max financial services ltd share price Management discussions


During the past three years, the global economy has faced significant upheavals, resulting in three major shocks. The initial shock occurred in 2020 with the onset of the COVID-19 pandemic. Two years later, as the global economy was in the process of recovering from the pandemic-induced downturn, a new challenge emerged in February 2022—the Russia-Ukraine conflict. This conflict led to a sudden surge in commodity prices, exacerbating already high inflationary pressures and causing disruptions in supply chains. The third challenge materialized when global central banks implemented monetary tightening measures to combat inflation, consequently slowing down economic growth.

The Indian Government presented a growth-oriented, non-inflationary budget with a focus on capital expenditure and job creation. The government adhered to the fiscal glide path of achieving a 4.5% fiscal deficit in FY26, thereby ensuring commitment towards long-term macro-stability.

India is expected to be one of the worlds fastest growing major economies in 2023 as well. According to the International Monetary Fund (IMF), Indias GDP is expected to grow by 6.9% in 2023 encouraging and attracting foreign investment. However, it is subject to India undergoing some structural reforms. These reforms include measures to improve business operations, accelerate infrastructure development, promote digitization, and streamline the tax system. The economy is bouncing back with gradual uptick in manufacturing and consumption post the pandemic stutter.

India is the 6th largest economy in the world by nominal GDP and the 3rd largest by purchasing power parity (PPP). The countrys economy has undergone major changes in recent years due to the shift to a service-oriented economy and increased integration into the global economy. The Indian economy is characterized by a large labour force, an important agricultural sector, and a rapidly growing service sector. The services sector accounts for a significant portion of the countrys GDP, along with important industries such as information technology, financial services, and healthcare.

As we move into a new fiscal year, India remains on the cusp of unlocking growth, with recovery expected in the agriculture, manufacturing and service sectors. Government policies, including Production- Linked Incentives (PLI), indigenisation of defence manufacturing and a focus on capital expenditure and infrastructure creation (roads, railways, irrigation and so on), are expected to boost future growth and aid the economys recovery. India has also followed a prudent monetary policy and the RBIs commitment to contain inflation will help ensure macro-stability and lead to more sustainable and inclusive growth over the medium term.

India is expected to be one of the worlds fastest growing major economies in 2023 as well. According to the International Monetary Fund (IMF), Indias GDP is expected to grow by 6.9% in 2023 encouraging and attracting foreign investment.

The country has undergone significant economic liberalization in recent decades with reforms aimed at increasing foreign investment and encouraging entrepreneurship. However, India still faces challenges such as a large informal economy, high unemployment, and poverty. The country has also been hit by the COVID-19 pandemic, which has reduced its GDP in 2020. Overall, the Indian economy has grown significantly in recent years and is expected to continue growing, driven by ongoing economic reforms and a growing middle class. However, challenges remain that must be addressed to ensure sustainable and inclusive growth.


The insurance industry in the country is undergoing rapid expansion and is anticipated to reach a market size of US$ 280 billion by 2025, per a recent International Trade Administration report, with a compound annual growth rate (CAGR) ranging between 12% and 15%, primarily attributable to rising awareness about the importance of insurance and increasing disposable incomes where Substantial increases in subscriber numbers and Assets Under Management (AUM) have been observed across various financial institutions. The growth of the sector has been facilitated by government initiatives, including Pradhan Mantri Fasal Bima Yojana (PMFBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Vaya Vandana Yojana, and Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (AB- PMJAY).

The banking sector and capital markets have also been expanding their reach, and this growth is reflected in the insurance and pension sectors. In India, insurance penetration rose steadily from 2.7% at the turn of the millennium to 4.2% in 2020 and stayed the same in 2021. The Indian insurance market has seen government interventions and a favourable regulatory environment, leading to partnerships, product innovations, and dynamic distribution channels, that has led to its constant growth. The said growth in the insurance industry has expanded the opportunities available to individuals to save money, protects their future, and form a sizable fund reserve. Contributing to the capital markets with the aid of these funds, the growth of the sector has consequently helped in accelerating significant infrastructure improvements in India.

