MFSLNSEq4fy25May 19, 2025

Max Financial Services Limited

8,234words

52turns

9analyst exchanges

3executives

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Management on call

Nishant Kumar

CFO from Max Financial

Prashant Tripathy

Managing Director and CEO; Mr. Amrit Singh - Chief Financial

Sumit Madan

Chief Distribution Officer of Axis Max Life Insurance.

Key numbers — 40 extracted

20%

Sustainable and Predictable Growth: In FY '25, our Individual adjusted first year premium grew by 20%, surpassing private sector growth of 15% and overall industry growth of 10%. On a 2-year CAGR basi

15%

Y '25, our Individual adjusted first year premium grew by 20%, surpassing private sector growth of 15% and overall industry growth of 10%. On a 2-year CAGR basis, we delivered 18% growth, significantly

10%

t year premium grew by 20%, surpassing private sector growth of 15% and overall industry growth of 10%. On a 2-year CAGR basis, we delivered 18% growth, significantly ahead of the 12% CAGR for the priv

18%

ate sector growth of 15% and overall industry growth of 10%. On a 2-year CAGR basis, we delivered 18% growth, significantly ahead of the 12% CAGR for the private sector and 8% for the total industry.

12%

ndustry growth of 10%. On a 2-year CAGR basis, we delivered 18% growth, significantly ahead of the 12% CAGR for the private sector and 8% for the total industry. Notably, this also marks the fastest gr

GR basis, we delivered 18% growth, significantly ahead of the 12% CAGR for the private sector and 8% for the total industry. Notably, this also marks the fastest growth among the top 10 private insur

27%

surers over the past 2 years. Our Prop Channels have been key drivers of these 2 years growing by 27% with e- commerce maintaining its leadership position across the Protection and Savings segment. Ou

rs,

n, growing Prop Channels, leadership in Protection and Annuity and adding more distribution partners, I am proud to say that we have performed well and are on track to achieve these ambitious targets o

35%

hip Health Product” introduced in Quarter 3, these launches helped grow our Protection business by 35% in FY '25 and Individual New business sum assured by 31% maintaining rank #3. Additionally, from

31%

es helped grow our Protection business by 35% in FY '25 and Individual New business sum assured by 31% maintaining rank #3. Additionally, from the presentation, you will notice that we with a lot of a

300%

resentation, you will notice that we with a lot of agility added riders, and our rider APE grew by 300%, contributing significantly to our margin performance, cushioning the impact of surrender regulati

50 basis point

tions that we took have quite substantially reduced and in my expectations there will be less than 50 basis points for Quarter 4. As a result, Quarter 4 margin stood at 28.1% despite the higher share of ULIP. And

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Guidance — 20 items

Sustainable and Predictable Growth

opening

“On a 2-year CAGR basis, we delivered 18% growth, significantly ahead of the 12% CAGR for the private sector and 8% for the total industry.”

Sustainable and Predictable Growth

opening

“Internally, we call that mission “Uday” with clear objectives of becoming leaders in online acquisition, growing Prop Channels, leadership in Protection and Annuity and adding more distribution partners, I am proud to say that we have performed well and are on track to achieve these ambitious targets or be very close to them while navigating all the external challenges.”

Sustainable and Predictable Growth

opening

“Overall, these partnerships and our direct expansion with new offices provide deeper penetration into Tier-2 and Tier-3 cities, which will add impetus to our growth in the medium term.”

Product Innovation to Drive Margins

opening

“Anticipating a question that might come our way in terms of the impact of surrender guidelines on the overall margins, I am very happy to share with you that the overall impact because of these actions that we took have quite substantially reduced and in my expectations there will be less than 50 basis points for Quarter 4.”

Digitization for Operational Efficiency

opening

“Eventually, by the end of this year, it will be launched across all channels.”

Amrit Singh

opening

“So we will be now happy to take any questions that you may have and I will hand over to the moderator to open the floor for questions.”

Prashant Tripathy

“And in that backdrop, how do you see the growth in this FY '26 and margins, would you be kind of guiding for FY '26 margin by and large stable or sort of an improvement, so that some sort of growth and margin guidance in FY '26 and what is driving currently your growth?”

Prashant Tripathy

“Coming to the guidance, it is really giving absolute guidance is not the best idea.”

Prashant Tripathy

“That will be at least the aspiration with which we will operate.”

Prashant Tripathy

“So for the time being, my suggestion and request will be we don't give much heed to these sound bites that keep coming.”

