1
Max India Limited
Investor Presentation
February, 2015
BSE Scrip Code: 500271, NSE Ticker: MAX, Bloomberg: MAX:IN www.maxindia.com
2
MAX GROUP - OVERVIEW
www.maxindia.com
Max Group Vision
“To be the most admired corporate for service excellence”
Sevabhav
Excellence
Credibility
• Positive social impact
• Helpfulness
• Culture of Service
• Mindfulness
• Expertise
• Dependability
• Entrepreneurship
• Business performance
• Transparency
• Integrity
• Respect
• Governance
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4
“ IN THE BUSINESS OF LIFE ”
Life Insurance
Protecting Life Healthcare
Caring for Life
Health Insurance
Enhancing Life
74:26 JV* with Mitsui
Sumitomo;
Largest non bank lead
private life insurer
Equal JV^ with Life
Healthcare, SA;
2,000 beds
74:26 JV with BUPA
Finance Plc, UK
Our Businesses
Multi-business corporate Focused on people and service
Focus on healthcare, children and the
environment
Corporate Social Responsibility
Senior Living
100% Owned;
Continuing Care
Retirement Community in
Dehradun
Niche high barrier polymer films & Leather
Finishing Foils
Speciality Films Clinical Research
100% owned;
Being divested
*Max India currently holds 72.1% in Max Life
^Current holding in MHC is Max India-46%, Life Healthcare-46% and IFC-7.5%
INR 116 billion+ Revenues*… INR 120 billion MCap… 5 Mn+ Customers…
18,000 Employees… 55,000+^ Agents… 2,100+ Doctors…
Strong growth trajectory even in challenging times; a resilient & diversified business model
Steady revenue growth and cost rationalization leads to strong financial performance
Well established board governance….internationally acclaimed domain experts inducted
Diversified ownership…..marquee investor base
Superior brand recall with a proven track record of service excellence
Strong history of entrepreneurship and nurturing successful business partnerships
5
A unique investment opportunity
and a resilient business model
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3
4
5
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Pharma Electronic
Component
Mobile
Telephony
Communication
Services
Plating
Chemicals
Medical
Transcription
Hutchison COMSAT
ATOTECH
*Total Revenue for FY14,
^Across Life and Health Insurance
Life
Insurance
6
Growth potential recognized by the market….
high pedigree investor base
• Temasek
• Fidelity
• Norges
• New York Life
• Jupiter
• GIC
• Comgest
• Reliance MF
• ICICI Prudential MF
Shareholding Concentrated with Marquee
Investors
Number of outstanding shares : 26.65 Cr.
Promoters 40.5%
IFC 3.1%
Goldman Sachs 15.5%
FII (Others) 18.6%
Mutual Funds 12.2%
Others 10.1%
Shareholding Pattern as on Dec 31, 2014
7
4508 5574
6668 7643 8180
9139
0
2000
4000
6000
8000
10000
FY 09 FY10 FY11 FY12 FY 13 FY14
Operating Revenue Trend
Rs Cr.
Rs Cr.
Consistent track record of strong growth across businesses
with the group turning strong profits
FY 10 FY 11 FY 12 FY 13 FY 14
Net Worth 1,993 1,944 2,513 2,903 2,984
Loan Funds 440 507 549 676 702
Net Fixed
Assets 965 1,017 1,256 1,361 1,495
Treasury
Corpus 909 540 397 409 235
Life Ins. AUM 10,121 13,836 17,215 20,458 24,716
FY 10 FY 11 FY 12 FY 13 FY 14
Operating
Revenue 5,574 6,668 7,648 8,180 9,139
Investment and
Other Income 2,087 1,223 914 2,444 2,544
Total Revenue 7,661 7,891 8,562 10,624 11,683
Profit / (Loss)
before Tax (86) 32 242 991* 274
(333)
(86)
32 242 197
274
-400
-300
-200
-100
0
100
200
300
400
FY 09 FY10 FY11 FY12 FY 13 FY 14
Profitability Trend
Rs Cr.
* Investment & Other Income and PBT for FY13 includes income from stake sale in Max Life amounting to Rs. 802 Cr and Rs.794 Cr, respectively.
However, PBT for FY13 has been appropriately adjusted in the chart to reflect proper trends
8
Max India
Max Life
Max Bupa
• In-principle understanding achieved with Bupa for resetting the JV to 51:49. Cash inflow of Rs. 182 Cr. assuming implementation by March 31, 2015
• GWP for Q3FY15 up 18% to Rs. 90 Cr. while B2C GWP grows 47%
• Average premium realization up 22%; Conservation ratio highest ever at 93%
Max India – Q3FY15 Key Highlights
• Structural clarity to be achieved by vertical split of Max India into 3 separate listed entities with mirror shareholding and divestment of clinical research:
Max Financial Services (Life Insurance)
Max India (Healthcare, Health Insurance, Senior Living, Corporate Management Services and others)
Max Ventures and Industries (Specialty Films)
Max Neeman in the process of being divested to a Canadian CRO for US 1.5 Mn
• GWP grows 11% to Rs. 2052 Cr. While APE grows 8%
• Expense ratio improves from 26.3% to 25.2%
• AUM grows 26% to Rs. 29,262 Cr.
• Conservation ratio up 80 bps to 81.7%
Max Healthcare
• IFC investment of Rs. 31 Cr. to maintain shareholding at 7.5% and redemption of preference shares implemented. Max India and LHC to hold 46% stake each
• Revenue grows 22% to Rs. 437 Cr.
• EBITDA grows 34% to Rs. 42 Cr.
