SBI LIFE INSURANCE CO LTD (SBILIFE) Q1 FY23 Earnings Concall Transcript

SBI LIFE INSURANCE CO LTD (NSE:SBILIFE) Q1 FY23 Earnings Concall dated Jul. 28, 2022

Corporate Participants:

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Sangramjit Sarangi — President & Chief Financial Officer

Analysts:

Dhaval — DSP Investment Managers — Analyst

Manas Modi — BNP Securities — Analyst

Sanketh Godha — Spark Capital Advisors — Analyst

Unidentified Participant — — Analyst

Shyam Srinivasan — Goldman Sachs — Analyst

Adarsh Parasrampuria — `CLS — Analyst

Avinash Singh — Emkay Global — Analyst

Unidentified Speaker —

Neeraj Toshniwal — UBS — Analyst

Madhukar Ladha — Elara Capital — Analyst

Deepika Mundra — JPMorgan — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to Q1 FY ’23 Earnings Conference Call of SBI Life Insurance Company Limited. [Operator Instructions] [Operator Instructions]

I now hand the conference over to Mr. Mahesh Kumar Sharma, MD and CEO, SBI Life Insurance Company Limited. Thank you, and over to you, Mr. Sharma.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes. Thank you very much. Good evening, everyone, and we hardly welcome you all to the results update call of SBI Life Insurance for the quarter ended June 30, 2022. An update on financial results can be accessed on our website as well, as well as under the sale of Bombay Stock Experience. Along with me, I have Sangramjit Sarangi, President and CFO; Ravi Fisher, President Operations and IT; Abhijit Gulanikar, President, Business Strategy; SuganDubal, CRO; Prithesh Chobei appointed Actuary; and Smita Verma, SVP, Finance and Investor Relations.

Now let me give from key highlights for this quarter ended 30th June 2022. New business premium registered a growth of 67% year-on-year and stands at 55.9 billion leading to a private market leadership. Individual [Indecipherable] premium stands at 34.3 billion with a strong growth of 87% and private market share of 24.5%. Gross written premium stands at 113.5 billion, growth of 35%. Production new business premium grew by 63% to seven billion. Profit after tax stands at 2.6 billion, with an 18% growth over corresponding quarter last year.

Value of new business is 838 billion, registering a strong growth of 130% over 3.8 billion in June 2021. And the VNB margin is at 30.4%, which is an improvement of 55 basis points over 23.7% in June ’21. We have aligned the value of new business and VNB margin for quarter ended 30th June 2021 in line with the 31st March 2022 disclosures. [Indecipherable] management grew by 13% to 2.63 trillion. Robust solvency ratio of 2.21 against regulatory event of 1.5. I would also like to highlight on a few key initiatives taken by the company.

Considering and keeping the pace with customer needs, we have launched SDL mark annuity plus. It offers a comprehensive range of ability with an option of deferred and SPO. It is due to broaden our reach as we live tied up with [Indecipherable] running back leading [Indecipherable]. We have also signed an agreement with major fintech renewed by PhonePay Booking Services Limited to the agile with changing customer behavior. With this, we have successfully delivered customer-centric profitable growth in this quarter as well.

We will update you on each of the key elements in detail. let me start in the period being one of the five focus areas of the company, individual new business has grown to 34.3 billion, with a growth of 87% year-on-year. Single premium contribution is 28% of the individual new business figure, which is mainly attributed to growth in individual annuity product. The company gained private market share by 59 basis points to 24.5%.

Our [Indecipherable] retail new business premium is stand at 25.8 billion with a growth of 86% and private market leadership of 24% having improvement of 11 basis points over the corresponding quarter last year. Also, group new business premium stands at 21.6 billion with a growth of 43%. Having said that, we have collected total new business premium of 55.9 billion, registering private market share of 21.9%. The radial premium grew by 13% to 57.6 billion which accounts for 51% of the gross written premiums.