Risks & concerns — 14 flagged

Additionally, from the presentation, you will notice that we with a lot of agility added riders, and our rider APE grew by 300%, contributing significantly to our margin performance, cushioning the impact of surrender regulations.

— Product Innovation to Drive Margins

Anticipating a question that might come our way in terms of the impact of surrender guidelines on the overall margins, I am very happy to share with you that the overall impact because of these actions that we took have quite substantially reduced and in my expectations there will be less than 50 basis points for Quarter 4.

— Product Innovation to Drive Margins

If we had not taken the actions of increasing the penetration of riders or our action on Protection as well as Health, the impact would have been more so by taking this quick actions to a great extent, we were able to negate the impact of product categories which inherently have lower margins.

— Product Innovation to Drive Margins

We also maintained our rank 3 in brand search queries consistently rising throughout FY '25, even as the industry experienced a decline in Quarter 4 of FY '25.

— Customer-Centric Approach

Furthermore, our risk analytics engine, including tools like Shield, MediCheck and GoVern have helped identify and mitigate potential claim risk exceeding about Rs.

— Digitization for Operational Efficiency

So I think it is a part of General evolution, and I must also say that as competitive forces as well as regulatory forces put pressure on ability to generate margins, the industry is definitely looking for product categories, which could potentially create more margins.

— Prashant Tripathy

And this slowdown actually you would have seen all across.

— Amrit Singh

Wherein even Axis at 7%, I would say it is kind of mirroring the broader trend across all channels with respect to the growth slowdown that was witnessed.

— Amrit Singh

So my question is, how should we think about it in terms of FY '26, would there still be sort of more impact left to come through in this year and just 50 basis points is on a blended basis, but on an overall product portfolio of traditional products, what would be the margin decline over there as a result of this, if you could help me understand and provide some clarity on how should we think about this?

— Sumit Madan

Over the last couple of years, banks have focused on building their deposits, which were under stress and that has been the reason why some of the effect on Life Insurance sales has come up.

— Sumit Madan

Talking about the surrender value question that you asked, the issue impact of whatever I spoke less than 50 basis points, I am going to invite Amrit Singh to give us, maybe the item, but I must call out that H2 generally does about 60%-65% of the sales.

— Amrit Singh

In my business, I don't even look at what is the net impact of surrender value.

— Amrit Singh

So Annuity is a bit of a shift from single premium business to regular premium business and that also is an underlying reason why you see a weak Annuity numbers that you have reported.

— Amrit Singh

Second is, in terms of number of policies, while I understand the non-PAR was not kind of a flavor in Financial Year ‘25 and we saw decline from 1,97,000-1,80,000 odd.

— Mohit Mangal

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Q&A — 9 exchanges

Good morning. Thanks for the opportunity. Very strong set of numbers. Couple of questions. The first one is more, if I see the growth in April, I mean your growth is very impressive, so can you and that is a bit of I would say or not in line with industry that is better struggling for growth. So what is driving this growth in this current year, this month, more into Protection or it is a kind of a balance across products. And in that backdrop, how do you see the growth in this FY '26 and margins, would you be kind of guiding for FY '26 margin by and large stable or sort of an improvement, so t

Avinash Singh

Thank you.

Couple of questions, sir. One, I think all players in the private space have been able to attach riders in this year, want to understand what has really changed and why is it working now versus not 3 years ago and why it should work in the next 3 years? That is part 1. Second is, you talked about the rebranding helping in building up the brand. Have we started to take any action on pricing to reflect brand strength? And just one more piece on timelines for reverse merger? That will be the questions. The first question is more evolutionary, Manas to be honest, if you went back 10 years, the ind

Manas Agrawal

Thank you, sir. Thank you, Manas.

Hi, thank you for the opportunity and congratulations on a good set of numbers. Just on the harping on the reverse merger, just one question that I had that another company which had won the case against IRDAI in NCLAT, ideally one would have expected that that should also have paved the path for you, has there been any discussion post that you have had with the regulator? That is my first question on the reverse merger bit and second is on the EV walk. Can you help us understand the operating variance that we have of 0.05 billion, how much of it is, can you give a breakup between how much was

Shreya Shivani

That is very useful. Thank you so much.

