YOUR NEW-AGE

DIGITAL INSURER
HDFC ERGO Insuring You
Anytime, Anywhere

ANNUAL REPORT
2020-2021
 Values that empower
us for the future

SENSITIVITY
We will build our business on empathy and
an inherent understanding of both our
internal and external customers' needs.

ETHICS
We will honour our commitments and be
transparent in our dealings with all our
stakeholders.

EXCELLENCE
We will always strive to offer innovative
products and services and endeavour to set
new benchmarks to do things better each
time.

DYNAMISM
We will be pro-active with a “can do”
approach.

2 14th Annual Report 2020-21

 Contents

Company Highlights 04

Message from the Chairman 05

Message from the CEO 06

Board of Directors 07

Brief Profile of the Directors 08

Directors' Report 10

Independent Auditors' Report 51

Balance Sheet 60

Profit & Loss Account 61

Receipts and Payments Account 62

Revenue Account 63

Schedules 64

Management Report 124

Glossary 131

Our Products 133

Customer Testimonials 134

14th Annual Report 2020-21 3

 Company Highlights

3rd largest General Insurance Company in private sector.

Overall market share of 6.2% for Fiscal Year 2020-21.

Comprehensive product portfolio along with a balanced channel mix.

Credit rating of ICRA/AAA, CRISIL/AAA, CARE/AAA and Acuité/

AAA with a stable outlook for the Non-Convertible Debentures
(Subordinated Debt) programme.

Solvency ratio of 190% vis-a-vis IRDAI required solvency ratio of

150%.

PAN-India presence across 203 branches and a close knit family of

6,400 professionals.

ISO certified processes for Claims Services, Operations, Customer

Services, ISO certified Business Continuity Management System and
ISO certified Information Security Management System.

Issued more than 10 million policies and serviced more than

2 million claims in FY21.

4 14th Annual Report 2020-21

 of course, will depend on the intensity and duration of the
second wave of infection.

The General Insurance (GI) industry grew by ~5% to

` 2 trillion in FY21. While the motor segment witnessed a
negative growth on account of low vehicle registrations,
retail health insurance remained the fastest growing
segment, reinforcing the need for adequate health
insurance cover.

The merger of HDFC ERGO Health Insurance Limited

(HEHI) with the Company, combined with the strong
growth in FY21, resulted in the Company becoming the
second largest retail health insurer in the country with
~10% market share.

In line with the HDFC group’s core values of trust,

integrity and transparency, the Company takes pride in
CHAIRMAN's servicing its over 15 million customers. During the year,

MESSAGE
“ the Company ensured that all its customers, especially
health policyholders, were serviced seamlessly using
innovative digital technologies delivering timely service.
During the year, the Company serviced over 45,000
“Pandemic led COVID-19 related claims.
to adoption The limit on Foreign Direct Investment (FDI) in insurance
of innovative digital companies was increased from 26% to 49% in 2015. In
the Union Budget 2021-22, it was announced that this
technologies to deliver would be further increased to 74%. Over the medium to
timely customer service." long-term, this is expected to attract new foreign
promoters to the Indian market and provide incumbent
insurers access to increased foreign capital. This is likely
The year gone by was unlike any other to further augment growth prospects of the industry and
we have experienced before. The deepen insurance penetration in the country.
COVID-19 pandemic led to lockdowns in
economies across the globe. While the Yet, there are challenges ahead as the country currently
lockdowns were eased gradually, the fights against the second wave of the virus. The impact on
lower economic activity and resultant the GI industry and on the Company in terms of overall
subdued demand had a severe impact premium growth and claims remains uncertain.
on global growth. Towards the end of the
fiscal year, the vaccine roll-out The regulatory amendments aimed at development of the
commenced even as some countries, GI industry, increasing competitive intensity and
including India, began to experience widespread adoption of digital initiatives, necessitated by
fresh waves of infections. The stimulus the pandemic situation, are expected to result in a more
package announced by the Government customer centric set of insurance solutions and deeper
of India and the liquidity and financial insurance reach, more specifically in rural India.
stability measures undertaken by the
Reserve Bank of India helped revive I thank all the stakeholders for their support to the
growth in the Indian economy. India’s Company and look forward to continued
Gross Domestic Product (GDP) is support in the coming years.
estimated to contract by 9.5% in FY21
but is expected to revive and be
amongst the fastest growing major
economies in FY22. These projections, Deepak S. Parekh
Chairman

14th Annual Report 2020-21 5

 de-growth of 13.6%. The crop insurance segment witnessed 3.4%
de-growth.

Private sector insurers (including standalone health insurers) grew

by 8.1%, capturing further market share from the public sector
insurers (including specialized insurers), who registered 6% growth.
In FY22, we expect that the GI industry will register strong growth
across segments, arising from economic growth and also on
account of base effect.

FY21 was a transition year for us, one in which we completed the
integration of HDFC ERGO Health Insurance Limited (HEHI) with
the Company. In line with our calibrated risk selection strategy, our
Gross Written Premium (GWP) grew by 27.5% during the year, from
` 9,760 crore to ` 12,444 crore. Our growth rate was 4.0%
considering the full year business of HEHI and the Company last
year, in line with the 5.2% growth for the industry.

As COVID-19 cases surged through the country, the GI industry

MD & CEO’s
witnessed COVID claims. We are one of the largest health insurers

MESSAGE
“ in the country and therefore our profitability was impacted by COVID
claims. Our portfolio steering measures and focus on cost
optimization could offset the negative impact of COVID claims.
Therefore, despite the impact of COVID claims, our combined ratio
improved from 105.3% for FY20 to 103.2% for FY21. Our profit after
tax increased from ` 327 crore to ` 592 crore.
“In FY21, HDFC ERGO
While our employees were working from home during the
achieved the dual lockdowns, the ‘Digital First’ approach we adopted few years ago
milestones of `10,000+ enabled us to service our customers seamlessly. We ensured
increased adoption of our digital tools by agents for sales and
crore in premiums and service so that they can stay indoors and yet procure business or
`500+ crore in profits.” service customers. During the year, your Company sold over 10
million policies, of which ~92% were issued digitally. Our customers,
network hospitals and motor workshops intimated claims digitally,
India, like the rest of the world, witnessed the either over our website or mobile apps or our portals. We, along with
onset of the COVID-19 pandemic in the last our partners, carried out inspection and surveys digitally to ensure
quarter of FY20. The nation was in a lockdown timely service to our customers. All our digital platforms – our
for most parts of the first half of FY21, leading to Website, Mobile App, DIA (chatbot), WhatsApp / Telegram Chat –
lower demand. While the lockdowns eased enabled customers to connect with us and helped in fulfilling their
across the country in the second half of the year, service requests. Apart from informing our customers about various
the domestic economy contracted by 8.0% in service requests which could be fulfilled digitally, we also launched
FY21 compared to 4.0% growth in FY20. With specific initiatives during the lockdown such as spreading
the vaccine roll-out having commenced in the awareness about COVID-19 via e-mailers, allowing motor renewals
last quarter of FY 2020-21, the economy is through customer self-inspection, prioritising pre- authorisation and
expected to register growth in FY22. At the same discharge requests in health claims, etc. As a result, we were able to
time, the second wave of COVID-19 is likely to deliver consistently high quality service even during the lockdown
lower the growth estimates. phase without compromising on the safety of our employees and
channel partners.
The economic slowdown had a cascading
impact on the non-life industry in FY21. The The year gone by has been one of the challenging years in recent
General Insurance (GI) industry wrote gross times. I would like to thank all our employees and their families for
direct premium of ~ ` 199,000 crore, registering going beyond their call of duty and ensuring business continuity in
a growth of 5.2% (FY20: 11.3%). The Corporate such uncertain times. The safety of our employees and partners has
segment led the industry growth with 17.1% been and shall continue to be of paramount importance to us. I
growth as the upward premium revision on would also take this opportunity to thank all our
certain risk categories announced last year was stakeholders for the contribution made and look
implemented on risks which renewed this year. forward to their continued support.
The pandemic led to increased awareness of
health insurance and this led to 12.0% growth of
the Accident & Health insurance segment. Motor
insurance continued to be subdued with Ritesh Kumar
1.7% de-growth, as the vehicle sales registered
MD & CEO

6 14th Annual Report 2020-21

 Board of Directors

Mr. Deepak S. Parekh Dr. Clemens Matthias Muth Mr. Anuj Tyagi
Chairman (DIN: 07824451) (DIN: 07505313)
(DIN: 00009078) (w.e.f October 12, 2020)
Executive Director & CBO
Directors (upto April 19, 2021)
Mr. Keki M. Mistry Mr. Bernhard Steinruecke
Deputy Managing Director
(DIN: 00008886) (DIN: 01122939)
(w.e.f April 20, 2021)
Ms. Renu Sud Karnad Mr. Mehernosh B. Kapadia
(DIN: 00008064)
(DIN: 00046612) Mr. Ritesh Kumar
Mr. Alexander Ankel Managing Director & CEO
(DIN: 07798908) Mr. Arvind Mahajan (DIN: 02213019)
(upto October 11, 2020) (DIN: 07553144)

Dr. Oliver Martin Willmes Mr. Ameet P. Hariani

(DIN: 08876420) (DIN: 00087866)
(w.e.f October 12, 2020)

Mr. Samir H. Shah

Mr. Theodoros Kokkalas
(DIN: 08093899) Executive Director & CFO
(upto October 11, 2020) (DIN: 08114828)

Senior Management Appointed Actuary Company Secretary

Mr. Rahul Ahuja Mr. Hiten Kothari Mr. Dayananda V. Shetty

Mr. Ankur Bahorey Membership No.: FCS 4638
Mr. Parthanil Ghosh
Mr. Sanjay Kaw
Mr. Mehmood Mansoori
Mr. Anurag Rastogi
Mr. Ravi Vishwanath

Auditors Bankers Debenture Trustee

G. M. Kapadia & Co. HDFC Bank Ltd. IDBI Trusteeship Services Limited Axis Trustee Services Limited
Chartered Accountants Asian Building, Ground Floor, 17, 2nd Floor, Axis Bank Limited,
B. K. Khare & Co. R. Kamani Marg, Ballard Estate, Plot No. 25, Pusa Road,
Chartered Accountants Mumbai – 400 001. Karol Bagh, New Delhi - 110 005.
Tel. No: +91 22 40807062
Fax No: +91 22 22882312

HDFC ERGO General Insurance Company Limited

(A subsidiary of Housing Development Finance Corporation Limited)

Registered & Corporate Office: HDFC House, 1st Floor, 165-166, Backbay Reclamation, H. T. Parekh Marg, Churchgate, Mumbai - 400 020.
Website: www.hdfcergo.com | E-mail: care@hdfcergo.com | Tel. No. : +91 22 6638 3600
CIN: U66030MH2007PLC177117 | IRDAI Reg. No. 146.

Customer Experience Management, Customer Happiness Center: D-301, 3rd Floor, Eastern Business District (Magnet Mall), LBS Marg,
Bhandup (West), Mumbai 400 078. Customer Service No.: 022 - 6234 6234 / 0120 - 6234 6234 | care@hdfcergo.com | www.hdfcergo.com

14th Annual Report 2020-21 7

 Brief Profile of the Directors

Mr. Deepak S. Parekh (DIN: 00009078) is the Chairman of the Company and its holding company - Housing Development
Finance Corporation Limited (HDFC), India’s premier Housing Finance Company. He is a fellow of The Institute of Chartered
Accountants (England & Wales). He joined HDFC in a senior management position in 1978. He was inducted as a Whole-time
Director of HDFC in 1985 and subsequently appointed as the Managing Director of HDFC (designated as 'Chairman') in 1993. He
retired as the Managing Director of HDFC on December 31, 2009. He was appointed as a Non-Executive Director of HDFC w.e.f
January 1, 2010. Mr. Parekh has been honored with several awards and accolades viz. Padma Bhushan, one of the highest civilian
awards by Government of India in 2006, ‘Bundesverdienstkreuz’ Germany’s Cross of the Order of Merit, one of the highest distinction
by the Federal Republic of Germany in 2014, Knight in the Order of the Legion of Honour, one of the highest distinctions by the
French Republic in 2010, first of a network of international ambassadors for championing London across the globe by the Mayor of
London in 2017, first international recipient of the Outstanding Achievement Award by the Institute of Chartered Accountants in
England and Wales in 2010 and 'Lifetime Achievement Award' at CNBC TV18’s 15th India Business Leader Awards, 2020.

Mr. Keki M. Mistry (DIN: 00008886) is a Non-Executive Director of the Company. Mr. Mistry is the Vice Chairman & Chief
Executive Officer of Housing Development Finance Corporation Limited (HDFC). He is a fellow of The Institute of Chartered
Accountants of India. He joined HDFC in 1981 and was appointed as the Executive Director in 1993, as the Deputy Managing
Director in 1999 and as the Managing Director in 2000. He was re-designated as the Vice Chairman & Managing Director of
HDFC in October 2007 and as the Vice Chairman & Chief Executive Officer w.e.f January 1, 2010. He is currently the
Chairman of CII National Council on Corporate Governance and a member of Primary Markets Advisory Committee set up by
the Securities and Exchange Board of India (SEBI). He was also a member of the Committee of Corporate Governance set
up by SEBI.

Ms. Renu Sud Karnad (DIN: 00008064) is a Non-Executive Director of the Company. Ms. Karnad is the Managing
Director of Housing Development Finance Corporation Limited (HDFC). She holds a Master’s degree in Economics from the
University of Delhi and a Bachelor’s degree in law from the University of Mumbai. She is a Parvin Fellow - Woodrow Wilson
School of Public and International Affairs, Princeton University, U.S.A. She joined HDFC in 1978 and was appointed as the
Executive Director in 2000, re-designated as the Joint Managing Director of HDFC in October 2007. Ms. Karnad has been
the Managing Director of HDFC w.e.f. January 1, 2010. Ms. Karnad is currently the President of the International Union for
Housing Finance (IUHF), an association of global housing finance firms.

Dr. Oliver Martin Willmes (DIN: 08876420) is a Non Executive Director of the Company. He has studied Business
Administration at the University of Cologne. Dr. Willmes has done MBA from Eastern Illinois University, USA. Dr. Willmes is
currently the Chairman of the Board of Management and Chief Operating Officer at ERGO International AG.

Dr. Clemens Matthias Muth (DIN: 07824451) is a Non-Executive Director of the Company. He has studied Economics
at the Universities of Mainz and Munich. He has done Doctorate in Economics from Munich University. He is currently the
Chairman of the Board of Management of DKV Deutsche Krankenversicherung AG and also a Member of the Board of
Management of ERGO Group AG responsible for all lines of Insurance.

Mr. Bernhard Steinruecke (DIN: 01122939) was the Director General of Indo-German Chamber of Commerce from
2003 till 2021. He studied Law and Economics in Vienna, Bonn, Geneva and Heidelberg and has a Law Degree from the
University of Heidelberg in 1980 (Honours Degree) and passed his Bar exam at the High Court of Hamburg in 1983.
Mr. Steinruecke was the former Co-CEO of Deutsche Bank India and Co-Owner and Speaker of the Board of ABC
Privatkunden-Bank, Berlin. Mr. Steinruecke was appointed as an Independent Director of the Company for a period of 5
years w.e.f. September 9, 2016.

8 14th Annual Report 2020-21

 Mr. Mehernosh B. Kapadia (DIN: 00046612) holds a Master’s degree in Commerce (Honours) and is a Member of The
Institute of Chartered Accountants of India and The Institute of Company Secretaries of India. Most of his corporate career of 34
years has been with GlaxoSmithKline Pharmaceuticals Limited (GSK) where he has worked for over 27 years. He retired as the
Senior Executive Director and Chief Financial Officer of GSK w.e.f. December 1, 2014. Over the years, he has been responsible for
an extensive range of finance and company secretarial matters. He has also held management responsibility for other functions
during his tenure with GSK, including Investor Relations, Legal and Compliance, Corporate Affairs, Corporate Communications,
Administration and Information Technology, and held the position of Company Secretary for many years. Mr. Kapadia was appointed
as an Independent Director of the Company for a period of 5 years w.e.f. September 9, 2016.

Mr. Arvind Mahajan (DIN: 07553144) is an Independent Director of the Company. He is a graduate (B.Com. Hons) from Shriram
College of Commerce, Delhi University and has a Post Graduate Diploma in Management from IIM, Ahmedabad.

Mr. Mahajan has more than 35 years’ experience in management consulting and industry. His management consulting experience
includes more than 22 years as partner with AF Ferguson & Co, Price Waterhouse Coopers, IBM Global Business Services and most
recently with KPMG. His industry experience was with Procter and Gamble in financial management and management reporting.

In his career at KPMG India, he has lead business consulting services and later the Energy, Infrastructure, Government and
Healthcare practices of the firm. He also had the privilege of being member of KPMG's Global Business Consulting and Global
Infrastructure Sector Leadership teams. His specialization is in advising CEOs & Boards in area of business strategy and helping
"make strategy happen" through growth and transformation initiatives. He also has strong background in corporate finance,
enterprise risk management and people and change. He has advised clients in a diversified portfolio sectors including consumer,
financial services, technology, media, telecom, energy, infrastructure & government.

Mr. Mahajan has strong understanding of technology including disruptive trends. While at IBM, he has lead technology strategy and
the communication sector vertical. He has also been member of KPMG’s Global Think Tank, which was involved in identifying
disruptive trends and developing the long term strategy for the firm. Mr. Mahajan was appointed as an Independent Director of the
Company for a period of 5 years w.e.f November 14, 2016.

Mr. Ameet P. Hariani (DIN: 00087866) has over 33 years of experience advising clients on corporate and commercial law,
mergers and acquisitions, real estate and real estate finance transactions. He has represented large organizations in international
real estate transactions, arbitrations and prominent litigations. He was a partner at Ambubhai and Diwanji, Mumbai and Andersen
Legal India, Mumbai. He is the Founder and Managing Partner of Hariani & Co. since the year 1991. He holds Law degree from
Government Law College, Mumbai and Masters in Law degree from the University of Mumbai. He is a Solicitor enrolled with the
Bombay Incorporated Law Society and the Law Society of England and Wales. He is also a member of the Law Society of Singapore,
the Bar Council of Maharashtra and the Bombay Bar Association. Mr. Hariani was appointed as an Independent Director of the
Company for a period of 5 years w.e.f July 16, 2018.

Mr. Samir H. Shah (DIN: 08114828) is a Fellow member of The Institute of Chartered Accountants of India (FCA), an Associate
member of The Institute of Company Secretaries of India (ACS) and The Institute of Cost Accountants of India (ACMA). He joined
the Company in 2006 and has about 30 years of work experience, of which over 14 years in the General Insurance sector. Mr. Shah
is the Executive Director of the Company appointed for a period of 5 years w.e.f. June 1, 2018 and is currently responsible for
Finance, Accounts, Tax, Secretarial, Legal & Compliance, Risk Management, Internal Audit functions of the Company.

Mr. Anuj Tyagi (DIN: 07505313) is a Chemistry (H) graduate and has a Post Graduate Diploma in Business Management.
Mr. Tyagi has about 21 years of work experience in Insurance and Banking. He joined the Company in 2008 as Head – Corporate
Business Group. Mr. Tyagi was appointed as a Whole-time Director (designated as Executive Director & CBO) of the Company for
a period of 5 years w.e.f. May 1, 2016. On November 13, 2020, Mr. Tyagi was re-appointed as the Executive Director & CBO for a
further period of 5 years and thereafter re-designated as the Deputy Managing Director w.e.f. April 20, 2021.

Mr. Ritesh Kumar (DIN: 02213019) is the Managing Director and CEO of the Company since 2008. Mr. Kumar has about 29
years of experience in the Financial Services Industry, of which the first 10 years were in Banking and the last 19 years in Insurance.
Mr. Kumar is a commerce graduate from Shriram College of Commerce, Delhi and holds a MBA degree from Faculty of Management
Studies (FMS), Delhi.

14th Annual Report 2020-21 9

Directors’ Report

TO THE MEMBERS Performance

Your Directors are pleased to present the Fourteenth The Gross Written Premium (GWP) of the Company
Annual Report of your Company together with the increased to ` 12,443.9 crore (PY: ` 9,760.1 crore).
audited financial statements for the financial year ended The Net Earned Premium increased to ` 6,405.6 crore
on March 31, 2021. The merger of HDFC ERGO Health (PY: ` 4,450.4 crore). The Company achieved a Profit
Insurance Limited (HEHI) with the Company was effective before Tax of ` 791.8 crore (PY: ` 459.0 crore) after
from November 13, 2020 with Appointed Date as March providing for diminution in the value of investments and
1, 2020. Accordingly, the financial results for FY 2020- write-off of Bad and Doubtful Investments amounting to
21 are for the merged entity. ` 31.2 crore (PY: ` 21.7 crore). The Profit after Tax for the
year is ` 591.7 crore (PY: ` 326.9 crore).
Financial Results (` in crore)
Particulars Year ended Year ended Dividend
March 31, 2021 March 31, 2020*
Gross Written Premium 12,443.9 9,760.1 The Board of Directors had approved the payment of an
Net Written Premium 6,504.3 4,866.9 interim dividend of ` 3 per equity share of ` 10 each for
Net Earned Premium 6,405.6 4,450.4 the financial year 2020-21 in March 2021. During FY20,
Other Income/Liabilities 7.4 4.8 the Company did not pay any dividend in view of advice
written back from IRDAI to all insurers to refrain from dividend pay-
Net Incurred Claims 4,852.0 3,524.1 outs in view of COVID-19 pandemic. No amount is lying
Net Commission (198.3) (211.9) in the unpaid dividend account.
(Income)/ Expenses No final dividend was recommended by the Board.
Expenses of Management 2,080.8 1,543.6
Investment Income – 958.5 734.9 Increase in Paid-up Share capital
Policyholders During the year, the Company allotted 3,45,651 equity
General Insurance Result 636.9 334.3 shares of ` 10 each pursuant to exercise of stock options
Investment Income – 186.0 146.4 under Employees Stock Option Plan-2009 (ESOP-2009).
Shareholders Further, in terms of the Scheme of Amalgamation of
Profit before Tax - Before 822.9 480.7 HEHI with the Company, 10,53,77,232 equity shares of
providing for diminution ` 10 each were allotted to the shareholders of HEHI on
in value of investments November 13, 2020.
& write-off of Bad and The Paid-up equity share capital of the Company has
Doubtful Investments increased to ` 711.6 crore as on March 31, 2021 from
Provision towards 31.2 21.7 ` 605.8 crore as on March 31, 2020 and the Share
diminution in value of Premium Account increased to ` 1,401.3 crore as on
investments & write- off March 31, 2021 from ` 1,395.8 crore as on March 31,
of Bad and Doubtful 2020.
Investments
Profit before Tax - After 791.8 459.0 Non-Convertible Debentures
providing for diminution As at March 31, 2021, the Company’s outstanding Non-
in value of investments Convertible Debentures (NCDs) stood at ` 504.00 crore
& write-off of Bad and consisting of:
Doubtful Investments i. 3,500 Unsecured, Subordinated, Fully Paid-up,
Provision for Tax 200.1 103.6 Listed, Redeemable NCDs of the face value of
MAT Credit Written Off - 28.4 ` 10,00,000 each, with a coupon of 7.60% per
Profit after Tax 591.7 326.9 annum allotted on November 9, 2016 and are
Interim Dividend 213.5 - redeemable on November 9, 2026.
Transfer to Debenture - 2.4
Redemption Reserve The NCDs are rated by CRISIL and ICRA and were
Profit carried to Balance assigned the highest rating of CRISIL AAA/Stable
Sheet 378.2 324.5 and ICRA AAA/Stable respectively;
Credit balance in P & L 778.4 832.0 ii. 800 Unsecured, Subordinated, Fully Paid-up,
account at the year end Listed, Redeemable NCDs of the face value of
*Comprises of financial results of the Company for ` 10,00,000 each, with a coupon of 8.40% per
the period of 12 months and 1 month of HEHI as the annum allotted on September 18, 2017 and
Appointed Date for merger was March 1, 2020. redeemable on September 17, 2027;

10 14th Annual Report 2020-21

iii. 740 Unsecured, Subordinated, Fully Paid-up, Listed, Number of meetings of the Board
Redeemable NCDs of the face value of ` 10,00,000 During the year, the Board met seven (7) times on
each, with a coupon of 10.25% per annum allotted May 8, 2020, June 12, 2020, July 22, 2020, October
on September 18, 2018 and redeemable on 21, 2020, November 13, 2020, January 21, 2021 and
September 17, 2028. March 3, 2021.
The above two NCDs are rated by CRISIL, CARE, Acuité The details of attendance of the Directors at the Board
and ICRA and were assigned the highest rating of CRISIL and Committee meetings are provided in the Report of
AAA/Stable, CARE AAA/Stable, Acuité AAA/Stable and the Directors on Corporate Governance.
ICRA AAA/Stable respectively.
Policy on Director’s appointment and remuneration
All the above NCDs are listed on the Whole Sale Debt The Company has in place a Board approved Policy
Market Segment of BSE Limited. on Appointment of Directors and Members of Senior
The Company has been regular in servicing its interest Management and other Employees (Appointment
towards NCDs. Policy) and Remuneration Policy for the Directors, Key
Managerial Personnel (KMPs), Senior Management and
Debenture Redemption Reserve other Employees (Remuneration Policy).
In accordance with the provisions of Section 71 of the The objective of the Appointment Policy is inter-alia
Companies Act, 2013 (‘Act’) read with Rule 18 of the to provide a framework and set standards for the
Companies (Share Capital and Debentures) Rules, 2014, appointment of high quality directors who should have
the Company was transferring amounts to the Debenture the capacity and ability to lead the Company towards
Redemption Reserve (DRR) from its profit till the quarter achieving its stated goals and strategic objectives,
ended June 30, 2019. taking into account the interest of all stakeholders
including shareholders, policyholders, channel partners
In terms of the Companies (Share Capital and Debenture)
and employees.
Amendment Rules, 2019 issued by the Ministry of
Corporate Affairs (MCA) vide its notification dated August The objective of the Remuneration Policy is inter-alia to
16, 2019, DRR is not required to be created by listed ensure that (i) the level and composition of remuneration
companies in case of privately placed debentures. In is in line with other companies in the industry, sufficient
view of the same, the Company has stopped creating to attract and retain right talent at all levels and keep
DRR w.e.f quarter ended September 30, 2019. them motivated enough to meet the organizational
objectives; (ii) a reasonable balance is maintained in
By an amendment to the Companies (Specification of the composition of remuneration (fixed and variable
definitions details) Rules, 2014, MCA vide its notification component); (iii) to have performance measurement
dated February 19, 2021 has clarified that, public parameters in place to assess the overall performance of
companies which have not listed their equity shares on Directors, KMPs, Members of Senior Management and
a recognized stock exchange but have listed their non- other employees; and (iv) the remuneration of Whole-
convertible debt securities issued on private placement time Directors including Managing Director & CEO, is
basis in terms of SEBI (Issue and Listing of Debt fixed keeping in perspective the various risks including
Securities) Regulation, 2008 shall not be considered as their time horizon and that such remuneration reflects
a listed company w.e.f April 1, 2021. the performance of the Company measured against
performance objectives including risk outcomes.
Accordingly, the Company will not be categorized as
a listed company under the Act and consequently, in The said Policies are available on the website of the
terms of Rule 18(7)(b)(iv)(B) of the Companies (Share Company (www.hdfcergo.com).
Capital and Debentures) Rules, 2014 as amended, Comments on Auditor’s Report
the Company has to create DRR of 10% of value of
outstanding debentures, w.e.f April 1, 2021. Neither the Secretarial Auditor nor the Joint Statutory
Auditors have made any qualification, reservation or
As at March 31, 2021, the balance in DRR stands at adverse remark or disclaimer in their reports. The reports
` 35.6 crore. of the Secretarial Auditor and the Joint Statutory Auditors
are appended to this Report.
Extract of Annual Return Further, during the year under review, the Joint Statutory
The extract of the Annual Return in prescribed Auditors have not come across or reported any incident
Form MGT- 9 is available on the website of the Company of fraud to the Audit and Compliance Committee of
(www.hdfcergo.com). Directors.

11
Particulars of Loans, Guarantees or Investments under payment. Premium received and claims on reinsurance
Section 186 ceded in foreign exchange during the year was ` 154.0
The Company has not given any loan or guarantee to any crore (PY: ` 172.8 crore).
person or body corporate.
Risk Management Framework
The investments of the Company are in compliance
The Company recognizes that risk is an integral element
with the norms prescribed by IRDAI, the Guidelines
of insurance business and realizes the criticality of
and Circulars issued by IRDAI from time to time and
institutionalized risk management practices to meet its
the Investment Policy of the Company. The particulars
objectives. The Company has therefore established an
of Investment Assets are provided in Management
effective and robust enterprise wide Risk Management
Discussion and Analysis Report section.
Framework (RMF), which addresses all relevant risks
Related Party Transactions including strategic risk, operational risks, investment
Transactions/ arrangements by the Company in its risks, insurance risks and information & cyber security
ordinary course of business with related parties primarily risks.
includes sale/ purchase of insurance products, lease of Under RMF, the Company has entrusted designated Risk
properties, wherein premium/ brokerage/ commission/ Owners to periodically identify, assess, manage and
claims/ rent is received from or paid to related parties. mitigate the risks pertaining to their respective areas of
Audit and Compliance Committee of Directors has given responsibility.
in-principle approval to enter into different types of The Risk Management Committee of Directors (RMC)
related party transactions which are recurring in nature has laid down the Risk Management Philosophy and
and in the ordinary course of business. Policy of the Company. The RMC oversees the functioning
of the RMF which has been designed in line with the
Related party transactions that were entered into during
the year were in the ordinary course of business and aforesaid Philosophy and Policy. The Chief Risk Officer
on an arm’s length basis. The details of transactions (CRO) is responsible for the consistent implementation
with related parties are placed before the Audit and of the RMF. The CRO reports to the RMC. The CRO
Compliance Committee of Directors at its quarterly inter-alia presents the Key and Top risks to the RMC at its
meetings. quarterly meetings.
The RMC is further assisted by a Sub-Committee
During the year under review, the Company did not enter
into any transaction or arrangement with related parties, comprising of the CEO, Executive Directors, CRO and
which were material or not at arm’s length. Heads of various business units which steers the
implementation of the Company’s Risk Management
There were no materially significant transactions with the Philosophy, Strategies, Policies and Procedures.
KMPs or their relatives that have a potential conflict with
The material risks identified by the Company and the
the interest of the Company at large. As per Accounting
mitigation measures are as under:
Standard (AS) 18 on ‘Related Party Disclosures’, the
details of related party transactions entered into by the Underwriting and Reserving Risks
Company are included in the Notes to Accounts.
Underwriting Risk is the risk of change in value due
Material changes and commitments affecting the to a deviation of the actual claims payment from the
financial position expected amount of claims payment. Underwriting Risk
There were no material changes or commitments, encompasses risk of concentration and insufficient
affecting the financial position of the Company between diversification.
March 31, 2021 and the date of this report. Reserving Risk is the risk of eventual cost of claims
diverging from the booked reserves due to under-
Particulars regarding conservation of energy, technology reserving which can make certain classes of business
absorption and foreign exchange earnings and outgo look profitable than they really are. Conversely, over-
Since the Company does not carry out any manufacturing reserving tends to lock in unnecessary capital and could
activity, the provisions with respect to disclosure of result in portfolio steering in the wrong direction.
particulars regarding conservation of energy and The following controls and mitigation measures have
technology absorption are not applicable to the Company. been established to effectively mitigate aforesaid risks:
During the year, the Company incurred an expenditure • The Underwriting Guidelines are used as a basis for
of ` 308.6 crore in foreign exchange (PY: ` 172.2 crore) underwriting of risks and basis for pricing charged
mainly on account of reinsurance premium and claims to the proposer;

12 14th Annual Report 2020-21

• Prudent margins are built in reserves and a regular comply with the prescribed minimum Financial Security
monitoring of its adequacy is done; Rating (FSR). This minimizes its credit risk exposures in
• Adequate protection is ensured through a well reinsurance protection arrangements.
designed Reinsurance Program with financially Operational Risks
sound reinsurers;
The Company faces varied operational risks in the various
• Catastrophe (CAT) protection has also been ensured processes it operates in the course of its day to day
to mitigate the risks of large losses arising from business such as Underwriting, Policy Administration,
probable catastrophic events; Claims, Finance, Investment, Marketing, Customer
• Detailed Reserving Guidelines are documented for Experience, etc. Operational risks majorly arise from
all classes of business which define the procedures breakdowns in internal processes, people and systems.
to be adhered to; and Operational risks are mitigated by developing
• The efficacy of the default reserve formula is comprehensive policies and processes and by
reviewed on a periodic basis to identify any implementing both automated and manual controls
significant changes in loss development patterns/ across various activities performed by various
IBNR utilization trends and adjusted if deemed departments.
necessary and agreed by all stakeholders.
Business Continuity risks are managed by implementing
Credit and Market Risk a robust Business Continuity Policy and Process to
ensure continuity of key services at minimum acceptable
Adverse change in financial situation due to fluctuation
level of business and safety of human resources. The
in the market price of investment assets, its liquidity and
Company has an alternate Disaster Recovery (DR) site
credit quality are some of the material risks faced by the
and identified critical business processes are tested
General Insurers.
periodically at the DR site to assess its operational
The Company’s Investment Function is overseen preparedness in the case of any eventuality. The
by the Investment Committee, duly assisted by the Company has been certified under ISO 22301:2012 for
Chief Investment Officer (CIO). The investments of its Business Continuity practices.
the Company are made as per the Board approved
Investment Policy, Investment Strategy Document and Information & Cyber Security
the Standard Operating Guidelines and are compliant The Company assigns critical importance to information
with the provisions of IRDAI (Investment) Regulations, and cyber security risks. Insurance business is highly
2016 and circulars issued thereunder. information driven where information is recognized as
The Investment Policy and the Standard Operating a critical business asset. Due to emerging information
Guidelines have been designed to be more conservative and cyber security threats in the Insurance Industry, it
than regulatory provisions relating to investment in debt is imperative that business information is protected
and equity instruments. adequately through appropriate controls and proactive
measures.
Market risk is managed by maintaining a diversified
investment portfolio having desired mix between Debt To manage the existing and emerging information and
and Equity in accordance with the Investment Policy. cyber security risks, following are in place:
Liquidity risk is managed by maintaining investments • Board approved Information and Cyber Security
in money market instruments upto the desired level as Policy;
required. • Board approved Information and Cyber Security
Credit risk or risk of default of counter parties is managed Crisis Management Plan;
by investing a substantial portion of the investible corpus • ISO 27001 Certified Information Security
in securities with prescribed Credit Rating (Sovereign Management System;
and AAA rated securities). • Awareness program for employees such as
The aforementioned risks are reviewed and monitored on awareness mailers, simulation and tabletop
a regular basis by the Management and the Investment exercises, classroom trainings, etc; and
Committee. • Vulnerability Assessment and Penetration Testing
Credit risk also arises on the reinsurance protection exercise on a periodic basis.
taken by the Company. The Company ensures that it The Company has had an independent assessment done
enters into reinsurance agreements with reinsurers who for Capability Maturity Model integration (CMMi) of its

13
Information & Cyber Security processes to benchmark its Besides the above, the Company has contributed to
practices against the globally recognized CMMi standard. furthering the cause of education of girl children by
As per the results of the independent assessment sponsoring education by supporting 50 learning
exercise, the Company’s overall Cyber & Information centers impacting over 1,400 girls attending the
Security has been assessed as “Processes are strong, sessions in 2 states and supporting 3 students on full
continuously monitored and measured.” scholarship for three year undergraduate program.
The cause of health is one of our mainstays and the
Corporate Social Responsibility (CSR) Company has sponsored over 2,500 eye surgeries for
The Company’s CSR Policy is hosted on its website - people from economically challenged backgrounds
www.hdfcergo.com. The Policy inter-alia specifies the across India. Support has been extended to 15 children
broad areas of CSR activities that could be undertaken suffering from Congenital Heart Defect (CHD) from
by the Company, approach and process for undertaking 12 states and 40 special adults for co–guardianship in
CSR projects and the monitoring mechanism. ADHAR centers. Also, Teleclinic centers are being run in
MCA vide its notification dated January 22, 2021, 11 villages.
amended the Companies (Corporate Social Responsibility Our country is facing one of its biggest challenges in the
Policy) Rules, 2014. face of COVID-19 pandemic. Your Company has joined
The amendments primarily acknowledges the ‘ongoing this fight on ground by contributing to Prime Minister’s
projects’ which spread over relatively longer tenure and Citizen Assistance and Relief in Emergency Situations
utilization of funds for such CSR projects, aids the CSR Fund (PM CARES Fund). Your Company has distributed
Committee in better assessing and monitoring the CSR washable masks to 5,000 tribal children, 3,225 hygiene
projects through review of ‘Annual Action Plan’. kits to farmers and 1,000 ration kits to underprivileged
families, supported in awareness drive in 12 states
The Annual Action Plan shall include the list of CSR projects
to prevent COVID-19 and quarantine centers and
or programmes that are approved to be undertaken
Government Hospitals by providing medical instruments
in areas or subjects specified in Schedule VII of the
and ambulances.
Companies Act, 2013 (‘Act’) the manner of execution of
such projects or programmes, the modalities of utilization Board Evaluation
of funds and implementation schedules, monitoring and
reporting mechanism and details of need and impact Pursuant to the provisions of the Act, the Directors
assessment, if any, for the projects undertaken by the have carried out an annual performance evaluation
Company. of Individual Directors, Board as a whole and Board
Committees.
The Annual Report on CSR activities, as prescribed under
Section 135 of the Act read with Rule 9 of the Companies The evaluation of the Board and the Board Committees
(Accounts) Rules, 2014 and Rule 8 of the Companies was carried out on the basis of various parameters like
(Corporate Social Responsibility Policy) Rules, 2014, as optimum mix, quality and experience of Board members,
amended is appended to this Report. regularity and frequency of meetings, cohesion in the
Board/ Committee meetings, constitution and terms of
During the year, the Company has spent the mandatory reference of various Board Committees, contribution
CSR spend of ` ­­­­­­­­­­­­­­­­­­­9.52 crore­­­­­ on various CSR activities, in shaping the Company’s strategy, protecting
projects and programmes. legitimate interest of various stakeholders, implement
During the year, the re-construction of 3 Government best corporate governance practices, follow up on
schools viz. Domabaramattur at Haveri, Karnataka; implementation of decisions taken at Board/ Committee
Jamkhar at Jabalpur, Madhya Pradesh and Mithivavdi meetings, Board Committee’s promptness and efficacy
at Patan, Gujarat was fully completed. The project is to report issues requiring Board’s attention, quality,
expected to positively impact the growth in student quantity and timeliness of flow of information, etc.
enrollment, average attendance rate, continuation The evaluation of Non-Executive Directors (including
of education of girls, student’s interest in sports and/ Independent Directors) was carried out based on
or extra-curricular activities and reduction in dropout parameters like attendance, active participation, exercise
rate in schools. Over 373 students and teachers were of independent judgement, bringing in objectivity in
benefitted through this initiative. decision making process, knowledge and competency,
Under Gaon Mera FY21, during the year, 1 Government commitment, high levels of integrity, leadership,
school viz. Dighal at Jhajjar, Haryana was taken up for re- bringing one’s own experience to bear on the items for
construction and foundation work is in progress. discussion, awareness and observance of governance,

14 14th Annual Report 2020-21

value addition to the business and strategic aspects of is maintained in the composition of remuneration
the Company. (fixed and variable component). The performance
In addition to the above, Whole-time Directors were also measurement parameters are in place to assess the
evaluated on other parameters such as involvement in overall performance of Directors, KMPs, Members
the job requirements with dedicated competence, quest of Senior Management and other Employees. The
for improvement in performance, ability to function as Nomination and Remuneration Committee (NRC),
an effective team-member, sufficient understanding whilst approving remuneration of the Managing
and knowledge of the Company and the sector in which Director and CEO and other Whole-time Directors,
the Company operates, understanding and fulfillment considers the above factors, which is subject to
of functions assigned by the Board and the law, taking approval of IRDAI.
initiative with respect to various areas. (b) Description of the ways in which current and future
risks are taken into account in the remuneration
Particulars of Employees and other related disclosures processes:
The total employee strength of the Company as on March The remuneration fixing process of Whole-time
31, 2021 stood at 6,410. Directors including Managing Director and CEO,
During the year, 14 employees employed throughout includes evaluation of performance against
the year were in receipt of remuneration of ` 1.02 performance objectives defined by NRC which
crore or more per annum or ` 8.50 lakhs or more per includes performance criteria covering the
month. In accordance with the provisions of Rule 5(2) enterprise wide Risk Management Framework.
of the Companies (Appointment and Remuneration of (c) Description of the ways in which the Company
Managerial Personnel) Rules, 2014, the names and seeks to link performance during a performance
other particulars of such employees are set out in the measurement period with levels of remuneration:
annex to the Directors’ Report.
The level of remuneration of Whole-time Directors
In terms of the provisions of Section 136(1) of the Act including Managing Director and CEO for any
read with the said Rule, the Directors’ Report is being financial year is inter-alia linked to the following
sent to the shareholders excluding the annex. Any performance objectives set by NRC:
shareholder interested in obtaining a copy of the said
a. Top line and bottom line targets of the Company
annex may write to the Company Secretary.
including portfolio steering;
Further, the disclosures on managerial remuneration as
b. Overall financial position of the Company
required under Rule 5(1) of the said Rules are provided
including adherence to IRDAI stipulations on
in Annexure 1 appended to the Directors’ Report.
Minimum Solvency Margin and Expenses of
Disclosures on remuneration of Managing Director and Management Limits;
Key Management Persons as mandated under IRDAI c. Key strategic and operational deliverables
Guidelines on Remuneration of Non-Executive Director for the year and progress on the mid-term
and Managing Director/ Chief Executive Officer/ Whole- deliverables;
Time Director of Insurers dated August 5, 2016 d. Satisfactory claim settlement and repudiation
(i) Qualitative Disclosures: performance;
(a) Information relating to the design and structure e. Effectiveness of the Grievance Redressal
of remuneration processes and Key Features and Mechanism; and
Objectives of the Remuneration Policy: f. Overall compliance to applicable laws including
The Remuneration Policy provides that the Corporate Governance Guidelines issued by
level and composition of remuneration is in line IRDAI and other statutory bodies.
with other companies in the industry, sufficient The remuneration payable to the Whole-time
to attract and retain right talent at all levels Directors including Managing Director and CEO is
and keep them motivated enough to meet the subject to approval from the shareholders of the
organizational objectives and a reasonable balance Company and IRDAI.

15
(ii) Quantitative Disclosures In addition to the above, the Whole-time Directors are
The following table sets forth the details of entitled to and provided perquisite in the nature of
quantitative disclosure of remuneration of Whole- Company owned car with fuel reimbursement, provident
time Directors including Managing Director and CEO: fund, gratuity, club membership, housing loan interest
subsidy and benefit of medical, life and personal accident
Particulars Year ended Year ended insurance, post approval of the NRC in accordance with
March 31, 2021 March 31, 2020
the Remuneration Policy.
Number of MD/ CEO/ 3* 3*
WTDs having received a Secretarial Audit
variable remuneration In accordance with the provisions of Section 204 of the
award during the Act and the Companies (Appointment and Remuneration
financial year of Managerial Personnel) Rules, 2014, the Company had
Number and total NIL NIL appointed Messrs Bhandari & Associates, Practicing
amount of sign-on Company Secretaries for conducting Secretarial Audit for
awards made during the FY 2020-21.
financial year The Secretarial Audit Report is appended to this Report.
Details of guaranteed NIL NIL
Employees Stock Option Plan (ESOP)
bonus, if any, paid as
joining / sign on bonus During the year, the Company granted 15,40,500 stock
options in respect of 15,40,500 equity shares of ` 10
Breakdown of amount each at an exercise price of ` 363.80 per option under
of remuneration awards ESOP-2009 to 39 eligible employees.
for the financial year
(Amount in `) The Options granted vest in tranches - 25% on completion
of 2 years from grant date, 25% at the end of 3 years
Fixed 7,59,38,032 7,64,24,458
from grant date and the balance 50% on completion of 4
Variable 3,34,03,999 3,75,00,492 years from grant date and are exercisable within a period
Deferred NIL NIL of 5 years from the date of respective vesting.
Non-deferred NIL NIL Further, during the year, pursuant to merger of HEHI with
the Company, in terms of the Scheme of Amalgamation,
Total amount of deferred NIL NIL
with respect to 19,09,000 options outstanding under
remuneration paid out in
HEHI Employee Stock Option Scheme, 4,95,864 stock
the financial year
options were issued to the Option holders under HEHI
Total amount of Employee Stock Option Scheme under HDFC ERGO
outstanding deferred Employee Stock Option Plan – 2009, in accordance
remuneration with Swap Ratio of 100:385. The exercise price of these
Cash (` in million) NIL NIL Options was also appropriately adjusted in accordance
Shares (nos.) NIL NIL with said Swap Ratio. The terms as to vesting and
exercise remained unchanged.
Shares-linked 4,62,500 NIL
instruments# During the year, Options vested aggregated to 7,69,192
and Options exercised aggregated to 3,45,651. Pursuant
Other forms NIL NIL
to the said exercise, the Company received ` 5.71 crore
*Mr. Anuj Tyagi was the Executive Director & CBO of the
as exercise consideration (excluding tax). Pursuant to
Company upto January 8, 2020 and was deputed as the
Managing Director & CEO of HEHI w.e.f January 9, 2020.
exercise of Options, 3,45,651 equity shares of ` 10 each
Pursuant to merger, Mr. Tyagi has been appointed as the have been allotted to the concerned employees.
Executive Director & CBO of the Company for a period of 5 (five) During the year, 5,03,728 Options lapsed and the
years w.e.f. November 13, 2020. Mr. Tyagi was re-designated Options in force as on March 31, 2021 were 53,01,099.
as Deputy Managing Director at the Board Meeting held on
April 20, 2021. There has been no variation in the terms of the Options
# Aggregate ESOPs granted at the prevailing fair market value, granted.
detailed elsewhere in this report. The diluted EPS is ` 8.29 against a basic EPS of ` 8.32.

