’s fine. But are we innovating the white spaces that you talked? Absolutely.
And if I were to take Sanchay Aajeevan and the SAGA product, there is no other product that exists today to my best of my knowledge in that avatar. And just in case you’re not very familiar with that product, what that product gives you is an accumulation vehicle, which is fine under the pension umbrella, but also gives you a floor as annuity — as a person looking to save towards one’s retirement. Also gives you a floor on annuity and a fairly attractive floor today of what might be several years hence, plus we give you the option to exit and go and buy someone else’s annuity if you want to. So it gives you the comfort, but not the obligation to do it. That kind of a — that is certainly a white space. And we have many more such in the pipeline.
On your point on regulations, I just want to mention, I mean, couple of things. On misselling, we are — we keep talking with both our regulator and the government. It is topical. But if I were to look at banca missale, it is not any worse than or it’s actually a shape better than some of the other channels even at an industry level. But at the same time, we respect the sentiments that come through and there are many things that we have operationalized. For example, at HDFC Bank, we have put in the first year of complaint for vulnerable segments such as wherein annual income is fairly low, say INR5 lakh and below of annual income or senior citizens, we would just say it’s — we will just handle those complaints very, very differently and that’s clearly beginning to show significant yield significant rewards. And many other things to make insurance sale a lot more holistic at the bank and us having an extra pair of eyes even within the organization to look at complaints. So that is on that part.
Second part is on caps on bancassurance and so on. The understanding we’re getting is that bancassurance is an extremely important channel to get to the objective of insurance for all by 2047. In fact, if we see the IRDA annual report, penetration levels have actually gone down rather than it increasing and then eventually we are becoming an insured society. So bancassurance having at least between 6x to 10x more branches than the sector, it will be a shame to let go of those touch points. So throwing the baby out of — out with the bathwater at what we understand is not the intention of the government. And as long as we pay attention to things like claim settlement, complaints resolution and so on. I think it is very much an important channel. At the same time, we’ll continue to grow our other channels also.
Avinash Singh
Thank you. Very clear. Thank you.
Niraj Shah
Thank you.
Operator
Thank you. [Operator Instructions] We’ll take the next question from the line of Madhukar Ladha from Nuvama Wealth. Please go-ahead.
Madhukar Ladha
Good evening. I had a question on individual protection. So if you know barring some rounding off, there seems to be some slowdown in individual protection in Q4. So can you help understand what’s going on over there? And also Q-o-Q, I don’t see any very big shift in product mix, but margins have improved considerably. So is that largely to do with fixed-cost absorption?
And again, just sort of coming back on the growth question, given you know the last few years have been good and the environment and last year was obviously also supported a lot by a good growth in ULIP. But incrementally with markets being choppy, short-term rates still being a little bit on the higher side, you know that may prevent non-par from actually picking up considerably. So in that context, how should we sort of think about your individual retail APE growth? And finally, how is the competitive intensity playing out given that the new surrender value regulations are now in place.
Niraj Shah
Yeah. So we’ll just go in order. First on protection, I think for the year, it’s grown at 25-odd percent. It had similar growth last year as well. So it’s been fairly steady, both in terms of volume as well as value. Secondly…
Madhukar Ladha
I meant on Q4 protection.
Niraj Shah
Yes. So Q4 also over 19%, which is fairly healthy. We don’t really see any change in trend there really. 19% is a fairly healthy growth in the overall context of how we are operating and that is something that we expect on a going-forward basis as well to continue faster than the overall company growth. So that’s on protection, no change in trends that we see, whether it’s on segments that are buying this or the kind of categories of products that are being bought. In fact, a couple of new product launches have actually helped get us to more customer segments. Some of them are at the higher age, some of them are in self-employed and some of them are at higher some assured levels as well. So these product launches is something that will help sustain growth and momentum in that overall protection segment as well.
To your question on margins, while overall walk for the year is there on the investor deck, your specific question is on the quarter. So basically, couple of things have happened there. One is, there is a negative of the surrender value regulations that is we had spoken about it last time as well, that’s a negative 30 basis points. The 40 basis point expansion is largely on account of inherent product margins that has improved from the same time last year to this period, we had spoken about lag in repricing and we managed to basically do two, three things. We managed to increase the level of protection in unit linked products, persistency levels have improved and longer-term products have been sold as a consequence of that the product — inherent product margins have improved in this period. So that’s really the reason for expansion in Q-on-Q as in Y-o-Y margins for the quarter from 26.1% to 26.5%.
Madhukar Ladha
Right.