Thanks for the opportunity. My first question is on the Bancassurance channel. Could you give us this split of what is the contribution from Axis Bank during this quarter and what has been the performance there because we have seen that the growth in this channel has slowed in the 4th quarter versus the 3rd quarter, so just wanted to understand, despite the synergies, why is the growth slowing and what are you doing to improve growth there? That is my first question. The second one was on the slide where you layout some of your aspirations, slide 16. Now, if I look at your expectation from the

Prashant Tripathy

So I am requesting Amrit to take the first one and then I will take the second one. Supratim, the Axis Bank growth for Quarter 4 was around 7% and the full year number as we shared is around 10%. And this slowdown actually you would have seen all across. In Quarter 4, the growth not just for us, but even from an industry perspective did moderate and we grew at around 11% for Quarter 4 on an adjusted FYP basis. Wherein even Axis at 7%, I would say it is kind of mirroring the broader trend across all channels with respect to the growth slowdown that was witnessed. Yes, but we are very satisfied

Hi, good morning. Thank you for taking my question. First on the Axis Bank channel, not only about the last quarter, so last quarter I think across the channels there has been a little bit of a slower growth number, but even if we look at the number over the last couple of years, the growth is about 10% last year and before that, I think one of their other partners was growing in that channel. So there were some challenges as a result of that. But even after that, growth from that channel continues to be just about 10%. While you maintain your counter share, but I would have expected the chann

Amrit Singh

also is becoming a key part of their portfolio. I think it is a combination of these strategies which should give us a further push as far as the growth of 10% for the last 2 years is concerned. Thank you, Sumit. Talking about the surrender value question that you asked, the issue impact of whatever I spoke less than 50 basis points, I am going to invite Amrit Singh to give us, maybe the item, but I must call out that H2 generally does about 60%-65% of the sales. So it is not equal, and I wish I knew the number. In my business, I don't even look at what is the net impact of surrender value. Ge

Thanks for the opportunity and congratulations for the good set of numbers. Sir, firstly, if you look at the growth in this year, we have done extremely well in the e- commerce channel. So what is driving the growth in that channel and how sustainable do you think that growth rate that we are putting out in that channel is there?

Sumit Madan

Yes, we feel very proud of our achievement in the e-commerce channel and for last many years, the growth will be more than 50% CAGR. Before FY '24 or around FY '24, we were the largest player in the Protection area and we have been no. 1 in Protection on e-commerce for many years, actually. However, we realized that just being Protection, we are not playing in a very quickly rising Savings area and we started to participate in the Savings area and some of the new things that you saw around index-linked fund designs, etc., have been instrumental. But for more details, I am just going to invite

Hi, thank you for the follow up question. Sir, just wanted to clarify, on your dividend strategy, you had mentioned 1 or 2 years back that you will not be paying out dividends. So this strategy does not change till Axis Max Life gets listed. Is that a correct understanding? And second is on the persistency, so I know Y-o-Y trend, you have shown us whatever trends have been there. However the formula for calculating the persistency seems to have changed, it changes from the regulator. Just for my understanding how regularly does this happen? And I believe this will be for the entire industry, r

Shreya Shivani

Yes. Great. That answers. Thank you so much.

Thanks for the opportunity. I was looking at slide 39 of your presentation deck and basically, I was looking at the case size. So what was a little surprising is that ULIP has actually declined and so is Annuity. Can you just specify the reasons for that? So Annuity is a bit of a shift from single premium business to regular premium business and that also is an underlying reason why you see a weak Annuity numbers that you have reported. Though on regular premium, actually the growth has been very robust. On ULIP, it is a bit of a choice of customer segments and where you are kind of going and

Mohit Mangal

Fine, that is helpful. Second is, in terms of number of policies, while I understand the non-PAR was not kind of a flavor in Financial Year ‘25 and we saw decline from 1,97,000-1,80,000 odd. But going forward, now that maybe ULIP may not grow as fast as maybe other segments, so can we assume that the number of policies in the non-PAR Savings should increase? Yes, that will be a good assumption to make. Thanks and wish you all the best. Thank you.

Thank you everyone for being part of Max Financial Earning Call. We look forward to more such interactions in the future. Thank you once again. Have a good day.

Prashant Tripathy

Thank you.

