Investor Presentation June 2020 SECTION I  Max Financial Services Max Group Vision “To Be the Most Admired Corporate for Service Excellence”

Max Financial Services Limited

Investor Presentation June 2020 SECTION I  Max Financial Services Max Group Vision “To be the most admired corporate for service excellence”

• Positive social impact • Culture of Service Sevabhav • Helpfulness • Mindfulness

• Expertise • Entrepreneurship Excellence • Dependability • Business performance

• Transparency • Respect Credibility • Integrity • Governance

3 Max Group – Overview

Max Group - Sponsors

28.3% 40.9% 49.7%

Senior Living and Real Estate, Manufacturing Holding Life Insurance Business Companies Skilling businesses & Other businesses

51% 72.52%^ 100%

100% • Independent living - Residencies • Assisted Living - Care Homes

Operating • Homecare - Care@Home 100% Companies

100% 100% Relatively stable, profitable and dividend Growth businesses Entrepreneurial Ventures paying

^ Max Life to be 70:30 JV with Axis Bank post series of transactions 4 Evolution of Max Group

First wave: Early years, Second wave: Group reinvented Third wave: Corporate restructuring to Started with Manufacturing from a B2B conglomerate to a B2C unlock value & Portfolio Rebalancing Businesses (1982 – 2000) company (2000 – 2014) (2015-20)

Started its journey with Reinvented itself … Shifted from B2B Acquisitions, Demerger, Wider world of Manufacturing & trading to B2C : businesses through MVIL & Portfolio businesses rebalancing : • Life Insurance: JV with NYL in 2001, new • Demerger: Spilt into 3 entities, Max Financial, • Pharma: Penicillin-based drug JV partner MSI in 2012 Max India & Max Ventures

• Packaging Films: Max Speciality Films • Health Insurance: JV with Bupa in 2009 • Wider world of businesses : MVIL forays into Real Estate; NYL acquires 22.5% stake in MVIL; • Electronics: Partnered with Avnet • Healthcare: JV with LHC in 2012, LHC Toppan inducted as JV partner in Max

• Cellular services: JV with Hutchison equalize stake in 2014 invested 766 Cr Speciality Films

• Re-balancing Portfolio: MHC merged with • Paging services: Tie-up with Motorola • Senior Living: Launched first community rd in Doon in 2013 Radiant to create 3 largest Hospital chain; • Communication & Satellite: Comsat JV True North acquired Max’s stake (51%) in Max • Fund Raised: Warburg invested 340 Cr in Bupa for Rs 543 Cr • Printed Circuit Board: JV with Atotech 2005; 1000 Cr QIP in 2007; IFC invested • Holistic Senior care service provider: Antara • Divestment: Divested 40% stake in 450 Cr till 2009; GS invested 522 Cr in aspires to create an ecosystem for seniors Telecom business for a gain of 488 Cr 2010 offering a blend of lifecare & lifestyle products.

5 Journey of Successful Partnerships

Current JV Partners Marquee Investors

Past JV Partners

6 MFS – Board of Directors

Former Chairman of HSBC India. Serving on the Chairman and Founder Founder and Chairman of Max Group. Awarded Independent Director Board of L&T, Cipla, Nayara Energy, Lafarage Mr. Analjit Singh with highest civilian honor, the Padma Bhushan Mrs. Naina Lal Kidwai Holicim

Managing Director Independent Director Currently the Chairman of Rothschild and Co, Seasoned professional with 36 years of Sir Charles Richard India. He is a Director of the JP Morgan Asian experience in Corporate Finance and Banking Mr. Mohit Talwar Vernon Stagg Investment Trust

Former CEO of HSBC Asia Pacific with 35 yrs of Seasoned professional with 37 years experience Independent Director Independent Director experience. Serving on the Board of Vedanta, with Bank of New York Mellon and Bank of Mr. Aman Mehta Mr. Jai Arya TCS, Tata Steel, Wockhardt & Godrej Consumer America

CEO & Managing Director of Max Ventures and Director Independent Director Former IAS officer of 1977 batch and has served Industries Limited. Responsible for the overall Mr. Sahil Vachani Mr. D. K. Mittal the government of India in various capacities strategic vision and direction of the company

7 Max Group – Senior Management

Mohit Talwar • Vice-Chairman, Max Group • Managing Director, Max India Limited • Managing Director, Max Financial Services • Vice-Chairman, Max Ventures and Industries Ltd • Chairman, Max Specialty Films

Prashant Tripathy Sahil Vachani • Managing Director & CEO, Max Life Insurance • MD & CEO, Max Ventures and Industries Limited • Director in Max Financial & Max Life Insurance

Tara Singh Vachani Rajit Mehta • Executive Chairman, Antara Senior Living • Managing Director& CEO, Antara Senior Living • Director in Max India & Max Healthcare • Group role to oversee Max India New Growth Initiatives and Advisor for Max Group’s Human Capital

Ramneek Jain Rajender Sud • CEO, Max Specialty Films • CEO, Max Skill First Limited

8 Max Group Overview

1 USD 2.5 billion Revenues… 4 Mn Customers… 16,000 Employees… ~46,000 Agents

2 Strong growth trajectory even in challenging times; a resilient & diversified business model

3 Steady revenue growth and cost rationalization leads to strong financial performance

4 Well established board governance….internationally acclaimed domain experts inducted

5 Diversified ownership…..marquee investor base

6 Superior brand recall with a proven track record of service excellence

7 Strong history of entrepreneurship and nurturing successful business partnerships

basis FY20 numbers for conversion assumed 1 USD = INR 75 9 High pedigree of long-term investor base

Shareholding concentrated with Marquee Investors ▪ KKR Shareholding Pattern ▪ Baron Emerging Market Fund as on 31st Mar 20 ▪ Ward ferry

▪ New York Life Public ▪ Vanguard 13.9% Promoter ▪ Norway Government Pension Fund 28.3% ▪ Jupiter ▪ Blackrock FII- Others ▪ Neuberger Berman 23.9% ▪ Eastspring KKR 6.7% ▪ Dimension ▪ Mirae Mutual Fund Mutual Funds ▪ HDFC Mutual Fund 27.2% ▪ Reliance Mutual Fund ▪ Kotak Mutual Fund ▪ ICICI Prudential Mutual Fund Number of outstanding shares: 26.95 Cr. ▪ Aditya Birla Sunlife Mutual Fund ▪ DSP Mutual Fund

10 SECTION II  Recent Developments in Max Financial & Max Life MSI & Axis Transaction Summary

MSI Transaction

▪Preferential allotment to MSI in MFS against swap of shares held by MSI in Max Life

▪MFS to acquire balance 5.17% stake from MSI at Rs 85 per share for cash consideration of Rs 843 Cr

▪Transaction expected to be completed by Jun’20, subject to receipt of all regulatory approvals (DEA, IRDAI & CCI)

Axis Transaction

▪ Axis Bank to acquire 29% stake in Max Life from MFS at a valuation as per Tax Book value (currently at Rs 28.62/sh^; ~ Rs 1,600 Cr)

▪ Post completion of series of transactions Max Life will be a 70:30 JV between MFS and Axis Bank

▪ This transaction brings together the 3rd largest private bank and 4th largest private life insurer in the country

▪ It will significantly improve Max Life’s competitive position vis a vis its Peers, including other large bank owned private life insurers

▪ Axis & Max Life had a successful business relationship with 19 lacs customers and premium generated over Rs. 38,000 Cr

▪ This JV will govern this in the spirit of equal partnership. Max Life will have 4 directors nominated by MFS and 3 by Axis

▪Transaction expected to be completed by Dec’20, subject to receipt of all regulatory approvals (RBI, IRDAI & CCI)

12 Transaction Structure

Final structure (Post completion of series of transactions Current Structure step wise detail given below )

Mitsui Max Promoter Public Max Promoter Public Sumitomo 28.31% 71.69% 22.11% 21.87% 56.02%

