The state of the Indian economy for the FY 20 can be studied as two different scenarios - pre and post-COVID-19. Prior to the global pandemic hitting the economy, the outlook for growth was positive owing to indices like robust harvests, conducive policy rates, reduction in GST, Corporate Tax rate cuts, among others. However, the onset of COVID-19 drastically altered the outlook of the Indian economy. In order to provide stimulus to the economy, the Reserve Bank of India and the government have initiated several measures including reduction in the repo rate by 75 bps to 4.40% and reduction in the reverse repo rate by 90 bps to 4.00%.
While the Indian economy recorded a low GDP growth of 4.7% in Q3FY20, with a strong hope of recovery in the last quarter of the fiscal, the COVID-19 pandemic signals a tough economic recovery in the near to medium term, due to disruptions in both demand and supply.
FY 20 can be considered a watershed year in the annals of history as we witnessed a global pandemic that brought a large part of the world to a standstill and is completely changing social order. Right from the way societal interactions happen to how businesses are conducted, the pandemic has necessitated a relook into the traditional ways of working and innovations to entail newer processes into everyday living.
As for the Indian life insurance sector that was growing at a healthy double-digit rate, it witnessed a negative impact on sales and renewals’ collections due to the COVID-19 crisis, in turn leading to a moderation of sectoral growth as the fiscal came to a close. The Indian Life Insurance industry ended the fiscal with a tepid growth rate of 6% in FY 20. Within this the private life insurance space grew at 5% on a year-on-year basis. The renewal collection was also impacted due to customers rescheduling payments and industry providing longer grace periods.
The Indian Life Insurance Industry is currently amid challenging times. Apart from having a minuscule life insurance penetration of 2.74%, the industry in the face of the COVID-19 crisis is also grappling with stunted growth. While the 11M FY 20 performance, prior to the COVID-19 pandemic was significantly better than the previous years, with the industry recording a growth to the tune of 18% FYTD Feb’20 (Individual Adjusted FYP), the immediate impact of COVID-19 was felt in the crucial month of March where traditionally the industry does about - 20% of its business. In the month of March alone, the industry degrew by 50%, and the private life insurers de-grew by 40%. However, the latter responded with agility and have been able to recover in the month of April 2020. By digitising the business processes, the industry is trying to take the business online swiftly and ensure business continuity.
To enhance the reach of the sector amongst consumers, the industry’s mass media campaign of ‘Sabse Pehle Life Insurance’ helped ensure widespread awareness around life insurance being a fundamental choice in personal financial planning.
The current adverse situation also opens newer vistas for collaboration, innovation and growth in a sector where all constituents will have to come together to pilot through these unprecedented scenarios. A focus on digitisation and innovation is expected to help leverage the disruption, where measures like streamlining of life insurance regulations, new product designs using sandbox for innovation and digital methods of doing business across the customer value chain will allow for the much-needed impetus in the sector.
FY 20 can be considered a watershed year in the annals of history as we witnessed a global pandemic that brought a large part of the world to a standstill and is completely changing social order. Right from the way societal interactions happen to how businesses are conducted, the pandemic has necessitated a relook into the traditional ways of working and innovations.
Max Life Insurance team with their top leadership for a day of team-building activities as part of the Marketing Academy at Lemon Tree Aerocity
This shift in processes will offer opportunities to the industry to evolve and adapt to newer ways of working which shall help the Indian life insurance industry leverage the changing consumer perceptions on life and health risk.
Max Life Insurance creates a three-year strategy and reviews it periodically. During FY 20, the Max Life’s management team undertook an in-depth exercise to identify its strategic priorities for the period FY 21-23. This was done keeping in view the socio-economic changes that India witnessed, insights from key stakeholders (including our customers and distributors) and the strengths of Max Life.
As part of the three-year Business plan for FY 22, Max Life has identified and created five strategic pillars to achieve consistent and profitable growth:
Continuous improvement on customer parameters is the key to sustained growth of any organisation. Max Life has always been amongst the leading players on customer-centricity and plans to further enhance its customer focus and gain undisputed leadership on key customer parameters over the years to come. During the year, the company progressed well on all customer parameters though ‘persistency’ was impacted due to the lockdown and enhanced grace period in March 2020.
Indians are spending more time online. nearly one-third of their waking hours are spent on social networking sites, chatting, streaming videos, listening to music, consuming news and other content, and engaging with each other through the virtual world. With ‘social distancing’ becoming the new normal, digitisation has become the new normal, enabling the country to move towards digital modes of business.
After almost a decade of working towards building a more efficient agency distribution, achieving strong growth in e-commerce channels, and scaling up the Customer Advisory Team (CAT) channel, Max Life successfully undertook an agency transformation programme in FY 20 that led to an uplift in agency productivity.
