Slide 1: Investor Release Q4 FY24 filing letter
May 7, 2024 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– Q4 FY 24 Pursuant to Regulation 30
Slide 2: Max Financial Performance Update
Max Financial Performance Update Investor Release FY24 May 7, 2024 *GPTW ranking as of 2021
Slide 3: Section I: FY'24 Key Highlights
SECTION I Max Financial Services and Max Life Insurance : FY’24 Key Highlights
Slide 4: Transaction Update
Transaction Update Current Structure (As of Apr‘24) Final structure (Post completion of series of transactions step wise details given below) Max Promoter Mitsui Sumitomo Public Max Promoter Mitsui Sumitomo Public 6.5% 21.9% 71.6% 6.5% 21.9% 71.6% Max Financial Axis Max Financial Axis (MFSL) Group*
Slide 5: Max Life Board of Directors
Max Life Board of Directors: Max Life has a highly experienced and versatile Board of Directors providing strong and secure foundation Deputy Managing Director at Axis Bank. He has Seasoned professional with experience of over Chairman Non-executive Director also served as the MD & CEO of Axis Asset
Slide 6: FY'24 Key highlights
FY’24 Key highlights ▪ MFSL revenue* excluding investment income at Rs 29,011 Cr, grows 16% in FY’24. Consolidated PAT at Rs 393 Cr. Revenue ▪ Individual Adjusted first year Premium grew by 16% to Rs 6,961 Cr and Total APE grew by 19% driven by robust NOP growth of 20%. ▪ Private Market share at 9.4
Slide 7: Key Highlights for Max Life FY19-24 (1/2)
Key Highlights for 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 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-Yr APE CAG
Slide 8: Key Highlights for Max Life FY19-24 (2/2)
Key Highlights for Max Life FY19-24 (2/2) Employee metrics Great Places to Experienced leadership1 Work rank #18 in FY21 with half of 13th best place Rank #55 among Great the leadership’s for data scientists tenure with Max Life of to work for within India Places by Analytics India to Work in Asia i
Slide 9: FY'24 Update: Industry best outcomes led by holistic growth across channels
FY’24 Update: Industry best outcomes led by holistic growth across channels, driven by unwavering commitment towards our strategic thrust areas, product innovations and investments in expansion Industry leading outcomes Secular Proprietary growth Focus on Annuity and Protection & Health Individual A
Slide 10: Consistently Improving Market share across all quarters
Consistently Improving Market share across all quarters and growth surpassing industry YOY growth - Ind Adjusted sales Basis Pvt Market Share 8.6% 8.9% 9.0% 10.4% Max Life Private Industry Total Industry 32% 18% 16% 13% 10% 9% 8% 6% 5% 2% 2% 0% Q1 FY’24 Q2 FY’24 Q3 FY’24 Q4 FY’24 Source: Life counci
Slide 11: Financial Performance Summary of Max Life FY24
Financial Performance Summary of Max Life* FY24 Total APE Gross Written Premium Renewal Premium AUM* 17% 13% Rs 7,433 Cr 19% Rs 29,529 Cr Rs 18,506 Cr Rs 1,50,836 Cr 23% [Rs 6,248 Cr] [Rs 25,342 Cr] [Rs 16,382 Cr] [Rs 1,22,857 Cr] Profit After tax Net Worth Policyholder Cost to Policyholder Expense
Slide 12: Section II: Max Life Insurance – Business Overview and Financials Update
SECTION II Max Life Insurance – Business Overview and Financials Update
Slide 13: Max Life has delivered strong business performance
Max Life has delivered strong business performance New Business Premiums (on APE basis) –Driven by strong growth in across Renewal Income – Delivering consistent growth channels Amount in INR Cr Amount in INR Cr 7,433 14% 13% 18,506 13% 19% 16,382 6,248 14,509 5,588 3,950 9,415 FY'19 FY'22 FY'23 FY'
Slide 14: Best in class Margin outcomes consistent with strategy of sales growth
Best in class Margin outcomes consistent with strategy of sales growth Product Mix: Focus on Annuity and Protection & Health Line of Business# FY’23 FY’24 Growth PAR Annuity NPAR Savings Protection & Health GROUP ULIP Par 872 1,358 56% Annuity 293 465 59% NPAR Savings 2,844 2,167 -24% 27% 37% 35% Pr
Slide 15: Value of New Business (VNB) and New Business Margin (NBM) Walk
Value of New Business (VNB) and New Business Margin (NBM) Walk NBM --> 31.2% - -4.7% 26.5% Note: Figures in Rs Cr. and may not add up due to rounding Investor Release 14
Slide 16: Efficient capital management with profitable growth
Efficient capital management with profitable growth Opex to GWP: Investing towards building distribution Solvency Ratio (Pre-dividend): Now at 206% post primary issue of INR 1,612 cr capital to Axis 242% 13.5% 14.2% 13.8% 13.2% 201% 190% 172% 150% Solvency Limit FY'19 FY'22 FY'23 FY'24 FY'19 FY'22 F