Niraj Shah
Your other questions in terms of the markets being choppy for non-par, again, we did have this question from Avinash as well. So if you look at non-par mix of last four to five years, ever since we launched this category six years back, after the first couple of quarters in which the mix was elevated, it has been in the mid to — early-to-mid 30s for the last 4.5 years, if I can recall. And we’ve seen various interest-rate environments in that period, a flattish environment for a fair bit of time that continues as we speak. It’s probably likely to be different in the next 12 months given the commentary from the RBI in terms of initiatives for rate cuts to support growth. So that will only be conducive for the non-par product segment as I mentioned. Even in the current flattish environment, we managed to maintain non-par at 30% plus. So we don’t expect anything differently on that. If at all, it will only aid further demand for this product as we go-forward.
Your last question on the surrender value, have you seen any change in competitive intensity? We have seen — it’s basically a mix of behavior that we see across the sector. I mean, large listed players have continued to be fairly calibrated. We haven’t seen any change from them pre or post surrender value regulations. Among the large unlisted players, we’ve seen you know different kind of approaches, some levels of aggression continues. Some folks have moderated that given their focus on profitability. So we’ll see how it develops, but that’s more to do with overall objectives, we believe rather than a response to surrender value changes. I think we’ve spoken about sharing the burden with the distribution. We’ve done that. We’ve taken a hit of 30 basis points. We’ve obviously adjusted some of our distribution commercials to support the rest of the burden. Customer proposition has remained largely unchanged for us. We’ve seen some adjustment in customer proposition in some parts of the industry depending on which player we’re talking about.
Vibha Padalkar
And one small data point, Madhukar, is on your first question on individual protection in quarter four. If I were to look at quarter-on-quarter sequentially, it has grown by 26%. So it’s more a factor of what happened last year, but sequentially it has grown very handsomely.
Madhukar Ladha
Understood. All right. All the best. Thank you.
Vibha Padalkar
Thank you.
Operator
Thank you. We’ll take our next question from the line of Nidhesh Jain from Investec. Please go-ahead.
Nidhesh Jain
Thanks for the opportunity. First question is on the investments that you spoke about highlighting that despite product mix shift towards higher margin product next year, you expect margins to be range-bound. So can you quantify the investments that you are likely to make next year in terms of, let’s say, a percentage of APE or anything and in which area we are making these investments?
Vibha Padalkar
So lesser about — I’ll give you the areas because it will depend on how much — we would love to do quite a bit. But key focus areas two that I called out, one was in our agency channel or proprietary channel, both for guide and variable. This would be a combination of our branches, training, people, the right hierarchy, right — the pay scales based on our very nuanced on geography-wise, technology to enable our — both our employees in the agency channel and our agents to win and so on. So it’s an entire gamut. We’re in the process of a reimagining our agency channels. So that’s one space.
Technology, we talked about Project Inspire and so all that we want to do. And as you know, there will always be — once you’re down a big transformation project, there will always be further asks from business or how do we embed AI at this stage itself into many parts of what we do. So that will also require some additional funds to be allocated. So these are the primary. Vineet, do you want to add anything?
Vineet Arora
I think it’s not covered. So largely in terms of expanding our or improving our quality of people on the ground, especially in agency channels and investment in technology, which gives us the edge over the rest of the market and both in long-term sustainable business.
Nidhesh Jain
Any quantification possible, 100 basis point of APE or any range, broad range?
Vibha Padalkar
Rough calculation. See Nidhesh, what we’re saying is that we will be range-bound on margins. Anything over and above that, we will invest into business.
Nidhesh Jain
In business. Okay. Sure. And just two data keeping questions…
Vibha Padalkar
If unfortunately, we don’t get that much of an upside because, say, hypothetically, unit linked continues to remain elevated, then we’ll run towards keeping it range-bound. If we are helped by a more favorable product mix versus some of the other competing products, non-par products start looking attractive because of an interest-rate comparison, then we will be likely to get that uplift and which we’ll just keep plowing back into these two, broadly these two markets. So it will be fairly dynamic and an iterated process.
Nidhesh Jain
Sure, understand. And just two data keeping question, one is if you can share a share of HDFC Bank in overall APE and retail protection ticket size for FY ’25.
Vibha Padalkar
So HDFC Bank is around 65%. It remained fairly around that.
Niraj Shah
Retail protection ticket is about 40,000.
Vineet Arora
HDFC Bank and our APE will be about 49%, 47%.
Vibha Padalkar
47% in our APE.
Nidhesh Jain
Okay. Sure, sure. Thank you.
Vibha Padalkar
But that’s on an APE basis,
Nidhesh Jain
One NBC basis…
Vineet Arora
It’s about 40%.
Vibha Padalkar
Yes.
Vineet Arora
It’s 40% on a premium basis.
Niraj Shah
Individual.
Vineet Arora
Individual premium basis.
Nidhesh Jain
Thank you. That’s it from my side.
Vibha Padalkar
Thank you.