16 14th Annual Report 2020-21

Employee wise details of Options granted during the year Directors and Key Managerial Personnel
to KMPs and employees who received grant amounting Re-appointment of Independent Directors
to 5% or more of the Options granted during the year are
as follows: Mr. Bernhard Steinruecke and Mr. Mehernosh B.
Kapadia were appointed as Independent Directors for
Name of the Position No. of Options granted a period of 5 (five) years, w.e.f September 9, 2016 and
employee and % ge to total grant Mr. Arvind Mahajan was appointed as an Independent
Ritesh Kumar Managing Director 2,25,000 Director for a period of 5 (five) years w.e.f November
and CEO (14.61%) 14, 2016. Accordingly, the present term of Mr. Bernhard
Steinruecke and Mr. Mehernosh B. Kapadia would expire
Samir H. Shah Executive Director 1,12,500 on September 8, 2021 and that of Mr. Arvind Mahajan
& CFO (7.30%) on November 13, 2021.
Dayananda V. Company Secretary 28,000 The Board, pursuant to the provisions of the Act and
Shetty & Chief Compliance (1.82%) based on the recommendation of the NRC, recommends
Officer the re-appointment of Mr. Bernhard Steinruecke and
Mr. Mehernosh B. Kapadia for the second term of 5 (five)
Mr. Anuj Tyagi, Deputy Managing Director, who was the years w.e.f September 9, 2021 and Mr. Arvind Mahajan
Managing Director & CEO of HEHI until merger, was w.e.f November 14, 2021. As required under the
granted 4,81,250 stock options at a Grant Price of provisions of Section 149(10) of the Act, the proposal for
` 93.30 per Option under HEHI Employee Stock Option re-appointment of aforesaid three Independent Directors
Scheme. Pursuant to merger, he has been issued is placed before the Members for consideration and
1,25,000 stock options under HDFC ERGO Employees approval at the ensuing AGM by way of special resolution.
Stock Option Plan – 2009 at an Exercise Price of
` 359.21 per Option. The Board is of the view that Mr. Bernhard Steinruecke,
Mr. Mehernosh B. Kapadia and Mr. Arvind Mahajan are
No employee was granted Options in excess of 1% of the persons of integrity and possesses relevant expertise and
issued share capital of the Company at the time of grant. experience to be appointed as Independent Directors
of the Company and fulfils the conditions specified in
Public Deposits
the Act and the rules made thereunder and they are
The Company did not accept any deposits from the public independent of the Management.
during the year.
Re-appointment of Directors liable to retire by rotation
Auditors
In accordance with the provisions of the Act and the
At the tenth Annual General Meeting (AGM) held Articles of Association of the Company, Mr. Keki M.
on September 29, 2017, Members had appointed Mistry (DIN: 00008886) and Ms. Renu S. Karnad
Messrs B. K. Khare & Co., Chartered Accountants (DIN: 00008064), Directors, would retire by rotation at the
(Registration No. of the firm with the ICAI: FRN 105102W) ensuing AGM and being eligible, have offered themselves
and Messrs G. M. Kapadia & Co., Chartered Accountants for re-appointment and the same is included in the
(Registration No. of the firm with the ICAI: FRN 104767W), Notice of the fourteenth AGM circulated to the Members.
as the Joint Statutory Auditors of the Company to audit
the accounts of the Company upto FY 2021-22 and hold Orientation Programme for Independent Directors and
office as such upto the conclusion of the fifteenth AGM Non-Executive Directors
of the Company. During FY20, the Insurance Regulatory and Development
The requirement to place the matter relating to Authority of India (IRDAI) vide letter dated December
ratification of appointment of auditors by Members 13, 2019, had advised all the insurance companies
at every AGM has been omitted by the Companies to ensure that all its independent directors participate
(Amendment) Act, 2017 w.e.f May 7, 2018. Accordingly, in a 2 day residential Orientation Programme for
no resolution is being proposed for ratification of Independent Directors to be conducted by the National
appointment of Statutory Auditors at the ensuing AGM Insurance Academy (NIA), Pune. The programme
and a note in respect of same has been included in the provides insights into the statutory and regulatory
Notice convening the fourteenth AGM. framework on the entities with respect to which they
are/would be acting as Independent Directors. All the
Subsidiary Company Independent Directors of the Company attended the
The Company has no subsidiaries. said Orientation Programme.

17
IRDAI vide its letter dated February 23, 2021 advised being appointed as Directors under the provisions of
all the insurance companies to ensure that all its Section 164 of the Act. Further, all the Directors have
Non-Executive Directors participate in a 3 day online confirmed that they comply with the ‘fit and proper’
Orientation Programme to be conducted by NIA, Pune. criteria prescribed under the Corporate Governance
The objective of the programme is to ensure high levels Guidelines issued by IRDAI vide circular dated May 18,
of corporate governance standards and to facilitate 2016 (‘Guidelines’).
fulfillment of obligations of Non-Executive Directors
in a prudent manner. The sector specific Orientation Significant and Material Orders passed by the Regulators
Programme would provide insights relating to the or Courts or Tribunals
industry requirements. There are no significant or material orders passed by the
Regulators or Courts or Tribunals impacting the going
Opinion of Board (Independent Directors Databank) concern status and the Company’s operations in future.
The Board is of the opinion that the Independent Directors
Internal control over Financial Reporting
of the Company possess requisite qualifications,
experience and expertise in insurance, banking, finance, The internal control over financial reporting is a
accountancy, economics, law, etc. and they hold highest process designed to provide reasonable assurance
standards of integrity. regarding the reliability of financial reporting and
the preparation of financial statements for external
The Company has taken appropriate steps towards the purposes in accordance with applicable accounting
inclusion of the names of all Independent Directors principles and includes those policies and procedures
in the Databank of Independent Directors maintained that (i) pertain to the maintenance of records that,
by the Indian Institute of Corporate Affairs, Manesar in reasonable detail, accurately and fairly reflect
(‘IICA’). Further, in terms of Section 150 of the Act the transactions and disposition of the assets of
read with Rule 6(4) of the Companies (Appointment & the Company; (ii) provide reasonable assurance that
Qualification of Directors) Rules, 2014, the Independent transactions are recorded as necessary to permit
Directors are required to undertake online proficiency preparation of financial statements in accordance
self-assessment test conducted by the IICA within a with generally accepted accounting principles, and
period of one (1) year from the date of inclusion of their that receipts and expenditures of the Company are
names in the Databank. being made only in accordance with authorizations
Proviso to Rule 6(4) of the Companies (Appointment of Management and Directors of the Company; and
& Qualification of Directors) Rules, 2014 provides that (iii) provide reasonable assurance regarding prevention
the Independent Directors shall not be required to pass and timely detection of unauthorized acquisition, use or
the online proficiency self-assessment test, if they have disposition of the Company’s assets that could have a
served as a Director or Key Managerial Personnel, for a material effect on the financial statements.
total period of not less than ten years, as on the date of The Company has established adequate internal control
inclusion of their name in the Databank, in one or more procedures, commensurate with the nature of its
of the following entities:- business and size of its operations and the same are
(a) listed public company; or periodically monitored and reviewed by the Management
(b) unlisted public company having a paid-up share for its adequacy and appropriateness. Standard
capital of rupees ten crore or more; or Operating Procedures are in place largely for all areas
(c) body corporate listed on a recognized stock exchange. of operations and the same are reviewed periodically.
The Management has assessed the effectiveness of
Of the four Independent Directors, three were in the Company’s internal control over financial reporting
compliance with the above criteria and one of the as of March 31, 2021. As a result of the evaluation, the
Independent Director has successfully completed the Management has concluded that the Company’s internal
online proficiency self-assessment test. control over financial reporting was effective as of March
Declaration by Directors 31, 2021 with no significant deficiency.
The Company has received declarations from all Audit and Compliance Committee
Independent Directors confirming that they meet the The Audit and Compliance Committee comprises of six
criteria of independence as provided under sub-section (6) members – four Independent Directors and two Non–
6 of Section 149 of the Act. Executive Directors. The Chairman of the Committee
The Company has received declarations from all is an Independent Director and a qualified Chartered
Directors confirming that they are not disqualified from Accountant. The composition of the Committee is in

18 14th Annual Report 2020-21

conformity with the provisions of Section 177 of the Act (Prevention, Prohibition and Redressal) Act, 2013
and the Guidelines. (POSH Act) with an objective to promote a safe and
All the Committee members possess adequate secure work environment for all employees and to provide
qualifications to fulfill their duties as stipulated under the protection against sexual harassment of employees and
Act and the Guidelines. prevention thereof and redressal of complaints.
The other details about the Committee are provided in In accordance with the provisions relating to the
the Report of the Directors on Corporate Governance. constitution of Internal Complaints Committee under
the POSH Act, the Company has constituted an Internal
Indian Accounting Standards (Ind AS) Complaints Committee (ICC). Presently, ICC comprises
Pursuant to notification of the Companies (Indian of six members, of which three are women including a
Accounting Standards) Rules, 2015, IRDAI vide circular member from a non-governmental organization, who
dated March 1, 2016, directed the insurance companies is an expert on the subject matter. One of the women
to prepare financial statements in accordance with members is the presiding officer of ICC.
Ind AS from April 1, 2018 onwards, with comparatives
for the period ended March 31, 2018. The role of ICC is to monitor complaints and redressal
of grievances under the POSH Policy. An online POSH
On May 18, 2017, the International Accounting
module was enabled for all employees (including study
Standards Board (IASB), issued IFRS 17: Insurance
material followed by compulsory test). Also during the
Contracts (applicable from January 1, 2021) replacing
year, 3 sessions were conducted on an on-going basis
IFRS 4: Insurance Contracts. Consequently, IRDAI vide
to create awareness about the Policy amongst the
circular dated June 28, 2017, deferred the implementation
employees.
of Ind AS for a period of two years i.e. to be implemented
effective FY 2020-21. Considering the challenges in During the year under review, 3 cases were reported and
implementation and concerns expressed by various are duly closed.
stakeholders, on November 14, 2018, the IASB proposed
the deferral of IFRS 17, by one year i.e. to be implemented Secretarial Standards
from January 1, 2022. The Company has complied with the applicable provisions
IRDAI vide circular No. IRDAI/F&A/CIR/ACTS/023/01/2020 of Secretarial Standards issued by the Institute of
dated January 21, 2020 informed the insurance Company Secretaries of India (ICSI).
companies that IRDAI would be in a position to notify the
Regulations on preparation of Ind AS compliant financial Registrar & Share Transfer Agent
statements only after final amendments to IFRS 17 are The Company has two Registrar and Transfer Agent
carried out by IASB and corresponding Indian equivalent (RTAs) (i) KFin Technologies Pvt. Ltd. (formerly known
standard is notified by MCA and stated that it has decided as Karvy Fintech Private Limited) (ii) Beetal Financial &
to implement all applicable Ind AS simultaneously Computer Services Pvt. Ltd. The address of the RTAs are
from an effective date that would be decided after the as follows:
finalization of IFRS 17 by IASB. Further, vide notification
dated March 17, 2020, IASB decided that the effective For ISIN: INE225R01027 For INE092V08010
date of IFRS 17, will be deferred to annual reporting & INE392I08011 & INE092VO8028
periods beginning on or after January 1, 2023.
KFin Technologies Pvt. Ltd. Beetal Financial &
Further, in June 2020, the IASB has published
Karvy Selenium Tower B, Plot Computer Services Pvt. Ltd.
amendments to IFRS 17 and subsequently, in December
2020, the Institute of Chartered Accountants of India No. 31-32, Nanakramguda, Beetal House, 3rd Floor, 99
(ICAI) has issued an exposure draft of amendments to Gachibowli, Serilingampally, Madangir, Behind LSC, Near
Ind AS 117 corresponding to aforesaid amendments in Hyderabad – 500 032, Dada Harsukhdas Mandir,
IFRS 17 issued by IASB. Telangana New Delhi - 110 062
Disclosure under the Sexual Harassment of Women at Email id: Email id:
Workplace (Prevention, Prohibition and Redressal) Act, einward.ris@kfintech.com beetal@beetalfinancial.com
2013
Tel No.: +91-40-67162222 Tel No.: 011-29961281-83
The Company has framed a Policy on Prohibition of
Website: Website:
Sexual Harassment at the workplace (POSH Policy)
based on the Sexual Harassment of Women at Workplace www.kfintech.com www.beetalfinancial.com

19
Directors’ Responsibility Statement Acknowledgements
In accordance with the provisions of Section 134 (5) of The Board wishes to express its sincere gratitude for the
the Act and based on the confirmation provided by the guidance and support extended by various authorities
Management, your Directors state that: including the Insurance Regulatory and Development
(a) In the preparation of the annual accounts, the Authority of India, General Insurance Council,
applicable accounting standards have been followed Competition Commission of India, Reserve Bank of
and there were no material departures; India, Ministry of Corporate Affairs and other Ministries
of the Government of India, Depositories and the Stock
(b) Accounting policies selected were applied
Exchanges.
consistently. Reasonable and prudent judgements
and estimates were made so as to give a true and The Board acknowledges the continued patronage of its
fair view of the state of affairs of the Company as at policyholders, and thanks other stakeholders such as
March 31, 2021 and of the profit of the Company for the channel partners, intermediaries and reinsurers for
the year ended on that date; their continued support, trust and co-operation.
(c) Proper and sufficient care has been taken for the The Board takes this opportunity to thank the Promoters
maintenance of adequate accounting records in – Housing Development Finance Corporation Limited,
accordance with the provisions of the Act and Rules ERGO International AG and Munich Health Holding AG
made thereunder, Insurance Act, 1938, as amended, for providing their continued guidance, co-operation and
Insurance Rules, 1939 and IRDAI Regulations, support.
Orders, Circulars and Guidelines for safeguarding The Board places on record their appreciation for the
the assets of the Company and for preventing and hard work, loyalty and commitment, of all the employees
detecting frauds and other irregularities; at all levels, enabling the Company’s continued growth.
(d) The annual accounts of the Company have been The Board remains grateful and acknowledges the
prepared on a going concern basis; indomitable spirit and commitment shown by the
(e) Internal financial controls have been laid down to be employees while servicing the customers and ensuring
followed by the Company and such internal financial least disruption during the COVID-19 pandemic.
controls are adequate and operating effectively;
and
(f) Proper systems are in place to ensure compliance On behalf of the Board of Directors
with the provisions of all applicable laws and DEEPAK S. PAREKH
that such systems were adequate and operating Mumbai Chairman
effectively. April 20, 2021 (DIN: 00009078)

20 14th Annual Report 2020-21

Annexure 1 to Directors’ Report

DISCLOSURES ON MANAGERIAL REMUNERATION Percentage increase in remuneration of each Director and Key
Details of remuneration as required under Rule 5(1) Managerial Personnel in FY 2020-21:
of the Companies (Appointment and Remuneration of Name Designation Increase in
Remuneration
Managerial Personnel) Rules, 2014, is provided below:
Mr. Ritesh Kumar Managing Director 0%
Ratio of remuneration of each director to the median and CEO
remuneration of the employees of the Company for
Mr. Anuj Tyagi*** Deputy Managing 0%
FY 2020-21: Director
Name Designation Ratio of Mr. Samir H. Shah Executive Director 0%
remuneration
and CFO
of each Director
to the median Mr. Dayananda V. Company Secretary 0%
remuneration of Shetty & Chief Compliance
the employees Officer
Mr. Deepak S. Chairman 1:1 ***Mr. Anuj Tyagi was the Executive Director & CBO of the Company
Parekh (Non-Executive) upto January 8, 2020 and was deputed as the Managing Director &
CEO of HEHI w.e.f January 9, 2020. Pursuant to merger, Mr. Tyagi has
Mr. Keki M. Mistry Non-Executive Director 10:1 been appointed as the Executive Director & CBO of the Company for
Ms. Renu Sud Non-Executive Director 7:1 a period of 5 (five) years w.e.f November 13, 2020. Mr. Tyagi was re-
Karnad designated as Deputy Managing Director at the Board Meeting held
on April 20, 2021.
Mr. Alexander Non-Executive Director -
Ankel* The Company did not pay any commission to Non-
Executive Directors. It is proposed to pay commission
Mr. Theodoros Non-Executive Director -
Kokkalas* of ` 10 lakh each to the Independent Directors for
FY 2020-21, which is the same as paid for FY 2019-20.
Dr. Oliver Martin Non-Executive Director -
Further details are provided in Form MGT-9, available on
Willmes**
the website of the Company (www.hdfcergo.com).
Dr. Clemens Non-Executive Director -
Matthias Muth** Percentage increase in the median remuneration of
Mr. Bernhard Independent Director 11:1 employees in FY 2020-21: 0%
Steinruecke Number of permanent employees on the rolls of the
Mr. Mehernosh B. Independent Director 12:1 Company as on March 31, 2021: 6,410
Kapadia
Average percentile increase already made in the salaries
Mr. Arvind Mahajan Independent Director 12:1
of employees other than the managerial personnel
Mr. Ameet P. Hariani Independent Director 12:1 in the last financial year and its comparison with the
Mr. Samir H. Shah Executive Director 58:1 percentile increase in the managerial remuneration
and CFO and justification thereof and point out if there are
Mr. Anuj Tyagi*** Deputy Managing 69:1 any exceptional circumstances for increase in the
Director managerial remuneration:
Mr. Ritesh Kumar Managing Director 200:1 In view of Covid–19 pandemic, during FY 2020-21
and CEO there was no increase in salaries of managerial or non-
*upto October 11, 2020; **w.e.f October 12, 2020 managerial personnel.

21
Report of the Directors on Corporate Governance

Corporate Governance is simplistically just the way a the applicable laws and conducting business in best
corporation is governed. Good governance would thus ethical manner.
entail balancing the expectations of key stakeholders The Company is not only committed to follow the
for the larger good. It is only this very foundation that Corporate Governance practices embodied in various
companies are built to last. The focus on good governance regulatory provisions, but is constantly striving to
has increased with the increase in public participation adopt and adhere to the emerging best practices
in the company’s ownership and will only increase with and benchmarking itself against such practices. The
increasing globalization and foreign participation. Good Independent Directors always watch for the business
Corporate Governance has therefore become imperative practices followed by the Company and consider the
for instilling and maintaining investors’ confidence. interest of various stakeholders including policyholders
The organization conducts business in a fair, transparent whilst approving major Board decisions.
and ethical manner which is the bedrock of good The Board of Directors has taken cognizance of various
Corporate Governance. The Company would like to regulatory changes in the overall governance framework
share that it would continue its endeavor in improving and remains committed to imbibe the spirit of governance
its processes to only scale heights in good governance. in all spheres of the Company’s business. The Company
It is noteworthy that recent developments across has complied with various provisions of the Act and the
various jurisdictions have alerted the regulators Guidelines on Corporate Governance for the Insurance
and they have prescribed various rules to maintain Sector (‘Guidelines’) issued by the Insurance Regulatory
minimum standards of governance which continues and Development Authority of India (IRDAI) and certain
to be dynamic in accordance with the changing non-mandatory requirements. The status with regard to
socio-economic environment. the same is listed below:
Company’s philosophy on Corporate Governance Board of Directors
The Company’s philosophy on Corporate Governance The Board of Directors of the Company are responsible
has been influenced by its Promoters, Housing for ensuring fairness, transparency and accountability
Development Finance Corporation Limited (HDFC) and of the Company’s business operations and they provide
ERGO International AG (ERGO). The Company endeavors appropriate directions, with regard to leadership,
to adhere to the well established and proven practices vision, strategies, policies, monitoring, supervision,
of HDFC and ERGO in maintaining corporate culture accountability to shareholders and to achieve greater
and the spirit in managing the business. Corporate levels of performance on a sustained basis as well
Governance at the Company is not just adherence to as adherence to the best practices of Corporate
legal statutes, mandatory rules and guidelines; it is Governance. The Board plays a pivotal role in creation
the Company’s philosophy to observe the spirit behind of stakeholder value and ensures that the Company
the letter. The Company believes in nurturing its long adopts sound and ethical business practices and that
term commitment and sustainable relationships with the resources of the Company are optimally used. The
Policyholders, Shareholders and other stakeholders. Board periodically reviews and approves the strategy and
The Company believes that Corporate Governance is a oversees the decisions of the Management.
continuous journey towards sustainable value creation The Company has a multi-tier management structure,
for all the stakeholders and is driven by its values of comprising the Board of Directors and its Committees at
Sensitivity, Excellence, Ethics and Dynamism (SEED). the apex, followed by employees at senior management,
The Company’s vision is to be the most trusted partner middle management and junior management positions.
for every stakeholder and the Company is committed to Through this, it is ensured that strategic supervision is
provide fair, transparent and equitable treatment to all provided by the Board; control and implementation of the
stakeholders. Company’s strategy is achieved effectively, operational
The Company endeavors to abide by its value system management remains focused on implementation;
guided by the principles of accountability, transparency information regarding the Company’s operations and
and timely disclosure of matters of interest to the financial performance is made available promptly;
stakeholders and ensuring thorough compliance with delegation of decision making with accountability is

22 14th Annual Report 2020-21

achieved; financial and operating control and integrity
Sr. Directors Category No. of Directorships
are maintained at an optimal level; and risks are suitably No. as on
evaluated and dealt with. March 31, 2021#

Composition 3. Ms. Renu Sud Non-Executive 8

The Board has a mix of executive, non-executive Karnad Director
and independent directors. The Board comprises of
competent and qualified directors to drive the strategies 4. Dr. Oliver Martin Non-Executive -
in a manner that would sustain the growth of the Willmes* Director
Company and protect the interest of various stakeholders
in general and Policyholders in particular. The Board 5. Dr. Clemens Non-Executive -
comprises of Directors having expertise in insurance, Matthias Muth* Director
banking, finance, accountancy, economics, law, human
resources, etc. 6. Mr. Bernhard Independent 2
Steinruecke Director
As at March 31, 2021, the Board comprised of twelve
members, of which three are Whole-time Directors and
nine are Non-Executive Directors. The three Whole-time 7. Mr. Mehernosh Independent 4
B. Kapadia Director
Directors include the Managing Director & CEO, Executive
Director & Chief Business Officer and Executive Director
8. Mr. Arvind Independent 2
& Chief Financial Officer. Of the nine Non–Executive
Mahajan Director
Directors, three Directors represent HDFC which includes
one Woman Director, two Directors represent ERGO and
9. Mr. Ameet P. Independent 6
four are Independent Directors.
Hariani Director
The Company is Indian Owned and Controlled and is in
compliance with the Guidelines on Indian Owned and 10. Mr. Samir H. Executive -
Controlled stipulated by IRDAI. Shah Director & CFO
All the Independent Directors have confirmed that they
satisfy the criteria laid down for an independent director 11. Mr. Anuj Tyagi** Deputy 1
under Section 149(6) of the Act and Rule 6(1) and Managing
(2) of the Companies (Appointment and Qualification Director
of Directors) Rules, 2014, as amended. None of the
Directors of the Company are related to one another. All 12. Mr. Ritesh Managing -
the Directors of the Company fulfill the ‘fit and proper Kumar Director & CEO
criteria’ as mentioned in the Guidelines.
#Directorships held in public companies registered
The details of Board of Directors, their directorships in under the provisions of the Companies Act, 1956 / 2013
public companies as on March 31, 2021, are as set out (excluding the Company) have been considered.
in the below table:
*w.e.f. October 12, 2020
Sr. Directors Category No. of Directorships
No. as on
**Pursuant to appointment as Managing Director
March 31, 2021# and CEO of HDFC ERGO Health Insurance Limited
w.e.f January 9, 2020, Mr. Anuj Tyagi continued as a
1. Mr. Deepak S. Chairman 5 Non-Executive Director of the Company upto November
Parekh (Non-Executive) 12, 2020 and was appointed as Executive Director &
CBO w.e.f November 13, 2020 and was re-designated
2. Mr. Keki M. Non-Executive 5
Mistry Director as Deputy Managing Director at the Board Meeting held
on April 20, 2021.

23
The names of the Directors of the Company, as at March 31, 2021, with qualification, field of specialization/core
skills/expertise are as set out in the below table:-
Name of the Qualification Field of specialization/core skills/ expertise
Director Governance Corporate Insurance Business Accountancy
Strategy and & Risk Management and Finance
Planning Management and Marketing
Mr. Deepak S. Fellow of Institute of Chartered 3 3 3 3 3
Parekh Accountants (England & Wales)
Mr. Keki M. Fellow of Institute of Chartered 3 3 3 3 3
Mistry Accountants of India
Ms. Renu Sud Law Graduate, from University of 3 3 3 3
Karnad Mumbai and Master’s degree in
Economics from Delhi University and
Parvin Fellow – Woodrow Wilson
School of International affairs,
Princeton University, USA
Dr. Oliver Business Administration at University 3 3 3 3 3
Martin Willmes of Cologne and MBA from Eastern
IIIinois University, USA
Dr. Clemens Economics at University of Mainz and 3 3 3 3 3
Matthias Muth Munich, Doctorate in Economics from
Munich University
Mr. Bernhard Law and Economics in Vienna, 3 3 3
Steinruecke Bonn, Geneva and Heidelberg and
Law Degree from the University of
Heidelberg & passed Bar exam at the
High Court of Hamburg
Mr. Mehernosh Master’s degree in Commerce 3 3 3 3 3
B. Kapadia (Honours) and Member of The
Institute of Chartered Accountants of
India and The Institute of Company
Secretaries of India
Mr. Arvind Graduate (B.Com. Hons) from 3 3 3
Mahajan Shriram College of Commerce, Delhi
University and Post Graduate Diploma
in Management from IIM, Ahmedabad
Mr. Ameet P. Law degree from Government Law 3 3
Hariani College, Mumbai and Masters in Law
degree from the University of Mumbai
Mr. Samir H. Fellow Member of The Institute of 3 3 3 3
Shah Chartered Accountants of India and an
Associate Member of The Institute of
Company Secretaries of India and The
Institute of Cost Accountants of India
Mr. Anuj Tyagi Chemistry (H) graduate and Post 3 3 3 3
Graduate Diploma in Business
Management
Mr. Ritesh Commerce Graduate from Shriram 3 3 3 3 3
Kumar College of Commerce, Delhi and MBA
degree from Faculty of Management
Studies, Delhi

24 14th Annual Report 2020-21

Responsibilities planned well in advance and informed to the Directors.
The Board of Directors represents the interest of the The notice of each Board and Committee meeting
Company’s shareholders in optimizing long-term value by is given in writing through email to each Director,
providing the Management with guidance and strategic Appointed Actuary, members of Senior Management and
direction on shareholders’ behalf. The Board’s mandate Statutory and Internal Auditors, as and when required.
is to oversee the Company’s strategic direction, review The Company also makes arrangements for participation
financial, operational and investment performance, of Directors in the meeting through video-conferencing
risks pertaining to the business, approve annual (VC), if for any reason they are unable to participate in
business plan/ budget, ensure regulatory compliance the meeting in person or the meeting could not be held
and safeguard interest of all stakeholders. The Board in physical form due to pandemic like COVID-19. The
plays a pivotal role in ensuring good governance and Board and its Committees meet at least once a quarter
creating value for all stakeholders. The Directors to inter-alia review the financial, operational, investment
acknowledge their duties as prescribed under the Act, performance and key risks impacting the business of the
the rules framed thereunder and the Guidelines. Company.

The Company Secretary in consultation with the Executive

Role of Independent Directors
Board prepares a detailed agenda for the meetings. All
The Independent Directors bring an independent
departments communicate with the Company Secretary
judgement to bear on the Board’s deliberation and
in advance with regard to matters requiring approval of
objectivity in the Board’s decision making process. The
the Board to enable inclusion of the same in the agenda
Independent Directors participate constructively and
for the meetings. With the objective of transparent flow
actively in the Committees of the Board in which they are
of information from the Management, detailed agenda
members. They represent and safeguard the interest of
notes are sent to all Directors in advance. The Members
all stakeholders.
of the Board also recommend inclusion of any matter in
the agenda for discussion. In case of matters requiring
Tenure
urgent consideration by the Board and arising post the
In accordance with the provisions of Section 152(6) of dispatch of agenda, the same is taken up for discussion
the Act, not less than two-thirds of the total number of by the Board as part of any other business with the
directors shall be persons whose period of office is liable permission of the Chairman and consent of majority of
to determination by retirement by rotation. One-third Directors present at the meeting.
of such directors are liable to retire every year and if
eligible, offer themselves for re-appointment. The members of the Board have access to all
information of the Company. Appointed Actuary is a
In accordance with the provisions of Section 149(10)
permanent invitee at the Meetings of the Board, Audit
and 152(5) of the Act, the Independent Directors are not
and Compliance Committee, Policyholder Protection and
liable to retire by rotation and are appointed for a fixed
Grievance Redressal Committee and Risk Management
term of 5 years.
Committee. Members of Senior Management team are
invited to attend the Board and Committee meetings
Board Meetings and Procedures
so as to provide additional inputs on the items being
All Directors participate in discussing the strategies, discussed. Urgent matters are also considered and
business performance, financials, investment performance approved by passing resolution through circulation,
and key risks pertaining to the business of the Company. which are noted at the next meeting. The Company
The Board follows a set of appropriate standard Secretary records the minutes of the proceedings of
procedures in the conduct of Board meetings which is each Board and Committee meetings. The draft minutes
summarized below: of each Board and Committee meetings are circulated
The meetings of the Board of Directors are generally to the members of the Board / Committee within fifteen
held at the Company’s registered office in Mumbai. The days from the date of meeting and the comments, if any
schedule of meetings to be held in a calendar year is on the draft minutes are received within seven days of its

25
circulation. The minutes are finalized within thirty days
Directors No. of Meetings held No. of Meetings
and thereafter recorded in the Minutes Book.
during the tenure attended
During FY 2020-21, the Board met seven (7) times on
May 8, 2020, June 12, 2020, July 22, 2020, October Mr. Anuj Tyagi 7 7
21, 2020, November 13, 2020, January 21, 2021 and
March 3, 2021. The time gap between any two meetings Mr. Ritesh Kumar 7 7
did not exceed 120 days.
*upto October 11, 2020; **w.e.f October 12, 2020
The attendance of the Directors at the said meetings is
listed below: The Board also met on April 20, 2021 for consideration
and approval of audited financial statements for the year
Directors No. of Meetings held No. of Meetings ended March 31, 2021.
during the tenure attended
Committees
Mr. Deepak S. Parekh 7 3 To enable better and more focused attention on
the affairs of the Company and as required under
Mr. Keki M. Mistry 7 7 regulatory provisions, the Board has constituted
various Committees. These Committees lay down the
Ms. Renu Sud Karnad 7 7 groundwork for decision-making and report at the
subsequent Board meeting. The terms of reference of
Mr. Alexander Ankel* 3 3 the Committees are approved by the Board, which inter-
alia includes all the statutory and regulatory stipulations.
Mr. Theodoros 3 1 Meetings of all Committees, except Nomination and
Kokkalas* Remuneration Committee (NRC) are held on a quarterly
basis. The NRC meets minimum twice in a year and as
Dr. Oliver Martin 4 4 and when required for transacting business assigned
Willmes** to it. Minutes of the Committee meetings/ report on
the activities of the Committee are submitted to the
Dr. Clemens Matthias 4 2 Board at its quarterly meetings. Matters requiring the
Muth** Board’s attention/ approval are generally placed in the
form of notes/ report to the Board from the respective
Mr. Bernhard 7 7 Committee. The Board has constituted the following
Steinruecke Committees with specific terms of reference:
1. Audit and Compliance Committee (ACC)
Mr. Mehernosh B. 7 7
Kapadia 2. Investment Committee (IC)
3. Risk Management Committee (RMC)
Mr. Arvind Mahajan 7 7 4. Policyholder Protection and Grievance Redressal
Committee (PPGRC)
Mr. Ameet P. Hariani 7 7 5. Nomination and Remuneration Committee (NRC)
6. Corporate Social Responsibility Committee (CSR)
Mr. Samir H. Shah 7 6
7. Allotment Committee

26 14th Annual Report 2020-21

 The relationship between the Board, the Committees and the Senior Management functions is illustrated below:

HDFC ERGO
General Insurance Company Limited

Other Board Committees Board of Mandatory Committees

(Allotment Committee) Directors

Internal
Auditors
Audit & Compliance External
Auditors

Company Secretary
Investment

Nomination &
Remuneration

Sub
Risk Management Committee

Policyholder Protection &

MD & CEO Grievance Redressal

Corporate Social Sub

Committee
Responsibility

Deputy Managing Executive

Director Director & CFO

Business Groups (Retail, Corporate Strategy Finance & Accounts

and Rural & Agri-Business)

Investments Secretarial, Legal &

Reinsurance Information Compliance
Technology

Risk Management &

Human Resources Operations & Internal Audit
Marketing

Customer Experience Fraud Control &

Underwriting
Management Investigation

Claims Actuarial

Administration & CSR

27
The role and composition of various Committees, who are Members of the Committee separately meet the
including the number of meetings held during the year Statutory Auditors prior to approval of audited financial
and the related attendance of the Committee Members statements.
at the said meetings, are given below: During FY 2020-21, the ACC met ten (10) times on May 2,
2020, May 8, 2020, July 7, 2020, July 22, 2020, August
Audit and Compliance Committee (ACC)
24, 2020, October 21, 2020, November 13, 2020,
The Audit and Compliance Committee comprises six (6) January 14, 2021, January 21, 2021 and March 9, 2021.
members – four Independent Directors and one nominee
The Committee also met on April 20, 2021 wherein it
each of HDFC and ERGO. The Chairman of the Committee
recommended the audited Financial Statements for the
is an Independent Director and a qualified Chartered
year ended March 31, 2021 to the Board for approval.
Accountant. The composition of the Committee is in
conformity with the provisions of Section 177 of the Act The composition of the ACC and attendance of the
and the Guidelines. Committee Members at the meetings held during
FY 2020-21 are listed below:
All the Committee Members possess adequate
qualifications to fulfill their duties as stipulated under the Members No. of Meetings No. of
Act and the Guidelines. held during the Meetings
tenure attended
The Members of the Senior Management and Auditors
Mr. Mehernosh B. Kapadia 10 10
are invited to participate in the meetings of the
(Chairman)
Committee as and when necessary. The Committee
invites Senior Executives as it considers their presence Mr. Bernhard Steinruecke 10 10
to be appropriate at its meetings. The Chairman of the Mr. Arvind Mahajan 10 10
Committee briefs the Board of Directors about significant Mr. Ameet P. Hariani 10 10
discussions and decisions taken at its meeting.
Mr. Keki M. Mistry 10 10
The Committee inter-alia oversees the financial
Mr. Alexander Ankel* 5 5
statements and financial reporting before submission to
the Board, internal audit function, compliance function Dr. Oliver Martin Willmes* 5 5
and the work of the Statutory Auditors. The Committee *Dr. Oliver Martin Willmes was inducted as a Member of the Committee
in place of Mr. Alexander Ankel w.e.f October 12, 2020.
also reviews the reports of the Internal Auditors and
Statutory Auditors along with the comments and action Investment Committee (IC)
taken reports of the Management. The Committee gives
The Investment Committee comprises eight (8)
appropriate directions to the Management in areas that
members – one HDFC nominee, one ERGO nominee,
needs to be strengthened. The Committee reviews and
one Independent Director, the Managing Director and
ratifies the related party transactions, monitors age-wise
CEO, the Executive Director and Chief Financial Officer,
analysis of unclaimed amount of Policyholders, progress
the Appointed Actuary, the Chief Investment Officer and
on settlement of unclaimed amount and steps taken
the Chief Risk Officer. The Chief Compliance Officer and
by the Company to reduce unclaimed amount, reviews
Company Secretary attends all Committee meetings. The
the process and mechanism in place to comply with the
composition of the Committee is in conformity with the
provisions of applicable laws. The Committee recommends
provisions of the IRDAI (Investment) Regulations, 2016,
to the Board the appointment or re-appointment of the
as amended from time to time.
Statutory Auditors, Internal Auditors, Secretarial Auditors,
Concurrent Auditors, Auditors for audit of remuneration The Committee reviews the Investment Policy of the
paid to Motor Insurance Service Providers, Investment Company, its implementation and the operational
Risk Management Auditors and their remuneration. The framework for the investment operations, ensuring
Committee and Statutory Auditors discuss the nature and liquidity for smooth operations, compliance with prudential
scope of audit prior to the commencement of the audit and regulatory norms on investments, risk management/
areas of concern, if any, arising post audit. The Committee mitigation strategies to ensure adequate return on
approves the type and nature of other services that can be investment of Policyholder and Shareholder funds. The
availed by the Company from the Statutory Auditors. The Committee also reviews the ALM and solvency position,
Committee also oversees internal financial control and the investment strategies adopted from time to time and
risk management systems of the Company and ensures gives suitable directions as needed.
that adequate procedures and processes has been set- The Committee at its quarterly meetings inter-alia reviews
up to address all concerns relating to adequacy of checks the report of the concurrent auditors on audit of investment
and control mechanisms. All the Independent Directors transactions and related systems, the investments made

28 14th Annual Report 2020-21

by the Company during the quarter, ALM position and the and practices, reviewing various key risks and frauds
investment strategy for the period ahead and provides associated with the business of the Company, evaluation
advise and suggestions. of risk exposure and laying down risk tolerance limits and
All the Committee Members are fully conversant with thereby assisting the Board in effective monitoring of the
various responsibilities cast on them by the IRDAI Risk Management Framework (RMF). The RMC advises
(Investment) Regulations, 2016, as amended from time the Board with regard to risk management in relation to
to time. The Committee regularly apprises the Board strategic and operational matters. The RMC also reviews
on the performance and analysis of the Company’s the ALM and the solvency position on a regular basis.
investment portfolio and strategy. In accordance with the framework, the RMC provides an
During FY 2020-21, the IC met four (4) times on May 8, assurance that risk exposures are adequately controlled
2020, July 22, 2020, October 21, 2020 and January 21, and identified gaps are effectively taken care of by
2021. The IC also met on April 20, 2021. implementing appropriate risk minimization measures.
The composition of the IC and attendance of the During FY 2020-21, the RMC met four (4) times on
Committee Members at the meetings held during the May 8, 2020, July 22, 2020, October 21, 2020 and
year are listed below: January 21, 2021. The RMC also met on April 20, 2021.
Members No. of Meetings held No. of Meetings
The composition of the RMC and attendance of the
during the tenure attended Committee Members at the meetings held during
Mr. Keki M. Mistry 4 4 FY 2020-21 are listed below:
(Chairman) Members No. of Meetings held No. of meetings
Mr. Alexander Ankel* 2 2 during the tenure attended
Dr. Clemens Matthias 2 1 Mr. Bernhard 4 4
Muth* Steinruecke (Chairman)
Mr. Arvind Mahajan 4 4
Mr. Mehernosh B. 4 4
Mr. Ritesh Kumar 4 4 Kapadia
Mr. Samir H. Shah 4 3
Mr. Ameet P. Hariani 4 4
Mr. Hiten B. Kothari 4 4
(Appointed Actuary) Mr. Keki M. Mistry 4 4
Mr. Abhiranjan Gupta 3 3 Ms. Renu Sud Karnad 4 4
(Chief Investment
Officer)** Mr. Theodoros 2 1
Mr. Sanjay Kulshrestha 1 1 Kokkalas*
(Chief Investment Dr. Oliver Martin 2 2
Officer)*** Willmes*
Mr. Sanjay Mishra 4 4
Mr. Samir H. Shah 4 3
(Chief Risk Officer)
*Dr. Clemens Matthias Muth was inducted as a Member of the Mr. Ritesh Kumar 4 4
Committee in place of Mr. Alexander Ankel w.e.f October 12, 2020.
*Dr. Oliver Martin Willmes was inducted as a Member of the Committee
**upto December 31, 2020; ***w.e.f January 1, 2021
in place of Mr. Theodoros Kokkalas w.e.f October 12, 2020.

Risk Management Committee (RMC) The Company has a Sub-Committee of the RMC
(SC-RMC) comprising of the Senior Executives including
The Risk Management Committee comprises eight the Managing Director and CEO and Executive Directors.
(8) members – three Independent Directors, two The SC-RMC inter-alia reviews the Company’s RMF
HDFC nominees, one ERGO nominee, the Managing and its effectiveness, monitors key areas of existing
Director and CEO and the Executive Director and Chief and emerging risks and assists the RMC in fulfilling its
Financial Officer. The Chairman of the Committee is an objectives of managing various risks associated with
Independent Director. the business of the Company. On a regular basis, the
The Chief Risk Officer is a permanent invitee to the SC-RMC reviews and updates the RMC on matters such
meetings of the Committee. as IBNR utilization status, premium payment warranty,
The terms of reference of the Committee inter-alia include frauds, business continuity and disaster recovery plan
overseeing the Company’s risk management policy and ALM from a risk perspective.

29
Policyholder Protection and Grievance Redressal Members No. of Meetings held No. of meetings
Committee (PPGRC) during the tenure attended
The Policyholder Protection and Grievance Redressal Ms. Renu Sud 4 4
Committee comprises seven (7) members – two Karnad
Independent Directors, two HDFC nominees, one ERGO Mr. Alexander Ankel* 2 2
nominee, two Executive Directors. The Chairman of the
Committee is an Independent Director. Dr. Clemens Matthias 2 1
Muth*
The Committee reviews the processes followed in
redressal of Policyholder grievances and the grievance Mr. Anuj Tyagi 4 4
redressal mechanism of the Company and suggests Mr. Samir H. Shah 4 3
mechanism for speedy redressal of complaints/ *Dr. Clemens Matthias Muth was inducted as a Member of the
grievances from Policyholders. The Committee also Committee in place of Mr. Alexander Ankel w.e.f October 12, 2020.
reviews the steps taken by the Company to reduce The Corporate Governance Guidelines issued by IRDAI,
unclaimed amount due to the Policyholders. advised insurers to include an expert/representative of
The Committee also reviews (i) the awards given by customers as an invitee at the meetings of the Committee
Insurance Ombudsman/ Consumer Forums and the to enable insurers to formulate policies for protection of
root cause of customer complaints; (ii) the claims report interests of the Policyholders and assess compliance
including status of outstanding claims with ageing and thereof.
repudiated claims with analysis of reasons thereof. Considering the vast experience of Dr. Jagdish Khattar,
The Policy on Protection of Interests of Policyholders (PPHI former Independent Director of the Company, in grievance
Policy) is available on the website (www.hdfcergo.com). The redressal and customer service, the Company has
key objective of the Policy is to provide for a mechanism to appointed Dr. Khattar as an expert/ representative of
redress the grievance and complaints of the Policyholders customers to take care of the interest of the Policyholders
in a time bound manner and to their satisfaction in and suggest formulation of requisite policies thereto and
accordance with the applicable laws. A designated email assess compliance thereof.
id viz. grievance@hdfcergo.com is provided to enable Dr. Khattar attends regular meetings of PPGRC as an
Policyholders to submit their grievance/ complaint and invitee and provides valuable advise to the Company in
its speedy redressal. protection of interest of Policyholders.
The Committee regularly submits its report to the Board
inter-alia with regard to complaints/ grievances received Nomination and Remuneration Committee (NRC)
and resolved, mechanism in place/ process being The Nomination and Remuneration Committee
followed for resolution of the complaints/ grievances comprises six (6) members – three Independent Directors,
and its observations on the efficacy of the existing two HDFC nominees and one ERGO nominee. The
mechanism. The report also contains the status of Chairman of the Committee is an Independent Director.
outstanding claims with ageing and repudiated claims The terms of reference of the Committee inter-alia
with analysis of reasons thereof. includes consideration and determination of the
During FY 2020-21, the PPGRC met four (4) times on May salary and other terms of the compensation package
8, 2020, July 22, 2020, October 21, 2020 and January for the Whole-time Directors, approval of the annual
21, 2021. The PPGRC also met on April 20, 2021. compensation of the Whole-time Directors, subject to
approval of IRDAI, approval of the annual increments
The composition of the PPGRC and the attendance of
to the Senior Management Personnel as well as overall
the Committee Members at the meetings held during the
salary increase across the organization, administration
year are listed below:
of the Employee Stock Option Plan (ESOP), approval
Members No. of Meetings held No. of meetings for grant of stock options to eligible employees and
during the tenure attended fixing of criteria inter-alia for evaluation of performance
Mr. Arvind Mahajan 4 4 of individual Directors, Board as a whole and Board
(Chairman) Committees.
Mr. Ameet P. Hariani 4 4 During the year, the NRC met four (4) times on May 8,
2020, June 12, 2020, November 13, 2020 and January
Mr. Keki M. Mistry 4 4
21, 2021. The NRC also met on April 20, 2021.

30 14th Annual Report 2020-21

The composition of the NRC and the attendance of the activities, as prescribed under Section 135 of the Act
Committee Members at the meetings held during the read with Rule 9 of the Companies (Accounts) Rules,
year are listed below: 2014, and Rule 8 of the Companies (Corporate Social
Members No. of Meetings held No. of meetings
Responsibility Policy) Rules, 2019, as amended is
during the tenure attended appended to the Board’s Report.
Mr. Mehernosh B. 4 4 The Company has a Sub-Committee of the CSR
Kapadia (Chairman) Committee (SC-CSR) comprising of the Senior
Mr. Bernhard 4 4 Management team including Executive Directors.
Steinruecke The SC-CSR evaluates and identifies CSR projects and
Mr. Arvind Mahajan 4 4 includes the same in Annual Action Plan and assists CSR
Mr. Keki M. Mistry 4 4 Committee/ Board of Directors in fulfilling the Company’s
CSR obligations and ensures timely execution and
Ms. Renu Sud Karnad 4 4
implementation of CSR projects and monitoring thereof.
Mr. Alexander Ankel* 2 2
Dr. Clemens Matthias 2 2 Allotment Committee (AC)
Muth* The Allotment Committee comprises five (5) members
*Dr. Clemens Matthias Muth was inducted as a Member of the – one Independent Director, two HDFC nominees, one
Committee in place of Mr. Alexander Ankel w.e.f October 12, 2020. ERGO nominee and the Managing Director & CEO.
Corporate Social Responsibility Committee (CSR) Members Position
The CSR Committee comprises six (6) members – two Mr. Mehernosh B. Kapadia Independent Director
Independent Directors, two HDFC nominees, one ERGO
nominee and one Executive Director. The Chairman of Mr. Keki M. Mistry Non-Executive Director
the Committee is an Independent Director. Ms. Renu Sud Karnad Non-Executive Director
During FY 2020-21, the Committee met four (4) times
on May 8, 2020, July 22, 2020, October 21, 2020 and Mr. Alexander Ankel* Non-Executive Director
January 21, 2021. The CSR also met on April 20, 2021. Dr. Clemens Matthias Muth* Non-Executive Director
The composition of the CSR Committee and the
Mr. Ritesh Kumar Managing Director and CEO
attendance of the Committee Members at the meetings
*Dr. Clemens Matthias Muth was inducted as a Member of the
held during the year are listed below:
Committee in place of Mr. Alexander Ankel w.e.f October 12, 2020.
Members No. of Meetings held No. of meetings
The terms of reference of the Committee inter-alia
during the tenure attended
includes consideration and approval of allotment of
Mr. Ameet P. Hariani 4 4 shares and other securities either pursuant to exercise of
(Chairman) stock options by eligible employees or in case the Board
Mr. Mehernosh B. 4 4 approves, issue of new securities from time to time.
Kapadia
During the year, the Committee approved the allotment
Mr. Deepak S. Parekh 4 1 of 3,45,651 equity shares of ` 10 each pursuant to
Ms. Renu Sud Karnad 4 4 exercise of stock options under Employees Stock Option
Mr. Theodoros 2 1 Plan - 2009 (ESOP-2009).
Kokkalas*
Dr. Oliver Martin 2 2 Meeting of Independent Directors
Willmes* The Independent Directors separately hold a meeting
Mr. Anuj Tyagi 4 4 once a year (without the presence of the Management)
*Dr. Oliver Martin Willmes was inducted as a Member of the Committee to evaluate the performance of the Whole-time
in place of Mr. Theodoros Kokkalas w.e.f October 12, 2020. Directors, Non-Independent Directors, Chairman, Board
The CSR Policy of the Company inter-alia specifies the Committees and the Board as a whole, and to assess the
key focus areas for CSR activities/ Projects that could quality, quantity and timeliness of the flow of information
be undertaken by the Company, formulation of Annual between the Company’s Management and the Board.
Action Plan, approach and process for undertaking During the year, the meeting of Independent Directors
CSR projects and the monitoring mechanism. The was held on January 21, 2021 which was attended by all
CSR Policy is available on the website of the Company Independent Directors and was chaired by Mr. Bernhard
(www.hdfcergo.com). The Annual Report on CSR Steinruecke.

