Max Life Insurance Records a Growth of 31% in the Value of New Business for FY18
Highlights
of all-round performance in FY18
Gross Written Premium up by 16% to Rs 12,501 crore
Gross Written Premium up by 16% to Rs 12,501 crore
As
on 31st March 2018 – Assets Under Management up by 18% to Rs 52,237
crore
Sum
Assured up by 35% to Rs 5,11,541 crore
by Shrutee K/DNS
New Delhi, May 29, 2018:
Max Life Insurance Co. Ltd, a
leading Indian life insurance company, recorded Individual adjusted first year
premium of Rs 3,215 crore achieving growth of 22% in the Financial Year 2017-18 (FY18). During this period the
Gross Written Premium of the company grew by 16% to Rs 12,501 crore,
while the renewal premium recorded growth of 15% to Rs 8,152 crore. The Company
recorded shareholder profit (Post Tax) of Rs 528 crore.
Max Life Insurance Co. Ltd. performed
well on other key business parameters for FY18:
New Business Premium (Individual + Group)
at Rs. 4,349 crore, recorded growth of 19%while retaining
private market share at 9%.
Solvency Ratio of263%,significantly higher than the regulatory requirement of
150%, indicating the Company’s strong and stable financial position.
Conservation ratio was at 90%as compared to 89% in the previous year
Claims paid ratio grew to 98.26%
in FY18 from 97.81% in FY17
Commenting on the performance of the company, Mr. Rajesh Sud, Executive Vice Chairman & Managing Director, Max
Life Insurance said, "I am delighted to share yet another year of
strong financial performance of the company inFY18. Max Life Insurance actively
leveraged growing household interest in financial savings and digitisation in
India. During the year Max Life Insurance not only recorded increase in case
size but also covered more lives than in past years which resulted in a robust
growth in new business. Max Life Insurance continued its leadership position in
online term plans as well as claims management. The increase in embedded value
reflects high quality of our business. Our strong business performance has
resulted in superior returns for both our policyholders in form of bonus and
investment return in ULIPs fund and shareholders in form of dividend. At Max
Life, we believe that engaged employees create happy customers which leads to
great shareholder outcomes.”
* The VNB represents the value added to the EV
due to the new business written by the Company during the year. For FY18, the
VNB was Rs 656 Cr, calculated at actual costs, resulting into new business
margin of 20.2%.
**Embedded Value post final shareholder dividend
|
Key
Business Drivers
|
Unit
|
Year
Ended
|
Y-o-Y
Growth
|
|
|
Mar
18
|
Mar
17
|
|||
|
a) Individual Adjusted Premium
|
Rs.
cr.
|
3,215
|
2,639
|
22%
|
|
b) Gross Written Premium Income
|
Rs.
cr.
|
12,501
|
10,780
|
16%
|
|
New Business Premium
(Individual + Group)
|
Rs.
cr.
|
4,349
|
3,666
|
19%
|
|
Renewal Premium
|
Rs.
cr.
|
8,152
|
7,114
|
15%
|
|
c) Expense to Gross
Premium Ratio
|
Rs.
cr.
|
14.8%
|
12.9%
|
190
bps
|
|
d) Shareholder Profit (Post Tax)
|
Rs.
cr.
|
528
|
660
|
-20%
|
|
e) Share Capital including reserves and
surplus
|
Rs.
cr.
|
2,689
|
2,506
|
7%
|
|
f) Conservation Ratio
|
%
|
89.6%
|
88.6%
|
100
bps
|
|
g) Number of Agents (Agency)
|
Nos.
|
54,791
|
54,283
|
1%
|
|
h) Individual Policies in Force
|
No.
Lacs
|
40.8
|
39.1
|
4%
|
|
j) Sum Insured in Force
|
Rs.
cr.
|
5,11,541
|
3,77,572
|
35%
|
|
k) Assets Under
Management
|
Rs.
cr.
|
52,237
|
44,370
|
18%
|
|
l) Embedded Value
|
Rs
cr.
|
7,509
|
6,590
|
20.6%
|
|
m) Operating return on EV
(ROEV)
|
%
|
20.6%
|
19.9%
|
70
bps
|
|
n) Margin
|
%
|
20.2%
|
18.8%
|
140
bps
|
FY 2017-18 (April 2017 – March
2018) compared with FY 2016-17 (April 2016 – March 2017)
Revenue
The
Gross Written Premium for FY18 increased by 16% to Rs.12,501 crore with 19%
increase in new business premium to Rs. 4,349 crore and the renewal premium
recording a growth of 15% to Rs.8,152 crore. The adjusted individual first year
premium increased by 22% to Rs. 3,215 crore and retained market share of 9%
amongst the private players. A growth of 4% in the number of policies has been
recorded, taking it to 40.8 lakhs for FY18, in comparison to 39.1 lakhs in
FY17.
