(‘MFSL’ or ‘the Company’) is a part of the $2.5 billion Max Group. It owns and actively manages a majority stake in Max Life Insurance Company Limited (Max Life), India’s largest non-bank owned, private life insurance company. Max Life is a joint venture with Mitsui Sumitomo Insurance (MSI), a Japan-headquartered global leader in life insurance. After the demerger of the erstwhile Max India Limited in January 2016, MFSL became the first listed company in India focusing exclusively on life insurance, thus providing an opportunity for Indian investors to get access to a unique pure life insurance business.
The Company currently holds 72.52% stake in Max Life. In FY 2019-20, MFSL reported consolidated revenues of ` 18,242 crore, down 7% over the previous year, due to volatility in capital markets in Mar’20 because of COVID. The Company reported consolidated Profit after Tax of ` 273 crore, 34% lower compared to the previous year, largely due to shift in product mix towards Non-Par products, investments in proprietary channel, provision for impairment and one-time tax expense on settlement of tax dispute. MFSL’s sole operating subsidiary, Max Life, demonstrated Individual Adjusted Sales of ` 4,116 crore in FY 2019-20, growing 5% over the previous year, full year growth impacted by COVID-19 in Mar’20, but Max Life preserved its market share at 10%.
Proprietary channel delivered 10% growth in FY20 faster than Banca growth of 3% on an APE basis. Share of proprietary channels in sales increased to ~31% in FY20 from 29% in FY19. Axis bank delivered 5% growth in FY20, though Yes Bank’s sales was down by 2% in FY20. Overall Protection sales (including Individual & Group) grew 42% y-o-y. Max Life’s Gross Written Premium (GWP) grew a strong 11% to Rs. 16,184 Cr and Renewal Premium stood at ` 10,600 crore, increasing 13% over the previous year. Shareholders’ Profit Before Tax was ` 595 crore, marginally down 4% than the previous year, largely due to shift in product mix towards Non-Par products, investments in proprietary channel and provision for impairment.
Max Life’s MCEV (Post dividend payout) as at 31st Mar 2020 at Rs. 9,977 Cr, operating RoEV at 20.3%. Structural NBMs (pre-cost overrun) have expanded by 180 bps to 24.3%, however Actual NBMs (post cost overrun) at 21.6% are in line with previous year. Value of New Business (post overrun) has grown 5% to Rs 897 Cr driven by increase in proportion of Non-Par savings business but partly offset by lower new sales growth and acquisition cost overrun.
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MAX FINANCIAL SERVICES LIMITED, L21, Max Towers, Plot No. C-001/A/1 Sector – 16B, Noida-201301, Uttar Pradesh
