Max Financial Services Limited · NSE:MFSL
Max Financial Services — 9M FY2025 Earnings Presentation
50 slides from Max Financial Services's earnings presentation, Feb 4, 2025
Slide 1: Exchange cover letter: Investor Release Q3 FY25
February 4, 2025 BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, Bandra Kurla Complex, Dalal Street Bandra (East) Mumbai – 400 021 Mumbai – 400 051 Scrip Code: 500271 Scrip Code: MFSL Dear Sir/Madam, Sub: Investor Release– Q3 FY 25 Pursuant to Regulatio
Slide 2: Max Financial Performance Update
Max Financial Performance Update Investor Release 9M FY’25 February 4, 2025 ^Individual Death Claims Paid Ratio as per Audited Financials for FY 2023-2024 | *As per public disclosure for H1 FY 2024 - 2025
Slide 3: Section I: 9M FY'25 Key Highlights
SECTION I Max Financial Services and Axis Max Life Insurance 9M FY’25 Key Highlights
Slide 4: Key highlights of Max Financial Services and Axis Max Life Insurance for 9M FY'25
Key highlights of Max Financial Services and Axis Max Life Insurance for 9M FY’25 ▪ MFSL revenue* excluding investment income at Rs 20,907 cr, grows 14% in 9M FY’25. Consolidated Profit After Tax at Rs 365 cr ▪ Individual Adjusted first year Premium at Rs 5,352 cr grew by 25% vs Private industry gro
Slide 5: Axis Max Life Insurance's financial performance summary for 9M FY'25
Axis Max Life Insurance’s financial performance summary for 9M FY’25 Total APE1 Gross Written Premium Renewal Premium AUM Rs 5,731 cr 26% Rs 21,360 cr 14% Rs 13,269 cr 12% Rs 1,71,705 cr 20% [Rs 4,561 cr] [Rs 18,793 cr] [Rs 11,823 cr] [Rs 1,42,621 cr] Profit Before tax Net Worth2 Policyholder Cost t
Slide 6: Transaction Update
Transaction Update Current Structure (As of Dec‘24) Final structure (Post completion of series of transactions step wise details given below) Max Promoter Mitsui Sumitomo Public Max Promoter Mitsui Sumitomo Public 3.4% 21.9% 74.7% 3.4% 21.9% 74.9% Max Financial Axis Max Financial Axis (MFSL) Group*
Slide 7: Section II: Axis Max Life Insurance Business Overview and Financial Update
SECTION II Axis Max Life Insurance- Business Overview and Financial Update
Slide 8: Key Highlights for Axis Max Life FY19-24 (1/2)
Key Highlights for Axis Max Life FY19-24 (1/2) 5-Yr CAGR of 12% on 1 Asset Under Management at Consistent Individual new business1 vs Rs 1.5 lac INR cr, CAGR leadership 10% for Total life of 19% over position in Consistent Growth insurance industry last 5 years online protection 5-Yr APE CAGR of 5-Y
Slide 9: Key Highlights for Axis Max Life FY19-24 (2/2)
Key Highlights for Axis Max Life FY19-24 (2/2) Experienced leadership1 Employee metrics Great Places to 13th best place with half of Work rank #28 in FY24 the leadership’s for data scientists Among the Top tenure with Max Life of to work for within India 25 in BFSI organisations by Analytics India m
Slide 10: Refreshed Brand momentum reflects growth in Awareness
Refreshed Brand momentum reflects growth in Awareness ▪ Awareness is defined with the Brand awareness in Metros & Non-Metros Brand Awareness in Tier 2 & Tier 3 help of questions asked from respondents Metros Non-Metros Tier 2 Tier 3 ▪ Awareness: Thinking about life insurance category, what all brand
Slide 11: Industry leading growth in Q3 FY'25 fueled by proprietary channels
Continue to post industry leading growth in Q3 FY’25 fueled by disproportionate growth in proprietary channels Industry leading outcomes Growth in proprietary channels Growth in Segments of choice Q3 Individual Adjusted FYP Proprietary growth (APE) Retail Protection3 & Health2 APE YOY Growth Q3 Mark
Slide 12: Max Life has delivered strong performance on new business
Max Life has delivered strong performance on new business New Business Premiums (on APE1 basis) –Driven by secular growth Renewal Income – Delivering consistent growth Amount in INR cr Amount in INR cr 5,731 13,269 18,506 7,433 11,823 4,561 16,382 6,248 FY'23 FY'24 9M FY24 9M FY25 FY'23 FY'24 9M FY2
Slide 13: Best in class outcomes consistent with strategy of VNB growth
