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Max Financial Services Q1 Review - Competition Drags Banca Growth; Margin Guidance Retained: Nirmal Bang

Max Financial Services Q1 Review - Competition Drags Banca Growth; Margin Guidance Retained: Nirmal Bang

<div class="paragraphs"><p>Indian rupee banknotes arranged for photograph. (Source: Unsplash)</p></div>
Indian rupee banknotes arranged for photograph. (Source: Unsplash)

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Nirmal Bang Report

Max Life reported Total annual premium equivalent growth of 15.3% YoY, led by higher growth in the unit linked insurance plan segment - a trend unlike peers who have reported slower growth, partially led by volatile capital markets.

Growth in par/non-par was ~15% YoY while retail protection was down ~20% YoY due to demand moderation amid inflationary pressures. The management expects ULIP growth rate to moderate in the coming quarters while non-par savings products are expected to do well given that the aspired APE mix of 30-35% is higher than current contribution.

Value of new business margin, although seasonally low due to reduced fixed cost absorption, expanded by 145 basis points YoY to 21.1%, led by more profitably designed existing products even as the overall product mix was steady YoY. Max Financial has retained its full-year VNB margin at ~26-27%.

Click on the attachment to read the full report:

Nirmal Bang Max Financial-Q1FY23 Result Update- 02 August 2022.pdf

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