Max India Limited Max India Limited I Investor Presentation t P t ti June, 2014 www.maxindia.com BSE Scrip Code: 500271, NSE Ticker: MAX, Bloomberg: MAX:IN 1
MAX GROUP - OVERVIEW www.maxindia.com 2
Max Group Vision “To be the most admired corporate for service excellence” • Positive social impact • Culture of Service Sevabhav • Helpfulness • Mindfulness • Expertise • Entrepreneurship Excellence Excellence • Dependability • Business performance • Transparency • Respect Credibility • Integrity • Governance 3
Our Businesses M lti b Multi-business corporate i t F Focused on people and service d l d i “ IN THE BUSINESS OF LIFE ” Life Insurance Healthcare Health Insurance Senior Living Protecting Life Protecting Life Enhancing Life Enhancing Life Caring for Life Caring for Life 100% Owned; Continuing Care 74:26 JV* with Mitsui 74:26 JV with BUPA 74:26 JV* with Life Retirement Community in Sumitomo; Healthcare, SA; Finance Plc, UK Dehradun Largest non bank lead 2,000 beds private life insurer Speciality Films Corporate Social Responsibility Clinical Research 100% owned; Niche high barrier polymer films & Leather Focus on healthcare, children and the 550 active sites Finishing Foils environment * Max India currently holds 71.1% in Max Life and 66% in Max Healthcare 4
A unique investment opportunity and a resilient business model INR 116 billion+ Revenues*.. 5 Mn+ Customers..15,000 Employees.. 5,000^ Agents.. 2,000+ 1 Doctors 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 Electronic Mobile Communication Plating Medical Life Pharma Pharma Component Telephony Services Chemicals Transcription Insurance COMSAT Hutchison ATOTECH *Total Revenue for FY14, 5 ^Across Life and Health Insurance
Growth potential recognized by the market…. high pedigree investor base Shareholding Pattern as on March 31, 2014 Others 8.4% 8 4% Mutual • Reliance MF Funds 11.0% • Temasek Shareholding Promoter • Fidelity Concentrated Concentrated 39.5% • Norges • Norges with Marquee • Jupiter • Matthews Investors FII (Others) • New York Life 21.7% • ICICI Prudential IFC IFC 3.9% Goldman Sachs 15.5% Number of outstanding shares : 26.55 Cr. 6
Consistent track record of strong growth across businesses with the group turning strong profits Rs Cr. Rs Cr Rs Cr. Operating Revenue Trend 10000 FY 10 FY 11 FY 12 FY 13 FY 14 8000 Operating 5,574 6,668 7,648 8,180 9,139 Revenue 6000 Investment and 2,087 1,223 914 2,444 2,544 Other Income 4000 8180 7643 6668 5574 Total Revenue 7,661 7,891 8,562 10,624 11,683 4508 2000 3244 Profit / (Loss) (86) 32 242 991* 274 0 before Tax FY 08 FY 09 FY10 FY11 FY12 FY 13 Rs Cr. Profitability Trend FY 10 FY 11 FY 12 FY 13 FY 14 1200 1000 1,993 1,944 2,513 2,903 2,984 Net Worth 800 991 440 507 549 676 702 Loan Funds 600 400 Net Fixed 965 1,017 1,256 1,361 1,495 200 Assets (86) 242 0 Treasury 32 -200 909 540 397 409 235 (60) Corpus -400 -400 FY 08 FY 09 FY10 FY11 FY12 FY 13 (333) 10,121 13,836 17,215 20,458 24,716 Life Ins. AUM *Investment & Other Income and PBT for FY13 includes income from stake sale in Max Life amounting to Rs. 802 Cr and Rs.794 Cr, respectively. 7
MAX LIFE INSURANCE COMPANY (Max Life) www.maxnewyorklife.com 8
The Essence of our chosen Strategy To be the most admired life insurance Our objective Sources of competitive advantage company in India with sharp focus on financial metrics ”Build a robust multi- channel distribution architecture while Max Our approach To serve the long-term savings and Life’s proprietary high protection needs of mass affluent+ quality agency will customers through a high quality agency remain the core supplemented by our privileged distribution channel.” bancassurance partnership Key choices RECREATE GROW TURBOCHARGE OPPORTUNISTIC REDUCE High quality Privileged Product New PD deals Cost “platinum banc-assurance development Group business – Driving cost standard” agency relationship with process management Discover growth that we were Axis Bank Change g – known for kno n for options for the options for the Lo ering Lowering Expand management and future costs of bancassurance governance agency Persistency management 9