To sum up, gross written premiums stand at 113.5 billion with a growth of 35%. Total APE stands at 29 billion, registering a growth of 80%. Out of this, individual AP stands at 26.1 billion with a growth of 87%. During the quarter ended June 30, 2022, totaled 4.14 lakhs [Indecipherable] new policy issue and registered a growth of 61% over the quarter ended June 30, 2021. Individual business, some assured registered a growth of 52% over the corresponding quarter last year as compared 6% to at private industry level. Considering the adverse impact of COVID-19 in Q1 FY ’22, followed by a strong performance in subsequent quarters of FY ’22.

We expect a steady growth in our performance over the coming quarters at the end of financial year 2023 on a strong healthy growth. Coming to the product mix, we are happy to report that the company has seen strong growth across all product segments. Our guaranteed nonpar sales products are contributing 23% of visual using this period. And on a total APE basis, this contributes 28%. Nonaguaranteed product new business has registered a growth of [Indecipherable] Y-o-Y, mainly due to the new business contribution of Smart Platina Plus, a new product which we launched in March last year of INR6.1 billion in the quarter ended June 30, 2022.

This product was launched in March, and have seen a strong traction is in the premium mainly due to the product engines high accepting in the market. [Indecipherable] has remained one of the flagship segments for the company. Individual unit business is at 30.6 billion, which constitutes 51% of business predates showed a growth of 42%. Individual production is at two billion register a growth of 55%. Group production stands at 4.9 billion with a growth of 66%.

Credit life new business premium has grown by 23% that stands at INR4.1 billion. On APE basis, production cost was 11% of new business has registered a growth of 46%. [Indecipherable] business is at 6.5 billion and contributes 12% of new business premium. Annuity and pension underwriting by the company is 11.6 billion, a growth of 7% over quarter ended 30th June 2021. Group fund management business is at 15.2 billion with a growth of 93%.

On our distribution partners, we have a strength of more than 54,000 CIS. RRD Bancassurance business contributes a share of 55% and grew 107% in individual new business premium and on individual APE basis, it stands at 17.4 billion with a growth of 100%. Agency, another strong channel registered new business premium growth of 50% and contributed 17% in new business periods. As [Indecipherable] APE stands with a growth of 64%. As of June 30, 2022, grew the total of age stands at one lakh 61,923.

There is improvement of 61% in the ag productivity levels on individual NBP basis as compared to the corresponding quarter last year and greater use of technology is assisting in better engagement in the entire value chain from recruitment and trading through to lead generation, sales and customer service. During the quarter, other channels [Indecipherable] grew by 82% which constitutes direct corporate digits, brokers, online and web aggregators. So this grew by 82% in terms of initial new business premium by [Indecipherable] in real AP.

Production will be a premium to other tariffs registered growth of 23%. Partnerships like Indian Bank, JucoBank, Sapinda, Bank, Panjabi [Indecipherable] Bank were [Indecipherable] group of 25% overall. These partnerships have started contributing 3% of the dials. On profitability, the company’s profit after tax for the quarter ended 30 June 2022, stands at 2.6 billion with an 18% growth Y-o-Y. Our solvency remains strong at to 2.21% on June 20, 20.

Value of new business is 8.8 billion with a growth of 130% Y-o-Y as is 38 billion in the corresponding quarter last year. VNB margin is at 30.4% vis-a-vis 23.7% in Q1 FY ’22, with an improvement of 665 basis points. Growth in [Indecipherable] margin is fueled by significant move is the [Indecipherable] growth and change in product mix with predominantly non-par guaranteed savings segment growth. With our growth targets and product mix shift, we expect to maintain the healthy VNB growth rate. On operational efficiency, opex ratio reduced to 6.6% for the quarter ended 30th June 2022 from 7.2% for the quarter ended June 30, 2021.

Our total cost ratio stands at 11.2% for the quarter ended 30 June 2022, vis-a-vis 10.5% for the same quarter last year. With respect to persistency on individual [Indecipherable] and limited premium paying policy, 13 month persistency stands at 85.6%. Company registered a significant improvement in [Indecipherable] 403 basis points with a fair growth in almost all the cohorts.

As mentioned in the opening remarks [Indecipherable] management change at 2.8 billion as of June 30, 2022, having growth of 30% compared to the last year same quarter. The company continues efficient use of technology for simplification of first with 99% of individual being submitted digitally. 40% of individual proposals are processed through automated underwriting.