9
MAX LIFE INSURANCE COMPANY (Max Life)
www.maxnewyorklife.com
2.2%
2.6% 2.3%
2.5% 2.5%
4.1% 4.0% 4.0%
4.6% 4.4%
3.4% 3.2% 3.1%
Max Life Insurance
FY02 FY00 FY01 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY14 FY13
Phase 1 – Joyful Entry (2000-2003) Phase 2 –Expansion (2004-2008) Phase 3 – Discovering New Normal (2009 onwards)
LIC
Private
Players 100% 98% 94% 85% 75% 66%
64%
50% 43%
48% 54%
63% 62%
10 12 12 14 16 21
40
53 47
55 50 48 47 45
62%
Global Financial crisis/ Bearish Indian Stock Market
Frequent regulatory interventions Equity Bull Run
ULIP introduced by private players
Entry of Private Players
Introduction of Bancassurance
Insurance penetration
Individual FYP adjusted for Single Premium (`'000 Cr.) xx
Source: IRDA Annual Report 2013-14
Indian life insurance industry has evolved
since the opening up of the sector in 2000
11
Top bank-led insurers observed linked products
gaining momentum driven by robust capital markets
KEY INSIGHTS
Apr-Dec’13 Apr-Dec’14
ICICI Prudential (YoY: +37%) and HDFC Life (YoY: +29%) recorded phenomenal growth driven by UL surge (result of customer pull due to
buoyant equity markets)
o Increased contribution from UL products led to significantly higher case sizes. However, count of new customers added to the book was seen
depleting which reflects reduced activity
SBI Life is known to have skewed it’s product portfolio to linked products starting December 2014 across key distribution channels
Top agency led players like Reliance Life and Birla Sunlife continue to have a Traditional heavy portfolio
Max Life’s UL share accounted for 30% of total portfolio as a result of increased customer demand
SOURCE: Market Intelligence & Internal Estimates | Public Disclosures
70%
55%
32%
21%
40%
14%
16%
30%
31%
38%
10%
23%
14%
15%
37%
41%
50%
63%
Max Life
Reliance Life
SBI Life
Birla Sunlife
HDFC Life
ICICI Pru
Par Non Par ULIP
58%
15%
45%
45%
23%
14%
12%
69%
33%
23%
19%
2%
30%
16%
23%
32%
58%
84%
53%
-26%
5%
-35%
-54%
0%
-11%
14%
5%
14% 19% 21% 22%
5% 8%
LIC Private Total Max Life
Oct-Dec’13 Jan- Mar’14 Apr-Jun’14 Jul-Sep’14 Oct-Dec’14
9.1%
10.0%
8.4%
10.3%
7.5%
12.3%
11.6%
9.6%
9.7%
9.5%
Last
Year
Max Life's Private
Market Share
Present
Private industry grew
by 1% excluding
ICICI Prudential &
HDFC Life
Max Life has remained the most
consistent player delivering growth
Multi-channel Distribution model
Highly efficient and productive agency
channel with focus on quality of advice
Best in class training capabilities within the
industry
Bancassurance relationship with Axis Bank
is benchmark in the industry
Financially sound*
Capital Base of `2,127cr
Solvency ratio of 487% (one of the highest)
Assets under management of `29,262cr
Long term Savings and Protection
Comprehensive product suite
Long tenor products and young customers
Product mix : Par 58%, Non-par 12%, ULIP
30%
Quality & Business Excellence
ISO Certification, strong feedback
processes & robust 6 sigma program
Focus on Service excellence & Operational
efficiency
Joint Venture between
– Max India Ltd. (leading Indian multi-
business corporate)
– Mitsui Sumitomo Insurance Co. Ltd.
(Member of MS&AD group which is
amongst top 10 general insurers in the
world)
Strong management team with proven
execution capabilities
Superior Customer Retention
Top quartile position among major private
players in 9MFY2015 in
– Surrender to gross premium ratio at 34%
(No.1)
– 13 M persistency at 79% (No.1)
– Conservation ratio at 83% (No.2)
“Treating Customers Fairly" framework
adopted to drive our customer centricity
agenda
Strong Parentage
*for the period H1 FY 2015
Max Life has distinct competitive strengths
which will help succeed in the new era
14
Max Life continues to maintain top quartile performance
amongst top private insurers on agency efficiency parameters
SOURCE: Market Intelligence & Internal Estimates | Public Disclosures
Note: Agency productivity calculated using FYP (100% SP)
Average Agent Productivity
In Rs. 000's per month
Average Branch Productivity
In Rs. Lakhs per month
Industry
Performance
Majority of the insurers are known to
have increased focus on productivity
solutions as industry attractiveness
has reduced due to agent give-get
ratio declining
Max Life’s
Performance
Continues to lead in the productivity
parameters (both agent productivity
and branch productivity)
H1 FY 2014
H1 FY 2015
10.0
10.7
5.1
4.6
4.9
3.9
9.8
8.6
6.2
6.2
4.4
4.0
SBI Life
Max Life
Reliance Life
HDFC Life
ICICI Pru
Birla Sunlife 6.9
13.1
6.4
6.7
19.8
14.2
6.1
13.5
8.3
6.2
19.0
14.1
15
Protection Oriented, Longer Tenor Life Insurance
0.1
DEFERRED
ANNUITY
5.9 MONEY BACK
UNIT LINKED
1.9 TERM
16.8
WHOLE LIFE
PROPORTION OF
POLICIES (%, by
number)
PRODUCT TYPE Tenure
(Years)
Age of Insured
(Years)
Max Life Average Max Life Average
ENDOWMENT 38.5
As on 31th Dec 2014
HEALTH
GUARANTEED
INCOME 1.9
0.4
34.5
33
34
35
41
30
36
39
44
43
16
26
17
15
15
14
19
20 35
16
1595 1584
1724
1506 1513
1769
5405
10,121
13836
17215
20458 24716
0
5000
10000
15000
20000
25000
30000
1200
1300
1400
1500
1600
1700
1800
FY 09 FY10 FY11 FY12 FY 13 FY 14
New Business Growth – Adjusted FYP 1 and AUM
AFYP (Rs cr) AUM (Rs cr)
Track record of strong performance
2014 3011 3751 4489 4739 5017
82% 83% 81% 81% 78% 80%
30%
60%
90%
0
1000
2000
3000
4000
5000
6000
FY 09 FY10 FY11 FY12 FY 13 FY 14
Renewal premium and conservation ratio 2
Renewal Premium (Rs cr) Conservation Ratio
94 123
155
152
169
200
2.6 3.0
3.4 3.5 3.5 3.6
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
0
50
100
150
200
250
FY 09 FY10 FY11 FY12 FY 13 FY 14
In force business and No. of policies
Sum Asssured (Rs 000's cr) Policies million
1. Individual First Year Premium adjusted for 10% single pay