Operator
We’ll take our next question from the line of Dhaval from DSP. Please go-ahead.
Dhaval Gada
Yeah, hi. Thanks for the opportunity. Just one clarification to a comment in the opening remarks around medium-term growth. So we mentioned that APE growth and VNB growth to be about a double in 4.5 years, which implies about 16.5%, 17% kind of growth. I was just trying to think through, are there enough buffers in the business to navigate assuming there are some of regulatory changes or I mean, how do you think about this growth estimate, any color around that? And similarly on margin at the end of the fourth year, I understand that near-term there will be some investments, but at the end of the fourth year, just directionally, how do you think about margins. Any comment around that would be also useful. Thanks.
Vibha Padalkar
Yeah. So Dhaval, if you look at slide 4 of our investor presentation, you will see that over cohorts of four years and if you look at individual APE on the top left-hand side, in cohort of FY ’21 to ’25, we have close to doubled, 1.9 times. Similarly, FY ’17 to ’21, we are close to double. Renewal premium has doubled, annuity has doubled, protection has more than doubled at 2.3 times. AUM has close to doubled. Our embedded value has more than doubled. So — and this is — we have fast forwarded it to FY ’25 numbers. So over a cohort of four years or four, 4.5 years, we remain committed to chasing that number.
You said, 16% 17%, yes, absolutely. But if you ask me this quarter, next quarter or immediate when there’s global volatility, we will still grow faster than the sector, no doubt about it, but it’s difficult to pin a number amidst that much of volatility. But definitely over cohorts of four years, yes. And same thing for margins as well. And four-year period, all things being equal on the regulatory outlook, margins should start moving a little bit upwards. And once our investments are — to the extent that we want to our tech transformation is out-of-the way, then, yes, it should slightly move upwards.
Dhaval Gada
Got it. Thanks.
Vibha Padalkar
Thank you.
Operator
Thank you. We’ll take our next question from the line of Dipanjan Ghosh from Citi. Please go-ahead.
Dipanjan Ghosh
Hi, good evening. Vibha, in your opening commentary, you mentioned of product optimization at HDFC Bank. So if you can elaborate on that in terms of what are the strategies around that? And while your counter share has remained constant, are you seeing any VNB accretion at the bank or you expect to see going ahead? Second question is your agency growth has been quite strong for the past few quarters, especially fourth quarter. So how should one think of that broken up between productivity improvement and let’s say, how much of it is led by the new agents which have been added in the last 12 to 24 months?
And lastly, on the persistency side, your unit persistency in the early buckets have improved gradually over the past few quarters and year. So just wanted to understand in terms of what are the pillars or levers that are really driving this?
Vineet Arora
So, I’ll take the first two questions. In the HDFC Bank product mix, I think what the initiatives that we are taking now and we have started doing that in the last few months as well is to how do we improve our mix of ULIP and some of these initiatives that Niraj mentioned earlier about adding more some assured into ULIP, more protection into ULIP or going for more longer-term ULIP products are the initiatives that we’ve been taking. So that even if our ULIP remains at a slightly elevated level there, we could still make it more profitable. So I think those are a few of these changes and few more of them are going to be taken into the next year as we go along by adding more riders and protection. That is something that we expect will help us improve the margin in the HDFC Bank channel.
Coming to agency channel, so the growth has been largely from the existing let’s say agents and efficiencies. The new expansion of branches would have given us about 5% of this business would have come from the expansion of the new branches and the new, let’s say, FLS, et-cetera and the new agents that we have got in these branches. There is a segment of always this BAU agents getting hired in the existing branches and that’s something that we have been doing. So I’m not considering that as inorganic, but the inorganic portion would be about maybe 5% of the business coming from the inorganic portion.
Vibha Padalkar
Yeah, on the last question on persistency, on unit-linked, we have done a lot of things, big and small on that. Right from early warning indicators wherein we believe this is likely to result in poorer persistency, we will probably probe further price at the beginning — I mean, underwriting that policy and then taking it onto our books as well as ensure that SIECS mandates and so on and de-tagging does not happen. There is extra hand-holding to explain to the customer, especially when there is a fair bit of volatility and there is an intention to or to surrender. Also some — keeping a watch when a customer possibly asks repeatedly for what their fund value is and so on. So many such — use of data analytics has also helped us because propensity to surrender and likelihood, I think that is something that we have taken some tough calls of where a particular profile of the customer is not suitable for settling product and especially amidst a very volatile environment.