To conclude, we are focused on striving ahead against all out by building a robust value system and foundation that are among of multiple forces, including our investors, customers, distributors, and our own people and other stakeholders. As we move forward, digitalization and automation will remain the core of enjoying customer satisfaction. We continue to aim to a sustainable and profitable growth in the long term.

Thank you very much, and we are now happy to take any questions that you may have.

Questions and Answers:

Operator

[Operator Instructions] First question from the line of from Dhaval DSP Investment Managers.

Dhaval — DSP Investment Managers — Analyst

Congratulations on strong numbers. I just had a couple of questions. First is relating to the non-par segment. So we’ve seen very strong growth this quarter. I mean, if you look at like FY ’22, we did about 1,700 crores of new business premium already in 1Q, we did about close to 800 crores. I just wanted to understand this product mix shift that we see, do you see it sustaining throughout FY ’22? Like do you see far more traction of smart Patina for the rest of the year as well? Any thoughts, comments around that.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes, so this is a product which we found was customer driven is a product mix customers want it. our Platina Assure, Smart Platina assure, which we launched earlier also was doing very well. And this is a brand where you have income. So that income product we felt that we didn’t have in our booking and we introduced that. And the customers have taken very good traction. I think going forward also, there will be good traction for this, and therefore, I’m sure that there will be more not for Platina being sold going forward.

Dhaval — DSP Investment Managers — Analyst

And sir, what’s the margin differential between company margin and this non-par segment margin? Like you mentioned in the presentation that a large part of the margin shift that you’ve seen is driven by product mix.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

We don’t want to go into exact numbers. We don’t give out exact numbers. But then the idea is that it is definitely very margin accretive. So it is already there.

Dhaval — DSP Investment Managers — Analyst

And sir, the second question is around the assumption — operating assumption change. You mentioned in the margin side, the margin that there have been some negative operating assumption change. If you could just specify what drove that, that would be useful.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

We have not made any change in our operating [Indecipherable] unchanged as we have used in the 31st March 2022. So if we have given this walk from the last June to this June, with March changes are coming, which is part of the number exercise that we always do clearing the segment, this is mainly an account [Indecipherable] that we explained in the March quarter.

Dhaval — DSP Investment Managers — Analyst

And sir, the last question is relating to the reserves that we have towards the COVID-19 pandemic. I mean how do you see this evolving at the end of the year? Like do we see write-backs in the fourth quarter, if any or we’ll use during the course of the year? How do we intend to utilize these results?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

And we see the crystal ball for this because last two years or so, we had made some provisions for COVID. There was one wave, second wave, third wave. So we really don’t know how the whole thing is going to pan out. As far as I can see, there is a very strong vaccination program in the country, which is very successful. Our hospitalization and mortality rates have come down hugely because of this pandemic — which were attributed to the pandemic.

So naturally speaking, if the trend continues, yes, this whole thing could be actually super clear and we could actually write it back. But right now, I can’t predict. So with two years experience of the pandemic, we have actually kept the reserve I think it’s a very prudent way of doing things going forward. In any case, I think one of the things that every insurance company will do going forward, and I think every company in the world is going to do is going to keep a slightly higher pandemic reserve than we were doing earlier.

So earlier in ’20, when the pandemic [Indecipherable], we had a reserve of 42 crores or something. I don’t remember the exact number right now, but I think it was around 42 crores. Today, we know from experience that we need a much higher amount than actually when the pandemic strike. So even with that point of view, I think we need to keep a higher amount as a result. So I think that is how I look at it.

Operator

The next question is from the line of Manas Modi from BNP Securities.

Manas Modi — BNP Securities — Analyst

Congrats on a great set of numbers. So first question is, again, sir, on the traditional savings products and particularly through the banker channel. So I think banker has generally been heavily skewed towards the unit product and this quarter that has been kind of now that the mix has moved towards this traditional savings.

