ICICI Lombard General Insurance Company Limited (ICICIGI) Q1 FY23 Earnings Concall Transcript

ICICI Lombard General Insurance Company Limited  (NSE:ICICIGI)Q1 FY23 Earnings Concall dated Jul. 19, 2022

Corporate Participants:

Bhargav Dasgupta — Managing Director & Chief Executive Officer

Gopal Balachandran — Chief Financial Officer & Chief Risk Officer

Analysts:

Deepika Mundra — JP Morgan — Analyst

Hitesh Gulati — HAITONG — Analyst

Prayesh Jain — Motilal Oswal — Analyst

Madhukar Ladha — Elara Capital — Analyst

Avinash Singh — Emkay Global — Analyst

Rishi Jhunjhunwala — IIFL Institutional Equities — Analyst

Nidhesh — Investec — Analyst

Dipanjan Ghosh — Citi — Analyst

Shreya Shivani — CLSA India — Analyst

Prakhar Sharma — Jefferies India — Analyst

Sanketh Godha — Spark Capital Advisors — Analyst

Presentation:

Operator

Good evening, ladies and gentlemen, and a very warm welcome to ICICI Lombard General Insurance Company Limited’s Q1 FY23 conference call. From the senior management we have with us today Mr. Bhargav Dasgupta, MD and CEO of the company; Mr. Gopal Balachandran, CFO and CRO; Mr. Sanjeev Mantri, Executive Director; and Mr. Alok Agarwal, Executive Director.

Please note that any statements, comments are made in today’s call that may look like forward-looking statements are based on information presently available to the management and do not constitute an indication of any future performance as future involves risks and uncertainties which could cause results to differ materially from the current views being expressed. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] I now hand the conference over to Mr. Bhargav Dasgupta, MD and CEO, ICICI Lombard General Insurance Limited. Thank you, and over to you, sir.

Bhargav Dasgupta — Managing Director & Chief Executive Officer

Thank you, Neerav, and good evening to each one of you. Thank you for joining our earnings conference call for Q1 FY23. I will give you a brief overview of the industry trends and developments that we have witnessed in the last few months. Post this, our CFO, Mr. Gopal Balachandran will share the financial performance of the company for the quarter ended June 30, 2022.

During the quarter, the Indian economy continued to steadily grow towards the pre pandemic levels with broad-based improvement across consumption, investment, credit growth of banking sector etc. In spite of the headwinds of inflation, geopolitical tension and supply chain disruptions, with improved rural and strong urban demand, the optimism towards India’s economic recovery remains intact. Amidst this, the GI industry performed reasonably well primarily driven by segments such as health insurance and motor insurance.

As per data published by SIAM, the new vehicle sales witnessed moderate growth for private car segment amidst continued supply chain constraints. The commercial vehicle segment grew robustly supported by underlying demand, while the two wheeler segment continued to remain slow compared to pre pandemic levels. Health insurance, in line with the expectations contributed to the overall industry growth. The commercial lines witnessed growth in sync with the current market environment.

Resultantly the GI industry delivered a GDPI growth of 23% for Q1 FY2023. As per public disclosures the combined ratio of the industry was 118.1% in FY2022, excluding one company which is yet to disclose their Q4 results, as compared to 112.2% in FY2021. We view this data with a one quarter lag because that’s when we get the full information.

Moving to regulatory updates, the Government of India via the Ministry of Road Transport and Highways in consultation with the Authority on May 25, 2022 published revision in base premium for motor third party insurance for various classes of vehicles effective from June 1, 2022. The rate hike is expected to be marginally positive, however the rise is not commensurate with the loss experienced and the inflation that the industry has envisaged in this segment.

Amid the current need to increase insurance penetration in the country, the Authority has recently announced several measures for the benefit of policy holders and towards ensuring ease of doing business for insurers. This includes reducing compliance burden on regulated entities by rationalizing regulatory framework, forming working committees towards distribution reforms, finance and solvency related provisions, product governance, regulatory and statutory reforms and review of data and technology framework and organising bimonthly interactive sessions with insurers for their suggestions for increasing insurance penetration.

Subsequently, on June 1, 2022, the Authority prescribed the Use and File procedure for all health insurance products and almost all general insurance products by moving from the current regime requiring prior approval for launching retail products to a regime where products could be launched without prior approval. On July 14, 2022, Use and File was also extended to agricultural and allied services.

On July 5, 2022, the Authority permitted general insurance companies to introduce the following tech-enabled concepts for motor own damage as an add-on to basic policy. One, pay as you drive; two, pay how you drive; three, floater policy for vehicles belonging to the same individual owner for two wheelers and private cars. The company had launched similar products under the regulatory Sandbox initiative in 2020 wherein there was a limitation of 50 lac of premium or 10,000 policies, whichever is achieved earlier. In line with the above regulatory change, the company has launched its motor floater add-on cover recently. It provides convenience to customer of having one policy document, one renewal date and one premium at lower cost.

Moving to business impact for us in Q1 2023, the company grew by 24.9% as compared to the industry growth of 21.7%, excluding crop and mass health. Coming to the growth for key segments during the quarter, for motor, the company grew in line with the industry and has maintained its leadership with a market share of 11.3%. The company increased its proportion of CV mix to 24.5%. The Electric Vehicle segment continues to be a focus area for the company. The company continues to maintain its leadership position in this segment as well with an estimated market share of 14% for private cars and 64% in two-wheelers.

Our investment in retail health has resulted in our agency channel premium growing by 18.3% this quarter. As indicated in our previous calls, we continued with our investment in adding managers to grow our retail health agency business and our current headcount stands, which includes new hires, at 1,101. We expect the growth to accelerate in the next few quarters as the agency managers start getting productive. I would also like to share that our one stop solution for all insurance and wellness needs, the IL TakeCare app, has surpassed 1.7 million user downloads till date. The incremental download for the quarter was 0.4 million.

Our Bancassurance and Key Relationship Groups grew at 49.4% this quarter. Within this the ICICI Bank distribution grew by 30.5% and the non-ICICI Bank distribution grew by 65.1%. Post pandemic, the recovery in credit growth along with increase in wallet share in distribution partners acquired through the demerger has been the key growth driver for us. Our business sourced through our Digital One team grew by 30.7%. Within that, the business on our website grew by 21.1% and business sourced through strategic alliance partners in the digital ecosystem grew by 170.8%. Overall, our digital focus has enabled us to increase our digital revenues to INR2.1 billion which accounts for 3.9% of our overall GDPI for this quarter.

