HDFC Standard Life Insurance Company Limited Nine Months ended Dec-2012 2012-13 This is the sole and exclusive property of HDFC Life
Performance Snapshot Revenue First Year premium higher by 15% vs PY de-growth of 17% Total premium growth* of 9% (PY 14%) Conservation ratio* at 78% (PY 80%) Ranked # 2 in private market share for 9M-FY13 Individual business market share at 17.2% (PY 15.2%) Indian GAAP Financials Overall surplus of ` 4.0 bn (PY 2.2 bn) Expense ratio* at 12.2% (PY 12.7%) of total premium AUM, NBM & Solvency Assets under management increased 41.9% on YoY basis NBM stood at 17.9% for individual business Solvency Ratio 219% as against a regulatory requirement of 150% * Since Q1-FY13, we stopped making an accrual for premium due but not received on unit-linked policies, based on directive from the regulator. Total premium growth, Conservation ratio and Expense ratio assume that this change has been done for previous years. Conservation ratio is for individual business. 2
Premium Income ` Bn 9M-Performance PY-12M Performance 57.6 2.9 31% 173% 65.9 1.5 14% -47% 70.3 0.9 7% -39% {9%} 90.0 5.9 29% 120% 102.0 2.1 13% -65% 31.8 40% 42.0 32% 44.6 6% {10%} 49.2 36% 63.4 29% 2.8-31% 5.7 105% 5.5-4% 5.9-5% 9.5 61% 20.1 24% 16.7-17% 19.2 15% 29.0 17% 26.9-7% 9M FY11 9M FY12 9M FY13 FY11 FY12 Total Premium Single Premium (Individual) Renewal Premium (Individual) Group Premium First Year Regular Premium (Individual) Robust growth in new business since Q3-FY12 over corresponding period last year (Q3 FY12: 3%, Q4 FY12: 15%, Q1 FY13: 17%, Q2 FY13: 7%, Q3 FY13: 22%) Positive growth in first year regular (15%) & renewal (10%) premium leading to overall growth of 9% Note: 1) Since Q1-FY13, we stopped making an accrual for premium due but not received on unit-linked policies, based on directive from the regulator. Figures in flower bracket represent growth numbers had this change been done for previous years. 2) After adjusting for change in accounting policy for unit-linked business, total reported premium growth would be 9% (9M-FY13), 14% (9M-FY12), 32% (9M-FY11), 13% (PY-FY12) and 29% (PY-FY 11). 3
Annualised Premium Equivalent(APE) ` Bn YOY Performance PY-12M Performance 30.0 25.0 20.0 15.0 12% 24% 17.2 17% 20.1 30% 10% -10% 38.0 33.0 28.0 11% 28.6-2% 27.9 50% 0% -50% 10.0 10.6 11.8 6.7 8.3-30% 23.0 18.0-100% 5.0-50% -150% 13.0 - H1 Q3 9M -70% 8.0 FY11 FY12-200% FY12 FY13 Growth FY11 FY12 Growth 30.0 30.0 25.0 24% APE 12% growth showing positive trends 17% 25.0 30% 12% 24% 17% 20.0 17.2 20.1 20.0 10% 20.1 17.2-10% 15.0 10.0 10.6 11.8 6.7 8.3 15.0 10.0-30% 11.8 10.6 8.3 6.7 5.0 Note: APE is for individual business 5.0-50% 4
Weighted Received Premia(WRP) Individual Growth 9M-Performance PY-12M Performance 25% 18% 15% 4% 1% 8% -9% -8% -8% -5% -18% -16% -34% 9M FY11 9M FY12 9M FY13-20% FY11-24% FY12 HDFC Life Growth Private Industry Growth Total Industry Growth 25% Outpaced the private industry consistently 15% Positive growth trend continues for the 5 consecutive quarters 4% 1% 8% -9% Source :IRDA -18% -16% 5
Market Share (WRP Individual) 9M-Performance PY-12M Performance 15.2% 17.2% 15.5% 12.2% 12.9% 5.9% 5.8% 6.2% 5.9% 5.7% 9M FY11 9M FY12 9M FY13 FY11 FY12 Private Industry Total Industry Consolidation & steady increase in the private market space continues Ranked #2 in 9M-FY13 amongst private insurance companies (Individual & Overall WRP) 12.9% During the last 2 years, private industry has ceded 12% market share to LIC (LIC market share increased from 52% in 9M-FY11 to 64% in 9M-FY13) 15.5% 5.9% 5.7% Source :IRDA 6
Distribution Mix 9M-Performance Tied Agency Broker Bancassurance Direct 3% 4% 5% PY-12M Performance Tied Agency Broker Bancassurance Direct 3% 4% 63% 74% 72% 65% 73% 1% 1% 33% 3% 7% 19% 16% 31% 4% 19% 9M FY11 9M FY12 9M FY13 FY11 FY12 Tied Agency Broker Bancassurance Direct New channels Broker & Direct increasing 3% their share 4% of APE 5% Tied Agency continues to face challenges in difficult business conditions in line with industry 63% We operate out of 451 offices across the country serving 74% over 939 cities 72% in India & a liaison office in Dubai 1% 33% The percentages are with reference to APE for individual business 3% 7% 19% 16% 7
Product Mix 9M-Performance ULIP Par Non Par PY-12M Performance ULIP Par Non Par 1% 1% 2% 11% 37% 39% 1% 1% 13% 43% 88% 62% 59% 86% 56% 9M FY11 9M FY12 9M FY13 FY11 FY12 Unit Linked Participating Non Participating Maintaining a balanced product mix Non par segment is picking up well and continues to grow with online term products forming a major share 1% 1% 2% 11% 37% 39% 88% 62% 59% The percentages are with reference to APE for individual business 8