During FY 20, many initiatives were taken to progress towards being a truly digital organisation and deliver many industry-first digital processes. FY 20 has been first time right (FTR) for Max Life in terms of Insta-issuance improvement, Open Architecture and Customer/Seller Experience. Some of them are explained below:
In FY 20, Max Life secured a 9.7% market share amongst the private players in terms of individual adjusted first year premium, maintaining its fourth rank by recording a modest gain of 4 bps.
Max Life Insurance continued its digitisation journey by digitising all the processes in offline channels resulting in superior recruitment, better quality of sales pitches and enhanced efficiency in sales process and policy issuance. In addition, through its website and Chatbot, Max Life Insurance is now well equipped to provide 24x7 customer service to its digitally-savvy customers.
Max Life Insurance believes that financial protection should form an integral part of sale of any life insurance product. Over time, the company has increased the share of protection business in its product mix. In addition, the company also enhanced its focus on selling higher sum assured across product range. The sum assured in force for FY 20 stood at ₹ 9,13,660 Cr., while the Individual protection business went up from 5.80% to 8.24%, a growth of 49% YoY on individual APE basis. The company has also launched one-of-its-kind Real Value Tool - a comprehensive tool specially designed keeping in mind the customer life stages, their family financial priorities, their current Life Insurance ownership and most importantly the degree to which they feel financially protected in an adverse scenario, helping them realise their financial protection gaps, if any. The company believes that even in traditional Endowment and ULIPs, adequate sum assured is important to ensure that there is no compromise in life goals for which the policy was bought even in the absence of life insured.
Inspiring leadership, improving employee experience and progressive people practices are key drivers of Max Life’s high-performance culture. The company believes that a happy employee is critical for a happy customer and a happy distributor leading to customer delight. To create an efficient and engaged workforce, Max Life laid significant emphasis on digitisation of processes, leadership engagement with employees, their health and well-being and training and development to give a boost to their career. This has led to a continuous improvement in the ‘Great Place to Work’ rankings on a year-on-year basis, where Max Life currently ranks as the 24th Best Place to Work, up from the 35th position in the previous year. This makes Max Life the only Life Insurance company to be ranked amongst the Top 100 rankings in the study.
In FY 20, Max Life secured a 9.7% market share amongst the private players in terms of individual adjusted first year premium, maintaining its fourth rank by recording a modest gain of 4 bps. In FY 20, Max Life secured a 5.5% overall market share and recorded a loss of 6 bps due to the faster growth of LIC than that of the private industry.
In FY 20, the First Year Premium (Individual + Group) for Max Life Insurance increased by 8% to ₹ 5,583 Cr. In terms of Individual Adjusted First Year Premium, Max Life recorded a 5% growth to ₹ 4,078 Cr. Further, the Renewal Premium (including group) grew by 13% to ₹ 10,600 Cr., taking gross written premium to ₹ 16,184 Cr., an increase of 11% over the previous financial year. The investment income stood at ₹ 2,366 Cr., a year-on-year de-growth of 54%.
Max Life’s Asset Under Management also grew by 9% year-on-year at ₹ 68,471 Cr. as on March 31, 2020 up from ₹ 62,798 Cr. as on March 31, 2019.
The operating expenses (policyholders) to net premium ratio increased from 13.4% in FY 19 to 14.7% in FY 20 primarily on account of investments towards augmenting distribution and the cost (commission plus policyholders’ operating expenses) to net premium ratio also increased from 20.2% in FY 19 to 21.1% in FY 20.
Max Life generated a post-tax shareholders profit of ₹ 539 Cr. in FY 20 as compared to ₹ 556 Cr. in the previous financial year, recording a decline of 3%. Max Life announced total shareholders’ Interim & Final dividend of ₹ 643 Cr. (net of Dividend Distribution Tax), which takes the total dividend distribution to 33.5% of the face value of each share.
Max Life unveils its campaign ‘I Am The Difference’ to inspire people to increase the value of their lives
Max Life is pleased to report strong performance across various operational parameters despite the COVID-19 impact in the critical month of March 2020.
In FY 20, the First Year Premium (Individual + Group) for Max Life Insurance increased by 8% to ₹ 5,583 Cr. In terms of Individual Adjusted First Year Premium, Max Life recorded a 5% growth to ₹ 4,078 Cr.
In FY 20, the proprietary channels recorded a growth of 13% and thus, increased its share in adjusted individual first year premium from 28% in FY 19 to 30% in FY 20 in line with its strategic priorities. As a nucleus to its consistent growth, Max Life’s distribution channels including the congregation of Agency Distribution, Customer Advisory Team, E-Commerce, Insurance Marketing Firms (IMF) and SPARC have combined to enable strong growth momentum for Max Life and has ensured exemplary performance in terms of the quality of business. Max Life’s focus on adopting new opportunities has enabled the company to become a leader in new and emerging distribution models such as Insurance Marketing Firms (IMF), agency partner channels, Rakshak (defence channel) etc.
