Max India Limited Investor Presentation February, 2015 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 • Dependability • Business performance • Transparency • Respect Credibility • Integrity • Governance 3
Our Businesses Multi-business corporate Focused on people and service “ IN THE BUSINESS OF LIFE ” Life Insurance Healthcare Health Insurance Senior Living Protecting Life Caring for Life Enhancing Life 100% Owned; Continuing Care 74:26 JV* with Mitsui 74:26 JV with BUPA Equal 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 Being divested Finishing Foils environment *Max India currently holds 72.1% in Max Life 4 ^Current holding in MHC is Max India-46%, Life Healthcare-46% and IFC-7.5%
A unique investment opportunity and a resilient business model INR 116 billion+ Revenues*… INR 120 billion MCap … 5 Mn+ Customers… 1 18,000 Employees… 55 ,000+^ Agents… 2,100+ 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 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 Electronic Mobile Communication Plating Medical Life 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 Dec 31, 2014 Others 10.1% • Temasek Mutual • Fidelity Funds Shareholding • Norges 12.2% Promoters • New York Life Concentrated 40.5% • Jupiter with Marquee • GIC • Comgest Investors • Reliance MF FII (Others) 18.6% • ICICI Prudential MF IFC 3.1% Goldman Sachs 15.5% Number of outstanding shares : 26.65 Cr. 6
Consistent track record of strong growth across businesses with the group turning strong profits Rs Cr. Rs Cr. Operating Revenue Trend FY 10 FY 11 FY 12 FY 13 FY 14 10000 Operating 8000 5,574 6,668 7,648 8,180 9,139 Revenue 6000 Investment and 2,087 1,223 914 2,444 2,544 9139 Other Income 8180 4000 7643 6668 5574 Total Revenue 7,661 7,891 8,562 10,624 11,683 4508 2000 Profit / (Loss) (86) 32 242 991* 274 0 before Tax FY 09 FY10 FY11 FY12 FY 13 FY14 Rs Cr. Profitability Trend FY 10 FY 11 FY 12 FY 13 FY 14 400 300 1,993 1,944 2,513 2,903 2,984 Net Worth 200 274 242 32 440 507 549 676 702 Loan Funds 100 197 0 Net Fixed 965 1,017 1,256 1,361 1,495 -100 Assets (86) -200 Treasury 909 540 397 409 235 -300 Corpus -400 (333) FY 09 FY10 FY11 FY12 FY 13 FY 14 10,121 13,836 17,215 20,458 24,716 Life Ins. AUM 7 * 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. However, PBT for FY13 has been appropriately adjusted in the chart to reflect proper trends
Max India – Q3FY15 Key Highlights • Structural clarity to be achieved by vertical split of Max India into 3 separate listed entities with mirror shareholding and divestment of clinical research: Max Financial Services (Life Insurance) Max India Max India (Healthcare, Health Insurance, Senior Living, Corporate Management Services and others) Max Ventures and Industries (Specialty Films) Max Neeman in the process of being divested to a Canadian CRO for US 1.5 Mn • GWP grows 11% to Rs. 2052 Cr. While APE grows 8% • Expense ratio improves from 26.3% to 25.2% Max Life • AUM grows 26% to Rs. 29,262 Cr. • Conservation ratio up 80 bps to 81.7% • IFC investment of Rs. 31 Cr. to maintain shareholding at 7.5% and redemption of preference shares implemented. Max India and LHC to hold 46% stake each Max Healthcare • Revenue grows 22% to Rs. 437 Cr. • EBITDA grows 34% to Rs. 42 Cr. • In-principle understanding achieved with Bupa for resetting the JV to 51:49. Cash inflow of Rs. 182 Cr. assuming implementation by March 31, 2015 Max Bupa • GWP for Q3FY15 up 18% to Rs. 90 Cr. while B2C GWP grows 47% • Average premium realization up 22%; Conservation ratio highest ever at 93% 8
MAX LIFE INSURANCE COMPANY (Max Life) www.maxnewyorklife.com 9
