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Max Financial Services Limited Investor Presentation June 2018

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Max Financial Services Limited Investor Presentation June 2018 Max Financial Services Limited Investor Presentation June 2018 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 2 Evolution of Max Group—Strong history of entrepreneurship and nurturing successful businesses NYL exits and JV with Max India demerged into Fund raising ~ USD 360 Mn MSI in 2012 3 listed hold cos Enters Telecom in JV ● QIP- USD 156 Mn in 2007 ● MSI is world’s 7th largest with Hutchison ● Warburg Pincus - 53 Mn in 2005 general insurance group ● IFC- 47 Mn(2007) &23 Mn (2009) ● MSI acquired 26% stake for Hutchison USD 425 Mn JV with Gist Brocades ● Goldman Sachs 82 Mn in 2011 (Asia’s largest Drug ● Max Life valued at USD 1.6 bn manufacturer ) 1985 1993 2000 2005 2007 2009 2011 2012 2013 2014 2015 2016 Forays into Penicillin LHC inducted as JV Landmark Acquisitions bulk pharma Partner in MHC by MHC nd ● Acquired 79% stake for Shift from B2B to Enter Senior ● LHC is 2 largest hospital chain in South Africa USD 40 Mn in 340 bedded B2C businesses: Health Insurance, Living business, Pushpanjali hospital launch first ● 2012 - Acquired 26% stake expandable upto 540 beds ●Life insurance JV with Bupa Plc for USD 81 Mn in MHC community in ● Acquired 51% stake for ●Healthcare Dehradun with ● 2014 - Equalize stake in USD 100 Mn in 230 200 units MHC invests USD 120 Mn bedded Saket City ●Clinical research hospital, expandable upto 1200 beds Note: USD rate considered at 64 3 Max Group – Corporate Structure Max Group - Sponsors 30.3% 41.0% 38.1% Life Insurance Health & Allied Manufacturing & Holding Companies Business* Business Other businesses 50% 51% 70.75% 100% 51% 100% Operating Companies 100% 100% Group CSR Arm Sponsors stake in Max Group holding companies 4 Max Group Overview 1 USD 3 billion Revenues… 10 Mn Customers… 25,000 Employees… ~70,000 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 5 Max Group : Continues to grow from strength to strength Group Revenue (USD Mn) 2,946 2,584 2,190 1,639 1,915 FY'14 FY'15 FY'16 FY'17 FY'18 Group EBITDA (USD Mn) 129 110 127 81 95 FY'14 FY'15 FY'16 FY'17 FY'18 Note: Adjusted for one-offs for conversion assumed 1 USD = INR 65 6 High pedigree of long term investor base Shareholding concentrated with Marquee Investors ▪ KKR Shareholding Pattern ▪ Aberdeen as on 31st Mar 18 ▪ Baron Emerging Market Fund Public 12.4% ▪ Vanguard Promoter ▪ Wasatch 30.3% ▪ Jupiter FII- Others 22.7% ▪ Norway Government Pension Fund KKR ▪ Reliance Mutual Fund 6.7% Mutual ▪ ICICI Prudential Mutual Fund Funds 27.8% ▪ Motilal Oswal Mutual Fund ▪ Aditya Birla Sunlife Mutual Fund ▪ HDFC Mutual Fund Number of outstanding shares : 26.84 Cr. 7 Max Life Insurance Company Limited Key Summary Messages Indian Life Insurance Industry has evolved rapidly; significant headroom still 1 available for growth due to low penetration and favourable demographic profile Strong parentage, marquee investors, eminent Board, strong management team 2 and robust governance framework Differentiated Life Insurer with key strengths of multi-channel distribution, 3 balanced product mix, operational excellence and digital capabilities One of the fastest growing players with equal emphasis on profitability – Among 4 the top quartile across the comprehensive measures of success With US 1.1 Bn+ of MCEV as at 31st March 2018, operating RoEV of 21% and new 5 business margin at 20% are amongst the best in the industry Strength in business model recognised through several Awards and Accolades 6 that Max Life Insurance wins every year 9 Overview of Life insurance industry in India Phase 1 Phase 2 Phase 3 Joyful Entry (2001-2003) Expansion (2004-2008) Discovering New Normal (2009 onwards) 56% 57% 54% 52% 52% 50% 49% 46% 37% 38% 38% Ind. Adj. FYP (First Year Premium) 34% 36% (In Rs 000 Cr) Private market share in 25% terms of Ind. Adj. FYP 63 15% 55 53 53 50 6% 48 47 47 45 0% 2% 44 40 41 21 16 13 10 12 12 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Growth: 19% 2% 13% 17% 34% 92% 31% -10% 17% -8% -5% -3% -3% -10% 8% 21% 19% Industry Growth: >100% >100% >100% >100% 81% 100% 86% 1% 7% -20% -24% 2% -3% 16% 14% 26% 24% Private Private players 4 11 12 12 13 14 15 17 21 22 22 23 23 23 23 23 23 count Source: IRDAI and Life Council for FY 17-18 10 Industry Landscape (FY’18): Total Industry grew by 19% driven by strong performance of the private players (+24%) and LIC (+13%) YoY Growth basis Individual