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Max Life Insurance, a private life insurer, is on anexpansion spree, and is implementing a comprehensive plan predominantly focused around channels, growth, new distribution build-up and product launches, its MD & CEO, Prashant Tripathy, has said.
Having announced a capital raise of ₹1,612 crore from existing shareholder Axis Bank recently, the life insurer plans to open 100 new offices in Tier-2 cities (where Max Life is not present through agents), hire 50,000 agent advisors this fiscal, besides ramping up its banca play, Tripathy told businessline here.
Encouraged by a strong show in the first quarter this fiscal, Max Life Insurance is now working on a multi-pronged strategy that will help deliver “double digit growth” in new business premium this fiscal, he added.
“Our aspiration is double-digit growth in new business premium this fiscal. We will also grow better than the industry,” Tripathy said.
Max Life’s New Business Premium (NBP) grew 25 per cent in the first quarter to touch ₹ 1,857 crore. The gross written premium was up 19 per cent at ₹4,871 crore.
“We are in a rush to expand our distribution, be it through our own channels, in partnership, online, or through new banks, because we believe that India has significant potential,” he said.
On the distribution front, Tripathy noted that Max Life had acquired five new banks, 10 new brokers and two new corporate agents. “There is a lot of energy that will go towards ensuring that all these relationships start to take shape, start to bear fruit for us and like, you know, we are going to work very very closely with our cherished bank partners, Axis Bank as well as YES Bank, to find opportunities for growth,” he said.
CAPITAL RAISING
Tripathy said that the ₹1,612-crore infusion from Axis Bank should be seen as growth capital.
“We expect all regulatory clearances for the Axis deal to be in place in the next six months. This will take our solvency from 188 per cent to 227 per cent. Besides this Axis deal, we are not looking to raise capital from any other source in the next two years,” he added.
Tripathy, however, noted that Max Life does need capital of about ₹3,000-₹4000 crore over the next four to five years to fund the company’s growth.
“We will have enough capital for our growth as we go along, at least for the next couple of years. In Axis we have a strong shareholder, who has shown its willingness to invest in Max Life Insurance at fair market value,” he said.
Post the end of two years, Max Life may look at raising other forms of capital, not necessarily equity.
“Now we could raise more debt …as you know, IRDAI has allowed up to 50 per cent of the equity to be raised as subordinate debt. We have raised only ₹500 crore so far. So we will have more headroom to raise debt. So, that will be an obvious second stage, but not happening over the next 24 months,” Tripathy said.
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