Commission Ratio 9M-Performance PY-12M Performance Commission (% Premium Income) 9M FY11 9M FY12 9M FY13 Commission (% Premium Income) FY11 FY12 - First year premiums 12.5% 16.8% 17.6% - Renewal premiums 2.0% 1.7% 1.4% - Single premiums 0.8% 0.4% 0.3% - First year premiums 11.0% 15.8% - Renewal premiums 2.0% 1.6% - Single premiums 1.6% 0.4% Total 5.5% 5.4% 5.7% Total 5.3% 5.7% Change in commission percentage is in line with change in product mix After adjusting for change in accounting policy for unit-linked business, total Commission as a percentage to Premium Income for previous years would be 5.5% (9M-FY12), 5.7% (9M-FY11), 5.8% (PY-FY12) and 5.4% (PY-FY 11) 9
Operating Expenses ` Bn 9M-Performance PY-12M Performance 14.0 {19.1%} 30.0% 12.0 10.0 18.7% {12.7%} 12.4% 12.2% 20.0% 10.0% 20.0 18.0 16.0 16.0% 11.5% 30.0% 20.0% 10.0% 0.0% 14.0 8.0-10.0% 12.0 0.0% 6.0 4.0 10.8 8.2 8.6-20.0% -30.0% 10.0 8.0 6.0 14.4 11.7-10.0% -20.0% -30.0% 2.0-40.0% 4.0 2.0-40.0% - -50.0% - -50.0% 9M FY11 9M FY12 9M FY13 FY11 FY12 Operating expenses ratio kept under control even after supporting investments in new channels, technology, branch refurbishments and international business - After adjusting for change in accounting policy for unit-linked business, operating expenses/total reported premium ratio for previous years would be 12.7% (9M-FY12), 19.1% (9M-FY11), 11.7% (PY-FY12) and 16.3% (PY-FY 11) - Operating expenses exclude service tax 10
Conservation Ratio 100% 9M-Performance PY-12M Performance 90% Conservation Ratio (Individual Business)* 80% 70% 60% 50% 40% 30% 82% 80% 78% 80% 80% 20% 10% 0% 9M FY11 9M FY12 9M FY13 FY11 FY12 80% 13 th Month Persistency Ratio 70% 60% 50% 40% 30% 20% 10% 80% 82% 78% 81% 82% 0% 9M FY11 9M FY12 9M FY13 FY11 FY12 The drop in persistency ratio is in line with the industry trends Focus on channels, products and customer oriented initiatives have improved the persistency ratio in Q3 vs H1 * Conservation ratio for previous years has been reworked after adjusting for change in accounting policy for unit-linked business 11
Indian GAAP Results ` Bn 9M-Performance PY-12M Performance 5.0 4.0 4.0 0.4 4.0 3.8 0.2 3.0 2.0 2.2 0.3 3.0 3.0 2.0 2.5 1.0 - (2.5) 0.0 1.7 0.2 0.6 1.0 - (2.7) 0.4 1.1 (1.0) (2.4) (1.0) (1.7) (2.0) (0.1) (2.0) (1.4) (3.0) (3.0) (4.0) 9M FY11 9M FY12 9M FY13 (4.0) FY11 FY12 Shareholder A/c surplus Policyholders' A/c surplus Deficit (created)/reversed in Rev A/c 380 Indian GAAP results have improved due to back book generating sufficient profits that offset 330 the new business strain incurred on writing of new policies Deficit as of 31st March 2012 of ` 0.6 bn has been completely off-set by the surplus generated in the Policyholders A/c 280 230 180 130 238 60-60 80 30 100 92 45 0 9 16 7 31 12
Total Share Capital 30.0 ` Bn Capital 3.00 Shareholding Pattern HDFC Limited Individuals / ESOP Trust Standard Life 25.0 1.03 0.0 0.0 1.00 20.0-1.00 26.0% 15.0-3.00 10.0 20.7 21.6 21.6-5.00 1.6% 72.4% 5.0-7.00 0.0 9M FY11 9M FY12 9M FY13-9.00 0 Closing Capital Capital Infused during the period 3.00 HDFC Limited Individuals / ESOP Trust Standard Life 0 0 0 0.03 0.0 0.0 No additional capital introduced in the last 7 quarters -1.00 26.0% Solvency Ratio as at 31st Dec 2012 was 219% as against a regulatory requirement of 150% 1.00-3.00 0 19.7 21.6 21.6-5.00 1.6% 72.4% 0-7.00 0 H1 FY11 H1 FY12 H1 FY13-9.00 13
14 Assets Under Management 9M-Performance PY-12M Performance AUM in Rs bn Sensex Growth in AUM vs LY AUM in Rs bn Sensex Growth in AUM vs PY 400 350 300 38.6% 20,509 6.7% 41.9% 392 26,000 24,000 22,000 350 300 29.8% 21.7% 26,000 24,000 22,000 19,427 20,000 250 19,445 20,000 250 200 259 276 18,000 16,000 200 265 323 17,404 18,000 16,000 150 15,455 31st Dec 2010 31st Dec 2011 31st Dec 2012 14,000 150 31st Mar 2011 31st Mar 2012 14,000 Debt Equity Debt Equity 58% 51% 50% 54% 52% 42% 49% 50% 46% 48% 31st Dec 2010 31st Dec 2011 31st Dec 2012 31st Mar 2011 31st Mar 2012 Robust growth in assets under management
Assets Under Management ` Bn AUM Movements 11 69 Net Inflow vs. Market movements 265 265 276 276 323 323 392 392 33 38 36 1st March 31st 2011 March 31st 2011 Dec 31st 2011Dec 2011 31st March 31st 2012 March 31st 2012 Dec 31st 2012Dec 2012 (27) 9M FY 12 9M FY 13 Net Inflow Market Movements 33 38 36 15