So is this a strategy that we are going to see through the banker channel going ahead also? Or if the sentiment related to the unit comes back, in general, we are hearing that there is some amount of weakness for the unit product in the industry. So if the sentiment comes back, then will the mix revert to the earlier kind of set of numbers? If you could throw some light on that.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes. So I think my answer will be what I have been saying quarter after quarter for the last many quarters, that we don’t actually determine the consumer behavior. So this is a product which we have launched, which have got accessing the public. I think there are circumstances which are encouraging people to go for guaranteed return products. But [Indecipherable] is also growing. So if you can see vis-a-vis last year same quarter, our unit has grown by 42%.

It’s not a small risk even though there was a base effect. But still even if you bring down the base effect. You will see that there was some growth over what would have been the unit number. So that way, I don’t think that we would like to fix the customer preference. And right now, as we see there is a good demand. And there is this product probably people were probably waiting for from our table, and that is why you see this good — very good demand.

And not only in banker channel. I think you’re reading it wrong. You’re really on we have the same kind of demand in the agencies and the channel is very different from the banker channel [Indecipherable]. So I don’t think there’s anything to do with the bank customer or an asset. People are finding it a useful good product, good returns, and that is what I think is helping the product.

Manas Modi — BNP Securities — Analyst

Sure, sir. helpful. Sir, in terms of [Indecipherable] also with a similar commentary because for what we have been seeing is that [Indecipherable] It was slightly debit in the past few quarters, and it has now come back very strongly this quarter. So has there been any new product introduction in par or…

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Par, I think there was a shift from par to non-par. I think in the last couple of years, you would have seen that as our non-par Platina grew in the popularity I think we had some loss in the par because I think the whole market is probably related. So right now, we have a very good. We have very good products. I think it will be a question of the customer exercising their choice.

Our trading of our own [Indecipherable] does help them to refresh some of the products that are already stable. And sometimes what [Indecipherable] that you have a hit of and the [Indecipherable] this is something which I — by customer would like very much. and then it starts clicking. So this is — I think that is all there is to it. But I — from what we see from the ground, and we have asked these questions very pointedly to our marketing people, and we find that there is more requirement for par. And going forward, I think this will also grow slightly more, at least, at least from this level, it is going to grow.

Manas Modi — BNP Securities — Analyst

Sir, what is the share of the new product in non-par out of the total nonpar APE?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

30?

Sangramjit Sarangi — President & Chief Financial Officer

30%

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes, 30%.

Manas Modi — BNP Securities — Analyst

Okay, sir. And a couple of data points, if you could, sir, share, generally, you have shared this in the past call. So the split of group protection under group credit life and group term life as well as for individual protection under [Indecipherable] if you can give the next.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

I refer that we see the same cause right now, I’d have to actually look for it in the back that I have. So can I send it across to you offline?

Manas Modi — BNP Securities — Analyst

Yes, thank you.

Operator

The next question is from the line of Adarsh Parasrampuria from CLSA. We’ll move to the next question, which is from the line of for now.

Sanketh Godha — Spark Capital Advisors — Analyst

[Indecipherable] 30% [Indecipherable]. Right, sir?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes.

Sanketh Godha — Spark Capital Advisors — Analyst

Yes, [Indecipherable] to 60% [Indecipherable] because it’s [Indecipherable] distribution center, if you do [Indecipherable]. So now is [Indecipherable] of the total decline. But from a full point of view, do you expect this 28.3 percentage to moderate to like 50 to [Indecipherable] percentage for the [Indecipherable].

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes. I don’t know looking at the trends, I think that it should be around this level, say, 20, 25% to 30%, I think that would be my own inclusion on this. And as far as the margins are concerned, I think it’s almost — it’s all comparable. It’s not very [Indecipherable].

Sanketh Godha — Spark Capital Advisors — Analyst

[Indecipherable] business because it’s flat year-on-year, both in AP terms and Indian new business terms. — if it’s more a slowdown in the [Indecipherable].

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Annuity has grown by I would tie by 3% — 3%. But overall, I would see the process is there and overall pension and [Indecipherable] business has grown by [Indecipherable]. So pension and annuity business has grown by 18%. There is definitely a focus out there. But then like I said, some of this will depend a lot on the customer demand also.