Indian life insurance industry has evolved since the opening up of the sector in 2000 Phase 1 – Joyful Entry (2000-2003) Phase 2 – Expansion (2004-2008) Phase 3 – Discovering New Normal (2009 onwards) Global Financial crisis/ Bearish Indian Stock Market Entry of Private Players Equity Bull Run Frequent regulatory interventions Introduction of Bancassurance ULIP introduced by private players 4.6% 4.4% xx Individual FYP adjusted for Single Premium (`'000 Cr.) 4.1% 4.0% 4.0% Insurance penetration 3.4% 3.2% 3.1% 2.6% 2.5% 2.5% 2.3% 2.2% 55 53 50 48 47 45 47 40 48% 50% 43% 54% 63% 62% 62% LIC 64% 21 16 14 12 12 10 66% Private 75% 85% 94% 98% 100% Players FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Source: IRDA Annual Report 2013-14 Max Life Insurance
Top bank-led insurers observed linked products gaining momentum driven by robust capital markets Apr- Dec’13 Apr- Dec’14 Par Non Par ULIP 14% Max Life 70% 16% 58% 12% 30% Reliance Life 55% 30% 15% 15% 69% 16% SBI Life 32% 31% 37% 45% 33% 23% Birla Sunlife 21% 38% 41% 45% 23% 32% HDFC Life 40% 10% 50% 23% 19% 58% ICICI Pru 14% 23% 63% 14% 84% 2% K EY I NSIGHTS ICICI Prudential (YoY: +37%) and HDFC Life (YoY: +29%) recorded phenomenal growth driven by UL surge (result of customer pull due to buoyant equity markets) Increased contribution from UL products led to significantly higher case sizes. However, count of new customers added to the book was seen o depleting which reflects reduced activity SBI Life is known to have skewed it’s product portfolio to linked products starting December 2014 across key distribution cha nnels Top agency led players like Reliance Life and Birla Sunlife continue to have a Traditional heavy portfolio Max Life’s UL share accounted for 30% of total portfolio as a result of increased customer demand 11 SOURCE: Market Intelligence & Internal Estimates | Public Disclosures
Max Life has remained the most consistent player delivering growth Oct- Dec’13 Jan- Mar’14 Apr- Jun’14 Jul- Sep’14 Oct- Dec’14 LIC Private Total Max Life Private industry grew 53% by 1% excluding ICICI Prudential & HDFC Life 22% 21% 19% 14% 14% 8% 5% 5% 5% 0% -11% -26% -35% -54% Max Life's Private Market Share Present 10.0 % 10.3 % 12.3% 9.6 % 9.5 % Last 9.1 % 8.4 % 7.5% 11.6 % 9.7 % Year
Max Life has distinct competitive strengths which will help succeed in the new era Strong Parentage Superior Customer Retention Joint Venture between Top quartile position among major private players in 9MFY2015 in – Max India Ltd. (leading Indian multi- – Surrender to gross premium ratio at 34% business corporate) (No.1) – Mitsui Sumitomo Insurance Co. Ltd. – 13 M persistency at 79% (No.1) (Member of MS&AD group which is amongst top 10 general insurers in the – Conservation ratio at 83% (No.2) world) “ Treating Customers Fairly" framework Strong management team with proven adopted to drive our customer centricity execution capabilities agenda Financially sound* Long term Savings and Protection Comprehensive product suite Capital Base of `2,127cr Long tenor products and young customers Solvency ratio of 487% (one of the highest) Product mix : Par 58%, Non-par 12%, ULIP Assets under management of `29,262cr 30% Multi-channel Distribution model Quality & Business Excellence Highly efficient and productive agency channel with focus on quality of advice ISO Certification, strong feedback processes & robust 6 sigma program Best in class training capabilities within the industry Focus on Service excellence & Operational efficiency Bancassurance relationship with Axis Bank is benchmark in the industry *for the period H1 FY 2015
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