'There is still room for us to reduce commission'

QA Tarun Chugh, managing director and chief executive officer (MD & CEO), Bajaj Life Insurance, in an online interview with Aathira Varier and Subrata Panda, speaks about how the company has navigated challenges related to withdrawal of input tax credit (ITC) and life after Allianz’s exit from the joint venture, among others things. Edited excerpts:

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How do you see the company’s performance for the quarter?

After the surrender value revision, we had a significant change in our business models. We reconfigured our product structures and product mix, brought our commissions down, deferred commissions, among other things. This quarter, our margins have gone up significantly, our value of new business (VNB) bottom line is up by 47 per cent to ₹512 crore, and new business premium (NBP) has gone up by 31 percent till September. We are the second largest in terms of product mix, where term is the highest. On an annual ised premium equivalent (APE) basis, it is close to 10 per cent, which is quite encour aging. It was under 5 per cent last year. We should retain our product mix, grow our term slightly further, and we also brought down our unit-linked products (Ulips) for the first half. This has been the core transi tion. There is a goods and services tax (GST) impact on ITC because it is some thing that we need to work on, and that would be the focus of the entire sector. However, I do expect that the trajectory of margins is on the upside.

How is the company mitigating the impact of withdrawal of ITC?