Niraj Shah
So we will continue these efforts and continue to monitor the — Vibha spoke about surrender trends in a softening market, surrender is actually lower. And typically we do see in a environment where the markets are doing extremely well, we do see some higher levels of surrender. So that is something that we do track on a regular basis. Stepping into the next 12-odd months, given the equity volatility and the elevated ULIPs that we’ve written in the past 12 to 18 months, we will definitely keep a very close eye on customer behavior in terms of how they respond to the volatile equity environment. But some of the building blocks Vineet and Vibha spoke about, we will obviously continue to work on this.
Operator
Does that answer your question?
Dipanjan Ghosh
Yes. Thank you and all the best.
Vibha Padalkar
Thank you.
Operator
Thank you. We’ll take our next question from the line of Shreya Shivani from CLSA. Please go-ahead.
Shreya Shivani
Hi, thank you for the opportunity and congratulations on a good set of numbers. I have just one question on the outlook we have for a four-year cohort and how we can grow. Towards that, I have a question for the protection book. This is obviously the overall protection book, right? This book has stayed at about INR17.7 billion, INR17.6 billion APE for past three years. And I understand it is the group protection, which has declined while we’ve done much better on the individual protection. But towards our, 16% 17% topline growth outlook for the next couple of years and particularly given ULIPs is going to be volatile next year. What is our view on the group protection bit and how much can this INR17 billion scale-up possibly in FY ’26 apart from just the retail portion of it?
Vineet Arora
So our view on group protection because this year we saw a disbursement in the MFA segment getting impacted. And we do expect maybe the next one or two quarters to remain muted on the MFA and then it should pick-up. So the group protection should start coming back towards the second-half of the year. On the retail protection, there are two-ways to grow the retail protection. One is obviously through the retail products by itself, which is unit-linked products and the various versions of it. And the other is by increasing the sum assured on the investment plans or by attaching more riders on the investment plan. And so these are the multiple methods for us to do this and we are trying to work on all of this. Some show success in different channels and different pockets. But I think largely we are quite confident that the protection growth will continue.
Shreya Shivani
And in the group protection bit, I understand the MFI portfolio, but even on your employer, employs the GTI bit, that also what is our outlook? I mean, I understand there was a price war or a competitive intensity this year, but how would things pan-out there?
Niraj Shah
Shreya, just complete — Vineet was talking about one of the segments on the credit life side, the other two segments are doing reasonably well. We expect that to continue in the next year as well. Housing is reasonably stable. Other loans are doing quite well. So that is, I guess likely to continue into next year as MFI stabilizes, like Vineet said. Group term, we’ve been fairly clear in our approach. I think these are 12-month renewable contracts. So we basically enter into arrangements, which are feasible from our perspective and we will continue to be fairly calibrated in our approach on that. So we don’t really have any targets that we run with on this business. We try and renew the policies that we have written if they are feasible and our approach on new business is very similar as well.
Shreya Shivani
Okay.
Vibha Padalkar
Also I want to add here, while we are looking at overall company, we’ve had pockets of major — more than green shoots on protection. For example, in my opening comments, I mentioned about in agency channels wherein protection has grown by over 50%. Within that, if I were to look at my variable agency channel, protection is touching about 14%. On the other hand, if you look at bancassurance, it’s around 4%. So there is even 4% in bancassurance going up to 6% can — on 50% of our business can mean a fairly meaningful uplift on protection, except that as you know, the ticket size is much smaller. And so it will take a little bit longer to show-up as a percentage of overall APE, but growth certainly as long as we continue to punch above company-level growth slowly, but surely and most importantly with the right pricing and on our terms, we should be able to grow — retail protection brick-by-brick.
Shreya Shivani
Got it. And just one follow-up over here. The reinsurance terms and conditions continue to be stable. There is no movement on that side, right, for our protection — for any of our portfolio protection book.
Niraj Shah
Not in the recent past, but like we managed our pricing, the reinsurers would do the same. And as we get deeper into India, the experience will be different from how the protection journey started in the top 10 cities. So all of that will have to be factored in not just by us, but the reinsurer as well. So we — I mean that will be a BAU activity that will happen from time-to-time, but nothing in the recent past.
Shreya Shivani
Yes, that’s useful. Thank you so much and all the best.
Vibha Padalkar
Thank you.
Operator
Thank you. We’ll take our next question from the line of Supratim Datta from Ambit Capital. Please go-ahead
Supratim Datta
Thanks for the opportunity. My first question is on the margin bit. So you have done very well with the ability to improve inherent margins like you pointed out. But just wanted to understand what are the levers are remaining to further improve it from here? So you talked about HDFC Bank and what you’re doing there, but are there other channels, other products where you can still improve inherent margins? That’s the first bit.
And secondly on Project Inspire, now it has been — you have been at this project for nearly one year now. Just wanted to understand, do you have a sense of what could be the savings or from a margin perspective from this project? I mean if you could quantify some opportunity, that would be very helpful. And lastly on agency, you have made significant investments in agency and you are currently again undertaking a transformation project there. Wanted to understand how does all of this get impacted if open architecture comes in agency because there have been some talks in the industry. So just wanted to understand how you’re thinking about that. Those are my three questions.
