Company strategy

Continue to focus on long term living benefits & enhance the existing product portfolio

Post pandemic, the financial goals of customers have undergone some recalibration with the need for protection and savings becoming more evident. Guarantees with long term benefits are taking centre stage for life insurance. This coupled with the fact that life expectancy in India is increasing has made us more focused on fulfilling customers’ goals for the longer term. The growing need for income and retirement planning has created a demand for secure investment options as well.

In each segment of products, Bajaj Allianz Life Insurance Company Limited (BALIC) offers superior benefits with long term planning options. The Company offers guaranteed returns or market-linked returns depending on customers’ needs.

The Company will continue to invest and innovate in products to address the ‘long term’ needs of the customers while continuing to maintain a balanced product mix which provides maximum value to the three key stakeholders i.e. Customers, Distributors and Shareholders.

At BALIC, ‘Customer Obsession’ is an organization wide program, that unifies all customer initiatives across the business to strengthen BALIC’s differentiation in the industry with the aim to make customer experience an integral part of the business. The focus is to drive customer first approach across the organization and inculcate the culture of first time right, creating a WOW experience, digitization, and simplified customer journeys.

The program is divided into 4 components, namely, VOC (Voice of Customer), VOIC (Voice of Internal Customer), Culture Building and Priority Initiatives:
- VOC – Customer Experience Indicators is the Customer First Tool across all customer facing channels to drive Zero Detractor Way of working and First Time Fix culture. Under this initiative, the Company is closely monitoring the Transactional Net Promoter Score (TNPS) and Relationship Net Promoter Score (RNPS)
- VOIC is being measured to understand ‘how can the Company enhance employee experience’. Under KPI (Key Performance Indicators) alignment approach, the organization is promoting customer first culture by adding TNPS and RNPS as a measure of success in the employee goal sheet
- Culture Building primarily focuses on driving the customer centric mindset and rewarding those who go extra mile for the customers
- Under Priority Initiatives, the Company has identified 11 priority tracks across the organization and aligned critical LRP (Long range Plans) and Non-LRP projects under these tracks. In each project the Company has defined business and customer impacting metrics and included TNPS as a measure of success. BALIC is also driving cross functional collaboration to keep these projects aligned around shared business goals & objectives
With an aspiration to provide customers with the ‘Best in Class’ product suite, the Company launched the Assured Wealth Goal product which is one of the most comprehensive and competitive guaranteed income plans in the industry.

Other key product offerings are:
- Guaranteed Pension Goal (Industry first – option to pay regularly and retire with a lifelong guaranteed annuity)
- Flexi Income Goal (participating income/endowment plan)
- Future Wealth Gain (market-linked product with loyalty additions and fund boosters)
- Smart Wealth Goal (market-linked product with the return of allocation and mortality charges)
- Guaranteed Income Goal & POS Goal Suraksha (non-participating guaranteed product)
- Smart Protect Goal (term plan with coverage up to 99 years of age and comprehensive add-on options)
These products have helped us cater to different customers’ segments and their needs at various stages of life. The Company will maintain the focus to innovate and launch feature-rich customer- centric products.
Continue with centricity in the Mass affluent

In continuation to the endeavour to be the brand of choice for higher income retail customer segments, the Company has aligned themselves towards gaining mind share of mass affluent and above category of customers.

The strategic orientation has started showing positive results, with a share of mass affluent and above customer’s mix moving up from 54% in FY2021 to 60% in FY2022. In terms of regular premium average ticket size, at the overall level BALIC is at ~78K in FY2022 v/s ~58K in FY2021. The distribution set up has enabled us to cater to various customer segments, for instance, variabalisation and verticalization of agency, new white spaces for BALIC Direct, and a diverse range of partners like new age partner Banks, SFBs, Brokers and Web Aggregators, all catering to specific target segments of customers.

Analytics serves as an important backbone behind all the initiatives which are driven by data to target the right set of customers with the right offering depending on the life stage and various life goals.

