As you probably know Bajaj Finserv is the holding company under which there are threekey financial sector businesses: (i) lending through Bajaj Finance Ltd. (BFL) which isitself a listed company; (ii) general insurance under Bajaj Allianz General InsuranceCompany Ltd. or BAGIC; and (iii) life insurance under Bajaj Allianz Life InsuranceCompany Ltd. or BALIC. In addition there are wind-farm assets in Maharashtra with aninstalled capacity of 65.2 MW.
Let me briefly share with you the key achievements of your Company in FY2016 under BFLBAGIC and BALIC.
Lending: Bajaj Finance Ltd. (BFL)
Despite relatively sluggish credit demand across the country BFL has deliveredexcellent results and has emerged as one of the leading non-banking financial companies(NBFCs) of India. Here are some of the numbers:
Assets under management increased by 36% to Rs. 44229 crore.
Receivables under financing grew by 37% to Rs. 42756 crore.
Total income rose by 36% to Rs. 7384 crore.
Profit before tax was up by 45% to Rs. 1965 crore.
Profit after tax increased by 42% to Rs. 1279 crore.
Net non-performing assets (NPAs) was at 0.28% which is among the lowest inbanking and the NBFC industry.
Capital adequacy as on 31 March 2016 was 19.50% which was well above the RBInorms.
Bajaj Allianz General Insurance Company Ltd. (BAGIC)
BAGIC is a composite insurer offering various types of general insurance includingmotor marine health and various forms of corporate insurances. FY2016 was a tough yearfor the general insurance industry and BAGIC on account of unprecedented floods in TamilNadu especially at Chennai. BAGIC expeditiously settled over 6000 claims worth Rs. 164crore. After reinsurance the net pre-tax impact of this event on BAGICs results wasRs. 80 crore.
Despite this BAGIC has performed well as the results below show:
Gross written premium (GWP) for FY2016 was up by 11.3% to Rs. 5901 crore.
BAGIC maintained its market share at 6.7% excluding specialised and standalonehealth insurers.
In FY2016 BAGIC was ranked 2nd among all private sector general insurers interms of its top-line; and 1st in profits.
Net earned premium for FY2016 increased by 10% to Rs. 4224 crore.
8.4 million policies were issued in the year versus 7.3 million in FY2015.
Profit before tax was Rs. 771 crore marginally below the previous years.
Profit after tax was Rs. 564 crore which was slightly above that of FY2015.
Despite huge claims on account of the floods BAGICs solvency ratio was251% which was well above the regulatory mandate of 150%.
Return on average equity was 22.5%.
Bajaj Allianz Life Insurance Company Ltd. (BALIC)
BALICs growth has been positive though lower than the industry and privatesector growth rates. With savings rates being lower than the historical peaks growth hastended to favour bank-sponsored insurance companies who have a natural advantage ofbundling insurance with their loan and savings products through bancassurance.
Even so BALIC has performed creditably as the figures below show:
New business premium grew by 7% in FY2016 to Rs. 2885 crore.
BALIC was ranked 4th among private companies on the basis of new businesspremium thus being the largest non-bank promoted life insurer.
It maintained a healthy product mix on its individual new business premium with59% contributed by unit-linked premium and 41% by non-unit-linked business.
Gross written premium was Rs. 5897 crore.
Assets under management were stable at Rs. 44108 crore.
Shareholders profits after tax were stable at Rs. 879 crore.
Among the three key businesses of your Company it is clear that BFL has doneextraordinarily well continuing with the outstanding performance that it has beendelivering over the past few years. BAGIC has also done well growing by 12% in agenerally muted market. BALIC however faces some growth challenges and needs to dobetter which I hope it shall do in FY2017.
Thank you for your support.
24 May 2016