Max Financial Services Limited Investor Presentation August 2017 - PowerPoint PPT Presentation

Max Financial Services Limited Investor Presentation August 2017

Max Group Vision “To be the most admired corporate for service excellence” 2

Evolution of Max Group—Strong history of entrepreneurship and nurturing successful businesses Max India demerged into Max India demerged into NYL exits and JV with NYL exits and JV with Fund raising ~ USD 360 Mn Fund raising ~ USD 360 Mn 3 listed hold cos 3 listed hold cos MSI in 2012 MSI in 2012 Enters Telecom in JV Enters Telecom in JV ● QIP- USD 156 Mn in 2007 ● QIP- USD 156 Mn in 2007 ● MSI is world’s 7th largest ● MSI is world’s 7th largest with Hutchison with Hutchison ● Warburg Pincus - 53 Mn in 2005 ● Warburg Pincus - 53 Mn in 2005 general insurance group general insurance group ● IFC- 47 Mn(2007) &23 Mn (2009) ● IFC- 47 Mn(2007) &23 Mn (2009) Hutchison ● MSI acquired 26% stake for ● MSI acquired 26% stake for USD 425 Mn USD 425 Mn ● Goldman Sachs 82 Mn in 2011 ● Goldman Sachs 82 Mn in 2011 JV with Gist Brocades JV with Gist Brocades ● Max Life valued at USD 1.6 ● Max Life valued at USD 1.6 (Asia’s largest Drug (Asia’s largest Drug bn bn manufacturer ) manufacturer ) 2011 2012 2013 2014 2015 1985 1993 2000 2005 2007 2009 2016 Forays into Forays into Landmark Acquisitions Landmark Acquisitions LHC inducted as JV LHC inducted as JV Penicillin Penicillin by MHC by MHC Partner in MHC Partner in MHC bulk pharma bulk pharma ● LHC is 2 nd largest hospital ● LHC is 2 nd largest hospital ● Acquired 79% stake for ● Acquired 79% stake for Shift from B2B to Shift from B2B to Enter Senior Enter Senior USD 40 Mn in 340 bedded USD 40 Mn in 340 bedded chain in South Africa chain in South Africa B2C businesses: B2C businesses: Living business, Living business, Health Insurance, Health Insurance, Pushpanjali hospital Pushpanjali hospital ● 2012 - Acquired 26% stake ● 2012 - Acquired 26% stake launch first launch first expandable upto 540 beds expandable upto 540 beds ● Life insurance ● Life insurance JV with Bupa Plc JV with Bupa Plc for USD 81 Mn in MHC for USD 81 Mn in MHC community in community in ● Acquired 51% stake for ● Acquired 51% stake for ● Healthcare ● Healthcare ● 2014 - Equalize stake in ● 2014 - Equalize stake in Dehradun with Dehradun with USD 100 Mn in 230 USD 100 Mn in 230 MHC invests USD 120 Mn MHC invests USD 120 Mn 200 units 200 units bedded Saket City bedded Saket City ● Clinical research ● Clinical research hospital, expandable upto hospital, expandable upto 1200 beds 1200 beds Note: USD rate considered at 64 3

Max Group – Corporate Structure Promoter holdings 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 4 Well established board governance….internationally acclaimed domain experts inducted 5 Diversified ownership…..marquee investor base 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 30 th Jun 17  Goldman Sachs  Vanguard Public 14.0%  Wasatch Promoter  Morgan Stanley 30.4%  FII‐ Others Baron Emerging Market Fund 18.9%  Reliance Mutual Fund Goldman Sachs  Motilal Oswal Mutual Fund 5.0% Mutual KKR  Funds ICICI Prudential Mutual Fund 10.0% 21.8%  Birla Sunlife Mutual Fund  Kotak Mutual Fund  DSP Blackrock Mutual Fund Number of outstanding shares : 26.73 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 Bn+ of MCEV as at 31st March 2017, operating RoEV of 20% and new 5 business margin at 18.8% 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% >100% >100% >100% 26% >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 (Q 1 FY’18): Industry grew by 29% driven by strong performance of the private players (+45%) and LIC (+13%) YoY growth Individual Adjusted FYP FY’16 FY’17 Q1 FY’17 Q1 FY’18 Private Industry 14% 45% YoY growth 26% 21% Industry Max Life 29% 25% 21% 19% 22% 16% 8% 8% Max Life’s private 8% 9% 9% 10% market share Significant proportion of the private industry’s growth was driven by higher UL mix and low base effect owing to relatively subdued performance in Q1 FY17 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