Go Digit General Insurance Ltd Management Discussions

FY 2023-24

"Go Digit General Insurance Limited ("GDGIL" or "Digit") is a subsidiary of Go Digit Infoworks Services Private Limited ("GDISPL"). "GDISPL" is promoted by Kamesh Goyal, Oben Ventures LLP and FAL Corporation ("FAL"). FAL is a wholly owned subsidiary of Fairfax Financial Holdings Limited ("Fairfax"). Fairfax is a holding company which, through its subsidiaries, is primarily engaged in property and casualty insurance and reinsurance and the associated investment management. Fairfax is incorporated under the laws of Canada and listed on the Toronto Stock Exchange."

Industry Overview

During FY 2023-24, the non-life insurance industry grew by 12.8% to 2.90 trillion from 2.57 trillion in FY 202223. Private multiline insurers grew by 17.5%, public sector multiline insurers grew by 9.0%, Stand-alone health insurers ("SAHI") grew by 26.2% and specialized insurers de-grew by 29.3%. Market share for Private multiline insurers, public sector multiline insurers, SAHI and specialized insurers was 53.5%, 31.2%, 11.4% and 3.9% respectively compared to 51.4%, 32.3%, 10.2% and 6.2% respectively in FY 2022-23.

Health business (including personal accident segment) grew by 20.2% to 1.09 trillion from 0.91 trillion in FY 2022-23, motor grew by 12.9% to 918 billion from 813 billion in FY 2022-23. Commercial segments, which include Fire, Marine, Engineering, Liability and Aviation, grew by 7.7% to 420 billion from 390 billion in FY 202223. Other miscellaneous segment grew by 0.7% to 392 billion from 389 billion in FY 2022-23.

During March 2024, IRDAI had notified eight principle- based consolidated regulations, covering pivotal domains such as safeguarding of policyholders interests, rural and social sector and motor third party obligations, Bima Sugam-(electronic insurance marketplace), insurance products and operation of foreign reinsurance branches, as well as aspects of registration, capital, actuarial, finance, investment and corporate governance ("Regulatory revamp"), replacing 34 earlier regulations that currently govern these domains. These key regulations will be effective from 1 Apr 2024.

Performance Review

GDGIL recorded premium of 9,016 crore during FY 2023-24 vs. 7,243 crore during FY 2022-23, registering a growth of 24.5%, which was higher than private sector growth of 17.5%. Following is the GWP mix and growth of the Company during last 3 financial years.

Following is the snapshot of the Companys financial and operational performance for FY 2023-24

Notes:

1. Data for the period FY 2024.

2. Market share is based on our Gross Written Premium of FY 2024.

3. Data as of 31 Mar 2024.

4. Customers/people covered under policies issued since inception of operations in 2017 till 31 Mar 2024.

We aim to make insurance simple. Through innovation and transparency, we believe in delivering a seamless customer experience journey in a significant financial product an individual would purchase in their lifetime. We are one of the leading digital full stack insurance companies, leveraging our technology to power what we believe to be an innovative approach to product design, distribution and customer experience for non-life insurance products. We offer motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products, which the customers can customize to meet their needs.

The Companys technology platform supports its product design by enabling the incorporation of a modular product architecture and provides the backbone for its application program interfaces ("API"), applications, portals and website that allow customers and partners to engage with the Company conveniently. We are one of the leading digital full stack insurance companies, leveraging our technology to power what we believe to be an innovative approach to product design, distribution, and customer experience for non-life insurance products. We have end- to-end digital capabilities and a digital first approach across customers insurance value chain.

Outlook, Opportunities and Threats

The non-life insurance penetration in India stayed at approx. 1% during CY 2022 and CY 2021 and non-life insurance density for CY 2022 was US$ 22 per capita.¹ Based on rising level of young population and increasing disposable income, the Company is well placed to tap the growing market with its modular product design, technology-enabled distribution and processes and the Companys mission to make insurance simpler. The customer experience is core to what we do. Insurance products have historically been hard to understand and sign up for, and making and settling claims has been cumbersome. We are dedicated to establishing trust and promoting transparency in our relationships with our customers by simplifying insurance and offering easy- to-understand, customizable products that enhance our customers experience.

The Company is invested in Artificial Intelligence and Machine Learning to improve the customer journey across products, product underwriting and claim assessment. The Company believes that these investments should aid in increasing customer satisfaction while also generating better returns for shareholders. Our use of technology and AI-driven microsystems, or bots, to streamline a major amount of our operations across the onboarding, underwriting, servicing and claims processes allows us to deliver a simple and tailored customer and partner experience while keeping our employee base lean. In addition, while our approach requires a certain level of ongoing investment in technology and headcount over time, we expect our overall marginal cost spent to support new business as a percentage of our premiums will continue to decline and ultimately result in increased profitability of our insurance operations as we scale.

We are dedicated to establishing a "partnership" in our relationship with our distributors. Our distribution partners include individual agents, POSPs, corporate agents, motor insurance service providers ("MISPs") and brokers. Our partners range from older agencies to new non-bank financial companies, and each has a different way of operating and a different level of technical capability. We understand these differences and extend our technology and expertise to our distribution partners to develop customized solutions that provides them with the tools, products, information and support to effectively target and service customers.

Loss reserves are based on estimates as to future claims liabilities and if they prove inadequate, it could lead to further increases in reserves and materially adversely affect our results of operations. Catastrophic events, including natural disasters, terrorist attack or nuclear disaster, could materially increase our liabilities for claims by customers.

Way forward

• Provide relevant, transparent and customizable coverage to policyholders

• Empower distribution partners through innovative use of technology through customized integrations and selfservice modules

• Leverage databank, utilize Artificial Intelligence and Machine learning to enable algorithms driven strategic decisions Key Financial Information

2Non-annualized