A summary of progress of the distribution channels and noteworthy developments distribution is given below:
Max Life team bags the Silver Award under the Life Insurance Provider of the Year at Outlook Money Awards
In FY 20, Max Life tracked performance on customer engagement and satisfaction through Net Promoter Score (NPS), which reflects the difference between promoters and detractors of the company. By doing so, the company has generated greater insights in what delights or detracts customers to buy and recommend our solutions and further implement corrective actions to ensure that we meet our customers’ expectations. In this fiscal, Max Life’s Net Promoter Score improved from 35 in FY 19 to 40 in FY 20. Also, the investments in fraud management and usage of robust analytical models has helped us achieve an improved ratio of 99.22%, that is an increase of 48bps over the ratio of 98.74% in FY 19. Max Life has also paid 15,342 death claims worth ₹ 563 Cr. during FY 20 and has since inception paid ₹ 3,238 Cr. towards death claim on 1,12,946 policies.
Group Business registered growth of 14% in FY 20 to achieve ₹ 444 Cr. of new business. Group business added 524 new clients in Group Term Life and 8 new clients in Group Credit Life. In addition, the business also added 38 new affinity partners.
Long-term customer retention is of critical importance in creating win-win for customers, distributors and Max Life. Ongoing improvements in our structural solutions and services in order to improve our persistency is one of the key focus areas for Max Life. During the year, 13th month persistency of Max Life was at 86.69% and 61st month persistency stood at 53.45%, that is slightly lower than previous year due to IRDAI’s allowance of an additional grace period for policies whose premium were due in March 2020. With a reduction in customer grievances and mis-selling complaints by robust customer service mechanisms, Max Life plans to further enhance its customer focus and gain leadership on key customer parameters over the years to come.
Fitness icon Mandira Bedi with Max Life leaders (R-L) Prashant Tripathy, V. Viswanand, and Aalok Bhan at the Max Life Family Run
While COVID-19 led to unprecedented times, where the ensuing lockdown has restricted the human interaction, Max Life has been proactively digitising its operations for the last couple of years in an attempt to deliver a seamless customer journey and deal with the COVID-19 disruption. In these times, Max Life remains committed to ensure financial protection of the larger community by leading with agility. The organisation transitioned business processes successfully onto digital channels to promptly provide life insurance solutions and service to its customers. In its aim to secure the financial future of the customer, Max Life has adapted itself to cutting-edge digitisation avenues that have enabled seamless business continuity, even when more than 95% of its workforce has been working from home, adhering to social distancing norms.
Strengthening its commitment towards ensuring greater financial protection for the country, Max Life Insurance unveiled the findings of the second edition of its flagship survey ‘Max Life India Protection Quotient’ 2.0 in association with Kantar. Bigger in scale and diversity, Max Life India Protection Quotient 2.0, covered 25 cities in FY 20 to explore the attitudes and behaviour of a rapidly advancing India, in the backdrop of aspects like technology, health and influence of digital channels of communication.
In FY 20, Max Life launched its Common Purpose “inspire people to increase the value of their life” and refreshed its core values of Caring, Collaboration, Customer Obsession, and Growth Mindset. The management is focussed on creating a great workplace and enhancing a values-driven culture.
The survey was conducted with a total of 7,014 respondents across 25 cities comprising 6 metros, 9 Tier I and 10 Tier II cities (added in IPQ 2.0), as opposed to the earlier survey which interviewed 4,566 respondents across 15 cities.
This survey determined policyholders’ level of protection by evaluating their life insurance ownership, awareness levels and mental preparedness around protection. It measured the level of knowledge and ownership of various life insurance products, degree of term insurance preference and penetration, primary fears and triggers to life insurance purchase, preferred channel of policy purchase and roadblocks to owning life insurance. The survey revealed that the overall IPQ level is pegged at 37 out of 100, confirming the fear that India feels inadequately prepared to face the eventuality of loss of life, disability and critical illness.
Max Life Insurance has participated in the Great Place to Work Study and since has improved its position on a year-on-year basis currently ranking 24th on the ‘Great Place to Work’ as part of the study conducted by Great Place to Work Institute and The Economic Times. The current rank is up from the 35th position in the previous year. Max Life has also been recognised among ‘India’s Best Workplaces for Women, 2019’. In its 2020 edition, Great Place to Work Institute, India, recognised Max Life amongst top 25 workplaces in the BFSI category. In the 2020 annual employee engagement survey conducted by an independent agency, over 94% employees shared their feedback, with 96% favourable scores.