Best in class outcomes consistent with strategy of VNB growth Product Mix: Line of Business# 9M FY’24 9M FY’25 Growth PAR Annuity NPAR Savings Protection & Health GROUP ULIP Par 940 788 -16% Annuity 288 304 5% NPAR Savings 1,320 1396 6% 27% 35% 31% Protection & Health2 434 594 37% 43% Group Credit L
Slide 14: Efficient capital management with profitable growth
Efficient capital management with profitable growth Opex to GWP: Investing towards building distribution Solvency Ratio (Pre-dividend): 14.2% 14.8% 10 bps 14.9% 13.8% 190% 196% 172% 179% 150% Solvency Limit FY'23 FY'24 9M FY'24 9M FY'25 FY'23 FY'24 9M FY'24 9M FY'25 Operating RoEV: Underwriting Prof
Slide 15: More than 95% of debt investments in sovereign and AAA securities
Axis Max Life has consistently grown its Asset Under Management1, reached INR 1.7 Lakh crore Assets Under Management - AMLI is the 4th largest2 manager of private LI Linked: Healthy mix of Debt and Equity AUMs and Largest Par fund2 AUM of ~75K cr Amount in INR Tn Debt Equity Linked Traditional 172 5
Slide 16: Axis Max Life recognized by business bodies for excellence
Axis Max Life has been recognized by a number of Indian and foreign business bodies for its excellence in business, customer service and focus on people Business Excellence Leaders in Quality Focus on People ▪ Awarded the Digital Transformation Award ▪ Amongst ‘Top 50 Large - India’s Best ▪ Accorded
Slide 17: Section III: Axis Max Life Insurance Business Strategy
SECTION III Axis Max Life Insurance: Business Strategy
Slide 18: Aspirations: strategic pillars
Axis Max Life will continue to focus on its chosen strategic pillars with emphasis on long term imperatives A B C D Predictable & Sustainable Digital to Product innovation Customer centricity across the value Digitization for efficiency and growth drive margins chain intelligence ▪ Fastest growing p
Slide 19: Growth in both Proprietary and Bancassurance channels
A Axis Max Life has focused on ensuring growth in both its Proprietary and Bancassurance channels Channel Mix – Disproportionate focus towards growing proprietary channels Proprietary Channels New Business (APE)* Proprietary Bancassurance Others Amount in INR cr 1% 2,957 2% 2% 2% 2,546 2,307 1,812 5
Slide 20: Augmenting distribution with new partnerships
Axis Max Life has been augmenting its distribution capability by expanding both traditional and A emerging ecosystems with 33 new partnerships in 9M of FY’25 Ecosystems Key partners signed by Max Life Bancassurance Corporate Agents Retail SL Group Credit Life* Medwell Online/Offline Insurance Broker
Slide 21: Product mix in proprietary and Bancassurance channels
A Product mix in proprietary and Bancassurance channels aligned to customer needs Proprietary Channels Product mix- Higher ULIP in Ecommerce owing to success of new fund offers Bancassurance Product Mix PAR Annuity NPAR Savings Protection & Health ULIP PAR Annuity NPAR Savings Protection & Health UL
Slide 22: Product innovation: industry-first propositions
Axis Max Life has been at the forefront of driving Products Innovation by INR creating first-in-industry B propositions ▪ Break the endowments category clutter with ▪ Enabled transparent customer participation ▪ Hedged Guarantees with Derivatives Industry First Whole Life plan in Bonds with First In
Slide 23: Accelerating product innovation agenda
Accelerating product innovation agenda through experiments and INR creating new customer B segments Benefits to cater to need of death, Industry first design of guaranteed Option to get back all premiums paid Health & Savings endowment back at no cost. Secure Earnings & Wellness Smart Total Elite Pr
Slide 24: Complete suite of products
Axis Max Life has a complete suite of products and focus is on selling longer term products along with B improving penetration of pure protection & Health offerings Axis Max Life has products across all Average Policyholder Age Average Policy Term Average PPT Product Type (Years) (Years) (Years) cat
Slide 25: IRIS: India Retirement Index survey