2. Conservation ratio = Renewal premium for the current period / (First Year + Renewal Premium for the previous period)
1% 3% 6% 9% 9% 10% 3% 4%
23%
41% 49% 53%
22% 22%
22%
14% 8%
8% 75% 71%
50% 36% 34% 29%
0%
20%
40%
60%
80%
100%
FY09 FY10 FY11 FY12 FY13 FY14
Distribution Mix
Group Bancassurance Partnership Distribution Own Channel
17
Funds
performance
Claims
Settlement
Product
Innovation
Business
Excellence
and Quality
Brand
Technology
HR Practices
CIO 100 Award for technology implementation (2008/2009/2010/2011)
Funds Performance Outlook Money award in Top Quartile across all categories (2011)
Amongst India's Top 100 Best Companies to Work for (2011, 2012, 2013, 2014) by Great Places
to Work
Shiksha Plus II ranked ‘Best Child Plan’ in India by Money Today
Golden Peacock Award for Max Vijay
ET Wealth rated Max Life claims settlement highest in the Industry at 99.58%
Swiss Re commendation for claims settlement TAT (2012)s
Brand Excellence Award and recognition as Superbrand (2010-11,2013-14), AIMA Loyalty
Award 2012 for Best Loyalty Practices, EFFIE’s Award for Aapke Sacche Advisor Campaign
in 2012
ASQ ITEA Bronze award; CII Commendation for Business Excellence (2008, 2009 & 2010)
CII 2nd Prize in Project of the Year
Global Finance – Best Life Insurance Company, India 2014
Accreditations and Awards
18
MAX HEALTHCARE (MHC)
www.maxhealthcare.in
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Indian healthcare industry poised
for exponential growth
Sources: Research on India Report , 2010, Healthcare India Report, Fitch Ratings, 2010, FICCI E&Y Report, 2008
KEY HIGHLIGHTS
• Indian Health Industry is poised to double to USD 125 bn by 2015E, driven by a combination of ageing population, growing
lifestyle diseases and medical insurance penetration as well as increasing ability to afford quality healthcare.
• Realization of latent demand through growth in insurance & consumer education likely to be a key growth driver
• Private hospitals to contribute USD 45 Bn by 2012
• Share of top tier private hospitals (>100 beds) is expected to grow to 40% of the total hospital segment by 2015
• Specialty hospitals are estimated to grow faster than overall industry due to rise in lifestyle diseases
• India needs an investment of USD 86 Bn by 2025 to increase bed density to 2 per 1,000 population
20
14 17 22 32
51 66
84
111
0
20
40
60
80
100
120
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
Rs
bill
ion
Growing Health Insurance Market...
Increasing prevalence and propensity are
key market drivers
Sources: FICCI & E&Y Report, 2007, IRDA, B&K report, 2009, Crisil, Research on India Report, 2010
Rising health insurance penetration will make healthcare
affordable
Cost differentials provide a huge untapped market for
medical tourism related business opportunities
6.8
6.4
2.9
3.4
1.2
8.4
3.1
3.3
4.2
3.6
0 5 10 15 20
US
Australia
Mexico
Brazil
India
International Healthcare Expenditure (as a % of GDP)
Public
Private
8.5 7 4.5 9.8
32 24
6.4
19.2
100
48
18
65
Open Heart Knee replacement Lap Cholcystectomy Obesity Surgery
Comparative medical cost
India UK US
(US
D ’000s)
233 837
109
7285
2992
863
0
2000
4000
6000
8000
China Brazil India USA UK Global
Per Capita Spending (PPP)
China Brazil India USA UK Global
On a per capita basis , both in terms of USD and PPP, India’s Healthcare spend is amongst the lowest globally. However India's
healthcare spending is growing at a healthy CAGR of 14%, rising from 5.5 % of GDP (2009) to 8% (2012)
Become Best Healthcare Provider in North India
Basis bed capacity & revenue
Basis quality of services
Basis key specialty focus of Onco, Neuro, Cardiac, Ortho, MAS and Renal Sciences
Basis leveraging technology for driving operational excellence
& benchmark our processes with global
standards
Align financial performance in line with
the best in Indian healthcare
MHC – Mission
Max Healthcare is focused on North India
Mohali, Punjab
(213 beds)
Bathinda, Punjab
(200 beds)
Dehradun, Uttrakhand (200 beds)
Saket, New Delhi
(541 beds)
Gurgaon, Haryana (64 beds)
Patparganj, New Delhi (402 beds)
Noida, Uttar Pradesh (33 beds)
Pritampura, New Delhi (70 beds)
Shalimar Bagh, New Delhi (280 beds)
Panchsheel, New Delhi
2000 beds across the
network
Dehradun
Gurgaon
Mohali
Bhatinda
Delhi
Noida
Trauma Oncology
Cardio
Neuroscience
Oncology
Cardiac Science
Mother & child
General
Shalimar
Bag
Pitampura
Saket
CardiacScience Oncology
Ambulatory Surgical Centre
Patparganj
Trauma
Neuroscience
MAS Orthopedics
Multispecialty
careOncology
Neuroscience
CardiacScience
Urology
Orthopedics
MHC network
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Cardiac Sciences
24
Extensive focus on service excellence –
a key strength for MHC
• Engagement with independent external agency (IMRB) for monitoring patient satisfaction
• Strong clinical protocols
Focus on service excellence & medical quality
• Investment in CRM; EHR; ERP
• Leveraging IT for driving cost & operational efficiencies
• IT Opex accounts for 1% of revenue Strong IT system
• Strong presence in North India with brand recognition Pan India
• Won numerous accolades including accreditations by the NABH, NABL and awards by FICCI
Well established brand
• Increased bandwidth for future growth & governance standards
• Involvement of clinicians in strategic decision making through doctor’s governing bodies such as GMAC; HMEC etc
Professionally run & Clinician engagement
• 2,100+ doctors; 3,100 nurses & 3,000 other trained personnel
• DNB (Diplomate of National Board) & fellowship programs
• OTJ trainings for nursing & paramedic care Focus on talent & training
25
MHC’s Governing Philosophy...