In FY 20, Max Life launched its Common Purpose “inspire people to increase the value of their life” and refreshed its core values of Caring, Collaboration, Customer Obsession, and Growth Mindset. The management is focussed on creating a great workplace and enhancing a values-driven culture. FY 20 also saw the introduction of the ‘You are the Difference’ belief that focusses on encouraging consumers to realise and embrace their ‘real life value’ and bringing a difference in the lives of their loved ones. Initiatives have been implemented to enhance digitisation and diversity and inclusion practices.
Pehal, our CSR volunteering programme, continued its momentum where over 5,400 employees and agent advisors across geographies participated in social causes such as financial literacy, saplings plantation, healthcare, immunisation and health camps, as well as collection and distribution of goods for the underprivileged. Over the last year, Max Life’s attrition of top talent was 10% down from 11% in the previous year.
At our Founders’ Day, 161 employees were recognised with long service awards for completing 10 and 15 years of service with Max Life.
Max Life continued to have a balanced product portfolio with an optimal mix of traditional endowment plans, unit linked plans and pure protection. In FY 20, Max Life had a healthy individual product mix at 32:20:8.6:40 for Participating:Non-Participating (Savings): Non-Participating (Protection): ULIP.
During FY 20, Max Life added new products to its portfolio in the individual space. For the individual business, Max Life launched the Guaranteed Lifetime Income Plan which marked our entry into the category of Deferred Annuity, Assured Wealth Plan that offers fully guaranteed lump sum maturity benefit to meet savings goals, Smart Term Plan, one of the most flexible term plans available which also offers additional benefit of return of premium which has also won the ‘Product of the Year 2020’, amongst others.
Protection continued to be a key focus area and in FY 20, one in four individual policies underwritten by Max Life was a protection policy. Of the new business premium, including individual and group business, protection share increased from 9.9% in FY 19 to 13.6% in FY 20.
Protection continued to be a key focus area and in FY 20, one in four individual policies underwritten by Max Life was a protection policy. Of the new business premium, including individual and group business, protection share increased from 9.9% in FY 19 to 13.6% in FY 20.
The operating expenses (policyholders) to net premium ratio marginally increased from 13.4% in FY 19 to 14.7% in FY 20 primarily on account of investment in future growth of the proprietary channel. The cost (commission plus total operating expenses) to net premium ratio increased marginally from 20.4% in FY 19 to 21.3% in FY 20 (marginal increase of 90 bps). Max Life maintained the ratios significantly despite investment in opening new offices and expansion initiatives.
Max Life’s assets under management (AUM) was ₹ 68,471 Cr. as on March 31, 2020. This was a growth of 9.03% over the previous year.
Max Life ensures the management of its investment assets in accordance with its asset liability management policy for traditional plans and a market-oriented approach for its unit-linked plans. The performance of both traditional and unit-linked funds is commensurate with the risks assumed in the respective funds.
With an endeavour to delivering optimal returns to policyholders, Max Life’s investment team follows a disciplined approach. On the traditional front, funds are invested keeping in mind the safety of capital and stability of returns over the long term. The debt portfolio of Max Life continues to be of high quality with 94% of the portfolio carrying top ratings of AAA/A1+. Most of the equity portfolios for traditional funds and Unit Linked Insurance Plan (ULIP) funds are large-cap oriented.
FY 20 saw equity markets rally after the General Elections in May and corporate tax cuts in September in the backdrop of an overall slow economy. The markets delivered modest positive returns till the early part of the last quarter. However, the unexpected global pandemic led to a sharp correction in the market in the last few weeks of the financial year and the Indian equity market ended down by 26%. Overall, the mid-cap index corrected by 36%, and the small-cap index was down 46% during the financial year. Our stance of sticking to large cap stocks helped us in navigating the volatility. Our ULIP funds outperformed the benchmarks for the year and our traditional funds have generated income in line with our objectives.
Fixed income markets were driven by two key themes 1) an overall economic slowdown and 2) aversion to credit risk. Due to the slowdown, RBI cut the policy rate during the year and brought down overall interest rates. The 10-year bond yield moved from 7.3% to 6.1% during the year. Markets continue to worry about asset quality and liquidity of NBFC balance sheets. Post COVID-19, these issues have become even more severe but RBI intervention has kept the situation under control.
With slowing economy and lower tax revenues, the Government invoked the escape clause of the Fiscal Responsibility and Budget Management Act (FRBM) to expand its fiscal deficit-to-GDP ratio by 50bps to 3.8% in FY 20. However, with the outbreak of COVID-19, the Government face challenges to meet its FY 21 fiscal targets.
The investments team has taken several new initiatives during the year to improve the risk-return objectives for long-term benefit of the policyholders. The company has gradually increased investment in commercial real estate, alternate investment funds and enhanced focus on stockpicking in the mid-cap oriented High Growth Fund. Max Life has also applied innovative hedging techniques of the fixed income portfolio for better risk-return outcomes for all stakeholders.
