Private sector life insurer Max Life is now a 70:30 joint venture between Max Financial Services (MFS) and Axis Bank. The arrangement is expected to significantly improve Max Life’s competitive position vis a vis competitors including the other large bank owned private life insurers.
The joint venture deal was approved by the boards of Axis Bank, MFS and Max Life on April 27, after the three companies signed a confidentiality and exclusivity arrangement deal. t is subject to approval of requisite corporate and regulatory authorities (including RBI, IRDAI and CCI). Max Life’s tag line will include Axis Bank’s name which will further enhance customer trust in the brand and highlight the strength of the partnership.
Axis Bank is the third largest private bank and Max Life is the fourth largest private life insurer in India. The two companies have a successful business relationship for over a decade by means of providing long term saving and protection products to over 19 lakh customers. The total premium generated through this relationship has aggregated to over Rs. 38,000 crore. Both companies have invested extensively in product and need-based sales training, thereby leading to consistent increase in productivity.
Announcing the transaction, Amitabh Chaudhry, managing director and CEO, Axis Bank, said, “We continue to believe in the long term prospects of India’s under-penetrated life insurance space, current environment notwithstanding. We see this joint venture creating immense value for our stakeholders given our long standing, high performing partnership with Max Life. We believe this transaction will allow us to deepen our working relationship leading to better integrated teams and infrastructure and a superior alignment in our approach.”
Welcoming the development, Analjit Singh, founder and chairman, Max Group, said, “This move is an emphatic signal that Max Life will become an even more formidable player in the life insurance space. We at Max Group have had a long standing record of having successful joint ventures. We achieve this by choosing partners with complementary skills, a matching belief system and a shared vision for the future of the business. I believe that in Axis we have found an exceptional partner and we have conviction that this will make Max Life fundamentally stronger, better performing and will bring stability to the franchise. We will run the organization as if it’s an equal partnership, a philosophy which has held us in good stead earlier as well.”
Elaborating the rationale for the potential transaction, Mohit Talwar, vice chairman, Max Group and managing director, Max Financial Services said, “The strategic benefits of this partnership will be multi-pronged and will continue to unfold over a long period of time. The combined trust of the Max and Axis franchise will hold us in good stead, especially in the current scenario where people are seeking safety in well governed and trusted institutions.”
Launched in 2000, Max Life is India’s largest non-bank private life insurer with gross premium income of Rs. 14,575 crore and claims paid ratio of 98.7 per cent in 2019-20. The company currently has over 4 million policies in force and has a pan-India presence through 345 branches.