Along with it, the focus has been on offering the best in class products for all ticket sizes to cater to the different needs of the customers. The Company has embarked on a customer obsession journey, where all processes & projects are being evaluated through customers’ lens with customer-facing metrics.
Continue to Invest in new retail engines of growth

Traditionally, the Company has been an Agency dominated company with limited retail business contribution from non-agency channels. The Company embarked on a journey to scale up the alternate channels by focusing on:
- creating a robust Proprietary Sales Force (BALIC Direct) to invest in upselling and cross selling opportunities to the existing customers
- strengthen Institutional Business (IB) with various corporate distributors (Banks, brokers, web-aggregators)
The Company has tied up with several partners as Corporate Agents in the recent past. The key recent partnerships include Axis Bank, IDFC First Bank, Ratnakar Bank Limited (RBL Bank), India Post Payment Bank, and Karur Vysya Bank. alternate retail channels (non-agency) now comprise Institutional Business and BALIC Direct channels which contribute ~60% of the retail business.
Improved quality of business which includes improvement in persistency and reduced surrenders, early claims and customer grievance

There has been a significant focus and rigorous efforts, to build a sustainable and good quality renewal book, arrest the surrenders and improve customer experience. Below are the few key initiatives undertaken for each category:
- Persistency: The following key initiatives are undertaken to improve persistency:
  - Promoting auto-payment registrations via various digital enablement to ensure renewal premium collection
  - Leveraging the latest technologies to offer self-servicing and digital payments thereby creating a seamless payment experience through various new-age avenues e.g. Online payment, Wallets, UPI (Unified Payments Interface) & Cards
  - Use of analytical Due and Lapse propensity models to drive renewal collections with optimum efforts
  - Driving distribution ownership and accountability on persistency by linking 13th & 25th month persistency rates with the sales KPIs (Key Performance Indicators)
  - Pre due renewal reminder calling for specific IB sub-channels to drive renewal collections
  - Contextual nudges around renewal & Auto-pay in customer service journeys
  - Enhanced coverage of customers located in remote areas via branch operations service executives to offer doorstep service
  - Making auto-payment registrations mandatory for policies on non-annual modes
  - Focused communication campaign drives for renewal & persistency e.g. Traditional Bonus, LTCG benefit on ULIPs, Season specific communication, etc.
  - Leveraging voice BOT calling to maximize coverage for renewal reminders
- Surrender retention
  - Regular training intervention on objection handling for branch operations team for effective retention
  - Surrender Retention room is instituted in eligible offices to facilitate customer’s discussion, which includes emphasis on policy benefits and staying invested
  - LAIP (Loan Against Insurance Policies) option (as per product conditions) is offered to customers as a retention tool to fulfil their temporary financial needs – ₹ 156 cr of LAIP for FY2022 as compared to ₹ 112 cr in FY2021
  - Central Surrender Retention desk is managed by a specialized team equipped with product knowledge, which communicates the benefits to retain customers
  - Relationship Model team (Virtual Account Management) proactively connects with a focused base to enhance customer experience and hence drive surrender retention
  - Customer engagement in the form of Life Goals based communications carrying policy benefits are triggered to customers to arrest surrender
- Early claims
  - Use of predictive analytics at pre-issuance (Early Death Claims Model EDC 2.0) and post- issuance by the FPU (Fraud Prevention Unit) team
  - Created in-house Early Warning Signals to identify high-risk policies at T+1
  - Conduct field verification on suspicious cases pre and post-issuance and at the claims stage too
  - Created strong ground intelligence and monitoring and surveillance unit keeping a constant watch on the business
  - Strong collaboration with Insurance Information Bureau (IIB) for identifying Fraudulent customers proactively who have been identified as fraudulent with peer insurance companies
  - Leveraging technologies like Face Recognition to identify Impersonation cases proactively
  - Creating awareness among distributors on types of frauds and Do’s and Don’ts through Classroom trainings, Anti-Fraud Communications, and Anti-Fraud Sessions at the onboarding stage
  - Continue to conduct police training sessions and file FIRs and police complaints against the fraud entities creating a fraud deterrence on the field
- Customer Grievances
  - With Robust RCA (Root Cause Analysis) driven process put in place to identify and route service related opportunities through re-engineering and continuous improvement, customer complaints have minimized year on year and BALIC has been able to control grievance ratio at one of the industry best levels
  - Action oriented governance matrix has helped drive proactive due diligence, management and redressal of customer escalations related to unfair business practices at an organization level
  Above listed efforts have led to improvement in the persistency, growth in renewals and reduction in grievances.
Digital by default

At BALIC, the technology team in collaboration with various internal and external teams successfully implemented several projects in order to strengthen the digital mode of sales and servicing and ensuring smooth collaboration among various stakeholders during the time of social distancing and “Work from Home” (WFH). This has prompted BALIC to offer digitally enabled omni-channel systems and better online functionalities.

