Max Financial Services Limited (MFS) today announced financial results for the year 2018-19 (FY2019). MFS, which manages a majority stake in Max Life Insurance, India's largest non-bank, private life insurance company, reported consolidated revenues of Rs 17,538 Cr, growing 17 per cent over the previous year.
The company reported a consolidated net profit of Rs 391 Cr, 30 per cent lower compared to the previous year, largely due to one-time expenses for pursuing an inorganic opportunity for Max Life and reversible fair valuation impact as per the recently adopted accounting methodology, IndAS.
MFS' sole operating subsidiary Max Life Insurance demonstrated broad-based growth across channels with gross written premium in FY2019 at Rs 14,575 Cr, growing 17 per cent over the previous year. New Business Premium (on APE basis) stood at Rs 3,950 Cr, achieving a growth of 22 per cent over the previous year. Max Life's Renewal Premium was Rs 9,415 Cr, growing 15 per cent over the previous year.
This was primarily driven by the growth in proprietary channel of 30 per cent during the year, increasing its share in the Adjusted Individual First Year Premium from 27 per cent in FY2018 to 30 per cent in FY2019. In addition to this, overall growth was also spurred by an increase of 18 per cent in the Bancassurance channel.
Max Life also reported Market-Consistent Embedded Value (MCEV) of Rs 8,938 Cr, with an Operating Return on EV (RoEV) of 22 per cent. The Value of New Business (VNB) written during FY2019 was Rs 856 Cr, growing 30 per cent over the previous year, and the New Business Margin (NBM) stood at 22 per cent, 150 bps higher compared to the previous year. This was primarily driven by higher sales of Protection products, an increase in Non-participating (Non-PAR) business and higher proportion of the Assured Wealth Plan.
Max Life achieved an important milestone this year with its Assets under Management (AUM) crossing the Rs. 60,000 Cr. mark for the first time. The AUM as at 31st March 2019 stood at Rs 62,798 Cr, growing 20 per cent over the previous year.
Max Life also set a benchmark as its Claims Settlement Ratio further improved by 48 bps to 98.7 per cent in FY19 from 98.3 per cent in FY18, as per the Insurance Regulatory and Development Authority of India (IRDAI) Annual Report.
Q4 FY2019 Performance
In Q4 FY2019, Max Life reported Individual new business premium of Rs 1,634 Cr, growing 22 per cent over the same quarter last year. Max Life reported revenues of Rs 6,236 Cr in Q4 FY2019, showcasing a growth of 18 per cent over Q4 FY2018.
"With an increase of 65 bps compared to last year, Max Life now commands approximately 10 per cent of the private market share in the life insurance sector. This is a testimony to the company's strong and consistent performance trajectory over the years. I am happy to report that in FY19 Max Life has clocked a 22-22-22 growth in Value of New Business, Margin and Return on Embedded Value, which sets it well on way to achieve 25-25-25 growth in these parameters by 2022", said Mohit Talwar, Vice Chairman, Max Group & Managing Director, Max Financial Services.