IRIS, one of India’s leading retirement-focused surveys, now in its 4th edition B India Retirement Index indicating the degree to which Indians feel prepared for tomorrow’s retired life on a scale of 0 to 100. IRIS: Consistent upward movement seen in IRIS index and sub Awareness: On an average, an i
Slide 26: Focus on development and growth of retirement ecosystem
B Focus on development and growth of retirement ecosystem Life stage & Age: 25-45 yrs Age: 45-60 yrs Age: 60+ yrs Objective Accumulate funds Plan for retirement Cover the risk of living too long ▪ Tax Saving ▪ Tax Saving ▪ Lump-sum req. for big events (child’s ▪ Regular income stream until death Nee
Slide 27: Understanding the customer to drive protection sales
B Focus is on understanding the customer to drive protection sales and its efficient risk management Awareness & Ownership Gap for Term Products1 Total Protection2 and Health APE Retail Protection2 and Health APE Amount in INR Cr Amount in INR Cr 1.9x 2.3x 24% 37% 70 64 594 949 47 763 434 30 31 502
Slide 28: Managing Other Major Risks
B Managing Other Major Risks Information Security and Interest Rate Risks Investment Risks Operational Risks Business Continuity Risks Robust Asset Liability Front Office – Led by CIO: Cyber DARE framework for Preventive Programs: Management Framework: ▪ Differential strategy as per the managing sec
Slide 29: Robust Asset Liability Management framework
B Robust Asset Liability Management (ALM) framework Max Life ALM framework Willis Towers Watson Opinion on Asset Liability Management of Max Life • ALM Approach • Scope covered non-participating asset and liability portfolio. WTW • Cash Flow Matching and Dollar duration matching tested a range of po
Slide 30: Persistency: strong focus on customer measures
Strong focus towards customer measures has helped deliver superior performance across health C parameters and will continue to remain an important priority Persistency# (Premium) NPAR Customers opting for continuation of their policy1 85% 87% 8M FY24 8M FY25 70% 72% Policies continuing to pay premiu
Slide 31: Claims Paid Ratio and next generation claims system
Strong focus towards customer measures has helped deliver superior performance across health C parameters and will continue to remain an important priority Claims Paid Ratio Rank#1 Rank#1 Rank#1 Rank#1 Rank#1 99.65% 99.51% 99.35% 99.34% 99.22% 98.74% FY'19 FY'20 FY'21 FY'22 FY'23 FY'24 Next generati
Slide 32: Our Digital Strategy is Based on 6 Key Pillars
D Our Digital Strategy is Based on 6 Key Pillars Scale Frictionless Digital Sales – Digital Customer E-Commerce Onboarding/ Bancassurance & Service Business Issuance Partnerships of future 1 2 3 4 Pervasive Intelligence (AI/ML & Analytics embedded in all key processes) 5 Agile, Scalable, Resilient T
Slide 33: Leadership in Ecommerce enabled by onboarding platform
D Leadership in Ecommerce enabled by Best-in-Class On-boarding Platform New Experience & Categories FRICTIONLESS ONBOARDING • Real time status with expected issuance date. • Simplified discrepancy and add info reasons • Tracking of policy pack delivery • Self-employed protection journey with PAYU &
Slide 34: Building a Digital Agency and Banca partnerships of future
D Focusing on building a Digital Agency and Banca partnerships of future Digital Agency Banca Partnerships UNIFIED LEARNING SALES GENIE ALTERNATE Integration Super App for D2C JOURNEY & TRAINING (SHAPER Smart Fixed Return CHANNELS (including Marketplace SALES Force Plan CAT Axis) MANAGEMENT PROSPECT
Slide 35: Leveraging generative AI and digitizing customer service
D Leveraging generative AI for competitive advantage and digitizing customer service to deliver superior experiences 1. Sales Enablement 2. Customer Service 3. Employee Experience Revamped Chat-bot ACR Journey enabled on Website Enterprise Grade use case development AI Driven RolePlay Generative AI
Slide 36: Agile, Scalable & Resilient Technology Platform
D Agile, Scalable & Resilient Technology Platform to Digitally power MLI Data & Analytics Platform Compliance & Security Cloud Foundation Legacy Modernization 76% on hybrid, multicloud architecture 1st organization in India & Lakehouse architecture providing ~100% Resiliency 2nd in world to have Sin