Slide 17: EV movement analysis: March 2023 to March 2024
EV movement analysis: March 2023 to March 2024 1,369 (57) (54) 19,494 1,973 16,263 VIF VIF 15,568 Operating RoEV: 20.2% 12,857 NAV NAV 3,406 3,926 Opening EV Value of Unwind Operating variance Non-Operating Closing EV New Business Variance ▪ The Operating Return on EV (RoEV) over FY24 is 20.2%. ▪ Op
Slide 18: Max Life has consistently grown its Asset Under Management
Max Life has consistently grown its Asset Under Management1, reached 1.5 lakh crore Assets Under Management1 - MLI is the 4th largest* manager of private LI AUMs and Largest Par fund AUM of ~68K Cr Linked: Healthy mix of Debt and Equity Amount in INR ‘000 Cr Debt Equity Linked Traditional 151 51% 54
Slide 19: Max Life has been recognised by a number of Indian and foreign business bodies
Max Life has been recognised 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 Excellence in driving distribution ▪ No. 2 in Customer Loyalty survey by Hansa Research
Slide 20: Section III: Max Life Insurance – Strategy
SECTION III Max Life Insurance – Strategy
Slide 21: Max Life's 5-Year Aspirations
Max Life’s 5-Year Aspirations 1 2 Fastest growing profitable 3 Leader in Protection + 4 5 Leader in online acquisition Health & Wellness Leader in Retirement Inorganic expansion proprietary distribution proposition #5 player1 in offline #5 player1 in Protection and No addition of a material FY21 Lea
Slide 22: Max Life's Strategic Thrust Areas and progress made
Max Life’s Strategic Thrust Areas and progress made A B C D Predictable & Sustainable Digitalto Product innovation Customer centricity across the value Digitization for efficiency and growth drive margins chain intelligence ▪ Fastest growing profitable ▪ Leader in Protection + Health & Wellness ▪ Im
Slide 23: Growth in both Proprietary and Bancassurance channels
A Max Life has focused on ensuring growth in both its Proprietary and Bancassurance channels Channel Mix - Focused on maintaining a balanced distribution mix Proprietary Channels New Business (APE)* Proprietary Bancassurance Others Amount in INR Cr 1% 0% 1% 2% 2,957 21% 2,307 1,611 1,162 62% 58% 70%
Slide 24: Proprietary channels have grown to 2.5x with bias to drive margins
A Proprietary channels have grown to 2.5x with bias to drive margins Proprietary Channels Product mix - biased towards traditional products for driving margins, FY24 UL increase led by buoyant market Offline Proprietary: On a normalized basis1 offline prop. grew by 34%. Amount in INR Cr PAR Annuity
Slide 25: Bancassurance partners continue to contribute strongly
A Bancassurance partners continue to contribute strongly Bancassurance Product Mix - has been biased towards Savings & ULIP to cater to target customer segments Axis Bank: Axis bank grew by 10% Amount in INR Cr PAR Annuity NPAR Savings Protection & Health ULIP 3,573 10% 3,826 3,469 2,262 36% 43% 52%
Slide 26: Augmenting distribution capability with 40+ new partnerships in FY'24
A Max Life has been augmenting its distribution capability by expanding both traditional and emerging ecosystems with 40+ new partnerships in FY’24 Ecosystems Key partners signed by Max Life Bancassurance Corporate Agents Online/Offline Brokers & others Group Credit Life* Coracle Finance Note: *AXIS
Slide 27: Forefront of driving Products Innovation
Max Life has been at the forefront of driving Products Innovation by creating first-in-industry B propositions 1. Break the endowments category clutter with 6. Enabled transparent customer participation in 10. Hedged Guarantees with Derivatives Industry First Whole Life plan Bonds with First Index-L
Slide 28: Accelerating product innovation agenda through experiments
Accelerating product innovation agenda through experiments and 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 Max Life SWAG Elite Plan
Slide 29: All-in-One product for Health, Wellness, Savings and Life
B Industry First offering of an All-in-One product for Health, Wellness Savings and Life Secure Earnings and Wellness Advantage Plan (SEWA) MaxCustomized Max Fit App: Fit App: Customized Wellness Offering Wellness Offering AN INDUSTRY FIRST: “ALL IN ONE PRODUCT” HEALTH WELLNESS LIFE SAVINGS Industry
Slide 30: Complete suite of products