Fund Performance (Since Inception) HDFCSL Returns Benchmark Returns 16.3% 13.7% 12.6% 9.2% 6.8% 5.4% 7.5% 4.2% Benchmarks: BSE 100 Growth Balanced Secured Opportunities 45% BSE-100 & 55% Crisil Composite Bond Index CRISIL Composite Bond Index CNX MIDCAP Index Delivered better results consistently compared to benchmarks Inception Dates: Growth Fund: January 02,2004 Balanced Fund: January 02,2004 Secured Fund: January 02,2004 Opportunities Fund: January 04,2010. Fund performance represented in Compounded Annual Growth Rate (CAGR) 16
17 Fund Performance (Last 1 year) HDFCSL Returns Benchmark Returns 39.2% 36.6% 31.6% 30.0% 20.6% 18.6% 11.1% 9.4% Benchmarks: BSE 100 Growth Balanced Secured Opportunities 45% BSE-100 & 55% Crisil Composite Bond Index CRISIL Composite Bond Index CNX MIDCAP Index
MCEV as at 30 th Sept 2012 ` Bn -0.7-3.7 Present Value of Future Prof its 53.0 42.6 Frictional Cost of Required Capital Cost of Non Hedgeable Risks 14.8 Shareholders Shareholders Adjusted Adjusted Networth worth 14.8 Present Value of Future profits Frictional Cost of Required + Value Capital of Inforce 38.2 Cost of Non Hedgeable Risks = MCEV 53.0 Market Consistent Embedded Value (MCEV) results are unaudited 18
Analysis of Change MCEV EV profit 4.8 ` Bn 0.6 1.0 0.3 Opening modeling, assumption and methodology changes 2.0 New business profits (before expense over-run)* -1.1 Acquisition expense overrun 2.0 Expected return on inforce Operating Variances Investment variances and change in economic assumptions 48.2 MCEV at 31st Mar 12 Notes to analysis of change: 3.8 Embedded value operating profit Opening modeling, assumptions and methodology changes: The models, assumptions and methodology are continuously refined and improved and the impact of these refinements is reflected in the opening changes. Expected return on inforce: This item reflects expected investment income on shareholder assets during the period, and reflects that future shareholder profits are now 1 year closer than at the start of the period. This positive item will occur in each MCEV period. Operating Variances: The Operating Variances capture the impact of the deviations of the actual claims, persistency and maintenance expense experience during the period from that assumed in the opening MCEV calculation. Investment variances and economic assumption changes: This reflects the impact due to the actual investment return being different from the expected returns and the impact from the change in the yield curve at the end of the period compared to the yield curve at the start of the period. 53.0 MCEV at 30th Sept 12 * New business profits pertain to Overall (Individual + Group) business 19
New Business Profits ` Bn 9M FY12 9M FY13 FY11 FY12 New business profits 1,2 2.7 3.6 5.4 4.8 New business APE 2 17.2 20.1 28.6 27.9 New business margin 1,2 15.6% 17.9% 18.8%* 17.2% 1 Based on loaded acquisition expenses 2 Margins and APE are shown for individual business only * FY11 had first 5 months of margins under product portfolio that existed in the pre charge cap regime. - Note: New business margin (after impact of acquisition expense overrun) for individual business is 10.5% (FY12) and 14.2% (FY11) 20
Organization agenda continues to be driven through five strategic themes 21 Leader in providing long term insurance solutions Set the industry standards by driving changes that encourage long term behaviour by all stakeholders & yield sustainable benefits Fortify & Diversify distribution channel mix Retain and grow existing distribution partners and win new relationships to de-risk business in the face of increasing competitive intensity Own select customer segments and product categories Select attractive customer segments, develop products based on needs of the segments and drive efforts & investments to these segments Deliver unique customer experience Improve customer experience & loyalty through offering best-in-class service standards across touch points Cost leadership across the delivery chain Run a profitable business through driving cost & productivity efficiencies across the value chain
22 Improvement in key indicators on the journey to becoming a leader in providing long term insurance solutions Leader in providing long term insurance solutions Acquire new customers Enhance policy term Balanced product mix Retain customers for the long term Number of policies grew by 24% in 9M- FY13 vs. 9M-FY12 Policy term enhanced to 12.3 years in 9M- FY13 vs. 11.1 years in 9M-FY12 Conventional products contributed 41% in 9M-FY13 vs. 38% in 9M-FY12 to individual premium Conservation ratio at 78% in 9M-FY13