Max Financial Max Financial (MFSL) (MFSL)

Max Life Max Life (MLIC)^ (MLIC)

72.52% 25.48% 1.99% 70% 30%

Max Financial Mitsui Max Financial Axis Bank Axis Bank (MFSL) Sumitomo (MFSL)

▪ Step 1: MSI to hold 21.87% stake of MFS stake in exchange of 20.57% of Max Life through a Share SWAP transaction ▪ Step 2: MFS & MSI to acquire 1% stake in Max Life from Axis in the ratio of 74: 26 ▪ Step 3: MFS to sell 29% stake in Max Life to Axis at Tax Book Value ▪ Step 4: MFS to acquire balance 5.17% stake from MSI

Note: MFS Shareholding on undiluted basis 13 SECTION III  Max Life Insurance – Insurance Opportunity Weak macroeconomic environment led to de-growth in financial assets flow; Life Insurance is among preferred asset class in India

Retail wealth in India - Increasing preference for avenues other than cash High Savings Culture though savings rate slowing due to consumption and bank deposits Amount in INR Trillion ` 226 Growth 22% 20% 20% lakh cr 2019 Vs 2015 24% 18% 18% 19% 18%

0.4 0.5 0.4 0.3 0.4 0.5 0.5 0.4 19.1 21.8 13.2 15.9 13.9 14.7 14.2 15.1 20.6 20.0 42% 10% 9.3 10.6 11.9 12.6 15.0 16.1 Bank Deposits 46% -2.9 -3.3 -3.6 -3.8 -3.9 -4.7 -7.4 -7.7 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19

Gross Financial Savings Savings in Physical Assets Gold and Silver

Financial Liabilities Household savings/ GDP (%) 16% Source: Handbook of Statistics on Indian Economy 2016/2017/18/19 12% Insurance AUM 17% Household Savings flow - ~3% de-growth in financial assets flow in 2019 - 7% Lowest in last 5 years 4% Direct Equities 2015 – 2019 10% 6% Amount in INR Bn 26% CAGR Mutual Funds 4% 9% 9% 41% 47% 55% 47% 50% 48% 52% 10% Cash 10%

20% 59% 53% 53% 50% 52% 48% 12% 24% 45% Others 13%

2008 2010 2015 2016 2017 2018 2019 Financial Assets Physical Assets 2015 2019 Source: Karvy India Wealth Report 2015/2016/2017/2018/2019 Source: Handbook of Statistics on Indian Economy 2016/2017/18/19 Direct Equities only for retail investor class; Bank Deposits include FD, CA deposits, SA deposits, NRI deposits X% CAGR 15 Significant opportunity for Life Insurance to grow in India on the plank of ensuring disciplined savings over a long term – Only asset class which is effective in addressing the gap

Gap between other countries and India is significant for Life Insurance India lags behind other developed countries on Life Insurance penetration density Life Insurance Penetration Life Insurance Density (Premium as % of GDP), CY 2018 (Premium per capita – USD), CY 2018

8,204 17.5% 16.8%

4,320

6.7% 6.1% ~ 2 Bps decline 2,629 from 2017 221 55 2.7% 2.3%

Taiwan Hong Kong Japan South Korea India China Hong Kong Taiwan Japan China India

Long Term • Life Insurance inculcates disciplined savings mindset which help retain AUM for longer – For the mutual fund industry, only 40-45%^ of the assets are more than 2 years old Nature of – For better Asset Liability management, Banks preference remains for shorter tenure deposits Savings – Investment in direct equities impacted by performance of stock market and does not ensure discipline

Source: IRDAI Annual Report 2016/17/18/19, ^ AUM under equity finds by retail investors from AMFI website 16 Urbanization, improving affluence, emergence of nuclear families will continue providing impetus to the Life Insurance industry

India has witnessed rapid urbanization, aids Middle class is likely to increase rapidly, especially in Top 150 cities; Top 19 cities continue to hold bulk of affluence and emergence of nuclear families household savings as well affluent households

Urban Population (%)

2050 53% Savings Estimated no. of Households* Next billion Total Savings Strugglers Aspirers Affluent (0.15 – 0.5 ` Trillion| % (<0.15 Mn) (0.5 – 1 Mn) (>1 Mn) 2035 43% Mn) Increase (2016-25)^ 30% 20% 50% >100% 2011 31% Tier 1 19 cities with 9.9| 43% 8 Mn 5 Mn 3 Mn 7 Mn 2 Mn+ pop. 2001 28%

Tier 2 3.5 | 15% 4 Mn 2 Mn 1 Mn 2 Mn 35 cities with 1-2 1991 26% Mn+ pop.

Tier 3 1.5 | 7% 4 Mn 2 Mn 1 Mn 1 Mn 1981 23% 56 cities with 0.5-1 Mn+ pop.

1971 20% Tier 4 3.1 | 14% 9 Mn 4 Mn 2 Mn 2 Mn 415 cities with 0.1-0.5 Mn+ pop. * Based on Annual gross household income in ` 1961 18%

Source: World Urbanization Prospects: The 2018 Revision, United Nations Source: Nielsen Analytics, Mumbai, India. MME: Metro, Town & Rural Skyline of India 2015-16 ^ Source: BCG: The New Indian 17 Life insurance industry has seen multiple cycles since 2001. Recent structural changes in the economy have resulted in positive flow towards financial assets aiding the insurance industry

Phase 1 – Joyful Entry Phase 2 –Expansion Phase 3 – Discovering New Normal Phase 4 – Reinvigoration (2001-2003) (2004-2008) (2009-2015) (2015-date) ▪ Equity Bull Run ▪ Global Financial crisis/ Bearish Indian Stock Market ▪ Stock Market Revival ▪ Entry of Private Players ▪ ULIP introduced by private players ▪ Frequent regulatory interventions ▪ De-monetization – New ULIP guidelines ▪ GST Implementation – New product guidelines ▪ Regulations: – Expense of Management Guidelines – Open Architecture for Corporate Agents – Distributor Compensation Guidelines xx Individual FYP adjusted for Single Premium (INR Billion) Life insurance penetration 4.6% (Percentage of insurance premium to GDP) 4.4% LIC 4.1% 4.0% 4.0% Private Players 3.4% 3.2% 3.1% 2.8% 2.7% 2.7% 2.7% 2.6% 2.5% 2.5% 2.6% 2.2% 2.3% 692 735 635 527 550 533 504 479 472 470 454 441 42% 43% 403 408 44% 48% 46% 50% 43% 54% 210 63% 62% 62% 48% 160 64% 51% 100 100 120 140 75% 66% 100% 98% 94% 85%

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20

Source: IRDAI Annual Reports, League tables 18 Industry Landscape (FY’20): Total Industry grew by 6%, while Pvt. players grew by 5% and LIC by 8%)

YoY Growth basis Individual Adjusted FYP

FY’17 FY’18 FY19 FY’20

Private Industry YoY growth 14% 26% 24% 5%

Industry 25% Max Life 22% 21% 21% 19%

9% 6% 5%

Max Life’s private 9% 9% 10% 10% market share

Max Life’s total 5% 5% 6% 6% market share

Max Life grew at 17% till YTD Feb, more than the private industry growth rate of 14%. Full year growth impacted by COVID-19 in Mar’20

Source: Life Insurance Council | IRDAI 19 SECTION IV  Max Life Insurance – Business Overview Max Life has an extensive presence across India through its own offices and distribution partners and is the 4th largest private Life Insurance player in the country Max Life has more ~6500 Point of Sales across the country

356 Own Branch Units

4th Largest 6000+ Partner Private Life Insurer^ Branches

^ Distribution ~9.7% Private Market Share ~46K Agents ~60 Partners #3 Claims Paid ratio in industry*

~68K Cr ~9L Crores Assets Under Sum Assured Management

~1 Cr+ Lives Insured** Till Date 4th Largest AUM 35 Lacs+ Active Customers**

^By Individual New Sales **Individual customers *As per IRDAI report 2018-19 21 Max Life Insurance’s road map to becoming India’s most admired life insurance company

