POLICYBZR — earnings call

The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.

Prepared remarks

EXECUTIVE OFFICER, PB FINTECH · MR. ALOK BANSAL – EXECUTIVE VICE CHAIRMAN &

MR. ALOK BANSAL – EXECUTIVE VICE CHAIRMAN &

WHOLE-TIME DIRECTOR, PB FINTECH · MR. SARBVIR SINGH – JOINT GROUP CHIEF

MR. SARBVIR SINGH – JOINT GROUP CHIEF

EXECUTIVE OFFICER, POLICYBAZAAR · MR. NAVEEN KUKREJA – CHIEF EXECUTIVE OFFICER,

MR. NAVEEN KUKREJA – CHIEF EXECUTIVE OFFICER,

PAISABAZAAR · MR. MANDEEP MEHTA – GROUP CHIEF FINANCIAL

MR. MANDEEP MEHTA – GROUP CHIEF FINANCIAL

OFFICER, PB FINTECH · Management

MS. RASLEEN KAUR – HEAD, CORPORATE STRATEGY & INVESTOR RELATIONS, PB FINTECH PB Fintech February 10, 2023

Moderator · Conference Operator

The next question is from the line of Subramanian Iyer from Morgan Stanley.

Please go ahead.

Subramanian Iyer

A few more data-keeping questions.

So, one is, if you can split your core revenues into credit and insurance?

So, I think your core revenues is about ₹425 crores.

Moderator · Conference Operator

The next question is from the line of Sachin from Bank of America.

Please go ahead.

Sachin S

I have three questions.

The first question is on your cost.

Employee expense and advertisement is lower… I presume employee expenses are mainly on the back of ESOPs… or is there anything else which has led to that decline in employee expense?

Moderator · Conference Operator

We'll take the next question from the line of Sachin Dixit From JM Financial.

Please go ahead.

Sachin Dixit

I have some questions regarding the omni- channel play, right.

So, now we are getting leads online and we are able to convert offline as well, there is a premium per enquiry go up significantly over the years.

Can you talk a bit about how this improvement in conversion is resulting in some savings and how does it compare to the cost of doing the offline business?

Moderator · Conference Operator

The next question is from the line of Nischint from Kotak Institutional Equities.

Please go ahead.

Nischint

I'm looking at sequential in your insurance premium and your revenues.

And I think you shared some data on the PoSP premium.

I believe the rest of the growth comes essentially on the core business on new business premium.

And it's a fairly large sequential growth in premium in the core business.

If I compare that with the revenue of the core business on a sequential basis, that's gone up only something like 3%, 4%.

So, I think, what that effectively means is that the calculated means in the core business have come down and –

Moderator · Conference Operator

The next question is from the line of the Dipanjan Ghosh from Citi.

Please go ahead.

Dipanjan Ghosh

A few questions from my side.

First, on your only PoSP business, you have mentioned the 12% is non-motor.

And I would assume that you would have some renewal commissions that you get from the manufacturer in this portion of the business.

Just wanted to understand the pass-through that you do to the partner on the renewal side, is that renegotiated every year, or is pre-decided at the start?

Second on Paisa, your renewal revenue seems to have gained some traction.

So, just wanted to get some understanding of how the products are structured, and what are the contours out there?

And lastly, two data-keeping questions.

If you can give your current pass-through rate on the PoSP, and the PoSP premium number, I guess I missed it at the start of the call?

Moderator · Conference Operator

The next question is from the line of Srinath V from Bellwether Capital.

Please go ahead.

Srinath V

Hi, guys, just wanted to understand the implication of the new tax structure in the income tax and there's a prevailing understanding that a large part of taxpayers will move into the new structure.

What would be the impact overall on our business in 80C, both life and health lose exemption on investment, broadly for us, as well as for the industry, not just from a premium standpoint, but more to understand how useful was the exemptions on investment in conversion, would lead times or conversion times get impacted as these SOPs have been withdrawn?

Moderator · Conference Operator

The next question is from the line of Arpit Shah from Stallion Asset.

Please go ahead.

Arpit Shah

I just wanted to understand your contribution margin in existing business.

In the last three quarters, if you see, the contribution margins have stayed around 45% despite additions of, let's say, renewal revenues, and the productivity that we've been gaining from the offline. which you guys is probably higher for the offline business as compared to the call center business.

So, just wanted to understand, 45% contribution margin, is that something peek-ish for us or you think there are rooms that has levers to grow this margin going ahead?

Moderator · Conference Operator

Ladies and gentlemen, we'll take the last question from the line of Prateek Poddar from Nippon India Mutual Fund.

Please go ahead.

Prateek Poddar

I just wanted to check with you, if you could give a breakup of your premium, I mean, the existing insurance business premium, which you called out that the split was 50:50 between new and renewal into protection, health, savings.

Moderator · Conference Operator

Ladies and gentlemen, that was the last question for today.

I would now like to hand the conference over to Mr. Yashish Dahiya for closing comments.

Ladies and gentlemen, on behalf of PB Fintech, that concludes this conference.

Thank you for joining us and you may now disconnect your lines.

Questions and answers

Moderator · Conference Operator

We will now begin the question-and-answer session.

The first question is from the line of Shreya Shivani from CLSA.

Please go ahead.

Shreya Shivani

I have three questions.

First is a data-keeping question.

Can you give us the breakup of the insurance premium of ₹3,028 crores into PoSP and existing business premium, and within the existing business, can you give a breakup of the new and the renewal?

The second question is on the PoSP business specifically.

The contribution margins have been quite good this quarter, like it's reduced quite a lot only at minus 15%.

So, where do you see the margins settling in the next couple of quarters?

And my last question is more to do with the structural change in the industry.

With the new tax laws coming in and non-par savings getting tax above ₹5 lakhs premium, can you give us a little detail about what is the share of your savings business, particularly on non-par business, which was a large ticket?