23 Efforts to fortify and diversify channel mix that started in FY11 beginning to yield results Fortify & Diversify Channel Mix Fortify existing channels Diversify Channel Mix Segregated management structures Win new relationships EPI growth in bancassurance, broker and direct channels at 9M-FY13 milestone Direct sales & broker contribution in individual business increased to 12% in 9M-FY13 vs. 7% in 9M-FY12 Dedicated sales team structures for channels & its verticals Interventions to improve knowledge, skills and relationships Plug-and-Play toolkit for new partner acquisitions Ongoing program to attract new financial consultants Ratnakar Bank Ltd added as a new partner
24 Products launched in identified customer segments and steps taken to improve speed to market Own select customer segments and product categories Product development aligned to customer segments Integrated & faster NPD process Sales of online term product Click2Protect continue to grow Invest wise plan launched for the wisdom investor Launched pension plans and immediate annuity plans in December 2012, contributing 15% to APE within a month of launch New Product Development driven through an integrated Research, Product & Marketing structure to improve speed-to-market from concept to launch has been deployed Positioned to manage any product changes that would be rolled out in 2013 by regulator
25 Processes & teams aligned to offer a unique customer experience Deliver unique customer experience Faster Policy Issuance Right Advice & Need based selling Improve Customer Loyalty Continuous Improvement Point-of-Sale underwriting engine - Click2Buy used extensively across channels Emphasis on straight- throughprocessing based on LEAN principles Mobility devices tested Aim to ensure standardization of communication Need based analysis financial planning tool Dedicated loyalty channel Tele-sales Feet-on-street Branch Sales Growth continues to surpass traditional sales channels Servesresht program based on Lean Six Sigma methodology Governance driven through Service Excellence Council
26 Improvement in cost ratios in a difficult business environment Cost leadership across the delivery chain Higher profitability Optimize Capital Technology enabled business transformation NBM: 17.9% (9M-FY13) vs 15.6% (9M-FY12) No capital draw-down needed in the last 7 quarters System Integrator team on board for end-to-end technology transformation Customer impacting projects prioritized and business process reengineering underway
27 HDFC Life is well positioned to align and take advantage of the potential changes expected in the near future Market Polarization of market share in favour of large players with access to existing distribution Customer Higher alignment to brands that evoke trust Channel Bancassurance guidelines expected in Q1-FY14 Product Revised product guidelines are expected in Q4-FY13 and speed to market would be critical in the short term Process & Technology Key differentiator to improve productivity & reduce cost across the value chain given anticipated business environment challenges People Ability to attract talent likely to be restricted to select few insurers who deliver profitable, sustainable growth
Awards and Accolades CIO 100 Award for Enterprise Excellence Brand Slam Leadership Award by CMO Asia FAME Fabulous Achievement in Marketing Excellence Underwriting initiative of the year award by Asian Leadership Awards BestPrax Benchmark Award for Leadership Governance Best Private Life Insurer at CNBC TV18 Best Bank and Financial Institution Awards 2012 For more details about our Awards & Accolades, kindly refer our website at www.hdfclife.com 28
Awards and Accolades Best Companies to Work for 3 rd consecutive year Best Product Innovation Award 2012 for second consecutive year CISO Best Information Security practices Quality Excellence Award 2012 World HRD Congress Thought Leader Award 2012 Award for CEO with HR orientation & Talent Management For more details about our Awards & Accolades, kindly refer our website at www.hdfclife.com 29
Awards and Accolades Award for Innovative Service (Click 2 Buy) Outlook Money Award 2012 - Runners Up in the 'Best Life Insurer' Category Celent Model Insurer Asia Award Award for Innovation in Finance Porter Prize for Strategy & Product Innovation For more details about our Awards & Accolades, kindly refer our website at www.hdfclife.com 30
Appendix & Glossary 31