Vibha Padalkar
So I take the first question on margins. Supratim, obviously, I can’t share everything that we’re doing on margins, but we do have quite a few levers and we will do it judiciously because it’s always a toggle between your topline, quality of business and the actual margins themselves, so — and all three are important. So just margins for the sake of margins is not that difficult. Similarly, topline for the sake of topline is not difficult either. It’s delivering all these three in tandem, which is what is a lot more an involved process.
But as we have demonstrated time and again, there are many aspects, but the most important aspect here is pricing discipline. And that’s something we try not to be swayed on, and I’ve talked about this almost on every call that whether it is on term pricing and if you see on any of the online platform, you will see almost a 40% cheaper term for similar kind of a product and similar kind of a customer profile, perhaps with lesser underwriting. Now all of that will come and bite us down the line, which it often does on margin. So that temptation is something that we want to reduce. I don’t think we can always eliminate, but reduce quite substantially. So that’s one.
Second is again pricing discipline on interest rate guaranteed products, especially the likes of annuity. You’ll find annuity rates in the market that are higher than the underlying products that one can lock into. So negative spreads, so that again is not going to be margin accretive. So also on when interest rate movements happen that for us to have a method and implementation rigor immediately in terms of new policies that are being sold, say on a non-par product. So that becomes very, very critical in being able to deliver the margins. Cost control, of course, is a given. So we will — we have many initiatives running so that our cost of servicing a policy steadily goes down. We have had positive operating variance on our operating assumptions and remediate value walk for as long as I can remember. So that becomes very, very important that maintenance cost continues to go down and thereby giving us the fuel to be able to not increase acquisition costs very substantially because then there is a funding of the — by the maintenance cost structure.
So that’s that — and then other things, I think I talked about earlier on riders, on longer-term policies and so on. So a combination of all of these things is important. We are possibly, to the best of my knowledge, possibly the only company that has channel CEOs that have not just sales targets, but they have topline, bottom line targets and quality of business and largely run their channels as if they are a standalone company. The only thing missing is the corporate avatar, but otherwise they run their own show. So this is two-pronged wherein there’s ownership on what kind of business is being sourced as well as nimbleness and reaction to market conditions as you grow as a large company, otherwise delay in those kind of reactions will mean loss of business opportunity. So that has also worked very well. We are into this process now in the third year and that has also helped big time in each of the channels being very close to company-level margins and there is no subsidy or a perpetual subsidy between one channel and other one.
You want to add anything, Vineet and also on Inspire?
Vineet Arora
So, I’ll — Inspire because we have covered the other part quite comprehensively. So Inspire — we started about a year back and this is a long-term project, so we’ll continue for some more time. The objective of getting into this kind of a program is two-fold. One is obviously to create a strategic moat for ourselves when we work with partners, agents or corporate partners, et cetera and the integrations are so seamless that the experience for their customers is fantastic. That’s one clear reason. Second is, like you said, there could be some cost efficiencies coming in because a lot of things could become more automated and seamless. And so hence, we can handle more capacity, more volumes with maybe the same number of people and the same number of employees.
The third one, which we also see playing out and the important part is the entire signs around how can we work with our existing customers a lot more, how can we work with our partners to get more new business coming in. And those new business would depend on how seamlessly we are able to work on the data that we make it more intelligent for them to happen. So it could be converting a new policy or it could be even recommending the right ticket size for a right customer or adding the right level of protection on that new business. So all these are smart data decisions which could happen now possible with a lot of data coming into one place and getting more organized. So there are multiple benefits, difficult to quantify as a percentage into one margin, but there are multiple benefits starting from saying that we should expect better retention of partners, we should expect a better topline and we should also expect some more efficiencies to come.
Supratim Datta
And on the open architecture for agents.
Vineet Arora
Yeah. So like I said, better retention of partners. I also mandate agents there because at the moment we have a much better experience for the agent, for his customers and a lot more seamless integration and helping him generate new business, new leads, et cetera, if we can do that through technology. This really helps us bring that moat. On the open architecture of agents, it is not about whether an agent will go and work with multiple and divide his business, but if there is a company which now is able to give the best of the service and the best of the products, we do expect to remain the most preferred company with every agent.
Supratim Datta
Thank you.
Operator
Thank you. Take our next question from the line of Sanketh Godha from Avendus Spark. Please go-ahead.