Major digital initiatives rolled out during the year are:
- CCM (Customer Communication Management)– 800+ communication templates made live for customers and other stakeholders. Integration with OPUS (policy admin system) for faster and reliable communication 25Corporate Overview Statutory Reports Financial Statements
- LMS-INSTab Journey Integration: Sales team can directly switch to INSTab from the Lead Management system (LMS) to continue the NB login journey without any discontinuity
- BOTs – WhatsApp bots have been rolled out to empower Sales managers from Direct business and Insurance Managers from Agency –Insurance Manager (IM) vertical
- Claims Risk Model: An analytical module integrated with OPUS that helps in identifying the risk of fraud on notified early claims
- Revamped Digital Applications: 7 existing critical Digital applications are revamped to modern micro service based architecture
- Geo tagging in Lead Management system(LMS): Now LMS is upgraded to capture the Latitude- longitude (co-ordinates) of the user based on his/her location. This would enable sales to carry out multiple activities with much more accuracy and efficiency
- Self-Lead journey ‘Swayam’ – New initiative enabling BALIC’s regional accountants (RAs) to get self-generated leads to be pushed via the Bank’s Branch Head, Branch Operations Head & Branch Sales Manager(BSM) using ‘Swayam’ tagging
- INSTab replica: A clone of INSTab (new business app) that is now used for hands-on training of new joinees across all Sales verticals
Technological adoption of micro services and containerization is now getting widely used to create a unified service catalogue and allows agents and banca partners & other alternate channels to issue policies via direct or integrated channels seamlessly and securely.

Performance overview: FY2022

New business growth and market ranking

In terms of Individual Rated New Business (IRNB) premium, BALIC witnessed strong growth of 49% vs. industry growth of 16% and private industry growth of 22%. BALIC registered the fastest growth among the top 10 private insurers during FY2022 and maintained its 6th rank for FY2022. In terms of new business premiums, BALIC registered a new business growth of 45% for FY2022 vs. industry growth of 13% and private industry growth of 23 %. In terms of new business premium, the Company improved it’s rank to 4th position.
Renewal premium

With continued focus and various initiatives; the Company registered for FY2022 renewal premium of ₹ 6,991 crore as compared to ₹ 5,712 crore for FY2021; growth of 22%.
Persistency

Continued focus on renewal collections supported by various initiatives to improve persistency such as driving auto-payment registrations, promoting digital payments, greater distribution ownership and various other initiatives have led to 22% growth compared to the previous year period.

Note: The persistency ratios for the year ended March 31, 2022 have been calculated for the policies issued in the March to February period of the relevant years. e.g.: the 13 th month persistency for the current year is calculated for the policies issued from March 2020 to February 2021
Claim Settlement Ratio

Continues to focus on improving the claim settlement ratio year on year. BALIC registered improvement in retail claims settlement ratio from 98.48% in FY2021 to 99.02% in FY2022 and improvement in group claims settlement ratio from 99.80% in FY2021 to 99.82% in FY2022.
Continual efforts in reducing grievances

Though complaints have been increased marginally by 2% from 1,887 in FY2021 to 1,916 in FY2022; the grievance ratio (grievances per 10,000 new policies issued) reduced from 44 in FY2021 to 40 in FY2022 (reduced by 9%).
Profitability – Profit after Tax and New Business Value/Margin

The Company earned a profit after tax of ₹ 324 crore during FY2022 as compared to the profit of ₹ 580 crore for FY2021 primarily due to higher Covid-19 related claims and new business strain basis higher business growth. The segmental performance for the Company is summarized below:

The New Business Value/Margin (NBV/NBM), which is the net present value of future profits for the Shareholders’ from the new business written during the year. NBV/NBM reflects the management’s view of the profitability of a product over its life measured at the point of sale. The Company’s net NBV was at ₹ 621 crore in FY2022 as against ₹ 361 crore for FY2021, a growth of 72% and Net NBM improved to 14.2% from 12.3%.
Market Consistent Embedded value

The Company has also been disclosing the Market Consistent Embedded Value (MCEV), which is a measure of the present value of Shareholders’ interests in the earnings distributable from the assets allocated to the business after sufficient allowance for the aggregate risks in the business. MCEV reflects the value of in-force business along with the Shareholders’ net-worth. MCEV is not a reflection of the market value of the Company. MCEV is computed in line with the Actuarial Practice Standard 10 issued by the Institute of Actuaries of India. The MCEV of the Company as at 31 March 2022 stood at ₹ 17,249 crore, up from ₹ 15,534 crore as at 31 March 2021.
Strong Solvency and Assets Under Management (AUM)

The Company remains well capitalized and maintained very high levels of solvency throughout the year. The solvency ratio as at March 31, 2022 stood at 581% (March 31, 2021: 666%) which is significantly in excess of the regulatory required limit of 150%.