As far as the commercial lines are concerned, we experienced robust growth, driven by 18.7% growth in the SME segment. We are optimistic with the recent positive regulatory developments would enable us to grow faster with emerging market needs. We remain on track and are focused on growth levers such as strengthening our distribution engine, digital advancements, realizing synergy, rationalizing cost while scaling up our preferred lines of business.

I will now request Gopal to take you through the financial numbers for the recently concluded quarter.

Gopal Balachandran — Chief Financial Officer & Chief Risk Officer

Thanks, Bhargav, and good evening to each one of you. I will now give you a brief overview of the financial performance of the company for quarter one FY 2023. We have put up the results presentation on our website. You can access it as we walk you through the performance numbers.

Gross Direct Premium Income, GDPI, of the company was INR53.7 billion in quarter one FY23 as against INR41.88 billion in quarter one FY22, a growth of 28.2%. This growth was higher than the industry growth of 23%. Our GDPI growth was primarily driven by growth in preferred segments, given that our approach has always been growing business sustainably. The fire segment GDPI grew by 10.3% at INR11.43 billion in quarter one FY23 as against INR10.36 billion in quarter one FY 2022. As indicated in our results presentation, the overall GDPI of our property and casualty segment grew by 14.3% at INR19.54 billion in Q1 FY23 as against INR17.09 billion in quarter one FY 2022.

On the retail side of business, GDPI of the motor segment was INR17.82 billion in quarter one FY23 as against INR14.01 billion in quarter one FY22, registering a growth of 27.2%. Our agents, including the point of sale distribution, increased to 94,559 as on June 30, 2022, up from 88,545 as on March 31, 2022. The advance premium number was INR34.71 billion as at June 30, 2022, as against INR33.68 billion as at March 31, 2022. Resultantly, the combined ratio was 104.1% in quarter one FY23 as against 123.5% in quarter one FY 2022.

Our investment assets rose to INR398.34 billion as at June 30, 2022, from INR387.86 billion as at March 31, 2022. Our investment leverage, net of borrowings, was 4.18 times as at June 30, 2022, compared to 4.23 times as at March 31, 2022. Investment income was INR6.55 billion in quarter one FY23 as against INR8.89 billion in quarter one FY22. Our capital gains was lower at INR0.32 billion in quarter one FY23 as against INR3.27 billion in quarter one FY 2022.

Our profit before tax grew by 80% — 80.1% at INR4.65 billion in quarter one FY23 as against INR2.58 billion in quarter one FY 2022. Consequently, profit after tax grew by 79.6% at INR3.49 billion in quarter one FY23 as against INR1.94 billion in quarter one last year. Return on average equity was 15% in quarter one FY23 as against 9.4% in quarter one FY 2022. Solvency ratio was 2.61 times as at June 30, 2022, as against 2.46 times as at March 31, 2022, continued to be higher than the regulatory minimum of 1.5 times.

On the ESG front, we have voluntarily adopted the Business Responsibility and Sustainability Reporting for FY 2022 thereby strengthening our commitment to transparency in disclosures and also to promote a culture that embraces sustainability practices within our business processes. The company for the first time has also disclosed its GHG emission. An independent external assurance provider has also provided limited assurance on the GHG emissions accounting.

As I conclude, I would like to reiterate we continue to stay focused on profitable growth, sustainable value creation and safeguarding interest of policyholders at all times. I would like to thank you for attending this earnings call and we will be happy to take any questions that you may have.

Questions and Answers:

 

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Deepika Mundra from JP Morgan. Please go ahead.

Deepika Mundra — JP Morgan — Analyst

Hi sir, thank you for the opportunity. Sir, firstly on the motor insurance products, can you walk us through little —

Operator

Deepika, may I request you to unmute your line from your side and go ahead with your question please.

Deepika Mundra — JP Morgan — Analyst

Hello, can you hear me?

Operator

Yes.

Deepika Mundra — JP Morgan — Analyst

Hi, sir, firstly on the motor insurance —

Operator

Deepika, sorry to interrupt you, I’m unable to hear you. May I request you to speak little louder please and through the handset?

Deepika Mundra — JP Morgan — Analyst

I’ll try again. Hello, can you hear me? Yes, much better.

Bhargav Dasgupta — Managing Director & Chief Executive Officer

Yeah, much better, Deepika.

Deepika Mundra — JP Morgan — Analyst

Okay, thanks; some trouble with the headset. Okay. Sir, on the motor insurance fees, in terms of what are you seeing in — on claim inflation, what is the pricing trend both on OD and TP. I think on TP you already very clearly mentioned you’re running below what the inflationary trends are. So — and overall, how do you expect this to impact the combined ratio this year, given the fact that the volumes are on the uptick?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

So if I look at the OD side, what we are seeing is slightly higher claims frequency than what we had last year. Some of it was anticipated as utilization of vehicles has increased, but overall even beyond that we are seeing slightly higher frequency numbers. Now normally, if you look at the ACS, it’s kind of flat, we are not seeing any significant increase in average claim size. Overall in terms of the pricing, the industry has also corrected pricing a little bit on the OD side in line with what we discussed last time. But on balance on the OD the price — the pressure on loss ratio remains in line with what we’ve been saying over the last few quarters. On the TP side, yes, while the premiums — the rate increase is not in line with the claims inflation, one of the things that we are hoping to see come through is now that the motor vehicle rules have been framed, we will see how the courts begin to adopt this six-month limit and the [Indecipherable], the intimation process.

If that comes through, that would be a positive. So that is in a sense something that we will watch very closely for the next two quarters to get a sense of whether it’s getting implemented. If it gets implemented, that will be a positive, overall on the TP side.

Deepika Mundra — JP Morgan — Analyst

Understood, sir. And all the new products which are data-driven, these — won’t they be largely disinflationary in nature, so wouldn’t the GAAP premium growth to a certain extent, or do you see the penetration benefits outweighing that significantly?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

So what — it could be a mix of both. You’re absolutely right. So if you price the exposure, which is in essence people who drive less and those are the customers who end up buying the telematic-driven products, that could be disinflationary. But what it does is basically price the risk better and logically the rest of the book, the pricing should go up. If that doesn’t happen, then what you’re saying may happen. We will have to see how big the penetration of this piece is because it’s just early days. Our sense is, it will take fair amount of time for this to become a large part of the motor business. The second opportunity that we believe is there is that — there is a large amount of business which is people buying only TP which potentially can buy OD also. So if we can increase penetration, that will help.

