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Max Financial Services Ltd.

BSE: 500271 Sector: Financials
NSE: MFSL ISIN Code: INE180A01020
BSE 00:00 | 19 May 707.75 -29.60
(-4.01%)
OPEN

717.00

HIGH

733.00

LOW

703.35

NSE 00:00 | 19 May 708.10 -27.30
(-3.71%)
OPEN

725.00

HIGH

733.70

LOW

703.50

OPEN 717.00
PREVIOUS CLOSE 737.35
VOLUME 12208
52-Week high 1147.90
52-Week low 697.05
P/E 238.30
Mkt Cap.(Rs cr) 24,424
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 717.00
CLOSE 737.35
VOLUME 12208
52-Week high 1147.90
52-Week low 697.05
P/E 238.30
Mkt Cap.(Rs cr) 24,424
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Max Financial Services Ltd. (MFSL) - Chairman Speech

Company chairman speech

The conclusion of our joint venture with Axis Bank the third largest bank in India inApril this year once again proved our mettle in forging long-standing partnerships andbusiness responsibilities that pave the way for a tactical and strategic edge over ourpeers in a highly competitive sector.

Max Life was ranked #1 in customer loyalty (based on the annual syndicated survey ofpolicyholders by Kantar) and ranked 2nd in customer grievances incidence rate (Q3 publicdisclosures) with decade- low mis-selling count and incidence rate.

Dear Shareholders

Greetings !

Success is not an overnight achievement but a culmination of well-considered andcreative ideas executed in the face of adversities and tribulations with methodicaldexterity to accomplish something incredible. The year gone by has been one- of-a-kind forus at Max Financials replete with challenges arising from the Covid-19 pandemic but alsoaccompanied with immense hope possibilities and perseverance.

the conclusion of our joint venture with Axis Bank the third largest bank in India inApril this year once again proved our mettle in forging longstanding partnerships andbusiness responsibilities that pave the way for a tactical and strategic edge over ourpeers in a highly competitive sector.

taking the decade-long relationship forward Axis Bank along with its subsidiariesAxis Capital Limited and Axis Securities limited acquired a 12.99% stake in Max life tobecome co-promoters at India's fourth largest private insurance firm. Axis entities canfurther increase their stake by acquiring another 7% in the times to come.

The idea behind the partnership - solidifying our collaboration with Axis Bankproviding long-term saving and protection products to nearly two million customerspermanently addressing the uncertainty around Max Life's distribution and consolidatingour position among the peers - was simple yet pivoted on our strong fundamentals of"sevabhav" credibility and excellence.

Bringing a partner of as high a pedigree as Axis Bank on board during such uncertaintimes was one of the standout achievements last year.

The team at Max Financials and Max Life guided by the senior leadership workedtirelessly over the years to carefully prune the intricacies of the joint venture tounlock the vast potential evident from the valuation re-rating of Max Financial by almost2.5x and generation of a total premium to the tune of over Rs. 40000 crore from thisrelationship since inception.

The Axis Bank joint venture is an extension of Max Group's rich tradition and dynamichistory of collaborating with some of the finest and most renowned names in the industry -both international and domestic. Our focus on building trust and treating our partners asequal counterparts is what makes us one of the most preferred business houses tocollaborate with.

Whether it was our strategic partnership with our founder joint partners New York Life(NYL) America's largest mutual and most-admired life insurer at the turn of themillennium to develop an expertise in critical functions such as underwriting creation ofa gold standard agency distribution network etc. or that with Japanese conglomerate suchas Mitsui Sumitomo we take pride in our ability to cultivate relations that transcend theconventional metrics of profit and economics and to that extent renewed our partnership onbancassurance front for another 5 years with YES Bank.

Our belief in our abilities to keep a razor-sharp focus on deliverables amid strenuouscircumstances is in line with our stellar corporate performance last year.

In FY21 Max Financials reported consolidated revenues of

Rs. 31288 crore 72% higher than the previous year rallying on market-to- marketgains on our debt and equity portfolios. The company's reported consolidated profit aftertax (pAT) surged a strong 105% compared with the previous year to Rs. 560 crore.

The numbers - bucking the overall trend of immense strain on financials due to theongoing COVID-19 pandemic - showcase an increase in customer confidence trust anddependability.

