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Your parent company Max India recently got the nod for demerger. How significant is that?
This is an important event for Max India and this is essentially to provide greater focus to each business. Here, the company will trifurcate into three entities — Max Financial Services, Max India and Max Ventures & Industries.
Max Financial Services will be the only listed entity that only holds a life insurance company. It will be the first and only life insurance holding company to be listed.
This would mean Max Life Insurance will be listed since Max Financial Services will only hold the life insurance venture. How will this be beneficial?
This is a matter of great pride for us. We are profitable, dividend-paying and have also established ourselves as a leader in relevant fields. The listing of the holding company will enable the markets to recognise the value we have created. We are privileged to be in this situation. Governance has always been strong for us. This will be a lot more visible to the market and we will also be more accountable. However, our focus will be that performance remains rock solid. This listing also allows discovery of value to be done through market process.
Were there any preparations for this at Max Life Insurance?
This was a long-drawn process. Changes were more at Max India level than at Max Life though we have completed the processes. All necessary regulatory approvals are already in place. The board has approved it.
After this, what are the growth strategies?
Our vision is to be a more admired life insurer. We will look at the potential of open architecture of bancassurance and look at acquisitions opportunities. We have a strong appetite for acquisitions and the focus is on life insurance to support our core business.
Will there be any changes in FDI stake in the life insurance company?
As far as FDI is concerned, there is status quo. Max India continues to be the majority shareholder and the foreign partner holds 26 per cent. However, the shareholders will discuss when they want to make changes in the stake.
Will the focus on traditional products continue?
We don't look at product push, but at customer pool. Research has shown that Indian customers prefer products where there is less volatility, returns are steady and safety of money is crucial for them. These features are more predominant in traditional product platform. Our product structure will be customer-driven.
We are looking to be more agile in the online space. Our challenge is to keep pace with the market shift versus the time taken to design and get approval for a product there. We have to get better at that.
Do you expect to see double-digit growth in new life insurance premiums in FY16?
We hope new premium growth transforms into broad-based and consistent growth. What we are seeing is, growth is concentrated at three or four players and only private players are growing. Further, growth is fluctuating for insurers from one quarter to another. It is being driven by those with bank partners like us and also equity market led unit-linked insurance products.
Penetration has been an issue in insurance. Are you expecting additional tax sops in the Budget for life insurance?
Financial savings must be pushed by the government and there should be more money in the hands of individuals through tax reforms. We expect long-term products in life insurance with tenure of more than 10 years should be given separate exemption. The existing tax exemption limit of Rs 1.5 lakh should be increased to Rs 3 lakh.