Deepika Mundra — JP Morgan — Analyst

Understood, sir. And a last one, if I may, in terms of the quarterly numbers, despite the scale up in volume there seems to be no operating leverage. Could you talk about the investments I think that you’re making on distribution or anything else that is contributing to that?

Gopal Balachandran — Chief Financial Officer & Chief Risk Officer

So, Deepika, I think what we have spoken about is continuing to make those investments in health agency, digital and claim service. So that’s something that is the continuing one, which is why if you recollect, I think while we had announced starting to add almost close to 1,000 health agency managers which we had spoken about last year, effectively by end of March we had onboarded about 750 of them. From that number if you speak, including the new hires as at June 30 stands at almost about 1,100 and odd thereabout. We are continuing to make those investments in health agency distribution.

Even digital for the matter of fact, again, when you look at the numbers, which is growth delivered through both our contributions coming in from website as well as the alliance partners tie up that we have, that numbers again has done quite well. We just put out even as a part of our opening remarks, that growth for us has been almost about 30%. So that’s an area where we are continuing to make investments in increasing the sourcing of the digital channel as well. And the third area which will always continue to stay focused on is with respect to excellence in claim service.

So those areas are continuing to kind of stay invested, which is why when you look at the aggregate, let’s say the growth in the management expense numbers, the overall growth for us for the quarter one this year has been roughly at about 28% or maybe on a gross written premium basis it will be close to about 30%. [Indecipherable] that, if you see the growth in management expenses has been about 28%. So in some sense there is some element of operating leverage but at the same time obviously there are those continuing investments that we’re making, which will obviously play through as we speak over the next several quarters.

Deepika Mundra — JP Morgan — Analyst

Okay, sir. Thank you so much. I’ll get back in the queue.

Operator

Thank you. Next question is from the line of Hitesh Gulati from HAITONG. Please go ahead.

Hitesh Gulati — HAITONG — Analyst

Yeah, thank you for giving me the opportunity. Sir, firstly on the health segment, we are seeing some slowdown for the industry in the retail health. What are your thoughts on that? And also if you could comment on what we are doing in the health segment exactly, for instance, in the ICICI Bank channel we had highlighted that they have started selling some amount of indemnity products, so what is the progress there? What is the progress in the other HFC, NBFCs we wanted to do more benefit products there. In general, indemnity benefit, some flavor on that, sir. I’ll follow up with one more question after that.

Bhargav Dasgupta — Managing Director & Chief Executive Officer

Yeah, so in terms of what we’re doing in health, one is — your first question of these bit of slowdown, there is a bit of base effect for the industry. Last year’s Q1 was very strong. So for the industry, the retail health growth has got a bit muted. But for us the growth is beginning to pick up. As we explained the agency driven business has grown by about 18% for us this quarter. Even as a full distribution that we are ramping up, it is getting productive. So we believe that this growth for us will actually increase going ahead. So from our perspective, that’s a positive.

The second thing is the bancassurance side. If you look at the point that I made in my opening remarks, your question on ICICI Bank, as I explained and we had talked about this last quarter as well, that last year was a bit of a headwind because the benefit business that was sold as an attachment by the bank, that had gone away, but the bank had started selling indemnity products as a group — in a group format as an attachment to the mortgage loan and that’s driving the 30% growth in that channel that we are seeing.

The other partners which is basically the new, the existing relationship that we’ve had over the years, the NBFCs, HFCs and other banks, as also the new bancassurance tie-ups that we’ve got through the merger with Bharti AXA, that channel has grown really well and that number — that growth is roughly about 65%. So, overall the bancassurance business has grown by about — roughly about 50%, 49.4% split into 30.5% at the bank level and 65% at the other bancassurance partners. So overall we are — and within that the benefit numbers also grown very well because lot of the attachment products that gets sold by the HFCs and some of the other banks is a benefit product.

Hitesh Gulati — HAITONG — Analyst

Sir, that’s what is growing the group other segment within health, right? This is the entire —

Gopal Balachandran — Chief Financial Officer & Chief Risk Officer

Group numbers, yes, absolutely right.

Hitesh Gulati — HAITONG — Analyst

Right. And sir just on the crop segment, we have I think won a few tenders here. So we are again looking to grow crop, right? This is in addition to what we got from Bharti AXA because our reinsurance rates also look higher this quarter, is that correct?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

No, that is not correct. So what we are doing is we are kind of — if you look at what we got from Bharti AXA, they had two states. One was Karnataka. The other one was Maharashtra. Maharashtra changed the scheme from the original insurance premiums for PMFBY to a scheme where the loss range is capped. So it’s a 80-110 scheme where if the loss ratio is below 80, as an insurance company we will refund that premium to the state. At the same time if the loss ratio is more than 110, the state will pay for that trade. So it’s a fixed range product which — that’s a replacement of the traditional PMFBY.

So what we’ve done is in Maharashtra in the — under the new scheme we’ve taken two clusters. So aggregate crop numbers for us will not be very different from what it was last year, maybe marginally little bit here and there, but aggregate numbers, very similar to last year. The reason why we bid for Maharashtra is because we had kind of indicated that we will observe how the scheme evolves and accordingly take a call. With the 80-110 model, our reinsurance cost for the stop loss that we used to buy goes away. That’s a big saving. If you remember, we used to talk about the fact that reinsurance cost is very high for a scheme of this nature and that’s one of the reason why we stopped writing this. So that reinsurance cost goes away because the loss is capped at 110 and overall we don’t want to increase the crop exposure beyond a certain level.

So we’re steering in line with what we did last year in aggregate as a company. Now there has been some booking difference. This year some of that got booked in the first quarter. Last year a lot of them got booked in the second quarter. So there may be some timing differences, but aggregate for the year, we don’t see too much of a difference in aggregate crop business that we like.

Hitesh Gulati — HAITONG — Analyst

Right. And just one last thing, on motor OD some increase in claim ratio is due to higher CV business, right? And this combined will still be lower, is that understanding correct?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

So, Hitesh, what we had kind of indicated, even if you recollect in our earlier calls, we had said, particularly on motor, we would look at certain segments which has — which could be relatively high on LR, but could be let’s say relatively lower in so far as our cost of distribution is concerned because from an ROE perspective, those kind of business selections makes viable sense. So that’s one reason why you also see maybe an increase in the OD loss issues. And even if you recollect, when we had kind of announced numbers for the full year at that point of time we did indicate particularly for let’s say own damage, maybe quarter four will be more representative of let’s say what one could experience in so far as OD loss ratios are concerned and so far as trend line is concerned.

