MFS key subsidiary Max Life Insurance 9MFY20 Financial Highlights:

• Embedded Value at Rs. 10077 Cr. grows 22% y-o-y; Operating Return on EV (annualised) at 18.4%

• Value of New Business^[3] grows 24% to Rs. 576 Cr.

• New Business Margin^[4]expands by 60 bps to 21%

Max Financial Services Limited(MFS) today announced its financial results for the third quarter of the financial year 2019-20 (Q3FY20). MFS the holding company ofMax Life Insurance(Max Life) India largest non-bank-owned life insurer reported consolidated revenue^[1] of Rs. 5366 Cr. growing 19% over the previous year while nine months (9MFY20) consolidated revenue stood at Rs. 14000 Cr. growing 13%. Profits after Tax for Q3FY20 grew at a robust 168% to Rs. 105 Cr. over the previous year while for 9MFY20 it grew at 38% to Rs. 181 Cr. due to one-off gain from successful transition in hedging strategy from Interest Rate Swap (IRS) to Forward Rate Agreement (FRA) aided by higher investment income partly offset by shift in product mix towards NPAR savings and investments in proprietary channels.

Max Life continued its strong performance in Q3FY20 reporting 14% revenue^[2] growth to reach Rs. 4688 Cr. The Shareholders; Profit after Tax for Q3FY20 grew by 92% to Rs. 154 Cr. due to one-off gain from successful transition in hedging strategy from IRS to FRA aided by higher investment income partly offset by shift in product mix towards NPAR savings and investments in proprietary channels.

In a first Max Life Embedded Value (EV) based on market consistent methodology (MCEV) crossed the Rs. 10000 Cr. mark at Rs. 10077 Cr. with an Operating Return on EV (annualised) at 18.4%. The Value of New Business(VNB) written during the first nine months of FY20 was Rs. 576 Cr^.[3] growing 24% over the previous year arising from the shift in product mix towards Non-PAR products. The New Business Marginwas 21.0%^[4]increasing 60 bps over last year.

Individual APE for Q3FY20 stood at Rs. 1000 Cr. increasing 16% over the past year driven by growth in proprietary and bancassurance channels while other channels too continued to deliver robust sales. Max Life Proprietary channel recorded sales of Rs. 309 Cr. in Q3FY20 growing 19% over the previous year and continued to grow faster than the Banca channel growth of 14%.

Max Life Assets under Management as of December 31 2019 were Rs. 68618 Cr. 18% higher than the previous year.

Max Life outperformed the Indian private life insurance industry (16% growth) by 4% in 9MFY20.

Commenting on the financial performanceMr. Mohit Talwar Vice Chairman Max Group Managing Director Max Financial Servicessaid 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% in the first nine months of the current financial year.

Due to its strong focus on creating a comprehensive channel mix Max Life was able to add eight partners for our individual and group business in the third quarter of FY2020.

Going forward we will continue our focus on growing the protection business seamlessly executing the agency excellence program in tandem with New York Life consultants and further enhancing our business development endeavours.

Note to the Editor

The EV of a life insurance company comprises two key elements -a) Net Asset Value or the Net Worth of the company which represents the market value of the company assets attributable to the shareholders and b) the Present Value of the company future expected profits from its existing business portfolio as at the date of valuation.

Max Life had transitioned its EV calculation to a Market Consistent methodology from the earlier traditional approach (Traditional Embedded Value ndash; TEV) in FY2015. This follows market practice in developed markets where life insurers have moved to adopt market consistent methodologies.

A market consistent methodology approach better reflects the embedded value of an insurance company by explicitly and specifically allowing for insurance and economic risks rather than using an implicit overall allowance for risks through a Risk Discount Rate (RDR) in the traditional approach. In addition the market-consistent approach is more objective where asset and liability cash flows are valued using assumptions consistent with those applied to similar cash flows in the capital markets thus more accurately reflecting the health of the business.

About Max Group

The Max Group is a leading Indian multi-business conglomerate with a commanding presence in the Life Insurance and Healthcare industry. It has ventured into high potential sectors ndash; Senior Living and Real Estate. In FY2019 the Group recorded consolidated revenue of Rs. 22150 Cr. It has a total customer base of 11 million over 350 offices spread across India and employee strength of more than 27500 as on 31st March 2019. The Group investor base includes marquee global financial institutions such as New York Life KKR IFC Washington Vanguard Ward Ferry Briarwood Capital Nomura Aberdeen First State Investments First Voyager Eastspring Target Asset Management Baron Jupiter and Doric Capital.

The Max Group comprises three holding companies namely Max Financial Services Max India and Max Ventures Industries.

About Max Financial Services Limited

Max Financial Services Limited (MFS) a part of the leading Indian multi-business conglomerate Max Group is the parent company of Max Life India largest non-bank private life insurance company. MFS actively manages a majority stake in Max Life Insurance Company Limited making it India first listed company focused exclusively on life insurance.

About Max Life Insurance

Max Life Insurance offers comprehensive long-term savings protection and retirement solutions through its high-quality agency distribution and multi-channel distribution partners. A financially stable company with a strong track record over the last 17 years Max Life Insurance offers superior investment expertise. Max Life Insurance has the vision To be the most admired life insurance company by securing the financial future of our customers;. The company has a strong customer-centric approach focused on advice-based sales and quality service delivered through its superior human capital.

[1] Consolidated numbers have been reported basis IndAS

[2] Max Life numbers are reported on IGAAP basis and Revenue excludes Unit linked Investment Income

[3] Value of New Business at post-overrun costs

[4] New Business Margin (post-overrun costs)