Sanketh Godha
Yeah. Thank you for the opportunity. So my question is that when you move two product launches that is to HU par and SAGA. And just want to understand that on overall basis, these two products are margin-accretive for the company as a whole, point number one because we believe that par products seems to be little lower margins compared to non-par and given in the fourth quarter par is much better compared to non-par. Just wanted to understand given the new launches, will these two products will add more to the margins or par will eat into ULIP and therefore margins might get muted. That’s point number one.
And then second, just wanted to understand that these two products in any way cannibalize any other products, for example, SAGA is a product which could have an implication on your regular pay deferred annuities because that is kind of an accumulation and then you promise annuity. So just wanted to understand how you see these two products to play out in near future? And the second thing is on this ULIP rider attachment, which you also alluded that in HDFC Bank that might lead to better margin kicker. So just wanted to understand at the company-level, what is the attachment rate now in ULIPs with the higher sum assured and the HDFC Bank, what is the defense? And so what is the scope still available for — to improve the overall margin? Yeah, that’s it from my side.
Niraj Shah
So thanks, Sanketh. So a couple of things. One is par, like you rightly said, the margins might be slightly lower than non-par on a — at a base level, but if the products are more longer-term, then the margin delta is not as much as it has been in the past. And that’s something that we are seeing now. Second, the delta between Unit-linked and par margins is also now coming down dramatically with two things. One is higher levels of sum assured and second is in terms of improving persistency. So what we’ve tried to do over the last couple of years is to try and get more and more product mix agnostic, while it’s never possible to be completely agnostic, but we are trying to see if we can have more flexibility in the way we operate and we’ve demonstrated that in the last couple of years with unit-linked being significantly elevated compared to the past with minimal outcome dilution in terms of margins. So that is something that we will continue to do as we go-forward with higher levels of protection attached to unit-linked as well as improving persistency over the medium-to-long term. That is one.
Participating products, definitely are improving in persistency as well over the last three to four years, if you look at it from that perspective and that also leads to better outcome for the customer as well as for the company. As the agency business starts scaling up, which it has been, that gives us fixed-cost leverage, agents are able to have more-and-more conversations around longer-term products as we’ve seen in the product mix and that is something that also helps in that journey from a perspective of margins.
Sanketh Godha
On SAGA —
Niraj Shah
So, we don’t yeah, so we don’t see any cannibalization really. In some sense, it opens up a new segment. So you’re right, there is a deferred annuity product that we have. That’s also a non-par product. This is a pension non-par product. So as such, the economics remains the same. It’s — it does help in opening up a new customer segment. So if you — I mean, to just give you a very broad example or just a data point, our deferred annuity average customer age is about 55, 57. In SAGA, the age could potentially go down to low 40s, early 50s. So it opens up a new segment of customers who are willing to basically save regularly for the next few years and need income only many years down the line and are able to actually put in money on a regular basis rather than on a one-time basis. So that’s something that we started to see more and more of with this very efficient product design and we don’t expect it to cannibalize. But as such, even if it does, it doesn’t really matter because it falls in the same category while allowing us access to a new customer segment.
Sanketh Godha
And the attachment differential between the company and the HDFC Bank on ULIPs, higher financial…
Niraj Shah
I think we’re not getting into that kind of detail, but like Vineet mentioned, the endeavor is to obviously try and make the category a lot more you know meaningful for the customer as well as for us as a company. So the efforts are not restricted to HDFC Bank. It applies to the entire organization across channels, across all banking partners, we would make that same attempt to try and increase the rider penetration.
Sanketh Godha
Okay. And maybe last one, if I can squeeze. This project Inspire or tech transformation what we are trying to do. So the full benefit of it is how far away, it’s 12 months, 24 months? So just want to understand where we will see the — I understand it’s an ongoing project, but because you are doing it on full-fledged basis right now, so meaningful if it should get expected. So just wanted to understand whether it’s 12 months away, 24 months away for our company from productivity, margins, anything like such?
Niraj Shah
So I’ll just give you a very basic answer in terms of how are we actually looking at making this kind of investment, Vineet and Vibha spoke about it from a business lens. What we try and do is to basically do a very simple cost-benefit analysis framework that we follow where let’s say, we do not have any of these investments, how would our BAU technology expense pan-out over the next five years? And how much incremental expense are we going to incur because of this? And are there any benefits that we’re seeing out of it in terms of ability to cross-sell more or in terms of manage risk better to improve margins of productivity.
So what we find is, I mean, when we started this exercise about a couple of years back, we’ve spoken about these nine streams. Collectively, these nine streams, all of them are CBA positive, which basically tell us that through the entire capex period as it moves from capex to operating expenses, each of these will realize a positive value for the company. That’s how we approached it because it’s difficult to take a call on a one-year basis, but if you were to play it out over a three to five-year period, then all of them make sense to us from an investment perspective.
Sanketh Godha
Perfect. That’s it from my side. Thank you.