31
Remuneration of Directors that the Whistleblowers are protected and not subjected
The remuneration of Non-Executive Directors (other to any discriminatory practices. During the year, WBCC
than Independent Directors) consists of sitting fees did not receive any complaint.
and the Independent Directors are paid sitting fees and In terms of the Policy, whistle blowing complaint can be
commission. sent directly to the Chairman of the Audit and Compliance
The Non-Executive Directors are covered under Group Committee of Directors. During the year, no person was
Medical Insurance Policy, premium whereof is borne by denied access to the Committee for expressing concerns
the Company. or reporting grievances under the Policy.
Except to the extent of insurance policies taken in Code of Conduct
the ordinary course of business, the sitting fees The Company’s Code of Conduct is applicable to all
and commission paid as mentioned hereinabove, employees and Directors of the Company. All the members
the Non-Executive Directors (including Independent of the Board and Senior Management Personnel have
Directors) do not have any pecuniary relationships or confirmed adherence to the provisions of the said Code
transactions with the Company. of Conduct.
The remuneration details of Whole-Time Directors as Securities Dealing Code
mandated under IRDAI Guidelines on Remuneration of As required under the provisions of Regulation 13(B)(2)
Non-Executive Director and Managing Director/ Chief of IRDAI (Investment) Regulations, 2016 and the
Executive Officer/ Whole-Time Director of Insurers dated Securities and Exchange Board of India (Prohibition of
August 5, 2016 is disclosed in the Directors report. Insider Trading) Regulations, 2015, as amended, the
The remuneration details of Directors are provided in Company has framed HDFC ERGO Securities Dealing
Section VI (B) of Form MGT-9, which is available on the Code for prevention of Insider Trading in the securities of
website of the Company (www.hdfcergo.com). Further, the investee companies and NCDs of the Company.
details of elements of remuneration paid to Managing The Directors, Key Management Persons, Designated
Director and Chief Executive Officer, and other Directors Employees, other identified employees, and their
and Key Management Persons are disclosed under immediate relatives are required to comply with
‘Managerial Remuneration’ section of Schedule 16 - Notes various provisions of the Code, to the extent applicable.
to Accounts forming part of the financial statements. These identified persons are prohibited from trading
in the securities of the investee companies whilst in
Whistleblower Policy possession of any unpublished price sensitive
The Company promotes ethical behavior in all its information of such investee companies and prohibited
dealings, business or otherwise and has put in place a from trading in NCDs of the Company without obtaining
Whistleblower Policy (Policy) for reporting of any illegal prior approval of the Compliance Officer.
or unethical behavior. The Policy is uploaded on the
website of the Company. In terms of the Policy, any Details of Claims
person including employees, customers and vendors The details of all claims incurred, paid, outstanding at
may report malpractice, actual or suspected fraud, the end of the year have been disclosed under Annexure 4
violations of the Company’s Code of Conduct, abuse to Schedule 16 - Notes to Accounts and Annexure 1 to
of power or authority by any official of the Company or the Management Report forming part of the financial
any other act with an intention of unethical personal statements.
On behalf of the Board of Directors
gain or cause damage to the Company or its employees
to the Whistleblower Complaints Committee (WBCC) DEEPAK S. PAREKH
constituted for the purpose. The Policy provides for Mumbai Chairman
maintaining confidentiality of such reporting and ensures April 20, 2021 (DIN: 00009078)

Compliance Certificate
In accordance with the provisions of Corporate Governance Guidelines issued by the Insurance Regulatory and
Development Authority of India, I, Dayananda V. Shetty, Company Secretary & Chief Compliance Officer of the
Company, hereby certify that the Company has complied with the provisions of Corporate Governance Guidelines
for Insurance companies issued by IRDAI, as amended from time to time and to the extent applicable and nothing
has been concealed or suppressed.
DAYANANDA V. SHETTY
Company Secretary &
Mumbai Chief Compliance Officer
April 20, 2021 FCS: 4638

32 14th Annual Report 2020-21

Management Discussion and Analysis Report

MACRO-ECONOMIC ENVIRONMENT of major segments in 2008. The Insurance Regulatory

The COVID-19 pandemic and the resultant lockdowns and Development Authority of India (IRDAI) continues to
led to lower demand and adversely impacted the global refine the existing regulations pertaining to insurance
economy in 2020. The International Monetary Fund companies, intermediaries and customers to ensure ease
(IMF) estimates that the economy contracted by 3.3%. of doing business and to drive insurance penetration in
Supportive policy measures announced in various the country.
economies and development and launch of vaccines In a COVID-19 pandemic impacted financial year, the
indicate that the global economy would be back on IRDAI has taken several measures with a major focus
the growth path in 2021, as demand revives across on driving industry wide uniformity in policy wording
segments. The IMF estimates this growth to be 6.0%. and coverages which will help in driving adoption of
Nevertheless, this growth is contingent on various factors insurance products.
such as successful containment of the transmission Last year, IRDAI had announced the standardization
of the virus, vaccine development and proper rollout, of health insurance product named Arogya Sanjeevani
limited impact of subsequent wave(s), policy measures Policy, w.e.f April 1, 2020. This year, IRDAI took further
to support growth, etc. With interest rates expected to measures aimed at standardizing retail products.
increase across economies in 2021, the tightening in Insurers are required to launch a standard cover for Home
global financial market conditions might also impact insurance (Bharat Griha Raksha), micro (Sookshma
corporate earnings growth. Like last year, a downside Udyam Suraksha) and small businesses (Laghu Udyam
risk to growth continues to be a likely scenario. Suraksha) and Standard Personal Accident Insurance
On the domestic front, the financial sector regulators from April 1, 2021. Further, IRDAI has also encouraged
and the Government undertook various measures insurers to launch a standard Vector Borne Disease
in FY 2020-21 from containing the risks to financial Health Insurance Policy (Mashak Rakshak) from April 1,
stability. At the same time, the Indian economy was also 2021.
impacted by a weak demand situation. According to the During the COVID-19 outbreak, IRDAI undertook various
estimates of the Central Statistical Office (CSO), the GDP initiatives and measures aimed at protecting the
contracted by ~8.0% in constant price terms this year as interests of the Policyholders. Apart from asking insurers
compared to 4.0% growth for the last year. Agriculture, to launch standard COVID-specific health insurance
forestry and fishing sectors registered 3.0% growth as products (Corona Kavach and Corona Rakshak), insurers
against 4.3% growth last year. The manufacturing sector were advised to expeditiously handle health insurance
registered 8.4% de-growth following 2.4% de-growth last claims, in particular those pertaining to COVID-19. The
year. The service sectors, in particular those related to timeline for payment of health and motor third party
hotels, transport and trade, were impacted adversely renewal premiums was also extended.
as well. Service sectors witnessed 8.1% de-growth as
against 5.9% growth last year. Effective August 1, 2020, IRDAI has also withdrawn the
long-term motor insurance package policies – 3 year
The Union Budget FY 2021-22 lay thrust on various OD + 3 year TP coverage for new cars and 5 year OD +
sectors such as infrastructure, health and well-being, 5 year TP coverage for new two wheelers.
innovation and research, etc. which should augment
growth prospects next year. With the vaccination roll- The Union Budget FY 2021-22 proposed to increase the
out picking up pace, the Reserve Bank of India expects Foreign Direct Investments (FDI) limit in insurance sector
near double-digit growth in the real economy in FY22 from 49% to 74%. Over the medium to long term, this
on the back of increased demand, especially in rural is expected to enable insurers to access foreign capital,
areas. Nonetheless, continuing uncertainty around which in turn may augment industry growth by increasing
subsequent waves of COVID-19, the impact of roll-backs penetration.
of loan moratorium, an expected increasing interest rate 2. Business Performance
scenario and unfavorable global developments continue
The General Insurance industry grew by 5.2% in FY21,
to be downside risks to domestic economic activity.
led by Commercial and Health segments. The upward
General Insurance Industry revision in premiums for certain categories of Commercial
risks announced in Q4FY20 continued to play out in the
1. Regulatory Developments first three quarters of FY21 as policies were renewed at
The Indian General Insurance industry has been one of higher premiums. As a result, the Commercial segment
the fastest growing industry over the last two decades led the industry growth with 15.2% growth. The onset
supported by the privatization in 2000 and de-tariffing of the pandemic resulted in increased awareness for

33
health insurance, thereby resulting in 13.4% growth in 1. Competitive Strength
Health Portfolio. Owing to almost 30% de-growth in the 1.1 One of the fastest growing Company
new vehicle registration, the motor segment registered a
The Company has been one of the fastest growing
de-growth of 1.7%. Thus, the industry excluding the crop
general insurance company with 5-year CAGR of 29%
segment witnessed 7.0% growth on a year-on-year basis.
vis-à-vis industry growth rate of 16% over the same
Industry - Product wise Premium (₹ in crore) period. Currently, the Company is the third largest private
+5% general insurer with an overall market share of 6.2% and
+11%
188,917
198,736 a private sector share of 10.8%.
169,448 -2%
34% 1.2 Largest Agency Force
36%
Motor 38%
The Company has the largest agency channel in the
32% 13% General Insurance industry with 32,721 multi-line
30%
Health & PA 30% agents and 112,677 health only agents totaling to
18% 15%
Commercial 16% 17% 145,398 agents and Point of Sales Personnel (POSPs).
-3%
Crop 16% 17% 16% The Company increased its agency premium to ` 2,460
Growth
FY19 FY20 FY21 crore in FY 2020-21 (YoY growth of 14%) representing
Source: IRDAI & GI Council
20% of the Company’s total premium.

During FY 2020-21, Private sector insurers grew by 7.6%, 1.3 Increased Presence in the districts
while the Standalone Health insurers grew by 11.1% and The Company follows a multi-geography, multi-product
Public sector insurers (including the specialized insurers) and multi-channel distribution strategy. The Company’s
grew by 1.6%. Private sector insurers grew faster than presence across the country has increased multi-fold
Public sector insurers across all segments other than post the merger of HEHI. As at March 31, 2021, the
Accident & Health (A&H). In the A&H segment, Private Company had a strong network of 203 branches and 375
sector insurers grew faster in the Retail Health segment, Digital Offices spread across 435 districts of the country.
while Public sector insurers grew faster in the Group
The Company’s focus to increase insurance penetration
& Government Health and Personal Accident segments.
in the tier-3 and beyond cities drives the geographical
Industry Premium (₹ in crore) and channel expansion strategy. The Digital Office has
+5% helped in faster ramping up of presence in upcountry
+11%
188,917
198,736 locations and now contributes ~5% of the Company’s
8%
169,448 8% 11% retail business. As a result, ~47% of retail premiums are
SAHI 7%
sourced from tier-3 and beyond geographies.
48% 49% 8%
Private 48%
1.4 2nd largest Retail Health Insurer
In FY 2020-21, the Company has become the second
Public 45% 44% 43% 2% largest retail health insurer (third largest in FY 2019-20)
Growth in the industry. The Company’s retail health premium
FY19 FY20 FY21 was ` 2,724 crore in FY 2020-21 with a market share
of 10%. The Company has one of the largest network of
Source: IRDAI & GI Council
more than 10,000 empanelled hospitals located in about
Company Performance 600 districts of India. The Company’s flagship products
During the year, the merger of HDFC ERGO Health Optima Restore and My Health Suraksha continues to
Insurance Limited (HEHI) (Formerly Apollo Munich Health drive the retail health portfolio along with Top-up and
Insurance Company Limited) was approved by NCLT and critical illness products.
IRDAI with Effective Date as November 13, 2020 and
Appointed Date as March 1, 2020. Therefore, FY 21 was 1.5 One of the Largest Crop Insurer using cutting edge
the first time that the merged entity was operational technology
for the entire financial year. Considering the Appointed The Company has been participating in the Government
Date, all the information, financial or otherwise for sponsored Crop Insurance Schemes from 2010 onwards.
FY 20 represents 1 month of HEHI and 12 months of the During FY 21, the Company implemented the Pradhan
Company. Mantri Fasal Bima Yojana in 62 districts spread over

34 14th Annual Report 2020-21

8 states covering more than 7.4 million farmers. The the country. The AI-enabled Bot on WhatsApp interacts
Company has maintained a stable market share of with customers using Natural Language Processing
8.3% and wrote a Gross Written Premium (GWP) of (NLP) and the customer can get services using chat
` 2,573 crore in FY 2020-21 as against ` 2,163 crore in mode or menu options. The encouraging adoption of
FY 2019-20. the WhatsApp platform helped the Company to launch
The Company is at the forefront of using various it on another instant message platform – Telegram. The
technology and innovative tools to estimate crop sown Company is continuing its efforts to utilize the power
area, moisture index, crop health index using in-house of messaging platform beyond customer servicing to
Geographic Information System (GIS) and Remote Advisor/Agent Servicing where our partners (Agents/
sensing analytics. Advisor) will be serviced instantly through WhatsApp.

For its holistic and all-round performance in terms of As part of Company’s customer-centricity policy, during
marketing and awareness creation about the Scheme, the year the Tele-clinic app - a Doctor on-call services
the Company has been rated Rank 1 in the assessment of was introducted for customers assisting them to get
insurance companies on Kharif 2020 IEC activities which medical consultation through the digital platform free of
was conducted by the Government of India. cost. The said service is also available for society at large
without any need to buy any product from the Company.
1.6 Technological Innovations
The Company’s digital applications for Customer
The Company ensured to remain focused on:
Servicing like Self Help on website, Mobile App Insurance
• new-age technologies like AI,IVR, Robotics, Portfolio Organiser, IVR, Chat Bot Dia, Email Bot eRA and
• to achieve the key objectives of providing superior Whatsapp, have seen good adoption. More than 50% of
customer experience, customer service requests were serviced digitally. Over
• enhanced productivity, the years, the Company’s service framework has become
• continuous innovation, and more robust and intuitive to help service customer’s
requirement seamlessly.
• being future-ready.

1.6.1 Artificial Intelligence (AI) First 2 Business Overview

The Company launched an ambitious program to The Company issued 1.02 crore policies (NOP) resulting
transform the Company into an AI-first organization, with in a GWP of ` 12,444 crore in FY 2020-21, with a
the core objective to use AI in all areas of operation of the market share of 6.2%.This resulted in a Y-o-Y growth rate
Company and automate decision making. The Company of 27% on a GWP basis (4% on a consolidated basis).
aims for AI to be the first layer for all customer servicing The merger led to an improved share of A&H in the
needs and only those which AI cannot handle to be Company’s portfolio.
addressed by humans. A host of digital initiatives were
initiated and executed during the year and our existing Company Premium and Policies issued
digital assets have seen significant scale-up with an 104 102
encouraging level of adoption. More so ~30% of digital Number of
Policies 85
services were serviced by AI. +27%
(Lakhs) 12,444
In order to be ahead in the technology curve, the Company +12%
9,760
has launched AI based external damage detection and 8,722
Gross
severity assessment tool for private car own damage Written
(OD) claims. The Company has successfully processed Premium
more than 40,000 private car OD claims since launch in (₹ in crore)
June 2020. The Company has also launched AI-assisted FY19 FY20 FY21
Break-in inspection for all its customers.
The Company achieved a profit after tax of ` 592 crore
1.6.2 Digital Initiatives as compared to ` 327 crore during the previous year,
Realizing the under penetration of digital awareness in representing a growth of 81% (58% on a consolidated
tier-2 towns, the Company launched its comprehensive basis). This was driven by portfolio steering measures
bouquet of services on the chat platform WhatsApp, to improve underwriting profitability and tight control on
which is widely used by the general public in all parts of operating expenses.

35
 Profit After Tax (₹ in crore) Channel wise Premium (₹ in crore)
Others 4% 6% 6% 22%
+81%
592 Direct 34% 32% 29% 17%

-15% 1%
12%
383 Bancassurance 18% 16% -1%
327 5%
Corporate agents 6% 7%
28% 23%
Broker 27% 29%

20% 125%
Agents 10% 11% Growth
FY19 FY20 FY21 FY19 FY20 FY21

3 Performance Highlights 3.2 Claims Settlement

3.1 Premium In FY 2020-21, 24.9 lacs (PY: 16.3 lacs) claims were
The Company’s GWP increased to ` 12,444 crore in reported to the Company with a growth of 53%. During
FY 2020-21 (PY: ` 9,760 crore) with a growth rate of FY 2020-21, the claims incurred (net) amounted to
27% (4% on a consolidated basis). Post merger, the A&H ` 4,852 crore (PY: ` 3,524 crore), an increase of 38%
business contribution has increased to 34% which was over last year.
23% in FY 2018-19 before merger.
The intimation of Motor OD Claims decreased Y-o-Y by
Product wise Premium (₹ in crore) 27% in FY21 with 3.8 lacs claims being reported. The
+27% Company has a fair and robust claims management
12,444 practice. Following its core values, the Company has
+12% 21% 19%
been able to provide a prompt response and quick
9,760
8,722 18%
claim settlement to all the Policyholders. The Settlement
22% 12%
Crop 24% Ratio for Motor OD Claims was 100% in FY21. The
20%
Commercial 18% 34% Company has helped the insured manage their claims
89%
A&H 23% 23% in a collaborative and mutually supportive manner by
Motor 35% 35% 27% 1% providing pan-India claims servicing across 523 districts.
Growth The repudiation rate for Motor OD Claims in FY21 has
FY19 FY20 FY21
been 1.2% (PY:1.3%), which is one of the lowest in the
Consequent to the merger, the distribution network of the industry. The faster settlement turn-around-times (TAT)
Company has strengthened, particularly in the Agency and higher settlement rate resulted in a Net Promoter
channel. The Company has an Agent network of 32,721 Score (NPS) of 20 in FY21 for Motor OD Claims.
General Insurance Agents and 112,677 Health Insurance
Agents, making it one of the largest networks in the General Despite challenges caused by COVID-19, the Company
Insurance industry. Likewise, the Company has 68 Bank / maintained its focus on serving its A&H customers. The
Corporate Agent partners for distributing General Insurance Company has one of the largest network of more than
products and another 29 Bank / Corporate Agent partners 10,000 empanelled hospitals located in about 600
for distributing Health Insurance products. districts of India. The Company endeavours to provide
The Company’s retail business grew across geographies the customers the best claims experience in the
through the Agency, MISP and Online channels this year. industry. To this end, the Company has embarked on
The growth of Bancassurance business was muted this a number of initiatives to further streamline processes
year as the banking industry, in general, witnessed a using data driven decision making. During FY21, the
slowdown. Company has paid over 4.2 lacs A&H claims.

36 14th Annual Report 2020-21

3.3 Claims Reserving claim liabilities are estimated basis available information
The outstanding claims liability is measured as the at the valuation date and assumptions around future
central estimate of the expected future ultimate trends in claims severity and frequency, judicial rulings
payments relating to claims incurred at the reporting and other factors. Further, the assumptions are influenced
date. The ultimate claims liability is measured based on by the Company’s claims handling procedures, inflation,
the advice of/ valuations performed by the Appointed minimum wages, court decisions, legislative changes,
Actuary. The expected future payments include those in customer behaviour, claims reporting delays, etc. The
relation to claims reported but not yet paid or not yet ultimate reserves takes into account the emerging
paid in full, claims incurred but not enough reported claims experience.
(IBNER), claims incurred but not reported (IBNR) and
Additionally, during the current financial year, the claims
the anticipated direct and indirect claims handling costs.
reporting and settlement pattern witnessed increased
While estimating the future ultimate claims liability,
delay on account of COVID-19 induced lockdown across
no allowance is made for discounting of reserves or
the country and principles of prudence has been followed by
negative provisions for any particular year of occurrence
the Appointed Actuary in applying judgements estimates
in compliance with IRDAI regulations. The ultimate
and assumptions to assess and provide for the impact
liability is estimated using established actuarial methods
of COVID-19 pandemic across line of business based on
depending on the class of business and nature of claims.
internal and external sources of information.
The ultimate claims reserves are estimates involving
actuarial projections at a given point of time, of what the The table below provides an overview of the development
Company expects the ultimate settlement of claims will of the Company’s estimates of gross ultimate claim
cost. amounts and gross paid losses (including loss adjustment
The claims reserve for the Motor Third Party liability expenses) in relation to a given accident year over
portfolio comprises a significant proportion of the time. This estimate of losses and their corresponding
Company’s total liability. The claims for Motor Third Party provision is increased or decreased as more information
liability are characterized by relatively longer time delay becomes known about the development of losses for
for reporting and settlement of claims. Thus, the ultimate each individual accident years.
(` in crore)
Gross Incurred Losses and Allocated Expenses (Ultimate Movement)
As at March 31, 2021 AY 10 AY 11 AY 12 AY 13 AY 14 AY 15 AY 16 AY 17 AY 18 AY 19 AY 20 AY 21
End of First year 452 741 770 1,065 2,178 2,636 2,923 5,007 5,616 7,049 8,236 9,099
One year later 442 734 846 1,103 2,323 2,547 2,980 4,788 5,332 6,951 7,661
Two years later 444 747 833 1,050 2,293 2,535 3,112 4,874 5,284 6,981
Three years later 453 753 781 1,116 2,289 2,638 3,121 4,860 5,290
Four years later 455 754 801 1,080 2,363 2,636 3,120 4,854
Five years later 458 767 806 1,144 2,369 2,621 3,134
Six years later 461 768 810 1,150 2,376 2,623
Seven years later 465 779 819 1,149 2,384
Eight years later 467 777 818 1,163
Nine years later 470 783 826
Ten years later 470 779
Eleven years later 472
               

37
 (` in crore)
Gross Paid Losses and Loss Adjustment Expenses
As at March 31, 2021 AY 10 AY 11 AY 12 AY 13 AY 14 AY 15 AY 16 AY 17 AY 18 AY 19 AY 20 AY 21
End of First year 284 411 424 548 1,263 1,390 1,808 2,071 2,706 3,882 3,810 3,612
One year later 373 597 637 840 1,801 2,020 2,387 3,779 4,191 5,310 5,561
Two years later 412 641 705 903 1,928 2,186 2,594 4,224 4,373 5,903
Three years later 425 663 725 948 2,000 2,279 2,725 4,307 4,480
Four years later 430 677 739 973 2,053 2,350 2,807 4,374
Five years later 434 692 749 1,006 2,098 2,397 2,834
Six years later 443 702 762 1,025 2,132 2,418
Seven years later 446 713 771 1,071 2,150
Eight years later 447 722 777 1,082
Nine years later 449 726 781
Ten years later 457 727
Eleven years later 459
(` in crore)
Gross Unpaid Losses and Loss Adjustment Expenses
As at March 31, 2021 AY 10 AY 11 AY 12 AY 13 AY 14 AY 15 AY 16 AY 17 AY 18 AY 19 AY 20 AY 21
End of First year 167 331 346 516 915 1,246 1,115 2,936 2,910 3,167 4,426 5,487
One year later 70 137 210 264 522 527 593 1,009 1,141 1,641 2,100
Two years later 31 106 128 146 366 349 517 649 911 1,078
Three years later 28 90 56 168 289 359 395 553 810
Four years later 24 77 62 107 309 286 312 480
Five years later 24 75 57 138 272 224 301
Six years later 18 66 48 125 243 205
Seven years later 19 66 47 78 234
Eight years later 19 55 41 81
Nine years later 21 57 45
Ten years later 13 52
Eleven years later 13
Note:
1. Motor Pool claims are excluded from the above table.
2. For Crop and Weather Insurance class of business, Accident Year corresponds to the year in which Premium is received.
3. The impact on the unpaid claims liability of the Company on account of landmark judgements issued by the Supreme Court of India and various
High Courts. e.g. Sarla Verma (April 2009) Pranay Sethi (October 2017) etc. has been allowed for in the claims ultimate liability.

4. Customer Servicing service set-ups, customer service and call centre set-ups
The Company was poised with a twin challenge in of erstwhile HEHI were in sourced and integrated with
this pandemic year; one, to enable its large workforce the Company’s operations and service set-up.
to work from home at a short notice due to sudden Another milestone during the year, was of unifying the
imposition of lockdown and the other for integrating Customer Service touch points for the merged entity,
HEHI with the Company during the pandemic in a remote ensuring that all our customers experience the same
working environment. The objective was not only to fight
standard of service. Through our customer management
against the pandemic but also to have high standards in
program, the Company made sure that all our customers
servicing the customers and ensure that the integration
is completed as per plan. The entire operations and stay well informed about the new developments within
customer services set-up pan India was integrated with the organization. The Company continues to expand its
required scale of optimisation to draw synergies. As the service offerings by providing convenient and easy to use
Company’s philosophy is not to outsource customer digital platforms for its customers.

38 14th Annual Report 2020-21

5. Investments The impact on net account was significantly reduced due
The Investment function complements the core business to adequate reinsurance protection.
of the Company. The investments of the Company are The Company has a strong reinsurance panel comprising
made in accordance with the Investment Policy as of the National Reinsurer - GIC, foreign reinsurers who
approved by the Board of Directors. The Investment have set up their branches in India and cross border
Committee oversees the implementation of the reinsurers with a financial strength rating of A- and
Investment Policy. The Company’s investment strategy above. Participation of Foreign Reinsurance branches
reflects the coordination between Assets and Liabilities has gradually increased in FY21.
given the nature of the business of the Company while
keeping in perspective the regulatory framework. The 7. Risk Management
Investment Policy mandate includes maintaining a The Company has a robust and integrated enterprise-
high degree of liquidity and safety of assets, optimizing wide Risk Management Framework (RMF) to identify,
returns and consistency of returns commensurate with assess, manage and mitigate all relevant risks in the
the risks undertaken. Company’s operating environment. The RMF works at all
As on March 31, 2021, the Investment Assets of the levels across the Company and is a proactive institution-
Company stood at ` 16,643 crore (PY: ` 13,577 crore). wide program. It has been aligned and integrated
The IRDAI (Investment) Regulations, 2016 requires Non- with business processes and covers all relevant risks
Life companies to invest 30% of their Investment Assets including Strategic risks, Operational risks, Investment
in Government and approved Securities, 15% in the risks, Insurance risks and Information & Cyber Security
Infrastructure sector and Housing sector. The Company risks. The Risk Strategy is embedded in the business
held ` 6,789 crore (40.8%) in Government securities, planning process.
` 4,940 crore (29.7%) in securities of the Infrastructure Under the RMF, periodic and realistic assessment of the
and Housing sector and remaining ` 4,914 crore (29.5%) risk exposures is conducted based on the impact and
in approved and other investments. The Company held the likelihood of the occurrence of a risk.
94% of its assets in Sovereign and AAA or equivalent
The Company’s Risk Management is overseen by the Risk
rated assets, reflecting a high degree of safety. Further,
Management Committee of Directors (RMC). The Board
the Company held ` 3,019 crore in assets maturing
approved Risk Management Policy & Manual provides
within one year. The total investment income generated
the framework and guidelines for management and
for the year ended March 31, 2021 was ` 1,145 crore
mitigation of all risks associated with the business of the
(PY: ` 881 crore).
Company. The risk performance is reviewed by the RMC at
its quarterly meetings.
Portfolio Mix - Investments
The Company also assigns critical importance to
29.5% Information and Cyber Security Risks. Accordingly, the
40.8% Company has an Information Security and Business
29.7%
Continuity framework within the RMF that ensures all
the information assets are adequately protected by
instituting required controls. The controls are assessed
periodically to determine the adequacy and effectiveness
of the controls instituted.
Govt./a pproved Securi ti es Infrastructure & Housing Sector
Other approved Inves tments
The Company had done an independent assessment
for Capability Maturity Model Integration (CMMi) of its
Information & Cyber Security processes to benchmark its
6. Reinsurance practices against the globally recognized CMMi standard.
The Company’s reinsurance program is designed to As per the results of the independent assessment
ensure protection against exposure to large losses exercise, the Company’s overall Information & Cyber
affecting single risks as well as catastrophic loss events Security has been assessed as “Processes are strong,
affecting multiple risks across portfolios. As per regulatory continuously monitored and measured”.
requirements, the Company has ceded 5% of its business The Internal Audit function is an independent function
to the General Insurance Corporation of India (GIC). of the Company. Risk-based audits of processes and
The Company had a successful reinsurance renewal for branches are conducted as per the Annual Audit Plan
FY21. The Company experienced a few large risk losses approved by the Audit and Compliance Committee of
and a CAT loss on account of Cyclone Amphan in FY21. Directors (ACC). The planning and conduct of internal

39
audits is focused towards assessing the existence and COVID-19 projects. Rest of the funds were allocated
design of controls and to provide a reasonable assurance towards funding surgeries and Telemedicine – a digital
on the operating effectiveness of internal controls. Key consultation platform in 11 villages across 8 states.
observations arising out of audits conducted by Internal Apart from this, over the years, CSR spend was allocated
Audit are presented to the ACC on a quarterly basis. All towards Education through the Company’s flagship
audit findings are tracked and monitored to confirm the government school reconstruction project – GAON MERA,
implementation of remediation plans. under which it has reconstructed 12 govt. schools in the
last 4 years. The Company also continued its support to
7.1 Fraud Control & Investigation
Girl Child education through scholarships.
The Company has a dedicated Fraud Control & Investigation
Unit which implements the Fraud Management Framework 10. Future Outlook
of the Company. It primarily endeavours to take all the The General Insurance (GI) industry has grown at a CAGR of
possible steps to prevent, detect and mitigate risks 17% over the last 19 years. Yet, the insurance penetration
emanating from various types of frauds to the Company. as % of GDP, which was at 0.94% for 2019, continues to
It relies on various automated tools using predictive be low vis-à-vis comparable economies. Low insurance
modelling, analytical engines and AI-based solution penetration, asset creation potential in commercial
to flag claims suspected to be fraudulent, dynamically lines and improved insurance awareness shall continue
and seamlessly. It also investigates the complaints by to provide growth opportunities for the industry over the
whistleblowers and ensures appropriate actions taken medium term.
thereof accordingly. Cyber and Forensic expertise are The domestic economy which was expected to register
utilized to investigate the important cases. Apart from double digit growth in FY22, has been temporarily
these, it also handles filing of complaints with the police impacted with the second wave of COVID-19 pandemic.
on fraud cases, initiates recoveries of the stolen assets Though the government has been proactive in taking
and takes legal action against the fraudsters. remedial measures to kick-start the economy, uncertainty
The department is ISO 9001:2015 certified. remains on the restoration of post-pandemic normalcy.
The GI industry is expected to register better growth in
8. Solvency FY 2021-22 vis-à-vis FY 2020-21.
An insurance company is considered to be solvent if While the low levels of penetration shall continue to
its assets are adequate and liquid to pay off claims or attract new entrants at one end, the capital intensive
liabilities as and when they arise. The solvency ratio nature of the business is expected to drive consolidation
is used to assess this. Thus, an insurance company’s on the other end. Regulatory changes are expected to
solvency ratio indicates its claim paying ability; the higher promote product innovation and nudge the insurers to
the solvency ratio, the better the claim paying ability. make their processes and risk management frameworks
As on March 31, 2021, the Company had a solvency more robust.
ratio of 1.90 times as against the minimum regulatory The Company believes that, over the coming years,
requirement of 1.50 times. the growth potential of the domestic economy and
regulatory changes will result in strong growth and
Solvency Ratio (times) improve the profitability of the GI industry. The Company
Solvency Ratio Actual Solvency Ratio Requirement would continue to innovate, use technological solutions
and strive to provide better policyholder and stakeholder
1.90
1.75 1.78 propositions in the future.
1.50 1.50 1.50 Disclaimer: This report contains forward-looking
statements based on beliefs of HDFC ERGO’s
management. The words ‘expected’, ‘estimate’, ‘believe’
and ‘intend’ used to identify forward-looking statements,
reflects the Company’s current views with respect to the
future events and are subject to risks and uncertainties.
FY19 FY20 FY21 Many factors could cause the actual result to be
materially different, including, amongst others, changes
9. Corporate Social Responsibility (CSR) of competitors/competing products, lack of acceptance
The Company is aware of its commitment to the society. of new products and may vary materially from those
In the pandemic impacted financial year, the Company projected here. HDFC ERGO does not intend to
increased its support to healthcare with 85% of CSR assume any obligation to update these forward-looking
expenditure, of which 76% focused specially towards statements.

40 14th Annual Report 2020-21

ANNUAL REPORT ON CSR ACTIVITIES (iii) Proposals/requests from a registered and
specialized body for providing financial assistance
1. Brief outline on CSR Policy of the Company for carrying out specific CSR initiatives subject to
A. CSR Policy the condition that it fulfills the criteria as prescribed
The CSR Policy of the Company inter-alia specifies in the statute in this regard.
the key focus areas for CSR activities/projects
iii. Implementation Methodology
that could be undertaken by the Company, approach
and process for undertaking CSR projects and the The CSR activities/ projects are implemented using
monitoring mechanism. internal resources or through collaborating with NGOs/
specialized agencies/ trusts/ institutions/ foundations/
The Policy is available on the website of the Company -
societies/ Government bodies; etc. in accordance with
www.hdfcergo.com.
the provisions of the Act and the Companies (Corporate
B. Organization setup Social Responsibility Policy) Rules, 2014.
The CSR projects are implemented under the guidance The details of major CSR initiatives undertaken by the
of the CSR Committee of Directors, which presently Company during the financial year 2020-21 are given
comprises six (6) Directors. The Company also has a below:-
Sub-Committee of CSR (SC-CSR) comprising of the Senior
Management team including the Executive Directors. I. Gaon Mera Government School Reconstruction &
Development Project in 4 Identified Villages -
The terms of reference of the CSR Committee inter-alia
includes: The focal area for the Company’s CSR intervention is
a dedicated “Adopt a Village” Program called “GAON
i. Formulate and review the CSR Policy and MERA”. The program is aimed at improving the current
recommend the same to the Board for its approval; status of Education, Sanitation and Healthcare in
ii. Formulate and recommend to the Board an Annual selected village(s).
Action Plan on CSR activities;
The Company has selected villages through an internal
iii. Recommend the amount of expenditure to be employee nomination program. The Company aims to
incurred on the CSR activities; work holistically towards development of education with
iv. Review the CSR projects/ programmes from time to all relevant stakeholders in these villages on Government
time; School Reconstruction Program to make a sustainable
v. Ensure overall governance and compliance for impact in the lives of the marginalized communities
CSR; and living in these villages.
vi. Annually report to the Board, the details of the CSR Charities Aid Foundation (CAF India), Yuva Unstoppable
activities. and Habitat for Humanity are working as Implementation
Partners for above activities.
C. Scope of activities
The main objective of Gaon Mera program is to address
The CSR activities of the Company are as per the
the need for sustainable educational infrastructure,
provisions of Schedule VII of the Companies Act, 2013
support system for rural development and holistic
(‘Act’).
advancement of education in the communities. The
i. Geographical Span of CSR Projects project works towards sustainable development in core
The CSR activities are taken up primarily in and around focus area of education in the selected village(s).
areas near HDFC ERGO’s places of business. Preliminary evaluation in the start-up phase was done
ii. Planning by the Implementation Partners in the form of rapid
need assessment and development of project proposal.
The identification of CSR activities is done using one or
Government School Construction Project is adopted
combination of the following methods:
using BaLA (Building as Learning Aid), an innovative
(i) In-house planned projects; concept for qualitative improvement in education,
(ii) Proposals from District Administration/ Local Govt. through developing child-friendly, learning and fun based
body/ Public representatives etc; and physical environment.

41
2. Composition of CSR Committee:
Sr. Name of Director Designation/ Nature of Number of meetings Number of meetings
No. Directorship of CSR Committee of CSR Committee
held during the year attended during the year
1 Mr. Ameet P. Hariani Chairman (Independent Director) 4 4
2 Mr. Mehernosh Kapadia Independent Director 4 4
3 Mr. Deepak S. Parekh Non - Executive Director 4 1
4 Ms. Renu Sud Karnad Non - Executive Director 4 4
5 Dr. Oliver Martin Willmes* Non - Executive Director 2 2
6 Mr. Theodoros Kokkalas* Non - Executive Director 2 1
7 Mr. Anuj Tyagi Deputy Managing Director 4 4
*Dr. Oliver Martin Willmes was inducted as a Member of the Committee in place of Mr. Theodoros Kokkalas w.e.f
October 12, 2020.

3.
Provide the web-link where Composition of CSR Policy) Rules, 2014 and amount required for
Committee, CSR Policy and CSR projects approved set-off for the financial year, if any:
by the Board are disclosed on the website of the Not Applicable
Company:
6. Average net profit of the Company as per Section
https://www.hdfcergo.com/corporate-social- 135(5) of the Act: ` 475.95 crore
responsibility
7. (a) Two percent of average net profit of the
4. Provide the details of Impact Assessment of CSR Company as per Section 135(5) of the Act -
projects carried out in pursuance of sub-rule (3) ` 9.52 crore
of Rule 8 of the Companies (Corporate Social (b) Surplus arising out of the CSR projects or
Responsibility Policy) Rules, 2014, if applicable programmes or activities for the previous
(attach the report): financial years – NIL
Not Applicable (c) Amount required to be set-off for the financial
5. Details of the amount available for set-off year, if any–NIL
in pursuance of sub-rule (3) of Rule 7 of the (d) Total CSR obligation for the financial year
Companies (Corporate Social Responsibility (7a+7b-7c) - ` 9.52 crore.

8. (a) CSR amount spent or unspent for the financial year:

Total Amount Spent Amount Unspent (in `)
for the Financial
Year (in `)
Total Amount transferred to Amount transferred to any fund specified under
Unspent CSR Account as per Schedule VII as per second proviso to Section
Section 135(6) of the Act 135(5) of the Act
Amount Date of transfer Name of the Fund Amount Date of transfer
95,201,616 NIL NA NA NIL NA

42 14th Annual Report 2020-21

 (b) Details of CSR amount spent against ongoing projects for the financial year:
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Sr. Name of the Item from Local Location of the project Project Amount Amount Amount Mode of Mode of Implementation
No. Projects the list of area duration allocated spent in transferred Implemen- -Through Implementing
Activities activities (Yes/ for the the current to Unspent tation Agency
in No) project financial CSR Direct
State District Name CSR
Schedule (in `) year (in `) Account
(Yes/No) Registration
VII to the for the
number
Act project as
per Section
135(6) of
the Act
(in `)
1 Reconstruction Education NO Haveri Karnataka 3 Years 10,284,836 Direct NA NO Yuva CSR00000473
project of Govt. expenditure: Unstoppable
School in 3 514,242
villages under Overheads–
Gaon Mera Nil
FY20 Projects
2 Reconstruction Education NO Patan Gujarat 3 Years 8,388,594 Direct NA NO Yuva CSR00000473
project of Govt. expenditure: Unstoppable
School in 3 661,374
villages under Overheads–
Gaon Mera Nil
FY20 Projects
3 Reconstruction Education NO Jhajjar Haryana 3 Years 9,097,760 Direct NA NO Habitat For CSR00000402
project of expenditure: Humanity
Govt. School 2,729,328
in village under Overheads–
Gaon Mera Nil
FY21 Projects
4 Supporting Education NO Wardha Maharashtra 3 Years 5,207,250 Direct NA NO Lila CSR00000090
Professional and expenditure: Poonawalla
Graduate Amravati 1,598,250 Foundation
Education Overhead-
for Girls Nil
through Lila
Poonawalla
Foundation
5 Supporting 3 Education NO Ranchi, Jharkhand, 3 years 3,030,000 Direct NA NO International CSR00000712
students on Thane Maharashtra expenditure: Foundation
full scholarship and and 3,030,000 For Research
for three year Unnao Uttar Pradesh Overhead- and
undergraduate Nil Education
program
6 Reconstruction Education NO Madhya Jabalpur 2 years 7,360,000 Direct NA NO CAF-India CSR00001692
project of Pradesh expenditure:
Govt. School 736,000
in village under Overheads
Gaon Mera - Nil
FY20 Projects
Total 9,269,194

(c) Details of CSR amount spent against other than ongoing projects for the financial year:
(1) (2) (3) (4) (5) (6) (7) (8)
Sr. Name of the Projects/ Item from Local Location of the project Amount spent Mode of Mode of Implementation -
No. Activities the list of area in the current Implementation Through Implementing Agency
activities in (Yes/ State District financial year –Direct (Yes/No) Name CSR
Schedule VII No) (in `) Registration
to the Act number
1 Running Teleclinic Centers in Health care NO 8 States 9 Districts Direct expenditure: Yes NA NA
11 villages 1,089,389
Overheads - Nil
2 Financial assistance and Health care YES Maharashtra Nashik, Direct expenditure: NO Association CSR00000230
extending co-guardianship to Thane 1,910,541 of Parents
special adults of ADHAR Overheads - Nil of Mentally
Retarded
Children,
Mumbai
(ADHAR)

43
 (1) (2) (3) (4) (5) (6) (7) (8)
Sr. Name of the Projects/ Item from Local Location of the project Amount spent Mode of Mode of Implementation -
No. Activities the list of area in the current Implementation Through Implementing Agency
activities in (Yes/ State District financial year –Direct (Yes/No) Name CSR
Schedule VII No) (in `) Registration
to the Act number
3 COVID-19 Awareness Health care NO pan India pan India Direct expenditure: YES NA NA
campaign 11,500,001
Overheads - Nil
4 COVID-19 Prime Minister’s Prime NO pan India pan India Direct expenditure: YES NA NA
Citizen Assistance and Relief Minister’s 50,000,000
in Emergency Situations National Relief Overhead - Nil
Fund (PM CARES Fund) Fund
5 COVID-19 Support - COVID-19 NO Bongaigaon Assam Direct expenditure: NO The Action CSR00003562
Contribution to Action Support 500,000 Northeast
Northeast Trust (ANT) for Overhead - Nil
distributing cotton masks
to students of Government
schools for precaution.
6 COVID-19 Support – COVID-19 NO Maharashtra Mumbai Direct expenditure: YES NA NA
Distribution of ration kits to Support 1,539,900
~ 1000 families affected Overhead - Nil
through BIG FM (United ways
of India)
7 Project Save Little Hearts Health care NO pan India pan India Direct expenditure: NO Genesis CSR00001713
(Genesis Foundation) 2,700,000 Foundation
Overhead - Nil
8 Girl Child Education Program Education NO Mewat Haryana Direct expenditure: NO IIMPACT CSR00002935
With IIMPACT by supporting 2,725,000
50 Learning Centers Overhead - Nil
9 Support Cataract Surgeries Health care NO pan India pan India Direct expenditure: NO Vision CSR00002065
through Vision Foundation 5,000,000 Foundation of
of India Overhead - Nil India
10 COVID-19 Support - COVID-19 NO Delhi, 7 Districts Direct expenditure: NO St. Jude India CSR00001026
Contribution for Childcare Support Rajasthan, 924,112 Childcare
Centers for COVID testing and West Bengal, Overhead - Nil Centres
Quarantine facilities Tamil Nadu,
Telangana and
Assam
11 COVID-19 Response COVID-19 NO Bihar, Delhi, 4 Districts Direct expenditure: NO Doctors for CSR00000608
-Strengthen COVID-19 clinical Support Maharashtra 7,543,604 You
care management at various and Karnataka Overhead - Nil
COVID hospitals
12 COVID-19 Support – Hygiene COVID-19 NO Assam, Tripura, 16 Districts Direct expenditure: YES NA NA
Kits to farmers in 7 States Support Rajasthan, 499,875
Maharashtra, Overhead - Nil
Karnataka,
Uttar Pradesh
and Odisha
Total 85,932,422

(d) Amount spent in Administrative Overheads – Nil

(e) Amount spent on Impact Assessment, if applicable – Nil
(f) Total amount spent for the Financial Year (8b+8c+8d+8e) - ` 95,201,616
(g) Excess amount for set-off, if any –Nil

44 14th Annual Report 2020-21

 Sr. No. Particular Amount (in `)
(i) Two percent of average net profit of the Company as per Section 135(5) of the Act 95,190,622
(ii) Total amount spent for the financial year 95,201,616
(iii) Excess amount spent for the financial year [(ii)-(i)]* NIL
(iv) Surplus arising out of the CSR projects or programmes or activities of the previous NIL
financial years, if any
(v) Amount available for set off in succeeding financial years[(iii)-(iv)] NIL
*The difference between (ii) and (i) i.e excess of ` 10,994 is not proposed to be carried forward

9. (a) Details of Unspent CSR amount for the preceding three financial years:
Sr. Preceding Amount transferred Amount Amount transferred to Amount remaining
No. Financial to Unspent CSR spent in the any fund specified under to be spent in
Year Account under reporting Schedule VII as per Section succeeding financial
Section 135 (6) of Financial Year 135(6) of the Act, if any years (in `)
the Act (in `) (in `) Name of Amount Date of
the fund (in `) transfer
NIL

9. (b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s):
Sr. Project Name Financial Project Total amount Amount Amount Cumulative Status of
No. ID of the Year in Duration allocated for allocated spent on the amount spent the project –
Project which the the project for the project in at the end of Completed/
project was (in `) project the reporting the reporting Ongoing
commenced (in `) Financial Year Financial Year
(in `) (in `)
NIL

10. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired
through CSR spent in the financial year (asset-wise details):
The Company has not constructed or acquired any asset in its name. However, the Company has refurbished/
reconstructed Govt. Schools as detailed below:
A. Govt. School in Jamkhar village, Jabalpur, Madhya Pradesh under Gaon Mera Projects –
(a) Date of creation or acquisition of the October 23, 2020
capital asset(s)
(b) Amount of CSR spent for creation or ` 7,360,000
acquisition of capital asset
(c) Details of the entity or public authority School Management Committee, Jamkhar village, Jabalpur,
or beneficiary under whose name Madhya Pradesh
such capital asset is registered, their
address, etc
(d) Provide details of the capital asset(s) Project completed and inaugurated virtually in October 2020. A
created or acquired (including complete brief overview of facilities provided by us in project is as follows -
address and location of the capital 1. Reconstruction of 2,942 sq.ft. area of school provided
asset) with all amenities with BaLA tools. A new drinking water
area with water filter has been constructed;
2. New garden area with play section has been created. A
variety of indoor and outdoor play items have been provided;
3. BaLA tools like knowledge grill, charts, maps, play of light
and shadow, periscope, toy making area, etc

45
 4. Furnishing items like wooden benches and wooden desk
for students, almirah for all classes, notice board, etc;
5. Complete uniforms including shoes and socks, school
bags and stationery kits for all students;
6. Refurbishment work includes:
a. Walls have been plastered, Tiling, plumbing, kitchen
platform and all cooking and serving utensils have been
provided; and
b. MDM Kitchen, Office room, Computer room and store room.
Total 60 students getting benefitted and expecting to increase
at least 6% number of students in newly constructed school.

B. Govt. School in Domabaramattur village, Haveri, Karnataka under Gaon Mera Projects –
(a) Date of creation or acquisition of the October 30, 2020
capital asset(s)
(b) Amount of CSR spent for creation or ` 9,770,595
acquisition of capital asset
(c) Details of the entity or public authority School Management Committee, Domabaramattur village,
or beneficiary under whose name Haveri, Karnataka
such capital asset is registered, their
address, etc
(d) Provide details of the capital asset(s) Project completed in October 2020 as per plan and inaugurated
created or acquired (including complete virtually on November 2021. A brief overview of facilities
address and location of the capital provided by us in project is as follows –
asset) 1. Reconstruction of 4,428 sq.ft. area of school provided
with all amenities with BaLA tools. A new drinking water
area with water filter has been constructed;
2. New garden area with play section has been created.
A variety of indoor and outdoor play items have been
provided;
3. BaLA tools like knowledge grill, charts, maps, play of light
and shadow, periscope, toy making area, etc;
4. Furnishing items like wooden benches and wooden desk
for students, almirah for all classes, notice board, etc;
5. Complete uniforms including shoes and socks, school
bags and stationery kits for all students;
6. Refurbishment work includes:
a. MDM kitchen, Walls have been plastered, Tiling, plumbing,
kitchen platform and all cooking and serving utensils have
been provided;
b. Boy’s toilet with all sanitary fittings; and
c. Repainting of MDM shed and providing a new roof.
Total 186 students getting benefitted and expecting to increase
at least 10% number of students in newly constructed school.