Max Life reviewed the Stewardship Code as prescribed by the IRDAI and stepped up voting actions across investee companies in best interests of the policy holders.
We began by launching the new purpose “Inspire people to increase the value of their life” in May 2019, followed by an internal drive to build self-belief to every Max Life Insurance family member.
Our Brand purpose is aligned with the company purpose; wherein we wish for the customer to be:
If under insured i.e. low Sum Assured, then encourage them to increase their Life insurance cover which may be currently lower than what it ought to be
By becoming more Self-Realised, the (difference) value they bring to the life of their loved ones, through their beliefs, actions, and sometimes, just by their mere presence
Thereby, Self-Action to buy the right value of Life Insurance cover. Hence, the brand communication platform of #YouAreTheDifference (YATD), rooted into the “You” - ’tum ho, tum se kahin zaida’, you mean much more than you think to your loved ones.
We continued to leverage #YouAreTheDifference across:
Keeping in view the requirements of long-term investors, the Company has been reporting the Embedded Value (EV) for the past several years. The EV is a measure of the shareholder value arising from in-force policies and net worth of the Company as at the valuation date. The Company uses a market-consistent methodology approach, as this approach better reflects the value of an insurance company by explicitly allowing for insurance and economic risks, rather than using implicit overall allowance for risks through risk discount rate in the traditional approach.
The EV of the Company, as on March 31, 2020, stood at ₹ 9,977 Cr., post allowing for dividend payment of ₹ 456 Cr. for FY20. The Operating Return on EV (RoEV) over FY 20 is 20.3% and including non-operating variances, the RoEV is 16.7%.
Max Life’s New Business Margin (NBM) for FY 20 was 21.6% (at actual costs). The Value of New Business (VNB) written over the period was ₹ 897 Cr. (at actual costs), representing an annual growth of 5%.
The New Business Margin (NBM) for FY 20 is 21.6% (at actual costs). The Value of New Business (VNB) written over the period is ₹ 897 Cr. (at actual costs), representing an annual growth of 5%. The lower growth in VNB for the year is on account of significantly lower than planned sales in the month of March 2020, amidst nationwide COVID-19 lockdown.
The VNB represents the value added to the EV due to the new business written by the Company during the year. Please find below the VNB and NBM for FY 20 compared to FY 19 at actual costs:
For FY 20, the VNB was ₹ 897 Cr., calculated at actual costs, resulting into NBM of 21.6%, broadly similar to margin of 21.7% for FY 19.
The marginal increase in VNB is on account of offsetting impact of increase in proportion of non-par protection and non-par savings products, leading to increase in overall margin/VNB, offset by lower than planned sales during the year for reason mentioned above.
As per the design of our participating products, the company annually reviews the performance of its inforce business to determine the non-guaranteed bonuses payable to its existing participating policies.
The recommendations for the participating policyholder bonuses applicable during the period from July 1, 2020 to June 30, 2021 are being made using the asset share framework, taking into account the experience of the fund during the year as well the expected performance of the fund in the future. The methodology and assumptions used to calculate such bonuses are consistent with the established principles and practices documented in the PPFM (Principles and Practices of Financial Management). On the advice and recommendation of Max Life’s appointed actuary, the board of directors approved to:
The total cost of regular bonus payable for the next 12 months starting July 2020 is estimated to be ₹ 1,312 Cr., an increase of ₹ 83 Cr. from the bonus distributed last year amounting to ₹ 1,229 Cr. In addition, the payment of terminal bonus on eligible deaths and maturities has been approved for the 12 months starting July 2020, the cost of which is estimated to be circa ₹ 25 Cr.
Corporate Governance has been the core of regulatory vision for FY 20. Insurance Regulatory and Development Authority of India (IRDAI) engaged with the insurers at an industry level to understand the ground realities of the operational framework for insurers and guide them to establish better corporate governance framework within the organisations.
IRDAI has also been supportive of the industry during the pandemic and announced various measures to facilitate policyholder servicing and focus on capital availability, capital preservation, and solvency margins of the insurers.
Following are the significant regulatory notifications issued by IRDAI and other regulatory bodies:
In light of the pandemic, IRDAI enforced the following measures - extension of grace period for premium payment of policies due in March and April 2020, development of a quicker claim settlement process, website disclosure on display of information about admissibility of COVID-19 claims, policyholder FAQs and list of closed offices and monitoring of situation, putting in place BCP and formation of Crisis Management Committee, devise insurance products providing protection from COVID-19, digital policy servicing and claims by allowing policy issuance via email, use of short messaging services to communicate with policyholders, digital payment methods for premium payments, etc. These were communicated through IRDAI Circulars dated March 23, March 30, and April 4, 2020.