Operator
Thank you. We’ll take our next question from the line of Nitin Jain from Fairview. Please go-ahead
Nitin Jain
Yeah. Thank you for the opportunity.
Operator
I’m sorry, your voice is not clear. Can you use your handset mode please?
Nitin Jain
Yeah. Can you hear me now?
Operator
Yes, please go-ahead.
Nitin Jain
Yeah. I have just one question. So can you explain what has gone behind the kind of subdued outlook for the first-half of FY ’26? Thank you.
Vibha Padalkar
Yeah, it’s not so much subdued as much as we are calling out the base effect. So in FY ’25, in first-half of the year, we had a fairly robust growth of almost 30% and it’s that base effect. And then, of course, the subdued in the sense that whatever is happening as you know as much as I do in terms of the volatility that we’re seeing, consumption, possible consumption slowdown and also what the RBI governor recently did in terms of downward movement of GDP estimate.
Niraj Shah
So maybe I’ll just add to it. I think, you know, it was a story in two halves for FY ’25, we expect the same thing to happen in FY ’26 as well. So it’s just that dimensions could be different. I think APE growth could be — is likely to be more back-ended. VNB growth may not be as back-ended as APE growth given the base effect that Vibha mentioned. So that’s how we expect it to be, but we will see. And I think like Vibha mentioned in the call that the environment is very, very volatile. So while we have an outlook basis — on the basis of which we’re going to plan our resources for the year, but we will have to be a lot more dynamic in terms of how we make some of these investments as well as you know the outlook can change as we progress through the year depending on how the overall environment is shaping up.
Vibha Padalkar
Yeah. And so we are continuing to invest. We are also saying that we should grow faster than whatever the sector goes. So if we get it completely wrong or if the outlook changes for the better very dramatically, then of course, we’ll still be begging to ourselves to the sector.
Nitin Jain
Okay. That’s very helpful. And if I can just add one more to this thing. So you mentioned that the margins will be range-bound. So would it be possible to quantify that, quantify the range, I mean, approximately?
Niraj Shah
Yeah. We like to retain the flexibility to be able to operate because like we saw the early part of this of the previous year, we absolutely took all the growth that we could, even though the product mix was dilutive to margins and because that does help us engage more deeply with customers over a period of that — over a period of time. We will continue the same approach. While we expect the macro-environment to be different in FY ’26, both on equity and interest rates, that will move product mix in a different direction, we understand, we believe from FY ’25. But as such, a narrow band is what we’d like to stay within. We don’t really have a target that we’re chasing in terms of where we want to land or be at the end of the year. VNB growth is what we will be basically looking for and that will basically depend on where the topline and where the margins could land based on product mix. So it’s going to be more focused on driving VNB growth.
Nitin Jain
Okay. Thank you and all the best.
Operator
Thank you. [Operator Instructions] We’ll take our next question from the line of Aditi Joshi from JPMorgan. Please go-ahead.
Aditi Joshi
Yeah. Thanks for the opportunity. I have one question on — if you look at our operating ROE in the last two years that has broadly on the downward trend. So going forward, what will be our efforts in order to, make recovery in that? And just one more if I can. It’s on the — one of your competitors said that they have raised some capital to support the solvency capital in the anticipation to have some — in order to have some cushion in case anything worse comes of the RBC capital regime. But I think in the past, we have been — we have communicated that RBC in general will be leading to the release of capital. So just wanted to have a double confirmation, do you still think that RBC will still be a range of capital? Yeah, that’s all. Thank you.
Niraj Shah
So if you get our look at slide five of our investor deck, you will actually slide six, sorry, you basically find that our EVOP has actually compounded at about 19-odd percent for the last five years and 18% for the last nine years. So that’s something that we look at. The EVOP has a little bit of a denominator effect as well because the embedded value has grown faster than the EVOP in the past few years because of the way the markets have been. So we do track both of these. But in terms of the absolute value generated in rupee terms, the compounding has been in the 18% to 19% range, and that’s what we will continue to track.
As far as you’re talking about subordinated debt, right? Now that’s the program that we’ve raised, we do expect to continue to optimize on that as we move into the next couple of years as well. We will have a retirement of one of the first tranches of our sub-debt in the next couple of months and we will look at our proposition and see if we want to replenish that. That option will always be available.
I’ll just hand over Eashwari for RBC.
Eshwari Murugan
On the proposed RBC framework, we expect that the calculation of the capital requirement will be more objective and we will look at all the risks in the company and also give rewards to companies are managing the risk in a much calibrated and efficient manner. So from that perspective, we believe that we will be one of the companies who will benefit from the movement to the RBC framework. And in all our discussions with the regulator, the regarding timelines as well as the next state of assessment, you believe that the regulator is also thinking of similar lines. We don’t expect any adverse impact because of the RBC framework. In fact, we expect this position to be much better.