46 14th Annual Report 2020-21

 C. Govt. School in Mithivavdi village, Patan, Gujarat under Gaon Mera Projects –
(a) Date of creation or acquisition of the December 9, 2020
capital asset(s)
(b) Amount of CSR spent for creation or ` 7,969,164
acquisition of capital asset
(c) Details of the entity or public authority School Management Committee, Mithivavdi village, Patan,
or beneficiary under whose name Gujarat
such capital asset is registered, their
address, etc
(d) Provide details of the capital asset(s) Project completed and inaugurated virtually in December
created or acquired (including complete 2020. A brief overview of facilities provided by us in project is
address and location of the capital as follows -
asset) 1. Reconstruction of 4,000 sq.ft. area of school provided
with all amenities with BaLA tools. A new drinking water
area with water filter has been constructed;
2. New garden area with play section has been created.
A variety of indoor and outdoor play items have been
provided;
3. BaLA tools like knowledge grill, charts, maps, play of light
and shadow, periscope, toy making area, etc;
4. Furnishing items like wooden benches and wooden desk
for students, almirah for all classes, notice board, etc;
5. Complete uniforms including shoes and socks, school
bags and stationery kits for all students;
6. Refurbishment work includes:
a. MDM kitchen, Walls have been plastered, Tiling, plumbing,
kitchen platform and all cooking and serving utensils have
been provided;
b. Boy’s toilet with all sanitary fittings; and
c. Repainting of MDM shed and providing a new roof.
Total 55 students getting benefitted and expecting to increase
at least 7% number of students in newly constructed school.
11. Specify the reason(s), if the Company has failed to spend two percent of the average net profit as per Section
135(5) of the Act – Nil

Ritesh Kumar Ameet Hariani

(DIN: 02213019) (DIN: 00087866)
(Managing Director & CEO) (Chairman - CSR Committee)

47
 Secretarial Audit Report for the Financial Year Ended 31st March, 2021
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014]
To, b. The Securities and Exchange Board of India
The Members, (Prohibition of Insider Trading) Regulations,
2015;
HDFC ERGO General Insurance Company Limited
CIN: U66030MH2007PLC177117 c. The Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements)
We have conducted the secretarial audit of the
Regulations, 2018#;
compliance of applicable statutory provisions and the
adherence to good corporate practices by HDFC ERGO d. The Securities and Exchange Board of India
General Insurance Company Limited (hereinafter called (Share Based Employee Benefits) Regulations,
“the Company”). Secretarial Audit was conducted in a 2014#;
manner that provided us a reasonable basis for evaluating e. The Securities and Exchange Board of
the corporate conducts/statutory compliances and India (Issue and Listing of Debt Securities)
expressing our opinion thereon. Regulations, 2008;
Based on our verification of the Company’s books, f. The Securities and Exchange Board of India
papers, minute books, forms and returns filed and (Registrars to an Issue and Share Transfer
other records maintained by the Company and also Agents) Regulations, 1993 regarding the
the information provided by the Company, its officers, Companies Act and dealing with client;
agents and authorised representatives during the
conduct of secretarial audit, we hereby report that in g. The Securities and Exchange Board of India
our opinion, the Company has, during the audit period (Delisting of Equity Shares) Regulations,
covering the financial year ended on 31st March, 2021 2009#; and
complied with the statutory provisions listed hereunder h. The Securities and Exchange Board of India
and also that the Company has proper Board-processes (Buyback of Securities) Regulations, 2018#;
and compliance-mechanism in place to the extent, in the #
The Regulations or Guidelines, as the case may be
manner and subject to the reporting made hereinafter: were not applicable for the period under review.
We have examined the books, papers, minute books, The list of Acts, Laws and Regulations specifically
forms and returns filed and other records maintained by applicable to the Company are given below:
the Company for the financial year ended on 31st March,
2021 according to the provisions of: vi. The Insurance Act, 1938, as amended;

i. The Companies Act, 2013 (‘the Act’) and the Rules vii. The Insurance Regulatory and Development
made thereunder; Authority Act, 1999, as amended and Regulations
framed thereunder and as amended from time to
ii. The Securities Contracts (Regulation) Act, 1956 time.
(‘SCRA’) and the rules made thereunder;
We have also examined compliance with the applicable
iii. The Depositories Act, 1996 and the Regulations clauses of the following:
and Bye-laws framed thereunder;
i. Secretarial Standards issued by The Institute of
iv. Foreign Exchange Management Act, 1999 and Company Secretaries of India; and
the rules and regulations made thereunder to the
extent of Foreign Direct Investment. The Company ii. The Securities and Exchange Board of India
does not have any Overseas Direct Investment (Listing Obligations and Disclosure Requirements)
and External Commercial Borrowings during the Regulations, 2015 [“Listing Regulations”].
financial year; During the period under review, the Company has
v. The following Regulations and Guidelines prescribed complied with the provisions of the Act, Rules,
under the Securities and Exchange Board of India Regulations, Guidelines, Standards, etc. mentioned
Act, 1992 (‘SEBI Act’):- above, to the extent applicable.

a. The Securities and Exchange Board of We further report that -

India (Substantial Acquisition of Shares and The Board of Directors of the Company is duly
Takeovers) Regulations, 2011#; constituted with proper balance of Executive Directors,

48 14th Annual Report 2020-21

Non-Executive and Independent Directors. The changes Tribunal (NCLT), Mumbai on February 17, 2020 for
in the composition of the Board of Directors that took its approval. The NCLT, Mumbai vide its order dated
place during the period under review were carried out in September 29, 2020 has sanctioned/ approved the
compliance with the provisions of the Act. Scheme of Amalgamation for the merger of HEHI
Adequate notice was given to all Directors to schedule the with the Company and the Insurance Regulatory
Board Meetings, agenda and detailed notes on agenda and Development Authority of India (IRDAI) vide its
were sent at least seven days in advance for meetings letter dated November 11, 2020 has given its final
other than those held at shorter notice, and a system approval for the merger with the Effective Date as
exists for seeking and obtaining further information and November 13, 2020. The Appointed Date for the
clarifications on the agenda items before the meeting merger is March 1, 2020.
and for meaningful participation at the meeting. ii. The Board of Directors of the Company at its
During the period under review, decisions were carried meeting held on November 13, 2020 has allotted
through unanimously and no dissenting views were 10,53,77,232 equity shares of Rs. 10/- each of
observed, while reviewing the minutes. the Company, to the equity shareholders of HEHI
in the Swap Ratio of 100:385 as approved in the
We further report that there are adequate systems and Scheme of Amalgamation.
processes in the Company commensurate with the size
and operations of the Company to monitor and ensure
compliance with applicable laws, Rules, Regulations and
For Bhandari & Associates
Guidelines.
Company Secretaries
We further report that during the audit period, the Firm Registration No: P1981MH043700
Company has undertaken following events/actions:
S. N. Bhandari
i. The Company Scheme Application for merger
Partner
of HDFC ERGO Health Insurance Limited (HEHI) Mumbai FCS No: 761; C P No. : 366
(formally known as Apollo Munich Health Insurance April 20, 2021 ICSI UDIN: F000761C000134323
Company Limited) with the Company pursuant to
Sections 230 to 232 of the Companies Act, 2013 This report is to be read with our letter of even date
and the rules framed thereunder was filed by the which is annexed as Annexure ‘A’ and forms an integral
Company with the Hon’ble National Company Law part of this report.

49
Annexure ‘A’

To,
The Members,
HDFC ERGO General Insurance Company Limited
CIN: U66030MH2007PLC177117
Our Secretarial Audit Report for the Financial Year ended on March 31, 2021 of even date is to be read along with
this letter.
1. Maintenance of secretarial record is the responsibility of the Management of the Company. Our responsibility is
to express an opinion on these Secretarial records based on our audit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about
the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that
correct facts are reflected in Secretarial records. We believe that the processes and practices we follow provide
a reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the
Company.
4. Wherever required, we have obtained the Management representation about the compliance of laws, Rules and
Regulations and happening of events, etc.
5. The compliance of the provisions of Corporate and other applicable laws, Rules, Regulations, Standards is the
responsibility of Management. Our examination was limited to the verification of procedures on test basis.
6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy
or effectiveness with which the Management has conducted the affairs of the Company.

For Bhandari & Associates

Company Secretaries
Firm Registration No: P1981MH043700

S. N. Bhandari
Partner
Mumbai FCS No: 761; C P No. : 366
April 20, 2021 ICSI UDIN: F000761C000134323

50 14th Annual Report 2020-21

Independent Auditors’ Report
Independent Auditors’ Report to the Members of HDFC ERGO GENERAL INSURANCE COMPANY LIMITED

Report on the audit of the Standalone Financial 2. Basis for opinion

Statements We conducted our audit in accordance with the Standards
1. Opinion on Auditing (the “SAs”) specified under section 143(10)
of the Companies Act, 2013. Our responsibilities under
We have audited the standalone financial statements of
those Standards are further described in the Auditor’s
HDFC ERGO GENERAL INSURANCE COMPANY LIMITED
Responsibilities for the Audit of the Financial Statements
(“the Company”), which comprise the Balance Sheet as
section of our report. We are independent of the Company
at March 31, 2021, the Revenue Accounts, the Profit and
in accordance with the Code of Ethics issued by the
Loss Account and the Receipts and Payments Account
Institute of Chartered Accountants of India together with
for the year ended March 31, 2021 and summary of the
the ethical requirements that are relevant to our audit of
significant accounting policies and other explanatory
the financial statements under the Insurance Act, the IRDA
information.
Act, the Regulations, the Act and the Rules thereunder,
In our opinion and to the best of our information and and we have fulfilled our other ethical responsibilities
according to the explanations given to us, the aforesaid in accordance with these requirements and the Code
standalone financial statements are prepared in of Ethics. We believe that the audit evidence we have
accordance with the requirements of the Insurance obtained is sufficient and appropriate to provide a basis
Act, 1938 (the “Insurance Act”), Insurance Regulatory for our opinion.
and Development Act, 1999 (the “IRDA Act”), Insurance
Regulatory and Development Authority (Preparation of 3. Emphasis of Matter
Financial Statements and Auditor’s Report of Insurance We draw your attention to the Note No. 35 to the
Companies) Regulations, 2002 (the “Regulations”) standalone financial statements in connection with the
including orders/directions/circulars issued by the management’s assessment of the impact of the second
Insurance Regulatory and Development Authority of India wave of Coronavirus (Covid-19) on the business operations
(“IRDAI”) and the Companies Act, 2013 (“the Act”) to the of the Company. The management assessment includes
extent applicable and in the manner so required, and but is not limited to valuation of investments, valuation
give a true and fair view in conformity with the accounting of policy-related liabilities and solvency position of the
principles generally accepted in India, as applicable to Company. The management continues to closely monitor
insurance companies: the implications of Covid-19 on its operations and financial
(a) in the case of the Balance Sheet, of the state of affairs statements. Our opinion is not modified in respect of this
of the Company as at March 31, 2021; matter.

(b) in the case of the Revenue Accounts, of the operating 4. Key Audit Matters
profit in so far as it relates to the Miscellaneous
Key audit matters are those matters that, in our
Revenue Account and the operating loss in so far as
professional judgement, were of most significance in our
it relates to the Fire Revenue Account and the Marine
audit of the financial statements of the current period.
Revenue Account for the year ended March 31, 2021;
These matters were addressed in the context of our audit
(c) in the case of the Profit and Loss Account, of the profit of the financial statements as a whole, and in forming our
for the year ended on March 31, 2021; and opinion thereon, and we do not provide a separate opinion
on these matters..
(d) in the case of the Receipts and Payments Account,
of the receipts and payments for the year ended on
March 31, 2021

51
Independent Auditors’ Report (Continued)

Key Audit Matter Description: - How the scope of our audit responded the key audit matter: -
1) Valuation of Investments:
• The carrying values of Investments amounting to To ensure that the valuation of investments and impairment
` 166,429,538 (‘000) (Policyholders and Shareholders) provision considered in the financial statements is adequate,
represent 86.15% of total assets as disclosed in the we have performed the following procedures:
financial statement. • Reviewed the manner in which the investments have been
• Due to the regulatory prescriptions applicable to made by the Company to ensure that the investments as
recognition, measurement and disclosure of Investments in accordance with Regulation of Investments as stated
and the assumptions used in the valuation of Investments, in the IRDAI guidelines.
(Note 10 to the financial statements) we have considered • Tested the management oversight and controls over
this as a key audit matter. valuation of investments.
• The valuation of all investments should be as per the • Independently test-checked valuation of quoted and
investment policy framed by the Company which in turn unquoted investments.
should be in line with IRDAI Investment Regulations.
• Reviewed the Fair Value Change Account for specific
• The Company has inter alia a policy framework for Valuation investments.
and impairment of Investments
• Reviewed the basis of provisions accounted in respect
• The valuation of unquoted investments and thinly traded of non-performing investments and ensured that the
investments continues to be an area of inherent risk provision meets the IRDAI guidelines
because of market volatility, unavailability of reliable prices
• Reviewed the compliance with the IRDAI guidelines on
and macroeconomic uncertainty.
recording of Income on non-performing investments
• The Company performs an impairment review of its
• Reviewed and assessed the adequacy with respect to
investments periodically and recognizes impairment charge
management assessment of impairment charge on
when the investments meet the trigger/s for impairment
investments outstanding at the year end.
provision as per the criteria set out in the investment policy.
Further, the assessment of impairment involves significant Accordingly based on our audit procedures, we noted no
management judgement. reportable matters regarding investments and its valuation
2) Provision for bad & doubtful debts relating to receivables from other insurance companies (Including Government
Receivables), outstanding premium and agent balances:
• “Dues from Other entities carrying on insurance business” The audit procedures performed by us included the following:
is ` 1,089,638 (‘000) as at the year end. • Evaluation and testing of controls over the recording, monitoring
• “Outstanding premium” amounting to ` 10,949,410 (‘000) and ageing of outstanding premium, Agents’ Balances and due
(Schedule 12) net of provision of ` 6,856 (‘000) includes from other entities carrying on insurance business
premium due from Central Government, State Government • Evaluating the adequacy of the process of reconciliation
and others. followed by the Company with respect to amounts due from
• Outstanding “Agent balances” as at the year end amounted other entities carrying on insurance business
to ` 5,905 (‘000) net of provision of ` 1,217 (‘000). • We reviewed the historical provision for bad debts and compared
• Due to the significance of the amount and judgement it to the actual amounts written off, to determine whether
involved in assessing the recoverability of dues, this has management’s estimates have been prudent and reasonable.
been considered as key audit matter. • Reviewed the details of co-insurance transactions uploaded
on the ETASS portal by the Company and Other Insurance
Companies and reconciled with the transactions accounted
by the Company.
• Sending out direct confirmations of balances to select
parties on a test check basis as required under “SA
505-External Confirmations”.
• We discussed with management and reviewed
correspondences, where relevant, to identify disputes, if
any, on any of the recoverable balances and review the
assessment of the management as to the requirement of
provisioning, if any on these disputed dues. Relied on the
management estimates with respect to such provisions.
Accordingly, based on our audit procedures, we noted no
reportable matter.

52 14th Annual Report 2020-21

Independent Auditors’ Report (Continued)

3) Data migration consequent to amalgamation of HEHI with HEGI:

• On September 29, 2020, the Company received sanction Our audit procedures, with respect to the above included,
from the National Company Law Tribunal, Mumbai Bench among others:
(NCLT), for the Scheme of Amalgamation of merger of HDFC • Test checked the transactions for the period April 2020 to
ERGO Health Insurance Limited (formerly Apollo Munich November 2020 in the system maintained by HEHI.
Health Insurance Company Limited) (IRDAI Regn No. 131)
• Testing the process of migration of the monthly summary of
(“HEHI”) with HDFC ERGO General Insurance Company
transactions in the financial reporting into the HEGI System
Limited (IRDAI Registration No. 146) ( “HEGI”).
• Assessing whether appropriate restrictions were placed on
• Further, IRDAI, vide its letter dated November 11, 2020 access to systems through reviewing the permissions and
gave its final approval to the said Merger with the Appointed responsibilities of authorised personnel.
Date of March 01, 2020.
• Where we identified the need to perform additional
• Information Systems of HEHI were in use up to November procedures such as reconciliations between systems and
2020 running parallelly with the information systems of performing additional testing; extended our sample sizes,
HEGI to obtain adequate and appropriate audit evidences.
• In view of the parallel operations and subsequent • Reviewed the controls with respect to manual processes in
migration of data from HEHI systems to HEGI systems, the consolidation of data of all lines of business and ensured
IT environment has become complex with regards to the data integrity with respect to such consolidation.
financial reporting process. • Our audit procedures include obtaining an understanding
• During the year, the management has migrated the data of the transaction and to ensure that the new migrated
of HEHI into the systems of the Company. environment qualifies the integrity and reliability tests of
• The process of data migration is highly dependent on auditors.
information technology including automated and manual Accordingly, based on our audit procedures, we noted no
controls and availability of complete and accurate electronic reportable matter.
data due to the size and complexity of the operations.
• Due to high level of automation, number of integrated /
non – integrated systems used and the process used for
the consolidation of data, this is a key audit matter for our
audit.

5. Other Matter 6. Information other than the Financial Statement and

The actuarial valuation of the outstanding claims Incurred Auditor’s Report thereon
but Not Reported (IBNR) including IBNER (Incurred but The Company’s Board of Directors is responsible for the
Not Enough Reported) and Premium Deficiency Reserve other information. The other information comprises the
(the “PDR”) that are estimated using statistical methods, information included in the “the management report”
PDR and IBNR reserve, as at March 31, 2021 have been and “Director’s report”, but does not include the financial
duly certified by the Appointed Actuary and in his opinion, statements and our auditor’s report thereon.
the norms and assumptions for such Valuation are in
Our opinion on the financial statements does not cover
accordance with the guidelines issued by the Insurance
the other information and we do not express any form of
Regulatory and Development Authority of India (“IRDAI”/
assurance conclusion thereon.
“Authority”) and the Institute of Actuaries of India in
concurrence with the Authority. We have relied upon the In connection with our audit of the financial statements,
Appointed Actuary’s certificate in this regard for forming our responsibility is to read the other information and,
our opinion on the valuation of liabilities for outstanding in doing so, consider whether the other information is
claims reserves and PDR contained in the standalone materially inconsistent with the financial statements
financial statements of the Company. or our knowledge obtained in the audit or otherwise

53
Independent Auditors’ Report (Continued)

appears to be materially misstated. If, based on the work intends to liquidate the Company or to cease operations,
we have performed, we conclude that there is a material or has no realistic alternative but to do so. Those Board
misstatement of this other information, we are required to of Directors are also responsible for overseeing the
report that fact. We have nothing to report in this regard. Company’s financial reporting process process. We have
nothing to report in this regard.
7. Responsibilities of Management for the Standalone
Financial Statements 8. Auditor’s responsibilities for the audit of the Standalone
The Company’s Board of Directors is responsible for the Financial Statements
matters stated in section 134(5) of the Act with respect to Our objectives are to obtain reasonable assurance about
the preparation of these standalone financial statements whether the financial statements as a whole are free from
that give a true and fair view of the financial position, material misstatement, whether due to fraud or error, and
financial performance, and receipts and payments of to issue an auditor’s report that includes our opinion.
the Company in accordance with the requirements of Reasonable assurance is a high level of assurance, but
the Insurance Act 1938, as amended by Insurance Laws is not a guarantee that an audit conducted in accordance
(Amendment) Act, 2015 read with the IRDA Act, the with the SAs will always detect a material misstatement
Regulations, order/ directions issued by the IRDAI in this when it exists. Misstatements can arise from fraud or
regard and in accordance with the accounting principles error and are considered material if, individually or in the
generally accepted in India including the Accounting aggregate, they could reasonably be expected to influence
Standards specified under section 133 of the Act [read the economic decisions of users taken on the basis of
with Rule 7 of the Companies (Accounts) Rules, 2014] these financial statements.
to the extent applicable and in the manner so required. As part of an audit in accordance with the SAs, we exercise
This responsibility also includes maintenance of adequate professional judgements and maintain professional
accounting records in accordance with the provisions of scepticism throughout the audit. We also:
the Act for safeguarding of the assets of the Company
• Identify and assess the risks of material misstatement
and for preventing and detecting frauds and other
of the financial statements, whether due to fraud
irregularities; selection and application of appropriate
or error, design and perform audit procedures
implementation and maintenance of accounting
responsive to those risks, and obtain audit evidence
policies; making judgements and estimates that are
that is sufficient and appropriate to provide a basis
reasonable and prudent; and design, implementation and
for our opinion. The risk of not detecting a material
maintenance of adequate internal financial controls, that
misstatement resulting from fraud is higher than for
were operating effectively for ensuring the accuracy and
one resulting from error, as fraud may involve collusion,
completeness of the accounting records, relevant to the
forgery, intentional omissions, misrepresentations, or
preparation and presentation of the financial statement
the override of internal control.
that give a true and fair view and are free from material
misstatement, whether due to fraud or error. • Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that
In preparing the financial statements, management
are appropriate in the circumstances.
is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, • Evaluate the appropriateness of accounting policies
matters related to going concern and using the going used and the reasonableness of accounting estimates
concern basis of accounting unless management either and related disclosures made by management.

54 14th Annual Report 2020-21

Independent Auditors’ Report (Continued)

• Conclude on the appropriateness of management’s matters that may reasonably be thought to bear on our
use of the going concern basis of accounting and, independence, and where applicable, related safeguards.
based on the audit evidence obtained, whether
From the matters communicated with those charged with
a material uncertainty exists related to events or
governance, we determine those matters that were of
conditions that may cast significant doubt on the
most significance in the audit of the financial statements
Company’s ability to continue as a going concern. If
of the current period and are therefore the key audit
we conclude that a material uncertainty exists, we
matters. We describe these matters in our auditor’s report
are required to draw attention in our auditor’s report
unless law or regulation precludes public disclosure about
to the related disclosures in thefinancial statements
the matter or when, in extremely rare circumstances, we
or, if such disclosures are inadequate, to modify our
determine that a matter should not be communicated in
opinion. Our conclusions are based on the audit
our report because the adverse consequences of doing
evidence obtained up to the date of our auditor’s
so would reasonably be expected to outweigh the public
report. However, future events or conditions may
interest benefits of such communication
cause the Company to cease to continue as a going
concern. 9. Report on other legal and regulatory requirements
• Evaluate the overall presentation, structure and As required by IRDA Financial Statements Regulations, we
content of the financial statements, including the have issued a separate certificate dated April 20, 2021
disclosures, and whether thefinancial statements certifying the matters specified in paragraphs 3 and 4 of
represent the underlying transactions and events in Schedule C to the IRDA Financial Statements Regulations.
a manner that achieves fair presentation. Further, to our comments in the Certificate referred to in
Materiality is the magnitude of the misstatement in paragraph 2 above, as required under the Regulations,
the standalone financial statements that, individually read with Section 143 (3) of the Act, we report that:
or in aggregate, makes it probable that the economic a) We have sought and obtained all the information and
decisions of a reasonably knowledgeable user of the explanations which to the best of our knowledge and
standalone financial statements may be influenced. We belief were necessary for the purposes of our audit.
consider quantitative materiality and qualitative factors
in (i) planning the scope of our audit work and evaluating b) In our opinion and to the best of our information
the results of our work; and (ii) to evaluate the effects of and according to the explanations given to us, proper
any identified misstatements in the standalone financial books of account as required by law have been
statements. kept by the Company so far as it appears from our
examination of those books.
We communicate with those charged with governance
regarding, among other matters, the planned scope and c) As the Company’s financial accounting system
timing of the audit and significant audit findings, including is centralized at Head Office, no returns for the
any significant deficiencies in internal control that we purposes of our audit are prepared at the branches
identify during our audit. and other offices of the Company.

We also provide those charged with governance with d) The Balance Sheet, the Revenue Account, the Profit
a statement that we have complied with relevant and Loss Account, and the Receipts and Payments
ethical requirements regarding independence, and to Account dealt with by this Report are in agreement
communicate with them all relationships and other with the books of account.

55
Independent Auditors’ Report (Continued)

e) In our opinion and to the best of our information j) With respect to the adequacy of the internal financial
and according to the explanations given to us, controls with reference to financial statements of the
investments have been valued in accordance with the Company and the operating effectiveness of such
provisions of the Insurance Act and the Regulations controls, refer to our separate report in “Annexure A”.
and orders/directions issued by the IRDAI in this
k) With respect to the other matters to be included in
behalf.
the Auditor’s Report in accordance with Rule 11 of
f) In our opinion and to the best of our information the Companies (Audit and Auditors) Rules, 2014, in
and according to the explanations given to us, the our opinion and to the best of our information and
remuneration paid by the Company to its directors according to the explanations given to us:
during the year is in accordance with the provisions
i. The Company has disclosed the impact of
of Section 197 of the Act and Section 34 of the IRDAI
pending litigations on its financial position in
Act.
its financial statements – Refer Note 4 to the
g) In our opinion and to the best of our information financial statements.
and according to the explanations given to us,
ii. The Company has made provision, as required
the accounting policies selected by the Company
under the applicable law or accounting
are appropriate and are in compliance with the
standards, for material foreseeable losses, if
Accounting Standards referred to in Section 133 of
any, on long-term contracts including derivative
the Act, read with Rule 7 of the Companies (Accounts)
contracts.
Rules, 2014, to the extent they are not inconsistent
with the accounting principles prescribed in the iii. There has been no delay in transferring amounts,
Regulations and orders/directions issued by the required to be transferred, to the Investor
IRDAI in this behalf. Education and Protection Fund by the Company.

h) In our opinion and to the best of our information and

according to the explanations given to us, the Balance
For B. K. KHARE & CO.
Sheet, the Revenue Account, the Profit and Loss Chartered Accountants
Firm’s Registration No.: 105102W
Account and the Receipts and Payments Account
dealt with by this report comply with the Accounting
Standards referred to in Section 133 of the Act, Padmini Khare Kaicker
Partner
read with Rule 7 of the Companies (Accounts) Rules, Membership No.: 044784
UDIN No.: 21044784AAAAAO8133
2014 to the extent they are not inconsistent with the
accounting principles prescribed in the Regulations
For G. M. KAPADIA & CO.
and orders/directions issued by IRDAI in this regard, Chartered Accountants
and Firm’s Registration No.: 104767W

i) On the basis of the written representations received

Rajen Ashar
from the directors as on March 31, 2021, taken on Partner
record by the Board of Directors, none of the directors Membership No. 048243
UDIN No.: 21048243AAAABZ6307
is disqualified as on March 31, 2021, from being
appointed as a director in terms of Section 164 (2) Mumbai,
of the Act. April 20, 2021

56 14th Annual Report 2020-21

Annexure A to Independent Auditors’ Report
Referred to in paragraph 9 (j) of the Independent Auditors’ Report of even date to the members of HDFC ERGO General
Insurance Company Limited on the standalone financial statements for the year ended March 31, 2021.

Report on the Internal Financial Controls with reference Auditors’ Responsibility

to financial statements under clause (i) of sub-section 3 Our responsibility is to express an opinion on the
of Section 143 of the Companies Act, 2013 (“the Act”) Company’s internal financial controls with reference to
financial statements based on our audit. We conducted
Opinion
our audit in accordance with the Guidance Note on Audit
We have audited the internal financial controls with of Internal Financial Controls Over Financial Reporting
reference to financial statements of HDFC ERGO General (the “Guidance Note”) and the Standards on Auditing,
Insurance Company Limited (“the Company”) as of March issued by ICAI and deemed to be prescribed under section
31, 2021 in conjunction with our audit of the Standalone 143(10) of the Act, to the extent applicable to an audit of
Financial Statements of the Company for the year ended internal financial controls, both applicable to an audit of
on that date. Internal Financial Controls and, both issued by the Institute
In our opinion, the Company has, in all material respects, of Chartered Accountants of India. Those Standards and
an adequate internal financial controls system with the Guidance Note require that we comply with ethical
reference to financial statements and such internal requirements and plan and perform the audit to obtain
financial controls with reference to financial statements reasonable assurance about whether adequate internal
were operating effectively as at March 31, 2021, based financial controls with reference to financial statements
on the internal control over financial reporting criteria was established and maintained and if such controls
established by the Company considering the essential operated effectively in all material respects.
components of internal control stated in the Guidance Our audit involves performing procedures to obtain audit
Note on Audit of Internal Financial Controls Over Financial evidence about the adequacy of the internal financial
Reporting issued by the Institute of Chartered Accountants controls system with reference to financial statements
of India (ICAI). and their operating effectiveness.
Management’s Responsibility for Internal Financial Our audit of internal financial controls with reference to
Controls financial statements included obtaining an understanding
of internal financial controls with reference to financial
The Company’s management is responsible for
statements, assessing the risk that a material weakness
establishing and maintaining internal financial controls
exists, and testing and evaluating the design and operating
based on the internal control over financial reporting
effectiveness of internal control based on the assessed
criteria established by the Company considering the
risk.
essential components of internal control stated in the
Guidance Note on Audit of Internal Financial Controls Over The procedures selected depend on the auditor’s
Financial Reporting issued by the Institute of Chartered judgement, including the assessment of the risks of
Accountants of India (ICAI). These responsibilities material misstatement of the standalone financial
include the design, implementation and maintenance of statements, whether due to fraud or error.
adequate internal financial controls that were operating
We believe that the audit evidence we have obtained is
effectively for ensuring the orderly and efficient conduct
sufficient and appropriate to provide a basis for our audit
of its business, including adherence to company’s
opinion on the Company’s internal financial controls
policies, the safeguarding of its assets, the prevention
system with reference to financial statements.
and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely Meaning of Internal Financial Controls with reference to
preparation of reliable financial information, as required financial statements
under the Act. A Company’s internal financial control with reference to

57
Annexure “A” to the Independent Auditors’ Report (Continued)

financial statements is a process designed to provide Other Matters

reasonable assurance regarding the reliability of financial
The actuarial valuation of the outstanding claims Incurred
reporting and the preparation of standalone financial
but Not Reported (IBNR) and Premium Deficiency Reserve
statements for external purposes in accordance with
(the “PDR”) that are estimated using statistical methods,
generally accepted accounting principles. A company’s
PDR and IBNR reserve, as at March 31, 2021 have been
internal financial control with reference to financial
duly certified by the Appointed Actuary and in his opinion,
statements includes those policies and procedures that (1)
the norms and assumptions for such Valuation are in
pertain to the maintenance of records that, in reasonable
accordance with the guidelines issued by the Insurance
detail, accurately and fairly reflect the transactions and
Regulatory and Development Authority of India (“IRDAI”/
dispositions of the assets of the company; (2) provide
“Authority”) and the Institute of Actuaries of India in
reasonable assurance that transactions are recorded as
concurrence with the Authority. We have relied upon the
necessary to permit preparation of standalone financial
Appointed Actuary’s certificate in this regard for forming
statements in accordance with generally accepted
our opinion on the valuation of liabilities for outstanding
accounting principles, and that receipts and expenditures
claims reserves and PDR contained in the standalone
of the company are being made only in accordance with
financial statements of the Company.
authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition,
use, or disposition of the company’s assets that could have
a material effect on the standalone financial statements. For B. K. KHARE & CO.
Chartered Accountants
Firm’s Registration No.: 105102W
Inherent Limitations of Internal Financial Controls with
reference to financial statements Padmini Khare Kaicker
Partner
Because of the inherent limitations of internal financial Membership No.: 044784
controls with reference to financial statements, including UDIN No: 2104478AAAAAO8133
the possibility of collusion or improper management
override of controls, material misstatements due to error For G. M. KAPADIA & CO.
Chartered Accountants
or fraud may occur and not be detected. Also, projections Firm’s Registration No.: 104767W
of any evaluation of the internal financial controls with
reference to financial statements to future periods are Rajen Ashar
subject to the risk that the internal financial control Partner
Membership No. 048243
with reference to financial statements may become UDIN No: 21048243AAAABZ6307
inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures Mumbai,
may deteriorate. April 20, 2021

58 14th Annual Report 2020-21

Independent Auditors’ Certificate

TO THE MEMBERS OF HDFC ERGO GENERAL INSURANCE COMPANY LIMITED

(Referred to in paragraph 9 of our Report on Other Legal and Regulatory Requirements forming part of the Independent Auditors’
Report dated April 20, 2021)
1. This certificate is issued to comply with the provisions of paragraph 3 and 4 of Schedule C of the Insurance Regulatory and
Development Authority (Preparation of Financial Statements and Auditor’s Report of Insurance Companies) Regulations 2002,
(“the IRDA Financial Statements Regulations”) read with Regulation 3 of the IRDA Financial Statements Regulations.
Management’s Responsibility
2. The Company’s Management is responsible for complying with the provisions of the Insurance Act, 1938 as amended by the
Insurance Laws (Amendment) Act, 2015 (the “Insurance Act”), the Insurance Regulatory and Development Authority Act, 1999
(the “IRDA Act”), the IRDA Financial Statements Regulations, orders/circulars/directions issued by the Insurance Regulatory and
Development Authority of India (the “IRDAI”) which includes (i) preparation of management report consistent with the financial
statements; (ii) compliance with the terms and conditions of the registration stipulated by the Authority; (iii) maintenance and
custody of cash balances and maintenance of investments with custody and depository; and (iv) ensuring that no part of the
assets of the policyholders’ funds has been directly or indirectly applied in contravention of the provisions of the Insurance
Act, relating to the application and investments of the Policyholders’ Funds. This responsibility includes collecting, collating
and validating data and designing, implementing and monitoring of internal controls suitable for ensuring the aforesaid and
applying an appropriate basis of preparation and making estimates and judgments that are reasonable in the circumstances.
Independent Auditor’s Responsibility
3. Pursuant to the requirement of the IRDA Financial Statements Regulations, it is our responsibility for the purpose of this
certificate, to provide reasonable assurance on the matters contained in paragraphs 3 and 4 of Schedule C of the IRDA
Financial Statements Regulation read with Regulation 3 of the IRDA Financial Statements Regulations for the year ended
March 31, 2021.
4. We conducted our examination in accordance with the Guidance Note on Reports or Certificates for Special Purposes (Revised
2016) and Standards on Auditing issued by the Institute of Chartered Accountants of India (ICAI) in so far as applicable for the
purpose of this Certificate. This Guidance Note requires that we comply with the ethical requirements of the Code of Ethics
issued by the ICAI.
5. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, “Quality Control for Firms
that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements”.
Opinion
6. In accordance with the information and explanations and representations given to us and to the best of our knowledge and
belief and based on our examination, of the books of account and other records maintained by the Company for the year
ended March 31, 2021, we certify that:
a) We have reviewed the Management Report attached to the financial statements for the year ended March 31, 2021,
and on the basis of our review, there is no apparent mistake or material inconsistencies with the financial statements;
b) Based on the Management representations and compliance certificates submitted to the Board of Directors by the
officers of the Company charged with compliance and the same being noted by the Board, we certify that the Company
has complied with the terms and conditions of registration stipulated by the IRDAI;
c) We have verified the cash balances to the extent considered necessary, and securities relating to the Company’s
investments as at March 31, 2021, or have sought and obtained certificates/confirmations received from the concerned
branches and /HO personnel of the company, Custodian and / or Depository Participants appointed by the Company, as
the case may be.
d) The Company is not a trustee of any trust; and
e) No part of the assets of the Policyholders’ Funds has been directly or indirectly applied in contravention to the provisions
of the Insurance Act, relating to the application and investments of the Policyholders’ Funds.
Restriction on Use
7. This certificate is issued at the request of the Company solely for use of the Company for inclusion in the annual accounts in
order to comply with the provisions of paragraph 3 and 4 of Schedule C of the IRDA Financial Statements Regulations read
with Regulation 3 of the IRDA Financial Statements Regulations and is not intended to be and should not be used for any other
purpose without our prior consent. Accordingly, we do not accept or assume any liability or any duty of care for any other purpose
or to any other person to whom this Certificate is shown or into whose hands it may come without our prior consent in writing.

For B. K. KHARE & CO. For G. M. KAPADIA & CO.

Chartered Accountants Chartered Accountants
Firm’s Registration No.: 105102W Firm’s Registration No.: 104767W

Padmini Khare Kaicker Rajen Ashar

Partner Partner
Membership No.: 044784 Membership No. 048243
UDIN No: 21044784AAAAAQ8522 UDIN No: 21048243AAAABZ6307

59
FORM B - BS
IRDAI Registration No: 146
Date of Registration with the IRDAI: July 09, 2010

Balance Sheet as at March 31, 2021

Particulars Schedule As at As at
March 31, 2021 March 31, 2020
( ` ’000) ( ` ’000)
SOURCES OF FUNDS
SHARE CAPITAL 5 7,115,649 6,058,421
SHARE CAPITAL SUSPENSE — 1,053,689
(Refer Note 3A of Schedule 16)
RESERVES AND SURPLUS 6 25,155,927 21,319,914
FAIR VALUE CHANGE ACCOUNT - SHAREHOLDERS 46,834 (110,020)
FAIR VALUE CHANGE ACCOUNT - POLICYHOLDERS 217,132 (645,147)
BORROWINGS 7 5,040,000 5,040,000
DEFERRED TAX LIABILITY — —
TOTAL 37,575,542 32,716,857
APPLICATION OF FUNDS
INVESTMENTS - SHAREHOLDERS 8 29,528,835 19,780,184
INVESTMENTS - POLICYHOLDERS 8A 136,900,703 115,988,644
LOANS 9 — —
FIXED ASSETS 10 2,733,604 2,824,353
DEFERRED TAX ASSET 736,533 726,276
(Refer note 15 of Schedule 16)
CURRENT ASSETS
Cash and Bank Balances 11 4,738,249 7,821,307
Advances and Other Assets 12 18,551,807 23,462,687
Sub-Total (A) 23,290,056 31,283,994
CURRENT LIABILITIES 13 112,312,673 95,494,980
PROVISIONS 14 43,301,516 42,391,614
Sub-Total (B) 155,614,189 137,886,594
NET CURRENT ASSETS/(LIABILITIES) (C) = (A-B) (132,324,133) (106,602,600)
MISCELLANEOUS EXPENDITURE 15 — —
(to the extent not written off or adjusted)
DEBIT BALANCE IN PROFIT AND LOSS ACCOUNT — —
TOTAL 37,575,542 32,716,857
NOTES TO ACCOUNTS 16
Schedules referred to above and the notes to accounts form an integral part of the Balance Sheet
Signatures to the Balance Sheet and Schedules 1 to 16
In terms of our report attached For and on behalf of the Board of Directors
B. K. Khare & Co. G. M. Kapadia & Co. Deepak S. Parekh Ritesh Kumar Dayananda V. Shetty
Chartered Accountants Chartered Accountants Chairman Managing Director & CEO Company Secretary and
Firm Registration No.: 105102W Firm Registration No.: 104767W (DIN: 00009078) (DIN: 02213019) Chief Compliance Officer
(Membership No.: FCS 4638)
Padmini Khare Kaicker Rajen Ashar Samir H. Shah Anuj Tyagi
Partner Partner Executive Director & CFO Executive Director & Chief
Membership No.: 044784 Membership No.: 048243 (DIN: 08114828) Business Officer
(DIN: 07505313)
Mumbai,
Dated: April 20, 2021

60 14th Annual Report 2020-21

FORM B - PL
IRDAI Registration No: 146
Date of Registration with the IRDAI: July 09, 2010

Profit and Loss Account for the year ended March 31, 2021
Particulars Schedule For the year ended For the year ended
March 31, 2021 March 31, 2020
(` ’000) (` ’000)
OPERATING PROFIT/(LOSS)
Fire Insurance (254,704) (508,217)
Marine Insurance (207,186) (190,496)
Miscellaneous Insurance 7,770,647 4,667,652
7,308,757 3,968,939
INCOME FROM INVESTMENTS
Interest, Dividend and Rent – Gross 1,661,112 1,339,648
Profit/Loss on sale of investments 199,059 123,953
1,860,171 1,463,601

OTHER INCOME — —
TOTAL (A) 9,168,928 5,432,540
PROVISIONS (OTHER THAN TAXATION)
For diminution in the value of investments (Refer note 10 of Schedule 16) 311,725 116,600
For doubtful debts (11,816) (27,608)
299,909 88,992
OTHER EXPENSES
Expenses other than those related to insurance business
Employees’ related remuneration and welfare benefits 93,124 91,467
(Refer note 11 of Schedule 16)
Corporate Social Responsibility Expenses (Refer note 29 of Schedule 16) 95,202 74,969
Bad debts written off 21,212 43,715
Remuneration to directors and others 4,120 4,000
Bad & Doubtful Investments written off (Refer Note 10 of Schedule 16) — 100,000
Amalgamation Expenses 328,426 161,443
Interest on Debentures 409,243 278,305
TOTAL (B) 1,251,236 842,891
PROFIT/(LOSS) BEFORE TAX 7,917,692 4,589,649
Provision for Taxation
– Current Tax 2,011,440 1,094,782
– Deferred Tax (Refer note 15 of Schedule 16) (10,258) (58,832)
MAT Credit Written Off — 284,281
PROFIT/(LOSS) AFTER TAX 5,916,510 3,269,418
APPROPRIATIONS
Interim Dividends paid during the year (Refer note 34 of Schedule 16) 2,134,695 —
Proposed final Dividend — —
Dividend Distribution tax — —
Transfer to any Reserves or Other Accounts — —
Transfer to Debenture Redemption Reserve (Refer Note 33 of Schedule 16) — 24,300
Transfer to Contingency Reserve for Unexpired Risks — —
Balance of Profit/(Loss) brought forward from previous year 4,002,118 5,074,847
BALANCE CARRIED FORWARD TO BALANCE SHEET 7,783,933 8,319,965
EARNINGS PER SHARE (Basic) (in `) 8.32 5.32
EARNINGS PER SHARE (Diluted) (in `) 8.29 5.30
(Face Value ` 10 per share) (Refer Note 25 of Schedule 16)
NOTES TO ACCOUNTS 16
Schedules referred to above and the notes to accounts form an integral part of the Profit and Loss Account

Signatures to the Profit and Loss Account and Schedules 1 to 16

In terms of our report attached For and on behalf of the Board of Directors
B. K. Khare & Co. G. M. Kapadia & Co. Deepak S. Parekh Ritesh Kumar Dayananda V. Shetty
Chartered Accountants Chartered Accountants Chairman Managing Director & CEO Company Secretary and
Firm Registration No.: 105102W Firm Registration No.: 104767W (DIN: 00009078) (DIN: 02213019) Chief Compliance Officer
(Membership No.: FCS 4638)
Padmini Khare Kaicker Rajen Ashar Samir H. Shah Anuj Tyagi
Partner Partner Executive Director & CFO Executive Director & Chief
Membership No.: 044784 Membership No.: 048243 (DIN: 08114828) Business Officer
(DIN: 07505313)
Mumbai,
Dated: April 20, 2021

61
IRDAI Registration No: 146
Date of Registration with the IRDAI: July 09, 2010

Receipts and Payments Account for the year ended March 31, 2021
Particulars Schedule For the year ended For the year ended
March 31, 2021 March 31, 2020
(` ’000) (` ’000)
Cash flows from operating activities
Premium received from policyholders, including advance receipts 146,028,961 115,667,641
Payments to re-insurers, net of commission and claims (23,365,657) (13,100,046)
Payments to co-insurers, net of claims recovery 516,553 199,385
Payments of claims (63,383,344) (45,893,023)
Payments of commission and brokerage (11,806,102) (8,837,357)
Payments of other operating expenses (21,016,226) (18,504,027)
Corporate Social Responsibility (CSR) expenses (95,202) (74,969)
Deposits, advances and staff loans 77,143 (210,729)
Income taxes paid (Net) (2,106,753) (1,176,873)
GST paid (6,217,673) (6,567,132)
Net cash generated from operating activities (A) 18,631,700 21,502,870
Cash flows from investing activities
Purchase of fixed assets (611,530) (696,559)
Proceeds from sale of fixed assets 41,000 10,881
Purchase of investments (74,665,676) (79,403,228)
Sale of investments 49,617,718 58,505,222
Rent/Interest/Dividend received 11,428,407 7,823,847
Investments in money market instruments and in liquid mutual funds (Net) (5,033,544) (3,809,069)
Net cash flow from / (used in) investing activities (B) (19,223,625) (17,568,906)
Cash flows from financing activities
Proceeds from issuance of share capital and share premium 57,738 41,465
Receipt of Share application money pending allotment — —
Repayments of borrowing — —
Proceeds from issuance of borrowing — —
Interest Paid (406,645) (268,980)
Dividend paid (Including dividend distribution tax) (2,134,695) —
Net cash flow from / (used in) financing activities (C) (2,483,602) (227,515)
Effect of foreign exchange rates on cash and cash equivalents (Net) (D) (1,028) 234
Net (decrease)/increase in cash and cash equivalents (A + B + C + D) (3,076,555) 3,706,683
Cash and cash equivalents at the beginning of the year 7,764,064 3,661,455
Cash and cash equivalents on Merger — 395,926
Cash and cash equivalents at the end of the period 4,687,509 7,764,064
Net (decrease)/increase in cash and cash equivalents (3,076,555) 3,706,683
Reconciliation of Cash and cash equivalents with the Balance Sheet:
Cash and Bank balances 4,738,249 7,821,308
Less: Deposit Accounts not considered as Cash and cash equivalents as defined in
AS-3 "Cash Flow Statements" (50,740) (57,244)
Cash and cash equivalents at the end of the year 4,687,509 7,764,064
NOTES TO ACCOUNTS 16
Refer Schedule 11 for components of cash and bank balances
Signatures to the Receipts and Payments Account
In terms of our report attached For and on behalf of the Board of Directors
B. K. Khare & Co. G. M. Kapadia & Co. Deepak S. Parekh Ritesh Kumar Dayananda V. Shetty
Chartered Accountants Chartered Accountants Chairman Managing Director & CEO Company Secretary and
Firm Registration No.: 105102W Firm Registration No.: 104767W (DIN: 00009078) (DIN: 02213019) Chief Compliance Officer
(Membership No.: FCS 4638)
Padmini Khare Kaicker Rajen Ashar Samir H. Shah Anuj Tyagi
Partner Partner Executive Director & CFO Executive Director & Chief
Membership No.: 044784 Membership No.: 048243 (DIN: 08114828) Business Officer
(DIN: 07505313)
Mumbai,
Dated: April 20, 2021

62 14th Annual Report 2020-21


(` ’000)
FIRE INSURANCE MARINE INSURANCE MISCELLANEOUS TOTAL
INSURANCE
Particulars Schedule For the year For the year For the year For the year For the year For the year For the year For the year
ended ended ended ended ended ended ended ended FORM B - RA
March 31, March 31, March 31, March 31, March 31, March 31, March 31, March 31,
2021 2020 2021 2020 2021 2020 2021 2020
1 Premiums Earned (Net) 1 2,401,067 1,459,430 797,565 721,251 60,857,174 42,322,834 64,055,806 44,503,515
2 Profit/Loss on Sale/Redemption of 52,015 29,659 7,489 5,832 961,404 612,505 1,020,908 647,996
IRDAI Registration No: 146

Investments (Net)
3 Others:
Investment Income from Terrorism Pool 44,675 30,188 — — — — 44,675 30,188
Miscellaneous Income/Liabilities written 2,739 1,487 924 752 70,495 46,238 74,158 48,477
back
4 Interest, Dividend and Rent – Gross 434,056 305,323 62,492 60,035 8,022,741 6,305,301 8,519,289 6,670,659
TOTAL (A) 2,934,552 1,826,087 868,470 787,870 69,911,814 49,286,878 73,714,836 51,900,835
Date of Registration with the IRDAI: July 09, 2010

1 Claims Incurred (Net) 2 1,795,580 1,021,393 718,721 589,499 46,006,185 33,630,295 48,520,486 35,241,187
2 Commission (Net) 3 (641,069) (292,128) 108,540 95,319 (1,450,815) (1,922,231) (1,983,344) (2,119,040)
3 Operating Expenses Related to Insurance 4 2,034,745 1,605,039 248,395 293,548 17,585,797 12,911,162 19,868,937 14,809,749
Business
4 Premium Deficiency (Refer Note 27 of — — — — — — — —
Schedule 16)
TOTAL (B) 3,189,256 2,334,304 1,075,656 978,366 62,141,167 44,619,226 66,406,079 47,931,896
Operating Profit/(Loss) (A-B) (254,704) (508,217) (207,186) (190,496) 7,770,647 4,667,652 7,308,757 3,968,939
APPROPRIATIONS
Transfer to Shareholders’ Account (254,704) (508,217) (207,186) (190,496) 7,770,647 4,667,652 7,308,757 3,968,939
Transfer to Catastrophe Reserve — — — — — — — —
Transfer to Other Reserves — — — — — — — —
TOTAL (C) (254,704) (508,217) (207,186) (190,496) 7,770,647 4,667,652 7,308,757 3,968,939
Revenue Accounts for the year ended March 31, 2021

