Axis Bank becomes a co-promoter of
Max Life
•
Axis Entities will own 12.99% stake in Max Life
•
Max Life’s Board to be recast with three Axis nominees
•
Axis Entities have right to acquire another 7% in Max Life
April 7, 2021 - New Delhi Axis Bank Limited (“Axis Bank”), India’s third largest
private sector bank, together with its subsidiaries Axis Capital Limited and
Axis Securities Limited (collectively referred to as “Axis Entities”) have
become the co-promoters of Max Life Insurance Company Limited (“Max Life”),
after completion of the acquisition of 12.99 % stake collectively by the Axis
Entities in India’s fourth largest private life insurance firm - Max
Life. The Board of Max Life recorded the closure of the deal today.
The
transaction was completed after the Insurance Regulatory and Development
Authority of India (IRDAI) gave its formal approval in February this year. Max
Life’s holding company Max Financial Services Limited (“MFSL”) and Axis Bank
had first announced their intent to bring in the latter as a strategic partner
in Max Life in February 2020.
Transaction
Axis
Bank and its two subsidiaries—Axis Capital Limited and Axis Securities Limited
collectively own 12.99% stake in Max Life after the consummation of the deal.
The Axis Entities have a right to acquire an additional stake of up to 7% in
Max Life, in one or more tranches, subject to regulatory approvals.
With
the conclusion of this transaction, Max Life’s Board will be strengthened
further, with co-option of three nominee directors of Axis Entities on its
Board.
Amitabh
Chaudhry, Managing Director & CEO, Axis Bank said: “We are delighted to see the strategic partnership come
through. Axis Bank has been a long-term partner to Max Life and together we
have contributed to deepening insurance penetration in India over the last
decade. We have the opportunity now to shape the future of the industry through
continued leadership in products, technology, and customer centricity. We are
confident this venture will enhance the value for all the stakeholders of Axis
Bank and Max Life.”
Welcoming
this long-awaited strategic development, Analjit Singh, Chairman of Max
Group and Max Financial Services, said, “The conclusion of this transaction
is truly a monumental milestone, which will bring added strength to Max
Life and help it chart a new growth trajectory by combining the forces of the
third largest private bank in India with the fourth largest private life
insurer in the country.
We
are again privileged to welcome another sterling name to Max’s history of
storied partners. Throughout our decade-long business association, Axis Bank
has exhibited value across customer insights, distribution expertise and a
myriad of functional benefits which will be of great benefit to our business.”
Subrat
Mohanty, Group Executive, Banking Operations & Transformation, Axis Bank, said, “We have a long-term commitment to build a strong
insurance distribution platform for our customers. This deal is an affirmation
of that commitment. Max Life is a well-managed professional organization with a
stellar track record. We are excited to enter into this new phase in our
partnership with them.”
Mohit
Talwar, Managing Director, Max Financial Services, said, “With the conclusion of this deal between Max Life
and Axis Bank, we are ready and equipped to integrate the synergies of the two
players and commence a relationship that will cement Max Life’s position as a
top quartile life insurer delivering sustainable and profitable growth.”
Prashant
Tripathy, Managing Director & CEO, Max Life Insurance, added, “This closure marks a new phase of growth and
stability for Max Life. The JV enhances our brand in the eyes of our customers,
business partners and investors by integrating the resources and benefits that
the two players bring. This development is also a reflection of the relentless
efforts put in over the years by the Max Life team. We are looking forward to
entering this promising era for Max Life with utmost fervor and dedication.”
Axis
Bank has shared a successful business relationship with Max Life for over a
decade, providing long-term saving and protection products to nearly 20 lakh
customers. The total premium generated through this alliance has aggregated to
over Rs. 40,000 crores. Both companies have invested extensively in product and
need-based sales training, thereby leading to a consistent increase in
productivity.
Max
Life has been consistently outperforming the private industry. Its asset under
management (AUM) grew by 23% YoY and reached Rs 84,724 crore as on 31st
December 2020, which has more than doubled in less than 4 years. In the last
four years (FY 16 –20), its Individual Adjusted New Sales registered a
compounded annual growth rate (CAGR) of 18%. In the first 11 months of last
fiscal FY 21, Max Life has outperformed the top three private players with YoY
Individual Adjusted New Sales growth of 14%.
About
Axis Bank:
Axis
Bank is the third largest private sector bank in India. It offers the entire
spectrum of services to customer segments covering Large and Mid-Corporates,
SME, Agriculture and Retail Businesses. With its 4,568 domestic branches
(including extension counters) and 11,629 ATMs across the country as on 31st
December 2020, the Axis Bank network spreads across 2,521centers, enabling the
Bank to reach out to a large cross-section of customers with an array of
products and services. The Axis Group includes Axis Mutual Fund, Axis
Securities Ltd., Axis Finance, Axis Trustee, Axis Capital, A.TReDS Ltd.,
Freecharge and Axis Bank Foundation.
For
further information on Axis Bank, please refer to the website: https://www.axisbank.com
About
Max Financial Services Limited:
Max Financial Services Limited
(MFSL) is part of the leading business conglomerate – the Max Group. Focused on
Life Insurance, MSFL owns and actively manages an 81.8% stake in Max Life
Insurance, India’s largest non-bank, private life insurance company. MFSL
earned a revenue of Rs. 18,242 crore in FY20. The Company is listed on the NSE
and BSE. Besides a 17.3% holding by Analjit Singh sponsor family, some other shareholders
include Mitsui Sumitomo, Ward Ferry, New York Life, Baron, Vanguard, First
Voyager, Jupiter, Blackrock and the Asset Management Companies of Reliance,
HDFC, ICICI Prudential, Motilal Oswal, Aditya Birla Sun Life, Mirae, and Kotak.
About Max Life:
Launched in 2000, Max Life is a
Joint Venture (JV) is the sole operating subsidiary of Max Financial Services
Limited. Max Life is India’s largest non-bank private life insurer and the
fourth largest private life insurance company, with gross premium of ₹
16,184 Cr., a Claims Paid Ratio of 99.22%, a Market-Consistent Embedded Value
(MCEV) of ₹ 9,977 Cr., and a sum assured of ₹
9,13,660 Cr., with a total of 269 branch units across India as of March 31,
2020.