Over the past two decades, the insurance market in India has experienced exceptional growth, owing to higher private sector involvement, better distribution capacities, and significant increases in operational effectiveness. Collaboration with foreign markets has also played a pivotal role in facilitating substantial growth within the industry. In 2000, India permitted private enterprises in the insurance market, limiting FDI to 26%, which was raised to 74% in 2023, as stated by the IRDAI in the Insurance Laws (Amendment) Act, 2015.1


Indias insurance density increased from USD 11.1 in 2001 to USD 91 in 2021, with life insurance having a density of USD 69 in 2021.


The Government offers insurance to people who live below the poverty level by implementing schemes such as:

Pradhan Mantri Suraksha Bima Yojana

The programme offers beneficiaries risk coverage of 2 lakh for accidental death and full disability, as well as 1 lakh for partial disability. As of November 30, 2022, the scheme had enrolled 31.3 crore beneficiaries and disbursed 1.07 lakh claims.

Pradhan Mantri Jeevan Jyoti Bima Yojana

The scheme provides coverage of 2 lakh to the policyholders family in the event of their death. As of November 30, 2022, the programme had enrolled 14.4 crore beneficiaries and disbursed 6.3 lakh claims.

Pradhan Mantri Vaya Vandana Yojana

Under the scheme, old age income security is provided to senior citizens through the provision of an assured pension/return linked to the subscription amount. As of November 30, 2022, the scheme had enrolled 8.6 lakh subscribers with a subscription amount of 84,659.4 crore.

The introduction ofthese schemes would make it easier for Indians with lower and lower-middle income levels to take advantage of the new insurances reduced premiums. The growth of the insurance industry is also projected to be supported by regulatory changes and digitalisation.

state of affairs of Indian life insurance SECToR

One of the coveted sectors in India that is expanding quickly is life insurance. Growing earnings and more industry awareness are the catalysts for the life insurance sectors favourable expansion in India. Insurance penetration in the life insurance market was 3.2% in 2021, which is slightly higher than the worldwide average and twice as high as that of developing nations.

Penetration and Density of

Life Insurance in India

Particulars 2012 2013 2014 2015







Life Insurance Penetration (in %) 3.17 3.10 2.60 2.72







Life Insurance Density (In $) 42.7 41.0 44.0 43.2








The Indian life insurance market has witnessed a number of changes in terms of new innovations, altered laws, amendment suggestions, and growth in the last few fiscals. These advances have created new growth opportunities for the sector while ensuring that insurers remain relevant in light of modern technological advancements and societal changes. Interesting to note is that in FY 2023, the first-year premium numbers grew by 179% vs. the 12.9% growth reported in FY 2022, per a recent CARE Ratings Report. The report also mentioned that the FY 2023 growth can continue to be attributed primarily to group single premiums and more specifically to LIC and a low base, which saw subdued levels due to the pandemic-induced (Covid-19 second wave) lockdowns. Meanwhile, private insurance companies continue to extend their lead in the individual nonsinge premium segment. Private insurance companies have continued their growth momentum as the fiscal year closed (tax saving options) and non-par policies to high-net-worth individuals were pushed aggressively prior to new taxation regime kicked in beginning April 2023.


Sum assured in (in f crore)

Growth (%)

FY 22

FY 2023

Private sector













According to the Life Insurance Council, the private life insurance industry in India demonstrated robust premium growth of 35% in March 2023. Furthermore, the overall premium growth for FY 2023 was impressive, experiencing a significant increase of 20%. The upsurge in demand for life insurance policies was predominantly observed towards the conclusion of the financial year, with the private life insurance sector emerging as the prominent beneficiary.

Life Insurance Corporation (LIC) of India had a lacklustre performance with a significant reduction in premiums despite being the largest life insurer in India. In March 2023, LIC witnessed a substantial 32% reduction in premium as compared to previous month, and the premium growth for FY 2023 was limited to only 17%. Furthermore, the retail annualised premium equivalent (APE) for LIC in March 2023 showed only a modest growth of 10%.

Despite LICs underwhelming performance, the private life insurance industry experienced a remarkable surge in premiums, contributing positively to the overall figures. In March 2023, the retail annualised premium equivalent (APE) for the private life insurance industry achieved an impressive annual growth rate of 56%, resulting in overall premium growth of 13%.2

This substantial growth in premiums for the private life insurance industry in March 2023 and throughout FY 2023 reflects an increasing awareness among the Indian population regarding the significance of life insurance. As the industry continues to prioritise digitisation and innovation, it is poised to witness further expansion in the future3.