With the objective to increase transparency and curb misselling in insurance, the IRDAI released a circular to make customised benefit illustrations mandatory for all products except microinsurance and POS products to be signed by the seller and the policyholder.
In order to ensure that insures are able to protect the policyholders’ interests and provide necessary financial security to the system, IRDAI issued circulars with requirements such as Boards critically examining capital availability and solvency margin for current FY 21, devising strategies to ensure availability of adequate capital and resources and rationalise expenses of management for FY 21 to be in line with the strategy. The April 13th circular directed insurers to align dividend payout for FY 20 to be in conformity with their strategies to ensure they have adequate capital and resources available with them to protect the interest of the policyholders and urging the insurers to refrain from dividend pay-outs from profits pertaining to financial year ending March 31, 2020, till further instructions.
The notification from Department of Revenue provides the way forward for entities other than banking companies and telecom licensees to carry out e-KYC authentication of its customers post approval of application by the Department of Revenue (Ministry of Finance) and UIDAI.
This was followed up with a notification from Ministry of Finance, allowing certain Insurers to Undertake Aadhaar Authentication Services of UIDAI.
With the objective to increase transparency and curb mis-selling, IRDAI released a circular on Benefits Illustrations and Market Conduct Aspects making customised benefit illustrations mandatory for all products except micro-insurance, POS products etc. to be signed by seller and policyholder, specific and separate confirmation for understanding of benefit illustration to be obtained from customers, benefit illustrations to be approved by Appointed Actuary and CEO, etc.
- mandatory collection of suitability information from prospects, with the exception of pure risk and pure health products
- putting in place a “Board approved Policy” on establishing suitability
- endeavour to be made by insurers for verification of customer contact information annually
- periodic statement to be sent to policyholders annually containing status report of all policies, premium payment status, accrued bonus, paid-up value, etc.
The Consumer Protection Act was amended in August 2019. Key changes included the following:
Max Life leader Sachin Arora at the forefront of the Max Life Family Run category held at Parinee Juhu Half Marathon 2020
On July 15, 2019, the IRDAI, by way of an update, notified the IRDAI (Non-Linked Insurance Products) Regulations 2019, and the IRDAI (Unit Linked Insurance Products) Regulations 2019 (collectively, 2019 Product Regulations), which replace the erstwhile IRDA (Non-Linked Insurance Products) Regulations 2013 and the IRDA (Linked Insurance Products) Regulations 2013, respectively.
The changes introduced under the 2019 Product Regulations mirror the changes proposed under the respective Exposure Drafts released by the IRDAI. A summary of the key changes are as follows:
Max Life has a Risk Management Framework (RMF) that enables it to appropriately develop and implement strategies, policies, procedures and controls to manage different types of material risks. The RMF is Max Life’s totality of systems, structures, policies, processes and people that identify, measure, monitor, report and control or mitigate all internal and external sources of material risk. This framework provides reasonable assurance to the Management that each material risk is being prudently and soundly managed, having regard to the size, business mix and complexity of MLI’s operations.
The Risk team periodically and pro-actively assesses the emerging situation and its possible implications on the continuity of its operations and operating model. During the pandemic COVID-19, the business continuity team under Risk Management Function started working proactively towards ensuring operational continuity by enhancing remote working capabilities (before the lockdown on March 25). This planning was a major enabler for us during the lockdown and helped in ensuring business continuity while giving primacy to the safety and security of our people.
The entire implementation is monitored both at the management level as well as the Board Committee levels, and the overall risk management framework and its effectiveness are subject to both internal and external assurance reviews.
In FY 20, the Indian life insurance industry under a common vision, came together to create the Insurance Awareness Committee, under the aegis of Life Insurance Council. The committee was built with a common corpus and launched a first-of-its-kind mass media campaign in December 2019. This industry-first mass media campaign on life insurance awareness was launched under the chairmanship of Prashant Tripathy, Managing Director & CEO, Max Life Insurance and was supported by focussed digital and social media initiatives and PR campaigns to reach a wider audience base. Max Life has strengthened this industry initiative through its continued work towards increasing life insurance awareness amongst its existing customers and prospective life insurance customers. Max Life worked on four specific themes:
During the COVID-19 pandemic, Max Life’s business continuity team under the Risk Management Function started working proactively towards ensuring operational continuity by enhancing remote working capabilities.
Max Life is working diligently to drive life insurance awareness amongst people through varied media that include Mass Media Campaigns, Social Media, Public Relations, Knowledge articles on online portals and Max Life’s website and RWA activities.