NOTES TO ACCOUNTS 16
Schedules referred to above and the notes to accounts form an integral part of the Revenue Accounts
Signatures to the Revenue Account and Schedules 1 to 16
In terms of our report attached For and on behalf of the Board of Directors
B. K. Khare & Co. G. M. Kapadia & Co. Deepak S. Parekh Ritesh Kumar Dayananda V. Shetty
Chartered Accountants Chartered Accountants Chairman Managing Director & CEO Company Secretary and
Firm Registration No.: 105102W Firm Registration No.: 104767W (DIN: 00009078) (DIN: 02213019) Chief Compliance Officer
(Membership No.: FCS 4638)
Padmini Khare Kaicker Rajen Ashar Samir H. Shah Anuj Tyagi
Partner Partner Executive Director & CFO Executive Director & Chief
Membership No.: 044784 Membership No.: 048243 (DIN: 08114828) Business Officer
(DIN: 07505313)
Mumbai,
Dated: April 20, 2021

63
 SCHEDULE - 1

64
PREMIUM EARNED (NET) (` ’000)
For the year ended March 31, 2021 For the year ended March 31, 2020
Particulars Marine Marine
Fire * Miscellaneous Total Fire **Miscellaneous Total

Schedules
Marine Cargo Marine Hull Marine Total Marine Cargo Marine Hull Marine Total
Premium from direct business written-net 11,751,194 1,266,089 222,770 1,488,859 109,710,974 122,951,027 9,794,450 1,613,803 230,254 1,844,057 84,657,366 96,295,873
of GST
Add: Premium on Re-insurance accepted 1,129,335 79,055 — 79,055 279,921 1,488,311 891,437 102,814 — 102,814 310,840 1,305,091
Less: Premium on Re-insurance ceded (9,657,290) (416,935) (222,161) (639,096) (49,100,094) (59,396,480) (8,419,667) (998,423) (229,492) (1,227,915) (39,284,722) (48,932,304)
Net Premium 3,223,239 928,209 609 928,818 60,890,801 65,042,858 2,266,220 718,194 762 718,956 45,683,484 48,668,660
Add/(Less): Adjustment for changes in reserve (822,172) (131,406) 153 (131,253) (33,627) (987,052) (806,790) 1,661 634 2,295 (3,360,650) (4,165,145)
for unexpired risks
Total Premium Earned (Net) 2,401,067 796,803 762 797,565 60,857,174 64,055,806 1,459,430 719,855 1,396 721,251 42,322,834 44,503,515

* Miscellaneous Premium Breakup for the year ended March 31, 2021 (` ’000)
Miscellaneous
Motor Others
Particulars Workmens Public Product Personal Health Total
Motor-OD Motor-TP Motor Total Compensation Engineering Aviation Other Home Specialty Weather/ Others
Liability Liability Accident Insurance Miscellaneous
Liability Crop
Premium from direct business written-net 15,049,515 19,015,041 34,064,556 165,741 29,448 9,783 1,748,058 121,934 5,399,683 37,416,320 813,992 225,378 2,113,322 25,729,721 1,873,038 109,710,974
of GST
Add: Premium on Re-insurance accepted — — — — 764 — 88,229 (1,446) 9,219 — 13,603 — 167,965 — 1,587 279,921
Less: Premium on Re-insurance ceded (777,013) (8,592,314) (9,369,327) (18,565) (22,846) (8,580) (1,321,029) (121,820) (1,580,701) (12,520,098) (581,312) (36,056) (1,704,412) (21,073,991) (741,357) (49,100,094)
Annexed to and forming part of the Revenue Accounts

Net Premium 14,272,502 10,422,727 24,695,229 147,176 7,366 1,203 515,258 (1,332) 3,828,201 24,896,222 246,283 189,322 576,875 4,655,730 1,133,268 60,890,801
Add/(Less): Adjustment for changes in reserve (1,682,593) 1,062,788 (619,805) 12,172 3,196 462 99,013 39 768,829 139,825 39,365 (167,801) 616 (40,683) (268,855) (33,627)
for unexpired risks
Total Premium Earned (Net) 12,589,909 11,485,515 24,075,424 159,348 10,562 1,665 614,271 (1,293) 4,597,030 25,036,047 285,648 21,521 577,491 4,615,047 864,413 60,857,174

** Miscellaneous Premium Breakup for the year ended March 31, 2020 (` ’000)
Miscellaneous
Motor Others
Particulars Workmens Public Product Personal Health Total
Motor-OD Motor-TP Motor Total Compensation Engineering Aviation Other Home Specialty Weather/ Others
Liability Liability Accident Insurance Miscellaneous
Liability Crop
Premium from direct business written-net 15,702,268 18,178,476 33,880,744 200,988 36,112 3,994 1,910,877 127,101 6,578,533 16,031,212 807,010 11,731 1,530,512 21,631,396 1,907,156 84,657,366
of GST
Add: Premium on Re-insurance accepted — — — — 3,389 708 87,961 — 14,039 — 42,137 — 162,071 — 535 310,840
Less: Premium on Re-insurance ceded (3,194,070) (5,676,132) (8,870,202) (13,647) (22,181) (1,445) (1,348,224) (124,003) (2,196,287) (6,440,764) (509,160) (3,444) (1,060,868) (17,829,996) (864,501) (39,284,722)
Net Premium 12,508,198 12,502,344 25,010,542 187,341 17,320 3,257 650,614 3,098 4,396,285 9,590,448 339,987 8,287 631,715 3,801,400 1,043,190 45,683,484
Add/(Less): Adjustment for changes in reserve 188,213 (979,779) (791,566) (6,356) (17) 624 (140,443) 229 (194,452) (1,896,880) (5,603) 9,003 (77,874) (18,300) (239,015) (3,360,650)
for unexpired risks
Total Premium Earned (Net) 12,696,411 11,522,565 24,218,976 180,985 17,303 3,881 510,171 3,327 4,201,833 7,693,568 334,384 17,290 553,841 3,783,100 804,175 42,322,834

14th Annual Report 2020-21


SCHEDULE - 2
CLAIMS INCURRED (NET) (` ’000)
For the year ended March 31, 2021 For the year ended March 31, 2020
Particulars Marine Marine
Fire * Miscellaneous Total Fire ** Miscellaneous Total
Marine Cargo Marine Hull Marine Total Marine Cargo Marine Hull Marine Total

Schedules
Claims paid direct 3,524,891 1,807,831 35,109 1,842,940 56,592,039 61,959,870 3,458,660 1,195,615 42,410 1,238,025 38,579,792 43,276,477
Add: Claims on Re-insurance accepted 232,618 87,241 — 87,241 43,249 363,108 234,881 95,902 — 95,902 79,347 410,130
Less: Claims on Re-insurance ceded (2,930,443) (1,104,887) (34,890) (1,139,777) (23,221,275) (27,291,495) (2,924,805) (684,474) (42,276) (726,750) (14,167,690) (17,819,245)
Net Claims paid 827,066 790,185 219 790,404 33,414,013 35,031,483 768,736 607,043 134 607,177 24,491,449 25,867,362
Add: Claims Outstanding at the end of the year 2,048,173 408,477 8,683 417,160 58,585,548 61,050,881 1,079,659 480,513 8,331 488,844 45,993,376 47,561,879
Less: Claims Outstanding on account of Merger — — — — — — — — — — (2,601,214) (2,601,214)
as on March 1, 2020
Less: Claims Outstanding at the beginning of (1,079,659) (480,512) (8,331) (488,843) (45,993,376) (47,561,878) (827,002) (501,588) (4,934) (506,522) (34,253,316) (35,586,840)
the year
Total Claims Incurred (Net) 1,795,580 718,150 571 718,721 46,006,185 48,520,486 1,021,393 585,968 3,531 589,499 33,630,295 35,241,187
* Miscellaneous Claims Incurred (Net) Breakup for the year ended March 31, 2021 (` ’000)
Miscellaneous
Motor Others
Particulars Workmens Public Product Personal Health Total
Motor-OD Motor-TP Motor Total Engineering Aviation Other Home Specialty Weather/ Others
Compensation Liability Liability Accident Insurance Miscellaneous
Liability Crop
Claims paid direct 9,589,399 2,802,165 12,391,564 59,286 3,384 — 811,040 51,289 1,545,667 24,429,451 202,934 12,530 179,189 15,641,743 1,263,962 56,592,039
Add: Claims on Re-insurance accepted — — — — — — 26,540 15,768 — 27 914 — — — — 43,249
Less: Claims on Re-insurance ceded (1,244,637) (2,381,396) (3,626,033) (3,002) (185) — (375,495) (51,193) (415,977) (5,452,399) (190,103) (672) (113,699) (12,341,667) (650,850) (23,221,275)
Annexed to and forming part of the Revenue Accounts

Net Claims paid 8,344,762 420,769 8,765,531 56,284 3,199 — 462,085 15,864 1,129,690 18,977,079 13,745 11,858 65,490 3,300,076 613,112 33,414,013
Add: Claims Outstanding at the end of the year 2,452,449 40,800,584 43,253,033 234,886 11,244 12,317 606,723 86,863 2,272,400 6,423,038 311,521 30,447 387,622 4,268,080 687,376 58,585,548
Less: Claims Outstanding at the beginning of the year (1,936,519) (33,225,630) (35,162,149) (189,817) (11,027) (8,612) (406,368) (88,080) (1,267,255) (4,035,386) (148,886) (14,936) (196,600) (3,986,643) (477,617) (45,993,376)
Total Claims Incurred (Net) 8,860,692 7,995,723 16,856,415 101,353 3,416 3,705 662,440 14,647 2,134,835 21,364,731 176,380 27,369 256,512 3,581,513 822,871 46,006,185

** Miscellaneous Claims Incurred (Net) Breakup for the year ended March 31, 2020 (` ’000)
Miscellaneous
Motor Others
Particulars Workmens Public Product Personal Health Total
Motor-OD Motor-TP Motor Total Engineering Aviation Other Home Specialty Weather/Crop Others
Compensation Liability Liability Accident Insurance Miscellaneous
Liability
Claims paid direct 13,026,967 3,026,010 16,052,977 122,377 37 — 887,857 132,705 1,927,247 9,043,611 273,052 4,538 562,538 8,579,875 992,978 38,579,792
Add: Claims on Re-insurance accepted — — — — — — 13,322 27,785 6 3,967 34,267 — — — — 79,347
Less: Claims on Re-insurance ceded (2,964,974) (212,790) (3,177,764) (6,198) (2) — (413,927) (126,177) (581,888) (2,145,852) (157,058) (278) (473,153) (6,768,645) (316,748) (14,167,690)
Net Claims paid 10,061,993 2,813,220 12,875,213 116,179 35 — 487,252 34,313 1,345,365 6,901,726 150,261 4,260 89,385 1,811,230 676,230 24,491,449
Add: Claims Outstanding at the end of the year 1,936,519 33,225,630 35,162,149 189,817 11,027 8,612 406,369 88,080 1,267,255 4,035,386 148,886 14,936 196,600 3,986,642 477,617 45,993,376
Less: Claims Outstanding on account of Merger as on — — — — — — — — (116,339) (2,484,875) — — — — — (2,601,214)
March 1, 2020
Less: Claims Outstanding at the beginning of the year (1,617,909) (27,236,171) (28,854,080) (133,049) (8,226) (7,797) (183,347) (146,445) (630,020) (1,171,413) (134,800) (6,159) (171,597) (2,524,310) (282,073) (34,253,316)
Total Claims Incurred (Net) 10,380,603 8,802,679 19,183,282 172,947 2,836 815 710,274 (24,052) 1,866,261 7,280,824 164,347 13,037 114,388 3,273,562 871,774 33,630,295

65
 SCHEDULE - 3

66
COMMISSION (NET) (` ’000)
For the year ended March 31, 2021 For the year ended March 31, 2020
Particulars Marine Marine
Fire * Miscellaneous Total Fire ** Miscellaneous Total
Marine Cargo Marine Hull Marine Total Marine Cargo Marine Hull Marine Total

Schedules
Commission paid direct 1,094,947 142,310 6 142,316 9,055,616 10,292,879 860,375 180,992 1,845 182,837 6,473,914 7,517,126
Add: Commission paid on Re-insurance accepted 75,138 4,411 — 4,411 39,771 119,321 47,297 4,652 — 4,652 44,451 96,400
Less: Commission received on Re-insurance ceded (1,811,154) (30,926) (7,261) (38,187) (10,546,202) (12,395,543) (1,199,800) (88,975) (3,195) (92,170) (8,440,596) (9,732,566)
Net commission paid/(received) (641,069) 115,795 (7,255) 108,540 (1,450,815) (1,983,344) (292,128) 96,669 (1,350) 95,319 (1,922,231) (2,119,040)

* Miscellaneous Commission Breakup for the year ended March 31, 2021 (` ’000)
Miscellaneous
Motor Others
Particulars Workmens Public Product Personal Health Total
Motor-OD Motor-TP Motor Total Engineering Aviation Other Home Specialty Weather/Crop Others
Compensation Liability Liability Accident Insurance Miscellaneous
Liability
Commission paid direct 2,644,185 279,824 2,924,009 22,354 2,111 1,231 123,150 3,343 685,734 4,734,279 96,373 29,204 240,736 49,890 143,202 9,055,616
Add: Commission paid on Re-insurance accepted — — — — 134 — 5,125 (72) 3,537 — 2,955 — 28,076 — 16 39,771
Less: Commission received on Re-insurance ceded (318,077) (1,913,946) (2,232,023) (3,520) (3,102) (1,772) (297,067) (8,058) (871,429) (5,016,698) (104,330) (2,178) (334,800) (1,575,470) (95,755) (10,546,202)
Net commission paid/(received) 2,326,108 (1,634,122) 691,986 18,834 (857) (541) (168,792) (4,787) (182,158) (282,419) (5,002) 27,026 (65,988) (1,525,580) 47,463 (1,450,815)

** Miscellaneous Commission Breakup for the year ended March 31, 2020 (` ’000)
Miscellaneous
Motor Others
Particulars Workmens Public Product Personal Health Total
Motor-OD Motor-TP Motor Total Engineering Aviation Other Home Specialty Weather/Crop Others
Compensation Liability Liability Accident Insurance Miscellaneous
Liability
Commission paid direct 2,800,957 247,466 3,048,423 26,000 2,593 600 119,062 4,602 821,333 2,056,885 84,187 1,054 164,247 37,427 107,501 6,473,914
Annexed to and forming part of the Revenue Accounts

Add: Commission paid on Re-insurance accepted — — — — 733 124 6,019 — 767 — 8,595 — 28,208 — 5 44,451
Less: Commission received on Re-insurance ceded (639,546) (1,342,193) (1,981,739) (2,479) (1,032) (86) (261,379) (10,024) (1,157,245) (3,566,116) (54,733) (313) (153,398) (1,128,813) (123,239) (8,440,596)
Net commission paid/(received) 2,161,411 (1,094,727) 1,066,684 23,521 2,294 638 (136,298) (5,422) (335,145) (1,509,231) 38,049 741 39,057 (1,091,386) (15,733) (1,922,231)

SCHEDULE - 3 A
COMMISSION PAID DIRECT (` ’000)
For the year ended March 31, 2021 For the year ended March 31, 2020
Particulars
Fire Marine Miscellaneous Total Fire Marine Miscellaneous Total
Agents 52,552 15,689 3,731,637 3,799,878 41,648 23,927 1,219,947 1,285,522
Brokers 813,531 125,539 2,575,255 3,514,325 607,790 158,138 2,395,116 3,161,044
Corporate Agency 228,585 1,081 2,266,914 2,496,580 210,829 771 2,424,101 2,635,701
Referral — — — — — — — —
Others: Web aggregator,CSC,IMF, MISP and POSP 279 7 481,810 482,096 108 1 434,750 434,859
Total 1,094,947 142,316 9,055,616 10,292,879 860,375 182,837 6,473,914 7,517,126

14th Annual Report 2020-21


SCHEDULE - 4
OPERATING EXPENSES RELATED TO INSURANCE BUSINESS (` ’000)
For the year ended March 31, 2021 For the year ended March 31, 2020
Particulars Marine Marine

Schedules
Fire * Miscellaneous Total Fire ** Miscellaneous Total
Marine Cargo Marine Hull Marine Total Marine Cargo Marine Hull Marine Total
Employees’ remuneration and welfare benefits 547,541 57,345 9,497 66,842 4,688,789 5,303,172 453,941 73,203 9,819 83,022 3,623,039 4,160,002
Travel, conveyance and vehicle running expenses 12,773 1,338 221 1,559 109,398 123,730 33,135 5,343 717 6,060 264,460 303,655
Training expenses 49,274 5,161 854 6,015 421,950 477,239 80,933 13,051 1,751 14,802 645,954 741,689
Rents, rates and taxes 59,138 6,194 1,026 7,220 506,419 572,776 43,019 6,938 930 7,868 343,342 394,229
Repairs 21,213 2,222 368 2,590 181,659 205,461 15,654 2,524 339 2,863 124,939 143,456
Printing and stationery 11,492 1,203 199 1,402 98,399 111,293 18,773 3,027 406 3,433 149,831 172,037
Communication 8,129 851 141 992 69,608 78,729 6,352 1,025 137 1,162 50,695 58,209
Legal and professional charges 474,026 49,645 8,222 57,867 4,059,252 4,591,145 327,475 52,809 7,083 59,892 2,539,963 2,927,330
Auditors’ fees, expenses etc
(a) as auditors 671 71 12 83 5,747 6,501 1,055 170 23 193 8,422 9,670
(b) as advisor or in any other capacity, in
respect of:
(i) Taxation matters — — — — — — — — — — — —
(ii) Insurance matters — — — — — — — — — — — —
Annexed to and forming part of the Revenue Accounts

(iii) Management services — — — — — — — — — — — —

(c) in any other capacity 522 55 9 64 4,473 5,059 325 52 7 59 2,595 2,978
Advertisement and publicity 635,287 66,534 11,019 77,553 5,440,182 6,153,022 466,720 75,264 10,095 85,359 3,725,024 4,277,103
Interest and bank charges 31,443 3,293 545 3,838 430,807 466,089 28,978 4,673 627 5,300 405,865 440,143
Others:
Electricity expenses 8,005 839 139 978 68,548 77,531 8,973 1,447 194 1,641 71,616 82,230
Office expenses 3,992 418 69 487 34,187 38,667 4,219 680 91 771 33,674 38,664
Miscellaneous expenses 8,483 889 147 1,036 72,643 82,161 10,821 1,745 234 1,979 86,368 99,168
Information Technology expenses 91,480 9,581 1,586 11,167 783,370 886,017 44,023 7,099 952 8,051 351,362 403,436
Postage and courier 2,725 285 48 333 23,336 26,394 16,113 2,599 349 2,948 128,603 147,664
Loss/(Profit) on sale of assets (net) 9,305 975 161 1,136 79,684 90,125 (112) (18) (2) (20) (894) (1,026)
Depreciation 59,246 6,205 1,028 7,233 507,347 573,827 44,642 7,199 965 8,164 356,305 409,111
Total Operating Expenses 2,034,745 213,103 35,292 248,395 17,585,797 19,868,937 1,605,039 258,831 34,717 293,548 12,911,162 14,809,749

67
 SCHEDULE - 4 (Continued)

68
* Miscellaneous Operating expenses related to Insurance business Breakup for the year ended March 31, 2021 (` ’000)

Miscellaneous

Motor Others
Particulars
Workmens Public Product Personal Health Total
Engineering Aviation

Schedules
Motor-OD Motor-TP Motor Total Compensation Liability Liability Accident Insurance Other Home Specialty Weather/Crop Others Miscellaneous
Liability

Employees’ remuneration and welfare benefits 641,579 810,634 1,452,214 7,066 1,288 417 78,026 5,137 230,588 1,595,103 35,281 9,608 97,254 1,096,889 79,918 4,688,789

Travel, conveyance and vehicle running expenses 14,969 18,914 33,883 165 30 10 1,820 120 5,380 37,217 823 224 2,269 25,592 1,865 109,398

Training expenses 57,736 72,950 130,686 636 116 38 7,022 462 20,751 143,546 3,175 865 8,752 98,710 7,192 421,950

Rents, rates and taxes 69,294 87,553 156,848 763 139 45 8,429 555 24,905 172,281 3,811 1,038 10,504 118,471 8,632 506,419

Repairs 24,857 31,407 56,263 274 50 16 3,023 199 8,934 61,799 1,367 372 3,768 42,497 3,097 181,659

Printing and stationery 13,464 17,012 30,476 148 27 9 1,637 108 4,840 33,475 740 202 2,041 23,020 1,677 98,399

Communication 9,525 12,034 21,559 105 19 6 1,158 76 3,423 23,680 524 143 1,444 16,284 1,186 69,608

Legal and professional charges 555,438 701,795 1,257,233 6,117 1,115 361 67,550 4,447 199,628 1,380,938 30,544 8,318 84,196 949,616 69,187 4,059,252

Auditors’ fees, expenses etc

(a) as auditors 786 994 1,780 9 2 1 96 6 283 1,955 43 12 119 1,344 98 5,747

(b) as advisor or in any other capacity, in respect of:

(i) Taxation matters — — — — — — — — — — — — — — — —

(ii) Insurance matters — — — — — — — — — — — — — — — —

Annexed to and forming part of the Revenue Accounts

(iii) Management services — — — — — — — — — — — — — — — —

(c) in any other capacity 612 773 1,385 7 1 — 74 5 220 1,522 34 9 93 1,046 76 4,473

Advertisement and publicity 744,394 940,541 1,684,935 8,198 1,494 484 90,530 5,960 267,541 1,850,724 40,935 11,148 112,840 1,272,669 92,725 5,440,182

Interest and bank charges 36,843 46,551 83,394 406 74 24 4,481 295 13,242 91,600 2,026 552 5,585 224,540 4,589 430,807

Others:

Electricity expenses 9,380 11,851 21,231 103 19 6 1,141 75 3,371 23,319 516 140 1,422 16,036 1,168 68,548

Office expenses 4,678 5,910 10,588 52 9 3 569 37 1,681 11,630 257 70 709 7,998 583 34,187

Miscellaneous expenses 9,940 12,559 22,499 109 20 6 1,209 80 3,572 24,713 547 149 1,507 16,994 1,239 72,643

Information Technology expenses 107,190 135,435 242,625 1,180 215 70 13,036 858 38,525 266,498 5,895 1,605 16,249 183,260 13,352 783,370

Postage and courier 3,193 4,034 7,227 35 6 2 388 26 1,148 7,938 174 49 484 5,460 398 23,336

Loss/(Profit) on sale of assets (net) 10,903 13,776 24,680 120 22 7 1,326 87 3,919 27,108 600 163 1,653 18,641 1,358 79,684

Depreciation 69,422 87,714 157,136 765 139 45 8,443 556 24,951 172,597 3,818 1,040 10,523 118,688 8,647 507,347

Total Operating Expenses 2,384,204 3,012,439 5,396,643 26,257 4,786 1,550 289,958 19,088 856,901 5,927,642 131,108 35,707 361,411 4,237,759 296,985 17,585,797

14th Annual Report 2020-21


SCHEDULE - 4 (Continued)
** Miscellaneous Operating expenses related to Insurance business Breakup for the year ended March 31, 2020 (` ’000)

Miscellaneous

Motor Others
Particulars

Schedules
Workmens Public Product Personal Health Total
Engineering Aviation
Motor-OD Motor-TP Motor Total Compensation Liability Liability Accident Insurance Other Home Specialty Weather/Crop Others Miscellaneous
Liability

Employees’ remuneration and welfare benefits 669,602 775,196 1,444,798 8,571 1,684 200 84,925 5,420 281,131 683,629 36,211 500 72,178 922,441 81,351 3,623,039

Travel, conveyance and vehicle running expenses 48,877 56,584 105,461 625 123 15 6,199 396 20,521 49,901 2,642 37 5,269 67,333 5,938 264,460

Training expenses 119,383 138,211 257,594 1,528 301 36 15,141 966 50,123 121,884 6,456 89 12,870 164,462 14,504 645,954

Rents, rates and taxes 63,455 73,462 136,917 812 160 19 8,048 514 26,642 64,785 3,432 48 6,840 87,416 7,709 343,342

Repairs 23,091 26,732 49,823 296 58 7 2,929 187 9,695 23,575 1,249 17 2,489 31,810 2,804 124,939

Printing and stationery 27,692 32,058 59,750 354 70 8 3,512 224 11,626 28,271 1,497 21 2,985 38,148 3,365 149,831

Communication 9,369 10,847 20,216 119 24 3 1,188 76 3,934 9,566 507 7 1,010 12,907 1,138 50,695

Legal and professional charges 482,993 559,178 968,460 6,182 1,215 145 61,257 3,910 202,774 493,361 26,119 363 52,070 665,426 58,680 2,539,963

Auditors’ fees, expenses etc

(a) as auditors 1,547 1,794 3,342 20 4 — 196 13 648 1,618 84 2 168 2,140 188 8,422

(b) as advisor or in any other capacity, in respect of:

(i) Taxation matters — — — — — — — — — — — — — — — —

(ii) Insurance matters — — — — — — — — — — — — — — — —

(iii) Management services — — — — — — — — — — — — — — — —

Annexed to and forming part of the Revenue Accounts

(c) in any other capacity 549 615 1,163 7 1 — 71 4 242 271 29 (2) 51 691 66 2,595

Advertisement and publicity 688,450 797,017 1,485,467 8,812 1,732 206 87,316 5,573 289,045 702,872 37,230 514 74,210 948,407 83,640 3,725,024

Interest and bank charges 42,744 49,485 92,229 547 108 13 5,421 346 17,946 43,639 2,311 32 4,608 233,473 5,192 405,865

Others

Electricity expenses 13,236 15,324 28,560 169 33 4 1,679 107 5,557 13,514 714 10 1,427 18,234 1,608 71,616

Office expenses 6,224 7,205 13,429 80 14 2 789 50 2,613 6,354 337 5 671 8,574 756 33,674

Miscellaneous expenses 15,962 18,479 34,441 204 40 5 2,024 129 6,702 16,296 863 12 1,721 21,990 1,941 86,368

Information Technology expenses 64,938 75,178 140,116 831 163 19 8,236 526 27,264 66,298 3,512 49 7,000 89,458 7,890 351,362

Postage and courier 23,768 27,517 51,285 304 60 7 3,015 192 9,979 24,266 1,285 18 2,562 32,743 2,887 128,603

Loss/(Profit) on sale of assets (net) (165) (192) (357) (2) — — (21) (1) (70) (169) (9) — (18) (227) (20) (894)

Depreciation 65,852 76,236 142,088 843 166 20 8,352 533 27,648 67,231 3,561 49 7,098 90,716 8,000 356,305

Total Operating Expenses 2,367,567 2,740,926 5,034,783 30,302 5,957 709 300,277 19,164 994,020 2,417,162 128,030 1,771 255,208 3,436,142 287,637 12,911,162

69
Schedules
Annexed to and forming part of the Balance Sheet
SCHEDULE – 5
SHARE CAPITAL
Particulars As at As at
March 31, 2021 March 31, 2020
(` ’000) (` ’000)

Authorised Capital
2000,000,000 Equity Shares of ` 10/- each 20,000,000 20,000,000
(Previous year: 2000,000,000 Equity Shares of ` 10/- each)

Issued Capital
711,564,933 Equity Shares of ` 10/- each 7,115,649 6,058,421
(Previous year: 605,842,050 Equity Shares of ` 10/- each)

Subscribed Capital
711,564,933 Equity Shares of ` 10/- each 7,115,649 6,058,421
(Previous year: 605,842,050 Equity Shares of ` 10/- each)

Called-up Capital
711,564,933 Equity Shares of ` 10/- each 7,115,649 6,058,421
(Previous year: 605,842,050 Equity Shares of ` 10/- each)
Less: Calls unpaid — —
Add: Equity Shares forfeited (Amount originally paid up) — —
Less: Preliminary Expenses — —
Total 7,115,649 6,058,421
Of the above 359,741,874 (Previous year 305,841,738) Equity Shares of ` 10/- each are held by Housing
Development Finance Corporation Limited, the Holding Company.

SCHEDULE – 5A
SHARE CAPITAL
PATTERN OF SHAREHOLDING As at March 31, 2021 As at March 31, 2020
[As certified by the Management] (Number of Shares) (% of Holding) (Number of Shares) (% of Holding)

Promoters:
Indian: Housing Development
Finance Corporation Limited 359,741,874 50.56% 305,841,738 50.48%
Foreign: ERGO International AG 293,470,812 41.24% 292,202,312 48.23%
Munich Health Holding AG 51,321,532 7.21% — —
Others: Employees 7,030,715 0.99% 7,798,000 1.29%
Total 711,564,933 100.00% 605,842,050 100.00%

70 14th Annual Report 2020-21

Schedules
Annexed to and forming part of the Balance Sheet

SCHEDULE – 6
RESERVES AND SURPLUS
Particulars As at As at
March 31, 2021 March 31, 2020
(` ’000) (` ’000)
Capital Reserve — —
Capital Redemption Reserve — —
Reserve on Amalgamation 3,003,014 3,003,014
Share Premium
Balance Brought forward from Previous Year 13,958,314 8,403,217
Add: Addition due to Merger (Refer Note 3 of — 5,517,832
Schedule 16)
Add: Addition during the period 54,198 14,012,512 37,265 13,958,314
General Reserves
Balance Brought forward from Previous Year — —
Less: Debit balance in Profit and Loss Account — —
Less: Amount utilised for buy-back — — — —
Contingency Reserve for Unexpired Risk — —
Catastrophe Reserve — —
Other Reserves
Debenture Redemption Reserve
Balance Brought forward from Previous Year 356,468 291,600
Add: Addition due to Merger (Refer Note 3 of — 40,568
Schedule 16)
Add: Addition during the period — 356,468 24,300 356,468
Balance of Profit/(Loss) in Profit and Loss Account
Balance Brought forward from Previous Year 4,002,118 5,074,847
Add: Profit during the year 3,781,815 3,269,418
Less: Transfer to Debenture Redemption Reserve — (24,300)
Less: On Merger (Refer Note 3 of Schedule 16) — 7,783,933 (4,317,847) 4,002,118
Total 25,155,927 21,319,914

SCHEDULE – 7
BORROWINGS
Particulars As at As at
March 31, 2021 March 31, 2020
(` ’000) (` ’000)
Debentures/Bonds 5,040,000 5,040,000
(Refer note 33 of Schedule 16)
Banks — —
Financial Institutions — —
Others — —
Total 5,040,000 5,040,000

71
Schedules
Annexed to and forming part of the Balance Sheet

SCHEDULE – 8
INVESTMENTS - SHAREHOLDERS (Refer note 2 (p) and 10 of schedule 16)
Particulars As at As at
March 31, 2021 March 31, 2020
(` ’000) (` ’000)
LONG TERM INVESTMENTS
Government securities and Government guaranteed bonds
including Treasury Bills 7,904,031 6,075,261
Other Approved Securities 3,184,193 1,962,791
Other Investment:
Shares
— Equity 740,489 438,758
Less : Provision for Diminution in value of Investments (103,793) 636,696 (87,050) 351,708
— Preference — 4,770
Mutual Funds 17,141 12,741
Derivative Instruments — —
Debentures/Bonds 5,447,533 4,467,528
Less : Provision for Diminution in value of Investments* (1,013,062) 4,434,471 (1,377,913) 3,089,615
Other Securities (Bank Deposits) 36,213 95,296
Investments in Infrastructure and Housing 7,959,598 5,209,021
Sub-total (A) 24,172,343 16,801,203
SHORT TERM INVESTMENTS
Government securities and Government guaranteed bonds
including Treasury Bills 918,412 101,948
Other Approved Securities 38,479 —
Other Investment:
Shares
— Equity 81,842 —
— Preference 2,734 —
Mutual Funds 2,321,494 1,067,482
Derivative Instruments — —
Debentures/Bonds 2,101,419 1,495,371
Less : Provision for Diminution in value of Investments * (1,568,885) 532,534 (909,053) 586,318
Other Securities (Commercial Papers and 654,918 458,512
Certificate of Deposits)
Subsidiaries — —
Investment Properties-Real Estate — —
Investments in Infrastructure and Housing 806,079 764,721
Sub-total (B) 5,356,492 2,978,981
Total (A+B) 29,528,835 19,780,184
Note:
a) Aggregate value of the investments other than Equity Shares and Mutual Fund
(` ’000) (` ’000)
Long term investments - Book Value 23,518,506 16,436,754
Market Value 24,283,741 17,010,850
Short term investments - Book Value 2,953,159 1,911,500
Market Value 2,978,182 1,918,447
b) Investments made outside India: ` Nil (Previous Year ` Nil)
* Refer Note 10 of Schedule 16

72 14th Annual Report 2020-21

Schedules
Annexed to and forming part of the Balance Sheet

SCHEDULE – 8A
INVESTMENTS - POLICYHOLDERS (Refer Note 2 (p) and 10 of schedule 16)
Particulars As at As at
March 31, 2021 March 31, 2020
(` ’000) (` ’000)
LONG TERM INVESTMENTS
Government securities and Government guaranteed bonds
including Treasury Bills 36,644,428 35,624,602
Other Approved Securities 14,762,466 11,509,574
Other Investment:
Shares
— Equity 2,951,831 2,062,376
— Preference — 27,968
Mutual Funds 79,467 74,714
Debentures/Bonds 20,558,962 18,117,134
Other Securities (Bank Deposits) 167,887 558,804
Subsidiaries — —
Investment Properties-Real Estate — —
Investments in Infrastructure and Housing 36,902,050 30,545,080
Sub-total (A) 112,067,091 98,520,252
SHORT TERM INVESTMENTS
Government securities and Government guaranteed bonds
including Treasury Bills 4,257,919 597,815
Other Approved Securities 178,396 —
Other Investment:
Shares
— Equity 379,433 —
— Preference 12,673 —
Mutual Funds 10,762,832 6,259,587
Derivative Instruments — —
Debentures/Bonds 2,468,922 3,438,098
Other Securities (Commercial Papers and Certificate 3,036,311 2,688,658
of Deposits)
Subsidiaries — —
Investment Properties-Real Estate — —
Investments in Infrastructure and Housing 3,737,126 4,484,234
Sub-total (B) 24,833,612 17,468,392
Total (A+B) 136,900,703 115,988,644
Note:
a) Aggregate value of the investments other than Equity Shares and Mutual Fund
(` ’000) (` ’000)
Long term investments - Book Value 109,035,794 96,383,161
Market Value 112,583,551 99,749,596
Short term investments - Book Value 13,691,347 11,208,805
Market Value 13,807,359 11,249,542
b) Investments made outside India: ` Nil (Previous Year ` Nil)

73
Schedules
Annexed to and forming part of the Balance Sheet

SCHEDULE - 9
LOANS
Particulars As at As at
March 31, 2021 March 31, 2020
(` ’000) (` ’000)

SECURITY-WISE CLASSIFICATION
Secured
(a) On mortgage of property
(aa) In India — —
(bb) Outside India — —
(b) On Shares, Bonds, Government Securities — —
(c) Others — —
Unsecured — —
Total — —

BORROWER-WISE CLASSIFICATION
(a) Central and State Governments — —
(b) Banks and Financial Institutions — —
(c) Subsidiaries — —
(d) Industrial Undertakings — —
(e) Others — —
Total — —

PERFORMANCE-WISE CLASSIFICATION
(a) Loans classified as standard
(aa) In India — —
(bb) Outside India — —
(b) Non-performing loans less provisions
(aa) In India — —
(bb) Outside India — —
Total — —

MATURITY-WISE CLASSIFICATION
(a) Short-Term — —
(b) Long-Term — —
Total — —

Total — —

74 14th Annual Report 2020-21


SCHEDULE – 10
FIXED ASSETS
(` ’000)
Cost/Gross Block Depreciation/Amortisation Net Block

Schedules
Particulars Opening Additions Addition on Deductions Closing Upto last For the Addition on On Sales/ To Date As at Year
Amalgamation year period Amalgamation Adjustments end
Intangibles - Computer Software* 2,340,910 244,790 — 205,058 2,380,642 1,829,802 243,951 — 134,231 1,939,522 441,120
(1,488,405) (179,914) (672,591) — (2,340,910) (1,165,700) (159,594) (504,478) (30) (1,829,802) (511,108)
Leasehold Property 172,122 13,094 — 24,891 160,325 127,176 17,688 — 295 144,569 15,756
(127,424) (44,698) — — (172,122) (112,248) (14,928) — — (127,176) (44,946)
Building 1,267,779 248,307 — — 1,516,086 135,323 24,238 — — 159,562 1,356,524
(1,267,779) — — — (1,267,779) (114,179) (21,144) — — (135,323) (1,132,456)
Furniture and Fittings 437,804 48,896 — 60,460 426,240 248,137 35,242 — 52,607 230,772 195,468
(318,042) (17,403) (103,178) (819) (437,804) (135,704) (29,000) (84,003) (570) (248,137) (189,667)
Information Technology Equipment 1,326,207 164,398 — 147,557 1,343,048 948,885 185,717 — 131,192 1,003,410 339,638
Annexed to and forming part of the Balance Sheet

(834,154) (224,179) (314,746) (46,872) (1,326,207) (625,051) (129,660) (240,860) (46,686) (948,885) (377,322)
Vehicles 231,299 17,118 — 29,721 218,696 120,096 38,907 — 19,468 139,535 79,161
(179,934) (29,110) (54,350) (32,095) (231,299) (62,495) (36,732) (43,735) (22,866) (120,096) (111,203)
Office Equipment 305,887 42,504 — 10,571 337,820 242,570 28,085 — 9,342 261,313 76,507
(214,955) (23,092) (71,590) (3,750) (305,887) (169,745) (18,055) (58,361) (3,591) (242,570) (63,317)
6,082,008 779,107 — 478,258 6,382,857 3,651,989 573,828 — 347,134 3,878,683 2,504,174
Total
(4,430,693) (518,396) (1,216,455) (83,536) (6,082,008) (2,385,122) (409,113) (931,437) (73,683) (3,651,989) (2,430,019)
Capital Work-in-progress 394,334 312,204 — 477,108 229,430 — — — — — 229,430
(includes advances)
(89,479) (347,576) (128,190) (170,911) (394,334) — — — — — (394,334)
6,476,342 1,091,311 — 955,366 6,612,287 3,651,989 573,828 — 347,134 3,878,683 2,733,604
Grand Total
(4,520,172) (865,972) (1,344,645) (254,447) (6,476,342) (2,385,122) (409,113) (931,437) (73,683) (3,651,989) (2,824,353)
*There are no internally generated Computer Software
(Figures in bracket pertains to Previous Year)

75
Schedules
Annexed to and forming part of the Balance Sheet

SCHEDULE - 11
CASH AND BANK BALANCES
Particulars As at As at
March 31, 2021 March 31, 2020
(` ’000) (` ’000)
Cash (including cheques, drafts and stamps) 811,595 358,572
Bank Balances
(a) Deposit Accounts — —
(aa) Short-term (due within 12 months) 772,469 4,315,811
(bb) Others 4,671 23,853
(b) Current Accounts 3,149,514 3,123,071
(c) Others — —
Money at Call and Short Notice
(a) With Banks — —
(b) With Other Institutions — —
Others — —
Total 4,738,249 7,821,307

SCHEDULE - 12
ADVANCES AND OTHER ASSETS
Particulars As at As at
March 31, 2021 March 31, 2020
(` ’000) (` ’000)
ADVANCES
Reserve deposits with ceding companies — —
Application money for investments — —
Prepayments 248,395 558,113
Advance tax paid and taxes deducted at source 354,080 258,742
(Net of provision for taxation)
Others:
Advances to employees 7,584 14,370
Advances to suppliers 800,713 756,182
Less : Provisions for doubtful debts — 800,713 (1,406) 754,776
Goods and Service tax Unutilised Credit 862,074 1,793,598
Sub-total (A) 2,272,846 3,379,599
OTHER ASSETS
Income accrued on investments 3,894,317 3,794,158
Outstanding Premiums 10,956,266 14,497,129
Less : Provisions for doubtful debts Govt Receivable (6,856) 10,949,410 — 14,497,129

76 14th Annual Report 2020-21

Schedules
Annexed to and forming part of the Balance Sheet

Schedule – 12 (Continued)

Particulars As at As at
March 31, 2021 March 31, 2020
(` ’000) (` ’000)
Agents’ Balances 7,123 11,302
Less : Provisions for doubtful debts (1,217) 5,905 (5,073) 6,229
Due from other entities carrying on insurance
business (including reinsurers) 1,089,638 1,416,200
Due from subsidiaries/holding Company — 26
Deposits for premises 147,133 198,432
Less : Provisions for doubtful debts — 147,133 (13,410) 185,022
Unclaimed amount of Policyholders Investment 147,786 144,396
Interest Income on Unclaimed amount of
Policyholders Investment 44,772 39,928
Sub-total (B) 16,278,961 20,083,088
Total (A+B) 18,551,807 23,462,687

SCHEDULE - 13
CURRENT LIABILITIES
Particulars As at As at
March 31, 2021 March 31, 2020
(` ’000) (` ’000)
Agents’ Balances 571,506 489,927
Balances due to other insurance companies 29,374,458 27,623,507
Premiums received in advance 8,938,194 7,578,930
Unallocated Premium 6,013,690 6,602,076
Unclaimed amount of Policyholders 264,090 229,040
(Refer Note 28 of Schedule 16)
Interest on Unclaimed amount of Policyholders 44,772 39,928
(Refer note 28 of Schedule 16)
Sundry creditors 5,160,450 4,411,203
Due to subsidiaries/holding company 112,036 97,576
Claims Outstanding 61,050,885 47,561,879
Due to Officers/Directors 3,700 3,600
Others:
Tax deducted at source 499,115 574,001
Other statutory dues 48,331 52,754
Interest payable on debentures 231,446 230,559
Total 112,312,673 95,494,980

77
Schedules
Annexed to and forming part of the Balance Sheet

SCHEDULE - 14
PROVISIONS
Particulars As at As at
March 31, 2021 March 31, 2020
(` ’000) (` ’000)

Reserve for Unexpired Risk 43,253,664 42,266,612

For taxation (less advance tax paid and taxes deducted at source) — —
For proposed dividends — —
For dividend distribution tax — —
Others:
Provision for Employee benefits 47,852 125,002
Total 43,301,516 42,391,614

SCHEDULE - 15
MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted)
Particulars As at As at
March 31, 2021 March 31, 2020
(` ’000) (` ’000)

Discount Allowed in issue of shares/debentures — —

Others:
Pre-operative expenses:
Opening balance — —
Incurred during the period — —
Less: Amortisation during the period — —
Total — —

78 14th Annual Report 2020-21

Schedule – 16
NOTES TO ACCOUNTS

1. BACKGROUND
HDFC ERGO General Insurance Company Limited (“the Company”) was incorporated on December 27, 2007 as
a Company under the Companies Act, 1956.
The Company is registered with the Insurance Regulatory and Development Authority of India (“IRDAI”) and
continues to be in the business of underwriting general insurance policies and has launched general insurance
products which include Motor, Home, Accident & Health, Commercial, Specialty and Weather/Crop business
lines.
The Company’s Unsecured, Subordinated, Fully Paid-up, Listed, Redeemable Non-Convertible Debentures
(NCDs) are listed on the Bombay Stock Exchange (BSE).
The Company’s certificate of renewal of registration dated February 25, 2014 was valid till March 31, 2015.
Pursuant to Section 3 read with Section 3A of the Insurance Act, 1938 as amended by the Insurance Laws
(Amendment) Act, 2015, said certificate shall consequentially continue to be in force from April 1, 2015
onwards.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
These financial statements have been prepared under the historical cost convention, on an accrual
basis and in accordance with the applicable provisions of the Insurance Regulatory and Development
Authority (Preparation of Financial Statements and Auditor’s Report of Insurance Companies) Regulations,
2002, the Insurance Act, 1938, as amended by Insurance Laws (Amendment) Act, 2015, the Insurance
Regulatory and Development Authority Act, 1999, circulars/notifications and guidelines issued by IRDAI
from time to time, the Accounting Standards (AS) specified under Section 133 of the Companies Act, 2013,
read together with Rule 7 of Companies (Accounts) Rule 2014 dated March 31, 2014 and Companies
(Accounting Standards) Amendment Rules 2016 dated March 30, 2016 to the extent applicable and the
relevant provisions of the Companies Act, 2013 and current practices prevailing within the insurance
industry in India. The financial statements are presented in Indian rupees rounded off to the nearest
thousand.
Accounting policies applied have been consistent with previous year except where different treatment is
required as per new pronouncements made by the regulatory authorities. The management evaluates, all
recently issued or revised accounting pronouncements, on an ongoing basis.
(b) Use of estimates
The preparation of the financial statements in conformity with accounting principles generally accepted
in India requires the management to make estimates and assumptions that affect the reported amount
of assets and liabilities as of the Balance Sheet date, reported amount of revenues and expenses for the
year and disclosures of contingent liabilities as of the Balance Sheet date. The estimates and assumptions
used in the accompanying financial statements are based upon management’s evaluation of the relevant
facts and circumstances as of the date of the financial statements. Actual results could differ from these
estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.
(c) Revenue Recognition
Premium Income
Premium including Reinsurance accepted (net of Goods & Service Tax) is recognized as income over

79
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

the contract period or period of risk, as appropriate, after adjusting for unearned premium (unexpired
risk). Any subsequent revisions to or cancellations of premiums are accounted for in the period in which
they occur. Instalment cases are recorded on instalment due dates. Premium received in advance
represents premium received prior to commencement of the risk. In case of Long Term Motor Insurance
Policies, premium is recognized on a yearly basis as mandated by IRDAI circular number IRDAI/NL/CIR/
MOT/137/08/2018 dated August 28, 2018.
Income earned on investments
Interest income on investments is recognised on an accrual basis. Accretion of discount and amortisation
of premium relating to debt securities is recognised over the holding/maturity period on a constant yield
to maturity basis.
Dividend income is recognised when the right to receive dividend is established.
The net realised gains or losses on the debt securities are the difference between the net sale consideration
and the amortised cost, which is computed on a weighted average basis, as on the date of sale. In case of
listed equity shares/mutual fund units, the profit or loss on sale of investment includes the accumulated
changes in the fair value previously recognised under “Fair Value Change Account”. The difference
between the acquisition price and the maturity value of treasury bills is recognised as income in the
revenue accounts or the profit and loss account, as the case may be, over the remaining term of these
instruments on a yield to maturity basis.
Sale consideration for the purpose of realised gain/loss is net of brokerage and taxes, if any, and excludes
interest received on sale.
(d) Reinsurance ceded
Reinsurance premium ceded is accounted in the year in which the risk commences and over the period
of risk in accordance with the treaty arrangements with the reinsurers. Reinsurance premium ceded
on unearned premium is carried forward to the period of risk and is set off against related unearned
premium. Any subsequent revisions to or cancellations of premiums are accounted for in the year in which
they occur.
Premium on excess of loss reinsurance cover is accounted as per the terms of the reinsurance
arrangements.
(e) Commission received
Commission on reinsurance ceded is recognised as income on ceding of reinsurance premium.
Profit commission under reinsurance treaties, wherever applicable, is recognised in the year of final
determination of the profits and as intimated by the Reinsurer.
(f) Reserve for Unexpired Risk
Reserve for unexpired risk represents that part of the net premium written which is attributable to and
allocated to the succeeding accounting period. Reserve for unexpired risk is calculated on the basis
of 1/365th method in all segment subject to a minimum of 100% in case of Marine Hull business and
based on Net Premium Written during the year, whichever is higher as per Circular No. IRDA/F&A/CIR/
CPM/056/03/2016 dated April 4, 2016.

