Max Life Results Highlights (9MFY22)
Total Assets Under Management (AUM): Rs. 102,471 Cr, Up 21%
Gross Written Premium: Rs. 14,415 Cr, Up 21%
Embedded Value at Rs. 13,412 Cr; Operating RoEV at 19.2%**
Value of New Business at Rs. 942 Cr, Up 20%
Max Financial Services Limited (MFSL) today announced its financial results for the quarter (Q3) and nine months of the financial year FY22 (9MFY22). During 9MFY22, MFSL reported consolidated revenues^ of Rs. 14,160 Cr., a growth of 21% from the corresponding year-ago period. The consolidated Profit Before Tax (PBT) in 9MFY22 stood at Rs. 236 Cr., lower as against previous year primarily due to COVID-19-related provision in 9MFY22 and one-off items in the same period last year.
MFSL’s sole operating subsidiary, Max Life, continued its growth journey by maintaining a 5-year CAGR of 18% on Individual New Business compared with 13% 5-year CAGR of the top 3 listed life insurers. It has also consistently been a part of the top quartile of life insurers in India. Further, Max Life New Business sales (on APE* basis) grew 23% on a year-on-year basis to Rs. 3,751 Cr. in 9MFY22 and 30% to Rs. 1,594 Cr. in Q3FY22, majorly driven by strong growth across channels.
Further, the renewal premium income (including group) rose 19% to Rs. 9,128 Cr. from Rs. 7,669 Cr. in the year-ago period. This propelled a 21% increase in gross written premium to Rs. 14,415 Cr in 9MFY22 from Rs. 11,192 Cr. in FY21.
This strong performance was despite a more severe impact of the second wave of COVID-19 compared with the first wave. Claim experiences were higher than expected across all lines of businesses with significantly higher variance for Protection and Group businesses. Max Life maintained its 4th rank in the private industry.
In terms of industry performance, on 2-year CAGR, Max Life surged 16% compared with the 11% growth in the overall private industry.
Max Life has maintained a sharp focus on balanced product mix, which has aided a 20% growth in the Value of New Business (VNB) to Rs. 942 Cr. in 9MFY22 from Rs. 788 Cr in the year-ago period. VNB grew at a CAGR of 27% over last five years.
The higher growth in VNB figures was due to higher sales and change in business mix, thus highlighting the strong growth momentum of Max Life. The New Business Margin (NBM) for 9MFY22 was 25.1% and in line with the FY21 margins.
Max Life reported an Embedded Value (EV) of Rs. 13,412 Cr. in 9MFY22 – an uptick of 19% from Rs. 11,723 Cr. in the year-ago period driven by growth in value of new business and quality of in-force business. The Operating Return on EV (RoEV) in 9MFY22 stood at 19.2%, a spurt of 120 basis points**. The Assets Under Management (AUM) in the first nine months of FY22 advanced 21% to Rs. 1.02 trillion from Rs. 84,724 Cr in the year-ago period.
Max Life conducted the ‘India Retirement Index Study’ (IRIS) in partnership with Karvy Insights. India’s Retirement Index stood at 44 in terms of health and financial preparedness and is a key retirement concern amongst Indians. It also released its ESG Report 2021 during the quarter under review, which focuses on the company’s transition to become one of the most sustainable workplaces that provide a conducive environment for the growth of its employees.
Lastly, following the appointment of Max Life as a ‘Sponsor’ of the Pension Fund, the formation of the subsidiary is underway, and it has sought IRDAI’s permission to set up a new company ‘PFM’ in line with the regulatory requirements.
Mr. Mohit Talwar, Managing Director, Max Financial Services, said, “Our robust performance in 9MFY22 and Q3FY22 was driven by our growth in proprietary channels, spurt in Banca channels and continued leadership in protection sales in e-commerce. Our constant endeavors towards customers through innovative products such as the Smart Wealth Income plan in Q3 FY22 worked well for us despite the immense pressure on the overall sector due to the COVID-19 provisioning.”
He added, “Further, the launch of our ESG Report highlights the vision and mission of the company to become one of the most sustainable workplaces in the time, and we are looking forward to it.”
About Max Financial Services Limited
Max Financial Services Limited (MFSL) is part of India’s leading business conglomerate – the Max Group. Focused on Life Insurance, MSFL owns and actively manages an 81.83% majority stake in Max Life Insurance, India’s largest non-bank, private life insurance company.
MFSL recorded consolidate revenues of Rs. 31,288 Cr. during FY21 and a Profit After Tax of Rs. 560 Cr.
The company is listed on the NSE and BSE. Besides a 14.7% holding by Analjit Singh and sponsor family, some of the other group shareholders include MSI, Ward Ferry, New York Life, Baron, Vanguard, Jupiter, Blackrock, and the Asset Management Companies of Nippon, HDFC, ICICI Prudential, Motilal Oswal, Aditya Birla Sun Life, Mirae, DSP and Kotak.
About Max Life Insurance Company
Max Life is the sole operating subsidiary of Max Financial Services Limited. Max Life – a part of the $4-Bn Max Group, an Indian multi business corporation – is India’s largest non-bank private life insurer and the fourth largest private life insurance company.
On April 6, 2021, Axis Bank Limited, India’s third-largest private sector bank, together with its subsidiaries Axis Capital Limited and Axis Securities Limited (collectively referred to as “Axis Entities”) became the co-promoters of Max Life. This was after completion of the acquisition of 12.99% stake collectively by the Axis Entities in Max Life.
Under the deal, the Axis Entities have a right to acquire an additional stake of up to 7% in Max Life, in one or more tranches, subject to regulatory approvals.
Max Life offers comprehensive protection and long-term savings solutions, through its multichannel distribution including agency and third distribution partners. Max Life has built its operations over almost two decades through need-based sales process, a customer-centric approach to engagement and service delivery and trained human capital. It has 358 branch units across India as of March 31, 2021.
^ Excluding investment income
* Annual Premium Equivalent (APE) is calculated as 100% of regular premium + 10% of single premium.
** Before COVID impact