To be the most admired life insurance company by securing the financial future Vision of our customers

Inspire People to increase the Value of their Life Purpose “I am the Difference”

Quality of Advice Value Driven Culture Superior Human Capital Corporate Governance We Stand for Financial Strength Service Excellence Caring: Respect people, Act with compassion Collaboration: Stronger together Values Customer Obsession: Customer at the core Growth Mindset: Curious to learn, Hungry to win

Integrity

22 Highly experienced and versatile Board of Directors providing strong and secure foundation

Director Chairman and Founder Founder and Chairman of Max India. Awarded Serving on the Board of ONGC, LIC Housing, STCI, Mr. K. Narasimha Mr. Analjit Singh with highest civilian honor, the Padma Bhushan Infiniti Retail‚ APSFC, Max Bupa and NABARD Murthy

Managing Director A seasoned professional with over two decades Deputy Managing An industry veteran with a dynamic presence in and CEO of experience. Appointed as Managing Director Director the financial services sector. Mr. Prashant Tripathy and CEO in January 2019 Mr. V Viswanand

Seasoned professional with 24 years of Director Fellow of the Society of Actuary (FSA). She is a Director experience in Corporate Finance and Investment Ms. Marielle Theron Principal of Erlen Street Corporation, Switzerland Mr. Mohit Talwar Banking

Currently the CEO and MD of Max Healthcare Director Former IAS officer of 1977 batch and has served Director Institute and also the founding member of Max Mr. D. K. Mittal the government of India in various capacities Mr. Rajit Mehta Life

Seasoned business leader with experience in Director Seasoned professional with 29 years experience Director leading FMCG companies like Mondelez, Gillette Mr. Hideaki Nomura in financial industries Mr. Pradeep Pant and Nestle

An academic associated with Georgetown Director Responsible for the overall strategic vision and Director University and has also worked extensively with Mr. Sahil Vachani direction of the company Mr. Deepak Bhattasali the World Bank

Director Associated with MSI since 1987 and has more Mr. Naoyuki Sakaki than 30 years experience in insurance industry.

23 Executive Management Team has rich insurance experience and spent ~100 years at Max Life combined

Max Life Management Team

▪ Stint in Max : 13+ years Prashant Tripathy ▪ Total Experience: 24+ years Managing Director & CEO ▪ Previous Organizations: Tata Steel, GE

V Viswanand Manu Lavanya Aalok Bhan Jose John Mihir Vora Shailesh Singh Amitabh Lal Das Mandeep Mehta Amrit Singh Sachin Saxena Deputy Managing Director & Chief Director & Chief Director & Director & Chief Director & Chief Director - Legal EVP & Deputy SVP & Head – SVP & Chief Director Operations Marketing Appointed Investment People Officer - Compliance & Chief Financial Strategy, Analytics & Risk Officer Officer Officer Actuary Officer Regulatory Affairs Officer Investor Relations

Stint in Max 19+ years <1 year 8+ years 11+ years 5+ years 8+ years 5+ years 4+ years 7+ years 13+ years Total Exp. 28+ years 23+ years 28+ years 20+ years 26+ years 28+ years 23+ years 25+ years 16+ years 17+ years Previous ANZ Grindlays ITC, Cognizant, Standard Prudential UK HSBC Global GE, SRF Yahoo, Sapient Global Logic, PwC, Infosys, Accenture, Org. Bank Brillio Chartered Metlife UK Asset Finance, Eicher MetLife, Religare Cognizant, ICICI Technologies- Bank, ABN Management, Tractors paternoster, Enterprises Prudential Incendo AMRO, RBS ICICI Prudential‚ JLT, Aviva Life, Technologies Birla Sun Life AMC DCM

24 Financial Performance Summary FY20

Pvt Market Share Individual APE Gross Written Premium AUM

5% 10% 4 bps Rs 4,116 Cr Rs 16,184 Cr 11% Rs 68,471 Cr 9% [10%] [Rs 3,917 Cr] [Rs 14,575 Cr] [Rs 62,798 Cr]

Profit Before tax Net Worth Policyholder Cost to Policyholder Expense to GWP Ratio GWP Ratio Rs 595 Cr -4% Rs 2,570 Cr -7% 20.8% 80 bps 14.5% 126 bps [Rs 623 Cr] [Rs 2,761 Cr] [20.0%] [13.2%]

New Business Margins RoEV Embedded Value* Solvency Structural Actual 20.3% 35% 24.3% 21.6%# 10 bps 20.3% 160 bps 9,977 207% [22.5%] [21.7%] [21.9%] [8,938] [242%]

VNB Policies Sold (‘000) Claim Settlement Ratio Protection Mix** Individual Group Total

# 5% -8% 897 597 99.22% 48 bps 8% 5% 13% 340 bps [856] [645] [98.74%] [6%] [4%] [10%]

Figures in [brackets] are for previous year numbers # VNB and Margins are post adjustment for effective tax rate *Embedded Value is pre-dividend, Growth on Embedded value is operating RoEV, **Group protection (incl. Group credit life adjusted for 10% for single premium and term business); 25 Max Life has delivered strong performance on both new business and renewal business; Maintained 4th rank in the private industry

New Business Premiums (on APE basis) Renewal Income

Amount in INR Cr Amount in INR Cr 5% 13%

4,149 10,600 3,950 9,415 8,108 3,248 7,081 2,657

FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 Mkt Share# 9.2% 9.0% 9.7% 9.7% Pvt Ind Rank 4 4 4 4 Individual Sum Assured of New business- 7% growth in FY20 is lower due to Gross Written Premium introduction of limited pay protection products Amount in INR Cr Amount in INR Cr 7% 11% 183,019 16,184 171,063 14,575 12,501 122,036 10,780 88,451

FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20

X% CAGR Total APE includes Individual and GCL APE. It excludes Group term Loan # on Adj FYP basis 26 Shift in product mix towards NPAR resulted in 180 bps improvement in structural margin; Current cost VNB growth in line with the sales growth owing to investments in growth and COVID impact

Product Mix – Shifting towards a balanced product mix Margins (post-overrun)#

280 bps 30% 41% 42% 38% 21.7% 21.6% 9% 20.2% 4% 7% 8% 9% 3% 4% 18% 8% 4% 10% 4% 6% 18.8% 5% 13% 8% 54% 43% 40% 30% FY17 FY18 FY19 FY20 FY 17 FY 18 FY 19 FY 20 PAR Individual Protection Group Protection Non PAR- Savings ULIP

# Margins (Structural) VNB (post over-run)

630 bps Amount in INR Cr 5% 24.3% 22.5% 897 20.2% 856 18.0% 656 499

FY17 FY18 FY19 FY20 FY 17 FY 18 FY 19 FY 20 #VNB and margins for FY19 and FY20 are post the adjustment of effective tax rate. YTD Feb VNB(post overrun) growth was at ~18%

X% CAGR 27 Efficient capital management with consistent RoE of 20%+… best in class among financial services

Opex to GWP*- Increase in FY20 ratio largely on account of investments in Solvency Ratio (pre dividend) - maintained well above the regulatory proprietary channels, growth initiatives and slowdown impact of COVID requirement 27bps 309% 275% 14.8% 14.5% 242% 207% 13.2% 12.9% 150% Solvency Limit

FY17 FY18 FY19 FY20

Underwriting Profits - Growth in FY20 inforce profits surpassed strain net of Return on Equity (RoE)# - maintained at consistently more than 20% overruns Amount in INR Cr NB Strain BackBook Surplus 30%

22% 21% 20% 1015 1189 761 726 -206 -336 -587 -761

FY17 FY18 FY19 FY20 FY 17 FY 18 FY 19 FY 20 SH Surplus 105 138 128 111

* Refers to the policyholder expense to GWP ratio; # ROE is PAT as a ratio of average Net worth during the year 28 Embedded value compounds at 15% with operating RoEV for FY20 at 20.3%