Sanketh Godha — Spark Capital Advisors — Analyst

And finally, sir, [Indecipherable] to, because when you look at the other peers, units has struggled for everyone because the market [Indecipherable], everyone has struggled to grow the [Indecipherable] business. In our case, it seems to be still decently very good. So sir, just wanted to understand your… [Indecipherable] Business depends a lot on the returns that you give to your customers. It doesn’t depend on whether you are not trying to actually sell units to people who don’t want it. As we sell not to people who understand the product. And therefore, they also understand however they need to wait for and also sometimes the market fluctuation will be there. And they have options to choose the [Indecipherable] fund, including debt, equity and balance. So there are so many kinds of funds that we have. At each of those — so we see some shifts going from one to the other or [Indecipherable]. But I have to say that — right now, our equity portion has grown rather than debt over some — over the last couple of years or so. Going forward, I don’t know how much that will sustain because market has not been very good. But then if people understand market, then maybe this is a good time to invest also.

Unidentified Participant — — Analyst

But [Indecipherable] how much portion would be [Indecipherable]?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Pending on a little bit check or pension. We’ll come back to that [Indecipherable]. So we like the product with that figure.

Sanketh Godha — Spark Capital Advisors — Analyst

And sir, last one, in the non par, which is 30% it is an income plan right now, given it’s a new launch, whether it might become higher contributor in the entire non-par file going ahead, given the traction will be said, in this particular product and we believe that income plans how generally have a better margin profit than the enrollment plan. So 30 percentage, how do you see it to improve going ahead or you could remain at the [Indecipherable]?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Was very difficult to predict prospect if you see the demand, then maybe it will actually grow a little more on that product than on some of the other products that we have. Having said that, all other products also have — our feel would be a — so in spite of the very strong growth, if you look at the growth figures in the segment that it is not only this product which has grown, but this is a new product. And obviously, the latent demand would get satisfied earlier than later. And then after that, it will probably settle into a factor. I really cannot predict the factor. But I suppose there will be some more growth in this product going forward.

Sanketh Godha — Spark Capital Advisors — Analyst

How much of the nonpar backed by [Indecipherable] and how much is backed by [Indecipherable]?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

So we have both the products, partially trade bonds and [Indecipherable]. And we are doing a hedging depending on the kind of requirement that we have and our own policy of hedging. So we are in line with our policy of hedging.

Operator

Next question is from the line of Shyam Srinivasan from Goldman Sachs.

Shyam Srinivasan — Goldman Sachs — Analyst

Sir, just first one on the protection business. I think retail protection, we have seen 50%, 60% growth. So this continues to be a slightly outlier to some of the peers who are seeing decline. So if you could just walk us through some of the dynamics around what is driving us market share gains in ROP. Are we just harvesting our own patient — our own customer pool, or are we able to compete effectively with the external customers as well? So some thoughts or color will be helpful, sir.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

So if you look at our production growth, we have had a decent production growth in our agency channel also. Add that if you want to talk about competition, that is competition. You have to go in the market and get it. The deal is there. And our group, if you look at the requirement in India for production, there is a huge protection gap. So almost exhibiting these production. Now our growth in production is 47%. And that growth comes out of selling good products — so we’ve been saying this earlier also.

I think the earlier question used to be, why are the others able to sell more? Why are you not selling as much as the other and things like that. So we always used to say that we have a steady growth because we are here the customers need, and we are fulfilling that date. At the same question is to defer the term with return of premium. And there was a halo around short-term insurance. You can see what has happened to road-term insurance.

There are some things which are not something which probably posted on people. So this team is something which is an ideal product for India. And I think we have — it’s a very sweet spot where people understand this product — and people also understand that if they survive, they get something back, okay? These are two things which help to spread insurance awareness also in the market. So I think you should see that rather than being outlier, we are a pioneer in doing this [Indecipherable] insurance in a sensible manner.

