Bajaj Fiserv is the holding company under which there are three key financial sector businesses: (i) lending through Bajaj Finance Ltd. (BFL), which is itself a listed company; (ii) general insurance, under Bajaj Allianz General Insurance Company Ltd., or BAGIC; and (iii) life insurance, under Bajaj Allianz Life Insurance Company Ltd., or BALIC. In addition, there are wind-farm assets in Maharashtra with an installed capacity of 65.2 MW.
Let me briefly share with you the key achievements of your Company in FY2017 under BFL,
BAGIC and BALIC.
Lending: Bajaj Finance Ltd. (BFL)
Despite lower than expected growth and relatively tight credit demand, BFL has delivered excellent 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 H 60,194 crore.
- Receivables under financing grew by 33% to RS, 56,832 crore.
- Total income rose by 36% to RS, 10,003 crore.
- Profit before tax was up by 43% to RS, 2,818 crore.
- Profit after tax rose by 44% to RS, 1,837 crore.
- Loan losses and provisions were at RS, 818 crore. Even so, BFL''''s net non-performing assets at 0.44% was among the lowest in the NBFC industry.
- Capital adequacy as on 31 March 2017 was 20.30%, which is well above the RBI norms.
General Insurance: Bajaj Allianz General Insurance Company Ltd. (BAGIC)
BAGIC is a composite insurer offering various types of general insurance including motor, marine, health and various forms of corporate insurance. It continues to be among the most profitable general insurers vis-a-vis peers in the public and private sectors of comparable size. It has one of the lowest combined ratios in the industry — a combined ratio below 100% indicates that the company makes profits from its insurance operations. For FY2017, it had a combined ratio of 96.8%, reflecting a sound balance between growth and profitability. Its solvency margin remains healthy and well above the minimum required by regulations.
BAGIC''''s results for FY2017 were as follows:
- Gross written premium (GWP), including reinsurance accepted, was RS, 7,687 crore versus RS, 5,901 crore in FY2016.
- BAGIC maintained its market share at 6.7%, excluding specialized and standalone health insurers.
- Net earned premium for FY2017 was RS, 4,937 crore, an increase of 17% over the previous year''''s figure of RS, 4,224 crore.
- 10 million policies were issued in the year, versus 8.4 million in FY2016.
- Profit before tax was up by almost 40% to RS, 1,078 crore.
- Profit after tax increased by nearly 29% to RS, 728 crore.
- BAGIC''''s solvency ratio was 261%, which was well above the regulatory mandate of 150%.
- Return on average equity was 23.0% — or 50 basis points higher than the previous year.
Life Insurance: Bajaj Allianz Life Insurance Company Ltd. (BALIC)
Due to some key restructuring of business priorities and channels, BALIC has also done reasonably well for FY2017, as the figures below indicate.
- Gross written premium (GWP) was RS, 6,183 crore, 5% better than the previous year.
- New business (NB) premium grew by 14% to RS, 3,290 crore.
- BALIC''''s assets under management (AUM) grew by 12% to RS, 49,270 crore as on 31 March 2017.
- Policyholders'''' surplus increased by 22% to RS, 483 crore.
- Shareholders'''' profit after tax decreased by 5% to RS, 836 crore.
- Net worth for the company as on 31 March 2017 was RS, 8,476 crore, compared to RS, 7,631 crore a year earlier.
Among the three key businesses of your Company, BFL continues to perform extraordinarily well
— yet again delivering outstanding industry-beating performance, as it has over the last few years. BAGIC has also done well. And having begun to proactively deal with some of its past business challenges, BALIC, too, has produced decent results that suggest it is well on the road to profitable growth.
With you, I wish all three companies even better performance in FY2018.
Thank you for your support.
Rahul Bajaj Chairman
17 May 2017