Embedded Value (EV) Operating Return on Embedded Value

Amount in INR Cr 12% 21.9% 9977 19.9% 20.6% 20.3% 8938 7509 6590

FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20

Operating Variance - has been generally positive over the years Sensitivity

Amount in INR Cr Embedded Value Value of New Business 126 Item 103 -10% 10% -10% 10% 86 62 Lapse / Surrender 1% -1% 4% -4%

Mortality 2% -2% 5% -5%

Expense 1% -1% 7% -7% FY 17 FY 18 FY 19 FY 20

** EV is Post-dividend 29 Max Life has consistently grown its Asset Under Management Assets Under Management - MLI is the 4th largest manager of ULIP: Healthy mix of Debt and Equity private LI AUMs* Debt Equity

Amount in INR ‘000 Cr 9% 54% 51% 51% 43% 68 63

57% 52 46% 49% 49% 44 49 43 FY 17 FY 18 FY 19 FY 20 35 29 Controlled: Healthy mix of Debt and Equity

20 8% 9% 7% 16 17 19 8%

FY17 FY18 FY19 FY20 ULIP Controlled Fund 92% 92% 91% 93%

Par fund size ~38K and controlled fund crossed 50K as on 30th April FY 17 FY 18 FY 19 FY 20

More than 95% of debt investments is in sovereign papers and AAA rated securities

* AUM growth till YTD Feb was at 17% 30 Unwavering focus on leadership strength and has a vintage employee pool, both of which are critical for success in long term businesses such as Life Insurance

Great Place to Work Survey - Only Life insurance Company amongst Top 100 Employee Engagement^ - Consistently amongst top decile India’s best place to work for in 2019; rank improved since 2015

97% Top 15 BFSI 96% 51 #1 in LI 46 43 35 83% 83%

2015 2016 2018 2019 2016 2018 2019 2020

Leadership Experience – Almost half of the leadership has been with the Headcount - In line with the growth aspirations, headcount has been ramped company for more than a decade* up by 24% in FY20, largely towards distribution buildup Total leadership count is 270 <2 24% 15020 17% 12082 9446 10226 >10 2-5 47% 14%

5-10 22% FY17 FY18 FY19 FY20

*Leadership defined as Vice President and above, Data as of Mar 31, 2020 31 ^ Conducted by IBM Kenexa till 2018 and Willis Tower Watson in 2019 and 2020. 2019 score is adjusted for methodology change done in 2020 Max Life has been recognised by a number of Indian and foreign business bodies for its excellence in business, customer service and focus on people

Business Excellence Leaders in Quality Focus on People ▪ Winner of CII Industry Innovation Award ▪ No. 1 in Customer Loyalty ▪ Ranked 35th – India’s Best ▪ Outlook Money Award- Best Life Insurer survey by IMRB Companies to work for in 2019. ▪ Most Admired Brand ▪ Gold at ASQ World Conference Best in Insurance industry By White Paper International ▪ Winner of IMC Ramkrishna Bajaj ▪ Top 25 BFSI companies to work ▪ BFSI Smart Tech Awards 2019 - IPQ won National Quality Award for by Great Place to Work the Best Use of Data and Analytics ▪ Winner of CII Industry Innovation Award Institute, India in 2020 ▪ Golden Peacock award for Corporate ▪ Asia Pacific Quality Organization (APQO) ▪ India’s Top 75 Workplaces for Governance award for global performance excellence Women by Great Place to Work ▪ Silver Award at the ACEF 8th Global ▪ Silver Award in ASQ ITEA 2019 for Sell Institute Customer Engagement Awards 2019 in Right for Customer Delight at Axis Bank ▪ Employee Engagement the BTL Activities Category. ▪ Silver Award in the 12th QCI-DL Shah Leadership Award for “Best use ▪ Best Use Innovation In Loyalty Quality Awards for Enhancing S2R of the Employee Award” Marketing -Virtual Reality at Customer Conversion% Select 60 offices in Agency. ▪ Employee Engagement Fest Show 2020 ▪ At CMO Asia Awards , won Best Term Leadership Award for “Best ▪ Smart Term Plan as Product of the Year Plan Company of the Year Social Responsibility” award under the Term Life Insurance category, Nielsen Survey 2020

32 SECTION V  Max Life Insurance – COVID Response Max Life responded immediately to COVID situation across key dimensions; All key processes were functional within 4 days of lock down initiation

Employees Customers Distributors

▪ Health and safety paramount Guiding ▪ Proactive customer communication ▪ Adequate support to Agents ▪ Health and safety paramount principles ▪ No disruption in customer service ▪ Enable distribution to continue working remotely

▪ Established BCP protocols across ▪ Continuous communication with ▪ 100% enabled end to end digital selling organization customers to provide reassurance across all distribution channels regarding claims & existing policies ▪ Frictionless journey ▪ HR guidelines on Do’s and Don’ts, continuous communication, facility ▪ 14% YoY increase in website customer ▪ 100% paperless, signature free readiness for PPEs and sanitization service traffic in April, 37% decline in journey inbound calls at customer service ▪ Enhanced telemedicals grids and ▪ Almost all employees enabled for work helpline; website transactions up by currently 1400+ functional diagnostic from home Immediate 50%+ YoY for online payment in April centers for physical medicals action taken ▪ ~2k users enabled on VDI\VPN since ▪ ▪ More than 24 different mechanisms exist Overcame barriers to new agent licensing Work from home kick-off for paying premiums through innovative means – Top of the funnel interest up by ~50% ▪ Most outsourced vendors operating now ▪ Enabled new liquidity options on website at pre-covid efficiency ▪ ‘Max Life Suraksha Kavach’ launched for to strengthen customer retention Agents to support on mortality, morbidity ▪ Significantly increased digital touchpoints & liquidity during COVID and work types to service customer

34 Key programs initiated to navigate through current situation and emerge stronger

COVID19

1 2 3 4 5 Furthering Digital Sales Products and Underwriting Cost rationalization Close to customer Human capital

▪ Simplified and 100% ▪ Distribution enablement ▪ Tactical and structural ▪ Proactive communication ▪ Engagement initiatives to digitized sales process for remote protection long term cost take out around reassuring keep employee morale enabled by digital tools selling customers high ▪ Reimagine the futuristic ▪ Digital agent recruitment, ▪ Enablement of Medical operating model ▪ Enablement of service / ▪ Infrastructure training and onboarding diagnostic network request types on self- enablement and ▪ Digitization for efficient service / digital modes collaboration tools for ▪ Cross selling and virtual ▪ Product innovations for backend operations (non-physical) work form home option engagement with new opportunities prospects ▪ Customer enablers for ▪ Leverage existing virtual premium payment learning platforms for ▪ Paperless onboarding continuous learning ▪ Virtual sales governance

Risk monitoring framework for emerging operational and IT risk, credit risk, liquidity risk

35 We also assessed how the current situation will effect our financial strength and asset portfolio; no immediate and medium term stress expected Key areas Results

▪ Strong solvency position at 207% as on March 31st, 2020. Stressed solvency in a 1-in-100 year event is also above internal thresholds. No Solvency immediate and medium term concerns on solvency given PAR & UL heavy portfolio

Interest rate risk & ▪ Non-par savings products were assessed on lower interest rates and current FRA rates Asset Liability ▪ Even with the volatile market conditions, no material impact foreseen on the ALM position given there are sufficient net investments Management (based on in-force projections) expected over the long period

▪ Manageable credit risk given high credit quality of bonds held; 95% & 99% exposure in AA+ and above bonds in PH & SH funds respectively (excl. YBL and Fixed-deposits) Credit risk ▪ Limited exposure to sectors which may see stress over next 6-12 months from COVID19 ▪ No securities being impaired in the debt portfolio ▪ Unit Linked: Robust performance both against the benchmark as well as that relative to the peers, on back of timely asset allocation bets along with high quality securities Market risk ▪ Controlled Fund: No equity securities qualifying for impairment, as of Mar’20 as well as Apr’20; increased frequency of monitoring impairment to fortnightly given current volatility