Adjusted FYP FY’16 FY’17 H1’18 H2’18 FY’18 Private Industry YoY growth 14% 26% 37% 17% 24% Industry Max Life 25% 25% 23% 21% 22% 19% 19% 16% 8% 8% Max Life’s private 9% 9% 8% 10% 9% market share Max Life’s total 5% 5% 4% 5% 5% market share Max life with continued focus on balanced product mix has grown by 22% in FY 18 and maintained its market share. Recorded strong growth in H2’18 at 23% compared to 16% industry growth Source: Life Insurance Council | IRDAI Investor Release 11 Significant potential to expand both in savings and protection segment Life Insurance Penetration (Premium as % of GDP), 2016 Level of Protection (Sum Assured as % of GDP), 2015 16.2% 16.7% 260% 226% 149% 7.4% 7.2% 96% 60% 2.3% 2.7% China India South Japan Hong Kong Taiwan Thailand India Malaysia Japan Singapore Korea % of Life Insurance in gross household savings- India Life Insurance Density (Premium per capita – USD), 2016 7,066 24.0% 25.0% 17.0% 17.0% 17.0% 3,599 2,803 190 47 FY'13 FY'14 FY'15 FY'16 FY'17 India China Japan Taiwan Hong Kong Source: "Swiss Re: World Insurance in 2016“, “IRDA annual report FY 16-17” Investor Release 12 Highly experienced and versatile Board of Directors providing strong and secure foundation Founder and Chairman Founder and Chairman of Max Seasoned business manager with Chairman Emeritus India. Awarded with highest wide domain expertise built over Mr. Rahul Khosla Mr. Analjit Singh civilian honor, the Padma Bhushan 27 years in financial services Exec. Vice Chairman A founder team member. Seasoned professional with 24 Director and MD Appointed as CEO and Managing years of experience in Corporate Mr. Mohit Talwar Mr. Rajesh Sud Director in November 2008 Finance and Investment Banking Fellow of the Society of Actuary Fellow of the Institute and Faculty Director Director (FSA). She is a Principal of Erlen of Actuaries. Served as the AA for Ms. Marielle Theron Street Corporation, Switzerland Mr. John Poole Max Life from 2005 till 2011 Serving on the Board of Max Independent Director Ventures, Srikari Management Currently the CEO and MD of Max Director Mr. K. Narasimha Consultants, STCI, Infiniti Retail‚ Healthcare Institute and also the Murthy Max Bupa, Max Speciality Films , Mr. Rajit Mehta founding member of Max Life Saket City Hospitals and Max Healthcare Independent Independent Founder and CEO of Arka Capital Former IAS officer of 1977 batch Director Advisors. Previously served as MD and has served the government of Director Mr. D. K. Mittal and India Head at Warburg Pincus India in various capacities Mr. Rajesh Khanna Director Responsible for Mitsui Sumitomo Director Seasoned professional with 31 Mr. Masataka overseas life insurance business Mr. Hideaki Nomura years experience in financial with more than 30 years of industries Kitagawa experience Currently CEO & Managing Director of Max Ventures and Director Industries Limited. He has diverse experience across various Mr. Sahil Vachani sectors including consumer durables and real estate. Executive Management team with rich experience of insurance and strong Governance Mechanism Executive Vice Chairman and MD ▪ Total Experience: 25 years Max Life Management Team ▪ Previous Organizations: Rajesh Sud Bank of America, ABN (17 years) AMRO , ANZ Grindlays Tenure at Max Life Sr Director and Director and Sr Director and Director & Director and Director and Director Marketing & Director and Head - Chief Operations Appointed Chief Financial Chief Distribution Chief Investment Chief People Chief Digital Officer Legal , Compliance Officer (17 years) Actuary (9 years) Officer (11 years) Officer Officer (4 years) Officer (6 years) (14 years) and Regulatory (5 years) Manik Nangia (4 years) V Viswanand Jose John Prashant Tripathy Aalok Bhan Mihir Vora Shailesh Singh Amitabh Lal Das ▪ Total Experience: ▪ Total Experience: ▪ Total Experience: ▪ Total Experience: ▪ Total Experience: ▪ Total Experience: ▪ Total Experience: ▪ Total Experience: 27 years 19 years 23 years 25 years 24 years 26 years 21 years 22 years ▪ Previous ▪ Previous ▪ Previous ▪ Previous ▪ Previous ▪ Previous ▪ Previous ▪ Previous Organizations: ANZ Organizations: Organizations: Organizations: Organizations: Organizations: Organizations: Organizations: Grindlays Bank Prudential UK Tata Steel, GE Standard HSBC Global Asset GE, SRF Finance, ABN AMRO, ICICI Yahoo, Sapient Metlife UK Chartered Bank, Management, ICICI Eicher Tractors Bank, ICICI ABN AMRO, RBS Prudential, Birla Prudential Sun Life AMC Shareholder Board Executive Vice Chairman and
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