B Max Life has a complete suite of products and focus is on selling longer term products along with improving penetration of pure protection & Health offerings Average Policyholder Age Average Policy Term Average PPT Max Life has products across all categories Product Type (Years) (Years) (Years) En
Slide 31: Focus on retirement leading to 59% growth in Annuity business
B Focus on retirement leading to 59% growth in Annuity business in FY’24 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
Slide 32: Understanding the customer to drive protection sales and risk management
B Focus is on understanding the customer to drive protection sales and its efficient risk management Awareness & Ownership Gap for Term Products^ Total Protection and Health APE Protection breakup Amount in INR Cr Line of Business# FY’23 FY’24 Growth* 3x 70 Protection & Health 398 649 63% 64 1,062 4
Slide 33: 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 s
Slide 34: Strong focus on customer measures: persistency and claims paid ratio
C Strong focus towards customer measures has helped deliver superior performance across health parameters and will continue to remain an important priority Persistency# (Premium)- Improvement across the cohort Persistency#(NOP)- Market leader on 13th month NOP persistency 84% 87% 11M FY23 11M FY24 8
Slide 35: Digital Strategy based on 7 Key Pillars
D Our Digital Strategy is Based on 7 Key Pillars & we aim to be India’s Leading Digital First Insurer 1 2 3 4 5 New Business Scale E-Commerce Digital Agency Models & Digital CX Platform Digital EX Platform Business Partnerships 6 Data & Analytics 7 Modern, Scalable & Flexible Technology Platform Per
Slide 36: Significant progress on our Digital Journey
D Significant progress on our Digital Journey % servicing dig 83 Text ital 81% 90% Automated Underwriting (Retail) mm FRICTIONLESS DIGITAL NATIVE CUSTOMER API Coverage - Partner integration TALENT NOP via E-co ONBOARDING 85% e- renewals 64 75% Website NPS (Purchase + CS) 7L+ DIGITAL Infra on Cloud T
Slide 37: Leveraging Digital Tech & Leader in E-Commerce Protection Sales
D Leveraging Digital Tech & is a Leader in E-Commerce Protection Sales… 1 New Mandate Page NFO Launch AXIS SFRD • New mode for auto-pay – UPI-SI • UPI auto pay SR at >50% • Small Cap NFO • Axis SFRD Journey first 4 • UPI auto pay contribution to 35% • Midcap NFO Click journey • Mandate attachment im
Slide 38: Significantly digitalized our Sellers to enable them to win
D Significantly digitalized our Sellers to enable them to win… 2 Sales Governance for Integrated Lead Intelligent quotes on Unified Learning & Mobile First all channels Funnel the go Training Management Recruitment app– ~3.5+ lacs+ activities per ~1.30 lacs+ meeting ~8+ lac quote generated 59% adopt
Slide 39: API Building
Significant progress in digitalizing Alternate channels, onboarding customers seamlessly and D integrating new partners through plug and play API suite… 3 Onboarding D2C Journeys with API Suite Tele and NRI PASA Journey Banks and Partners API Building Reusable APIs D2C Journeys available for ~ 5 Min
Slide 40: Building a New Age Digital customer experience platform
D Building a New Age Digital customer experience platform 4 Website Unified Payment Platform Group Claims Revamped - WhatsApp Bot Industry first initiative of Group claim workflow handling GCL, GTL and Website NPS has also improved 10 points Enables us to serve our customers in 8 Payment transaction
Slide 41: Leveraging Digital & AI to augment employee experience
D Leveraging Digital & AI to augment employee experience and productivity 5 empApp DISHA (Success Factor Viva Engage Ely Emplus meCube App) Employee App with self service An employee communication Empuls is the employee Mobile based search to Entire hire to retire lifeycle modules for Leave manageme
Slide 42: India Stack and Insurtech partnerships
D India Stack and Insurtech partnerships to accelerate the digitalization 6 Improve Distribution Reach via Plug & Play Platforms Augment Retention, Customer Service & Claims Experiences for New Business Sales Leveraging Bharat Stack for Auto-Filling & Consent Data Augmentation Leverage Alternate Dat
Slide 43: AI & analytics capabilities across the life insurance value chain
D AI & analytics capabilities have made significant inroads across the life insurance value chain 7 Incremental Business Impact FY24 YTD New Business Enablement Sourcing Risk Avoidance Incremental Renewal Collection Margins enablement • Self serve insights on mortality • Propensity campaigns for Ban
