Max Financial Services Limited (MFS) today announced its financial results for the second quarter of financial year 2018-19 (Q2 FY2019). MFS is the holding company of Max Life Insurance (Max Life), India's largest non bank-owned life insurer.
MFS reported consolidated revenues1 of Rs. 4,075 Cr., growing 18% over the previous year. The Company also reported Profit after Tax4 of Rs. 53 Cr., 22% lower compared to the previous year due to one-off expenses for the attempted acquisition of IDBI Federal Life, higher proportion of protection sales and shift in product mix.
During the quarter, Max Life reported Revenues1 of Rs. 4,067 Cr., growing 19% over the corresponding quarter last year. Shareholders' Profit before Tax was for the quarter was Rs. 185 Cr., 42% higher compared to the previous year.
The business also reported strong Operating Return on Embedded Value (RoEV) of 18.5% with Market-Consistent EV (MCEV) of Rs. 8,034 Cr. The Value of New Business (VNB) (pre-cost overrun) written during the first half of FY2019 (H1 FY2019) was Rs. 325 Cr. growing 41% over the previous year, mainly due to higher sales of protection products. The pre-cost overrun New Business Margin (NBM) stood at 22.9%. The post-cost overrun VNB during H1 was Rs. 290 Cr. growing 42% over the previous year. The post-cost overrun NBM stood at 20.4%.
Max Life's Assets under Management, as on 30th September 2018, were Rs. 56,070 Cr., growing 17% over the previous year. Max Life is one of the 5 largest fund managers among life insurers in India.
H1 FY2019 Performance
During H1 FY2019, MFS's Consolidated Revenues were Rs. 7,168 Cr, up 19% over the previous year. The Company also reported Consolidated Net Profit of Rs. 66 Cr. in H1 FY2019.
During this period, Max Life reported Individual Adjusted Premium Equivalent (APE) of Rs 1,405 Cr., growing an impressive 26%. The Gross Written Premium during this period was Rs. 5,619 Cr., growing 17% over last year.
Commenting on Max Life's performance, Mr. Rahul Khosla, President, Max Group and Chairman, Max Life Insurance said, "Max Life's financial performance is at an all-time high. Growing 26% in the first half of the year, the business has significantly outpaced the 11% growth by the Indian private life insurance sector. Shareholders' profit has also shown remarkable growth, owing largely to higher investment income. The business has notched up a gain of 90 basis points in market share to 9%, consolidating its position amongst the four largest private life insurers.
While we have experienced strong growth across all channels - proprietary channels have especially led the way with a robust 33% growth in H1, significantly exceeding the 22% growth in Banca. The e-commerce channel specifically has grown an outstanding 158% over last year. We are confident that our continued thrust towards reinvigorating these channels will create strong long-term growth for the business."
Mohit Talwar, Managing Director, Max Financial Services Ltd. said, "The impressive growth in Embedded Value and Value of New Business reflects strong fundamentals in the existing business and a continued focus on profitable new business. The health metrics of the business also continue to be solid with a Conservation Ratio of 91%, which puts us at the top in the industry; and Surrenders to GWP Ratio of only 21%, which is the third best in the industry as of date. I strongly believe that the market will take these fundamentals into cognizance very soon, which will be accordingly reflected in the Company's market cap as well.
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