▪ Comfortable liquidity position in Policyholder funds (as on 31st Mar’20) over both short and medium term. Extreme stress testing of Liquidity risk liquidity also depicts no concerns with >100% liquidity ratio given high level of investments in G-sec bonds ▪ Reasonable liquidity in the Shareholder fund (as on 31st Mar’20) to manage business expenses even with no renewal or new business

36 SECTION VI  Max Life Insurance – Strategy FY19-22 Significant progress made across key strategic priorities

A B C D

Predictable & Sustainable Product innovationDigital to Customer centricity across the value Digitization for efficiency and growth drive margins chain intelligence ▪ Deepen Bancassurance ▪ Increase protection penetration ▪ #1 position in 13M and 61M ▪ Continue with digitization agenda partnerships ▪ Drive Non PAR saving persistency across the organisation ▪ ▪ On-board new distribution ▪ Tap into new growth opportunities ▪ Highest Relationship Net Build intelligence (AI) in all digital partners like health and retirements Promoter Score (NPS) in the assets ▪ industry ▪ Scale up existing proprietary ▪ Enhanced investment and mortality Minimize back-office costs channels

INITIATIVES risk management ▪ Opportunistic play for inorganic growth ▪ Entered into definitive ▪ Focus on increasing Protection ▪ Claim paid ratio at 99.22% among ▪ 98% of all policies digitally sourced - agreements with Axis Bank* penetration and NPAR savings the best in class Achieved 71%+ Insta-issuance ▪ Extended corporate agency ▪ Revamped customer service website – contributed to increase structural ▪ Continued Improvement in NPS agreement with Yes Bank for 5 margins from 22.5% to 24.3% 80% requests enabled through digital and among the best in class self service means years ▪ Supplement retirement offering ▪ ▪ Focus required on persistency ▪ Launch of Max Life Innovations Lab – Increase share of proprietary through ‘deferred annuity’ channels sales to ~31% from measures Working with 7 startups ▪ 29% Executed FRA contracts to augment ▪ Improved brand consideration ▪ Among the best website page load time non-par appetite in the industry Progress FY20 in Progress ▪ Signed up with 28 new score partners ▪ Progressing well on AI and modernizing IT journey

*subject to regulatory approvals 38 A Max Life has focused on ensuring growth in both its Proprietary and Bancassurance channels

Proprietary Channels New Business (APE) - Sales has grown at 19% CAGR since FY17, YTD Feb growth was ~20%

Amount in INR Cr 10% Channel Mix - Max Life has focused on maintaining a balanced distribution 1282 mix 1162 891 752 1% 1% 1% 1%

71% 72% 70% 68% FY17 FY18 FY19 FY20

Bancassurance Channel (APE) - Growth in Banca channels has been ~15%,

28% 27% 29% 31% YTD Feb growth was ~16% Amount in INR Cr 3% FY17 FY18 FY19 FY20 2,760 2,838 2,335 Proprietary Banca Others 1,882 Axis’s Share 59% 60% 57% 57%

FY17 FY18 FY19 FY20

39 A Product mix in proprietary and Bancassurance channels aligned to customer needs; Strategic focus on NPAR share increase to further strengthen the balanced mix

Proprietary Channels Product mix - biased towards traditional products and Bancassurance Product Mix - has been biased towards ULIPs to cater to protection for driving margins target customer segments

15% 2% 29% 26% 26% 10% 39% 0% 3% 47% 10% 49% 52% 11% 14%

17% ULIP 12% 1% NPAR-S 11% ULIP 12% NPAR-P 2% 24% 73% 2% NPAR-S 60% 58% PAR 4% NPAR-P 47% 48% 39% 34% PAR 25%

FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20

40 A Agency: Strategic focus on increasing agent productivity and retention (1/2)

Active agent productivity increasing year on year; dip in Recruitment growth rate slowed down in FY20, with the FY19 due to new offices Agency initiative requiring a shift in new ADMs focus areas ADM and Active agent productivity in Number of agents recruited FY20 Progress INR Lacs per month 3.79 3.23 3.71 2.93 3.23 30,355 31,296 2.43 2.17 26,096 25,497 ▪ Engaged with consultants (ex-New York Life (NYL) to 1.03 0.84 0.88 drive Agency 0.69 Transformation Program

FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 Branch 205 203 334 391 ▪ Continued focus to Active Agent Productivity BAU Agency Units increase top agent count Branch Prod (in Cr)

Consistent focus on increasing the number of agents doing Focus has also been on ensuring that agents contribute ▪ Investment in alternate business of more than INR 10 lacs per annum atleast INR 50K per annum Agency models yielding Number of agents with greater Number of agents doing business of results than Rs 10 lacs annual business* more than Rs 50,000 per annum* – 2-3x growth in all 1,356 1,274 26,052 1,104 initiatives

777 23,432 22,039 22,177

FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 Total Adj. MFYP by an agent in the same store offices

Investor Release 41 A Agency: Strategic focus on increasing agent productivity and retention

Active agent productivity increasing year on year; dip in Recruitment growth rate, FY20 impacted due to COVID FY19 due to new offices Branch and Active agent productivity in Number of agents recruited FY20 Progress INR Lacs per month 3.23 3.79 2.93 3.05 3.26 30,355 3.23 2.43 29,290 ▪ Engaged with consultants 1.94 1.90 (ex-New York Life (NYL) to 26,096 26,562 25,497 drive Agency 0.84 0.88 1.01 0.69 0.83 Transformation Program

FY17 FY18 FY19 YTD Feb19 YTD Feb20 FY17 FY18 FY19 YTD Feb19 YTD Feb20 ▪ Continued focus to Branch Active Agent Productivity 205 203 334 334 391 increase top agent count Branch Prod (in Cr) BAU Agency Units

FY17 FY18 FY19 YTD Feb19 YTD Feb20 FY17 FY18 FY19 YTD Feb19 YTD Feb20

Total Adj. MFYP by an agent in the same store offices

42 A Bancassurance partners continue to contribute strongly

Axis Bank: YTD Feb growth was ~16%

Banca channels have grown at CAGR of 15% while increasing branch Amount in INR Cr productivity, YTD Feb growth was ~16% 5% 2,262 2,366 Amount in INR Cr 1,936 1,564 3%

2,760 2,838

2,335 FY17 FY18 FY19 FY20 Branches (#) 3,304 3,703 3,938 4,351 1,882 Branch Productivity 47 52 57 54 (lacs per annum)

Other Bancassurance Partnerships: YTD Feb growth was ~16%

Amount in INR Cr -5% 498 472 FY17 FY18 FY19 FY20 399 318 Branches (#) 5,608 6,170 6,521 6,956 Branch Productivity 34 38 42 40 (lacs per annum) FY17 FY18 FY19 FY20 Branches (#) 2,304 2,467 2,583 2,605 Branch Productivity 14 16 19 18 (lacs per annum)

43 A E-commerce: Max Life has focused it efforts in online towards driving protection

Policies – Steady growth in NOP contribution, drop in FY20 Website Traffic - Annual traffic to Max Life’s website has is driven by limited pay protection launch seen a significant increase over the last 4 years Policies in ‘000s Website Traffic in Lacs 8% 10% 12% 12% FY20 Progress 370 75.1 67.0 56.9 218 ▪ Robust growth in Direct 37.8 business on back of Brand 120 123 Search Queries

FY17 FY18 FY19 FY20 ▪ Deployed frictionless FY17 FY18 FY19 FY20 journey with no document Online Leads - Due to deployment of technology smarts, Brand Search Queries - have increased significantly over the requirement for over 40% leads have increased by ~350% in 3 years years of B2C customers Leads in FY16 baselined to 100 In Lacs ▪ Increased contribution 37.3 445 from affluent customer 374 29.3 segments 25.2 19.4 193 100 ▪ Launched industry-first initiative - “Buy Now Pay Later” FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20