Clinical excellence – employer of choice
for physicians
Service excellence
Information technology and
modern management techniques
GMAC1
Doctor Councils
Provide Strategic direction
Drive hospital specific
decisions
Idea exchange
forum
HMAC
(one for each hospital)
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423 534 685 824 1149 1407
56.5% 57.2%
59.2% 59.6%
61.2% 61.7%
55.0%
57.0%
59.0%
61.0%
63.0%
65.0%
0
150
300
450
600
750
900
1050
1200
1350
1500
FY 09 FY10 FY11 FY12 FY13 FY 14
Revenue and Contribution Margin
Revenue (Rs cr) Contribution Margin
MHC delivering superior performance
across all key metric
712 751 926 992
1302 1472
19433 20431 21558
23585 25126 26208
0
5000
10000
15000
20000
25000
30000
0
200
400
600
800
1000
1200
1400
1600
FY 09 FY10 FY11 FY12 FY13 FY 14
Avg. operational beds and Avg. revenue per
occupied bed day*
Avg. operational beds Avg Revenue per bed day (Rs)
51103 59130 64335 69375
95114 112668 64390
68806
76838
84635 87522
92857
40000
60000
80000
100000
0
15000
30000
45000
60000
75000
90000
105000
120000
FY 09 FY10 FY11 FY12 FY13 FY 14
Inpatient Trends
Inpatient Transactions Avg. revenue per patient (Rs)
1900 2250
2906 3103 3636 3799
493 565 594
676 735
807
0
200
400
600
800
1000
0
500
1000
1500
2000
2500
3000
3500
4000
FY 09 FY10 FY11 FY12 FY13 FY 14
Outpatient Trends
Outpatient transactions (000's) Avg. revenue per patient (Rs)
*Average revenue per occupied bed day has been calculated on inpatient revenue
27
MHC – Accreditations and Awards
Achievements: 2012-13:
MSSH: Shalimar Bagh: NABH New Accreditation
MSSH, Mohali: NABH New Accreditation (awaited shortly)
MSSH, Saket: NABH Reaccreditation
MSSH, Patparganj: NABH Surveillance Accreditation
Blood Bank: MSSH, Patparganj: NABH Reaccreditation
Pathology Lab: MSSH, Patparganj: NABL Reaccreditation
Pathology Lab, MSSH, Gurgaon: NABL Reaccreditation
National Standards:
Mark of Excellence :
636 aspects are addressed:
•Patient Rights: respect,
transparency, consent
•Standardized protocols in all
departments: over 200 SOPs
•Patient safety
•Measurement & Evaluation
• Staff Training and safety: on all
SOPs
NABH / NABL Accreditation
MHC is committed to ensure
that all units are complaint to
the National Standards
Centre of Excellence Recognition to MHC
for Treatment of Heart Attacks
By Lumen Global 2013
Under leadership of Dr. Roopa Salwan
Radiation Therapy Radiation Oncology Department,
Saket:
Recognition of Quality Standards conforming to
International Atomic Energy Agency / World Health
Organization
Under leadership of Dr Anil K Anand & Mr. Munjal
Dr. Arati Verma selected as Co Chairperson of Technical Committee of NABH
ISO 14001:2004 & 18001:2007 at Patparganj , Pitampura & Shalimar Bagh
ISO 9001:2008 at Max Heart & Vascular Institute, Patparganj, Noida,
Pitampura, Shalimar Bagh, Panchsheel Park & Home Office.
Awarded on 17th Jan, 2013
Past winners: www.mahindra.com and www.volkswagon.co.in
MHC won among 200 Nominations in the Award Category
IAMAI jury evaluated entries based on :
• Content
• Structure and Navigation
• Visual Design
• Functionality
• Interactivity
• Overall Experience
Best Corporate Website
– maxhealthcare.in
3rd India Digital Awards
by Internet & Mobile
Association of India
Management bandwidth for M & A available
Value adding deals will be pursued in consonance with Shatabadi Strategy
Phased approach towards growth to ensure absolute Operating Profit is not depressed in absolute terms.
Asset light strategy to growth will be preferred; attractive PPP arrangements will also be explored.
Addition to bed capacity in existing hospitals in NCR will be prioritised in light of new FAR rules in New Delhi
Our Growth Philosophy
MHC expansion by 2020…
2,000 beds 3500-4000 beds
12 hospitals 20 hospitals
Scope for expansion in existing units –
Saket, Patparganj; & Shalimar Bagh
Brown & Green field opportunities can be
looked at for smaller units in NCR
29
MAX BUPA HEALTH INSURANCE (Max Bupa)
www.maxbupa.in
A symbiotic partnership in
the health insurance space
30
• India’s leading conglomerate
• Successful track record of
building businesses
• Expertise in life insurance,
health insurance and
healthcare businesses
• Group revenues in FY 2014 –
Rs 11,683 crores
• Local perspective of the Indian
market
• Culture of service excellence
• Global Health Insurance provider
with market leadership in UK,
Spain & Australia
• 12 million customers in over 190
countries
• Group revenues in 2012 - £8.5
billion and PBT of £600 million
• Employee base of over 52,000
• Voted as best international health
care provider in 2013
Leveraging the strengths of both partners to build a robust and profitable
enterprise with focus on service excellence
Industry is poised for an exponential growth
31
Key drivers of growth
SOURCE: Team analysis, WHO statistics, NCAER, McKinsey Urbanisation report, Government economic survey, BRIC report
▪ Increase in affordability
– Increasing affordability with rise in
income levels and healthcare spend
per capita
▪ Increase in willingness
– Rapid scale-up of hospitals and
expansion outside metros
– Take-off of comprehensive
insurance coverage products e.g.
secondary healthcare, out-patient
etc.