Shyam Srinivasan — Goldman Sachs — Analyst

Sir, second question is on guaranteed. I think you called it out as 23% of total APE, right? So it seems to be relative to your own past, that number has jumped up quite a bit quarter-on-quarter, even year-on-year, right? So what is the comfort level in the sense that you talked about your hedging, you said that it’s under [Indecipherable] policy. But we can’t write unlimited number of such policies, maybe there is unlimited amount, I don’t know.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

So that is the main thing. So see, we are very comfortable as far as our position right now is, okay? And as far as we are able to do that and customer demand is there. I think we’ll continue with this approach. First, of course, the recalibration will come in terms of pricing. So what happens is that because the interest rates grow, the market expectation will grow when you reprice the product, then it depends on how much you reprice rate, whether you are in line with the market, whether more than the market, less than the market is repricing. So that will always determine what kind of growth count. So these things will be determined by the divide, what the customer needs and what we can [Indecipherable] do going forward.

Shyam Srinivasan — Goldman Sachs — Analyst

Sir, last question on this is a bit technical. So average duration on this portfolio, you look at your presentation seems to suggest a very 20-plus years kind of duration. Is that right, or you have a limited pay, which actually makes the average duration on the portfolio lower?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

This is a limited pay — so becomes on the product [Indecipherable] income plan and seven papers [Indecipherable] plan. So we will.

Operator

[Operator Instructions] The next question is from the line of Adarsh Parasrampuria from CLS.

Adarsh Parasrampuria — `CLS — Analyst

Sir I have a follow-up on the previous question. is the constraint on what you can say, given that you are seeing demand will be on hedging? So sir, the question was a follow-up on the previous one. So your — you’ve had a spectacular result, a lot of it driven by the mix change. The only constraint are always for every player is the hedging. And since you believe that a lot of these momentum that you are seeing can continue, it will really help all of us, if you could, in a little bit more detail, explain your hedging policy. And because it will make your margin outlook a lot more sustainable if there is a very effective hedging policy on this.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Sure. So what happens is — what are you hedging against? So we are hedging against change in the interest rate, okay? So what is the period that you need to hedge for? The period up to which you are uncertain about the interest, okay? So [Indecipherable] will come at a future point of time, and at that time, you don’t know what is the return you’re going to get, and that is what you are hedging.

So seeing there is visibility, let’s say, in the next year, two years or whatever, at any given point of time, the kind of visibility that we have, we would be comfortably directly for that portfolio. And anything beyond that, what will happen is that we’ll have to wait and watch what are the inflows and what is the rate at that point of time. So then instead of were on working, we hedge that. So that is exactly what we are doing right now. I don’t know if that gives you the clarity that you’re looking for.

Sangramjit Sarangi — President & Chief Financial Officer

What we are seeing is other for future of four years, three onwards, whatever are the expected premium is slow. Majority of the nodes are fixed. We will not be able to share subjective, but majority includes [Indecipherable]

Adarsh Parasrampuria — `CLS — Analyst

Sir, if you could just throw some light on what’s the premium paying terms in most of these policies, like what you’ve sold this 800 crores, approximately a ballpark number of what the premium paying term is, are these likely five to seven years, are these mostly longer product?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Seven to 10 years.

Adarsh Parasrampuria — `CLS — Analyst

Sir, now coming to the second question, obviously, if you believe you can deliver similar momentum or in the same vicinity. Maybe about six months back, you have guided to 30% margin over a three year period, and we have like fifth quarter or just starting FY ’24 and your margins are north [Indecipherable] and if you sustain this product mix, then obviously, the margins look sustainable. So I just wanted to understand how you are looking at it, how the Board is looking at it because this is a phenomenal jump in margins. And just wanted to understand how sustainable it looks to us.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

The margin is not something we are chasing per se. We are looking at the bigger picture. We need to have the value of the business go up we need to have very easy growth. So that is what will show that we are growing as a company, and we are doing — going in the right direction. As margin is one of those factors, so margin — I will not be stuck on a particular number for the margin because going forward, if I sell more of some of the other products, for example, units, if I sell slightly more of [Indecipherable] then the margins can slightly come down from this level also.

But then the value that I deliver will continue to grow because we are looking at good growth going forward, upwards of 25% growth in premiums. And I think that is something which we think is steal as we see it now. We have done extremely well the last couple of years, given that there was a time a we had virtually 0 business in some of the — at least for weeks, we had some much lesser business.