32 Appendix 1 : MCEV methodology and approach MCEV methodology The calculations of embedded value and new business profits have been performed using a market consistent embedded value ( MCEV ) approach. This approach differs from a traditional EV approach primarily in respect of the way in which allowance for risk is made. Within the traditional EV approach allowance is made for risk through an increase in the risk discount rate used to value future shareholder cash flows, whilst within the MCEV calculation explicit separate allowances are made for risk. Components of MCEV There are two components to the MCEV: 1. Shareholders adjusted net worth this component represents the market value of assets attributable to shareholders. This amount is derived from the Indian GAAP balance sheet adjusted to allow for assets on a market value basis, elimination of intangible assets and to allow for shareholder attributable assets or liabilities residing within the unit-linked and non Par policyholder funds. 2. Value of in-force this component represents the discounted value of after tax shareholder attributable cashflows expected on the business as at the valuation date. No allowance is made for future new business. This amount has been adjusted to deduct allowances for non hedgeable risk, frictional costs of required capital and the time value of financial options and guarantees.
33 Appendix 2 : Components of value of in force ( VIF ) Present value of future profits ( PVFP ) This component has been calculated by discounting the projected future after tax shareholder attributable cashflows expected to arise on in-force business at the valuation date. The cashflows have been projected on a deterministic basis using the company s best estimate view of future persistency, mortality and expenses. Future investment returns and the risk discount rate have been set equal to the returns from the risk free (government bond) yield curve at the closing balance sheet date. Time Value of Financial Options and Guarantees ("TVFOG") During FY 2010-11, the company carried out an extensive analysis of the profile of guarantees in its Par funds to identify the level of guaranteed benefits occurring at future time periods. The investment strategy of the Par funds was re-set to enable, where possible, hedging of these guaranteed benefits through cashflow matching of the guarantees with fixed interest assets. As a result, the company is of the view that there is no residual TVFOG associated with the Par funds. The cost associated with the investment guarantees in the Unit linked funds that have such guarantees has been allowed for in the MCEV calculations by modelling a cost equal to the additional guarantee charge levied on these funds. This allowance has been factored into the PVFP. Frictional Costs of Required Capital ( FCRC ) The VIF allows for a deduction in respect of the frictional costs of holding required capital ( FCRC ). Required capital has been set equal to the amount of shareholder attributable assets required to back local regulatory solvency requirements. The FCRC has been calculated as the discounted value of investment costs and taxes on shareholder attributable assets backing the required capital over the lifetime of the in-force business. Cost of non hedgeable risk ( CNHR ) The VIF incorporates an explicit deduction to allow for non hedgeable and non economic risks. The CNHR has been derived using a cost of capital approach and is calculated as the discounted value of an annual charge applied to projected risk bearing capital. The initial risk bearing capital has been calculated based on 99.5 th percentile stress events for non economic assumptions over a 1-year time horizon. This initial risk bearing capital has been updated to be based on the portfolio of business as at 31st March 2012. Projected risk bearing capital has been determined by running-off the initial risk bearing capital in line with the expected movement in the regulatory solvency margin requirement. 99.5 th Percentile stress events have been taken from the EU Solvency II, QIS 5 framework (previously QIS 4 framework). In order to allow for the greater risks associated with emerging markets, the risk bearing capital has been uplifted by 50%. The annual charge applied to the projected risk bearing capital is 4% p.a. The stress events, uplifts to NHR, run-off pattern for projected risk bearing capital and annual charge, are reviewed and modified if necessary on an annual basis.
