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 percent in the Financial Year 2017-18 (FY18). During this period the Gross Written Premium of the company grew by 16 percent to Rs. 12,501 crore, while the renewal premium recorded growth of 15 percent 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 percent while retaining private market share at 9 percent.
-Solvency Ratio of 263 percent, significantly higher than the regulatory requirement of 150 percent, indicating the Company's strong and stable financial position.
-Conservation ratio was at 90 percent as compared to 89 percent in the previous year
-Claims paid ratio grew to 98.26 percent in FY18 from 97.81 percent in FY17
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"I am delighted to share yet another year of strong financial performance of the company in FY18. 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," said executive vice chairman and managing director, Max Life Insurance, Rajesh Sud.
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 percent to Rs. 12,501 crore with 19 percent increase in new business premium to Rs. 4,349 crore and the renewal premium recording a growth of 15 percent to Rs. 8,152 crore. The adjusted individual first year premium increased by 22 percent to Rs. 3,215 crore and retained market share of 9 percent amongst the private players. A growth of 4 percent 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 gross premium ratio improved from 14.8 percent in FY17 to 12.9 percent in FY18 and the cost (Commission plus policyholders operating expenses) to gross premium ratio improved from 23.5 percent FY17 to 20 percent 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 percent 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 percent 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 percent 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 percent to Rs. 8,152 Crore and Max Life Insurance continued its leadership in conservation ratio at 89.6 percent.The 13th Month persistency has been 80.49 percent with an improvement of 9 bps. The 61st month persistency has been 52.5 percent 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 percent. 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 percent with 5 out of 10 touchpoints having score of about 80 percent which is in line with global standard results. The surrender to gross written premium has also improved from 21% in FY17 to 20 percent in FY18. In addition, the Customer Confidence Index improved to 80 percent due to significant increase in Treating Customer Fairly culture to 91 percent.