Max Financial Services Limited — Interim / Quarterly Report 2022

Nov 9, 2021

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Max Financial Performance Update

Investor Release H1 FY22 November 9, 2021

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SECTION I

 Max Financial Services : Q2FY22 Key Highlights

Max Financial Services: Q2 & H1FY22 Key Highlights

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1	Consolidated Revenue^ atRs 15,271 Cr,grows21%inH1FY22.Consolidated PBT atRs 134Cr, down45%inH1FY22, primarily due to recovery in investment value in last year.
2	Robust VNB growthat 24% YoY; achieved highest ever quarterly margin of 29.1% in Q2vs19.7%inQ1by driving balanced product mix.MCEVas at Sep’21 endat Rs. 12,988 Cr;Operating RoEV at (without/with COVID impact)18.0%/ 16.5%
3	Assets under Management (AUM) crossed 1 Lakh Crin Q2FY22. AUM as at Sep’21 end wasRs 1,00,090 Cr,grew 29% y-o-y
4	Application filed with IRDAI for acquiring residual~5.17%stake fromMSIinMax Life
5	Appointed as “Sponsor” of Pension Fundfor managing assets under National Pension Scheme (NPS); Pension Fund subsidiary formation underway. Max Life has sought IRDAI’s permission to set up a new company “PFM” in line with the regulatory requirements
6	Recognized amongst theTop 100in theIndia’s Best Workplaces for Women 2021study by Great Place to Work® Institute, India

Investor Release 3

^ Consolidated Revenue includes investment income

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SECTION II

 Max Life Insurance – Business Overview

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Industry Landscape (H1 FY22): Max Life grew by 19% Y-o-Y in H1 FY22. On 2 Year CAGR, Max Life rew b 11% while rivate industr rew b 8% g y p y g y

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YoY Growth basis Individual Adjusted FYP

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FY’21 H1 FY’21 H1 FY’22 H1 FY’22 (2 year CAGR)
Private Industry 11% 32% 8%
YoY growth 8%
20%
19%
19%
11%
5%
4%
3%
Industry Max Life
-7%
10%
Max Life’s private 11% 11%
market share
Max Life’s total
market share 6% 6%
6%
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Source: Life Insurance Council | IRDAI

Investor Release 5

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Max Life 5 year journey- Consistent performance across keyyear journey- Consistent performance across keyear journey- Consistent performance across keyjourney- Consistent performance across keyourney- Consistent performance across keyy- Consistent performance across key- Consistent performance across keyperformance across keyerformance across keyy parametersarameters
Consistent Sales growth Protection Focus Fastest VNB growth
Total APE Individual Protection APE VNB
Rs Cr Rs Cr Rs Cr
4,957 475
1,249
2,113
64 378
FY16 FY21 FY16 FY21
FY16 FY21
Proprietary APE Individual New Business Sum assured NBM
Rs Cr Rs Cr %
2,22,682 25.2%
1,403
17.9%
653
54,301
FY16 FY21 FY16 FY21 FY16 FY21
Banca APE Individual Claims Paid Ratio EV
Rs Cr % 99.35% Rs Cr
11,834
3,529 96.95%
5,617
1,428
FY16 FY21 FY16 FY21 FY16 FY21
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Max Life 5 year journey- Consistent performance across keyyear journey- Consistent performance across keyear journey- Consistent performance across keyjourney- Consistent performance across keyourney- Consistent performance across keyy- Consistent performance across key- Consistent performance across keyperformance across keyerformance across keyy parametersarameters

*Return on EV represents cumulative annualized operating ROEV

Investor Release 6

Financial Performance Summar H1FY22 y

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Individual APE Gross Written Premium Renewal Premium AUM
18% 21% 19% 29%
Rs 2,127 Cr Rs 8,815 Cr Rs 5,706 Cr Rs 100,090 Cr
[Rs 1,804 Cr] [Rs 7,283 Cr] [Rs 4,789 Cr] [Rs 77,764 Cr]
Profit Before tax Net Worth Policyholder Cost to Policyholder Expense to
GWP Ratio GWP Ratio
Rs 148 Cr -11% Rs 2,969 Cr 5% 21.7% 5 bps 15.5% 11 bps
[Rs 165 Cr] [Rs 2,834 Cr] [21.6%] [15.4%]
New business margin Operating RoEV [#] Embedded Value^ Solvency
25.3% 110 bps 18.0% / 16.5% 50 bps 12,988 18% 211% 4%
[24.2%] [17.5%] [11,047] [207%]
VNB Policies Sold (‘000) New business Sum assured Protection Mix
Individual Group Total
546 24% 259 -9% 88,187 -20% 375 bps
8% 9% 16%
[438] [284] [110,305]
[12%] [8%] [20%]
Figures in [brackets] are for previous year numbers.
^Growth on Embedded value is operating RoEV, * Profit is lower compared to last year due to covid related provision Group protection (incl. Group credit life adjusted for 10% for single premium and term business);
#Operating RoEV is without/with COVID impact Investor Release 7
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Investor Release 7