So we think that we will be able to sustain that. Nothing is unlimited. But if you look at the potential that you have in India, it’s human the potential that you have for insurance issues almost 82% of the people are not covered to the extent that is required, the production. And if you look at the coverage of insurance to GDP, 3.2%. So the scope is what — so it literally actually, the whole business can grow to anything from here.

Operator

The next question is from the line of Avinash Singh from Emkay Global.

Avinash Singh — Emkay Global — Analyst

A couple of questions. Firstly, on your accounting profit. I mean coming from that last year’s base when there was kind of a since COVID delta [Indecipherable] the profit accounting terms of course not a key number, but looks a bit muted. I mean, is that largely an impact of higher earning business strain because of the same product mix?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

You’ve got it on the button.

Avinash Singh — Emkay Global — Analyst

And the second, in terms of your distribution, I mean, of course, you have typically a very gradual branch contract record and kind of sustainable. Now we have close to 1,000 branches. And of course, your largest bank distributor is only been almost across India. So now I mean in terms of branch addition now you are done, are you going to stop or your own branch addition will also continue at the same pace you have been doing for the last couple of years?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

We have been growing that in a very — what you call it, sensible [Indecipherable] say, you look at the potential that is available at any areas which we have not covered earlier, where we think there is good potential or any area that has got very good potential and we have an adequate staff or representation out there. So that is — those are the places that we do — and I think we will continue to look at it in the same fashion. We have never had to open branches at that closer.

So we do have a very good approach to the whole thing. We do a very scientific analysis of the kind of business that is available and then we grow that. So the brand network also, I think, at least as of now into the near term or even the midterm, foreseeable future, I don’t think we are going to actually stop expansion. So especially but you can see the numbers are not huge. So we probably had every year, and that is, I think, very, very sustainable.

Avinash Singh — Emkay Global — Analyst

And one data keeping. I mean what sort of run rate currently your individual term you’re seeing on [Indecipherable] platform? I mean is some momentum continuing or has sort of for the moment come to hold?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes, there is a good traction on the [Indecipherable] platform. And this year, we have taken a good target to sort the ILS also. So that’s something which we will continue to because of [Indecipherable].

Avinash Singh — Emkay Global — Analyst

Sir, what’s the current prorate on protection side? I mean retail products on unit platform?

Unidentified Speaker —

Currently, all our we are only selling protection at

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Right now, you were protection on — our app, we have one product that is the production to our production.

Avinash Singh — Emkay Global — Analyst

Yes. What is the premium are any sort of number? Premium, yes. Moment it is very small, but we are eyeing for a big number, along with other product products which is introduced in this platform. So in this year, we are expecting to jump as far as the platform is concerned.

Operator

[Operator Instructions] Next question is from the line of Neeraj Toshniwal from UBS.

Neeraj Toshniwal — UBS — Analyst

Just wanted to know, last year, in August, we the repricing of both nonprofit and the term insurance plan and we told that another year won’t be changing anything especially for the non-par protection. Where are we in terms of repricing of the products now, we already have launched a new variant of the non-receiving wanted your thoughts on are we looking to maintain our spreads there with the rising interest rates and the LPDs going up, how we are thinking about it?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

So like I said, for the non-car savings products, our pricing will depend on the market conditions or the interest rate. So going forward also, we keep a look at the interest rate movement and we do want be getting part of it on the market.

Sangramjit Sarangi — President & Chief Financial Officer

Just to add that is that we see a very active pricing for all our [Indecipherable] of the interest rate movement and our total transition on which we’re getting the forwarding on the [Indecipherable]. Accordingly, we are actively repricing looking to the market scenario. And our objective is to optimize the were cost of the customer and [Indecipherable].

And in terms of [Indecipherable] maintain the spread that we’re getting to today. So [Indecipherable] we’re able to maintain this expense and able to hang this investor. I think we’ll continue to that. So difficult to comment that when we do that, we have can pricing so one by one. So as and when we quite [Indecipherable].