80 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

(g) Premium deficiency

Premium deficiency is recognised for the Company as a whole on an annual basis. Premium deficiency
is recognised if the sum of the expected claim costs, related expenses and maintenance cost (related to
claims handling) exceeds related reserve for unexpired risk. The expected claim costs are calculated and
duly certified by the Appointed Actuary.
(h) Claims incurred
Claims incurred comprises of claims paid (net of salvage and other recoveries), change in estimated
liability for outstanding claims made following a loss occurrence reported, change in estimated liability for
claims incurred but not reported (IBNR) and claims incurred but not enough reported (IBNER) and specific
settlement costs comprising survey, legal and other directly attributable expenses.
Provision is made for estimated value of outstanding claims at the Balance Sheet date net of reinsurance,
salvage and other recoveries. Such provision is made on the basis of the ultimate amounts that are likely
to be paid on each claim, established by the management in light of past experience and progressively
modified for changes as appropriate, on availability of further information and include claim settlement
costs likely to be incurred to settle outstanding claims.
Claims (net of amounts receivable from reinsurers/coinsurers) are recognised on the date of intimation
based on estimates from surveyors/insured in the respective revenue accounts.
The estimated liability for claims incurred but not reported (IBNR) and claims incurred but not enough
reported (IBNER) has been estimated by the Appointed Actuary in compliance with guidelines issued by
IRDAI vide circular No. 11/IRDA/ACTL/IBNR/2005-06 dated June 8, 2005 and applicable provisions of
Guidance Note 21 issued by the Institute of Actuaries of India. The Appointed Actuary has used generally
accepted actuarial methods for each product category as considered appropriate depending upon
the availability of past data as well as appropriateness of the different methods to the different lines
of businesses. The above elements of estimates of liability for claims are periodically reviewed by the
Appointed Actuary and adjusted based on recent experience and emerging trends.
(i) Salvage Recoveries
Salvaged vehicles are recognised at net realizable value and are deducted from the claim settlement
made against the same. Salvaged vehicles on hand are treated as stock-in-trade and are recognised at
estimated net realizable value based on independent valuer’s report.
(j) Acquisition Costs
Acquisition costs are defined as costs that vary with, and are primarily related to the acquisition of new
and renewal insurance contracts viz. commission. These costs are expensed in the period in which they
are incurred. In accordance with the requirements of the Circular no. IRDA/INT/CIR/Comm/139/08/2018
dated August 29, 2018, Commission, remuneration, reward and distribution fees for new Long Term
Private Car and Two-wheeler motor policies at the prescribed rates is accounted in the year in which the
corresponding premium is recognised.
(k) Borrowing Costs
Borrowing costs are charged to the Profit and Loss account in the period in which they are incurred.

81
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

(l) Fixed Assets and Depreciation

Fixed assets are stated at cost of acquisition (including incidental expenses relating to acquisition and
installation of assets) and expenses directly attributable to bringing the asset to its working condition
for its intended use, less accumulated depreciation and impairment of assets, if any. Salvaged vehicles,
transferred and registered in the name of the Company are stated at fair market value determined based
on the independent valuer’s report as on the date of capitalization less accumulated depreciation.
Capital work-in-progress includes assets not ready for the intended use and are carried at cost, comprising
direct cost and related incidental expenses.
Depreciable amount for assets is the cost of an asset or other amount substituted for cost, less its
estimated residual value.
Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful
life prescribed in Schedule II to the Companies Act, 2013, except in respect of the following categories
of assets, in whose case the life of the assets has been assessed as under, based on technical advice,
taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of
the asset, past history of replacement, etc.
- Information Technology Equipment - 4 years
- Vehicles - 5 years
- Salvaged Vehicles Capitalised - 5 years
Leasehold Property is depreciated over the duration of lease.
Intangible assets are amortised over their estimated useful life on straight line method as follows:
- Computer Softwares - 4 years
The estimated useful life of the intangible assets and the amortisation period are reviewed at the end of
each financial year and the amortisation period is revised to reflect the changed pattern, if any.
Impairment of assets
The carrying values of assets forming part of any cash generating units at Balance Sheet date are reviewed
for impairment at each balance sheet date. If any indication for such impairment exists, the recoverable
amounts of those assets are estimated and impairment loss is recognised, if the carrying amount of those
assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price
and their value in use. Value in use is arrived at by discounting the estimated future cash flows to their
present value based on appropriate discount factor. If at the Balance Sheet date there is any indication
that a previously assessed impairment loss no longer exists, then such loss is reversed and the asset is
restated to that extent.
(m) Finance Leases
Finance leases, which effectively transfer substantially all the risks and benefits incidental to ownership
of the leased item to the Company, are capitalised at the lower of the fair value of the asset and present
value of the minimum lease payments at the inception of the lease term and are disclosed as leased
assets. Lease payments are apportioned between the finance charges and the corresponding liability so
as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are
charged to the Revenue Accounts. Leased assets capitalised under finance lease are depreciated on a
straight line basis over the lease term.

82 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

(n) Operating Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the
leased asset are classified as operating leases. Operating lease payments are recognised as an expense
on straight line basis in the revenue accounts, as per the lease terms.
(o) Foreign Currency Transactions
Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date
of the transaction.
At the Balance Sheet date, monetary items denominated in foreign currencies are converted into rupee
equivalents at the exchange rates prevailing at that date.
All exchange differences arising on settlement/conversion of foreign currency transactions are included in
the Revenue Accounts.
(p) Investments
Investments are made, accounted and classified in accordance with the Insurance Act, 1938, as amended
by Insurance Laws (Amendment) Act, 2015, the Insurance Regulatory and Development Authority
(Investment) Regulations, 2000, Insurance Regulatory and Development Authority of India (Investment)
Regulations, 2016 as amended and various other circulars/notifications issued by the IRDAI in this context
from time to time.
Investments are recorded at cost, which include brokerage, taxes, if any, stamp duty and excludes broken
period interest.
Investments maturing within twelve months from the Balance Sheet date and investments made with the
specific intention to be disposed off within twelve months from the balance sheet date are classified as
short-term investments.
Investments other than short-term investments are classified as long-term investments.
Pursuant to the provisions of IRDAI Circular No. IRDA/F&A/CIR/CPM/056/03/2016 dated April 4, 2016
and IRDA/F&A/CIR/CPM/010/01/2017 dated January 12, 2017, the Investment made by the Company,
investment income and fair value change account are bifurcated into Policyholders and Shareholders
funds on notional basis.
Policyholders fund shall be the sum of a) Outstanding Claims including IBNR (Incurred but not reported)
& IBNER (Incurred but not enough reported), b) Unexpired Risk Reserve (URR), c) Premium deficiency, if
any, d) Catastrophe Reserve, if any, and e) Other liabilities net off Other assets. Other liabilities comprise
of Premium received in advance, unallocated premium, Balance due to other Insurance Companies,
Due to others members of the Motor third party pool and Due to Policyholders. Other assets comprises
of outstanding premium, Due from other entities carrying on Insurance business (including reinsurers),
Balance with Terrorism Pool and Balance with Motor third party pool, if any.
Shareholders’ funds comprises of share capital, including reserves and surplus, less accumulated losses,
if any, preliminary expenses and miscellaneous expenditure to the extent not written off or adjusted.
Schedule 8 denotes Investment made out of the Shareholders fund and Schedule 8A denotes Investments
made out of the Policyholders’ fund.

83
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

All debt securities excluding Additional Tier I Bonds and non-convertible preference shares are considered
as ‘held to maturity’ and accordingly stated at historical cost subject to amortisation of premium or
accretion of discount on constant yield to maturity basis to the extent of policyholders funds in the
Revenue Accounts and to the extent of shareholders’ funds in the Profit and Loss Account over the period
of maturity/holding.
All mutual fund investments are valued at net asset value as at Balance Sheet date.
Equity shares actively traded and convertible preference shares as at the Balance Sheet date are stated
at fair value, being the last quoted closing price on the National Stock Exchange (NSE) being selected as
Primary exchange as required by IRDAI Circular No. IRDA/F&I/INV/CIR/213/10/2013 dated October 30,
2013. However, in case of any stock not being listed on NSE, the same is valued based on the last quoted
closing price on Bombay Stock Exchange (BSE).
Additional Tier I Bond Investments are fair valued at market yield rates published by rating agency
registered with the Securities and Exchange Board of India (SEBI).
In accordance with the Regulations, any unrealized gains/losses arising due to change in fair value of
mutual fund investments, listed equity shares and Additional Tier I Bonds are accounted in “Fair Value
Change Account” and carried forward in the Balance Sheet and is not available for distribution.
The Company assesses, whether any impairment has occurred on its investments at each Balance Sheet
date. If any such indication exists, then carrying value of such investment is reduced to its recoverable
amount/market value on the Balance Sheet date and the impairment loss is recognised in the Profit and
Loss Account. If at the Balance Sheet date there is any indication that a previously assessed impairment
loss no longer exists then impairment loss, earlier recognised in Profit and loss Account, is reversed in
Profit and loss Account and the investment is restated to that extent.
(q) Employee Benefits
(i) Short-term employee benefits
All employee benefits payable within twelve months of rendering the service are classified as short
term employee benefits. Benefits such as salaries, bonuses, short term compensated absences and
other non-monetary benefits are recognised in the period in which the employee renders the related
service. All short term employee benefits are accounted on undiscounted basis.
(ii) Long term employee benefits
The Company has both defined contribution and defined benefit plans, of which some have assets
in special funds or similar securities. The plans are financed by the Company and in case of some
defined contribution plans, by the Company along with its employees.
Defined contribution plans
These are plans in which the Company pays predefined amounts to separate funds and does not
have any legal or informal obligation to pay additional sums. These comprise of contributions to the
employees’ provident fund, family pension fund and superannuation fund. The Company’s payments
to the defined contribution plans are reported as expenses during the period in which the employees
perform the services that the payment covers.
Defined benefit plans
Expenses for defined benefit gratuity and supplemental payment plans are calculated as at the
Balance Sheet date by independent actuaries using projected unit credit method in a manner that

84 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

distributes expenses over the employee’s working life. These commitments are valued at the present
value of expected future payments arrived at after considering the funded status, with consideration
for calculated future salary increases, utilizing a discount rate corresponding to the interest rate
estimated by the actuary, having regard to the interest rate on government bonds with a remaining
term that is almost equivalent to the average balance working period of employees.
The Company recognizes the net obligation of the scheme in Balance Sheet as an asset or liability
in accordance with AS- 15”Employee Benefits”. The discount rate used for estimation of liability is
based on Government securities yield. Gain or loss arising from change in actuarial assumptions/
experience adjustments is recognised in the Revenue Accounts for the period in which they emerge.
Expected long term rate of return on assets has been determined based on historical experience and
available market information.
(iii) Other long term employee benefits
Provision for other long term benefits includes accumulated compensated absences that are entitled
to be carried forward for future encashment or availment, at the option of the employer subject to the
rules framed by the Company which are expected to be availed or encashed beyond twelve months
from the Balance Sheet date. The Company’s liability towards these other long term benefits are
accrued and provided for on the basis of an actuarial valuation using projected unit credit method
made at the end of the financial year.
(r) Taxation
Direct Tax
Income tax expense comprises current tax (i.e. amount of tax payable on the taxable income for the period
determined in accordance with the Income-tax Act, 1961), and deferred tax charge or credit (reflecting
the tax effects of timing differences between the accounting income and taxable income for the period).
Current tax is the amount expected to be paid to the tax authorities after taking credit for allowances
and exemptions in accordance with the Income-tax Act, 1961. The deferred tax charge or credit and the
corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted
or substantively enacted by the Balance Sheet date.
Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be
realised in future. However, where there is unabsorbed depreciation or carried forward loss under taxation
laws, deferred tax assets are recognised only to the extent there is virtual certainty backed by convincing
evidence that sufficient future taxable income will be available against which deferred tax assets can be
realised. Deferred tax assets are reviewed as at each Balance Sheet date and written down or written up
to reflect the amount that is reasonably or virtually certain to be realised.
Indirect Tax
The Goods and Service Tax (“GST”) is collected as per the GST Laws in force and the same is considered as
a liability. The Input Tax Credit (ITC) eligible as per the GST Laws is considered as an asset. The ineligible
ITC is examined and expensed out as per the GST laws. The eligible unutilised ITC, if any, is carried forward
for utilisation in subsequent periods.
(s) Terrorism Pool
In accordance with the requirements of IRDAI, the Company, together with other insurance companies,
participates in the Terrorism Pool. This pool is managed by the General Insurance Corporation of India

85
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

(“GIC”). Amounts collected as terrorism premium in accordance with the requirements of the Tariff Advisory
Committee (“TAC”) are ceded at 100% of the terrorism premium collected to the Terrorism Pool.
In accordance with the terms of the agreement, GIC retrocedes, to the Company, terrorism premium to the
extent of the Company’s share in the risk, which is recorded as reinsurance accepted. Such reinsurance
accepted is recorded based on quarterly statements received from the GIC. The reinsurance accepted on
account of terrorism pool has been recorded in accordance with the last statement received from GIC.
The Company has ensured that it has created liability, to the extent of premium retroceded to the Company,
through reserve for unexpired risks.
(t) Contributions to Solatium Fund
In accordance with the requirements of IRDAI Circular dated March 18, 2003 and based on the decision
made by the General Insurance Council in its meeting held on May 6, 2005, the Company provides for
contribution to Solatium Fund established by the Central Government as a percentage of gross written
premium for all motor policies written during that year, till the year ended March 31, 2010. Further, General
Insurance Council in its meeting held on April 1, 2010 recommended that the contribution should be a
percentage of gross written third party premiums.
(u) Transfer of amounts to Senior Citizen Welfare Fund
In accordance with the requirement of the Notification no G.S.R 380(E), issued by the Ministry of Finance,
dated April 11, 2017 read with IRDAI Circular No. IRDA/F&A/CIR/MISC/173/07/2017 dated July 25, 2017
the Company transfers amounts outstanding for a period of more than 10 years in Unclaimed Amount of
Policyholders to the Senior Citizen Welfare Fund (SCWF) on or before March 1st of each financial year.
(v) Contribution to Environment Relief Fund
In accordance with the notification no G.S.R 768(E), issued by Ministry of Environment and Forests, dated
November 4, 2008, the Company provides for contribution to the Environment Relief Fund established by
the Central Government, an amount equal to the premium received in relation to Public Liability policies
issued by the Company, as per the rules specified by Public Liability Insurance Rules 1992.
(w) Segment Reporting
In case of General insurance business, based on the primary segments identified under Insurance Regulatory
and Development Authority (Preparation of Financial Statements and Auditor’s Report of Insurance
Companies) Regulations, 2002 read with AS 17 on “Segment Reporting” specified under Section 133 of
the Companies Act, 2013, the Company has classified and disclosed segment information for Fire, Marine
and Miscellaneous lines of business.
There are no reportable geographical segments, since all business is written in India.
The allocation of revenue and expenses to specific segments is done in the following manner, which is
applied on a consistent basis.
Allocation of Investment Income
Investment income earned on the policyholders’ funds has been allocated on the basis of the average of
reserves for unexpired risks, IBNR, IBNER and outstanding claims of the respective segments.
Operating Expenses relating to Insurance Business
Expenses which are directly attributable and identifiable to the business segments shall be allocated to
the respective business segment.

86 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

Expenses, which are not directly attributable and identifiable to the business segments, shall be
apportioned on the basis of Gross written premium of the respective business segment.
The accounting policies used in segment reporting are same as those used in the preparation of financial
statements.
(x) Earnings Per Share (“EPS”)
The earnings considered in ascertaining the Company’s EPS comprises the net profit after tax. The number
of shares used in computing basic EPS is the weighted average number of shares outstanding during the
year. The number of shares used in computing diluted EPS comprises of weighted average number of
shares considered for deriving basic EPS and also the weighted average number of equity shares which
could have been issued on the conversion of all dilutive potential equity shares.
Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease
the net profit per share from continuing ordinary operations.
(y) Provisions and Contingencies
A provision is recognised when the Company has a present legal obligation as a result of past event and it
is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable
estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value
and are determined based on best estimate required to settle the obligation at the Balance Sheet date.
These are reviewed at each Balance Sheet date and adjusted to reflect current best estimates.
Contingent losses arising from claims other than insurance claims, litigations, assessments, fines,
penalties etc. are recorded when it is probable that a liability has been incurred and the amount can be
reasonably estimated.
A disclosure for a contingent liability other than those under policies is made when there is a possible
obligation or a present obligation that may, but probably will not require an outflow of resources.
When there is a possible obligation or a present obligation in respect of which the likelihood of outflow
of resources is remote, no provision or disclosure is made. A Contingent asset is neither recognised nor
disclosed.
(z) Employee Stock Option Plan (“ESOP”)
The Company follows the intrinsic method for computing the compensation cost, for options granted
under the Plan. The difference if any, between the fair value of the share and the grant price, being the
compensation cost is amortized over the vesting period of the options.
(aa) Receipts and Payments Account
(i) Receipts and Payments Account is prepared and reported using the Direct Method, in conformity
with Para 2.2 of the Master Circular on Preparation of Financial Statements - General Insurance
Business dated October 5, 2012, issued by the IRDAI.
(ii) Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-
term balances (with an original maturity of three months or less from the date of acquisition),
highly liquid investments that are readily convertible into known amounts of cash and which
are subject to insignificant risk of changes in value.

87
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

3. Merger of HDFC ERGO HEALTH INSURANCE LIMITED (Formerly Apollo Munich Health Insurance Company
Limited) (“Transferor Company”) with the Company (“Transferee Company”)
The National Company Law Tribunal, Mumbai Bench (NCLT), on September 29, 2020 sanctioned the Scheme
of Amalgamation of merger of HDFC ERGO Health Insurance Limited (formerly Apollo Munich Health Insurance
Company Limited) (IRDAI Regn No. 131) (“Transferor Company”) with HDFC ERGO General Insurance Company
Limited (IRDAI Regn No. 146) (“Transferee Company”). Further, the Insurance Regulatory and Authority of India
(IRDAI), vide its letter dated November 11, 2020 gave its final approval to the said Merger with Effective Date of
November 13, 2020 and Appointed Date of March 1, 2020. Consequently, the Scheme has been given effect to in
the previous year’s financial statements, which were prepared containing 12 months business of the Transferee
Company and 1 month business of Transferor Company. Accordingly, current year figures are not comparable
with previous year figures for Profit & Loss and Revenue Accounts.
The merger has been accounted under the ‘Pooling of interests’ method as prescribed under Accounting Standard
14 : ‘Accounting for Amalgamations’ (AS 14). Accordingly, the assets, liabilities and reserves of the Transferor
Company as at March 1, 2020 have been taken over at their book values.

3A. SHARE CAPITAL SUSPENSE:

Pursuant to IRDAI approval on said merger, the Company, in the current year, has allotted 10,53,77,232 equity
shares (105,368,928 equity shares upto March 31, 2020 plus 8,304 equity shares issued on July 23, 2020)
of ` 10/- each, fully paid–up, of the Company to the shareholders of the Transferor Company, determined in
accordance with the Scheme of Amalgamation @100 equity shares of ` 10 each of the Company to be allotted
to the shareholders of the Transferor Company, for every 385 equity shares of ` 10 each held in the Transferor
Company. On allotment, the entire balance previously reflected under Share Capital Suspense has been credited
to Paid-up Share Capital.

4. CONTINGENT LIABILITIES (` ’000)

Sr. Particulars As at As at
No. March 31, 2021 March 31, 2020
1 Partly paid up investments Nil Nil
2 Underwriting commitments outstanding (in respect of shares and Nil Nil
securities)
3 Claims, other than those under policies, not acknowledged as debts Nil 1,682
4 Guarantees given by or on behalf of the Company Nil Nil
5 Statutory demands/liabilities in dispute, not provided for (Refer Note Nil 270,442
1 below)
6 Reinsurance obligations to the extent not provided for in accounts Nil Nil
7 Others (Refer Note 2 below) Nil 10,000
Note :
(1) The Company has disputed the demand raised by Service Tax Authorities of ` 270,442 thousand, the
appeals of which are pending before the appropriate Authorities. Based on the expert advice in respect of
this matter, the Management does not expect any outflow of economic benefits and assessed the likelihood
of outflow of resources as remote.
(2) Represents amounts payable on cancellation of a service contract, which on the date of approval of previous
year financial statements had concluded.
(3) The Company has pending litigations arising out of matters relating to Service Tax and has received Order in
Original in respect of a Service Tax matter of ` 2,015,673 thousand (Previous year ` 1,742,305 thousand).
Based on the expert advice in respect of these matters, the Management does not expect any outflow of
economic benefits and assessed the likelihood of outflow of resources as remote.

88 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

5. ENCUMBRANCES ON ASSETS
The assets of the Company are free from encumbrances.
6. COMMITMENTS
There are commitments made and outstanding of ` 88,648 thousand (Previous year ` 110,158 thousand) for
investments.
Estimated amount of contracts remaining to be executed on capital account and not provided for, [net of payments
` 229,430 thousand (Previous year ` 394,334 thousand)] is ` 297,900 thousand (Previous year ` 407,669
thousand).
There are no commitments made and outstanding for loans (Previous year ` Nil).
7. CLAIMS
All claims, net of reinsurance are incurred and paid in India except for Marine Insurance where consignments
are exported from India, Liability Insurance and Overseas Travel Insurance.
(` ’000)
Particulars For the year ended For the year ended
March 31, 2021 March 31, 2020
Outside India 136,874 269,455
There are no claims that have been settled and remaining unpaid for a period of more than six months as at the
end of the year (Previous year ` Nil).
The Ageing of gross claims outstanding (unsettled) is as under:
(` ’000)
Particulars As at As at
March 31, 2021 March 31, 2020
More than six months 10,949,031 26,125,781
Others 31,364,229 10,290,035

8. PREMIUM
(a) All premiums net of reinsurance are written and received in India.
(Refer Note 37(b) for treatment, in previous year, of premium received for renewal of Motor Third Party
Insurance policies falling due during the lockdown period as a result of Covid-19 situation, in terms of IRDAI
Circular No. IRDAI/NL/CIR/MOT/079/04/2020 dated April 2, 2020.)
(b) Premium income recognized on “Varying Risk Pattern” is ` Nil (Previous year ` Nil).
9. EXTENT OF RISKS RETAINED AND REINSURED
Extent of risk retained and reinsured with respect to gross written premium is set out below:
For the year ended on March 31, 2021
Particulars Basis Gross Premium Retention Cession Retention Cession
(` ’000) (` ’000) (` ’000) % %
Fire Total sum insured 12,880,529 3,804,160 9,076,369 30 70
Marine Cargo Value at Risk 1,345,144 1,075,288 269,855 80 20
Marine Hull Total sum insured 222,770 609 222,161 — 100
Miscellaneous  
– Motor Total sum insured 34,064,555 24,734,822 9,329,732 73 27
– Workmen’s Compensation Value at Risk 165,741 147,532 18,209 89 11
– Public/Product Liability Value at Risk 39,995 8,568 31,427 21 79
– Engineering Total sum insured 1,836,286 611,418 1,224,868 33 67
– Aviation Value at Risk 120,489 (1,331) 121,820 — 100
89
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

Particulars Basis Gross Premium Retention Cession Retention Cession

(` ’000) (` ’000) (` ’000) % %
– Personal Accident Value at Risk 5,408,902 3,898,459 1,510,444 72 28
– Health Insurance Value at Risk 37,416,318 24,897,466 12,518,852 67 33
– Other Liability / Specialty Value at Risk 3,108,881 823,157 2,285,724 26 74
– Others Value at Risk 27,829,724 6,057,474 21,772,249 22 78
The above excludes Excess of Loss cover reinsurance premium of ` 1,014,770 thousand for the year ended on
March 31, 2021.
For the year ended on March 31, 2020
Particulars Basis Gross Premium Retention Cession Retention Cession
(` ’000) (` ’000) (` ’000) % %
Fire Total sum insured 10,685,887 2,759,047 7,926,840 26 74
Marine Cargo Value at Risk 1,716,618 756,683 959,934 44 56
Marine Hull Total sum insured 230,254 761 229,493 — 100
Miscellaneous  
– Motor Total sum insured 33,880,743 25,105,977 8,774,766 74 26
– Workmen’s Compensation Value at Risk 200,988 187,774 13,214 93 7
– Public/Product Liability Value at Risk 44,203 20,577 23,626 47 53
– Engineering Total sum insured 1,998,838 830,044 1,168,795 42 58
– Aviation Value at Risk 127,101 3,098 124,003 2 98
– Personal Accident Value at Risk 6,592,572 4,459,852 2,132,720 68 32
– Health Insurance Value at Risk 16,031,212 9,592,574 6,438,638 60 40
– Other Liability / Specialty Value at Risk 2,541,731 971,703 1,570,028 38 62
– Others Value at Risk 23,550,819 4,909,909 18,640,910 21 79
The above excludes Excess of Loss cover reinsurance premium of ` 929,340 thousand for the year ended on
March 31, 2020.

10. INVESTMENTS
Details of contracts for purchase / sale of securities during the year, where deliveries are pending at the end of
the year and credit/debit in Company’s Demat Account has been done subsequent to the year end are as under:
(` ’000)
Particulars Nature Type of Security No. of Units As at As at
March 31, 2021 March 31, 2020
Axis Liquid Fund Direct Growth Purchase Mutual Fund 6,828.648 — 15,000
Jhelum Investment Fund Purchase Alternate 3.875 — 388
Investment Fund
Total — 15,388

Investments made are in accordance with the Insurance Act, 1938, as amended by Insurance Laws (Amendment)
Act, 2015, the Insurance Regulatory and Development Authority (Investment) Regulations, 2000, Insurance
Regulatory and Development Authority of India (Investment) Regulations, 2016 as amended and various other
circulars / notifications issued by the IRDAI in this context from time to time.
The Company had non-performing investments in Dewan Housing Finance Corporation (DHFL) Limited amounting
` 250,000 thousand, Reliance Capital Limited (RCL) amounting ` 199,979 and IL&FS group securities amounting
` 2,131,969 thousand. These Companies have defaulted in the payment of interest and redemption proceeds
and based on IRDAI Guidelines, the investment has been classified as non-performing. During the year, the

90 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

Company has made provision for DHFL amounting to ` 125,000 thousand (Previous year ` 125,000 thousand)
and RCL amounting ` 169,982 thousand (Previous year ` 29,997 thousand). Hence, as on March 31, 2021.
100% provision has been made for DHFL and RCL. For IL&FS group securities, 100% provision had been provided
in previous years amounting to ` 2,131,969 thousand.
No interest income has been accrued thereon, in terms of the provisions of point 13 of Para 3.7 of the Master
Circular on IRDAI (Investment) Regulations, 2016.
During the previous year, the Company had written-off ` 100,000 thousand, being the book value of its investments
in non-convertible debentures (Additional Tier 1) in Yes Bank Limited, as part of the restructuring process initiated
by the Reserve Bank of India under Section 45 of the Banking Regulation Act, 1949 and in terms of directions
issued under Para 3 of letter No. YBL/CS/2019-20/186(2) dated March 14, 2020, by the Administrator of Yes
Bank Limited.
Historical cost of investments which have been valued on a market value basis:
Mutual Funds – ` 13,192,752 thousand (Previous year ` 7,414,772 thousand)
Equity Shares – ` 3,774,017 thousand (Previous year ` 3,169,005 thousand)
(` ’000)
Particulars As at As at
March 31, 2021 March 31, 2020
Aggregate market value of the Investments other than Mutual Fund 153,652,833 129,928,435
and Equity Shares
Aggregate amortized cost / cost of the Investments other than 149,198,806 125,940,220
Mutual Fund and Equity Shares
11. MANAGERIAL REMUNERATION
In terms of the disclosure requirements of Para 9 of IRDAI Corporate Governance Guidelines for Insurers in
India, 2016, the elements of remuneration paid to Managing Director and Chief Executive Officer (MD & CEO),
the Executive Directors, all other directors and Key Management Persons are as follows:
(a) The Managing Director and Chief Executive Officer (MD & CEO) and the Executive Directors are remunerated
in terms of the approval granted by IRDAI.
Details of their remuneration included in employee remuneration and welfare benefits are as follows:
(` ’000)
Particulars For the year ended For the year ended
March 31, 2021 March 31, 2020
Salary, perquisites and bonus 134,055 130,026
Contribution to Provident Fund 4,069 3,941
Total 138,124 133,967
Figures for the previous year includes remuneration paid to Mr. Anuj Tyagi, as Executive Director of the
Company, for the period April 01, 2019 to January 08, 2020 and as MD & CEO of the Transferor Company
for the period March 01, 2020 to March 31, 2020.
Out of the above ` 15,000 thousand (Previous year ` 15,000 thousand) remuneration for each Director
(proportionate for previous year, in case of Mr. Anuj Tyagi for the period April 01, 2019 till January 08, 2020
and March 01, 2020 to March 31, 2020) has been charged to Revenue Accounts and balance ` 93,124
thousand (Previous year ` 91,467 thousand) has been transferred to Profit and Loss Account.
(b) During the year, the Company has paid an amount of ` 4,000 thousand (Previous year ` 4,000 thousand)
as Commission to Independent Directors. An amount of ` 21,700 thousand (Previous year ` 14,000
thousand) has been paid as fees to Non-Executive Directors for attending Board / Committee meetings
and ` 120 thousand (Previous year ` Nil) has been paid for a Group Mediclaim insurance cover policy for
the Non-Executive Directors.

91
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

(c)
Details of the elements of remuneration paid to Key Management Persons (KMPs) excluding Wholetime Directors,
as defined under IRDAI Corporate Governance Guidelines for Insurers in India, 2016, are as follows :
(` ’000)
Particulars For the year ended For the year ended
March 31, 2021 March 31, 2020
Salary, perquisites and bonus 180,701 144,470
Contribution to Provident Fund 4,496 3,599
Total 185,197 148,069
In addition to the above, Wholetime Directors and KMPs are entitled to ESOPs under the Company’s ESOP
Scheme.
Expenses towards gratuity funding and leave encashment provision are determined actuarially on an overall
Company basis annually and accordingly have not been considered in the above information.
12. SECTOR WISE BUSINESS BASED ON GROSS DIRECT PREMIUM INCOME (GDPI)
Business Sector For the year ended March 31, 2021 For the year ended March 31, 2020
GDPI (` ’000) % of GDPI GDPI (` ’000) % of GDPI
Rural 34,738,074 28 28,720,875 30
Urban 88,212,953 72 67,574,998 70
Total 122,951,027 100 96,295,873 100

Social Sector For the year ended For the year ended
March 31, 2021 March 31, 2020
Number of lives 8,951,187 7,356,537
GDPI (` ’000) 27,760,111 26,707,213
13. REINSURANCE REGULATIONS
As per Para 6 of Insurance Regulatory and Development Authority of India (Reinsurance) Regulations, 2018, prior
approval from IRDAI is required in case of re-insurance placements with Cross Border Reinsurers (CBRs) by the
cedants transacting other than life insurance business, which shall be subject to the following overall cession
limits on the overall reinsurance premium ceded outside India during a financial year.
Rating of the CBR as per Standard & Poor or equivalent Maximum overall cession
limits allowed per CBR
BBB & BBB+ of Standard & Poor 10%
Greater than BBB+ and upto & including A+ of Standard & Poor 15%
Greater than A+ of Standard & Poor 20%
In terms of above Reinsurance Regulations, the Company has submitted details of its reinsurance programmes
to the IRDAI, covering reinsurance wise placement for such treaties.
14. ASSETS TAKEN ON LEASE
Operating lease commitments – Premises, Furniture and Fittings:
The Company takes premises; both commercial (includes furniture taken on lease). The minimum lease payments
to be made in future towards non-cancellable lease agreements are as follows:
(` ’000)
Particulars As at As at
March 31, 2021 March 31, 2020
Not later than one year 291,242 122,802
Later than one year but not later than five years 210,315 68,368
Later than five years — —

92 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

The aggregate operating lease rental, charged to the Revenue Accounts in the current year is ` 405,322 thousand
(Previous year ` 279,376 thousand).
The lease terms do not contain any exceptional / restrictive covenants nor are there any options given to the
Company to renew the lease or purchase the asset.

15. TAXATION
Accounting Standard (AS) 22 – ‘Accounting for Taxes on Income’, requires the Company to accrue taxes on income
in the same period as the revenue and expenses to which they relate. As the taxable income is different from the
reported income due to timing differences, there arises a potential Deferred Tax Asset or Deferred Tax Liability,
as the case may be. The components of the Company’s Deferred Tax Assets and Liabilities are tabulated below.
(` ’000)
Particulars As at As at
March 31, 2021 March 31, 2020
Deferred Tax Assets:
Section 43B & 40(a) of Income Tax Act 24,224 91,602
Rule 6E of the Income-tax Rules, 1962 (Reserve for unexpired risk) — —
Amalgamation Expenses 100,974 56,944
Provision for diminution in value of Investment and Doubtful Debts 674,515 599,033
Total 799,712 747,579
Deferred Tax Liabilities:
Depreciation 63,179 21,303
Total 63,179 21,303
Deferred Tax Asset / (Liabilities) (Net) 736,533 726,276
Deferred Tax on unabsorbed depreciation or carried forward loss under taxation laws are recognized only to
the extent there is virtual certainty backed by convincing evidence that sufficient future taxable income will be
available against which Deferred Tax Asset can be realized.
16. EMPLOYEE STOCK OPTION PLAN (ESOP)
The Company had introduced an Employee Stock Option Plan 2009 (“ESOP 2009”) in financial year 2009-10.
ESOP 2009 provides that eligible employees are granted options to acquire equity shares of the Company that
vest in graded manner. During the previous year, pursuant to the merger scheme, the stock options granted
under the Transferor Company ESOP Plan 2011 are transferred from Transferor Company to Transferee Company,
taking into account the Share Exchange Ratio and on the same terms and conditions as provided in the Scheme.
The options will vest over a period of two to four or five years as per the terms of the respective Tranches from
the date of grant and are exercisable over a period of five years from the respective dates of vesting.
During the year, the Company issued three tranches viz. Tranche XIV, having 1,530,500 options granted at
` 363.80 per option, Tranche XV having 10,000 options granted at ` 363.80 per option & HI Tranche VII having
125,000 options granted at ` 359.21 per option (Previous year Tranche XII & Tranche XIII having 100,000 options
each granted at ` 364.40 per option). Accordingly, during the year, 2,922 options (Previous year Nil options)
were vested out of HI Tranche III, Nil options (Previous year 581,500 options) were vested out of Tranche VII,
20,000 options (Previous year 10,000 options) were vested out of Tranche VIII, 503,750 options (Previous year
503,750 options) were vested out of Tranche IX, 217,500 options (Previous year Nil options) were vested out of
Tranche X and 25,000 options (Previous year Nil options) were vested out of Tranche XI.

93
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

Movement in the options :

(No. of Options)
Tranche XV Tranche XIV Tranche XIII Tranche XII

Particulars As at As at As at As at As at As at As at As at
March 31, March 31, March 31, March 31, March 31, March 31, March 31, March 31,
2021 2020 2021 2020 2021 2020 2021 2020
Outstanding at the Beginning — — — — 100,000 — 100,000 —
of the year
Transfer on Merger — — — — — — — —
Granted during the year 10,000 — 1,530,500 — — 100,000 — 100,000
Exercised during the year — — — — — — — —
Lapsed during the year — — 28,000 — — — — —
Outstanding at the end of the 10,000 — 1,502,500 — 100,000 100,000 100,000 100,000
year
Unvested at the end of the 10,000 — 1,502,500 — 100,000 100,000 100,000 100,000
year
Vested at the end of the year — — — — — — — —
Weighted average price per 363.80 — 363.80 — 364.40 364.40 364.40 364.40
option

(No. of Options)
Tranche XI Tranche X Tranche IX Tranche VIII

Particulars As at As at As at As at As at As at As at As at
March 31, March 31, March 31, March 31, March 31, March 31, March 31, March 31,
2021 2020 2021 2020 2021 2020 2021 2020
Outstanding at the Beginning 100,000 100,000 870,000 915,000 1,872,500 2,015,000 20,000 30,000
of the year
Transfer on Merger — — — — — — — —
Granted during the year — — — — — — — —
Exercise during the year — — 123,251 — 122,500 142,500 20,000 10,000
Lapsed during the year — — — 45,000 25,000 — — —
Outstanding at the end of 100,000 100,000 746,749 870,000 1,725,000 1,872,500 — 20,000
the year
Unvested at the end of the 75,000 100,000 652,500 870,000 982,500 1,511,250 — 20,000
year
Vested at the end of the year 25,000 — 94,249 — 742,500 361,250 — —
Weighted average price per 257 257 257 257 151 151 91 91
option

94 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

(No. of Options)
HI Tranche VII Tranche VII HI Tranche VI Tranche VI

Particulars As at As at As at As at As at As at As at As at
March 31, March 31, March 31, March 31, March 31, March 31, March 31, March 31,
2021 2020 2021 2020 2021 2020 2021 2020
Outstanding at the Beginning — — 550,000 748,500 383,134 — — —
of the year
Transfer on Merger — — — — — 383,134 — —
Granted during the year 125,000 — — — — — — —
Exercise during the year — — 29,400 198,500 — — — —
Lapsed during the year — — — — 181,826 — — —
Outstanding at the end of 125,000 — 520,600 550,000 201,308 383,134 — —
the year
Unvested at the end of the 125,000 — — — 201,308 383,134 — —
year
Vested at the end of the year — — 520,600 550,000 — — — —
Weighted average price per 359.21 — 80 80 364.60 364.60 80 80
option

(No. of Options)
HI Tranche V Tranche V HI Tranche IV Tranche IV

Particulars As at As at As at As at As at As at As at As at
March 31, March 31, March 31, March 31, March 31, March 31, March 31, March 31,
2021 2020 2021 2020 2021 2020 2021 2020
Outstanding at the Beginning 162,349 — 76,000 91,000 91,429 — 98,500 135,500
of the year
Transfer on Merger — 162,349 — — — 91,429 — —
Granted during the year — — — — — — — —
Exercise during the year — — 19,000 15,000 — — 18,500 37,000
Lapsed during the year 84,421 — — — 58,182 — — —
Outstanding at the end of 77,928 162,349 57,000 76,000 33,247 91,429 80,000 98,500
the year
Unvested at the end of the 77,928 162,349 — — 33,247 91,429 — —
year
Vested at the end of the year — — 57,000 76,000 — — 80,000 98,500
Weighted average price per 281.05 281.05 62.50 62.50 75.81 75.81 50 50
option

95
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

(No. of Options)
HI Tranche III Tranche III Tranche II Tranche I

Particulars As at As at As at As at As at As at As at As at
March 31, March 31, March 31, March 31, March 31, March 31, March 31, March 31,
2020 2019 2020 2019 2020 2019 2020 2019
Outstanding at the Beginning 35,606 — 13,000 18,000 — — 13,000 25,000
of the year
Transfer on Merger — 35,606 — — — — — —
Granted during the year — — — — — — — —
Exercised during the year — — 13,000 5,000 — — — 12,000
Lapsed during the year 26,299 — — — — — — —
Outstanding at the end of 8,767 35,606 — 13,000 — — 13,000 13,000
the year
Unvested at the end of the 5,845 35,606 — — — — — —
year
Vested at the end of the year 2,922 — — 13,000 — — 13,000 13,000
Weighted average price per 75.81 75.81 50 50 10 10 10 10
option

Method used for accounting

The Company has adopted intrinsic value method for computing the compensation cost for the Options granted.
Since the exercise price is not less than the intrinsic value of shares on the date of grant, value of options is
` Nil (Previous year ` Nil) and accordingly, no compensation cost is recognized in the books.
Had the Company followed the fair value method for valuing its options for the year, the charge to the Revenue
Accounts and Profit and Loss Account would have been higher by ` 115,532 thousand (Previous year ` 50,101
thousand) and profit after tax would have been lower by ` 86,337 thousand (Previous year ` 38,046 thousand).
Consequently, the Company’s basic and diluted earnings per share would have been ` 8.19 and ` 8.17 respectively.

Fair Value Methodology:

The fair value of options on date of grant has been estimated using Black-Scholes model. The key assumptions
used in Black-Scholes model for calculating fair value under ESOP 2009 Tranche I, Tranche II, Tranche III, Tranche
IV, Tranche V, HI Tranche V, Tranche VI, HI Tranche VI, Tranche VII, HI Tranche VII, Tranche VIII, Tranche IX, HI
Tranche III, HI Tranche IV, Tranche X, Tranche XI, HI Tranche V, Tranche XII, HI Tranche VI, Tranche XIII, HI Tranche
VII, Tranche XIV, Tranche XV, and as on the date of grant viz. February 10, 2010, May 25, 2010, July 25, 2011,
April 24, 2012, April 30, 2013, April 24, 2014, March 16, 2015, April 21, 2016, April 28, 2017, October 1, 2017,
February 9, 2018, April 16, 2018, August 20, 2018, August 7, 2019, February 06, 2020, February 10, 2020,
February 20, 2020, June 12, 2020, June 12, 2020 and July 14, 2020 are as follows:

96 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

Particulars Risk Free Expected Life Expected Volatility* Expected dividend

Interest rate yield
Tranche XV 4.81%-5.46% 4-6 years 32% Nil
Tranche XIV 4.95%-5.66% 4-6 years 32% Nil
Tranche XIII 5.98%-6.27% 4-6 years 14% Nil
Tranche XII 6.07%-6.34% 4-6 years 14% Nil
Tranche XI 7.83%-7.96% 4-6 years 10% Nil
Tranche X 7.33%-7.58% 4-6 years 10% Nil
Tranche IX 6.90%-6.95% 4-6 years 12% Nil
Tranche VIII 7.41%-7.62% 4-6 years 18% Nil
HI Tranche VII 4.95%-5.66% 4-6 years 32% Nil
Tranche VII 7.82%-7.86% 4-6 years 13% Nil
HI Tranche VI 5.95%-6.28% 4-6 years 14% Nil
Tranche VI 8.75%-8.93% 4-6 years 17% Nil
HI Tranche V 6.10%-6.48% 4-7 years 13% Nil
Tranche V 7.64%-7.60% 4-6 years 13% Nil
HI Tranche IV 7.22%-7.59% 4-7 years 9% Nil
Tranche IV 8.22%-8.49% 4-6 years 20% Nil
HI Tranche III 6.58%-6.75% 4-6 years 10% Nil
Tranche III 8.22%-8.31% 4-6 years 17% Nil
Tranche II 6.92%-7.42% 4-6 years 22% Nil
Tranche I 7.29%-7.72% 4-6 years 32% Nil
*Volatility of BSE Sensex for one year has been considered.

Particulars Fair Value Method

For the year ended For the year ended

March 31, 2021 March 31, 2020

A Net Profit after Tax (` ‘000) 5,830,173 3,231,372

B Less: Preference dividend — —
C Weighted Average number of Equity Shares of `10/- each (Basic) 711,483 614,623
(in ‘000)
D Weighted Average number of Equity Shares of `10/- each (Diluted) 713,328 616,759
(in ‘000)
E Basic Earnings Per Share (`) 8.19 5.26
F Diluted Earnings Per Share (`) 8.17 5.24

97
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

Information in respect of Options outstanding

Particulars Exercise Price (`) No. of Options Weighted Average
remaining life
Tranche XV As at March 31, 2021 363.80 10,000 90 months
As at March 31, 2020 — — —
Tranche XIV As at March 31, 2021 363.80 1,502,500 89 months
As at March 31, 2020 — — —
Tranche XIII As at March 31, 2021 — — —
As at March 31, 2020 364.40 100,000 98 months
Tranche XII As at March 31, 2021 364.40 100,000 85 months
As at March 31, 2020 364.40 100,000 97 months
Tranche XI As at March 31, 2021 257 100,000 68 months
As at March 31, 2020 257 100,000 80 months
Tranche X As at March 31, 2021 257 746,749 64 months
As at March 31, 2020 257 870,000 76 months
Tranche IX As at March 31, 2021 151 1,725,000 52 months
As at March 31, 2020 151 1,872,500 64 months
Tranche VIII As at March 31, 2021 — — —
As at March 31, 2020 91 20,000 52 months
HI Tranche VII As at March 31, 2021 359.21 125,000 89 months
As at March 31, 2020 — — —
Tranche VII As at March 31, 2021 80 520,600 26 months
As at March 31, 2020 80 550,000 38 months
HI Tranche VI As at March 31, 2021 364.60 201,308 85 months
As at March 31, 2020 364.60 383,134 97 months
Tranche VI As at March 31, 2021 80 — —
As at March 31, 2020 80 — —
HI Tranche V As at March 31, 2021 281.05 77,928 86 months
As at March 31, 2020 281.05 162,349 98 months
Tranche V As at March 31, 2021 62.5 57,000 4 months
As at March 31, 2020 62.5 76,000 16 months
HI Tranche IV As at March 31, 2021 75.81 33,247 80 months
As at March 31, 2020 75.81 91,429 92 months
Tranche IV As at March 31, 2021 50 80,000 1 month
As at March 31, 2020 50 98,500 4 months
HI Tranche III As at March 31, 2021 75.81 8,767 57 months
As at March 31, 2020 75.81 35,066 69 months
Tranche III As at March 31, 2021 50 — —
As at March 31, 2020 50 13,000 2 months
Tranche II As at March 31, 2021 10 — —
As at March 31, 2020 10 — —
Tranche I As at March 31, 2021 10 13,000* —
As at March 31, 2020 10 13,000 6 months
*The last date for exercise of Tranche 1 options vested on February 10, 2014, was February 10, 2021 (extended
period). The options pending for exercise pertain to two employees who have given a request letter in January
2021, indicating their intention to exercise the options and the same would be considered in the next exercise
window by the Management.