Cost
Management
The Company continued to remain focused on providing greater
value to its policyholders through improvement in efficiency. The operating expenses (policyholders) to grosspremium
ratio improved from 14.8% in FY17 to 12.9% in FY18 and the cost (Commission plus
policyholders operating expenses) to gross premium ratio improved from 23.5%
FY17 to 20% in FY18.
Shareholders’ Profit After
Tax (PAT)
During the FY 2017-18, Max Life
Insurance, recorded a shareholders’ Net Profit After Tax of Rs. 528 crore,
compared to Rs 660 Cr (current year’s profit is less due to non-repeatable high
investment income recorded in FY17).
Final shareholders’ dividend (net of Dividend Distribution Tax)
of Rs.163.10 crore has been proposed by the Board of Directors, which takes the
total dividend distribution to Rs. 326.20 crore translating to 17% of the face
value of each share.
Policyholder Bonus
Considering the surplus that arose over the
financial year in the participating fund, Max Life Insurance announced
policyholder bonus. The total bonus estimated to be paid out in the 12 months in financial year 2018– 19 is Rs. 1084 crore, an increase of Rs. 230 crore from the previous year figure of Rs. 854
crore.
Assets
Under Management
The Company’s Assets under
Management (AUM) of Rs. 52,237 crore recorded a growth of 18%
over the last year. As on March 31, 2018 Rs 35,139 of the AUM was in controlled
fund and Rs 17,098 in ULIP funds.
Embedded Value
The Embedded Value(EV), post final
shareholder dividend, as at 31st March 2018 is Rs 7,509 Cr. The
operating return on EV of 20.6% is mainly driven by new business growth and
healthy experience on persistency & mortality.
Service Parameters
Customer retention is the best proof of not just selling
right product solutions but also the quality of service a company provides to
its customers which leads to better engagement. During FY18, the renewal
premium grew by 15% to Rs. 8,152 crore and Max Life Insurance continued its
leadership in conservation ratio at 89.6%.The 13th Month persistency has
been 80.49% with an improvement of 9 bps. The 61st month persistency
has been 52.5% this year.
Payment of death claim is the biggest moment of truth in
a life insurance contract.Max Life continued its leadership journey on that
front with Claim Paid Ratio improving to 98.26%. The company paid 10,152 death
claims worth Rs. 353 crore during the Financial Year 2017-18. Since inception,
Max Life Insurance has paid Rs. 2,223 crore towards death claim to 81,253
families. Customer Experience Index, a
cumulative index of customer experience across key policyholder transactions,
witnessed an increase in Top 2 box score to 81% with 5 out of 10 touchpoints
having score of about 80% which is in line with global standard results. The
surrender to gross written premium has also improved from 21% in FY17 to 20% in
FY18. In addition, the Customer Confidence Index improved to 80% due to
significant increase in Treating Customer Fairly culture to 91%.
About
Max Life Insurance Co. Ltd. (www.maxlifeinsurance.com)
Max Life Insurance, the leading
non-bank promoted private life insurer, is a joint venture between Max
Financial Services Ltd. and Mitsui Sumitomo Insurance Co. Ltd. Max Financial
Services Ltd. is part of the Max Group, which is a leading Indian
multi-business corporation, while Mitsui Sumitomo Insurance is a member of
MS&AD Insurance Group, which is amongst the leading insurers in the world.
Max Life Insurance offers comprehensive long term savings, protection and
retirement solutions through its high quality agency distribution and
multi-channel distribution partners. A financially stable company with a strong
track record over the last 18 years, Max Life Insurance offers superior
investment expertise. Max Life Insurance has the vision 'To be the most admired
life insurance company by securing the financial future of our customers'. The
company has a strong customer-centric approach focused on advice-based sales
and quality service delivered through its superior human capital. During the Financial Year 2017-18, Max Life
Insurance achieved gross written premium of Rs.12,501 crore and had sum assured in force of Rs.5,11,541 crore.
As on 31st March 2018, the company had Rs.52,237crore of
Assets Under Management and the share capital including reserves and surplus of
Rs. 2,689 crore.
The Company has more than 32 lakh customers serviced by its 10,226 employees and 54,791 agent advisors through 210 offices
across the country.
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