Sunday, 18 May 2014

Max Life Outperforms in FY 2014

Max Life Outperforms industry in FY 2014
Records New Business Premium Growth of 19% to Rs. 2,262 crore
Announces Total Shareholder Dividend of Rs.265 crore and Policyholder Bonus of Rs. 391 crore
Posts impressive all-round performance:
Gross Written Premium up 10% to Rs. crore 7,279
Market Share amongst private life insurers up 180 bps to 10.3% on Adjusted Individual FYP
Profit After Tax up 3% to Rs. 436 crores
AUM up 21% to Rs. 24,716 crore
New Delhi, May 15, 2014: Max Life Insurance, one of the fastest growing Indian life insurance company, today announced it Annual Results for the Financial Year ended March 31st 2014. The company continued its profitable growth journey during the Financial Year 2013-14 and has outperformed the private industry to record New Business Premium of Rs. 2,262 crore,  growth of  19% over the corresponding period last year. Max Life Insurance further increased its market share to 10.3%, an increase of 180 bps, amongst private life insurers and maintained its rank as the largest non bank owned life insurer. The Gross Written Premium of the Company grew 10% to Rs.7,279 crore. During the period Shareholder Profit After Tax grew 3% to Rs. 436 crore.
Max Life Insurance also performed well on other business parameters for FY 2013-14 as compared to corresponding period in the previous year:
·         Assets Under Management increased by 21% to Rs.24,716 crore from March 2013
·         Sum Assured in-force (Individual and Group) at   Rs.1,99,660 crore, recorded an increase of 18%
·         Solvency Ratio of 485%, more than 3 times the mandatory 150%, indicates the Company’s strong and stable financial position
·         Cost to Gross Premium ratio improved 144 bps to 27.1% (PY: 28.5%) and Opex to Gross  Premium ratio was better 157 bps at 17.7% % (PY: 19.2%)
Max Life Insurance’s customer centric approach to business has contributed to this strong financial performance.
·         One of the lowest customer complaints incidence at 0.24 complaints per thousand policies
·         99.95% of all claims were settled within 10 days of receipt of all documents during FY 2014. The total  amount paid out as claims in the year stood at Rs. 228 crore
·         Conservation ratio at 82%, continues to be one of the best in the industry
Commenting on the performance of the company, Mr. Rajesh Sud, CEO & Managing Director, Max Life Insurancesaid, "I am delighted that Max Life Insurance performed well on all parameters while coping with the changing business and regulatory environment.  In fact, Max Life is the only company to witness uninterrupted growth in the past 20 months. All distribution channels recorded growth in new business premium during the year, including the core channel of agency distribution which also witnessed growth in productivity and performed ahead of plan.
The Company did a splendid job of  restructuring its entire product portfolio within a short time frame and had the highest number of approved products by January 2014. With this new product portfolio, Max Life’s growth in new business premium by 21% in the last quarter of the financial year as against an industry wide decline of 20% is noteworthy.”
“We have demonstrated superior all round performance and have been able to gain market share amongst private life insurers. This has been made possible due to our continued focus on building a successful life insurance business to deliver the core value of long-term savings and protection in a Life Insurance contract. Going forward, we are confident of a sustained profitable growth for Max Life Insurance as we continue to differentiate in the market place basis our advice based sales, balanced product portfolio, multi-channel distribution and superior customer experience through superior claims and complaint management.” he further added.
FY 2013-14(April 2013 – March 2014) compared with FY 2012-13 (April 2012 – March 2013)

Apr -March’14
(Rs. Crs)
Apr –March ’13
(Rs. Crs)
Change
New Business Premium
2,262
1,899
19%
Adj. Indv. First Year Premium
1,769
1,513
17%
Gross Written Premium
7,279
6,617
10%
Shareholders’ Profit After Tax
436
423
3%

As on March 31, 2014
(Rs. Crs)
As on March 31, 2013
(Rs. Crs)
Change
Sum Assured In force
1,99,660
1,69,167
18%
Asset Under Management
24,716
20,458
21%
Solvency Ratio %
485%
521%
(3600) bps
Revenue
The Gross Written Premium for the financial year 2013-14 increased by 10% to Rs.7,279 crore with a 19% increase in new business premium to Rs.2,262 crore and the renewal premium recording a growth of 6% to Rs.5,017 crore.
The company also outperformed the industry by growing 17% as compared to a 3% decline witnessed by the industry over the corresponding period last year, in Adjusted individual First Year Premium, which is the true indicator of new business success. The Company’s conservation ratio at 82%, is amongst the best in the industry and testimony to its commitment towards customers. 13th month persistency at 76% is also amongst the best in the industry.

Cost Management
Over the past 4 years Max Life Insurance has focused on higher efficiency and productivity and reduction of wasteful expenditure. The cost minimisation focus is reflected in Cost to Gross Premium ratio improving to 27.1% (PY: 28.5%) and Opex to Gross  Premium ratio better at 17.7% (PY: 19.2%).
Profit After Tax (PAT)
During the FY 2013-14, Max Life Insurance, recorded a shareholders’ Net Profit After Tax                   of Rs. 436 crore, compared to Rs. 423 crore in FY 2012 - 13.
This rise in shareholders’ profit was a result of continued revenue growth coupled with better productivity and cost efficiency.

Policyholder Bonus
Considering the surplus that arose over the financial year in the participating fund, Max Life Insurance announced policyholder bonus. The total bonus that is estimated to be paid out in the 12 months in financial year 2014 – 15 is Rs. 391 crore, an increase of Rs. 94 crore from the previous year figure of Rs. 297 crore.
Shareholder Dividend
Max Life Insurance announced a year-end dividend of Rs.136 crore. This takes the total shareholders dividend for FY 2013-14 to Rs.265 crore, including an interim dividend of Rs.128 crore.

Solvency Ratio & Capital
The solvency ratio of the company stood at 485% as on 31st March 2014 as compared to 521% on March 31st 2013. Max Life Insurance maintained more than 3 times solvency margin as compared to the margin of 150% mandated by IRDA.
As on March 31st 2014 the Company maintained its paid up capital (including share premium) at    Rs. 2,127 crore.
Assets Under Management
The Company’s Assets under Management (AUM) of Rs. 24,716 crore recorded a growth of 21% over the last year. As on March 31, 2014, 54% of the AUM was in controlled fund and 46% in ULIP funds.
Service Parameters

Apr-March ’14
Apr-March ’13
Change
Customer complaint resolution within 14 days
99.98%
99.90%
8 bps
Claims settlement ratio within 10 days of receipt of all documents
99.95%
98.63%
132 bps
Claims Payment Ratio
93.86%
94.25%
(0.39) bps
Outstand Claims Ratio
0.04%
0.09%
86 bps
Max Life Insurance has taken several initiatives to enhance its focus on customer centricity. Service Promise and Claims Guarantee introduced in the financial year 2013 demonstrated continuous improvement. Max Life has now one of the lowest customer complaints incidence rate. The Company’s customer complaints incidence rate stands at 0.24 as on March 2014 and ~100% of the customer complaints are resolved within the specified time of 14 days.
The Company is also tracking well on its promises of claims guarantee to its policyholders. ~100% of death claims received on policies more than 3 year old have been paid and 99.95% of all death claims were paid within 10 days of receipt of relevant documents. Our efforts to further enhance the efficiency of our claims management process has resulted in Outstanding Claims Ratio coming down to 0.04%.

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