Max Life Insurance to expand its presence in 100 more cities this year

The insurance company will increase its rural penetration deeper because it believes that over the years, some of these pockets have become quite wealthy and very attractive for life insurance, the MD and CEO, said

New Delhi-based Max Life Insurance is planning to expand its presence in 100 more cities this year, said Managing Director & Chief Executive Officer, Prashant Tripathy, in an exclusive conversation with Moneycontrol on August 28.

"We are opening 100 offices in 100 more cities this year. Currently, our own presence is in the top 140 cities," Tripathy said. Max Life Insurance is also planning to add 1,000 more headcounts this year.

Tripathy also added that its Value of New Business (VNB) margin will remain low this year owing to this proposed expansion. Edited excerpts:

How are you planning to expand your presence this year?

We are opening 100 offices in 100 more cities this year. Currently, our own presence is in the top 140 cities. Notably, 60 percent of our business comes through our partnerships - our two large partnerships are Axis Bank and Yes Bank. We also have partnerships now with Tamilnad Mercantile Bank, Ujivan Small Finance Bank and Capital Small Finance Bank.

We just signed up with South Indian Bank. These banking partnerships are helping us to get access to customers from all kinds of geographies.

How are you growing your rural businesses?

We have to give more than 20 percent of policies through rural areas every year. But the objective also is to have our own offices in cities where we are not present.

So we will take us deeper because Max Life Insurance believes that over the years, some of these pockets have become quite wealthy and very attractive for life insurance. So we will continue to expand and this journey will continue in the coming years also.

How are you looking at the growth in new business premiums this fiscal?

On new business, we grew 25 percent in the April-June period of 2023. On an annualised premium (AP) basis, we grew 10 percent. I can see very strong momentum in the new business growth as every month passes.

The objective will be to drive robust growth and drive market share. So at this point, I've been working very hard on increasing our new sales and the market is growing quite well, and did not slow down after March, as we had thought.

By how much are you planning to increase headcount this year?

Currently, we have a headcount of 21,000 of our own employees. That number every year should see a growth of at least 10 percent. This year we will add 1000 more of our own employees. This year we are hoping to recruit about 50,000 agents.

How are you looking at your Value of New Business (VNB) margin?

The Value of New Business (VNB) margin last year was a little over 31 percent because we were focusing a lot on growth and we were making investments in the business. Our guidance is that we'd like to be between 27-28 percent this year, because we're focused on growth, we are expanding. We are growing our headcount, and deploying fixed costs. So there may be a minor decrease this year.

How do you see your competition?

I think competition will remain intense in the financial services industry. LIC is the largest player and has been the largest for a long period, and we have a lot of respect for them. The insurance market is expanding at a very fast pace and there is a place for everybody.

Delays in getting insurance claims are still a serious issue, how are you dealing with it?

Claims paid ratio is a critical ratio and on that, Max Life Insurance is 99.5 percent. It's the highest in the industry, including all players. This is the highest and we have been the highest for the past four years.

So, all I can tell you is Max Life Insurance is a company that looks for reasons on why and how to pay rather than why and how not to pay. Unless there's a fraudulent claim. Otherwise, we are very savvy and that has helped us grow. If you look at our protection business, claims become very important.