– Higher need with rise in incidences
of chronic diseases (viz. cancer,
heart disease)
– Acceptability of insurance with
increasing awareness
▪ Increase in ticket size
– Rise in healthcare costs with market
inflation
17 22 32
51 66 83 111
131 160
192 231
266 305
351 404
464
0 50
100 150 200 250 300 350 400 450 500
GW
P (
Rs.
in B
illio
n)
Indian Health Insurance Market (Rs. In Billion)
• Industry grew by 15% in FY 2013-14 marginally lower than
that in the previous fiscal (17% in FY 12-13)
• Growth driven equally by both Private as well as public
sector players (YTD Mar’14 : 14% and 15% respectively)
• Insurers focusing on containing loss ratio’s and improving
profitability
• Standalone health insurers growing aggressively
Health and
wellness focus
Value for money:
Comprehensive
benefits for the
money paid
Good
Hospitalization
experience: Cashless processing;
No TPA
Health Coach
Simplicity,
Transparency: Hassle free claim
processing; No
underwriting at point
of claim
Comprehensive
benefits
Access to
information
Checkups on
renewal
Support for
Family’s health
24/7 health line
Relationship
Manager for
Gold & Platinum
Customers
Max Bupa to capitalise on this opportunity through
innovative product and superior service offering
Technology &
automation
ahead of curve
32
33
• Max India - strong understanding of Indian Insurance landscape, learning's from Max Life’s success and leverage synergies with Max Life and MHC
• BUPA – Product design, underwriting and clinical expertise
Leveraging Max India and BUPA capabilities
• Opened up to Standalone Health insurers in February 2013
• 4 tie-ups - Standard Chartered, Deutsche, Federal Bank and Ratnakar Bank successfully launched
Bancassurance would catapult growth
• Value based pricing based on data and analysis
• Selective targeting of profitable Group business
Pricing for profitability
• Build a culture of innovation and expertise.
• Focus on wellness and specialized products with no age limit and high sum assured.
• Emphasis on Health Risk Management
Continuous product innovation
• Focus on the mass affluent+ customer base
• Robust underwriting procedure
Focused customer profile
Extensive focus on key growth levers to
maximize long-term value
Factsheet* – Max Bupa
Gross Written Premium^ INR 249 Cr.
Customer Base^ ~800K
Number of Employees ~1,500
Number of Agents ~10,000
Number of Offices 26
Partner Hospitals ~3,500
* For the year ended December 31, 2015
34
MAX SPECIALITY FILMS (MSF)
www.maxspecialityfilms.com
35
1.91.6
1.2
0.5 1.60.16
0.8
Western Europe
China North America
Asia Latin America
India World Average
Global per capita consumption of BOPP
BOPP per capita consumption in India lower than
the global average
(KG’s)
Industry marked by robust global
and domestic demand
Key Highlights
•Growth of flexible packaging Industry ~ 12-14% in India
•Per capita consumption of BOPP in India relatively lower
•Growth in FMCG and organized retail and changing urban life styles & rural demand.
•Competitive pricing and costs spurs exports from India and restricts imports.
•Shift from PET to BOPP (Indian BOPP:PET products ratio around 1:2 against 3:1 globally)
•BOPP films are recyclable and have a competitive advantage over other plastic and traditional products
•Convertor industry growing & India becoming global hub for supplies of Flexible Laminates
Confectionary, 5%
Biscuits, 14%
Snacks, 20%
Pasta, 15% Other Foods,
10%
Tobacco, 2%
Tape, 16%
Labels, 8%
Other App, 10%
Global Demand FY 15
36
Max Speciality Films is much more than packaging…
Established in 1990 MSF manufactures ‘Speciality’ BOPP (Bi- axially Oriented
Polypropylene) & Thermal Lamination Films
Committed to innovation, product quality and service excellence
Deep Partnerships with Brands and converters in India & Abroad
Significant market share of converts 60-70% output served to FMCG industry
Geographical footprint covers Europe, the middle East, the US, Latin America, Africa,
Australia, South Korea, CIS countries & SAARC
MSF uniquely positioned to be India’s most admired &
preferred global supplier of Specialty Polymer films
COMMODITY
PACKAGING, INDUSTRIAL,
TEXTILES
SPECIALITY HERMETIC SEAL,
ULTRA HIGH BARRIER
HIGH SPEED PACKAGING,
LAMINATION
METALLISED FILM
PACKAGING, LAMINATION,
HIGH BARRIER
THERMAL & COATED FILM
PACKAGING, DOCUMENT
PROTECTION
ENHANCEMENT,
PRESERVATION VIZ.
GREETING CARDS OUR STRENGTH
37
Business evolution & infrastructure
MSF Growth - FY07-14 Revenue CAGR: 24 %
Quantity CAGR: 22 %
EBITDA CAGR: 15 %
REVENUE &
QUANTITY GROWTH
1990 1996 1998 2001 2003 2006 2007 2009 2011 2015
BOPP LINE 1
(3.6 KTA)
METALIZER 1
LEATHER
FINISHING FOIL
THERMAL LINE 1,
BOPP LINE 2
METALIZER 2 THERMAL LINE 2
BOPP LINE 3
THERMAL LINE 3,
LEATHER FINISHING
FOIL 4
LINE 4,
METALIZER 4
EXPANSION LINE
5
METALIZER 5
(54 KTA)
METALIZER 3
3 EXTRUSION LINES 4 METALLISERS 4 BOPP LINES 3 COATING LINES
CAPACITY GROWTH
Visibility in Top Brands
You will Find MSF films in…
38
Markets we serve…
Food Packaging Non Food Packaging Industrial Packaging Leather Industry
Awards & Recognition
39
GOLDEN
PEACOCK
YEAR -2011 YEAR -2010 YEAR -2012
WORLD STAR
YEAR 2010
YEAR 2012
INDIA STAR
40
MAX INDIA FOUNDATION (MIF)
www.maxindiafoundation.org
41
MAX INDIA FOUNDATION Making a difference… to life
Factsheet* – MIF
Locations 500
NGO Partners 367
Beneficiaries 12,33,233
Initiatives
• Immunization
• Artificial Limbs & Polio
Callipers
• Health Camps
• Surgeries & Treatment
• Palliative Care
• Lifeline Express Camps
• Multi-speciality Camps
• Cancer Awareness
• Environment Awareness
Max India Foundation
• Corporate Social Responsibility (CSR) Arm of the Max
India Group focused on providing quality healthcare to
the underprivileged, facilitating awareness of health
related issues, and promoting and fostering an eco-
friendly healthy environment.