34 Appendix 3 : Key assumptions underlying MCEV Expenses Maintenance expenses have been based on the latest expense analysis done in FY 2011-12 and are inflated at 7.5% per annum. These assumptions do not incorporate any allowance for future productivity improvements. Given the substantial changes in regulations, the Company has reviewed its cost structure, as a result of which the long-term acquisition expense levels have been calibrated at a level lower than that used earlier. These new long-term acquisition expense levels, as approved by the committee of Board in March 2012, have been incorporated into the pre-overrun margins disclosed for FY 2011-12 and H1 FY 2012-13. Economic assumptions The closing MCEV is calculated assuming projected earned and risk discount rates are both set equal to the risk free (government bond) yield curve at the closing balance sheet date. The new business profitability is calculated with similar assumptions, except that the yield curve at the opening balance sheet date is used. No allowance for any illiquidity premia is made within the earned rates, except for group credit spread products. Persistency Persistency assumptions are set by product line, payment mode and duration in-force, based on past experience and expectations of future experience. Separate decrements are modeled for lapses, surrenders, paid-ups and partial withdrawals. Tax assumptions Tax assumptions are based on interpretation of existing tax legislation, where appropriate supported by legal opinion. Profits attributable to shareholders are assumed to be taxed at 13.52% for Life business and 0% for Pensions business. Allowance is made within the tax computation for dividend offsets permitted under Section 2A of the Income Tax Act and for losses incurred within the Shareholder Fund. No allowance is made for future changes to taxation such as the Direct Tax Code. These changes will be incorporated only once materially enacted. It is expected that implementation of DTC in its current form will result in a material negative impact to the MCEV and new business profitability. Mortality and morbidity Mortality and morbidity assumptions are set by product line and are based on past experience.
35 Glossary Commission ratio Ratio of total commissions paid out on first year, single and renewal premiums to total premiums. Conservation ratio Ratio of current year renewal premiums to previous year s renewal premium and first year premium. APE (Annualized Premium Equivalent) The sum of annualized regular premiums and 10% weighted single premiums and single premium top-ups for individual business. First year premiums Regular premiums received during the year for all modes of payments chosen by the customer which are still in the first year. For example, for a monthly mode policy sold in March 2012, the first installment would fall into first year premiums for 2011-12 and the remaining 11 installments in the first year would be first year premiums in 2012-13. New business received premium The sum of first year premium and single premium. Operating expense All expenses of management excluding service tax. It does not include commission. Operating expense ratio Ratio of operating expenses (excluding service tax) to total premiums. Renewal premiums Regular recurring premiums received after the first year. Solvency ratio Ratio of available solvency margin to required solvency margins. Total premiums Total received premiums during the year including first year, single and renewal premiums for individual and group business. Weighted received premium (WRP) The sum of first year premium and 10% weighted single premiums and single premium top-ups. 13th month persistency Percentage of contracts, measured by premium, still in force 13 months after they have been issued.
36 Disclaimer This release is a compilation of published financial results, other information and is not a statutory release. This may also contain statements that are forward looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ from our expectations and assumptions. We do not undertake any responsibility to update any forward looking statements nor should this be constituted as a guidance of future performance. This release is a privilege copy intended for reference of selected group. These disclosures are subject to the prevailing regulatory and policy framework as on December 31, 2012 and do not reflect any subsequent changes.
37 Thank You In partnership with Standard Life