44 A Cross-selling Direct Channels: Max Life has set up a channel focused exclusively on cross-selling

New Business Premium from direct channels Frontline Productivity

Amount in INR Cr Productivity in INR Lacs per month

FY20 Progress

1.6 1.6 ▪ Launched various digital 1.6 assets and 100% adoption 1.4 of tools increased efficiency FY17 FY18 FY19 FY20 ▪ Contribution of affluent Cross-sell Policies - Strong growth in number of cross-sell customers increased in policies both in value and number 245 Policies sold in FY16 baselined to 100 of policies terms

182 9% ▪ High focus on protection led to significant increase in 124 protection penetration 90 184 169 ▪ Launched alternate models 123 100 like Business Insurance

FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20

45 B Max Life has a complete suite of products and focus is on selling longer term products along with improving penetration of pure protection offerings

Average Policyholder Age Average Policy Term Average PPT Max Life has products across all categories Product Type (Years) (Years) (Years)

Endowment 35 22 11 4 Protection plans 1 Health plan 3 Income plans 1 Annuity plan ULIP 38 14 10 3 Endowment plans 1 Retirement ULIP Whole Life 36 64 51 3 ULIP plans 1 Whole life 2 Child plans 4 Riders Money back 27 17 16

Current portfolio1 biased towards traditional Pure Term 35 35 34 products Guaranteed 43 19 9 Cancer/ Retirement, products Health, 1.8% 0.2% Health 39 19 19 UL, 19.4%

Cancer Insurance 38 29 29 Whole Life, 7.4% Pension 34 23 23

63 57 1 Term, 11.5% Annuity

Money back, Endowment, st 2.3% 53.3% As on 31 Mar 2020 36 25 16 Guaranteed Products, 4.1% Average Average Average

(1) Based on all policies sold till date 46 Focus on Protection: 49% increase in individual protection APE and 31% of total individual B policies are pure protection

No of Protection Policies (Individual)- limited growth in FY20 policies, Total APE (Individual + Group) protection growth led by introduction of limited pay

Figures in Rs. Cr. Figures in ‘000. 571

232 403

183 175 176 256

114 189 120 339 93 78 227 137 96

FY 17 FY18 FY19 FY20 FY 17 FY 18 FY 19 FY 20 Individual Group Individual

Total APE (incl. Group credit life adjusted for 10% for single premium and term business) 47 C Strong focus towards customer measures has helped deliver superior performance across health parameters and will continue to remain an important priority

Claims Paid Ratio- One of the best claims paid ratio in the industry Persistency*

290 70 320 420 -90 83% 179141 bps 80%80%83% 98.74% 99.22% 70%72%71%71% 97.81% 98.26% 62%64%63% 60% 57%58%59% 55% 53%53%53%52%

13th Month 25th Month 37th Month 49th Month 61st Month FY'17 FY'18 FY'19 FY'20 FY17 FY 18 FY19 11M FY20

Conservation Ratio Surrender to GWP

2% due to UL 2% discontinuance 89% 90% 89% 85%

21% 20% 19% 19%

FY17 FY18 FY19 FY20 FY'17 FY'18 FY'19 FY'20 XX Change in persistency from FY17 to FY20 (in bps) *FY 20 persistency is reported for 11M as full year reporting accounts for grace period extension which may not be appropriate for comparison from last year th th th th th Full year persistency disclosure as follows: 13 month- 87%, 25 month- 73%, 37 month- 64%, 49 month- 60%, 61 month- 53% 48 D Significant progress in driving adoption of digital assets & embedding intelligence across insurance value chain aiding in effectiveness and efficiency (1/2)

Recruitment Prospecting Fulfilment

Products illustration generation Form filling, document collection tool and post sales verification in a End-to-end agent CSG/one CRM – Sales CRM tool seamless manner Digital Assets recruitment platform facilitating faster agent for lead management Integration with Bank partners for prospecting and onboarding Cross sell and up sell tool customer data

▪ OCR for document parsing to enable real time identification and verification of ▪ Predictive sales propensity models documents to reduce discrepancies Embedded ▪ Upfront persistency risk model- ▪ Psychometric based scoring and selection ▪ AI based pre-approved sum assured intelligence engines to generate customized offers for integration with various Bureaus & customers external databases to identify risk of lapsation ▪ Fraud checks on customer photographs ▪ 100% Policies issued digitally Impact ▪ 100% recruitment digitally ▪ 100% need analysis digitally ▪ 75% FTR ▪ 71% Insta issuance (1 day)

49 Significant progress in driving adoption of digital assets & embedding intelligence across D insurance value chain aiding in effectiveness and efficiency (2/2)

Underwriting Renewal Servicing

CRM system for One view of customer Customer Servicing tool

Milli – chatbot for query resolution Rule-based underwriting Multiple digital payment options Digital Assets engine for policy issuance Easy revival options on website Self service options on website Whatsapp for customer Click to call and Robo call functionality query and servicing Scheduled customer reminders

▪ Model to identify early mortality risk - ▪ Email Bot for customer queries ▪ Propensity to lapse model using Deep highlights risky policies and reduces Learning ▪ Linguistic speech analyzer to extract Embedded overall issuance time intelligence meaningful information from customer ▪ Early warning system to enable upfront ▪ Integration with fraud database to calls persistency check identify and flag risky customers ▪ Smart Conversational IVR

▪ 80% digital self serve adoption ▪ Automated Underwriting: 65% clear Impact ▪ 70% digital payments ▪ > 50 lacs self service transactions cases ▪ 24X7 query resolution using chatbot

50 D Max Life continues to drive technology transformation agenda in FY20

FY22 Target Progress in FY 20

▪ Migration to Open Source technology ▪ Moved to cloud native, modular architecture FLUID ▪ All applications to be on cloud customer onboarding solutions ARCHITECTURE ▪ Omni-channel enterprise ▪ Moving underwriting and New Business platform to modern scalable architecture

▪ Migration of all identified processes to in-house BUY FOR applications ▪ Replacing proprietary UW platform with differentiated modular solution EFFICIENCY, BUILD ▪ Phasing out of all proprietary business platforms to off FOR the shelf packages ▪ Building Intelligent lead management system for E- DIFFERENTIATION Comm fulfilment

▪ AI enabled cognitive workflows across the value chain ▪ Internal AI Works teams aiding development of COGNITIVE ▪ 360 degree view of customer cognitive intelligence across Vision – Speech – ENTERPRISE ▪ Open source based analytics architecture Conversations in addition to multiple Deep Learning and Machine learning algorithms

▪ Modernize all lines of business ▪ Building a modern Data Lake based Enterprise ▪ Adapt critical legacy systems to provide partners with MODERNIZING Data Architecture for scaling analytics LEGACY the facilities and services the require ▪ 83% of business processes enabled through API

