Max Financial Services Limited Investor Presentation April 2018
Max Group Vision “To be the most admired corporate for service excellence” • Positive social impact • Culture of Service Sevabhav • Helpfulness • Mindfulness • Expertise • Entrepreneurship Excellence • Dependability • Business performance • Transparency • Respect Credibility • Integrity • Governance 2
Evolution of Max Group — Strong history of entrepreneurship and nurturing successful businesses Max India demerged into NYL exits and JV with Fund raising ~ USD 360 Mn 3 listed hold cos MSI in 2012 ● QIP- USD 156 Mn in 2007 Enters Telecom in JV ● MSI is world’s 7th largest with Hutchison ● Warburg Pincus - 53 Mn in 2005 general insurance group ● IFC- 47 Mn(2007) &23 Mn (2009) Hutchison ● MSI acquired 26% stake for USD 425 Mn ● Goldman Sachs 82 Mn in 2011 JV with Gist Brocades ● Max Life valued at USD 1.6 (Asia’s largest Drug bn manufacturer ) 2015 1985 1993 2000 2011 2012 2013 2014 2005 2007 2009 2016 Forays into Landmark Acquisitions LHC inducted as JV Penicillin by MHC Partner in MHC bulk pharma ● Acquired 79% stake for ● LHC is 2 nd largest hospital Shift from B2B to Enter Senior USD 40 Mn in 340 bedded chain in South Africa B2C businesses: Living business, Health Insurance, Pushpanjali hospital ● 2012 - Acquired 26% stake launch first expandable upto 540 beds ● Life insurance JV with Bupa Plc for USD 81 Mn in MHC community in ● Acquired 51% stake for ● Healthcare ● 2014 - Equalize stake in Dehradun with USD 100 Mn in 230 MHC invests USD 120 Mn 200 units bedded Saket City ● Clinical research hospital, expandable upto 1200 beds Note: USD rate considered at 64 3
Max Group – Corporate Structure Max Group - Sponsors 30.3% 41.0% 38.1% Companies Holding Life Insurance Health & Allied Manufacturing & Business* Business Other businesses 51% 50% 70.75% Operating Companies 100% 51% 100% 100% 100% Group CSR Arm Sponsors stake in Max Group holding companies 4
Max Group Overview 1 USD 2.6 billion+ Revenues… 9 Mn Customers… 23,000 Employees… ~65,000 Agents 2 Strong growth trajectory even in challenging times; a resilient & diversified business model 3 Steady revenue growth and cost rationalization leads to strong financial performance Well established board governance….internationally acclaimed domain experts inducted 4 Diversified ownership…..marquee investor base 5 6 Superior brand recall with a proven track record of service excellence 7 Strong history of entrepreneurship and nurturing successful business partnerships 5
Max Group : Continues to grow from strength to strength Group Revenue (USD Mn) 2,625 2,225 1,944 1,664 1,465 FY'13 FY'14 FY'15 FY'16 FY'17 Group EBITDA (USD Mn) 160 112 97 82 69 FY'13 FY'14 FY'15 FY'16 FY'17 Note: Adjusted for one-offs 6
High pedigree of long term investor base Shareholding concentrated with Marquee Investors ▪ KKR Shareholding Pattern as on 31 st Mar 18 ▪ Aberdeen ▪ Baron Emerging Market Fund Public 12.4% ▪ Vanguard Promoter ▪ Wasatch 30.3% ▪ FII- Others Jupiter 22.7% ▪ Norway Government Pension Fund KKR ▪ Reliance Mutual Fund 6.7% Mutual ▪ ICICI Prudential Mutual Fund Funds 27.8% ▪ Motilal Oswal Mutual Fund ▪ Aditya Birla Sunlife Mutual Fund ▪ HDFC Mutual Fund Number of outstanding shares : 26.84 Cr. 7
Max Life Insurance Company Limited
Key Summary Messages Indian Life Insurance Industry has evolved rapidly; significant headroom still 1 available for growth due to low penetration and favourable demographic profile Strong parentage, marquee investors, eminent Board, strong management team 2 and robust governance framework Differentiated Life Insurer with key strengths of multi-channel distribution, 3 balanced product mix, operational excellence and digital capabilities One of the fastest growing players with equal emphasis on profitability – Among 4 the top quartile across the comprehensive measures of success With US 1.1 Bn+ of MCEV as at 30th September 2017, operating RoEV of 17% and 5 new business margin at 18-20% are amongst the best in the industry Strength in business model recognised through several Awards and Accolades 6 that Max Life Insurance wins every year 9