The AUM for the Company (including unclaimed funds) grew by 16% to end at ₹ 85,623 crore at March 31, 2022, increased from ₹ 73,773 crore at March 31, 2021.
Brand performance

A few key initiatives are as under:
- Launched a multi-media (TV, Print and Outdoor) campaign “Yeh Bhi Sahi Hai” aimed at promoting Guaranteed return plans highlighting the need to diversify one’s portfolio with guaranteed return products and invest for key Life Goals like child education in Guaranteed return plans from Bajaj Allianz Life
- Launched a unique campaign - Superstar After Retirement - to engage with customers over the age of 45 years who has the passion and skill to be part of a music video under the guidance of key Bollywood stars. 5,500+ entries were received
- Launched “ULIP EK, Fayde Anek” campaign to promote the various unique advantages of investing in ULIPs like long term growth, flexibilities and life cover
- Got associated with “ThinkStartup” for the Youth Ideathon - India’s largest festival of ideas with an aim to develop a spirit of innovation and entrepreneurship amongst school students
- Bajaj Allianz Life celebrated Compliance Awareness Week to re-iterate the needs and importance of compliance and strengthening the compliance culture in the Company
Awards Won
- BALIC was certified by Great Place to Work® India and also won Kincentric Best Employer Award 2021 during the year
- ‘Highest Growth’ award at the ASSOCHAM 13th Global Insurance E-Summit & Awards for the overall growth trajectory of the company
- ‘Domestic Life Insurer of the Year- India’ at Insurance Asia Awards 2021
- Revolutionary platform Smart Assist won various accolades during the year. These include:
  - Digital Technology Senate Award 2021, under the ‘Enterprise Mobility’ category
  - Insurance Asia Awards 2021 under ‘Insurance Initiative of the Year-India’
  - Tech Leadership Awards 2021 under ‘Business Innovation – Best Covid-19 Response’ and ‘Best in Future of Digital Innovation’
  - IDC Future Enterprise Awards for India under ‘Best in Future of Customers and Consumers’
  - ET BFSI.com Excellence Awards 2021 under ‘Best Digital Customer Experience Initiative [Insurance]’
- Also won the following awards for its overall digital infrastructure
  - Tech Leadership Awards 2021 under ‘Best in Future for customers and consumers’
  - IDC Future Enterprise Awards under ‘Special Award for Digital Resiliency’
Internal control and its adequacy

The Company has in place adequate systems of internal control commensurate with its size and nature of business. This Internal Control architecture has been summarized below:

Board oversees the internal control governance structure. Head of Departments (HOD) ensures control activities are performed at all levels within their functions, at various stages within business processes, and over the technology environment.

Observations of statutory, internal and concurrent auditors are presented before the audit committee for corrective and preventive actions. A pre audit committee is in place to go through, in great detail, each aspect impacting the control environment. The Audit Committee deliberates upon auditors’ views on the adequacy of internal control systems and monitors the progress of open items through the action taken report. The risk management process identifies risks surrounding the Company’s activities. Risk management is integrated into the Company’s culture by way of an effective policy and a program led by the most senior management.

Departmental policies and procedures are an effective way to maintain a strong system of internal controls. All the departments have documented policies and procedures of critical processes in their respective functions and ensure operating level controls through clear delegation of authority and segregation of duties.

Further, the financial reporting control framework reasonably assures that the Company’s financial statements are reliable and prepared in compliance with the accounting standards as prescribed in the Companies Act, 2013, in accordance with the provisions of the Insurance Act, 1938 and the practices prevailing in the insurance industry in India.

Investment operations are subject to daily concurrent audit certification and an Investment Risk Management Systems (IRMS) audit once in two years. Any significant findings in the concurrent audit or IRMS audit are presented to the Audit Committee. The financials prepared are audited by joint statutory auditors and are reviewed by Audit Committee. They are also submitted to the Insurance Regulatory Development Authority of India (IRDAI). The Company has a Board approved fraud risk management policy.