But having said that, I think the way to look at OD segment will be to obviously look at both the loss ratios, plus the cost of distribution put together and on that basis is how we are looking at selecting the portfolio. You could see some periods where you would see possibly an increase in the OD loss ratios given the fact that we would want to sell it, certain segments which could be high on loss ratios, in which case you may see periods of increase in loss ratios, at the same time possibly we will see a moderation in the overall cost of distribution. On an aggregate basis I think we would want to kind of stay disciplined in terms of the risk selection that we do.

Hitesh Gulati — HAITONG — Analyst

Sure. Thank you, sir. That’s it from my side.

Operator

Thank you. Next question is from the line of Prayesh Jain from Motilal Oswal. Please go ahead.

Prayesh Jain — Motilal Oswal — Analyst

Yeah, hi, sir. Few questions from my side. Firstly, you didn’t explained in the previous question the reason for the lesser retention in this quarter, if crop was not there reason then what was the reason for lesser retention in this quarter?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

So Prayesh, if you are comparing the net retention ratio vis-a-vis the full financial year and the quarter one of this year, then obviously it will not be like to like comparison because a large part of quarter one business is largely driven by the commercial line of businesses. So particularly let’s say fire engine and bulk of the corporates, they will kind of have their renewal coming through in quarter one of this year where relatively because of the size of the risk is bigger, you tend to have an element of [Indecipherable].

It’s more towards I would say quarter three and quarter four where bulk of the retail business, particularly motor and health will largely get driven and book — in so far as business book is concerned, where as we have explained earlier, both on motor and health, we kind of leave aside the obligatory minimum which now for the current year is about 4%, by and large we tend to retain rest of the risk on the net account. So hence whatever retention that you’re seeing of the 65% number for quarter one vis-a-vis maybe a 70% or 72% for the full year may not be a like-to-like comparison as I said, because of the corporate renewals that happen in the first quarter.

Prayesh Jain — Motilal Oswal — Analyst

Okay, got that. Secondly, it was on the investments yield, so it seems to have dropped sequentially quite a bit. Any explanation for that?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

Could you just repeat that, sorry, please?

Prayesh Jain — Motilal Oswal — Analyst

Sir, the investment yield on the — if I calculate on the investment book, that seems to have dropped sequentially materially in this quarter, any reason for that?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

Largely driven by capital gains drop. If you look at the Q1 of last year we had almost 300 crores of capital gain. This quarter the capital gain number is down to about 32 crores —

Prayesh Jain — Motilal Oswal — Analyst

Compared to Q4.

Bhargav Dasgupta — Managing Director & Chief Executive Officer

So I’m comparing Q1 to Q1, Q1 last year we had about 327 crores of capital gains that we had on the investment book. This quarter it is about 31 — 32 crores. If you compare sequentially, last quarter, that is Q4 of last year we had about [Indecipherable] of capital gain. This quarter we have about 32. So even sequentially it dropped a lot. It is largely to do with the market context and these are times you know as a long-term investors we see these markets as opportunities to invest rather than worry about the fact that for this quarter we had our capital gain fall.

Prayesh Jain — Motilal Oswal — Analyst

Okay, got that. And last — and could you give an explanation as — again possibly this is NEP to NWP ratio, generally I would assume that in this quarter there should be an unwind that would happen from Q4 and that NEP to NWP ratio should be a positive number, but it should be better than one number, but anything that you can guide — help me understand there?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

So, nothing specific Prayesh. Attrition so far as recognitions of earnings is concerned, pretty much it remains the same, which is earnings get earned over the policy contract. What you see as the gap between, let’s say, growth in, let’s say, premiums or NWP and NEP is largely a function of the growth coming back in this quarter, which will possibly start seeing unwinding happening towards the next two or three quarters. So it’s more a catch-up of the growth that we see coming back in this quarter vis-a-vis, let’s say, if you would have looked at Q1 last year, for example, the growth for us — low single-digit number in terms of aggregate book revenue.

So vis-a-vis that if we see for quarter one this year as we explained as a part of the opening remarks, we had a growth in GDPI of almost about 28%. This unwinding of earnings or maybe the gap that you will see between NEP and NWP will start getting to concern maybe over the next several quarters, of course subject to what we get to experience in so far as growth in revenues are concerned.

Prayesh Jain — Motilal Oswal — Analyst

All right, thank you so much.

Operator

Thank you. The next question is from the line of Madhukar Ladha from Elara Capital. Please go ahead.

Madhukar Ladha — Elara Capital — Analyst

Hi, good evening and thank you for taking my question. Most of my questions have been answered, but what’s happening on the commission line. So I see like a drop in the commission ratio. What explains that? I’m guessing it’s something on reinsurance that you would have earned some commission, that’s one thing. And again the management expenses, that have also gone up a lot. So I’m talking not insurance related expenses, but the expense of management, that’s gone up to about 19.8 crores. So why is that happening?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

I think on the first one Madhukar, I think in so far as commissions are concerned, yes, you are absolutely right. When you look at the net commission ratio, it is a function of both what commissions that we pay as a cost of doing business and obviously the element of reinsurance commission that we earn as a part of reinsurance cedings that we do to the reinsurers. As we have been explaining, particularly on the reinsurance side, given the outcome that we have exhibited to the reinsurers, we talked about even in the last quarters to say that the reinsurance programs that we have been able to renew for FY23 has got two positive changes.

One is we have been able to strengthen the panel of reinsurers which we have been able to operate with, that positive from a credit risk standpoint given that we are working with high quality reinsurers. The second aspect that we kind of exhibited also was given the fact that, as I said, we have been able to exhibit a positive outcome to the reinsurers. The terms of commissions that we have been able to get from the reinsurers have also been relatively better than what we had seen for FY22.

So — and as I said, quarter one typically forms the bulk of the corporate policy renewal cycle and hence to that extent you will always find in quarter one the extent of reinsurance commissions coming to you at the time when the businesses are booked and that’s the reason why you see possibly the commission ratios reflecting a relatively lower number than what we had seen in the earlier period. So, that’s in response to the commission ratio point that you made.