Slide 44: Agile, Flexible, Scalable & Resilient Technology Platform
D We are building a Agile, Flexible, Scalable & Resilient Technology Platform to Digitally power MLI Data & Analytics Platform Compliance & Security Cloud Foundation Legacy Modernization ▪ Data Lake Foundation - Data availability @ 60% on cloud ▪ DevSecOps - Vulnerability Management ▪ Multi Cloud Ad
Slide 45: Won various recognitions across top global and domestic industry forums
D Won various recognitions across top global and domestic industry forums ETBFSI – AWS AI AIM AI Celent Global CYPHER – Top 50 Best Firms for Data Nasscom AI Game 40 Under 40 AI ML Paper/Case Exceller Conclave- Innovation Model Insurer Domestic Scientist - 23 Changers Award data scientists study pub
Slide 46: Section IV: Max Life Insurance – ESG
SECTION IV Max Life Insurance – ESG
Slide 47: Four pillars of our sustainability framework
Four pillars of our sustainability framework Investors Communities ly Ca eopl ab SustWork P re e ain for Regulators resp ESG Distribution Partners io n s Finaonsib pe een ra t nci ilit Gr al y O Customers Employees Investor Release 46
Slide 48: Four pillars of our sustainability framework
Four pillars of our sustainability framework Work Ethically & Sustainably Care for People Financial Responsibility Green Operations Corporate Governance Diversity & Inclusion Sustainable Investing Waste Management Ethics & Compliance Employee Development Product responsibility Water Management Digit
Slide 49: Work Sustainably and Ethically
Work Sustainably and Ethically Governance Data Privacy & Security Risk Management Compliance & Policies Dedicated ESG Management MLI received the DSCI Excellence Max Life has a robust governance Platforms, mechanisms, channels in Committee Award for Best Security Practices in framework with Board ri
Slide 50: Care for People and Community
Care for People and Community Diversity & Inclusion Well-being of Employee Development CSR Initiatives Employees & Policies Gender diversity ratio at 27% at Introduced CARS for a digitalized 2024 sustainable engagement score Employee volunteering initiatives: 60,200 Max Life employee helpdesk experi
Slide 51: Financial Responsibility
Financial Responsibility Committed to responsible investments ESG evaluation will be ensured in all equity investment research and decision making 75% of equity portfolio to be ESG compliant at all times 100% compliance for equity portions of shareholders fund to be adhered to Integrating Responsibl
Slide 52: Green Operations
Green Operations Holistic approach Conducted a carbon footprint assessment of our pan-India offices Measurement of GHG emissions of DLF Square and 90C for FY 2022-23 To reduce carbon emissions by 80% by 2028 Energy Water Waste Management Conservation Management Replacement of CFL with LED lights ong
Slide 53: Accomplishments in our key strategic shifts identified in our ESG journey
Accomplishments in our key strategic shifts identified in our ESG journey Indicators Key Metric for ESG Indicators Key Targets Current Status Digital 95% of digital penetration by FY26 Digital penetration 89% for March 24 Operations Diversity & Overall Gender Diversity Ratio Achieve 28% gender diver
Slide 54: Annexures
> a ANNEXURES a
Slide 55: Expansion number of policies sold to be a key driver for FY24
Expansion number of policies sold to be a key driver for FY24 Case Size* (INR’000) NoP’s (000’s) Par Annuity NPAR Savings Protection & Health ULIP Par Annuity NPAR Savings Protection & Health ULIP 103 102 715 645 90 153 163 615 165 597 123 168 131 116 61 27 34 189 24 175 134 110 147 139 176 123 40 1
Slide 56: Sensitivity analysis as at 31st March 2024
Sensitivity analysis as at 31st March 2024 EV New business Sensitivity Value (Rs Cr) % change VNB (Rs Cr) | NBM % change Base Case 19,494 - 1973 | 26.5% - Lapse/Surrender - 10% increase 19,644 0.8% 1961 | 26.4% (0.6%) Lapse/Surrender - 10% decrease 19,324 (0.9%) 1980 | 26.6% 0.4% Mortality - 10% inc
Slide 57: 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 58: 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 59: 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 60: 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 March 2024. The VNB is calculated using the beginning of respective quarter’s risk free yield curve (i.e. 31st March 2023, 30th June 202
Slide 61: 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