The Board Audit Committee oversees the compliance framework of the Company. The Company has formulated various internal policies/ procedures and an employee code of conduct, which govern the day-to-day activities to ensure compliance. The compliance function disseminates the information regarding the relevant laws, regulations and circulars related to insurance and anti-money laundering to various functions. It also serves as a reference point for the staff of various functions for seeking clarifications on applicable laws, regulations and circulars issued by the regulatory authorities.

As required under the Companies Act 2013, Company has implemented Internal Financial Control (IFC) considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

Various other policies and committees support a robust internal control structure which includes the Whistle Blower policy, Ethics Committee and Claims Review Committee.
Risk exposure due to Covid-19 and mitigating strategies adopted

For employee’s safety and perspective, several measures continue in practice in Company premises since March 2020.
- Covid-19 Advisory and SOP for re-opening of offices, rostering guidelines, safety measures, Pan India Covid-19 hospitals information etc. (Digital Awareness), agile QR based online rostering, as per state government protocols
- Employee awareness on Covid-19 and safety measures in employee connect sessions through several leadership connect sessions – CEO Webinar in Managing Omicron Wave, E-Townhall by Top Management, decentralised E-Townhalls by GMs & leaders, Regional Business Councils by Top Management etc.
- Exclusive Leadership Connect with Pan India employees with CHRO (Chief Human Resources Officer), Head Legal & Compliance and FPU (Fraud Prevention Unit) addressing employee queries
- Strict adherence to safety measures at the workplace including wearing a mask, checking of Aarogya Setu status, maintaining social distance, sanitization supply while entering the office. Facilities like canteen, crèche, indoor sports arena remained closed. Entry to BALIC offices is allowed only if vaccinated with both the doses
- Daily monitoring and reporting of employee wellbeing, checking the status of Covid-19 positive cases within the Company, regular fumigation of offices, sensitize employees & their colleagues & updating them regularly on the nearby cases
- Continue to provide Covid-19 Care benefits to employees and their families. Roll out Family Assistance programme for family members of unfortunate colleagues the Company lost due to Covid-19 and support with financial aid, children education till graduation level and extended Mediclaim support for family members
- Provide Flexibility to employees (stress buster policy, WFH for working mothers, wellbeing solutions on physical, mental & emotional wellbeing, conducted webinars on Covid-19 and how to handle the pandemic) and launch of Customised wellness program – ENERGISE through online health assessment and further customised wellness interventions as per specific health zones
- Vaccination drives through vaccination centres at BALIC offices or hospital tie-ups or reimbursement facilities for employees, staff and family. Presently 99.60% of employees are vaccinated with both the doses
For more details, pertaining to risk, please refer to Management Report Section 8 for “Overall risk exposure and strategy adopted to mitigate the same”.
Material developments in Human Resources

As the future of work is being continuously redefined and Human Resources department in the Company continues to be positioned as a culture and change catalyst. The various roles as part of the culture and change anchor, the Company HR plays the role of a digital partner, talent driver and strategic advisor contributing to the overall business agenda.

A few of the key interventions are listed below:
- Internal Talent Mobility – Launch of UDAAN, for providing career opportunities to grow
- Continuous employee listening – Launch of quarterly employee survey VIBES for real time, frequent employee listening and actions, agile Covid-19 interventions for employees etc.
- Engaging leadership connects – E-Town halls, Regional Business Councils convened by Top Management towards driving Company focus areas as set in the long-range plans and new innovations within the Company
- LEAD R&R (Rewards and Recognition) architecture – launch of R&R, integrated with LEAD mindsets and behaviours, quarterly customised R&R by Top Management, regular conduct of UTSAV R&R celebrations as one team at a functional level
- Green Onboarding – Digital employee Onboarding through HR tech enablement for a seamless experience
- Employee Wellness – Launched Digital Wellbeing Coach towards holistic wellbeing of employees and their family through solutions related to physical, mental and emotional wellbeing. Including consultation with an external health coach and external certified counsellors
- Peer Learning – Continue Peer Learning & sharing through Knowledge Cafe
- Predict Index assessment – launched towards interview & selection of quality talent focus
- Conducted Talent Councils towards identification and development of leadership pipeline as per the robust Talent management framework and Succession Planning
- Customized Learning and development related to the Sales process, products, skills and behavioural training, including specialized training for first time managers, induction for new joiners etc.
- Mega virtual celebrations Pan India as one team to enhance employee motivation, morale and camaraderie. For example, Foundation Day Celebration, Annual Business Conventions and Annual Awards felicitations etc.
- On time and seamless Performance management and Rewards through quarterly bonus to incentives transition and annual rewards pay-outs