Awards Received:-
•Golden Peacock Global CSR Award 2011
•Global CSR Awards at the World CSR Day 2012
•Golden Peacock Award for CSR 2012
•“Best CSR Practices 2013” at 7th Indy’s Award
•“Best CSR Practices 2013”at the World CSR Day
• “Golden Peacock Award for CSR 2013
• “Outstanding Social Impacts” Award 2014 at the
World CSR Day Congress
• Best Overall CSR Practices 2015”at the World CSR
Day
* Till Feb 2015
Under the ‘Village Adoption Scheme’ being promoted by Government, MIF adopts Dhakrani, a village in Dehradun district to address healthcare related needs including waste disposal and sanitation.
42
Annexures
Consolidated Financial Snapshot^ (Q3 & 9MFY15)
Particulars 31-Dec-14 31- Mar-14 Growth
Net Worth 3,267 2,984 9%
Preference Shares - 65 -
Loan Funds 571 702 -19%
Fixed Assets (Net Block) 1,111 1,495 -26%
Treasury Corpus (Debt M. Funds & Term Deposits) 728 247 195%
Life Insurance Investments (AUM) 29,262 24,716 18%
43
(Rs. Cr.)
Particulars
Quarter ended Y-o-Y Growth
Nine month ended Y-o-Y Growth Dec-14 Dec-13 Dec-14 Dec-13
Total Revenue 3,779 3,376 12% 10,756 7,943 35%
Operating Revenue 2,477 2,328 6% 6,936 6,208 12%
EBITDA 293 135 117% 618 385 61%
PBT 235 77 206% 429 212 102%
• Max Healthcare results consolidated on proportionate basis as it becomes a JV as opposed to a subsidiary earlier impacting revenue and PBT growth
• Gain from stake sale in Max Healthcare to Life Healthcare of Rs. 296 Cr. included in revenue and Rs 265 Cr. included in EBITDA/ PBT
• Expenses of Rs. Rs 77 Cr. being carried forward to be charged over future projects of Antara recognized in the Q3 P&L as current focus is on ensuring
the success of first project
To be the most admired life insurance company by securing the financial future of our customers
FY 2020-21: • Touch 1 Crore lives and grow by 3 times in 8 years • Defined targets for Revenue, Profit and AEV
Caring | Credibility | Collaborative | Excellence
We are an honest life insurance company, committed to doing what is right We serve our customers through Long term savings,
protection and retirement solutions, delivered by our high quality Agency & Multi channel Distribution Partners We are a business with strong social relevance and contribute
to Society by supporting causes in health and wellbeing.
Financial Strength Quality of Advice Service Excellence Superior Human Capital Value Driven Culture Corporate Governance
Vision
Goals
We Stand for
Values
Integrity
Mission
Vision & Mission Statement
45
Rank Company Individual New Business Premium (Rs. Cr)
Premium Adjusted for 10% single premium
Apr’14-Dec’14 Apr’13-Dec’13 Growth (%) Private Market
Share
1 ICICI Prudential 3,011 2,190 37.5% 23.9%
2 SBI Life 1,887 1,882 0.3% 15.0%
3 HDFC Life 1,870 1,455 28.6% 14.9%
4 Max Life 1281 1162 10.2% 10.2%
5 Reliance Life 820 800 2.5% 6.5%
6 Bajaj Allianz 477 718 -33.6% 3.8%
7 Birla Sunlife 474 561 -15.5% 3.8%
8 PNB MetLife 439 393 11.8% 3.5%
9 Kotak Life 311 270 15.6% 2.5%
10 Exide Life 287 322 -10.9% 2.3%
Others 1,714 1593 7.6% 13.6%
Private Total 12,571 11,345 10.8%
LIC 13,791 21,438 -35.7%
Grand Total 26,362 32,783 -19.6%
Market Share of Pvt. Players
47.7% 34.6%
Market Position Insurance Sales
Source: Life Insurance Council | IRDA Website
46
Amount in Rs. Cr.
Value of New
Business
Opening EV
Unwind of
Discount**
Operating
Variance* Non
Recurring
Variance
Closing EV
Denotes decrease to EV
Denotes increase to EV
379*
240
79 34
3,756
* Includes Rs 6 crs of cost underrun..
** Unwind calculated on the expected basis where the Net Worth earns 8.15% and the VIF earns 13%.
*** VNB includes shareholders’ interest in the residual estate from participating business aggregating Rs. 40 Cr. Implied NBM is on a structural basis.
****APE: Adjusted Premium Equivalent (Annualized First Year Premium adjusted for 10% of Single Premium; Limited Premium valued at 100%).
Net Worth
Value of In-force business
3,953
Operating RoEV of 15.6%
Headline RoEV of 13.5%
1,858
1,898 1,931
2,021
Max Life – Embedded Value
March 31, 2014
SH
dividend
payouts
309
Implied NBM*** is
13.4% on APE****
(14% in 2012-13)
47
Max Life – Key Assumptions to Embedded Value
Cash/Money Market/TB 8.5%
G Secs 8.8%
Corporate Bonds 9.6%
Equities 13.00%
Unit Linked Fund Growth Rate 10.50%
Interest Rate on Non-Unit Reserves 8.15%
Inflation 6.50%
Risk Discount Rate 13.00%
Service Tax 12.36%
Tax Rate 14.1625% (12.5% + 10% surcharge + 3% education
cess)
Economic Assumptions
Operating Assumptions
Operating assumptions like mortality, morbidity and lapses are set on a best estimate basis, based on
Company’s own experience where available. Maintenance expense assumptions are in line with the
current experience and acquisition expense assumptions are based on structural level expenses
The economic assumptions used are internally consistent and have been set with regard to current
economic conditions
48
Max Life – Sensitivities to Embedded Value
* For the purpose of par sensitivity analysis, the impact on enhanced dividends has not been allowed for.