Speaking time

Moderator

Prashant Tripathy

Amrit Singh

Nidhesh Jain

Supratim Datta

Nishant Kumar

Shreya Shivani

Sumit Madan

Mohit Mangal

Sustainable and Predictable Growth

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Opening remarks

Nishant Kumar

Thank you. Good morning, everyone and thank you for joining Max Financial Earnings Call for the Quarter-Ended March 31st, 2025. Our Results along with the Investor Presentation and Press Release have been made available on our website and stock exchanges. Joining me today are Mr. Prashant Tripathy - Managing Director and CEO; Mr. Amrit Singh - Chief Financial Officer and Mr. Sumit Madan - Chief Distribution Officer of Axis Max Life Insurance. I will now request Prashant to walk us through the key developments and insights for FY '25.

Prashant Tripathy

Thank you, Nishant, and warm welcome to all of you. As you all know, FY '25 was marked by substantial product regulatory changes and market volatility that challenged many players across the life insurance industry. But I am very proud to say that despite all these headwinds, Axis Max Life Insurance remained resilient and emerged stronger, regaining our rank number 4 for the full year and more importantly, achieving rank number 3 for the second-half of the year as well as Quarter 4. Following the implementation of new surrender regulations, our agility, strong distribution capabilities, disciplined execution and unwavering customer focus enabled us to adapt and continue delivering consistent growth and value. Let me now take you through the key developments across 3 or 4 parameters that I always do, which are the strategic areas for the year.

Sustainable and Predictable Growth

In FY '25, our Individual adjusted first year premium grew by 20%, surpassing private sector growth of 15% and overall industry growth of 10%. On a 2-year CAGR basis, we delivered 18% growth, significantly ahead of the 12% CAGR for the private sector and 8% for the total industry. Notably, this also marks the fastest growth among the top 10 private insurers over the past 2 years. Our Prop Channels have been key drivers of these 2 years growing by 27% with e- commerce maintaining its leadership position across the Protection and Savings segment. Our Bancassurance channels delivered steady growth of 12% despite headwinds of open architecture. Back in FY '22, we had outlined our aspirations for FY '26. Internally, we call that mission “Uday” with clear objectives of becoming leaders in online acquisition, growing Prop Channels, leadership in Protection and Annuity and adding more distribution partners, I am proud to say that we have performed well and are on track to achieve these ambitio

Product Innovation to Drive Margins

Axis Max Life remains committed to leading in product innovation with a clear focus on stakeholder value creation, be it customers, employees, partners, investors and communities. In FY '25, we rolled out 80 product interventions and this is a large number predominantly because we had to pretty much change all the products in view of the surrender guidelines. In Quarter 4, we actually launched 2 very innovative new product propositions: 1. STAR ULIP combining life coverage with market-linked returns which offers high sum assured multiples and flexible add-ons such as accidental disability coverage plus diverse investment strategies. 2. The second one was smart-term plan plus featuring and auto rebalancing life cover, maternity benefits for women and the lifeline plus option providing top up cover in case of the spouse’s demise with 7 flexible variants it meets diverse Protection needs. Together with SEWA 2.0 which is our “Flagship Health Product” introduced in Quarter 3, these launches

Customer-Centric Approach

Axis Max Life Insurance has made significant strides in customer centric metrices underscoring its unwavering commitment to customer satisfaction and retention. We are pleased to announce that for the third consecutive year, we have retained rank 2 in customer satisfaction as for as syndicated NPS study by Hansa Research and we have also consolidated our position as rank 2, just one point behind rank 1. Our brand strength continues to show notable improvements with 7% increase in our brand consideration scores. We also maintained our rank 3 in brand search queries consistently rising throughout FY '25, even as the industry experienced a decline in Quarter 4 of FY '25. You may also recall that we had rebranded ourselves from Max Life Insurance to Axis Max Life Insurance. We did measure our brand awareness and brand considerations scores before the exercise and after the exercise in the month of March. I am very happy to share that across all vectors of awareness and consideration, we ha

Digitization for Operational Efficiency

Axis Max Life Insurance has made substantial progress in enhancing its digital capabilities during FY '24-25 with a focus on operational efficiency, customer experience and business growth. Key initiatives include the launch of mSpace, a super app that aims to streamline the insurance sales process by providing our frontline staff with easy access to policy information customer data and performance analytics with a long-term view of integrating training, intelligent nudges and a backend powered by Generative AI, thereby improving productivity and customer engagement. We as management of Axis Max Life Insurance have strong conviction in this particular digital design for our sales staff, which has the potential to substantially increase productivity in our field force. In the agency, we have achieved 90% adoption already for supervisor roles and 100% adoption for the direct sales force and these are two channels where it has been launched. Eventually, by the end of this year, it will be

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