Slide 37: Section IV: ESG
> SECTION IV > ESG a
Slide 38: Four pillars of our sustainability framework (1/3)
Four pillars of our sustainability framework (1/3) Investors Communities ly Ca eopl ab SustWork P re e ain for Regulators resp ESG Distribution Partners io n s Finaonsib p e ee n ra t nci ilit Gr al y O Customers Employees 37
Slide 39: Four pillars of our sustainability framework (2/3)
Four pillars of our sustainability framework (2/3) Work Ethically & Sustainably Care for People Financial Responsibility Green Operations ▪ Corporate Governance ▪ Diversity & Inclusion ▪ Sustainable Investing ▪ Waste Management ▪ Ethics & Compliance ▪ Employee Development ▪ Product responsibility ▪
Slide 40: Four pillars of our sustainability framework (3/3)
Four pillars of our sustainability framework (3/3) Work Ethically & Sustainably Care for People Financial Responsibility Green Operations Governance Diversity & Inclusion Committed to responsible Energy Management Diverse Board composition with Gender diversity ratio at 28.1% at investments Home Off
Slide 41: Progress made in key strategic shifts in ESG journey
Progress made in our key strategic shifts identified in our ESG journey- as on 31st December 2024 Indicators Key Metric for ESG Indicators Key Targets Current Status Digital Digital penetration 95% of digital penetration by FY 2026 91.42% as of 31st Dec’24 Operations Diversity & Achieve 28% gender d
Slide 42: Annexures
> _¢ Annexures a
Slide 43: Expansion in case size and number of policies sold
Expansion in both case size and number of policies sold in 9M FY’25 Case Size (INR’000) NoP’s (000’s) Par Annuity NPAR Savings Protection & Health ULIP Par Annuity NPAR Savings Protection & Health ULIP 715 104 102 98 540 103 146 597 165 153 163 164 454 175 116 41 92 27 34 34 189 112 147 134 110 109
Slide 44: Sensitivity analysis as at 30th September 2024
Sensitivity analysis as at 30th September 2024 EV Value of new business New Business Margin Sensitivity Value (cr) % change VNB (cr) % change NBM % change Base Case 234 - 7.7 - 21.2% - Lapse/Surrender - 10% increase 235 0.7% 7.5 (2.4%) 20.6% (0.6%) Lapse/Surrender - 10% decrease 231 (0.8%) 8.8 2.4%
Slide 45: Definitions of the EV and VNB
Definitions of the EV and VNB Market consistent methodology ▪ The EV and VNB have been determined using a market consistent methodology which differs from the traditional EV approach in respect of the way in which allowance for the risks in the business is made. ▪ For the market consistent methodolo
Slide 46: Components of VIF (1/2)
Components of VIF (1/2) Present Value of Future Profits (PVFP) ▪ Best estimate cash flows are projected and discounted at risk free investment returns. ▪ PVFP for all lines of business except participating business is derived as the present value of post-tax shareholder profits from the in-force cov
Slide 47: Components of VIF (2/2)
Components of VIF (2/2) Time Value Of Options and Guarantees (TVFOG) ▪ The TVFOG for participating business is calculated using stochastic simulations which are based on 5,000 stochastic scenarios. ▪ Given that the shareholder payout is likely to be symmetrical for guaranteed non-participating produ
Slide 48: Key Assumptions for the EV and VNB (1/2)
Key Assumptions for the EV and VNB (1/2) Economic Assumptions ▪ The EV is calculated using risk free (government bond) spot rate yield curve taken from FBIL1 as at December 2024. The VNB is calculated using the beginning of respective quarter’s risk free yield curve (i.e. 31st March 2024, 30th June
Slide 49: Key Assumptions for the EV and VNB (2/2)
Key Assumptions for the EV and VNB (2/2) Expense and Inflation ▪ Maintenance expenses are based on the recent expense studies performed internally by the Company. ▪ Future CSR related expenses have been taken to be 2% of post tax (risk adjusted) profits emerging each year. ▪ The commission rates are
Slide 50: Thank You
Thank You 49 ^Individual Death Claims Paid Ratio as per Audited Financials for FY 2023-2024 | *As per public disclosure for H1 FY 2024 - 2025
Max Financial Services — 9M FY2025 Earnings Presentation on 6ix