Base Case (% change*) Value of In force Value of New
Business
Mortality +10% -2.20% -5.20%
Mortality -10% 2.20% 5.20%
Lapses +10% -3.90% -6.50%
Lapses -10% 4.20% 7.20%
Maintenance Expenses +10% -1.10% -1.80%
Maintenance Expenses -10% 1.10% 1.80%
RDR +100bps -4.20% -7.20%
RDR – 100bps 4.70% 8.00%
Investment Return +100bps and RDR +100 bps -2.00% -0.10%
Investment Return -100bps and RDR -100 bps 2.20% 0.00%
49
Max Life Embedded Value – Basis of Preparation
Max Life’s Embedded Value is guided by the European Embedded Value (EEV) principles and is consistent with
the reporting of traditional embedded values on a deterministic basis
Allowance for risk has been made through the use of a single risk discount rate (“Top down discount rate
approach”), including allowance for the time value of financial options and guarantees
Explicit allowance is made for the cost of capital where the capital is defined as the higher of the internal required
solvency margin (being 170% of the Minimum Required Solvency Capital) and the internal economic capital
requirement
Operating experience assumptions are set on a best estimate basis, reflecting the Company’s recent experience as
well as the expected future experience adjusted for Management actions and non recurring factors contributing to
current experience in order to avoid arbitrary changes in assumptions
Operating experience assumptions are monitored on a six-monthly basis at a granular level, including channel and
product, and are reviewed by the Product, Actuarial and Risk Management Committee of the Board
The EV assessment does not include any value generated by future new business but various assumptions used to
make the assessments are based on the ability of the company to continue writing new business
It is to be noted that the EV methodology is in line with accepted international practices, however the results have
not been subject to an external review. The results have been reviewed internally by members of the Product,
Actuarial and Risk Management Committee of the Board, including actuaries who have expertise in this area.
*Individual First Year Premium adjusted for 10% single pay **Conservation Ratio = Renewal Premium for the current period / (First Year + Renewal Premium for the previous period) *** Due to buyback of 1% stake from Axis Bank as per the agreed arrangement and proportionate stake from MSI to maintain foreign holding at 26%
Max Life Insurance
50
Key Business Drivers Unit Quarter Ended Y-o-Y Growth
9 months ended Y-o-Y Growth Dec'14 Dec'13 Dec'14 Dec'13
a) Gross written premium income Rs. Cr
First year premium 480 446 8% 1,267 1,165 9%
Renewal premium 1,399 1,265 11% 3,754 3,366 12%
Single premium 174 129 34% 426 315 35%
Total 2,052 1,841 11% 5,447 4,846 12%
b) Shareholder Profit (Pre Tax) Rs. Cr 73 134 -45% 356 382 -7%
c) Expense Ratio % 25.2% 26.3% - 26.7% 28.4% -
d) Individual Adjusted Premium (APE*) Rs. Cr 489 453 8% 1,281 1,162 10%
e) Conservation ratio** 81.7% 80.9% 82.9% 78.3%
f) Average case size (Agency) Rs. 37,930 30,122 26% 33,067 28,699 15%
g) Case rate per agent per month No. 0.29 0.43 -32% 0.30 0.41 -27%
h) Number of agents (Agency) No. 47,128 43,120 9% 47,128 43,120 9%
i) Paid up Capital*** Rs. Cr 2,013 2,127 -5% 2,013 2,127 -5%
j) Individual Policies in force No. Lacs 36.3 35.8 1% 36.3 35.8 1%
k) Sum insured in force (Including Group) Rs. Cr 211,401 191,379 10% 211,401 191,379 10%
Padma Shri Dr. Rustom Phiroze Soonawala
MD, FRCS, FRCOG
Chairman, Obstetrics & Gynaecology
Eminent and Internationally renowned Obstetrician & Gynaecologist.
Former President of the Federation of Obstetricians and Gynaecologists
Padma Shri Dr. Pradeep K Chowbey
MBBS, MS, FIMSA, FAIS, FICS, FACS,
Doctor of Science (Honoris Causa)
Chief- Surgery & Allied Surgical Specialties
Director - Minimal Access, Metabolic & Bariatric Surgery
Prior to joining MHC, he was Chairman of the Minimal Access Metabolic & Bariatric surgery
center, Sir Ganga Ram Hospital. He has been visiting faculty to the best Medical Institutions like
Memorial Sloan Kettering Cancer Hospital, NewYork, John Hopkins Institute in USA & Royal
Marsden Cancer Hospital, in U.K. Dr. Chowbey has done his MBBS followed by MS, General
Surgery(1977) from Govt. Medical College, Jabalpur & MNAMS, National board of Examination.
Dr. S.K.S. Marya (M.S., DNB, Mch, FICS)
Chairman - Orthopaedics & Joint Replacement
Renowned Joint Replacement Surgeon having 30 years experience.
Pioneered bilateral Hip and Knee Joint replacement.
Author and teacher par excellence.
Dr. A.K.Singh (M.S., Mch, Diploma WFNS)
Director – Max Institute of Neurosciences, Dehradun
Renowned Neuro Surgeon having 40 years experience.
Pioneer in the field of neurosurgery, credited with many ‘firsts’ in India - Median Corpectomy
for Cervical Spondylosis; Direct Trans Nasal Trans Sphenoidal removal of Pituitary Tumors
and many others. Also won BC Roy Award amongst others
Author and teacher par excellence.
Dr. Harit Chaturvedi (MS, MCH)
Chief Consultant & Director – Surgical Oncology
Having 25 years of experience in Surgical Oncology.
Served institutions of repute like Rajiv Gandhi Cancer Institute, Indraprastha Apollo Hospitals,
Batra Hospital & Medical Research Centre, New Delhi.
Dr. Anurag Krishna
MS, MCh., FAMS
Director, Paediatrics and Paediatric Surgery
20 years experience in Paediatric surgery -complex congenital malformations
Published 50 scientific papers in leading national and international journals
Served as Member of the Board of Management of Sir Ganga Ram Hospital.