On the management expenses, as I explained, I think if you look at it vis-a-vis the growth in revenues that we have had, as I said, either if you look at it on a GDPI basis or even if you look at it from a GWP standpoint, we have seen a growth in revenues of almost about 28% or 30% whichever way you look at it. Vis-a-vis that I think if you look at the growth in management expenses, which includes both commissions that we incur for cost of distribution, plus, let’s say, the operating expenses that we incur, both of them put together has grown at about 27.8%.

So hence I think whatever increase in numbers that you are seeing is relative to the growth in revenues that one has seen. At the same time, I think as what we have been explaining, we continue to see, let’s say, relative competitive intensity continuing in the market, and hence to that extent, that’s also a factor that is playing through with respect to the management expense number.

Madhukar Ladha — Elara Capital — Analyst

Got it. So this commission ratio part of it, should it — is it more like a quarter one phenomena or do you think it will normalize during yesterday or I’m guessing some portion of it, there should be some further reduction in the balance part — I don’t mean — yeah, I don’t mean on a quarter-over-quarter, I don’t mean from the 2.2% that we’re seeing right now. But on a year-over-year basis, there should be some reduction because of what you mentioned right now.

Bhargav Dasgupta — Managing Director & Chief Executive Officer

That’s right. So again it’s a function of how do we see, let’s say, growth coming back. I think while quarter one has been good, let’s say from — even from a — to some extent, from a retail standpoint, so that obviously involves an element of commissions expenses that we will have to incur for doing the business. So over the next three quarters, we will have to see how that growth momentum plays out, which will also have a factor in terms of the commission ratio numbers.

Two, over the next three quarters definitely you will see the extent of reinsurance commissions that we would have earned in quarter one, that number will definitely see a relatively declining number as we move towards quarter two, quarter three and quarter four given the fact as I said and maybe Q2 and Q3, Q4 also to some extent, the cycle comes back in terms of reinsurance commissions because some of the companies which follow a January to December cycle, they will have their renewal period starting from January 1. So there again you will see an element of reinsurance commission that will play out. So there are multiple factors that get attached to this number. So obviously, we’ll have to wait and see how the growth plays out on the retail side and equally as I said in terms of the renewal cycle that will happen in Q4 will also be a factor that will drive the reinsurance commission numbers.

Madhukar Ladha — Elara Capital — Analyst

And any particular lines of business —

Operator

Sir, sorry to interrupt you. I request you to come back in the question queue for a follow-up question.

Madhukar Ladha — Elara Capital — Analyst

Sure.

Operator

Thank you. The next question is from the line of Avinash Singh from Emkay Global. Please go ahead.

Avinash Singh — Emkay Global — Analyst

Yes, hi, good evening. So, first question is more from a value perspective. I mean you are well capitalized, you’re rather overcapitalized and commercial lines typically, you have your sort of I would say strength as well. So I mean, how is the pricing environment because I see in commercial lines you are more or less maintaining your market share to slightly feeding in some lines. So, I mean why not certain because you have advantage on the reinsurance side as well, you have sort of your capital strength, so why not sort of go a bit aggressive on commercial line, especially in the back — in the retail lines are seeing heightened competition ongoing. So that’s one. Then I will come with the follow-up question.

Bhargav Dasgupta — Managing Director & Chief Executive Officer

So that’s a good — great question, Avinash. And if you see the last three or four years, we’ve consistently gained on the commercial segment. Our expectation that is that even this year we will gain. It is just that in the month of April, we always find that the — because the big month for commercial business, most companies renew, there is a lot of pricing aggression that happen just in that month and we are usually a bit more cautious in that month and then gain during the rest of the year. So, our anticipation is that even this year like in the last three, four years we will gain on the commercial lines of business.

Also one of the point that we made is the SME business for us has been growing. We are even more sustaining that effort in the emerging markets of the — more in the — more distributed market of the country and we hope to see some traction there. So your point is absolutely right and that’s what our plan is. We hope to increase our commercial lines market share even this year like the last few years.

Avinash Singh — Emkay Global — Analyst

Okay. So second maybe again kind of that — you again, in suffice of I would say [Indecipherable] I mean, capital continues to pooling and we’ll get the profitability. Some of the metric you told and we see, it is still not really impressive. So of course we have to book in for some price incentive to returning some of the retail —

Bhargav Dasgupta — Managing Director & Chief Executive Officer

Avinash, your voice is a bit, not very clear. You know, I think you asked a question about new capital coming in, is that the question?

Avinash Singh — Emkay Global — Analyst

Yeah, I’m saying — capital continue to change, I mean the growth you get this year, I mean the pricing basically already not coming back and how long this — I would say a worst pricing cycle, particularly in the [Indecipherable] continue, I mean, regulator of course I know, regulator has given you a benign hike, but regulator cannot be giving hike in the DP lines when the players are not sort of exiting exhibiting discipline in the OD line. So just I want your sense that, okay, when do you expect some synergy to come back in the motor [Indecipherable]?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

Yeah. So I think that’s again a good question, and you’re absolutely right. We cannot seek too much of an increase in PPP, we don’t see discipline in the OD beyond the point. Though honestly speaking, when you look at each segment of risks, each risk should be appropriately priced, that’s the ultimate principle. But having said that, your larger question about when we see discipline on the OD side, I think this quarter we have seen some discipline coming in terms of, you know, some rationalization by a few players, not all, but I think the larger issue is that if more capital comes into a sector, there will always be aggressive behavior by some players.

And unfortunately, lot of investors mistakenly believe that the valuation of our company is a price to GW multiple, which actually makes more sense. Hopefully given the change in the overall macro environment for more sensible investment valuations, we will see some of those changes. But till that happens there will be some that pressure. So I think we’ve always been saying that motor OD normally rationalizes very — within about a year and a half, so we had — we expect it to happen this year, but you will have to watch for it. In the first quarter it was small signs in that direction. At the same time, as I said, unfortunately the claims frequency was a bit more than what I guess the industry anticipated. So on balance that canceled each other out. But we’ll have to see how that goes ahead from the next three quarters.

Operator

Thank you. Avinash, I would request you to come back in the question queue for a follow-up question. Thank you. The next question is from the line of Rishi Jhunjhunwala from IIFL Institutional Equities. Please go ahead.

Rishi Jhunjhunwala — IIFL Institutional Equities — Analyst

Yeah, thanks for the opportunity. A couple of questions from my side. Firstly on the motor TP. I guess the — has the rate has been effective from first June and if that were to be the case, then in the quarterly motor TP loss ratio, given the price hike will come through fully in 2Q, if everything else remains similar we should expect improvement there going forward, right?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

Rishi, TP loss issues as we’ve always been saying look at on an annual basis, don’t look at on quarterly basis because there are — and in fact, last year — end of the year also, we had indicated that look at the annual rate — our annual loss ratio rate for PP because there could be quarters based on the actual model, there could be releases for the quarter, there could be — in another quarter there may not be releases. So our recommendation has always been to look at TP loss ratio at a annual basis rather than a quarterly basis.