Despite LICs underwhelming performance, the private life insurance industry experienced a remarkable surge in premiums, contributing positively to the overall figures. In March 2023, the retail annualised premium equivalent (APE) for the private life insurance industry achieved an impressive annual growth rate of 56%, resulting in overall premium growth of 13%.


Max Financial Services Limited (MFSL or the Company), a part of the $4-Bn Max Group, is the holding company for Max Life Insurance Company Limited (Max Life). It owns and actively manages an 870% majority stake in Max Life - Indias largest non-bank owned, private life insurance company. On April 6, 2021, Axis Bank Limited, Indias third-largest private sector bank, together with its subsidiaries

Axis Capital Limited and Axis Securities Limited (collectively referred to as "Axis Entities") became the co-promoters of Max Life. This was after completion of the acquisition of a 12% stake collectively by the Axis Entities in Max Life till March 31, 2022.

Subsequently, on January 9, 2023 the Company has executed revised agreements with the parties in terms of which Axis Entities have the right to purchase the balance 7% equity stake of Max Life from the Company at Fair Market Value using Discounted Cash Flows instead of valuation as per Rule 11UA of the Income Tax Rules, 1962. This revision has been done consequent to the guidance received by Max Life from IRDAI. This development resulted in a mutually beneficial and enduring relationship between Axis Bank and Max Life. It further solidifies Max Lifes decade-long relationship with Axis Bank, providing long-term saving and protection products to over 2.5 million customers over 3,81,900 crore worth of sum assured to cover their risks (as of 31 March 2023). This relationship will permanently address uncertainty around Max Lifes distribution and improve its position amongst its peers

During FY 2022, Max Life had filed an application for approval with IRDAI for acquisition of 99,136,573 equity shares constituting 5.17% equity stake in Max Life (balance shares held by MSI) by the Company under MSI Put/Call option. The Company had received approval from Insurance Regulatory and Development Authority of India (IRDAI) vide its letter dated November 25, 2022. Pursuant to the approval, on December 8, 2022, the Company acquired residual 5.17% equity stake held by MSI in Max Life at a price of 85 per share. On acquisition of the aforesaid stake in Max Life, the shareholding held by the Company in Max Life increased to 87%.


MFSL reported consolidated revenues of 31,431 crore, grew 1% mainly due to lower investment income, excluding investment income, consolidated revenues grew 13% in FY 2023. Consolidated Profit after Tax (PAT) stood at 452 crore, grew 42% in FY 2023.

In FY 2023, Max Life grew by 11%, ranking fifth in the industry. During the year, the total new business premium (First Year Premium and Single Premium) of Max Life increased by 13% to 8,960 crore. In terms of adjusted individual first year premium, your Company recorded a 11% growth to 6,025 crore. Further, the renewal premium income (including group) grew by 13% to 16,382 crore, taking gross written premium to 25,342 crore, an increase of 13% over the previous financial year. Max Life generated a posttax shareholders profit of 435 crore in FY 2023, as compared to 387 crore in the previous financial year, recording an increase of 12%. The net worth increased from 3,064 crore in FY 2022 to 3,505 crore in FY 2023, a growth of 11%.

Proprietary channels registered highest ever growth of 43% in FY 2023, new business premium grew to 2,176 crore, driven by secular growth across all channels i.e. online (ecommerce), agency, direct selling teams. Proprietary channels contribution to individual sales increased from 28% in FY 22 to 36% in FY 23. Max Life strengthened its retirement offering with the launch of regular pay annuity variant, annuity sales grew by 300%, in FY 2023 on APE basis.

Max Life generated a posttax shareholders profit of 435 crore in FY 2023, as compared to 387 crore in the previous financial year, recording an increase of 12%. The net worth increased from 3,064 crore in FY 2022 to 3,505 crore in FY 2023, a growth of 11%.

Max Lifes assets under management (AUM) were 1,22,857 crore as on March 31, 2023, a rise of 14% over the previous year.

Max Life achieved the highest New Business Margin (NBM) of 31.2% in FY 2023, improved by 380 bps over corresponding previous period. Value of New Business (VNB) grew at 28% to 1,949 crore in FY 2023. Max Life reported an Embedded Value of 16,263 crore, while the Operating Return on EV (RoEV) improved by 290 bps to 22.1% year-on-year.

Max Life has secured 4 new banca partnerships with DCB Bank, Tamilnad Mercantile Bank, Ujjivan Small Finance Bank, Capital Small Finance Bank and 6 new renowned Brokers in FY 2023.

