Max Financial Services on February 5 reported a 168 percent year-on-year rise in its December quarter (Q3) consolidated net profit at Rs 105.22 crore. This was on account of a one-time gain.
The company said that the profit rise was due to a one-off gain from successful transition in hedging strategy from Interest Rate Swap (IRS) to Forward Rate Agreement (FRA), aided by higher investment income. This, it said, was partly offset by shift in product mix towards non-par savings and investments in proprietary channels.
Max Financial is the holding company of private insurer Max Life Insurance posted a 14 percent YoY rise in its revenue to touch Rs 4,688 crore in Q3. The shareholders' profit after rax for Q3FY20 grew by 92 percent to Rs 154 crore due to the one-time gain mentioned above.
The company said that Max Life's Embedded Value (EV) based on market consistent methodology (MCEV) crossed the Rs 10,000 crore mark, touching Rs 10,077 crore with an operating Return on EV (annualised) at 18.4 percent.
The Value of New Business (VNB) written during the first nine months of FY20 was Rs. 576 crore, growing 24 percent over the previous year, arising from the shift in product mix towards non-participating products. The New Business Margin (NBM) rose by 60 basis points YoY to 21 percent.
Max Life's individual annualised premium equivalent (APE) for Q3FY20 grew by 16 percent YoY to Rs 1,000 crore. This, it said, was driven by growth in proprietary and bancassurance channels, while other channels too continued to deliver robust sales. Max Life’s assets under management as of December 31, 2019 rose by 18 percent YoY to Rs 68,618 crore.
"Max Life continues to tread on the trajectory of outstanding financial performance. Not only has it surpassed expectations on most financial metrics, it has outpaced the private Life Insurance industry growth by 4 percent in the first nine months of the current financial year," said Mohit Talwar, Vice Chairman, Max Group & Managing Director, Max Financial Services.
Going forward, Talwar said that the company will continue its focus on growing the protection business.
The company announced that the board had in August 2019 meeting had considered and approved a binding term sheet on the issuance and allotment of up to 7,35,51,029 equity shares of the company of the face value of Rs 2 each, fully paid up. This was on a preferential basis to Mitsui Sumitomo Insurance Company Limited (MSI) through swap of 36,33,92,784 equity shares of Rs 10 each, held by MSI in Max Life Insurance.
However, since MSI and Max Life could not reach an agreement for the finalisation of the definitive documents, they mutually agreed to terminate the transaction.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