Rishi Jhunjhunwala — IIFL Institutional Equities — Analyst

Okay. And the other thing is, can you give us some sense of how much of your motor book currency would be coming from new vehicle sales and how much would be on the motor TP side from long-term TP?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

So Rishi, for the first quarter, the business mix in terms of new and renewal is about 40-60; 40% of the business is new, 60% of the business is renewal. And this number if you look at for quarter one last year, that number was about 35% was new and the balance 65% was renewal. For the full year, pretty much it was similar. We are almost about one-third, roughly about 33% which was new and the rest was renewal.

Rishi Jhunjhunwala — IIFL Institutional Equities — Analyst

And within motor TP, the long-term TP portion would be?

Gopal Balachandran — Chief Financial Officer & Chief Risk Officer

We don’t have that number separately kind of put out, but I would say that — I think the advance premium numbers is what we kind of put out. I think if you look at that number for the quarter ended June 30, it is roughly at about 34.7 billion. This number at the end of March ’22 was 33 — almost about 100 crores higher than what we had towards the end of last year.

Rishi Jhunjhunwala — IIFL Institutional Equities — Analyst

Okay, all right, thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Nidhesh from Investec. Please go ahead.

Nidhesh — Investec — Analyst

Thanks for the opportunity, sir. Two questions. Firstly on the health insurance, on the retail health insurance, the data which published in [Indecipherable] where we have not been able to make any impact despite hiring so many people in last 12 months. Our market share has not changed. So, any comment on that, that is one. Second is, if I look at claims experience data of FY22, our claim reputation ratio — claim reputation as percentage of claims intimated in health insurance, retail health insurance is around 20% which is similar to other companies. So how do we think about customer experience on the — because I think last year a lot of companies, lot of customers had pretty bad experience with the sector to health insurance settlement across the sector. So in that scenario how are we differentiating ourselves — respect to customer experience on claim settlements?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

So, Nidhesh, on the first one, as we indicated, so our retail health numbers had businesses that we are sourcing from retail agency channel, has also some businesses that we are selling through banks as a retail health business. So if you look at the agency channel, the number that we gave out, we grew at about 18% for this quarter. Our sense is given that these — agency managers, agents are getting more used to our systems, processes and getting more productive, that number this quarter should — we should be able to deliver higher growth in this quarter. The aggregate number for retail health was a bit lower because one of the banks which we’re selling things as retail policy has converted that business to a group format. So it’s kind of shifted from retail health to a group health, but underlying business is to the B2B2C customer base. But as I said the retail health channel that we are investing in, it grew at about 18%. We expect the number to grow higher in this quarter.

Coming back to your question on the claims experience, you’re right. For some companies this was an issue last year. I believe the regulator actually asked them to reopen their claims and pay more subsequently. That happened for a few companies, not for us. We had paid whatever we believe is delivered and that was fine with — in that sense. I think of course we’ve taken is that the entire journey of claims has to be, you know, as much as possible on our [Indecipherable] to increase engagement and service experience. What we’re seeing is increasingly in the cashless is always relatively done to us, but even reimbursement claims with that’s a corporates, we are seeing almost 50% of the reimbursement claim coming through the app now and we believe the service experience is significantly superior. And that’s been the approach that we’ve taken in terms of the claims experience.

What we also watch is the number of complaints of customers and we track all complaints on whether there we reputed the claim, do the customer goes to an ombudsman and when it goes to an ombudsman on a court, what is our winning ratio? So we track all claims which we deny for what we believe are valid reasons. Do we end up losing those cases in the court? So we track all losses till that end and our experience in all of that has been quite positive. Our win-loss ratio in the legal courts and ombudsman is very high.

Nidhesh — Investec — Analyst

Sure, sir. One follow on motor insurance. Motor will be — is it right to expect that we have been losing market share in the new vehicle while probably we have been gaining market share on the renewal book, given the change in strategy which we articulated last quarter?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

To some extent, yes. I mean if you look at our new market share, it is lower than what we were last year, while Gopal give you the mix because overall new vehicle sales has been higher. Given the strategy that we articulated, given the overall cost of — in some of these channels, we are kind of — we are kind of calibrating the book and our share in new has come down a little bit, in private cars, but CV we’ve gained, in two-wheeler we’ve largely held up. This was in line with what we talked about in April.

Nidhesh — Investec — Analyst

Yeah. Thank you, sir. Thank you. That’s it from my side.

Bhargav Dasgupta — Managing Director & Chief Executive Officer

Thanks, Nidhesh.

Operator

Thank you. [Operator Instructions] The next question is from the line of Dipanjan Ghosh from Citi. Please go ahead.

Dipanjan Ghosh — Citi — Analyst

Am I audible?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

Yeah, we can hear you Dipanjan.

Dipanjan Ghosh — Citi — Analyst

Sir, just one question from my side. On the group employer-employee health insurance policies, earlier — historically we have seen for both Lombard and the industry, which will be on the higher side and probably the pricing on the large corporate — higher than the SME side. Sir, just wanted to get some sense of how things are kind of turning out in that respect, how the pricing is and how our SME mix has been changed within that overall book out?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

Dipanjan, I think one of the changes that we are seeing on the group health side is we are seeing at least with all the players we are seeing a bit more disciplined coming in. Obviously, last year’s losses have hurt the industry. We are seeing some discipline coming in. One of the things that we had talked about last year from the July quarter onwards, we had talked about the fact that we had been increasing premium for life by about 15%. But we have seen continued retention of our of our customers given our service proportion that we had. That story continues. Even this year we are seeing a roughly about 15% premium — per life premium increase, which should help in terms of the loss ratios. The other point to keep in mind is in group health, the cost of distribution is very minimal. But we, for us, because we do a lot of business directly. So overall combined, even if the loss ratios in the low 90s, the combined works out well for us.