Neeraj Toshniwal — UBS — Analyst

And more core the protection will be helpful as an to understand, because now the whole industry is now doing similar to what you are doing as competition really increased or it doesn’t affect us because our de I don’t think it affects us, but because we are expanding the market, we are going and selling. These are products which people, new people who are not covered by insurance or buy.

And if they see value in the product, we will continue to buy that. And we will keep looking at the pricing to make sure that it is sustainable for us, and it is viable for the customer. And last question on Youla, I want to understand do we have done well in terms of Y-o-Y growth when it comes from [Indecipherable]. So where do we think the lip kind of settling for the full year, given overall industry struggling, we have done B2B better, but still it will be helpful because.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

I think it should be [Indecipherable] 55 [Indecipherable] it should be somewhere around 55% % around — so it could be, say, somewhere around 50% to 60%. But I really — my own feeling is that it will certainly come around to 50% to 60%.

Operator

The next question is from the line of Madhukar Ladha from Elara Capital.

Madhukar Ladha — Elara Capital — Analyst

Congratulations on an exceptional set of numbers. I have a few questions Sorry, I joined in a little late on the call, so I may have missed this if it’s only discussed. First, do you have some sort of limit for how much nonpar you could write? I understand that there is a lot of demand. But internally, have you sort of kept the limit for yourself that of my entire product mix, this is the extent to which I’m okay writing nonpar? Second, there is a change in assumptions which has impacted margins by about 50 basis points.

What is that? Third, on the individual annuity business, can you — so my calculation suggests that we’ve done about 60 crores of there. Can you just verify that? And finally, the next two quarters are — were very strong sort of last year. So now the base is very high for us going into the balance part of there. And we are hearing some talk about rural slowdown. Maybe you can give us some context, some commentary around the demand environment and how confident you are of growing on this base for the balance part of the year?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes. So first, let me talk about your reliant as you have the correct figure. I think it’s about 51 crores on media annuity. And as far as the limit to the [Indecipherable] is concerned, we don’t have an internal limit. But my own sense is that we would be around this kind of level maybe 25% to 30% of our portfolio because I do see the other parts also growing.

So all of it is growing. When you come back to growth, then yes, as of now, we — obviously, there’s a base effect to all these numbers. So I don’t think we’ll continue to grow at 87% or something in some of the things — but our target is about 25-plus percent and then after that price limit. So 25% is what we will aim to have and my sense is that we should get there.

Sangramjit Sarangi — President & Chief Financial Officer

Yes, coming to the [Indecipherable] I asked the — there is no change in assumption in this quarter. In fact, you see was as the assumption change that we have done in a month of March by [Indecipherable]. If you’re showing this walk from December to — sorry, June to [Indecipherable] June, this impact is coming from, but there is no change in [Indecipherable]. And the changes that we have done in the March is mainly like out of insurance, I think some of the things [Indecipherable], nothing else.

Madhukar Ladha — Elara Capital — Analyst

Understood. So 25% on last base…

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

So that is what we are targeting here for the full year.

Operator

Yes. Thank you. SP1 The next question is from the line of Deepika Mundra from JPMorgan.

Deepika Mundra — JPMorgan — Analyst

Congratulations on a great quarter. So just want to understand as the product revenue margin, is there any product where the margin is changing, particularly on non-par? Are you seeing significant benefit of higher spreads, which is helping the margin other than just the mix increasing?

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

So like we said, we’ll try to optimize the prices so that we also have a sustainable product and the customer also gets value. So I don’t see an and that side of growth.

Operator

As there no further questions in the participants, I now hand the conference over to Mr. Mahesh Sharma for his closing comments.

Mahesh Kumar Sharma — Managing Director and Chief Executive Officer

Yes. So I’d like to say that pays much for supporting us — and we hope to continue to deliver all those expectations that we have from all of you and from our customers. And going forward in this year, if we have a COVID free year and if there are no other major disruptions, which I simply hope there would be, I think we’ll be able to come up with a good performance by the end of the year. One thing, I’d like to thank all the stakeholders, all our friends here for — on the conference for listening patiently to us. Have a great evening and wish you a very safe and healthy future. Thank you.

Operator

[Operator Closing Remarks]