98 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

17. SEGMENT REPORTING

The statement on segment reporting is included in Annexure 1.
18. ACCOUNTING RATIOS
The statement on accounting ratios is provided in Annexure 2.
19. EMPLOYEE BENEFITS
(a) Defined Contribution Plan:
(` ’000)
Expenses on defined contribution plan For the year ended For the year ended
March 31, 2021 March 31, 2020

Contribution to Staff Provident fund 204,064 140,676

Contribution to Superannuation fund Nil Nil
Contribution to National Pension Scheme 26,919 14,691
Total 230,983 155,367
(b) Defined Benefit Plan – Gratuity :
Disclosures as per AS-15 (Revised) “Employee Benefits” for the year ended on March 31, 2021:
(` ’000)
Sl. Particulars March 31, 2021 March 31, 2020
No.
I. Assumptions
Discount Rate 5.58% 5.45%-6.84%
Rate of increase in compensation levels 7.00% 7.00%-8.00%
Rate of Return on Plan Assets (p.a.) 5.58% 5.45%-6.84%
II. Table Showing Change in Benefit Obligation
Net liability as per books (A) 452,296 276,106
Fair value of Assets at the beginning of the year (B) Nil Nil
Shortfall/(Excess) in opening liability determined as per actuarial Nil Nil
valuation (C)
Opening net Liability as per actuarial valuation (A)+(B)+(C) 452,296 276,106
Interest Cost for the year 31,437 21,288
Service Cost for the year 94,515 53,144
Past Service cost 35,164 Nil
Liability taken over from Transferor Company Nil 103,043
Liability Transferred Out Nil Nil
Benefits paid during the year (63,117) (31,269)
Actuarial (Gain)/Loss on obligations (68,978) 29,984
Liabilities assumed on acquisition / settled Nil Nil
Plan Benefit Obligation at the end of the year 481,316 452,296

99
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

(` ’000)
Sl. Particulars March 31, 2021 March 31, 2020
No.
III. Tables of Fair value of Plan Assets
Fair Value of Plan Assets at the beginning of the year 433,566 277,036
Expected Return on Plan Assets for the year 28,340 21,362
Contributions during the year 84,376 82,951
Assets taken over from Transferor Company Nil 74,878
Benefits Paid during the year (63,117) (31,269)
Actuarial Gain/(Loss) on Plan Assets 6,365 8,608
Fair Value of Plan Assets at the end of the year 489,530 433,566
IV. The Amounts to be recognised in the Balance Sheet
Present Value of Obligation (481,316) (452,296)
Fair Value of Plan Assets 489,530 433,566
Asset/(Liability) recognised in Balance Sheet 8,214 (18,730)
V. Amounts to be recognised in the Revenue Accounts (Net Periodic Cost)
Current Service Cost 94,515 53,144
Past Service cost 35,164 Nil
Interest Cost 3,098 (74)
Expected Return on Plan Assets Nil Nil
Net actuarial (Gain) / Loss recognised in the year (75,344) 21,376
Actuarial determined charge for the year (A) 57,432 74,446
Shortfall/(Excess) (B) Nil Nil
Total Charge as per books (A+B) 57,432 74,446
(expense is disclosed in the line item – Employees’ remuneration
and welfare benefit)
VI. Movements in the liability recognised in the Balance Sheet:
Net Liability as per books (A) 18,730 (930)
Shortfall/(Excess) in opening liability determined as per actuarial Nil Nil
valuation (B)
Opening net liability(A+B) 18,730 (930)
Expense as above 57,432 74,446
Net Liability / (Asset) Transfer In Nil 28,165
Net (Liability) / Asset Transfer Out Nil Nil
Contribution paid (84,376) (82,951)
Closing Net (Asset)/Liability 8,214 18,730
VII. Actual Return on Plan Assets
Expected return on Plan Assets 28,340 21,362
Actuarial Gain/(Loss) on Plan Assets 6,365 8,608
Actual return on Plan assets 34,705 29,970

100 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

Experience adjustments (` ’000)

Particulars March 31, 2021 March 31, 2020 March 31, 2019 March 31, 2018 March 31, 2017
Defined Benefit Obligation 481,316 452,296 276,106 234,391 190,652
Plan Assets 489,530 433,566 277,036 229,315 171,907
Surplus/(Deficit) 8,214 (18,730) 930 (5,076) (18,745)
Experience Adjustment on (67,395) 4,214 (21,701) (20,613) (5,019)
Plan Liabilities
Experience Adjustment on 6,365 8,608 (1,808) (4,446) (419)
Plan Assets
The Transferee Company’s gratuity funds are managed by HDFC Life Insurance Company Limited. Secure
Managed Fund constitutes 100% (Previous year 98%) and Liquid Fund constitutes Nil (Previous year 2%) of the
total fund balance.
Investment Pattern of Transferee Company’s Gratuity Funds in HDFC Life Insurance Company Limited:
Particulars Invested as on March 31, 2021 Invested as on March 31, 2020
Secure Managed Liquid Fund Secure Managed Liquid Fund
Fund Fund
Government Securities 59% — 46% —
Debentures/Bonds 36% — 49% —
Deposits, Money Market Securities and 5% 100% 5% 100%
Net Current Assets
Total 100% 100% 100% 100%
During the previous year, Transferor Company’s gratuity funds were managed by Kotak Mahindra Life Insurance
Company Limited (“Kotak Life”) and Life Insurance Corporation (LIC) of India. Gratuity fund invested with Kotak
Life were ` 94,552 thousand and LIC ` 124 thousand as on March 31, 2020.
Investment Pattern of Transferor Company ’s Gratuity Funds in Kotak Life:
Particulars Invested as on March 31, 2020
Balanced Fund Bond Fund

Equity 45% —
Government Securities 18% 33%
Debentures/Bonds 26% 60%
Money Market Securities and Net Current Assets 12% 7%
Total 100% 100%
Balanced Fund constitutes 31% and Bond Fund constitutes 69% of the total fund balance.
The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority,
promotion and other relevant factors such as supply and demand in the employment market.
The contribution expected to be made by the Company during the financial year 2021-22, amounts to ` 58,688
thousand (Previous year ` 105,981 thousand).

101
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

20. RELATED PARTY DISCLOSURE

As per the Accounting Standard (AS) 18 on ‘Related Party Disclosures’, the related parties of the Company are
as follows:
(a) Names of the related parties and description of relationship:
Holding Company
Housing Development Finance Corporation Limited (HDFC Limited)
Fellow subsidiaries (with whom company has transactions)
HDFC Asset Management Company Limited
HDFC Life Insurance Company Limited (upto November 12, 2020)
GRUH Finance Limited (upto August 30, 2019)
HDFC Sales Private Limited
HDFC Property Ventures Limited
HDFC Credila Financial Services Private Limited
HDFC Education and Development Services Private Limited
HDFC Capital Advisors Limited
HDFC Pension Management Company Limited (upto November 12, 2020)

Entities over which Holding Company has control

HDFC Investment Trust
HDFC Investment Trust II
H T Parekh Foundation

Investing Party and its group companies

ERGO International AG
Munich Re
Munich Health Holding AG

Key Management Personnel and Relatives of Key Management Personnel

Mr. Ritesh Kumar, Managing Director and CEO
Ms. Reena Kumar, Spouse of Ritesh Kumar (MD & CEO)
Ms. Harshita Agarwal, Daughter of Ritesh Kumar (MD & CEO)
Ms. Saloni Agarwal, Daughter of Ritesh Kumar (MD & CEO)
Mr. Amish Kumar Agarwal, Brother of Ritesh Kumar (MD & CEO)
Mr. Anuj Tyagi, Executive Director & Chief Business Officer
(For the period April 01, 2019 till January 8, 2020 and MD & CEO of the Transferor Company from
March 1, 2020 to March 31, 2020)
Mr. Samir H. Shah, Executive Director & CFO
Mr. Sanjay H. Shah, Brother of Samir H. Shah (ED & CFO)

102 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

(b) Details of Transactions:

(` ’000)
Holding Company Fellow Subsidiaries# Investing Party and its Key Managerial Personnel
group companies (including relatives)
Particulars Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended
March March March March March March March March
31, 2021 31, 2020 31, 2021 31, 2020 31, 2021 31, 2020 31, 2021 31, 2020
INCOME
Interest, Dividend and 458,387 393,385 — 6,330 — — — —
Rent-Gross
Premium from direct 113,130 146,072 73,830 76,485 — (3) 210 226
business written - net
of GST
Commission received — — — — 3,566,394 830,520 — —
on Reinsurance ceded
Claims on Reinsurance — — — — 4,399,478 1,109,020 — —
ceded
Other Income 258 269 — — 28,443 37,439 — —
Total 571,775 539,726 73,830 82,815 7,994,315 1,976,976 210 226
EXPENSES
Rent, rates and taxes 65,407 66,702 — — — — — —
Name Usage Fees 373,318 377,556 — — 22,109 — — —
Electricity expenses 450 377 — — — — — —
Claims paid direct 1,551 5 576 1,766 — — — —
Commission paid — — 655,431 607,447 — — — —
Employees’ — — — — — — 138,124 133,967
remuneration and
welfare benefits
Premium on — — — — 15,344,221 4,681,511 — —
Reinsurance ceded
Interest on Debentures — — — — 162,800 132,312 — —
Dividend 1,079,226 — — — 1,034,377 — — —
Insurance Premium — — — — — — — —
Paid
Repairs (Office 11,940 1,582 — — — — — —
Maintenance)
Others 753 10 — — 3,000 — — —
Total 1,532,644 446,232 656,006 609,213 16,566,507 4,813,823 138,124 133,967

103
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

(` ’000)
Holding Company Fellow Subsidiaries# Investing Party and its Key Managerial Personnel
group companies (including relatives)
Particulars Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended
March March March March March March March March
31, 2021 31, 2020 31, 2021 31, 2020 31, 2021 31, 2020 31, 2021 31, 2020
ASSETS
Transactions during the
year
Investment purchased — 200,000 500,305 1,207,525 — — — —
during the year
Investment sold during — — 531,257 932,447 — — — —
the year
Account Balances:-
Investments 6,638,154 5,295,620 — — — — — —
Income accrued on 173,266 352,858 — — — — — —
investments
Other Receivable — 26 — — 5,698 9,759 — —
LIABILITIES
Account Balances:-
Share Capital 3,597,419 3,058,417 — — 3,447,923 2,922,023 — —
Securities Premium 4,940,894 4,940,894 — — 8,778,393 3,260,251 — —
Debentures — — — — 2,100,000 2,100,000 — —
Balance due to other — — — — 8,315,049 3,014,006 — —
insurance companies
Due to holding company 112,036 97,576 — — — — — —
Interest Payable on — — — — 77,096 78,367 — —
Debentures
Unallocated premium 16,026 14,406 22,478 24,831 — 125 — —
Agents’ Balances — — 93,201 38,431 — — — —
# includes transaction with HDFC Investment Trust, HDFC Investment Trust II & H T Parekh Foundation (Entity
over which control is exercised by the Holding Company)

104 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

Transactions included in (b) above which are in excess of 10% of the total related transactions of the same
type are given below for the Financial Year 2020-21:
(` ’000)
Particulars Munich Re ERGO Munich Health HDFC HDFC Life HDFC Sales
International Holding AG AMC Ltd (uptill Nov 12, Private
AG 2020) Limited
INCOME      
Premium from direct business — — — 15,529 4,421 44,498
written -net of GST
Commission received on 3,566,394 — — — — —
Reinsurance ceded
Claims on Reinsurance ceded 4,399,478 — — — — —
Other Income — 28,443 — — — —
Total 7,965,872 28,443 — 15,529 4,421 44,498
EXPENSES          
Name Usage Fees — 22,109 — — — —
Claims paid direct — — — — 566 10
Premium on Reinsurance ceded 15,344,221 — — — — —
Interest on Debentures 33,600 129,200 — — — —
Dividend — 880,412 153,965 — — —
Commission Paid — — — — — 655,431
Deputation Fees Paid — — — — — —
Other expense 3,000 — — — — —
Total 15,380,821 1,031,721 153,965 — 566 655,440
ASSETS:
Transactions during the year
Investment purchased during the year — — — — 500,305 —
Investment sold during the year — — — — 531,257 —
Account Balances
Other Receivable — 5,698 — — — —
Interest accrued on investments — — — — — —
LIABILITIES:
Account Balances
Share Capital — 2,934,708 513,215 — — —
Securities Premium — 3,260,251 5,518,142 — — —
Debentures 400,000 1,700,000 — — — —
Balance due to other insurance 8,315,049 — — — — —
companies
Interest Payable on Debentures 29,242 47,854 — — — —
Unallocated Premium — — — 21,240 697 332
Agent Balances — — — — — 93,201

105
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

Transactions included in (b) above which are in excess of 10% of the total related transactions of the same
type are given below for the Financial Year 2020-21:
(` ’000)
Particulars Ritesh Kumar Anuj Tyagi Samir H. Shah
(Incl. Relatives) (Incl. Relatives) (Incl. Relatives)

INCOME    
Premium from direct business written - net of GST 154 33 23
Total 154 33 23
EXPENSES      
Commission paid direct — — —
Employees remuneration and welfare benefits 84,154 28,523 25,447
Total 84,154 28,523 25,447

Transactions included in (b) above which are in excess of 10% of the total related transactions of the same
type are given below for the Financial Year 2019-20:
(` ’000)
Particulars Munich Re ERGO HDFC AMC Ltd HDFC Life HDFC Sales
International AG Private Limited

INCOME      
Premium from direct (3) — 14,544 9,328 47,108
business written - net of
GST
Commission received on 830,520 — — — —
Reinsurance ceded
Claims on Reinsurance 1,109,020 — — — —
ceded
Other Income — 37,439 — — —
Total 1,939,537 37,439 14,544 9,328 47,108
EXPENSES          
Claims paid direct — — — 1,016 750
Premium on Reinsurance 4,681,511 — — — —
ceded
Interest on Debentures 2,846 129,466 — — —
Dividend — — — — —
Commission Paid — — — — 607,447
Insurance Premium Paid — — — — —
Total 4,684,357 129,466 — 1,016 608,197

106 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

(` ’000)
Particulars Munich Re ERGO HDFC AMC Ltd HDFC Life HDFC Sales
International AG Private Limited

ASSETS:
Transactions during the year
Investment purchased — — 656,840 550,685 —
during the year
Investment sold during the — — 657,197 275,250 —
year
Account Balances
Other Receivable 399 9,360 — — —
Interest accrued on — — — — —
Investments
LIABILITIES:
Account Balances
Share Capital — 2,922,023 — — —
Securities Premium — 3,260,251 — — —
Debentures 400,000 1,700,000 — — —
Balance due to other 3,014,006 — — — —
insurance companies
Interest Payable on 30,930 47,436 — — —
Debentures
Unallocated Premium 125 — 18,291 263 4162
Agent Balances — — — — 38,431

Transactions included in (b) above which are in excess of 10% of the total related transactions of the same
type are given below for the Financial Year 2019-20:
(` ’000)
Particulars Ritesh Kumar Anuj Tyagi Samir H. Shah
(Incl. Relatives) (Incl. Relatives) (Incl. Relatives)
INCOME    
Premium from direct business written - net of GST 173 13 40
Total 173 13 40
EXPENSES      
Commission paid direct — — —
Employees remuneration and welfare benefits 84,154 24,366 25,447
Total 84,154 24,366 25,447

21. LOAN RESTRUCTURING

The Company has not given any loans in the financial year 2020-21 (Previous year ` Nil)

107
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

22. SUMMARY OF FINANCIAL STATEMENTS

The summary of financial statements is provided in Annexure 3.
23. FOREIGN EXCHANGE GAIN/(LOSS) (NET)
(a) During the year Foreign Exchange Loss (net) incurred by the Company is ` 5,747 thousand (Previous year
Gain (net) earned of ` 3,163 thousand) (included in Schedule 4 - Operating Expenses, under the head
“Miscellaneous Expenses”).
(b) The year end foreign currency exposure is ` Nil (Previous year ` Nil).
24. (a) CONTRIBUTION TO TERRORISM POOL
The Company is a participant in and has received the Terrorism Pool retrocession of premium in the current
financial year.
(b) SOLATIUM FUND
The IRDAI had asked the General Insurance Council (“the Council”) to recommend the percentage of
contribution to be made to a Solatium Fund and matters relating to the administration of the Fund. The
Council has decided that The New India Assurance Company Limited would administer the fund. The Council
in its meeting held on May 6, 2005 approved the contribution of 0.10% of the motor gross written premium
with effect from the date of commencement of business, for private insurance companies.
Vide letter dated July 26, 2010, the Council recommended the companies w.e.f. April 1, 2010 to contribute
0.10% of all the third party premium written as Solatium Fund to the administrator on demand. However,
during the year the Company has provided charge to the Revenue Accounts of ` 19,015 thousand (Previous
year ` 18,178 thousand) on an accrual basis (see accounting policy in paragraph 2(u) above) and disclosed
under Current Liabilities.
(c) CONTRIBUTIONS TO ENVIRONMENT RELIEF FUND
During the year, an amount of ` 2,773 thousand (Previous year ` 2,567 thousand) was collected towards
Environment Relief Fund for public liability policies and an amount of ` 2,613 thousand (Previous year
` 2,707 thousand) has been transferred to “United India Insurance Company Limited, Environment Fund
Account” as per Notification of Environment Relief Fund (ERF) scheme under the Public Liability Insurance
Act, 1991 as amended. The balance amount of ` 192 thousand (Previous year ` 32 thousand) is included
under balance due to other Insurance Companies in Schedule 13.
25. EARNINGS PER SHARE (EPS)
Sr. Particulars For the year ended For the year ended
No. March 31, 2021 March 31, 2020
1 Net Profit After Tax for the year (` ‘000) 5,916,510 3,269,418
2 Weighted Average No. of Equity Shares for Basic (` ‘000) 711,483 614,623
3 Weighted Average No. of Equity Shares for Diluted (` ‘000) 713,328 616,759
4 Basic Earnings per Share (`) 8.32 5.32
5 Diluted Earnings per Share (`) 8.29 5.30
6 Nominal Value per Share (`) 10.00 10.00
There are 1,845 thousand (Previous year 2,136 thousand) dilutive potential equity shares outstanding during
the year.
26. According to the information available with the Company, as on March 31, 2021, there are no dues (Previous
year ` Nil) including any overdue amount (Previous year ` Nil), interest due thereon (Previous year ` Nil) and
interest paid during the year (Previous year ` Nil) to Micro and Small Enterprises as defined under Micro, Small
and Medium Enterprises Development Act, 2006, as amended.

108 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

27. PREMIUM DEFICIENCY

There is no premium deficiency for the Company on an overall basis in accordance with Para 2(2) of Schedule II
of Insurance Regulatory and Development Authority of India (Assets, Liabilities and Solvency Margin of General
Insurance Business) Regulations, 2016 (Previous year ` Nil).
28. STATEMENT SHOWING THE AGE-WISE ANALYSIS OF THE UNCLAIMED AMOUNT OF POLICYHOLDERS
The statement of age-wise analysis of the unclaimed amount of policyholders is provided in Annexure 4.
29. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Ministry of Corporate Affairs has notified Section 135 of the Companies Act, 2013 on Corporate Social
Responsibility with effect from April 1, 2014. As per the provisions of the said Section read with Companies
(Corporate Social Responsibility Policy) Amendment Rules, 2021, the Company has undertaken the following
CSR initiatives during the financial year 2020-21:
• “Adopt Village” program called “Gaon Mera” introduced to improve the sanitation, healthcare, education
and livelihood of villagers in selected villages i.e. Jamkhar & Jabalapur in Madhya Pradesh; Dombramattur
& Haveri in Karnataka; Mithivavdi & Patan in Gujarat and Singachauri & Sitamarhi in Bihar.
• Besides the above, the other CSR related activities carried out by the Company include Cataract Surgeries
children’s surgery for Congenital Heart Defect, supporting Professional Graduate Education of girls through
Lila Poonawalla Foundation, Running Teleclininc centers in villages etc.
• In addition, specific COVID-19 related CSR activities were carried out which included Contribute to Prime
Minister’s Citizen Assistance and Relief in Emergency Situations Fund’ (PM CARES Fund), distributing
washable masks to Tribal children, Hygiene Kits distributed to Farmers, Ration Kits Distributed to
underprivileged families, awareness drive in 12 States to prevent Covid19, supported Quarantine centers,
provided Medical instrument and ambulances to Government Hospitals.
(` ’000)
Sr. Particulars For the For the
No. year ended year ended
March 31, 2021 March 31, 2020
1 Gross amount required to be spent by the Company during the 95,191 72,460
year.
2 Amount approved by the Board to be spent during the year 95,191 72,460
3 Amount spent during the year on:
- Construction / acquisition of any asset Nil Nil
- On purposes other than above 95,202 74,969
4 Amount paid to related Parties Nil Nil
5 Unspent amount as per Section 135 (5) Nil Nil
6 Excess amount Spent as per Section 135 (5) Nil Nil

7 Details of ongoing projects For the year ended March 31, 2021
Amount required to be spent during the year 9,269
Amount spent during the year 9,269
30. PROVISION FOR FREE LOOK PERIOD
The provision for Free Look period is ` Nil (Previous year ` Nil), as certified by the Appointed Actuary.

109
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

31. DISCLOSURE ON OTHER WORK GIVEN TO AUDITORS

Pursuant to clause 7.1(g) of Corporate Governance Guidelines issued by IRDAI on May 18, 2016 the services of
the statutory auditors are disclosed below:
(` ’000)
Name of the auditor Services rendered For the year ended For the year ended
March 31, 2021 March 31, 2020
Review of quarterly financial information 1,500 1,416
Agreed upon procedures and Certifications 2,539 896
G. M. Kapadia & Co.
Issuance of comfort letters for Qualified Institutional
2,500 —
Placement issue of HDFC Ltd*
Tax Audit 900 472
Certifications 121 197
B. K. Khare & Co.
Issuance of comfort letters for Qualified
2,500 —
Institutional Placement issue of HDFC Ltd*
* This cost is reimbursed to the Company by HDFC Ltd and does not reflect as a charge to the Revenue / Profit
& Loss Account.
32. PENALTIES LEVIED BY VARIOUS GOVERNMENT AUTHORITIES
(` ’000)
Sr. Authority Non-Compliance/ Penalty Awarded Penalty Paid Penalty Waived/
No. Violation Reduced

1 Insurance Regulatory and N.A. Nil Nil Nil

Development Authority of
(N.A.) (Nil) (Nil) Nil
India
2 Goods & Service Tax N.A. Nil Nil Nil
Authorities (N.A.) (Nil) (Nil) (Nil)
3 Income Tax Authorities N.A. Nil Nil Nil
(N.A.) (Nil) (Nil) (Nil)
4 Any other Tax Authorities N.A. Nil Nil Nil
(N.A.) (Nil) (Nil) (Nil)
5 Enforcement Directorate/ N.A. Nil Nil Nil
Adjudicating Authority / (N.A.) (Nil) (Nil) (Nil)
Tribunal or any Authority
under FEMA
6 Registrar of Companies/ N.A. Nil Nil Nil
NCLT / CLB / Department (N.A.) (Nil) (Nil) (Nil)
of Corporate Affairs or any
Authority under Companies
Act, 2013 /1956
7 Penalty awarded by any Court N.A. Nil Nil Nil
/ Tribunal for any matter (N.A.) (Nil) (Nil) (Nil)
including claim settlement
but excluding compensation

110 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

Sr. Authority Non-Compliance/ Penalty Awarded Penalty Paid Penalty Waived/

No. Violation Reduced

8 Securities and Exchange N.A. Nil Nil Nil

Board of India (N.A.) (Nil) (Nil) (Nil)
9 Competition Commission of N.A. Nil Nil Nil
India (N.A.) (Nil) (Nil) (Nil)
10 Any other Central/State/ N.A. Nil Nil Nil
Local Government/Statutory (N.A.) (Nil) (Nil) (Nil)
Authority
(Previous year’s figures are in brackets)
33. The Company has Non-Convertible Debentures (NCDs) amounting ` 5,040,000 (‘000s), details of which are as under:
a) 10 years, 3,500 nos. of 7.60% Unsecured, Subordinated, Fully paid up, Listed, Redeemable Non-Convertible
Debentures (NCDs) having face value of ` 1,000 thousand each, issued for cash at par under NCD Series
2016-17/1 with a call option after 5 years (“NCD Series 2016-17/1”)
b) 10 years, 800 nos. of 8.40% Unsecured, Subordinated, Fully paid up, Listed, Redeemable Non- Convertible
Debentures (NCDs) having face value of ` 1,000 thousand each, issued for cash at par under NCD Series
2017-18/1 with a call option after 5 years (“NCD Series 2017-18/1”)
c) 10 years, 740 nos. of 10.25% Unsecured, Subordinated, Fully paid up, Listed, Redeemable Non-Convertible
Debentures (NCDs) having face value of ` 1,000 thousand each, issued for cash at par under NCD Series
2018-19/1 with a call option after 5 years (“NCD Series 2018-19/1”)
Consequent to the issuance of the Companies (Share Capital and Debentures) Amendment Rules, 2019 (“Rules”)
on August 16, 2019 and in terms of Rule 18, sub-rule (7)(b)(iii)(B) of the said Rules, requirement of creation of
Debenture Redemption Reserve (DRR) has been dispensed with. Hence, the Company has not created DRR from
the date of issuance of the said Rules. During the previous year, the Company had created DRR of ` 24,300
thousand upto June 30, 2019.
34. The IRDAI vide its Circular No. IRDA/F&A/CIR/MISC/099/04/2020 dated April 24, 2020 had restrained
insurance companies from making dividend pay-outs from profits pertaining to the financial year ended March
31, 2020 until further instructions, with a view that insurance companies must conserve capital in the interest
of policyholders and economy at large, in an environment of heightened uncertainty caused by Covid-19. The
Authority has withdrawn the said circular vide its Circular no. IRDA/F&A/CIR/MISC/032/02/2021 dated February
25, 2021. Accordingly, the Board of Directors, in its meeting held on March 03, 2021, has approved the payment
of an interim dividend of ` 3 per equity share of ` 10 each (Previous Year Nil) and accordingly an amount of
` 2,134,695 thousand (Previous Year Nil) was paid to the shareholders.
35. In light of the Covid-19 outbreak and the information available upto the date of approval of these financial
statements, the Company has assessed the impact of Covid-19 on its operations and its financial statements.
The assessment includes but is not limited to valuation of investments, valuation of policy-related liabilities and
solvency position of the Company as at March 31, 2021. Further, there have been no material changes in the
controls or processes followed in the financial closing process of the Company. The Company continues to closely
monitor the implications of the second-wave of Covid-19 on its operations and financial statements, which are
dependent on emerging uncertain developments.
36. The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment
benefits received Presidential assent in September 2020 and has been published in the Gazette of India. The
Ministry of Labour and Employment has released draft rules (‘Rules’) for the Code on November 13, 2020, the

111
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

final Rules and the Effective Date of the Code is awaited. The Company will assess the impact of the Code once
the Rules are notified and will record any related impact in the period when the Code becomes effective.
37. Previous year figures have been regrouped in respect of the following items for better presentation, understanding
and comparability with those of the current year.
(` in ‘000)
Description Regrouped from Regrouped to Amount
Audit & other certification fees Schedule 4 - Operating Schedule 4 - Operating 1,433
paid to Statutory Auditors of Expenses Related to Expenses Related to
erstwhile HDFC ERGO Health Insurance Business : Insurance Business : Legal
Insurance Limited. Auditors’ fees, expenses etc. and Professional charges
(a) as auditors
(c) in any other capacity

Signature to the Notes to Accounts

For and on behalf of the Board of Directors

Deepak S. Parekh Ritesh Kumar Dayananda V. Shetty

Chairman Managing Director & CEO Company Secretary and
(DIN: 00009078) (DIN: 02213019) Chief Compliance Officer
(Membership No.: FCS 4638)
Samir H. Shah Anuj Tyagi
Mumbai, Executive Director & CFO Executive Director & Chief Business Officer
Dated: April 20, 2021 (DIN: 08114828) (DIN: 07505313)

112 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

Annexure 1
Segmental Breakup of the Balance Sheet as at March 31, 2021
Segment revenue and segment results have been incorporated in the financial statements. However given the
nature of business, segment assets and liabilities, have been allocated amongst various segments to the extent
possible.
(` ’000)
Particulars Fire Marine Miscellaneous Unallocated Total
Claims Outstanding 2,048,173 417,160 58,585,552 — 61,050,885
(Refer note 2(h)) (1,079,659) (488,844) (45,993,376) — (47,561,879)
Reserve for Unexpired 3,792,685 324,637 39,136,342 — 43,253,664
Risk (2,970,513) (193,383) (39,102,716) — (42,266,612)
(Previous year’s figures are in brackets)

113
 SEGMENT REPORTING FOR THE YEAR ENDED MARCH 31, 2021

114
Annexure 1
(` ’000)

Fire Marine Marine- Motor Motor-OD Motor-TP Workmens Public Product Other Engineering Aviation Personal Health Home Specialty * Weather/ Others Total
Cargo Hull Compensation Liability Liability Liabilities Accident Crop

Premium Earned (Net) (Schedule - A) 2,401,067 796,804 761 24,075,424 12,589,909 11,485,515 159,349 10,562 1,664 285,648 614,271 (1,292) 4,597,030 25,036,047 21,521 577,491 4,615,048 864,412 64,055,805

Profit on Sale of Investments 52,015 7,392 97 557,317 98,133 459,184 3,018 175 117 3,836 7,881 920 89,674 229,624 1,393 6,132 45,619 15,697 1,020,908
NOTES TO ACCOUNTS
Interest, Rent and Dividend (Net of Amortisation) 434,056 61,685 807 4,650,710 818,902 3,831,808 25,185 1,460 978 32,009 65,767 7,681 748,309 1,916,172 11,623 51,173 380,683 130,991 8,519,288
Schedule – 16 (Continued)

Investment Income from Pool 44,675 — — — — — — — — — — — — — — — — — 44,675

Other Income 2,738 923 1 27,891 14,585 13,306 185 12 2 331 703 — 5,326 29,004 25 669 5,346 1,001 74,157

Total Segmental Revenue 2,934,550 866,803 1,666 29,311,342 13,521,529 15,789,813 187,736 12,209 2,762 321,824 688,622 7,309 5,440,338 27,210,847 34,562 635,466 5,046,697 1,012,101 73,714,833

Claims Incurred (Net) (Schedule - B) 1,795,580 718,148 573 16,856,415 8,860,693 7,995,722 101,352 3,415 3,704 176,380 662,440 14,648 2,134,835 21,364,731 27,366 256,512 3,581,513 822,872 48,520,485

Commission (Net) (Schedule - C) (641,069) 115,795 (7,255) 691,985 2,326,107 (1,634,122) 18,835 (858) (541) (5,002) (168,792) (4,787) (182,159) (282,420) 27,026 (65,987) (1,525,580) 47,464 (1,983,345)

Operating Expenses Related to Insurance 2,034,744 213,103 35,292 5,396,642 2,384,204 3,012,439 26,257 4,786 1,550 131,111 289,957 19,088 856,900 5,927,643 35,705 361,411 4,237,756 296,986 19,868,933
Business (Schedule - D)

Premium Deficiency — — — — — — — — — — — — — — — — — — —

Total Segmental Expenditure 3,189,255 1,047,046 28,610 22,945,043 13,571,004 9,374,039 146,444 7,344 4,713 302,490 783,605 28,949 2,809,576 27,009,954 90,098 551,935 6,293,689 1,167,322 66,406,072

Segmental Profit/(Loss) (254,705) (180,243) (26,944) 6,366,300 (49,475) 6,415,774 41,292 4,865 (1,951) 19,334 (94,982) (21,639) 2,630,761 200,892 (55,536) 83,531 (1,246,992) (155,220) 7,308,761

*Includes - 1. Directors’ and officers’ liability

2. Mutual Fund assets protection

SCHEDULE - A to Annexure 1
(` ’000)

Fire Marine Marine- Motor Motor-OD Motor-TP Workmens Public Product Other Engineering Aviation Personal Health Home Specialty Weather/ Others Total
Cargo Hull Compensation Liability Liability Liabilities Accident Crop

PREMIUM EARNED [NET]

Premium from direct business written-net of GST 11,751,194 1,266,089 222,770 34,064,556 15,049,515 19,015,041 165,741 29,448 9,783 813,992 1,748,058 121,934 5,399,683 37,416,320 225,378 2,113,322 25,729,721 1,873,038 122,951,028

Add: Premium on Re-insurance accepted 1,129,335 79,055 — — — — — 764 — 13,602 88,228 (1,446) 9,219 — — 167,964 — 1,587 1,488,310

Less: Premium on Re-insurance ceded (9,657,291) (416,935) (222,161) (9,369,327) (777,013) (8,592,314) (18,565) (22,846) (8,580) (581,312) (1,321,028) (121,820) (1,580,701) (12,520,098) (36,056) (1,704,412) (21,073,990) (741,358) (59,396,481)

Net Premium 3,223,239 928,209 609 24,695,229 14,272,502 10,422,727 147,176 7,366 1,202 246,282 515,258 (1,331) 3,828,201 24,896,222 189,322 576,875 4,655,731 1,133,267 65,042,857

Add/(Less): Adjustment for changes in reserve (822,172) (131,406) 153 (619,805) (1,682,593) 1,062,788 12,172 3,196 462 39,366 99,013 39 768,829 139,825 (167,801) 616 (40,683) (268,855) (987,052)
for unexpired risks

Total Premium Earned 2,401,067 796,804 761 24,075,424 12,589,909 11,485,515 159,349 10,562 1,664 285,648 614,271 (1,292) 4,597,030 25,036,047 21,521 577,491 4,615,048 864,412 64,055,805

14th Annual Report 2020-21


SEGMENT REPORTING FOR THE Year ENDED MARCH 31, 2021 (Continued)
SCHEDULE - B to Annexure 1
(` ’000)

Fire Marine Marine- Motor Motor-OD Motor-TP Workmens Public Product Other Engineering Aviation Personal Health Home Specialty Weather/ Others Total
Cargo Hull Compensation Liability Liability Liabilities Accident Crop

CLAIMS INCURRED [NET]

Claims paid direct 3,524,891 1,807,831 35,109 12,391,563 9,589,399 2,802,165 59,286 3,384 — 202,934 811,040 51,289 1,545,667 24,429,451 12,529 179,189 15,641,743 1,263,962 61,959,870
NOTES TO ACCOUNTS
Add: Claims on Re-insurance accepted 232,618 87,240 — — — — — — — 914 26,540 15,769 — 27 — — — — 363,108
Schedule – 16 (Continued)

Less: Re-insurance ceded (2,930,444) (1,104,887) (34,890) (3,626,033) (1,244,637) (2,381,396) (3,002) (186) — (190,103) (375,494) (51,193) (415,977) (5,452,399) (672) (113,699) (12,341,667) (650,850) (27,291,496)

Net Claims paid 827,065 790,183 219 8,765,531 8,344,762 420,768 56,284 3,199 — 13,746 462,086 15,865 1,129,690 18,977,079 11,857 65,490 3,300,076 613,112 35,031,481

Add: Claims Outstanding at the end of the year 2,048,174 408,478 8,684 43,253,033 2,452,449 40,800,584 234,886 11,244 12,317 311,521 606,722 86,863 2,272,400 6,423,038 30,447 387,622 4,268,080 687,376 61,050,884

Less: Claims Outstanding at the beginning (1,079,659) (480,513) (8,331) (35,162,149) (1,936,519) (33,225,630) (189,817) (11,027) (8,612) (148,886) (406,368) (88,080) (1,267,255) (4,035,386) (14,936) (196,600) (3,986,643) (477,617) (47,561,878)
of the year

Total Claims Incurred 1,795,580 718,148 573 16,856,415 8,860,693 7,995,722 101,352 3,415 3,704 176,380 662,440 14,648 2,134,835 21,364,731 27,366 256,512 3,581,513 822,872 48,520,487

SCHEDULE - C to Annexure 1
(` ’000)

Fire Marine Marine- Motor Motor-OD Motor-TP Workmens Public Product Other Engineering Aviation Personal Health Home Specialty Weather/ Others Total
Cargo Hull Compensation Liability Liability Liabilities Accident Crop

COMMISSION PAID [NET]

Commission paid direct 1,094,947 142,310 6 2,924,009 2,644,185 279,824 22,354 2,111 1,231 96,373 123,150 3,343 685,734 4,734,279 29,204 240,736 49,890 143,202 10,292,878

Add: Commission paid on Re-insurance accepted 75,138 4,411 — — — — — 134 — 2,955 5,125 (72) 3,537 — — 28,076 — 16 119,320

Less: Commission received on Re-insurance (1,811,154) (30,926) (7,261) (2,232,023) (318,077) (1,913,946) (3,520) (3,102) (1,772) (104,330) (297,067) (8,058) (871,429) (5,016,698) (2,178) (334,800) (1,575,470) (95,755) (12,395,542)
ceded

Net commission paid/(received) (641,069) 115,795 (7,255) 691,985 2,326,107 (1,634,122) 18,835 (858) (541) (5,002) (168,792) (4,787) (182,159) (282,420) 27,026 (65,987) (1,525,580) 47,464 (1,983,344)

115
 SEGMENT REPORTING FOR THE Year ENDED MARCH 31, 2021 (Continued)

116
SCHEDULE - D to Annexure 1 (` ’000)

Fire Marine Marine- Motor Motor-OD Motor-TP Workmens Public Product Other Engineering Aviation Personal Health Home Specialty Weather/ Others Total
Cargo Hull Compensation Liability Liability Liabilities Accident Crop

OPERATING EXPENSES RELATED TO INSURANCE

BUSINESS

Employees’ remuneration and welfare benefits 547,541 57,345 9,497 1,452,214 641,579 810,634 7,066 1,288 417 35,281 78,026 5,137 230,588 1,595,103 9,608 97,254 1,096,889 79,918 5,303,172

Travel, conveyance and vehicle running expenses 12,775 1,338 222 33,883 14,969 18,914 165 30 10 823 1,820 120 5,380 37,217 224 2,269 25,592 1,865 123,733

Training expenses 49,274 5,161 855 130,686 57,736 72,950 636 116 38 3,175 7,022 462 20,751 143,545 865 8,752 98,710 7,192 477,239
NOTES TO ACCOUNTS
Rents, rates and taxes 59,138 6,194 1,026 156,848 69,294 87,553 763 139 45 3,811 8,427 555 24,905 172,281 1,038 10,504 118,471 8,632 572,774
Schedule – 16 (Continued)

Repairs 21,213 2,222 368 56,263 24,857 31,407 274 50 16 1,367 3,023 199 8,934 61,799 372 3,768 42,497 3,096 205,461

Printing and stationery 11,491 1,203 199 30,476 13,464 17,012 148 27 9 740 1,637 108 4,839 33,475 202 2,041 23,019 1,677 111,292

Communication 8,129 851 141 21,559 9,525 12,034 105 19 6 524 1,158 76 3,423 23,680 143 1,444 16,284 1,186 78,729

Legal and professional charges 474,026 49,646 8,222 1,257,233 555,438 701,795 6,117 1,115 361 30,544 67,550 4,447 199,628 1,380,938 8,318 84,196 949,616 69,187 4,591,146

Auditors’ fees, expenses etc

(a) as auditors 671 70 12 1,780 786 994 9 2 1 43 96 6 283 1,955 12 119 1,344 98 6,500

(b) as advisor or in any other capacity,in

respect of:

(i) Taxation matters — — — — — — — — — — — — — — — — — — —

(ii) Insurance matters — — — — — — — — — — — — — — — — — — —

(iii) Management services — — — — — — — — — — — — — — — — — — —

(c) in any other capacity 522 55 9 1,385 612 773 7 1 — 34 74 5 220 1,522 9 93 1,046 76 5,059

Advertisement and publicity 635,286 66,535 11,019 1,684,935 744,394 940,541 8,198 1,494 484 40,935 90,530 5,960 267,541 1,850,724 11,148 112,839 1,272,669 92,725 6,153,022

Interest and bank charges 31,443 3,293 545 83,394 36,843 46,551 406 74 24 2,026 4,481 295 13,242 91,600 552 5,585 224,540 4,589 466,089

Others:

Electricity expenses 8,005 838 139 21,231 9,380 11,851 103 19 6 516 1,141 75 3,371 23,320 140 1,422 16,036 1,168 77,532

Office expenses 3,992 418 69 10,588 4,678 5,911 52 9 3 257 569 37 1,681 11,630 70 709 7,998 583 38,667

Miscellaneous expenses 8,483 888 147 22,499 9,940 12,559 109 20 6 547 1,209 80 3,572 24,713 149 1,507 16,994 1,238 82,161

Information Technology expenses 91,479 9,581 1,587 242,625 107,190 135,435 1,180 215 70 5,895 13,036 858 38,525 266,498 1,605 16,249 183,260 13,352 886,016

Postage and courier 2,725 285 47 7,227 3,193 4,034 35 6 2 176 388 26 1,148 7,938 48 484 5,459 398 26,391

Loss/(Profit) on sale of assets (net) 9,305 975 161 24,680 10,903 13,776 120 22 7 600 1,326 87 3,919 27,108 163 1,653 18,641 1,358 90,125

Depreciation 59,246 6,205 1,028 157,136 69,422 87,714 765 139 45 3,818 8,443 556 24,951 172,597 1,040 10,523 118,688 8,647 573,827

Total Operating Expenses 2,034,744 213,103 35,292 5,396,642 2,384,204 3,012,439 26,257 4,786 1,550 131,111 289,957 19,088 856,900 5,927,643 35,705 361,411 4,237,756 296,986 19,868,933

14th Annual Report 2020-21


SEGMENT REPORTING FOR THE Year ENDED MARCH 31, 2020
Annexure 1
(` ’000)

Fire Marine Marine- Motor Motor-OD Motor-TP Workmens Public Product Other Engineering Aviation Personal Health Home Specialty * Weather/ Others Total
Cargo Hull Compensation Liability Liability Liabilities Accident Crop

Premium Earned (Net) (Schedule - A) 1,459,430 719,855 1,396 24,218,975 12,696,411 11,522,564 180,985 17,302 3,881 334,385 510,171 3,327 4,201,836 7,693,565 17,289 553,841 3,783,100 804,177 44,503,515

Profit on Sale of Investments 29,659 5,767 65 379,827 68,797 311,030 2,013 141 79 2,470 4,355 989 65,915 115,019 344 3,677 28,948 8,727 647,996
NOTES TO ACCOUNTS
Interest, Rent and Dividend (Net of 305,323 59,365 669 3,910,042 708,214 3,201,828 20,723 1,449 818 25,431 44,832 10,185 678,545 1,184,038 3,546 37,849 298,001 89,841 6,670,657
Schedule – 16 (Continued)

Amortisation)

Investment Income from Pool 30,188 — — — — — — — — — — — — — — — — — 30,188

Other Income 1,487 750 1 25,238 13,231 12,008 189 18 4 348 524 - 4,379 10,163 18 577 3,942 838 48,477

Total Segmental Revenue 1,826,087 785,738 2,131 28,534,082 13,486,653 15,047,430 203,909 18,911 4,783 362,635 559,882 14,502 4,950,674 9,002,786 21,198 595,944 4,113,992 903,583 51,900,833

Claims Incurred (Net) (Schedule - B) 1,021,394 585,969 3,530 19,183,282 10,380,603 8,802,679 172,947 2,835 814 164,347 710,273 (24,053) 1,866,261 7,280,825 13,036 114,388 3,273,563 871,774 35,241,188

Commission (Net) (Schedule - C) (292,127) 96,668 (1,350) 1,066,682 2,161,410 (1,094,727) 23,520 2,293 638 38,050 (136,297) (5,422) (335,145) (1,509,231) 741 39,057 (1,091,386) (15,732) (2,119,040)

Operating Expenses Related to Insurance 1,605,038 258,829 34,717 5,034,782 2,367,567 2,740,926 30,305 5,956 709 128,033 300,276 19,164 994,019 2,417,165 1,769 255,205 3,436,141 287,639 14,809,749
Business (Schedule - D)

Premium Deficiency — — — — — — — — — — — — — — — — — — —

Total Segmental Expenditure 2,334,304 941,466 36,897 25,284,746 14,909,580 10,448,878 226,772 11,085 2,161 330,430 874,253 (10,310) 2,525,135 8,188,759 15,547 408,651 5,618,318 1,143,681 47,931,897

Segmental Profit/(Loss) (508,217) (155,728) (34,766) 3,249,336 (1,422,927) 4,598,552 (22,863) 7,826 2,621 32,205 (314,371) 24,812 2,425,539 814,027 5,651 187,293 (1,504,326) (240,098) 3,968,937

*Includes - 1. Directors’ and officers’ liability

2. Mutual Fund assets protection

SCHEDULE - A to Annexure 1
(` ’000)

Fire Marine Marine- Motor Motor-OD Motor-TP Workmens Public Product Other Engineering Aviation Personal Health Home Specialty Weather/ Others Total
Cargo Hull Compensation Liability Liability Liabilities Accident Crop

PREMIUM EARNED [NET]

Premium from direct business written- 9,794,450 1,613,803 230,254 33,880,743 15,702,268 18,178,476 200,988 36,112 3,994 807,010 1,910,877 127,101 6,578,534 16,031,212 11,731 1,530,512 21,631,396 1,907,156 96,295,874
net of GST

Add: Premium on Re-insurance accepted 891,437 102,814 — — — — — 3,389 708 42,137 87,961 — 14,038 — — 162,071 — 535 1,305,091

Less: Premium on Re-insurance ceded (8,419,667) (998,423) (229,493) (8,870,203) (3,194,070) (5,676,132) (13,647) (22,181) (1,445) (509,160) (1,348,224) (124,003) (2,196,287) (6,440,766) (3,444) (1,060,868) (17,829,996) (864,501) (48,932,306)

Net Premium 2,266,220 718,194 761 25,010,541 12,508,198 12,502,343 187,341 17,320 3,257 339,988 650,615 3,098 4,396,285 9,590,447 8,287 631,715 3,801,400 1,043,190 48,668,660

Add/(Less): Adjustment for changes in (806,790) 1,661 634 (791,566) 188,213 (979,779) (6,356) (17) 624 (5,603) (140,444) 229 (194,452) (1,896,880) 9,003 (77,874) (18,300) (239,015) (4,165,145)
reserve for unexpired risks

Total Premium Earned 1,459,430 719,855 1,396 24,218,975 12,696,411 11,522,564 180,985 17,302 3,881 334,385 510,171 3,327 4,201,836 7,693,565 17,289 553,841 3,783,100 804,177 44,503,515

117
 SEGMENT REPORTING FOR THE Year ENDED MARCH 31, 2020 (Continued)

118
SCHEDULE - B to Annexure 1
(` ’000)

Fire Marine Marine- Motor Motor-OD Motor-TP Workmens Public Product Other Engineering Aviation Personal Health Home Specialty Weather/ Others Total
Cargo Hull Compensation Liability Liability Liabilities Accident Crop

CLAIMS INCURRED [NET]

Claims paid direct 3,458,660 1,195,616 42,410 16,052,977 13,026,967 3,026,010 122,377 36 — 273,052 887,857 132,705 1,927,247 9,043,611 4,538 562,538 8,579,875 992,979 43,276,477
NOTES TO ACCOUNTS
Add: Claims on Re-insurance accepted 234,881 95,902 — — — — — — — 34,267 13,322 27,785 6 3,967 — — — — 410,130
Schedule – 16 (Continued)

Less: Re-insurance ceded (2,924,805) (684,474) (42,276) (3,177,764) (2,964,974) (212,790) (6,198) (2) — (157,058) (413,927) (126,177) (581,888) (2,145,852) (278) (473,153) (6,768,645) (316,748) (17,819,245)

Net Claims paid 768,736 607,044 133 12,875,213 10,061,993 2,813,219 116,179 35 — 150,261 487,252 34,313 1,345,365 6,901,727 4,260 89,385 1,811,230 676,230 25,867,362

Add: Claims Outstanding at the end 1,079,659 480,513 8,331 35,162,149 1,936,519 33,225,630 189,817 11,027 8,612 148,886 406,368 88,080 1,267,255 4,035,386 14,936 196,600 3,986,643 477,617 47,561,878
of the year

Less: Claims Outstanding on account of — — — — — — — — — — — — (116,339) (2,484,875) — — — — (2,601,214)

Merger as on March 1, 2020

Less: Claims Outstanding at the beginning (827,002) (501,588) (4,934) (28,854,080) (1,617,909) (27,236,171) (133,049) (8,226) (7,797) (134,800) (183,347) (146,445) (630,020) (1,171,413) (6,159) (171,597) (2,524,310) (282,073) (35,586,839)
of the year

Total Claims Incurred 1,021,394 585,969 3,530 19,183,282 10,380,603 8,802,679 172,947 2,835 814 164,347 710,273 (24,053) 1,866,261 7,280,825 13,036 114,388 3,273,563 871,774 35,241,188

SCHEDULE - C to Annexure 1
(` ’000)

Fire Marine Marine- Motor Motor-OD Motor-TP Workmens Public Product Other Engineering Aviation Personal Health Home Specialty Weather/ Others Total
Cargo Hull Compensation Liability Liability Liabilities Accident Crop

COMMISSION PAID [NET]

Commission paid direct 860,376 180,992 1,845 3,048,423 2,800,957 247,466 25,999 2,593 600 84,187 119,063 4,602 821,333 2,056,885 1,054 164,247 37,427 107,501 7,517,128

Add: Commission paid on 47,297 4,652 — — — — — 733 124 8,595 6,018 — 767 — — 28,208 — 5 96,398
Re-insurance accepted

Less: Commission received on (1,199,799) (88,975) (3,196) (1,981,739) (639,546) (1,342,193) (2,479) (1,032) (86) (54,733) (261,378) (10,024) (1,157,245) (3,566,116) (313) (153,398) (1,128,813) (123,239) (9,732,566)
Re-insurance ceded

Net commission paid/(received) (292,127) 96,668 (1,350) 1,066,682 2,161,410 (1,094,727) 23,520 2,293 638 38,050 (136,297) (5,422) (335,145) (1,509,231) 741 39,057 (1,091,386) (15,732) (2,119,040)