Dipanjan Ghosh — Citi — Analyst

Sure. And just a follow-up on that, is there a metric that you track on how much of group customers have you been able to cross-sell or is there — is that even a focus area?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

It is a focus area. So if you look at the approach to cross-sell was largely triggered by the IL TakeCare app that we talked about two years back. So what we’re seeing is that almost close to 50% of the employees of our corporates are downloading the app. And that number is increasing quarter-on-quarter. We are seeing them using the app and give the point — the data about them filing reimbursement claims through the app. And our thought processes as you get more engagement, we will then look at cross selling, and it’s only last year that we started the sales process on that app.

The sales numbers on a month-on-month basis is growing quite well. If you look at the growth in the IL TakeCare app download, I’ll give you numbers from Q2 to Q3 to Q4 to Q1 this year on the group segment. In Q2 last year, about 38% of our employees in the group — empolyees of group that we had ensured they would have taken taken the IL TakeCare download, that number has moved to over 40%. And I give the number in terms of the usage of those apps. The sales in the cross sells numbers are picking up month-on-month as we speak. For this month the total sales on that app is roughly about — for this quarter, the sales that we’ve achieved on that app is about 10 crores.

Dipanjan Ghosh — Citi — Analyst

Okay, thank you. All the best.

Operator

Thank you. Next question is from the line of Shreya Shivani from CLSA India. Please go ahead.

Shreya Shivani — CLSA India — Analyst

Hi, thank you for the opportunity. Sir, I have two questions. First, I think I missed your explanation on why the loss ratios in crop surprisingly better, like 63% versus historically we’ve always seen like 100 plus percent ratio. First is that. And second, it’s a bit more technical here, but I just wanted to get a clarity on the unexpired risk reserve. So, for FY22 the unexpired risk reserve also includes an adjustment for the merger, the impact of the merger, around 10 billion on that 80 billion of URR that you have.

So when I — but in the P&L that adjustment doesn’t flow. In the P&L where you have between the net earned premium and net written premium, there the change in reserve — change in URR doesn’t include that impact. So I just wanted to understand in Bharti AXA, how is the reserving methodology, is it different from ICICI Lombard and then should I — when I build my future numbers, should I take the reserving, how should I take the reserving going ahead like right now your URR is at around 59% to 60% of your net gross premiums, how will it be going ahead, will it largely be the same or anyway Bharti AXA is not a very big chunk of the gross figures, but just some clarity on that?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

One, Shreya, the second question first. I think as I kind of explained so far as unexpired risk reserve is concerned, it’s purely a function of earning the premiums over the policy contract, so that is pretty much similar whether it is for ICICI Lombard or whether it is for the incoming company, Bharti AXA. Hence to that extent, there is no difference in methodology or approaches in which earnings were done by both the companies. Second, in terms of for you to model what is it that URR could be as a percentage of net premium, honestly very difficult for me to kind of give you a number for the simple reason as I said, if you look at, for example, this particular quarter, which was in response to one of the other questions, the growth in revenues for us was almost close to about 28%, 29%.

The growth in earned premium were — I mean, maybe the change in earned premium was only about 10%. That’s primarily because as we said quarter one last year growth was relatively muted, growth has come back to us in Q1 this year. So obviously you will see, let’s say, relatively — relative lower contribution of earned premium coming in from the policies that we’ve written in the last year and the ones that we have written on an incremental growth in quarter one of this year will start to play out as we speak, which I mentioned over the next three or four quarters, so that’s one.

Second, also — I mean over the next three quarters for the year, it depends on what kind of growth that we are able to exhibit in terms of businesses from different segments. That will also be a function of how the URR as a percentage of net premium could kind of play out. So very difficult to give a point number. But as I said, it’s nothing but just earning of the premiums over the contract period. Predominantly I would say a large part of our contracts are annual in nature. I mean, barring some of the long-term policies that we may issue, which is not a very large proportion of our overall numbers, but given the fact that the large majority of the policy that we are writing our annual contracts, I think to that extent it depends on at what point of time we see growth getting exhibited and the earnings will happen corresponding with therefore.

A better thing to look for will be more maybe, which is what we keep saying, I think look at it more from an absolute final underwriting outcome in terms of the combined ratios or maybe the loss ratios, which is kind of factors in both the element of earnings that has been done for the risk that has been underwritten and corresponding to that particular risk, which has been earned, what has been the claim experience therefore. I think that could be a better measure to kind of look for across different segments rather than just looking at only unexpired risk reserve or independent basis. So that’s one in response to your unexpected reserve question.

On the first question of yours in terms of crop portfolio has exhibited a relatively lower loss ratio is, as we keep saying generally quarters will always have aberrations in different lines of businesses in terms of loss experiences. And in the past if you recollect the approach that we have followed particularly on crop has been that we obviously, given the fact that we don’t have complete information on the claim position, we tend to reserve conservatively on a no profit, no loss basis, however, factoring in for the cost of reinsurance protection that we take. As and when maybe you have evidences of claim getting factored in appropriately in terms of loss experience, we tend to kind of actualize those numbers.

So hence to that extent you will always find in, let’s say, in some quarters when the claim experiences are getting actualized, you will possibly see a loss ratios which is relatively lower than what you would have seen at the time when we estimated the loss experience, so which is why in Q1 in see the loss ratios on crop at maybe at about 65%. But secondly, I think when you look at the crop earned premium for this quarter is just about 8 crores, 9 crores. So hence from an absolute numbers standpoint, it does not have a material impact to the overall numbers for the quarter. So principally the crop book that Bharti AXA has written while we have provided higher earlier, in reality is looking like a better book than what we had provided for. But the impact into the aggregate P&L is not material.

Operator

Thank you. Shreya, I request you to come back in the question queue for a follow-up question. Thank you. The next question is from the line of Prakhar Sharma from Jefferies India. Please go ahead.

Prakhar Sharma — Jefferies India — Analyst

Thank you. So, just a broader level question in terms of the direction of combined ratio and return on equity, will the acquisition of Bharti AXA you had identified some areas where you can have some cost efficiencies, etc. So our over the next two years or so, what in your view will be the direction of these two line items and what could be the critical assumption that you are building in towards improving return on equity from about 15% which used to be plus 20% and within that the combined ratio, which FY21 was a good year and 99%, 100%, but now we are 104%. So if you could just give some direction over the next two years where should we be expecting. Thank you.

Bhargav Dasgupta — Managing Director & Chief Executive Officer

So, Prakhar, in line with what we said, you know, simply because of the merger, we would have ended up with 104%, 105%. We saw the synergy benefits of roughly 200 crores that we anticipate for this year. We said we will reinvest that back and hence we had said at the beginning of this year that our combined ratio will be elevated above our normal 100, 101 number that we had over the last two years. Elevated means it will be in this ballpark that you are seeing now and over the next two years we hope to bring it down gradually. We don’t expect the number to go below 100 in this two-year period, but the trend line would be gradual reduction.