51 SECTION VII  Max Life Insurance – ESG ESG Framework: Setting benchmarks for inclusivity and sustainability

Environmental Social Governance

Replace Community Service Supervisory Board ▪ End to end digital solutions for our business ▪ Plantation Drive: >35,000 trees planted in ▪ Diverse Board composition activities FY20 across offices ▪ 30% Independent Directors ▪ Live plants to improve air quality; 2,600 live ▪ Joy of Giving: Provided sanitizers and masks ▪ Corporate Governance Policy; code of plants placed in Head Office to police officials during Covid 19 outbreak, conduct policy provided soaps and ration to ▪ Average board experience > 30 years Reduce underprivileged families, blood donation ▪ Energy reduction by using energy efficient and health check-up camps Risk Management cooling and lighting across branches ▪ Financial Literacy: >5,400 employee ▪ Risk management policy and enterprise risk ▪ Water conservation through sensor based volunteers; ~3 lac people connected management (ERM) framework taps and urinals; 100% water gets recycled ▪ Sensitivity analysis and stress testing - in Head Office Customers conducted periodically ▪ >1 lac water saving nozzles distributed ▪ Digital enablers provide 24x7 service ▪ Managed print services and stationery ▪ COVID-19: Un-interrupted service & claims Compliance ▪ Food wastage awareness drive in Head ▪ Information security and cyber security Office; food wastage reduced to half Employees compliant with ISO guidelines ▪ Diversity & Inclusion: 22% women ▪ Data privacy policy Reuse & Recycle employees overall, 31% women employees ▪ Waste management: segregation of waste in non-distribution roles Ethical Practices ▪ E-waste disposal through certified vendors ▪ Employee health and wellbeing - flexi ▪ Policies on AML, whistleblower, POSH, anti- ▪ Saved 2 lacs paper cups in 6 months in Head working hours, paid paternity leave, paid bribery, corruption, gifts acceptance Office by using ceramic cups maternity leave, 100% Work from home

53 SECTION VIII  Max Life Insurance – MCEV Disclosures: FY’20 Key Results

The Embedded Value1 (EV) as at 31st March 2020 (post allowing for the total shareholder dividend payout for FY20) is Rs 9,977 Cr.

The Operating Return on EV (RoEV2) over FY20 is 20.3%. Including non-operating variances, the RoEV is 16.7%.

The New Business Margin (NBM) for FY20 is 24.3% (before allowing for acquisition operating cost overrun) and 21.6% (post overrun), with Value of New Business (VNB) written over the period being Rs 897 Cr (post overrun).

Notes: 1 Max Life’s Embedded Value (EV) is based on a market consistent methodology. However, they are not intended to be compliant with the MCEV Principles issued by the Stitching CFO Forum Foundation (CFO Forum) or the Actuarial Practice Standard 10 (APS10) as issued by the Institute of Actuaries of India. 2 The Return on EV is calculated before capital movements during the year, example dividends.

55 Overview of the components of the EV as at 31st March 2020

VIF Net worth and EV

Market value of Shareholders’ owned assets over liabilities

Time value of financial Cost of residual non- options and guarantees hedgeable risks Net Worth Frictional cost Rs 2,545 Cr

TVFOG Rs 60 Cr CRNHR EV FC Present Value of Rs 713 Cr Rs 9,977 Cr Rs 130 Cr Future Profits (PVFP) Value of Inforce Rs 8,335 Cr (VIF) Rs 7,432 Cr

1. The deductions for risks to arrive at the VIF represent a reduction of ~11% in the PVFP. The largest deduction is in respect of CRNHR. 2. Within CRNHR, persistency risk constitutes the largest risk component.

Note: Figures in Rs Cr. And may not add up due to rounding 56 Value of New Business and New Business Margins as at 31st March 2020

Description FY19 FY20 Y-o-Y growth

APE 1 3,950 4,149 5%

New Business Margin (NBM) 22.5% 24.3% +180 bps (before cost overrun) New Business Margin (NBM) 21.7% 21.6% -10 bps (post cost overrun) Value of New Business2 (VNB) 887 1,010 14% (before cost overrun) Value of New Business (VNB) 856 897 5% (post cost overrun)

▪ The New Business Margin (NBM) before cost overrun has increased by circa 180 bps to 24.3% for FY20 compared to 22.5% for FY19. ▪ The increase in margins (before cost overrun) is primarily driven by increase in proportion of non-par business. ▪ Post allowing for acquisition operating cost overrun chargeable to shareholders, the NBM reduces to 21.6% for FY20 compared to 21.7% for FY19.

1 Annual Premium Equivalent (APE) is calculated as 100% of regular premium + 10% of single premium. 2 The VNB is accumulated from the point of sale to the end of the reporting period (i.e. 31st March 2020), using the beginning of quarters’ risk free yield curve.

Note: Figures in Rs Cr. 57 EV movement analysis: March 2019 to March 2020

Figures in Rs Cr.

317 EV 813 103 456 EV 897 9,977 8,938

VIF Operating RoEV: 20.3% VIF 6,541 7,432

NAV NAV 2,397 2,545

Opening EV Value of Unwind Operating Non-Operating Dividend paid during the Closing EV New Business Variance Variance year

▪ Operating return on EV of 20.3% is mainly driven by new business growth and unwind. ▪ Non-operating variances are mainly driven by negative economic variance during the year.

58 Value of New Business (VNB) and New Business Margin (NBM) Walk

Figures in Rs Cr.

NBM --> 21.7% - 2.0% -1.9% -0.1% 21.6%

59 Sensitivity analysis as at 31st March 2020

Figures in Rs Cr. EV New business Sensitivity Value (Rs Cr) % change VNB (Rs Cr) | NBM % change

Base Case 9,977 - 897 | 21.6% - Lapse/Surrender - 10% increase 9,854 (1%) 864 | 20.8% (4%) Lapse/Surrender - 10% decrease 10,103 1% 930 | 22.4% 4% Mortality - 10% increase 9,800 (2%) 852 | 20.5% (5%) Mortality - 10% decrease 10,154 2% 942 | 22.7% 5% Expenses - 10% increase 9,880 (1%) 831 | 20.0% (7%) Expenses - 10% decrease 10,073 1% 963 | 23.2% 7% Risk free rates - 1% increase 9,728 (2%) 911 | 22.0% 2% Risk free rates - 1% reduction 10,154 2% 847 |20.4% (6%) Equity values - 10% immediate rise 10,040 1% 897 | 21.6% Negligible Equity values - 10% immediate fall 9,914 (1%) 897 | 21.6% Negligible Corporate tax Rate - 2% increase 9,793 (2%) 871 | 21.0% (3%) Corporate tax Rate - 2% decrease 10,161 2% 923 | 22.3% 3% Corporate tax rate increased to 25% 8,762 (12%) 722 | 17.4% (20%)

1. Reduction in interest rate curve leads to an increase in the value of assets which offsets the loss in the value of future profits. 2. Risk free rate sensitivities under new business allow for the change in the value of assets as at the date of valuation.

ANNEXURES Definitions of the EV and VNB

Market consistent methodology

▪ The EV and VNB have been determined using a market consistent methodology which differs from the traditional EV approach in respect of the way in which allowance for the risks in the business is made. ▪ For the market consistent methodology, an explicit allowance for the risks is made through the estimation of the Time Value of Financial Options and Guarantees (TVFOG), Cost of Residual Non-Hedgeable Risks (CRNHR) and Frictional Cost (FC) whereas for the traditional EV approach, the allowance for the risk is made through the Risk Discount Rate (RDR).

Components of EV The EV is calculated to be the sum of: ▪ Net Asset value (NAV) or Net Worth: It represents the market value of assets attributable to shareholders and is calculated as the adjusted net worth of the company (being the net shareholders’ funds as shown in the audited financial statements adjusted to allow for all shareholder assets on a market value basis, net of tax). ▪ Value of In-force (VIF): This component represents the Present Value of Future expected post-tax Profits (PVFP) attributable to shareholders from the in-force business as at the valuation date, after deducting allowances for TVFOG, CRNHR and FC. Thus, VIF = PVFP – TVFOG – CRNHR – FC.

Covered Business

▪ All business of Max Life is covered in the assessment except one-year renewable group term business and group fund business which are excluded due to their immateriality to the overall EV.

63 Components of VIF (1/2)

Present Value of Future Profits (PVFP) ▪ Best estimate cash flows are projected and discounted at risk free investment returns. ▪ PVFP for all lines of business except participating business is derived as the present value of post-tax shareholder profits from the in-force covered business. ▪ PVFP for participating business is derived as the present value of shareholder transfers arising from the policyholder bonuses plus one-tenth of the present value of future transfers to the participating fund estate and one-tenth of the participating fund estate as at the valuation date. ▪ Appropriate allowance for mark-to-market adjustments to policyholders’ assets (net of tax) have been made in PVFP calculations to ensure that the market value of assets is taken into account. ▪ PVFP is also adjusted for the cost of derivative arrangements in place as at the valuation date.