14th Annual Report 2020-21


SEGMENT REPORTING FOR THE PERIOD ENDED MARCH 31, 2020 (Continued)
SCHEDULE - D to Annexure 1
(` ’000)

Fire Marine Marine- Motor Motor-OD Motor-TP Workmens Public Product Other Engineering Aviation Personal Health Home Specialty Weather/ Others Total
Cargo Hull Compensation Liability Liability Liabilities Accident Crop

OPERATING EXPENSES RELATED TO INSURANCE

BUSINESS

Employees’ remuneration and welfare benefits 453,941 73,203 9,819 1,444,797 669,601 775,196 8,571 1,684 200 36,211 84,925 5,420 281,131 683,629 500 72,178 922,441 81,351 4,160,002
NOTES TO ACCOUNTS
Travel, conveyance and vehicle running expenses 33,135 5,343 717 105,461 48,877 56,585 626 123 15 2,643 6,199 396 20,521 49,901 37 5,269 67,333 5,938 303,655
Schedule – 16 (Continued)

Training expenses 80,933 13,051 1,751 257,593 119,383 138,210 1,528 300 36 6,456 15,141 966 50,123 121,884 89 12,869 164,462 14,504 741,688

Rents, rates and taxes 43,018 6,937 930 136,917 63,455 73,462 812 160 19 3,432 8,048 514 26,642 64,785 47 6,840 87,416 7,709 394,226

Repairs 15,654 2,524 339 49,824 23,091 26,732 296 58 7 1,249 2,929 187 9,695 23,575 17 2,489 31,810 2,805 143,457

Printing and stationery 18,773 3,027 406 59,750 27,691 32,058 354 70 8 1,497 3,512 224 11,626 28,271 21 2,985 38,148 3,364 172,037

Communication 6,352 1,024 137 20,216 9,369 10,847 120 24 3 507 1,188 76 3,934 9,566 7 1,010 12,907 1,138 58,209

Legal and professional charges 327,475 52,809 7,083 968,460 482,993 559,178 6,182 1,215 145 26,119 61,257 3,910 202,774 493,361 363 52,070 665,426 58,680 2,927,330

Auditors’ fees, expenses etc

(a) as auditors 1,055 170 23 3,342 1,547 1,794 20 4 — 84 196 13 648 1,618 2 168 2,140 188 9,670

(b) as advisor or in any other capacity,in

respect of:

(i) Taxation matters — — — — — — — — — — — — — — — — — — —

(ii) Insurance matters — — — — — — — — — — — — — — — — — — —

(iii) Management services — — — — — — — — — — — — — — — — — — —

(c) in any other capacity 325 52 7 1,163 549 615 7 1 — 29 71 4 242 272 (2) 51 691 66 2,981

Advertisement and publicity 466,719 75,263 10,095 1,485,467 688,450 797,017 8,812 1,732 206 37,230 87,316 5,573 289,045 702,872 514 74,210 948,407 83,641 4,277,101

Interest and bank charges 28,978 4,673 627 92,229 42,744 49,485 547 108 13 2,312 5,421 346 17,946 43,640 32 4,608 233,473 5,193 440,144

Others:

Electricity expenses 8,973 1,447 194 28,560 13,236 15,324 169 33 4 716 1,679 107 5,557 13,514 10 1,427 18,234 1,608 82,232

Office expenses 4,219 680 91 13,429 6,224 7,205 80 16 2 337 789 50 2,613 6,354 5 671 8,574 756 38,667

Miscellaneous expenses 10,821 1,745 234 34,441 15,962 18,479 204 40 5 863 2,024 129 6,702 16,296 12 1,721 21,989 1,939 99,167

Information Technology expenses 44,023 7,099 952 140,116 64,938 75,178 831 163 19 3,512 8,236 526 27,264 66,298 49 7,000 89,458 7,889 403,436

Postage and courier 16,113 2,598 349 51,285 23,768 27,516 304 60 7 1,285 3,015 192 9,979 24,266 18 2,562 32,743 2,888 147,664

Loss/(Profit) on sale of assets (net) (112) (18) (2) (357) (166) (192) (2) — — (9) (21) (1) (70) (169) — (18) (228) (20) (1,028)

Depreciation 44,643 7,199 966 142,088 65,852 76,236 843 166 20 3,561 8,352 533 27,648 67,231 49 7,098 90,717 8,000 409,113

Total Operating Expenses 1,605,038 258,829 34,717 5,034,782 2,367,567 2,740,926 30,305 5,956 709 128,033 300,276 19,164 994,019 2,417,165 1,769 255,205 3,436,141 287,639 14,809,749

119
 Annexure 2

120
Ratios for Non-Life Companies
Sr. Performance Ratio As on 31st March 2021 As on 31st March 2020
No. Fire Marine Miscellaneous Total Fire Marine Miscellaneous Total
1 Gross premium growth rate (refer note 1a and 1b) 19.98% -19.26% 29.59% 27.68% 36.10% 2.37% 9.76% 11.80%
Gross Premium for Current period / Gross Premium for
Previous period
2 Gross Premium to shareholders' fund ratio NA NA NA 4.20 NA NA NA 3.79
Gross Premium for Current period / (Paid up Capital plus NOTES TO ACCOUNTS
Free Reserves)
Schedule – 16 (Continued)

3 Growth rate of shareholders' funds NA NA NA 15.10% NA NA NA 28.27%

Shareholders' funds as at the current balance sheet date /
Shareholders' funds at the previous balance sheet date
4 Net retention ratio (refer note 1a and 1b) 25.02% 59.24% 55.36% 52.27% 21.21% 36.93% 53.77% 49.86%
Net Premium / Gross Premium
5 Net commission ratio (refer note 1a and 1b) -19.89% 11.69% -2.38% -3.05% -12.89% 13.26% -4.21% -4.35%
Net Commission / Net Premium
6 Expenses of Management to gross direct Premium ratio 26.63% 26.24% 24.28% 24.53% 25.17% 25.83% 22.90% 23.19%
Operating Expenses + Gross Commission/ Gross Premium
7 Expenses of Management to Net written Premium ratio 97.10% 42.07% 43.75% 46.37% 108.79% 66.26% 42.43% 45.88%
Operating Expenses + Gross Commission/ Net Premium
8 Net Incurred Claims to Net Earned Premium 74.78% 90.11% 75.60% 75.75% 69.99% 81.73% 79.46% 79.19%
Net incurred Claim / Net earned premium
9 Combined ratio 118.02% 128.54% 102.10% 103.25% 127.92% 135.82% 103.52% 105.26%
Net incurred Claim, Net Commission plus Operating
Expense / Net Premium + Net earned premium
10 Technical reserves to net Premium ratio 1.81 0.80 1.60 1.60 1.79 0.95 1.86 1.85
Reserve for Unexpired Risks plus Deficiency Reserve plus
Reserve for Outstanding Claims / Net Premium
11 Underwriting balance ratio -0.33 -0.35 -0.02 -0.04 -0.60 -0.36 -0.05 -0.08
Underwriting Profit / Net Premium
12 Operating profit ratio -10.61% -25.98% 12.77% 11.41% -34.82% -26.41% 11.03% 8.92%
Underwriting Profit plus Investment Income / Net Premium
13 Liquid assets to liabilities ratio NA NA NA 0.33 NA NA NA 0.31
Liquid Assets of the Insurer / Policyholders' Liabilities
14 Net earnings ratio NA NA NA 9.10% NA NA NA 6.72%
Profit after Tax / Net Premium
15 Return on net worth NA NA NA 20.21% NA NA NA 12.86%
Profit After Tax / Net Worth
16 Available Solvency Margin (ASM) to Required Solvency NA NA NA 1.90 NA NA NA 1.78
Margin (RSM)
ASM / RSM
17 Gross NPA ratio* NA NA NA 1.62% NA NA NA 2.01%
Gross NPA / Gross Investment
Net NPA ratio* NA NA NA 0.03% NA NA NA 0.32%
Net NPA / Net Investment
*Pertains to Non - Performing Investments

14th Annual Report 2020-21


Annexure 2
Ratios for Non-Life Companies (Continued)

Notes:
1a. Miscellaneous Breakup for the year ended March 31, 2021
Sr. No. Particulars Miscellaneous
Motor Others
Workmens Public Product Personal Health Total
Motor-OD Motor-TP Motor Total Engineering Aviation Other Home Specialty Weather/ Others
Compensation Liability Liability Accident Insurance
Liability Crop
Miscellenous
NOTES TO ACCOUNTS
1 Gross premium growth rate -4.16% 4.60% 0.54% -17.54% -18.45% 144.96% -8.52% -4.07% -17.92% 133.40% 0.87% 1821.17% 38.08% 18.95% -1.79% 29.59%
Schedule – 16 (Continued)

Gross Premium for Current period / Gross

Premium for Previous period
2 Net retention ratio 94.84% 54.81% 72.50% 88.80% 24.38% 12.29% 28.06% -1.11% 70.78% 66.54% 29.76% 84.00% 25.29% 18.09% 60.45% 55.36%
Net Premium / Gross Premium
3 Net commission ratio 16.30% -15.68% 2.80% 12.80% -11.64% -44.98% -32.76% 359.53% -4.76% -1.13% -2.03% 14.28% -11.44% -32.77% 4.19% -2.38%
Net Commission / Net Premium

1b. Miscellaneous Breakup for the year ended March 31, 2020
Sr. No. Particulars Miscellaneous
Motor Others
Workmens Public Product Personal Health Total
Motor-OD Motor-TP Motor Total Engineering Aviation Other Home Specialty Weather/ Others
Compensation Liability Liability Accident Insurance Miscellenous
Liability Crop
1 Gross premium growth rate -3.97% 27.58% 10.72% 3.97% 1.03% -60.44% 28.16% -54.66% -5.27% 25.37% -2.74% -53.13% 21.34% 3.04% 13.63% 9.76%
Gross Premium for Current period / Gross
Premium for Previous period
2 Net retention ratio 79.66% 68.78% 73.82% 93.21% 43.85% 69.27% 32.55% 2.44% 66.69% 59.82% 40.04% 70.64% 37.32% 17.57% 54.68% 53.77%
Net Premium / Gross Premium
3 Net commission ratio 17.28% -8.76% 4.26% 12.55% 13.24% 19.60% -20.95% -175.01% -7.62% -15.74% 11.19% 8.95% 6.18% -28.71% -1.51% -4.21%
Net Commission / Net Premium

2. Gross Premium represents Gross Direct Premium

3. Net Premium represents Gross Direct Premium including Premium accepted on reinsurance less reinsurance ceded
4. Underwriting Profit represents Segmental Profit / (Loss) excluding Investment Income
5. Liquid Assets represent Cash and Cash Equivalents and Short Term Investments.

121
Schedule – 16 (Continued)
NOTES TO ACCOUNTS

Summary of Financial Statements

Annexure 3
Sr. Particulars 2020-21 2019-20 2018-19 2017-18 2016-17
No. (` ’000) (` ’000) (` ’000) (` ’000) (` ’000)
OPERATING RESULTS
1 Gross Written Premium 124,439,338 97,600,965 87,218,003 74,011,117 22,524,054
2 Net Premium Income 65,042,858 48,668,660 43,727,874 34,554,756 9,991,352
3 Income from Investments (net) 9,540,196 7,318,655 5,613,146 4,814,513 1,732,409
4 Other Income (includes provision written back) 118,832 78,665 104,959 79,176 21,305
5 Total Income 74,701,886 56,065,980 49,445,980 39,448,445 11,745,066
6 Commission (net) (1,983,344) (2,119,040) (1,525,955) (2,684,241) (1,524,143)
7 Operating Expenses 19,868,937 14,809,749 11,313,294 10,544,703 4,651,511
8 Premium Deficiency — — — — —
9 Net Incurred Claims 48,520,486 35,241,187 29,091,815 22,266,806 7,697,974
10 Change in Unexpired Risk Reserve 987,052 4,165,145 5,627,767 4,609,759 100,332
11 Operating Profit / (Loss) 7,308,755 3,968,939 4,939,059 4,711,418 819,392

NON-OPERATING RESULTS
12 Total Income under shareholder’s account 608,935 620,710 (266,762) 421,263 394,632
13 Profit / (Loss) before tax 7,917,692 4,589,649 4,672,297 5,132,681 1,214,024
14 Provision for tax 2,001,182 1,320,231 842,419 1,095,624 (30,070)
15 Profit / (Loss) after tax 5,916,510 3,269,418 3,829,877 4,037,057 1,244,094

MISCELLANEOUS
16 Policyholders’ Account :
Total Funds 136,900,703 115,988,644 72,068,296 63,433,015 51,092,887
Total Investments 136,900,703 115,988,644 72,068,296 63,433,015 51,092,887
Yield on Investments 7.3% 8.1% 8.2% 8.2% 6.2%
17 Shareholders’ Account :
Total Funds 29,268,562 25,429,010 19,823,885 17,611,118 14,848,389
Total Investments 29,528,835 19,780,184 18,971,760 18,154,614 18,230,354
Yield on Investments 7.3% 8.1% 8.2% 8.2% 6.2%
18 Paid up equity capital 7,115,649 6,058,421 6,054,221 6,050,718 6,004,659
19 Net worth 29,268,562 25,429,010 19,823,885 17,611,118 14,848,389
20 Total Assets 29,268,562 25,429,010 19,823,885 17,611,118 14,848,389
21 Yield on Total Investments 7.3% 8.1% 8.2% 8.2% 6.2%
22 Earnings per Share (Basic) (`) 8.32 5.32 6.33 6.70 2.07
23 Book Value per Share (`) 41.13 41.97 32.74 29.11 24.73
24 Total Dividend 2,134,695 — 1,362,200 1,210,144 —
25 Dividend per Share (`) 3.00 — 2.25 2.00 —

122 14th Annual Report 2020-21

Schedule – 16 (Continued)
NOTES TO ACCOUNTS

Annexure 4
A) Statement showing the Age-wise Analysis of the Unclaimed amount of Policyholders (` ’000)
Particulars AGE-WISE ANALYSIS
Total 0-6 7-12 13-18 19-24 25-30 31-36 37-120 More
Amount months months months months months months months than 120
months
Claims settled but not paid to the
policyholders/insured’s due to any —  —  —  —  —  —  —  —  — 
reasons except under litigation from (—) (—) (—) (—) (—) (—) (—) (—) (—)
the insured/policyholders
Sum due to the insured/policyholders —  —  —  —  —  —  —  —  — 
on maturity or otherwise (—) (—) (—) (—) (—) (—) (—) (—) (—)
Any excess collection of the premium/
tax or any other charges which is
refundable to the policyholders either
as terms of conditions of the policy or
as per law or as may be directed by 9,109 —  2,167 1,494 1,545 512 563 2,701 128 
the Authority but not refunded so far (5,910) (—) (2,525) (564) (15) (184) (138) (2,467) (17)
Cheques issued but not encashed
by the policyholder/insured (refer
note below) 83,357 — 7,043 5,771 3,377 3,309 3,078 59,151 1,628
- Premium (74,936) (—) (6,543) (2,412) (2,179) (3,473) (4,192) (55,452) (684)
169,781 —  18,056 64,298 11,597 16,393 6,408 52,345 683
- Claims - MACT (—) (11,556)
(91,899) (20,609) (7,589) (11,414) (9,294) (31,074) (364)
101,536 —  13,713 5,896 8,763 2,049 720 63,081 7,315
- Claims - Non MACT (—) (12,357)
(98,503) (1,551) (991) (2,256) (15,506) (62,081) (3,746)
363,783 —  40,979 77,458 25,281 22,264 10,769 177,278 9,754
TOTAL (—) (32,981)
(271,248) (25,136) (10,775) (17,327) (29,130) (151,074) (4,826)
(Previous year’s figures are in brackets)
Note: The Policyholder due includes amount of ` 54,921 thousand (Previous year ` 2,280 thousand) pertains to
cheques reissued but not encashed by the policyholder / insured.
Pursuant to Master Circular on unclaimed amount of Policy Holder due’s issued by IRDAI on July 25, 2017
the Company has considered the unclaimed amount which are payable to Policyholders remaining unclaimed
beyond six months from the settlement date or due date whichever is earlier. Accordingly there are no additions
in the unclaimed amount of Policyholder dues in the category of 0-6 months.
B) Statement showing movement of Unclaimed Amount and Investment Income as per IRDAI Circular no. IRDA/
F&A/CIR/MISC/282/11/2020 dated November 18, 2020 (` ’000)
Particulars For the year ended For the year ended
March 31, 2021 March 31, 2020
Policy Dues Income Accrued Policy Dues Income Accrued
Opening Balance 229,040 39,928 202,806 25,451
Add: on Merger — — 27,297 6,226
Add : Amount transferred to unclaimed fund 121,805 — 57,877 —
Add : Cheques issued out of the unclaimed amount
but not encashed by the policyholders (to be
included only when the cheques are stale) 52,642 — 22,374 —
Add : Investment Income on unclaimed Fund — 10,310 — 10,400
Less : Amount of claims paid during the year 131,577 2,595 76,854 998
Less: Amount transferred to SCWF (net of claims 7,820 2,871 4,459 1,150
paid in respect of amounts transferred earlier)
Closing Balance of Unclaimed Amount Fund 264,090 44,772 229,040 39,928
“Unclaimed amount of policyholders (Investment)” ` 147,786 thousand (Previous year ` 144,396 thousand)
and “Income on Unclaimed Amount of Policyholders (Investment)” ` 44,772 thousand (Previous year ` 39,928
thousand) are disclosed under Schedule 12 – Advances and Other Assets.

123
Management Report
In accordance with Part IV of Schedule B of the Insurance Rents outstanding”, “Interest, Dividends and Rents
Regulatory and Development Authority (Preparation of accruing but not due”, “Amounts due from other
Financial Statements and Auditor’s Report of Insurance persons or Bodies carrying on insurance business”,
Companies) Regulations 2002, the Management submits “Sundry Debtors”, “Bills Receivable”, “Cash” and
the following Report: the several items specified under “Other Accounts”
1. We confirm the validity of Certificate of Registration except debt securities which are stated at cost /
granted by the Insurance Regulator y and amortised cost .
Development Authority of India to transact general 7. The Company is exposed to a variety of risks
insurance business. associated with general insurance business such
2. To the best of our knowledge and belief, all the as quality of risks undertaken, fluctuations in value
material dues payable to the statutory authorities of assets and higher expenses in the initial years of
have been duly paid. operation. The Company monitors these risks closely
and effective remedial action is taken wherever
3. We confirm that the shareholding pattern and the
deemed necessary.
transfer of shares during the year ended March
31, 2021 are in accordance with the statutory or The Company has, through an appropriate
regulatory requirements. reinsurance program kept its risk exposure at a
level commensurate with its capacity.
4. We declare that funds of holders of policies issued
in India have not been directly or indirectly invested 8. The Company does not have operations outside
outside India. India.
5. We confirm that the Company has maintained the 9. a. For ageing analysis of Gross Claims outstanding
required solvency margins laid down by Insurance (excluding provision for IBNR / IBNER and
Regulatory and Development Authority of India. claims relating to inward re-insurance from
terrorism pool) during the preceding five years,
6. We certify that the all assets of the Company have
please refer Annexure 1.
been reviewed on the date of the Balance Sheet and
to the best of our knowledge and belief the assets b. For average claims settlement time during the
set forth in the Balance Sheet are shown in the preceding five years, please refer Annexure 2.
aggregate at amounts not exceeding their realizable 10. Details of payments to individuals, firms, Companies
or market value under the several headings and organizations in which directors are interested
– “Loans”, “Investments”, “Agents balances”, during the year ended on March 31, 2021:
“Outstanding Premiums”, “Interest, Dividends and

Sr. Name of the Director Entity in which Director is interested Interested As Payment during
No. the year (` ’000)
1 MR. DEEPAK S. PAREKH HDFC LIMITED Chairman 1,532,644
HDFC LIFE INSURANCE COMPANY LIMITED Chairman 768
BREACH CANDY HOSPITAL TRUST Director 41,324
2 MR. KEKI M. MISTRY HDFC LIMITED Vice Chairman and 1,532,644
CEO
HDFC LIFE INSURANCE COMPANY LIMITED Director 768
TATA CONSULTANCY SERVICES LIMITED Director 147,004
TORRENT POWER LIMITED Director 905

124 14th Annual Report 2020-21

Management Report (Continued)

Sr. Name of the Director Entity in which Director is interested Interested As Payment during
No. the year (` ’000)
3 MS. RENU SUD KARNAD  HDFC LIMITED Managing Director 1,532,644
HDFC BANK Nominee Director 2,266,123
HDFC LIFE INSURANCE COMPANY LIMITED Director 768
ABB INDIA LIMITED Director 4,294
Glaxosmithkline Pharmaceuticals Limited Chairperson 200
4 MR. ANUJ TYAGI CSC E-Governance Services India Limited Director 116,602
5 MR. BERNHARD STEINRUECKE Zodiac Clothing Limited Director 105

11. We certify that all debt securities excluding Additional investments such as Government securities, rated
Tier I Bonds and non convertible preference shares debt instruments and liquid and Money Market
are considered as ‘held to maturity’ and accordingly instruments in order to maintain optimum liquidity.
stated at historical cost subject to amortisation Investments are managed in consonance with the
of premium or accretion of discount on constant investment policy laid down by the board from time
yield to maturity basis to the extent of policyholders to time and are within the investment regulation and
funds in the Revenue Accounts and to the extent of guidelines of IRDAI. The Company has carried out
shareholders funds in the Profit and Loss Account periodic review of the investment portfolio and where
over the period of maturity/holding. found necessary, has made provision for diminution
All mutual fund investments are valued at net asset in value of investments or written them off.
value as at Balance Sheet date. 13. The Management of HDFC ERGO General Insurance
Equity shares actively traded and convertible Company Limited certifies that:
preference shares as at the Balance Sheet date are The financial statements have been prepared in
stated at fair value, being the last quoted closing accordance with the applicable provisions of the
price on the National Stock Exchange (NSE) being Insurance Regulatory and Development Authority
selected as Primary exchange as required by IRDAI (Preparation of Financial Statements and Auditor’s
circular number IRDA/F&I/INV/CIR/213/10/2013 Report of Insurance Companies) Regulations,
dated October 30, 2013. However, in case of any 2002, the Insurance Act, 1938 as amended by
stock not being listed on NSE, the same is valued Insurance Laws (Amendment) Act, 2015, the
based on the last quoted closing price on Bombay Insurance Regulatory and Development Authority
Stock Exchange (BSE). Act, 1999, circulars/notifications issued by IRDAI
Additional Tier I Bond Investments are fair valued from time to time (including Circular No. IRDA/F&A/
at market yield rates published by rating agency CIR/CPM/056/03/2016 dated April 04, 2016 and
registered with the Securities and Exchange Board IRDA/F&A/CIR/CPM/010/01/2017 dated January
of India (SEBI). 12, 2017), the Accounting Standards (AS) specified
under Section 133 of the Companies Act, 2013,
In accordance with the Regulations, any unrealized
read together with Rule 7 of Companies (Accounts)
gains/losses arising due to change in fair value of
Rule 2014 dated March 31, 2014 and Companies
mutual fund investments, listed equity shares and
(Accounting Standards) amendment Rules 2016
Additional Tier I Bonds are accounted in “Fair Value
dated March 30, 2016 to the extent applicable
Change Account” and carried forward in the Balance
and the relevant provisions of the Companies Act,
Sheet and is not available for distribution.
2013, and disclosures have been made, wherever
12. The Company has adopted a prudent investment the same is required. There is no material departure
policy with emphasis on optimizing return with from the said standards, principles and policies.
minimum risk. Emphasis was towards low risk

125
Management Report (Continued)

i. The Company has adopted accounting policies for safeguarding the assets of the Company
and applied them consistently and made and for preventing and detecting fraud and
judgements and estimates that are reasonable other irregularities.
and prudent, so as to give a true and fair view iii. The financial statements of the Company have
of the state of affairs of the Company as at been prepared on a going concern basis.
March 31, 2021 and of the operating profit for
iv. The Company’s internal audit is conducted
the year ended on that date.
by an in-house audit team and an appointed
ii. The Company has taken proper and sufficient audit firm. The scope of work of internal audit
care for the maintenance of adequate is commensurate with the size and nature of
accounting records in accordance with the the Company’s business. The management
applicable provisions of the Insurance Act, has ensured that an internal audit system
1938, (4 of 1938) as amended by Insurance commensurate with the size and nature of
Laws (Amendment) Act, 2015 / Companies Act, business exists and is operating effectively.
1956, (1 of 1956)/ the Companies Act, 2013,

Signature to the Notes to Accounts

For and on behalf of the Board of Directors

Deepak S. Parekh Ritesh Kumar Dayananda V. Shetty

Chairman Managing Director & CEO Company Secretary and
(DIN: 00009078) (DIN: 02213019) Chief Compliance Officer
(Membership No.: FCS 4638)
Samir H. Shah Anuj Tyagi
Mumbai, Executive Director & CFO Executive Director & Chief Business Officer
Dated: April 20, 2021 (DIN: 08114828) (DIN: 07505313)

126 14th Annual Report 2020-21


Annexure 1
Details of ageing analysis of Gross Claims outstanding
Outstanding As on 31.03.2021 (F. Y. 2020-21) (` ’000)
Period Workmens
Fire Marine Cargo Marine Hull Motor OD Motor TP Public liability Product Liability Other Liabilities
Compensation
No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount
0-30 days 99 972,707 147 103,916 2 7,510 11,942 698,735 1,360 447,458 64 12,064 2 760 — — 9 2,820
31 days to 6 months 132 1,013,281 91 103,668 4 53,475 5,111 632,750 4,719 1,825,600 190 39,633 — — — — 27 9,669
6 months to 1 year 86 1,776,277 13 1,538,188 1 50,007 337 114,644 1,813 662,644 110 26,792 — — — — 33 17,687
1 year to 5 years 40 5,271,345 48 273,365 2 702,237 1 10 20,257 12,176,993 180 59,616 6 2,482 — 5,440 138 151,973
5 years and above 2 277,635 5 37,745 — 14,040 — — 7,172 3,995,514 10 3,335 — 400 1 64,221 5 31,960
Total 359 9,311,245 304 2,056,883 9 827,268 17,391 1,446,138 35,321 19,108,209 554 141,441 8 3,642 1 69,661 212 214,110

(` ’000)
Period Engineering Aviation Personal Accident Health Home Specialty Weather/Crop Others Total
No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount
0-30 days 198 36,462 — — 1,533 322,118 31,501 2,310,929 22 3,915 14 5,120 2,250 23,785 600 151,482 49,743 5,099,782
31days to 6 months 130 300,808 5 2,979 961 338,764 13,541 1,150,462 8 6,295 40 68,556 9,000 89,329 237 213,980 34,196 5,849,249
Annexure to Management Report

6 months to 1 year 22 235,261 6 5,708 65 48,291 496 88,287 — — 61 22,990 5,863 86,618 55 169,385 8,961 4,842,780
1 year to 5 years 21 954,429 11 60,704 53 67,057 1,144 232,539 — — 164 373,915 993 15,043 64 291,776 23,122 20,638,924
5 years and above — 101,482 2 412,514 11 12,168 235 32,606 — — 19 110,698 245 787,445 — 763 7,707 5,882,525
Total 371 1,628,442 24 481,904 2,623 788,398 46,917 3,814,824 30 10,210 298 581,278 18,351 1,002,221 956 827,387 123,729 42,313,261
(Continued)

Outstanding As on 31.03.2020 (F. Y. 2019-20) (` ’000)

Period Workmens
Fire Marine Cargo Marine Hull Motor OD Motor TP Public liability Product Liability Other Liabilities
Compensation
No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount
0-30 days 92 407,077 248 121,707 1 15 10,712 604,204 705 221,856 66 11,270 — — — — 9 6,067
31 days to 6 months 148 1,552,915 277 283,876 6 135,688 6,661 894,205 5,118 1,781,036 226 47,582 2 800 — — 52 19,807
6 months to 1 year 98 1,268,098 21 127,451 1 17,999 516 116,357 4,711 2,002,960 138 38,121 2 800 — — 37 59,946
1 year to 5 years 34 4,359,012 55 258,332 7 726,357 38 12,753 15,783 10,298,747 116 31,412 2 882 — 907 59 61,362
5 years and above 2 170,456 — 15,763 — 6,147 — — 6,034 3,110,935 5 1,994 — 400 1 64,221 3 22,396
Total 374 7,757,557 601 807,129 15 886,206 17,927 1,627,518 32,351 17,415,534 551 130,378 6 2,882 1 65,127 160 169,578

(` ’000)
Period Engineering Aviation Personal Accident Health Home Specialty Weather/Crop Others Total
No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount
0-30 days 180 26,272 — 3,876 841 178,478 25,924 1,818,897 1 — 23 7,200 18,052 247,730 509 209,805 57,363 3,864,454
31 days to 6 months 118 570,668 — 824 761 234,788 3,243 304,563 2 2,070 59 22,921 11,286 102,543 287 471,297 28,246 6,425,581
6 months to 1 year 35 472,256 7 63,990 15 12,941 273 40,495 2 495 46 282,143 18 617 22 56,532 5,942 4,561,199
1 year to 5 years 22 333,754 5 152,488 30 53,690 1,029 155,247 1 155 103 207,095 22 41 15 244,357 17,321 16,896,593
5 years and above 1 99,018 2 331,246 8 11,075 197 20,064 — — 40 26,565 245 787,445 — 265 6,538 4,667,989
Total 356 1,501,968 14 552,425 1,655 490,973 30,666 2,339,266 6 2,720 271 545,924 29,623 1,138,376 833 982,256 115,410 36,415,816

127
 Outstanding As on 31.03.2019 (F. Y. 2018-19) (` ’000)

128
Period Workmens
Fire Marine Cargo Marine Hull Motor OD Motor TP Public liability Product Liability Other Liabilities
Compensation
No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount
0-30 days 74 170,527 517 177,521 3 885 10,775 576,290 961 453,687 161 35,973 — — — — 2 12,283
31 days to 6 months 119 1,381,692 249 215,635 7 714,442 5,277 632,100 3,560 2,235,030 162 52,299 — — — — 30 53,705
6 months to 1 year 95 915,490 18 60,181 2 58,085 633 88,054 3,146 2,228,407 142 21,843 5 2,075 — 107 17 20,988
1 year to 5 years 24 4,538,649 38 197,149 3 17,664 110 25,085 14,724 10,263,020 61 17,930 2 507 — 800 52 205,200
5 years and above 4 157,108 — 14,279 1 5,527 2 1,698 3,858 2,025,014 2 455 — 400 1 64,221 2 19,146
Total 316 7,163,466 822 664,766 16 796,604 16,797 1,323,226 26,249 17,205,158 528 128,501 7 2,982 1 65,127 103 311,322

(` ’000)
Period Engineering Aviation Personal Accident Health Home Specialty Weather/Crop Others Total
No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount
0-30 days 174 80,958 — 21,431 666 169,808 3,090 206,970 4 1,448 22 10,000 240 3,838 379 80,501 17,068 2,002,120
31 days to 6 months 96 242,855 3 12,617 520 152,862 886 122,312 2 195 32 20,073 66,713 103,670 196 184,743 77,852 6,124,229
6 months to 1 year 60 279,900 5 30,109 4 6,973 28 24,372 — — 40 23,387 1,448 5,634 21 10,919 5,664 3,776,524
1 year to 5 years 29 163,605 18 244,205 — 524 4 6,116 — — 56 217,518 527 64,695 9 250,150 15,657 16,212,818
Annexure to Management Report

5 years and above 5 89,597 2 342,545 — — 1 1,491 — — 42 365,515 125 725,014 — 265 4,045 3,812,276
Total 364 856,915 28 650,908 1,190 330,167 4,009 361,261 6 1,643 192 636,493 69,053 902,851 605 526,579 120,286 31,927,968

Outstanding As on 31.03.2018 (F. Y. 2017-18) (` ’000)

(Continued)

Period Workmens
Fire Marine Cargo Marine Hull Motor OD Motor TP Public liability Product Liability Other Liabilities
Compensation
No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount
0-30 days 109 288,722 669 86,676 2 2,506 7,990 445,409 1,063 407,981 51 7,078 — — — — 14 12,495
31 days to 6 months 279 1,058,433 483 206,980 5 4,032 3,936 379,661 3,947 1,869,268 140 19,585 3 1,200 — — 16 11,444
6 months to 1 year 115 3,173,303 60 73,604 5 6,511 1,031 162,560 3,755 2,040,825 64 9,129 — — — 400 20 19,055
1 year to 5 years 39 1,765,746 38 213,830 5 26,318 489 123,020 14,543 8,321,601 78 20,215 5 1,907 — 400 49 35,736
5 years and above 1 141,282 1 44,403 — 4,184 — — 2,866 1,214,447 1 100 — 400 1 64,221 9 19,221
Total 543 6,427,487 1,251 625,494 17 43,552 13,446 1,110,650 26,174 13,854,123 334 56,107 8 3,507 1 65,021 108 97,951

(` ’000)
Period
Engineering Aviation Personal Accident Health Home Specialty Weather/Crop Others Total

No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount
0-30 days 621 56,511 3 1,503 1,235 219,528 3,651 253,983 5 831 5 3,500 697 204,084 134 51,000 16,249 2,041,808
31 days to 6 months 446 212,253 5 127,547 570 275,797 1,190 203,760 10 5,392 8 3,803 790 6,372 154 143,205 11,982 4,528,733
6 months to 1 year 56 100,631 7 59,812 26 9,093 50 34,941 3 2,668 31 14,429 14 702 28 61,956 5,265 5,769,619
1 year to 5 years 42 233,130 33 219,249 4 3,277 87 63,763 — — 92 314,710 250 795,330 5 112,768 15,759 12,251,000
5 years and above — 68,097 2 340,378 — — — — — — 50 367,575 — — — 265 2,931 2,264,574
Total 1,165 670,621 50 748,488 1,835 507,694 4,978 556,447 18 8,891 186 704,018 1,751 1,006,489 321 369,195 52,186 26,855,734

14th Annual Report 2020-21


Outstanding As on 31.03.2017 (F. Y. 2016-17) (` ’000)
Period Workmens
Fire Marine Cargo Marine Hull Motor OD Motor TP Public liability Product Liability Other Liabilities
Compensation
No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount
0-30 days 143 337,782 690 62,544 — — 7,822 505,725 1,240 226,548 32 4,318 — — — 800 11 6,105
31 days to 6 months 250 791,483 363 255,051 8 76,666 3,329 325,161 3,974 1,289,453 123 18,921 3 1,600 1 400 18 6,733
6 months to 1 year 107 3,928,085 69 118,005 3 1,140 708 130,171 4,064 1,673,155 108 18,624 1 600 — — 15 74,277
1 year to 5 years 50 1,751,185 33 233,847 3 13,930 464 132,365 14,281 6,319,350 285 42,421 11 4,077 3 1,200 85 56,325
5 years and above 1 69,201 2 5,450 — 9,151 2 1,698 2,152 725,111 5 755 — — 2 65,521 3 21,209
Total 551 6,877,736 1,157 674,898 14 100,887 12,325 1,095,119 25,711 10,233,617 553 85,039 15 6,277 6 67,921 132 164,649

(` ’000)
Period Engineering Aviation Personal Accident Health Home Specialty Weather/Crop Others Total
No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount
0-30 days 1,963 66,441 1 16,507 1,126 165,942 2,996 210,933 7 2,594 2 1,220 58 44,520 80 31,743 16,171 1,687,408
Annexure to Management Report

31 days to 6 months 798 189,448 8 97,007 536 153,359 1,850 282,286 9 1,907 49 20,800 6 9,871 172 284,035 11,497 3,804,181
6 months to 1 year 47 188,093 3 28,369 6 2,014 157 21,363 2 2,510 36 13,420 17 294 17 24,658 5,360 6,224,777
1 year to 5 years 40 272,353 27 212,367 2 6,300 8 11,747 — — 181 267,631 254 796,215 6 35,251 15,733 10,156,564
5 years and above 1 61,325 — 299,097 — — — — — — 33 51,984 — — — 927 2,201 1,311,428
(Continued)

Total 2,849 777,660 39 653,347 1,670 327,615 5,011 526,328 18 7,011 301 355,055 335 850,900 275 376,613 50,962 23,184,358

129
 Annexure - 2

130
Details of Average Claims Settlement Time
Line of Business F.Y 2020-21* F.Y 2019-20 F.Y 2018-19 F.Y 2017-18 F.Y 2016-17
No. of Claims Average No. of Claims Average No. of Claims Average No. of Claims Average No. of Claims Average
Settlement Time Settlement Time Settlement Time Settlement Time Settlement Time
(Days) (Days) (Days) (Days) (Days)
Fire 1,853 75 1,762 4 1,925 87 1,645 114 920 245
Marine Cargo 11,103 12 12,471 5 15,068 18 12,882 44 3,742 139
Marine Hull 8 461 9 4 6 448 12 245 3 128
Motor OD 356,087 17 487,550 2 412,047 15 274,597 21 98,738 50
Motor TP 4,030 901 3,308 29 6,885 611 8,020 557 3,196 1,014
Workmens Compensation 314 198 564 2 330 183 123 212 133 337
Public liability 2 23 4 5 — — — — — —
Product Liability — — — — — — — — — —
Other Liabilities 6 175 19 26 19 171 15 281 4 408
Engineering 43,585 3 50,330 1 27,669 7 14,409 30 2,013 304
Aviation 1 426 — — 3 353 1 168 1 184
Annexure to Management Report

Personal Accident 7,635 28 12,107 3 10,460 21 8,406 24 2,160 44

Health 425,183 13 197,022 5 152,051 12 93,388 21 24,480 39
Home 172 18 31 3 33 44 30 111 43 217
Specialty 42 163 14 2 10 518 7 284 2 580
(Continued)

Weather/Crop 1,410,985 3 703,193 1 1,228,191 3 61,108 3 3,170 11

Others 26,550 14 27,917 6 12,112 9 7,335 10 1,383 112
Total 2,287,556 1,496,301 1,866,809 481,978 139,988
*Date of intimation of claims is considered for computation of ‘Average Settlement Time’ basis Authority’s mail dated 26th March, 2021.

14th Annual Report 2020-21

Glossary

Sr. No. Terms Description

1 Accretion Incremental growth over a period of time.
2 Actuary A person skilled in determining the present effects of future contingent
events or in finance modelling and risk analysis in different areas of
insurance, or calculating the value of life interests and insurance risks, or
designing and pricing of policies, working out the benefits, recommending
rates relating to insurance business, annuities, insurance and pension
rates on the basis of empirically based tables and includes a statistician
engaged in such technology, taxation, employees’ benefits and such
other risk management and investments and who is a fellow member of
the Institute of Actuaries.
3 Appropriations Money set aside for specific purpose.
4 Bad debts written off Bad debt expense is the amount of an account receivable that is
considered to be not collectible.
5 Book Value Per Share This is computed as networth divided by number of outstanding shares.
6 Company or We or Us Means HDFC ERGO General Insurance Company Limited (IRDAI Regn. 146).
7 Claim A request by a policyholder for payment following the occurrence of an
insured event. A claim does not necessarily lead to a payment. 
8 Co-insurance Method of sharing insurance risk between several insurers. The
policyholder will deal with the Lead insurer who issues documents and
collects premiums. The policy will detail the shares held by each company. 
9 Combined Ratio Incurred Claims Ratio plus Expense Ratio.
10 Commission paid Amount paid to intermediaries for acquiring business.
11 Deferred Tax Asset An asset that is used to represent lower amount of tax that a company will
have to pay in a later tax period.
12 Deferred Tax Liability A tax liability that a company owes and does not pay at the current point,
although it will be responsible for paying it in a later tax period.
13 EPS Earning Per Share (EPS) is arrived at by dividing Net Profit After Tax by the
weighted average number of shares.
14 Expense Ratio Expense Ratio is a proportion of the sum of all expenses (acquisition &
operating) and net commission received on reinsurance to net written
premium expressed as a percentage.
15 Fair Value Change Account It represents unrealized gains or losses at the end of the period with
respect to listed equity securities, derivative instruments and Mutual
Fund investments.
16 Gross Written Premium (GWP) Gross Written Premium is the sum of gross direct premium and the
reinsurance premium accepted.
17 Incurred But Not Reported A reserve created by insurer and certified by an Actuary to cover the
(IBNR) estimated cost of losses that might have incurred but not yet reported.
18 Incurred But Not Enough Losses that might have incurred but have not yet been enough reported.
Reported (IBNER)
19 Incurred Claims It is claims paid during the period plus the change in outstanding claims
at the end of the period versus at the beginning of the period.
20 Incurred Claims Ratio Proportion of incurred claims to premiums earned during a period.

131
 Sr. No. Terms Description
21 Industry Market Share Proportion of gross written premium of an insurer to the total gross
premium written of the General Insurance Industry - expressed as a
percentage.
22 IRDAI Insurance Regulatory and Development Authority of India (IRDAI)
established under IRDA Act, 1999 to protect the interests of the
policyholders, to regulate, develop, promote and ensure orderly growth of
the insurance industry.
23 Loss on sale Loss on sale of assets when an asset is sold below its book value.
24 Net Premiums Earned Net premium written adjusted for the change in unexpired risks reserve.
25 Net Premiums Written Gross written premium less reinsurance premium ceded.
26 Net Worth Paid up share capital (+/-) reserves/ accumulated losses (-) preliminary
expenses.
27 Operating Expenses Expenses for carrying out insurance / reinsurance business.
28 Operating Profit or Loss Surplus/ Deficit from carrying out insurance business activities i.e. profit
before tax excluding investment income and other income.
29 Policy The legal document issued by an Insurance Company to a policyholder
which outlines the terms and conditions of the insurance.
30 Policy Holder [Insured] A person who pays a premium to an insurance company in exchange for
the insurance protection provided by a policy of insurance.
31 Premium Deficiency Premium deficiency is recognised as the sum of expected claim costs,
related expenses and maintenance cost exceeds related reserve for
unexpired risks.
32 Reinsurance Transfer of an insurance (or part of the risk covered) from one insurance
company to another for a premium, not necessarily with the knowledge
of the policyholder.
33 Retention The amount of risk retained by the insurer on its own account.
34 Solvency Margin A ratio of Available Solvency Margin (ASM)/ Required Solvency Margin
(RSM) (calculated as per IRDAI Guidelines).
35 Technical Reserves Amount set aside in the balance sheet to meet liabilities arising out of
insurance contracts, including claims provision (whether reported or
not) and reserve for unexpired risks.
36 Treaty Reinsurance It means a reinsurance arrangement between the cedant and the
reinsurer, ususally for one year or longer, which stipulates the technical
particulars and financial terms applicable to the reinsurance of defined
class or classes of business.
37 Underwriting The process of selecting applicants for insurance and classifying them
according to their degrees of insurability so that the appropriate premium
rates may be charged. The process includes rejection of unacceptable
risks.
38 Unexpired Risks Reserve Portion of premium with respect to the unexpired insurance contracts as
at the end of the period.
Note: The definitions of the ratios in the glossary above are used in this report unless specifically defined otherwise.

132 14th Annual Report 2020-21

 Our Products
Retail Products Rural Products
Motor Insurance Home Insurance Cattle Insurance
Health Insurance Personal Accident Weather Insurance
Travel Insurance Crop Insurance

Overseas Travel Insurance

Liability Insurance
Casualty and Specialty Lines Financial Lines
n Product Liability n Directors and Officers Liability
n Public Liability and Public Liability Act n Venture Capital Asset Protection Policy
n Errors and Omission (Tech) n Employment Practices Liability
n Commercial General Liability n Multimedia Liability Insurance
n Employee’s Compensation Insurance
n Commercial Crime Insurance
n Professional Indemnity
n Cyber Security Insurance Policy

Property Insurance Accidental and Health Insurance

Standard Fire and Special Perils Policy Group Travel
Consequential Loss (Fire) Insurance Group Mediclaim
Industrial All Risks Policy Group Personal Accident
Business Suraksha Classik – Laghu Udyam Group Critical Illness Insurance
Group Hospital Cash Benefit
Engineering Insurance
Erection All Risks Insurance Marine Cargo Insurance
Contractor’s All Risk Insurance
Marine Specific Policy
Advance Loss of Profit
Marine Open Policy
Contractor’s Plant and Machinery Insurance
Sales Turn Over Policy
Machinery Breakdown Insurance
Electronic Equipment Insurance
Regulatory Products
Boiler and Pressure Plant Insurance
Health
Innovative Covers Arogya Sanjeevani Policy, HDFC ERGO5
E@Secure Saral Suraksha Bima, HDFC ERGO
Drone Insurance Corona Kavach Policy, HDFC ERGO
Business Kisht Suraksha Property Insurance
Mosqito Disease Protection Policy Corona Rakshak Policy, HDFC ERGO
TravelX - Dynamic Flight Delay & Sportify HDFC ERGO - Bharat Griha Raksha
My: Health Comprehensive Suraksha (Group) - HDFC ERGO - Bharat Laghu Udyam Suraksha
Critical Illnesses Sachet HDFC ERGO - Bharat Sookshma Udyam Suraksha

14th Annual Report 2020-21 133

 Customer Testimonials

Arun Sankar K
Health Insurance Customer | Policy No. 2805203720461200

The whole process has been hassle-free and we are extremely satisfied with our experience with HDFC ERGO. Didn't
perceive any particular area of concern or requiring improvement. Keep up your good work. Thank you!

Nataraj P
Motor Insurance Customer | Policy No. 2311202452185801

Thank you for a professional claim expericence. It is great to have associated with HDFC ERGO.

Shaik Reshma
Motor Insurance Customer | Policy No. 2311201759167502

I am so happy with the services provided. Response was so fast through the WhatsApp number at the HDFC ERGO
Mobile App.

Joseph Dias
Health Insurance Customer | Policy No. 2952201017032804

I was helped on the phone beyond MEASURES at every step and I hope this continues.

Rajesh Kalra
Motor Insurance Customer | Policy No. 2311100301017301

Delightful experience of my transaction conducted via e-mail. Thank you HDFC ERGO.

Abhinav Mishra
Health Insurance Customer | Policy No. 2805203530570500

I am mighty pleased with the resolution time. It was overall swift. Thanks

5
134 14th Annual Report 2020-21
 Customer Testimonials

Vipul V Jobanputra
Health Insurance Customer | Policy No. 2805203652980100

There is nothing better than HDFC ERGO General Insurance in industry.

MD Asif Equbal Khan

Health Insurance Customer | Policy No. 2952201297427503

Great service from HDFC ERGO, you are the best as always. Keep up the good work!

Vyaghreswarudu Akella
Health Insurance Customer | Policy No. 2825100373435501

HDFC ERGO provided very fast and nice service. I will definitely recommend the same.

Jitesh Ajmera
Home Shield Insurance Customer | Policy No. 2990100606606200

Excellent and prompt service. Fully satisfied.

Prasad Ramakant Pangerkar

Home Suraksha Plus Insurance Customer | Policy No. 2918201725940500

I had a nice experience with HDFC ERGO. Good quality service.

Anand Kumar Kesari

Health Insurance Customer | Policy No. 2805203608295500

I really appreciate the way HDFC ERGO has help me in my difficult time. I would recommend to my friends & family to
choose HDFC ERGO only.

14th Annual Report 2020-21 135

HDFC ERGO General Insurance Company Limited
Registered & Corporate Office: HDFC House, 1st Floor, 165-166 Backbay Reclamation,
H. T. Parekh Marg, Churchgate, Mumbai – 400 020.

Customer Experience Management, Customer Happiness Center: D-301, 3rd Floor,

Eastern Business District (Magnet Mall), LBS Marg, Bhandup (West), Mumbai - 400 078.

Trade Logo displayed above belongs to HDFC Ltd and ERGO International AG and used
by the Company under license. CIN: U66030MH2007PLC177117. IRDAI Reg. No. 146.

Phone E-mail Website

+91 22 6638 3600 care@hdfcergo.com www.hdfcergo.com