At the same time the focus for us as we’ve been saying is that we want to continue to grow some of these businesses where we are investing, particularly in health and digital, and some of the other areas in the technology side that we are investing. That is something that we want to continue to focus on. What it translates to and because health business is relatively lower ROE than corporate business, it translates to ROE number which is in the high teens. That’s what we think we will be able to deliver over the next — over these periods, over the next two years.

Prakhar Sharma — Jefferies India — Analyst

Got it. Thank you.

Operator

Thank you. The next question is from the line of Sanketh Godha from Spark Capital Advisors. Please go ahead.

Sanketh Godha — Spark Capital Advisors — Analyst

Yes, thank you for the opportunity. I have two questions, one, if you can’t give the breakup of health loss ratio broken down into group, health — retail health and PA. So just wanted to understand which segments drove the improvement in the loss ratios compared to the previous quarter. And second question was with respect to the commercial vehicle, we had a year-end target to achieve a 25% of the total book to be commercial vehicle, which we seem to have achieved the first quarter itself. So how do we see this business, CV as a book — will become a meaningful part, whether it will go beyond 25% by the end of the year and whether it is new led or renewal led is the part which I wanted to understand [Indecipherable].

Bhargav Dasgupta — Managing Director & Chief Executive Officer

For the first one, Sanketh, I think in so far as the health split on the loss ratios are concerned between corporate and the retail indemnity book, the corporate loss ratios for this quarter stands at about 91% and on the retail indemnity book the loss ratio is at about 78%. This, if you look at vis-a-vis last year, honestly, it will not be a relative comparison because that was the year where we had those impact of COVID losses, both on the corporate book as well as on the retail indemnity book. But the numbers what I gave you is for the current quarter one of this year.

Sanketh Godha — Spark Capital Advisors — Analyst

As a — the retail health growth the sort 78% look little higher compared to even we have a your contribution to be entire pie, so just wanted to understand what led to that little increase because last year fourth quarter, we had some 60% kind of a loss ratio.

Bhargav Dasgupta — Managing Director & Chief Executive Officer

So Sanketh as we keep saying that again I will give — maybe repeating this point, quarterly loss ratios has got many elements attached to it and therefore to that extent one may not necessarily be representative of what loss experiences for the book that we’re underwriting. So hence to that extent comparing a Q4 number with, let’s say, Q1 of this year, may not be like to like comparison. I think a better thing will be to start looking at loss experiences over annual cycles, which will be far more better reflection of the portfolio that that one is underwriting. So that’s one. The second and more important thing is if you recollect even what we had spoken during our annual earnings call in April, we did indicate that possibly particularly in this quarter one, one could possibly see some still increase in non-COVID health intimations, that’s something we are continuing to see.

In this quarter we did exhibit relatively heightened number of claim intimations which has happened on the non-COVID health front. The question for us is whether is it again just bunch up of cases which has happened in quarter one, or is this trend line likely to be more structural in terms of intimations to continue in the next few quarters. So we’ll wait for couple of — maybe couple of particularly in quarter two, we will observe how the intimations are happening in so far as non-COVID health claims are concerned, and two, even on the ACS front, I think we have seen maybe slight increase in the average claim sizes relative to what we had seen in the earlier period. That again is something that we are doing a watch to see whether is it more structural or is there — we could possibly see let’s say, maybe reduction as we look at the subsequent quarters. So these are things that we will have to kind of watch out for and maybe we will be able to come back with a better estimate of what direction the loss ratios could take.

But in so far as the portfolio that we’re underwriting, as we explained I think we are looking at writing a book on the retail indemnity side, which from a steady state standpoint both new plus renewal put together, we would want to see the portfolio running with the loss ratio in the range of 65% to 70%.

Sanketh Godha — Spark Capital Advisors — Analyst

Got it. On the CV question?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

Yeah, on the CV, we believe our range will remain in the 20s. We reached about 24% odd in this quarter, but the range will remain in the 20s, that’s the plan.

Sanketh Godha — Spark Capital Advisors — Analyst

But it will be new led or renewal led?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

Sorry?

Sanketh Godha — Spark Capital Advisors — Analyst

It will be new business led or renewal business led?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

It’s a bit of both. We’ve gained in the new share also in the CV side, but the larger focus is on the agency channel. So it will be more old.

Sanketh Godha — Spark Capital Advisors — Analyst

Got it. And the last one, in the opex side — on the opex side, the sales and promotion expenditure which almost doubled year-on-year and maybe multiplied quarter-on-quarter, exactly what it the nature of these expenditures because we just wanted to understand it is more business expenditure than to get the higher business or how do we read about it, it should be linked to the topline incrementally every time?

Bhargav Dasgupta — Managing Director & Chief Executive Officer

So, Sanketh, every expense that we incur is in connection with sourcing of businesses and to that extent which is why I think when we look at the numbers we always look at it more from the management expense ratio standpoint, which is — which include both the commissions that we are required to kind of pay for the cost of doing business and at the same time, some of the other operating expenses, which we incur in order to kind of run the businesses on a sustainable basis.

So there if you look at the — which is why I gave out that management expense change or the range between the quarter one last year and quarter one this year, that vis-a-vis the growth in revenues, if you see just to kind of repeat, our topline has grown by about 28%, 29%. The management expense growth has been about 27.8%. So that’s the way we look at the numbers because end of the day whether it is commissions or whether it is, let’s say, operating expenses, all of them go into, let’s say, cost of doing the business.

This will also include maybe some of the investments that we are doing particularly let’s say on the digital side, for example, when we are required to do a lot of marketing and other related promotional efforts, those also get into these sales promotion related costs, so hence the better way to look at it is more the expense ratio numbers, which is the management expense ratio numbers rather than looking at the line item on a standalone basis.

Operator

Thank you very much. Ladies and gentlemen, we’ll take that as the last question. I will now hand the conference over to the management for closing comments.

Bhargav Dasgupta — Managing Director & Chief Executive Officer

Well, thank you. Thank you guys for joining in, it’s pretty late in the day and we are happy to take any questions that you may have subsequently. Look forward to meeting you during the quarter. Thank you, bye-bye.

Gopal Balachandran — Chief Financial Officer & Chief Risk Officer

Thank you so much.

Operator

[Operator Closing Remarks]