Overview of Life insurance industry in India Phase 1 Phase 2 Phase 3 Joyful Entry (2001-2003) Expansion (2004-2008) Discovering New Normal (2009 onwards) 57% 52% 52% 50% 49% 46% 38% 38% 37% 36% Ind. Adj. FYP (First Year Premium) 34% (In Rs 000 Cr) 55 53 53 25% 50 Private market share in 48 47 47 terms of Ind. Adj. FYP 45 15% 44 41 40 6% 2% 0% 21 16 13 12 12 10 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Growth: 2% 13% 17% 34% 92% 31% -10% 17% -8% -5% -2% -3% -10% 8% 21% 19% -3% Industry Growth: 81% 100% 86% 1% 7% -20% -24% 2% -3% 16% 14% 26% >100% >100% >100% >100% Private Private 4 11 12 12 13 14 15 17 21 22 22 23 23 23 23 23 23 players count 10 Source: IRDAI and Life Council for FY 16-17
Industry Landscape (Apr’17 - Feb’18 ): Industry grew by 22% driven by strong performance of the private players (+28%) and LIC (+15%) YoY growth Individual Adjusted FYP FY’16 FY’17 Apr’16 - Feb’17 Apr’17 - Feb’18 Private Industry 14% 28% 26% 25% YoY growth 27% Industry Max Life 25% 24% 22% 21% 21% 8% 8% Max Life’s private 8% 9% 9% 9% market share Significant proportion of the private industry’s growth driven by higher ULIP contribution. Source: Life Insurance Council | IRDAI Investor Release 11
Significant potential to expand both in savings and protection segment Life Insurance Penetration (Premium as % of GDP), 2016 Level of Protection (Sum Assured as % of GDP), 2015 16.7% 16.2% 260% 226% 149% 7.4% 7.2% 96% 60% 2.7% 2.3% China India South Japan Hong Kong Taiwan Thailand India Malaysia Japan Singapore Korea % of Life Insurance in household savings- India Life Insurance Density (Premium per capita – USD), 2016 7,066 21.0% 19.0% 19.0% 17.0% 16.0% 3,599 2,803 190 47 FY'12 FY'13 FY'14 FY'15 FY'16 India China Japan Taiwan Hong Kong Source: "Swiss Re: World Insurance in 2016" Investor Release 12
Highly experienced and versatile Board of Directors providing strong and secure foundation Founder and Chairman Founder and Chairman of Max Seasoned business manager Chairman India. Awarded with highest Emeritus with wide domain expertise civilian honor, the Padma Mr. Rahul Khosla Mr. Analjit Singh built over 27 years in financial Bhushan services Exec. Vice Chairman A founder team member. Seasoned professional with 24 and MD Director Appointed as CEO and years of experience in Managing Director in Mr. Mohit Talwar Mr. Rajesh Sud Corporate Finance and November 2008 Investment Banking Fellow of the Society of Actuary Fellow of the Institute and Director Director (FSA). She is a Principal of Erlen Faculty of Actuaries. Served as Ms. Marielle Theron Mr. John Poole Street Corporation, Switzerland the AA for Max Life from 2005 till 2011 Independent Director Serving on the Board of ONGC, Independent Founder and CEO of Arka Mr. K. Narasimha LIC Housing, STCI, Infiniti Director Capital Advisors. Previously Murthy Retail, APSFC, Max Bupa and Mr. Rajesh Khanna served as MD and India Head NABARD at Warburg Pincus Independent Former IAS officer of 1977 Responsible for Mitsui Director Director batch and has served the Sumitomo overseas life Mr. Masataka Mr. D. K. Mittal government of India in various Kitagawa insurance business with 30 capacities years of experience Seasoned professional with 29 Director years experience in financial Mr. Hideaki Nomura industries 13
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