Max Financial Services Limited
(MFS) announced financial results on November 14, 2018, for Q2FY18. MFS, which manages a majority stake in Max Life Insurance, a private life insurance company, reported consolidated revenues of Rs4,075cr (excluding unit-linked investment income), growing 18% over the previous year. The company reported a consolidated profit after tax (owner’s share) of Rs53cr, which declined by 22% yoy, due to one-off expenses relating to IDBI Federal acquisition, higher proportion of protection sales and shift in product mix.
Max Life’s individual adjusted first year premium increased by 31% yoy to Rs646cr in Q2FY19. This was primarily driven by improvement in productivity and balanced product mix. Max Life’s renewal premium stood at Rs2,157cr, up by 14% yoy. This was led by efficiency improvement and various initiatives aimed at lapse recovery. Overall, gross written premium (GWP) in Q2FY19 was Rs3,299cr, up by 18% yoy.
Value of new business (VNB) during H1FY19 is Rs290cr, up by 42% yoy and the new business margin stood at 20.4% (post cost over-run), which expanded by ~230bps yoy in H1FY19. Max Life reported an embedded value (EV) of Rs7,752cr as on September 30, 2018, with an annualized operating return on EV (RoEV) of 18.5% in Q2FY19. AUM as at September 30, 2018 stood at Rs56,070cr, growing 17% over the previous year.
The solvency ratio of Max Life stood at 2.62x as on September 30, 2018. The market share based on individual APE improved by 90bps to 9% during H1FY19.