The company conducted 4 mass media campaigns spread over 25 weeks to educate prospective customers about the need to identify the real value and buy sufficient life cover. Social media has become an integral part of the life of a large part of Indian population. Being online, connected and updated with information has become the need of the hour. To leverage this digital revolution, Max Life Insurance has engaged with people at large through our own social media assets to educate them about the importance of life insurance as a financial solution for protection and meeting life stage needs. On social media through 195 Facebook, LinkedIn and Instagram posts and tweets, we reached out to 1.79 Cr. people. In addition, 512 articles related to life insurance were posted on leading portals and our own website where the blog section was revamped.
Fraudulent activities and spurious calling to defraud life insurance consumers are a reality which life insurance industry is tackling through individual and joint efforts. During the year, messages related on how to protect oneself from such activities were shared with Max Life’s existing policyholders by incorporating such message in most customer communication. Similar information was also shared through mobile text messages and articles with policyholders.
A large number of consumers walk into Max Life branches and provide us an opportunity to engage with them to enhance their understanding of life insurance. During the year, Max Life launched monthly ‘Super Customer Week’ to connect with over 12,000 customers every month who walk into our branches across the country. During these week-long sessions every month, multiple activities were carried out in branches through which customers were educated about the need for protection, benefits of various life insurance plans and tax savings through life insurance. Apart from this, the customers are also educated and encouraged to check their Real Value through the Real Value Tool which helps them identify the right value life insurance cover to protect their loved ones, basis their current financial situation and life goals. In addition, articles on how to get the best out of life insurance plans were also sent through email to our existing customers.
Max Life Insurance conducted a financial literacy and insurance awareness activity at village Damdama through its own employee volunteers. This activity was attended by men and women from more than 100 households.
During the year, Max Life launched monthly ‘Super Customer Week’ to connect with over 12,000 customers every month who walk into our branches across the country. During these week-long sessions every month, multiple activities were carried out in branches through which customers were educated about the need for protection, benefits of various life insurance plans and tax savings through life insurance.
Max Life and its directors firmly believe that the ultimate objective of Max Life is to contribute to the well-being of the society it operates in. With this belief, Max Life has set up a well-defined Corporate Social Responsibility (CSR) agenda for Max Life and its employees.
While Max Life focussed on education, healthcare, environment awareness & protection and financial literacy, greater efforts were made towards employees volunteering in various CSR activities across the country.
During FY 20, Max Life supported 10 NGOs working in the areas of preventive healthcare, health awareness, artificial limbs, rehabilitation of patients, nourishment to children, immunisation and medicines to underprivileged patients where 43,596 people benefited from these interventions during Q1 FY 20. Max Life also provided for palliative care for cancer patients, childhood cancer treatment and cancer awareness, cancer screening support to cancer affected children which benefited 2,484 patients and 1,127 care givers. Max Life provided financial support 10 NGOs, and this benefited 1,632 children during the year.
Max Life also supported education of 51,936 children and provided support for training of 80 teachers. In addition, Max Life helped set up 30 libraries in schools under the South Delhi Municipal Corporation.
In its fourth year, Pehal gained further momentum and over 5,400 employees and agent advisors of the Company participated in multiple activities for social good. The employees participated in various activities including tree plantation in around 130 offices and planted more than 35,000 saplings. Under the Water Conservation drive, 1,00,000+ numbers of the low-cost water nozzles were distributed to Max employees, residents of condominiums and Government offices.
Max Life also collaborated with District Administration, Gurugram’s Water Conservation Campaign wherein 8,000 nozzles were distributed in 13 RWAs. Max Life also organised three insurance awareness activities in 120 Resident Welfare Communities of Delhi, Ghaziabad, Gurugram and NOIDA along with Health Camps for the residents where around 1 lakh residents of these societies were reached out by our employees and agent advisors and 13,000 water nozzles were also distributed in these societies.
Overall, employees in 120+ offices collected material such as bicycles, clothes, toys and stationery and distributed those to underprivileged people including children.
In line with the requirements under section 135 of the Companies Act, 2013, Max Life contributed ₹ 13.37 Cr. towards these CSR activities during FY 20 through its execution partner, Max India Foundation and through the company directly.
For FY 21, Max Life will remain focussed on its strategic priorities that have been identified keeping in view the socio-economic changes witnessed in the country, insights from key stakeholders (including our customers and distributors) and leveraging key strengths of Max Life.
While business growth at Max Life has also been impacted by the COVID-19 pandemic, the company has responded with great speed to the situation and identified potential actions to navigate through the uncertain period. Displaying immaculate agility, Max Life has worked towards leveraging this disruption to its advantage by minimising the effect on sales, tactical and structural cost savings and targeting positive margins.
As the FY 20 fiscal came to closure, Max Life has responded quickly to the COVID-19 situation with all management actions directed towards health and safety of employees and agent advisors, while enabling remote working and proactive communication with employees and customers. Max Life has built new capabilities leveraging the digital channel across the customer value chain to navigate and emerge stronger through the current situation. In the long term, Max Life will focus on strengthening the new capabilities built, along with a strong focus on risk monitoring to steer Max Life in the right direction.