During the financial year total new business premium (individual and group) of MaxLife the flagship arm of Max Financials rose 22% to Rs. 6826 crore contributing to agrowth of 18% in the company's gross written premium of Rs. 19018 crore. Max Life hasoutperformed the industry growth on New Sales (individual) by growing 19% as against theprivate insurers growth of 8% thereby taking our private market share to a decade high of10.8%.

In the year under review Max Life reported an Embedded Value (EV) of Rs. 11834 crorewith an Operating Return on EV (RoEV) of 18.5%.

The Value of New Business (VNB) was Rs. 1249 crore (at actual costs) a stupendousgrowth of 39% in the most challenging environment with the new business margins at anall-time high of 25.2%. Led by higher sales and margin expansion the growth in VNBindicates how the team at Max Life turned the COVID-19 pandemic into an opportunity to notonly ramp up its functioning but also serve its customers

with utmost conviction during such calamitous times.

The team also ensured all claims were settled on time with minimal delays resulting ina claims paid ratio of 99.35% a feat we would endeavor to better in the coming year.

With totals assets under management (AUM) of Rs. 90407 crore in FY21 a rise of 32%over the previous year Max Life has been steadfast in deepening its asset portfolios anddiversifying its mix to manage a diverse range of funds. The over thirtyfold spurt in AUMreflects that Max life continues to be a favorite pick among customers and investorsalike.

The efforts to deliver superior outcomes were reinforced with a quick transitiontowards digitization - a move that was in the offing but accelerated by COVID-19. The needto shift to digital tools and our preparedness to undertake the transition was criticalwhich catalyzed our growth and bolstered the revenues over the last year. We believe theoptimum utilization of digital areas such as artificial intelligence machine learningchat bot integration etc. is the future and the pace and nature of transition to suchtools will differentiate winners from the rest.

Strong roots and investments in digital assets enabled transition to fully digitalsales recruitment training and governance in the four weeks during the lockdown.Agility in technology enabled faster new product launches (14 new/modified products &riders launched in 12 months) sales momentum & margin improvement. Based on ourunderstanding we believe Max Life has the highest market share among life insurers one-commerce direct online and web aggregator marketplace for protection products segment.

With customer-centricity at the core Max life's 'Close to Customer' program ensuredproactive communication to reassure customers and enable digital modes of servicing. Inaddition to establishing a digital sales ecosystem with a focus on 'Protection for AH'it invested in product innovations to capture emerging opportunities by creating abalanced product mix of traditional savings-cum-protection plans unit-linked plans andpure- protection products.

This led to the highest ever Individual Sum Assured sold at 2.2L Cr growing at astrong 22% and outperforming the private players growth of 6%. The market share based onthis vector touched 15.6% and Max Life improved its rank to 3rd in the industry based onthis metric.

Max Life was ranked #1 in customer loyalty (based on the annual syndicated survey ofpolicyholders by Kantar) and ranked 2nd in customer grievances incidence rate (Q3 publicdisclosures) with decade-low mis-selling count and incidence rate.

We at Max Financials and Max Life practice what we preach and all aspects of WorkWellphilosophy- physical emotional and spiritual well-being - are integral to our workecosystem for the development of our employees. Consequently Max Life scored tremendously- 18th position - in the 'Great Places to Work For in India' rankings for 2021.

For the first time it was among the 'Top 20 Companies to Work for in India' and the5th consecutive year of being ranked amongst the top 50 workplaces. Max Life Insurancealso ranked 55th Amongst '2021 Best Workplaces in Asia' by Great Place to Work onlyIndian life insurer in the region to feature on the coveted list. It is a matter of prideto see Max Life consistently improving its rank in India in the last decade and break toAsian list for the first time this year.

In FY22 Max Financials' and Max Life's management actions will be focused onpreserving profitability while navigating changing consumer preferences and aconservative phase of economic revival in the country. We are extremely positive ofmaintaining our top quartile position in the sector and are looking forward to an excitingphase of our journey enhanced by the coming in of our new co-promoters Axis Bank.

With all good wishes and gratitude for your support and confidence.

Analjit Singh
Founder & Chairman
Mohit Talwar
Managing Director

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