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Max Financial Services Ltd.

BSE: 500271 Sector: Financials
NSE: MFSL ISIN Code: INE180A01020
BSE 00:00 | 19 Feb 516.45 14.10
(2.81%)
OPEN

511.70

HIGH

522.30

LOW

502.70

NSE 00:00 | 19 Feb 516.75 14.60
(2.91%)
OPEN

502.00

HIGH

523.00

LOW

501.35

OPEN 511.70
PREVIOUS CLOSE 502.35
VOLUME 90746
52-Week high 567.90
52-Week low 370.00
P/E 144.26
Mkt Cap.(Rs cr) 13,918
Buy Price 516.45
Buy Qty 2316.00
Sell Price 522.00
Sell Qty 16.00
OPEN 511.70
CLOSE 502.35
VOLUME 90746
52-Week high 567.90
52-Week low 370.00
P/E 144.26
Mkt Cap.(Rs cr) 13,918
Buy Price 516.45
Buy Qty 2316.00
Sell Price 522.00
Sell Qty 16.00

Max Financial Services Ltd. (MFSL) - Chairman Speech

Company chairman speech

Dear Shareholders

As you may recall last year we had outlined a renewed growth plan for Max FinancialServices Limited's (MFSL) sole operating subsidiary Max Life Insurance Company (Max Life).We shared with you Max Life's ambitious plans for its proprietary channels to nearlydouble its offices and rapidly increase its agency force while continuing to develop itsdigital and direct sales channels.

It gives me immense satisfaction to report that the Company has successfully executedits growth initiatives and has also grown faster than the life insurance sector. For MFSLFY 2019 has been synonymous with meeting and exceeding expectations and achieving newsuccess milestones.

Max Life's performance was a combination of stellar effort by its team along with asecular uptick in the Indian life insurance sector - a phase that started immediatelyafter demonetization and led to savings shifting from physical assets to financial assets.This high point of India's life insurance industry has proved to be immensely beneficialfor Max Life who outpaced the industry with a growth of 21%. Max Life now commands nearly9.7% of the private life insurance market share.

Driven by Max Life's financial performance MFS reported consolidated revenues ofर 19501 crore showcasing a growth of 19% over the previous year. Its consolidatedProfit After Tax however was 6% lower than last year at र 416 crore largely due toone-time expenses for pursuing an inorganic opportunity for Max Life and the impact ofadopting accounting methodology IndAS in FY2019.

Max Life's success has been anchored by robust performance traversing multiplebusiness metrics. The Company demonstrated growth across channels with Gross WrittenPremium of र 14575 crore growing 17% over the previous year. New Business Premiumstood at र 5160 crore achieving a growth of 19% over the previous year. It alsoreported Market-Consistent Embedded Value (MCEV) of र 8938 Crore with an OperatingReturn on EV (RoEV) of 22%. The Value of New Business (VNB) written during FY2019 wasर 856 Crore growing 30% over the previous year and the New Business Margin (NBM)stood at 22% 150 bps higher compared to the previous year. Max Life has also set abenchmark as a leader among industry peers with a Claims Paid Ratio of 98.7% animprovement of 48 bps from last year.

The resolute focus on proprietary channels led to a robust 29% growth in new businessfrom them. Digital and direct online sales in particular now account for nearly 15% ofMax Life's customers for the year.

The focus on proprietary channels did not however come at the cost of bancassurancewhich also witnessed a strong 18% growth on a relatively large base. Its bancassurancerelationship with Axis Bank continues to be one of the fastest growing such partnershipsin the Indian life insurance industry. Despite an open architecture set up at Axis BankMax Life continued to garner strong business volume at the bank in both individual andgroup categories. To enhance value creation for all its stakeholders Max Life is activelyexploring longer term partnership options that can further solidify its partnership withAxis Bank. At the same time Yes Bank's exclusive relationship with Max Life alsocontinued to gain scale driven by growth of 34% in new business.

Great Place to Work Institute in its annual listing in 2019 has ranked Max LifeInsurance as the only life insurer amongst India's ‘Top 100 Great Places to WorkFor'. This is a strong validation of the Company's talented & highly motivated teamand a great work culture.

After exhibiting consistent financial growth across various parameters of businesshealth and a steadfast commitment to securing the financial future of its customers MaxLife now has a clear focus to achieve its 25-25-25 vision by FY 2022. In simple terms theCompany is targeting 25% New Business Margin Return on Embedded Value and 25%growth in Value of New Business. This will be accomplished through a well-defined strategyencompassing digitisation a superior customer service experience reinvigoration of itsproprietary channels and an increased focus on protection products. The Company willcontinue to leverage smart technologies to ease the policy issuance journey for thecustomer and will deploy Artificial Intelligence (AI) in its customer service processes.

We are confident that Max Life will be able to achieve these milestones especiallyagainst the backdrop of a promising future for the Indian life insurance industry. Thesector has the potential to grow at an impressive pace of 12% to 15% in the coming two -three years primarily powered by a wave of confidence in financial savings andinvestments a healthy demand for protection and long-term saving products as well asincreased awareness around the importance of financial planning.

It is our firm belief that given Max Life's top quartile position in the sector and awell articulated strategy backed by strong execution muscle we will achieve the newgrowth milestone mentioned earlier in a record time. This achievement will reap immensebenefits for you our shareholders. We look forward to your continuous support and beliefin the Company's vision and thank each and every one of you for bestowing your faith inall our endeavours.

With Best Wishes and Kind Regards
Analjit Singh Mohit Talwar
Founder & Chairman Managing Director