Max Financial Services Ltd. (MFSL) today announced its financial results for the quarter ended June 30th, 2020. In Q1 FY21, MFSL’s consolidated Profit after Tax grew 235% to Rs. 182 Cr. backed by strong performance of its life insurance subsidiary Max Life Insurance. Consolidated revenues were at Rs. 5,517 Cr., growing 40% year-on-year.
Max Life reported Shareholders’ Profit after Tax of Rs. 171 Cr., growing 151% over the previous year. The growth in profits was aided by higher investment income, lower claims, and tax refunds. Max Life’s total revenues2 of Rs. 3,616 Cr. grew 2% in Q1 FY21. Despite an impact on new sales due to COVID-19 towards the end of FY2020, Max Life picked up momentum in Q1 FY21 and gained market share by 217 bps to 11%. Max Life ranked fourth amongst all private life insurers. The individual protection penetration saw a 103% increase in the first quarter, indicating that every second policy sold was a protection policy. In the same period, Individual New Business sum assured grew by 39%.
Max Life’s Individual APE was recorded at Rs. 660 Cr. in Q1 FY21 despite headwinds due to COVID-19. This was driven by a growth of 8% in proprietary channels, 5% in agency channels, and 31% in e-commerce. This reflects the industry outperformance in Individual APE. Private players de-grew by 23% whereas Max Life de-grew by only 4%.
Max Life reported a Market-Consistent Embedded Value (MCEV) of Rs. 10,670 Cr., with an Operating Return on Embedded Value (RoEV) of 16%. The Value of New Business (VNB) written during Q1 FY21 was Rs. 113 Cr., while New Business Margin stood at 17%. In this period, Max Life’s Assets under Management (AUM) stood at Rs. 73,239 Cr., growing 15% year-on-year.
Max Life was also named as the only Insurer (Life, General or Health) in the ‘Top 100 Best Companies to Work For’ survey for India conducted jointly by the Great Place to Work (GPTW) Institute and the Economic Times. Max Life was the 24th best employer overall, progressing 11 ranks from its last year’s position. The recognition marked the fourth consecutive year of Max Life’s representation being ranked one of top 50 companies in GPTW’s best workplaces league table.
Mohit Talwar, Vice Chairman, Max Group & Managing Director, Max Financial Services, said, “Max Life has rebounded commendably, outpacing the competition with its growth. This has been possible due to the emphasis on strengthening digital channels, which has allowed Max Life to function remotely almost entirely from sales to customer on-boarding, and after-sales. The company has successfully invested in product innovations to capture emerging opportunities by creating a balanced product mix of traditional savings cum protection plans, unit linked plans, and pure protection products.”
“We are currently in the process of coordinating regulatory approvals for the Max Life-Axis Bank JV that we announced in April 2020. The proposed JV will set Max Life up well for its next stage of growth,” he added.