51
MHC – Key Physicians
Max Healthcare*
52 *The above results are for MHC Network of hospitals and includes results for Max Super Specialty Hospital, Saket, unit of Devki Devi Foundation and Max Super Speciality Hospital, Patparganj, unit of Balaji Medical and Diagnostic Research Centre
Key Business Drivers Unit
Quarter Ended Y-o-Y
Growth
9 months ended Y-o-Y
Growth Dec-14 Dec-13 Dec-14 Dec-13 a) Revenue (Gross) Rs. Cr
Inpatient Revenue 329 272 21% 964 768 26%
Day Care Revenue 16 13 19% 45 36 25%
Outpatient Revenue 94 75 26% 281 223 26%
Other Operating Income (2) - - (2) 3 -
Total 437 360 22% 1288 1030 25%
b) Profitability
Contribution (%) % 63.2% 62.0% - 62.4% 61.7% -
EBITDA Rs. Cr 42 32 34% 128 80 60%
EBITDA (%) % 9.7% 8.8% - 9.9% 7.7% -
Cash Profit Rs. Cr 22 9 141% 62 12 429%
c) Patient Transactions (No. of Procedures) No.
Inpatient Procedures 32,649 29,628 10% 98,643 83,882 18%
Day care Procedures 6.805 4,745 43% 19,850 13,325 49%
Outpatient Registrations 1,072,689 934,258 15% 3,304,297 2,805,031 18%
d) Average Inpatient Operational Beds No. 1,717 1,511 14% 1,659 1,449 15%
e) Average Inpatient Occupancy % 69.4% 75.3% - 74.1% 74.3% -
f) Average Length of Stay No. 3.36 3.53 5% 3.43 3.53 3%
g) Avg. Revenue/Occupied Bed Day (IP) Rs. 29,996 25,952 16% 28,512 25,933 10%
Max Bupa Health Insurance
53
Key Business Drivers Unit
Quarter Ended Y-o-Y
Growth
9 months ended Y-o-Y
Growth Dec-14 Dec-13 Dec-14 Dec-13
a) Gross written premium income Rs. Cr
First year premium* 34 41 (18%) 97 112 (14%)
Renewal premium 56 35 61% 152 94 62%
Total 90 76 18% 249 206 21%
b) Net Earned Premium Rs. Cr 82 64 28% 235 169 39%
c) Net Profit / Loss Before Tax Rs. Cr (19) (21) 10% (67) (83) 19%
d) Claim Ratio (B2C Segment) % 51% 38% - 52% 50% -
e) Av. premium realization per life (B2C) Rs. 6,478 5,312 22% 6,278 5,310 18%
f) Conservation ratio (B2C Segment) % 93% 84% 90% 84%
g) Number of agents No. 9,756 10,534 (7%) 9,756 10,534 (7%)
h) Paid up Capital Rs. Cr 763 601 27% 763 601 27%
* B2C First year premium growth at 23% for Q3FY15
54
Max Specialty Films
Key Business Drivers
Unit
Quarter Ended Y-o-Y
Growth
Nine months ended
Y-o-Y Growth Dec-14 Dec-13 Dec-14 Dec-13
a) Sales Quantity – BOPP Tons 10,399 12,152 -14% 32,885 35,113 -6%
b) Revenue Rs. Cr. 175 197 -11% 565 550 3%
c) Profitability:
Contribution Rs. Cr. 30 25 22% 100 83 20%
Contribution Margin % 17% 13% 18% 15%
EBITDA Rs. Cr. 17 15 10% 54 43 26%
EBITDA Margin % 9% 8% 10% 8%
PBT Rs. Cr. 0.4 2 -80% 6 7 -14%
Margin % 0.2% 1% 1% 1%
• 14% drop in Sales Quantity is predominantly because of shift to high margin yielding thin films
• Higher realisations per unit coupled with cost rationalisation, lead to 10% higher EBITDA vis-à-vis Q3FY14
• Decline in PBT is on account of higher interest cost on fresh borrowings consequent to transfer of MSF to a subsidiary resulting in liquidity of Rs. 110 cr. for Max India
• Continues to aggressively tap growth opportunities with key FMCG brands
Disclaimer
55
This presentation has been prepared by Max India Limited (the “Company”). No representation or warranty, express or implied, is made and no
reliance should be placed on the accuracy, fairness or completeness of the information presented or contained in the presentation. The past
performance is not indicative of future results. Neither the Company nor any of its affiliates, advisers or representatives accepts liability
whatsoever for any loss howsoever arising from any information presented or contained in the presentation. The information presented or
contained in these materials is subject to change without notice and its accuracy is not guaranteed.
The presentation may also contain statements that are forward looking. These statements are based on current expectations and assumptions
that are subject to risks and uncertainties. Actual results could differ materially from our expectations and assumptions. We do not undertake
any responsibility to update any forward looking statements nor should this be constituted as a guidance of future performance.
This presentation does not constitute a prospectus or offering memorandum or an offer to acquire any securities and is not intended to provide
the basis for evaluation of the securities. Neither this presentation nor any other documentation or information (or any part thereof) delivered or
supplied under or in relation to the securities shall be deemed to constitute an offer of or an invitation.
No person is authorised to give any information or to make any representation not contained in and not consistent with this presentation and, if
given or made, such information or representation must not be relied upon as having been authorised by or on behalf of the Company any of
its affiliates, advisers or representatives.
The Company’s Securities have not been and are not intended to be registered under the United States Securities Act of 1993, as amended (the
“Securities Act”), or any State Securities Law and unless so registered may not be offered or sold within the United States or to, or for the
benefit of, U.S. Persons (as defined in Regulations S under the Securities Act) except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and the applicable State Securities Laws.
This presentation is highly confidential, and is solely for your information and may not be copied, reproduced or distributed to any other
person in any manner. Unauthorized copying, reproduction, or distribution of any of the presentation into the U.S. or to any “U.S. persons” (as
defined in Regulation S under the Securities Act) or other third parties ( including journalists) could prejudice, any potential future offering of
shares by the Company. You agree to keep the contents of this presentation and these materials confidential.
56
MAX INDIA LTD. Max House, Okhla, New Delhi – 110 020
Phone: +91 11 26933601-10 Fax: +91 11 26933619
Website: www.maxindia.com