Max Life Pension fund management (PFM) commenced operations in FY 2023, AUM as at March 31, 2023 ~143 crore and also obtained a point of presence (POP) license will aid mobilization of NPS funds.

Max Life has been recognised by a number of Indian and foreign business bodies for its excellence in business, customer service and focus on people select recognitions are Celent Model Insurer Award; ICAI for excellence in financial reporting for FY 21-22; Awarded Excellence in driving distribution through Digital at the FICCI Insurance industry awards 2022; Awarded Excellence in Claims service and Best product innovation for SFRD at World BFSI Congress and awards


Max Life believes that the employees overall wellbeing represents the core of the business. It aspires to empower employees and enrich their careers by providing various opportunities to upskill them, develop an inclusive work environment and evaluate their performance for continuous improvement. Max Life enables a seamless flow of communication and further motivates them to perform better.

Our progressive policies and practices, a value- driven culture and inspirational leadership have helped us attract, engage and retain key talent. By advancing employees competencies and skill sets through various initiatives, we bring value at every stage of the employee life-cycle, which benefits both the organisations productivity and the individual employees motivation and encouragement.


Prompt settlement of death claims is the most important promise a life insurer makes while selling a life insurance policy. A timely and hassle-free claim settlement is the most important moment of truth for the life insured and life insurer relationship. We endeavour to keep promises and keep dreams alive at the time of the customers utmost need by paying death claims within one day for eligible policies.

Max Life has paid in-total 19,563 death claims worth 1,242 crore during FY 2023. Since its inception, Max Life Insurance has paid 7,375 crore towards death claims on 1,83,261 policies. With the InstaClaim™ initiative for our vintage policyholders (i.e., policies that have been in force for at least 3 continuous years with us), your Company endeavours to provide death claim payment within one day. Currently, 56% of claims are settled in a day and this number is expected to increase materially with our relentless customer obsession to be provide financial security to our customers when it matters the most.

Long-term customer retention is of critical importance in creating a win-win for customers, distributors, and your Company. Ongoing improvements in our structural solutions and services to improve persistence are one of the key focus areas for your Company. In FY 2023, the 13th-month persistency of Max Life Insurance was at 84.1% (Premium) and the 61st-month persistency stood at 51% (Cumulative, Premium).

The Company also tracked performance on customer engagement and satisfaction through Net Promoter Score (NPS) across key customer touchpoints During FY 2023, your Company witnessed an improvement of 3 points (+6%) in the NPS scores to 52. Further, our transactional NPS reflecting the satisfaction of our customers at key touchpoints increased from 66 to 69, another reflection of your companys obsession to better serve our customers.


Indias insurance sector is experiencing rapid growth and is well-positioned to become the worlds sixth largest by 2032. The total premiums in nominal local currency are estimated to witness a surge of an average of 14% annually over the next ten years, with a real-term growth rate of 9% each year. The life insurance segment is anticipated to register 9% annual growth (in real terms) by 2032, making India the fifth largest life insurance market worldwide. The pandemic has raised awareness of the need for life insurance, resulting in greater demand. Additionally, regulatory developments and the adoption of digital technologies are expected to boost the growth of the insurance sector in India. These measures, accompanied by an increase in the FDI limit for insurance companies, are likely to expedite an increased flow of long-term capital, global technology, processes and international best practices, which will bolster the growth of Indias insurance sector.

Max Life creates a three-year strategy and reviews it periodically. With Axis Bank becoming a co-promoter of Max Life in FY 2022, the Companys management team decided to chart a new growth trajectory by combining the forces of the third largest private bank in India with the fourth largest private life insurer. The management team undertook a detailed review of the market landscape and opportunities to redefine our growth ambitions and sharpen our strategic framework to drive consistent and profitable growth.

As a part of a three-year business plan for FY24- 26, Max Life redefined the comprehensive strategic framework around five key elements and will remain focus on Sustainable and Profitable Growth, Product innovation to drive margins, Customer centricity, Digitization and Human Capital.

MFSL and Max Life are committed to ensure financial protection of the larger community by leading with agility and transitioning the business processes onto digital channels to promptly provide life insurance solutions and service to the customers. Consumer receptiveness is driving digital adoption in the industry by demonstrating their comfort in engaging through online channels.