Par products & ULIPs fill the void left by withdrawn non-par products Evolution of product Mix for top E l ti f d t Mi f t Par Non ‐ Par ULIP players over the last 2 quarters Apr ‐ Sep'13 Jan ‐ Mar'14 ICICI P ICICI Pru 8% 32% 60% 26% 4% 70% 1 st Disruption: 2 nd Disruption: SBI Life 27% 35% 38% 46% 5% 49% HDFC Life 40% 8% 52% 25% 30% 45% NAV Guaranteed NAV Guaranteed >90% products >90% products Max Life 69% 20% 11% 61% 5% 34% UL & Index linked replaced in non ‐ par products accordance with Reliance Life 53% 30% 17% 35% 40% 25% withdrawn on regulations October 1, 2013 implemented on Bajaj Allianz 27% 71% 5% 24% 68% 5% January 1, 2014 Birla Sunlife 4% 56% 40% 43% 12% 45% Kotak Life 18% 40% 42% 11% 50% 39% K EY S HIFTS K S Players with a high non par index linked focus till Sep'13 migrated towards Par & ULIP segments (ICICI Pru; BSLI; Max Life) Players with a high non ‐ par index linked focus till Sep 13 migrated towards Par & ULIP segments (ICICI Pru; BSLI; Max Life) Key players (SBI Life, ICICI Pru), Birla Sunlife, HDFC Life) migrated from NAV Guaranteed ULIPs to other ULIPs (primarily wealth based) thus maintaining their UL share HDFC Life: Higher non ‐ par share in JFM'14 due to focus on banca specific non ‐ par guaranteed endowment product (Sanchay) Reliance Life & Kotak Life also witnessed a greater non ‐ par play (Reliance Life: guaranteed moneyback plan; Kotak Life: regular income & savings plans) Bajaj Allianz: No UL in portfolio for major part of JFM'14 led to UL share drop 10 SOURCE: Market Intelligence
Max Life continues to perform better than the private industry on agency efficiency parameters Average Branch Productivity M Max Life’s Lif ’ M Max Life continued to lead Lif i d l d In Rs. Lakhs per month Performance productivity parameters (both agent Apr-Dec'12 Apr-Dec'13 productivity and branch productivity) 21 20 16 14 14 4 4 11 10 10 9 9 9 8 8 8 7 7 7 7 7 7 6 4 Average Agent Productivity In Rs. 000's per month 11.3 11.0 11.0 11.0 Apr-Dec'12 Apr-Dec'13 7.0 6.4 6.1 6.0 5.7 5. 5. 5. 5.3 5 5 5.0 7 5.0 5 .4 5 5 4.5 4.4 4.2 4.0 4.0 3.8 3.7 Note: Agency productivity calculated using FYP (100% SP) 11 SOURCE: Market Intelligence & Internal Estimates | Public Disclosures
Max Life well positioned for the transformation Agency base at 43,000 agents Highly productive agency FY 14 Average case size at ~Rs. 29,000 with average case rate ~0.41 model and best in class Need based insurance sales training 400+ trainers on board Comprehensive product Product mix for FY14: Par 68%, Non-par 11%, ULIP 21% portfolio with an enduring Long tenor products (21 Yr) & a young customer profile (35 Yr) customer base Embedded Value; EV for FY14 at Rs. 3,953 Cr (FY13 at Rs. 3,756 Cr) Disclosures ahead of competition Implied NBM is 13.4% on APE* for FY14 (FY13 at 14%) Max Life’s share of private sector grows to 10.3% in FY14; Assets under Management at Rs. 24,716 Cr. as at Mar 31, 2014, grow 21% y-o-y Over 3.6 million polices in-force with Sum assured touching Rs. 199,660 Cr. Other key drivers Business capitalised at Rs. 2,127 Cr. as at Mar 31, 2014; solvency surplus of Rs. 2,043 Cr. and solvency margin of 485% Paid Dividend for FY 14 of 264Cr (final dividend~ 136Cr & interim dividend~ 128Cr) after paying dividends of 259 Cr dividends for FY 13 (All numbers post DDT) paying dividends of 259 Cr dividends for FY 13.(All numbers post DDT) *APE – Adjusted Premium Equivalent (Annualized First Year Premium adjusted for 10% of Single Premium). 12
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