Aditi Joshi
Okay. That’s. Thank you so much.
Operator
Thank you. We’ll take our next question from the line of Prayesh Jain from Motilal Oswal. Please go-ahead.
Prayesh Jain
Yeah, hi. Just one question. There is a marginal increase in non-par sensitivity to interest rates. Anything to read-out there as to what is the reason for that and how do you see that?
Eshwari Murugan
The interest-rate sensitivity has been range-bound. I don’t think there is any material change and what is important to notice is that the margin will be better in a lower interest-rate scenario. And that is what we are always monitoring because of the interest-rate guarantee we give on the non-par savings for us. A decline in interest is something that we want to have protection against. So these are the two aspects we look at. One is the sensitivity is range-bound and the other is that increase in interest-rate is the one which gives us a negative impact, whereas our concern is on the decline in the interest-rate, which gives us a positive impact.
Prayesh Jain
Just wondering if you look at the product mix shifting towards non-par possibly group term and group products will — group term products should also increase, your ULIP level margins have gone up, par, you mentioned that the new products are margin-accretive. And then FY ’26, you said that the incremental margins will be utilized in investments, but it could be as we’ve been trying to ask you whether it could be 100 basis points, 200 basis points. If the margins expand by 200 basis points from the levels would entirely be consumed or you have a threshold of the amount of investments that you need to do.
Niraj Shah
So hard to say because investments are upfront. So that is something which is a little more definitive and clear. Investments in people, in branches and in technology, all of them are in some sense we committed to it. So that is something that will happen. We may make some adjustments depending on how the environment is shaping up, but that’s in some sense a commitment. How the product mix will evolve, of course, we will try and drive as much balance as we can as we have in the past, but we will also have to be cognizant of how the environment moves.
The inherent margins, and we both spoke about efforts that we will make to try and improve inherent margins. Some of that, of course is dependent on the competitive intensity as well. So we have to take cognizance of that. So hard to say how much of the margin uplift from product mix can actually come through from some of these investments, how much will it get subsumed in that. Also, increasing our customer penetration is equally important. So from that perspective, growth is something that is something that we will look at to ensure that we are able to then balance between these three things. So like we just mentioned repeatedly on the call, the aspirations remain to grow faster than the sector to try and keep our margins range-bound.
That basically gives us the flexibility to expand our franchise and in whichever direction it kind of goes, whether it’s Tier 2, Tier 3, getting deeper into that, opening up new customer segments or being able to navigate in a different environment. So as such, we don’t want to really be bound by how many basis points with which the margins can expand the contract in a near-term period. We’ve already spoken about our aspirations on a four to five-year period it’s doubling on year doubling. So we keep that as a frame of reference for us.
Prayesh Jain
Yeah. Okay. Thank you.
Operator
Thank you. We’ll take our last question from the line of Neeraj Toshniwal from UBS Securities. Please go-ahead.
Neeraj Toshniwal
Yeah, hi. Two questions. One on the timeline of these investments. So at what point you know we can see again margins or VNB expanding faster than APE? First. And second is on the product side, on this SAGA product, how many of the customers are actually choosing variant to with a higher guaranteed product and with the margins are higher on those products compared to one. I just wanted to understand because that kind of juxtapose similar to your whole-life non-par guaranteed product that we’re into, if people choose more of the higher maturity option. So just these two questions.
Niraj Shah
Yeah. So again, nothing further to add-on the investments and the impact of that on margins. I think, like I said, the commitment is kind of made. We will navigate to product mix depending on the environment and try and do justice to the capacity that we’re building in terms of resources. And we’ll come back to you every quarter in terms of how that’s moving. As far as SAGA is concerned, early days, it’s moving well. It’s I think both these options are pretty much half and half in terms of how the offtake is so far. But I think we will wait and see how that develops. We are also monitoring various aspects within that in terms of how many folks are basically taking the guaranteed entity upfront, how many folks are choosing to, what kind of we do? What kind of coverage these people are doing? All of these things are still early days, it’s still kind of developing.
Neeraj Toshniwal
So much is the margin higher than within two versus within one, looking at the product sector?
Niraj Shah
And it’s fairly similar. It’s not something that is dramatically different. We’ve also been asked this question on protection on ROP versus non-ROP. It’s not very different for us because we price it accordingly.
Neeraj Toshniwal
Thanks and all the very best sir. Thank you.
Niraj Shah
Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to Ms. Vibha Padalkar for closing comments. Over to you, ma’am.
Vibha Padalkar
Thank you for joining us today. Please reach-out to the Investor Relations team for any follow-up queries. Good evening.
Operator
[Operator Closing Remarks]