Cost of Residual Non-Hedgeable Risks (CRNHR) ▪ The CRNHR is calculated based on a cost of capital approach as the discounted value of an annual charge applied to the projected risk bearing capital for all non-hedgeable risks. ▪ The risk bearing capital has been calculated based on 99.5 percentile stress events for all non-hedgeable risks over a one-year time horizon. The cost of capital charge applied is 4% per annum. The approach adopted is approximate. ▪ The stress factors applied in calculating the projected risk capital in the future are based on the latest EU Solvency II directives recalibrated for Indian and Company specific conditions.

64 Components of VIF (2/2)

Time Value Of Options and Guarantees (TVFOG) ▪ The TVFOG for participating business is calculated using stochastic simulations which are based on 5,000 stochastic scenarios. ▪ Given that the shareholder payout is likely to be symmetrical for guaranteed non-participating products in both positive and negative scenarios, the TVFOG for these products is taken as zero. ▪ The cost associated with investment guarantees in the interest sensitive life non-participating products are allowed for in the PVFP calculation and hence an explicit TVFOG allowance has not been calculated. ▪ For all unit-linked products with investment guarantees, extra statutory reserves have been kept for which no release has been taken in PVFP and hence an explicit TVFOG allowance has not been calculated.

Frictional Cost (FC) ▪ The FC is calculated as the discounted value of tax on investment returns and dealing costs on assets backing the required capital over the lifetime of the in-force business. Required capital has been set at 170% of the Required Solvency Margin (RSM) which is the internal target level of capital, which is higher than the regulatory minimum requirement of 150%. ▪ While calculating the FC, the required capital for non-participating products is funded from the shareholders’ fund and is not lowered by other sources of funding available such as the excess capital in the participating business (i.e. participating fund estate).

65 Key Assumptions for the EV and VNB (1/2)

Economic Assumptions

▪ The EV is calculated using risk free (government bond) spot rate yield curve taken from FBIL1 as at 31st March 2020. The VNB is calculated using the beginning of respective quarter’s risk free yield curve (i.e. 31st March 2019, 30th June 2019, 30th September 2019 and 31st December 2019 respectively). ▪ No allowance has been made for liquidity premium because of lack of credible information on liquidity spreads in the Indian market. ▪ Samples from 31st March 2020 and 31st March 2019 spot rate yield curves used are:

Year 1 2 3 4 5 10 15 20 25 30

Mar 20 4.82% 5.16% 5.40% 5.72% 6.24% 6.95% 6.97% 6.81% 6.95% 6.68%

Mar 19 6.43% 6.56% 6.66% 6.87% 6.99% 7.40% 7.83% 7.78% 7.73% 7.72%

Change -1.61% -1.40% -1.26% -1.15% -0.75% -0.45% -0.86% -0.96% -0.78% -1.04%

Demographic Assumptions

The lapse and mortality assumptions are approved by Board committee and are set by product line and distribution channel on a best estimate basis, based on the following principles: ▪ Assumptions are based on last one year experience and expectations of future experience given the likely impact of current and proposed management actions on such assumptions. ▪ Aims to avoid arbitrary changes, discontinuities and volatility where it can be justified. ▪ Aims to exclude the impacts of non-recurring factors.

1 Financial Benchmark India Pvt. Ltd. 66 Key Assumptions for the EV and VNB (2/2)

Expense and Inflation

▪ Maintenance expenses are based on the recent expense studies performed internally by the Company. The VIF is reduced for the value of any maintenance expense overrun in the future. The overrun represents the excess maintenance expenses expected to be incurred by the Company over the expense loadings assumed in the calculation of PVFP. ▪ Future CSR related expenses have been taken to be 2% of post tax (risk adjusted) profits emerging each year. ▪ Expenses denominated in fixed rupee terms are inflated at 6.0% per annum. ▪ The commission rates are based on the actual commission payable, if any.

Tax

▪ The Corporate tax rate is the effective tax rate, post allowing for exemption available on dividend income. Tax rate is nil for pension business. ▪ For participating business, the transfers to shareholders resulting from surplus distribution are not taxed as tax is assumed to be deducted before surplus is distributed to policyholders and shareholders. ▪ Goods and Service tax is assumed to be 18%. ▪ The mark to market adjustments are also adjusted for tax.

67 Delivering consistent growth in top line and renewals coupled with driving cost efficiencies

Financial Performance FY 17 FY18 FY19 FY20

21% 22% 5% Individual APE 2,657 3,217 3,917 4,116

15% 15% 13% Renewal Premium 7,114 8,152 9,415 10,600

16% 17% Gross Premium 10,780 12,501 14,575 11% 16,184

Policyholder expense to GWP 187 bps 34 bps 14.8% 12.9% 13.2% 126 bps 14.5% Ratio

80 bps 341 bps 20.8% Policyholder Cost to GWP Ratio 23.5% 20.0% 20.0%

Expense to average AUM 21 bps 4.3% 70 bps 3.6% 3.6% 3.8% (Policyholder)

Note: Figures in Rs Cr. 68 Healthy and consistent profitability creating value to all the stakeholders while maintaining solvency above required levels

Financial Performance FY 17 FY18 FY19 FY19

4% 20% 1% Profit(before Tax) 768 615 623 595

18% 20% 9% AUM 44,370 52,237 62,798 68,471

140 bps 20.2% 150 bps 21.7% 10 bps 21.6% New Business Margin (Post 18.8% Overrun)

6,739 14% 7,706 22% 9,257 20% MCEV (pre dividend)^ 10,433

70 bps 130 bps 160 bps Operating RoEV 19.9% 20.6% 21.9% 20.3%

Abs 34% 33% 35% Solvency Ratio 309% 275% 242% 207%242%

Figures in Rs. Cr. ^Arrow represents growth in Operating RoEV 69 Performance update- Q4’FY20 and FY20

Quarter Ended Q-o-Q Year Ended Y-o-Y Key Business Drivers Unit Mar’19 Mar’20 Growth FY19 FY20 Growth

a) Individual APE Rs. Crore 1,634 1,398 -15% 3,917 4,116 5%

b) Gross written premium income Rs. Crore 5,521 5,873 6% 14,575 16,184 11%

First year premium 1,631 1,391 -15% 3,873 4,088 6%

Renewal premium 3,459 3,983 15% 9,415 10,600 13%

Single premium 431 499 16% 1,287 1,495 16%

c) Shareholder Profit (Pre Tax)^ Rs. Crore 247 242 -2% 623 595 -4%

d) Policy Holder Expense to Gross Premium % 11.2% 11.4% -18 bps 13.2% 14.5% -126 bps

e) Conservation ratio % 86.6% 86.4% -18 bps 88.6% 84.7% -394 bps

f) Average case size(Agency) Rs. 57,873 70,415 22% 56,007 65,815 18%

g) Share Capital Rs. Crore 1,919 1,919 0%

h) Individual Policies in force No. Lacs 43.20 43.90 2%

i) Sum insured in force Rs. Crore 703,972 913,660 30% Per Ten j) Grievance Ratio 59 48 -19% thousand

^Profit declined from previous year due to increase in new business strain from higher NPAR (protection and savings), however offset to some extent by gains from introducing FRA and unwinding of IRS 70 Case size continues to expand across the board; Almost 50% growth in Protection Plans

Case Size (INR’000) NoPs (INR’000)

Non PAR- Saving PAR Ind Protection ULIP Non PAR- Saving PAR Ind Protection ULIP 69 645 597 61

561 123 -14% 57 106 156 121

139 175 114 183 114

19 13 11 59 49 53 307 224 296

85 88 96 84 30 40 FY18 FY19 FY20 FY18 FY19 FY20