Also, by kick-starting a COVID-19 Transformation Programme, the aim has been to leverage short and long-term actionable plan across 9 work-streams to help business recovery. Keeping the safety and well-being of all employees, agents and distribution staff paramount, the focus going forward will be on digitisation of sales, cost management, increasing the protection penetration and ensuring persistency and collection efficiency.
Initiating a robust employee, agents and customer-first programme, Max Life prepared itself well in advance by initiating a Business Continuity Program that ensured seamless movement into the work-from-home scenario, a week before the country-wide lockdown was announced. The organisation ensured digital capabilities of the organisation were firmly in place to ensure seamless business continuity. Keeping the value of care paramount, Max Life ensured all employees and agent advisors were taken care of with the leadership being thoroughly connected with all employees ensuring a cohesive business working environment focusing on health and well-being of all.
Living its value of Customer Obsession, Max Life’s quick digital led action plan ensured that the fulfilment team operated at nearly 80% efficiency with more than 1,000 employees working from home. Ensuring claim processing went on unhindered, all claims and support documents were accepted online, along with an increase in customer connect which enabled Max Life to win customer trust in difficult times.
As the FY 20 fiscal came to closure, Max Life has responded quickly to the COVID-19 situation with all management actions directed towards health and safety of employees and agent advisors, while enabling remote working and proactive communication with employees and customers.
With the COVID-19 pandemic generating awareness among customers around life and health-related risks, Max Life with its quick-response program ‘Mission Possible 2020’ has implemented a swiftly designed digital operating model for distribution. This comprehensive program has been launched to prepare Max Life’s distribution to pivot to a Digital Operating Model has been launched with focus on simplified and 100% digitised sales process enabled by digital tools; digital agent recruitment, training and onboarding; paperless onboarding; and virtual sales office governance. Digitisation is also being leveraged to further increase efficiency of backend operations and enable uninterrupted customer service through digital self-service transactions.
Under this program, an agile shift to remote work has enabled frontline sellers and sales managers with infrastructure and digital tools to continue work from home and support existing customers and sell remotely. Revised ‘Digital Sales Processes’ across all channels have also been rolled out under which training of more than 9,000 frontline sales team and 10,000 agent advisors in the field has been completed digitally. As an outcome, in the month of April 2020, Max Life Insurance was able to maintain the number of policies sold to similar levels as in April 2019.
In these turbulent times, ‘Cross-Sell’ to existing customers has been prioritised as a dominant theme, where customers with a high propensity to buy have been identified through evolved analytical models. Max Life sales managers together with Agent advisors are now connecting to around 4 lakh customers over joint video calls to provide them details of their current protection and investment portfolio and understanding additional needs. Max Life has also pivoted the end-to-end ‘Agent Recruitment’ programme to a completely paperless and contactless process, which has yielded nearly 50% increase in unique registrations for new Agent applications. Additionally, series of digital enablers have been triggered to reduce or eliminate any friction in the onboarding of customers, such as selective waivers for supporting documents and need for medical tests.
With a clear sight to ensure cross-functional coordination while keeping a close watch on the evolving pandemic situation, the company has swiftly constituted a Business Recovery Team (BRT). In line with its core objectives of ensuring the safety and well-being of the employees along with convenience to the customers, BRT has taken proactive steps basis the developing government guidelines. As the nation gradually moves back to its feet, Max Life has stepped up its efforts to resume offices in a phased manner. To ensure the utmost safety of its employees, Max Life has gone ahead with opening few branch offices in the Green Zone during the first phase of office reopening. The focus while opening these offices has been to provide policy-related services to the customers for which only select employees have been called to these offices.
Max Life is committed towards making digitisation the new normal and enhance the digital way of working. The aim for the coming fiscal will remain to enable digital sales across distribution channels through various training and development modules.
Employee well-being and safety will continue to be of paramount importance to the company as offices reopened. Strict adherence to government mandate and protocols has been ensured as the company gradually ramps up its operations. An automated process for checking the eligibility to work has been introduced using the Max One mobile app. Besides this, a set of mandatory safety guidelines have been formulated to guide employees in resuming work. The guidelines are a way to help the employees bring about long-term changes in their basic social habits and adapt to the new normal in a better way.
With FY 21 being a year of consolidation and adaption to the disruption, Max Life is committed towards making digitisation the new normal and enhance the digital way of working. The aim for the coming fiscal will remain to enable digital sales across distribution channels through various training and development modules. Over the medium to long-term, Max Life will aim to incorporate the learnings from the period of COVID-19 into our revised business models around digitisation, infrastructure, remote working amongst others to develop the business utilities of the future.