Founders Message

Dear Shareholders,

Bajaj Finserv Limited is the holding company for the various financial services businesses under the Bajaj group. It serves millions of customers in the financial services space by providing solutions for asset acquisition through financing, asset protection through general insurance, family protection and income protection in the form of life and health insurance and retirement and savings solutions.

More specifically, the areas are:


Bajaj Finance Limited (BFL), participates in the financing business and is a company listed on The Stock Exchange, Mumbai (the BSE) and the National Stock Exchange (NSE).

BFL also operates through a 100% subsidiary namely, Bajaj Housing Finance Limited (BHFL) which is registered with National Housing Bank (NHB) as a Housing Finance Company (HFC) for its mortgage business. BHFL started its operations in FY2018 and all the incremental mortgage business is now done through BHFL.

Protection and savings

These are done through (i) Bajaj Allianz General Insurance Company Limited (BAGIC) for general insurance including health insurance; and (ii) Bajaj Allianz Life Insurance Company Limited (BALIC) for life insurance and retirement plans. BAGIC and BALIC are both unlisted joint ventures with Allianz SE, one of the world’s leading composite insurers.

Digital and Online platform

During the year under review, Bajaj Financial Holdings Ltd., a wholly-owned subsidiary, has firmed up new business plans for undertaking activities on digital and online platform to augment the business of the Company’s subsidiaries and has changed its name to Bajaj Finserv Direct Ltd. with effect from 27 February 2018

In addition, there are wind-farm assets in Maharashtra with an installed capacity of 65.2 MW.

As required by regulation, BFS has adopted Indian Accounting Standards (Ind AS) for FY19 which require Ind AS compliant comparatives for FY18. Accordingly, figures for previous year / period have been recast and reviewed by statutory auditors as per new accounting standards. The insurance companies are not covered under Ind AS. They have prepared Ind AS financials only for the purpose of consolidation. Accordingly, for BAGIC and BALIC, standalone numbers reported below are based on non-Ind AS accounting standards (Indian GAAP) as applicable to insurance companies.

In brief, how did the three operating entities perform in FY2019?

Lending: Bajaj Finance Limited (BFL)

BFL has continued to deliver outstanding results. Here is a summary:

• Consolidated assets under management (AUM) grew by 41% to ₹ 115,888 crore.
• Consolidated total income rose by 45% to ₹ 18,502 crore.
• Consolidated profit before tax (PBT) increased by 61% to ₹ 6,179 crore.
• Consolidated profit after tax (PAT) grew by 60% to ₹ 3,995 crore.
• Impairment of financial assets at a consolidated level was ₹ 1,501 crore. At 0.63%, BFL’s consolidated net NPA was among the lowest across all NBFCs.
• As on 31 March 2019, BFL’s capital adequacy on a standalone basis was 20.66%, which is well above the RBI norms. Tier I adequacy was 16.27%.

General Insurance: Bajaj Allianz General Insurance Company Limited (BAGIC)

BAGIC is one of India’s leading composite general insurers offering all types of general insurance including motor, health, crop insurance, marine, and various forms of corporate insurance. In an extremely competitive and dynamic market, it has built a strong retail franchise and retained a leading position among private insurers. BAGIC’s results for FY2019 were as follows:

• Some 20 million policies were issued, versus 13 million in FY2018.
• Gross written premium (GWP) increased by 17% to ₹ 11,097 crore.
• Net earned premium for FY2019 grew by 15.7% to ₹ 7,010 crore.
• The combined ratio was 96.7%. A combined ratio below 100% indicates that a company is making profits from insurance operations — and is considered as a sign of soundness of any general insurer.
• PAT decreased by 15.3%% to ₹ 780 crore in FY2019, mainly on account of losses from the catastrophic Kerala floods, impairment on investments in a large systemically important NBFC, and additional investments to increase growth in retail channels.
• The solvency margin was 255% — well above the normal regulatory requirement of 150%.
• Return on average equity was 16.2%. This was 6.8 percentage points lower than the previous year, and entirely on account of lower PAT in FY2019.

Life Insurance: Bajaj Allianz Life Insurance Company Limited (BALIC)

BALIC was able to drive a balanced and sustainable product mix, with a view of de-risking its business from volatile market movements and, in the process, showed impressive growth during the year. The key results for FY2019 were:

• Rated individual new business premium increased by 24.7% to ₹ 1,742 crore.
• New business premium grew by 14.7% to ₹ 4,923 crore.
• Renewal premium grew by 19.7% to ₹ 3,934 crore.
• GWP rose by 16.9% in FY2019 to ₹ 8,857 crore.
• Profit after tax was ₹ 502 crore.
• AUM grew by 8.9% to ₹ 56,620 crore as on 31 March 2019.
• BALIC had a solvency ratio of 804% as on 31 March 2019 — well in excess of the regulatory minimum of 150%.

All the three businesses have operated well. Therefore, congratulations are in order for the performance in FY2019. And here’s to even better performance in FY2020.

Thank you for your support.
Yours sincerely,

Rahul Bajaj Sign
Rahul Bajaj