Max Life focussed on product rebalancing leading to growth in margins in Q2’FY22

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Product Mix- Q2 focused on product rebalancing, higher non-par savings

Proprietary Channel APE- Q2 sales growth back to double digits

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ULIP
31%
37%
Non PAR- Savings
34% Group Protection
27%
Individual Protection
9% 8%
PAR
10% 6%
17% 20%
Q1 FY22 Q2 FY22
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Amount in INR Cr

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10% 370
335
248 5% 260
Q1 FY21 Q1 FY22 Q2 FY21 Q2 FY22
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NBM- Highest ever NBM achieved in Q2 by driving balanced product mix

VNB - 2 year growth at 28%

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28% 29%
22%
Q2 FY20 Q2 FY21 Q2 FY22
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Amount in INR Cr

28%

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15% 374
325
42%
230
Q2 FY20 Q2 FY21 Q2 FY22
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Investor Release 8

Max Life has delivered strong performance on new business ; Maintained 4[th] rank in the private industr y

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New Business Premiums (on APE basis)

Renewal Income

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Amount in INR Cr
19% 19%
4,957 2,158
4,149 1,815
FY20 FY21 H1 FY'21 H1 FY'22
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Gross Written Premium

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Amount in INR Cr
18% 21%
8,815
19,018
7,283
16,184
FY20 FY21 H1 FY'21 H1 FY'22
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Amount in INR Cr
15% 19%
5,706
12,192
10,600 4,789
FY20 FY21 H1 FY'21 H1 FY'22
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Individual Sum Assured of New business- 20% decline in H1FY22 cautious approach in protection business

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Amount in INR Cr
22% -20%
2,22,682
1,83,019
1,10,305
88,187
FY20 FY21 H1 FY'21 H1 FY'22
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Investor Release 9

Total APE includes Individual and Group Credit Life APE. It excludes Group term Loan # on Adj FYP basis

VNB increased by 24% over last year aided by increase in YoY margins by 110 bps, sequential QnQ margin up by 940 bps

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Product Mix – Increasing in NPAR savings while maintaining balance

Value of New Business

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Amount in INR Cr
39% 24%
38% 37% 31% 33% 1,249
897
31%
18%
30% 31%
546
5% 438
13%
8%
8% 5% 20% 9%
14% 16%
9% 12% 8%
30%
19% 17% 19%
FY20 FY21 H1 FY'21 H1 FY'22
FY 20 FY 21 H1 FY'21 H1 FY'22
PAR Individual Protection Group Protection Non PAR- Savings ULIP
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New Business Margin

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360 Bps 110 Bps 940 Bps
25.2% 25.3% 29.1%
19.7%
21.6% 24.2%
FY 20 FY 21 H1 FY'21 H1 FY'22 Q1 FY'22 Q2 FY'22
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Investor Release 10

Efficient ca ital mana ement with consistent returns p g

Opex to GWP*

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-30 bps 11 bps
15.5%
15.4%
14.5%
14.2%
FY20 FY21 H1 FY'21 H1 FY'22
Return on Equity (RoE) [# ] H1 FY’22 profits lower due to COVID related
provisions
21%
20%
19%
16%
FY 20 FY 21 H1 FY'21 H1 FY'22
Normalized for Tax refund 19% 16%
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Solvency Ratio (pre dividend)

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211%
207% 207%
196%
150%
Solvency
Limit
FY20 FY21 H1 FY'21 H1 FY'22
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Underwriting Profits- H1 FY’22 backbook surplus lower than previous year due to COVID related provision

Amount in INR Cr

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Backbook Surplus NB Strain SH Surplus
1189 1242
567 445
111 141 131 137
-501 -446
-761
-860
FY20 FY21 H1 FY'21 H1 FY'22
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Investor Release 11

* Refers to the policyholder expense to GWP ratio; # ROE is trailing 12 months PAT as a ratio of average Net worth for trailing 12 months

Operating RoEV for H1 FY22 at 18.0%, post COVID impact operating RoEV is 16.5%

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Embedded Value (EV) - EV has grown at 18% driven by growth in value of new business and quality of inforce business

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Amount in INR Cr
19%
18%
12,988
11,834
11,047
9,977
FY20 FY21 H1 FY'21 H1 FY'22
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Operating Return on Embedded Value

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RoEV 16.5%
post COVID
20.3%
impact
18.5%
18.0%
17.5%
FY20 FY21 H1 FY'21 H1 FY'22
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Investor Release 12

Asset Under Management crossed 1 Lakh Cr in Q2’FY22

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Assets Under Management - MLI is the 4[th] largest manager of private LI AUMs, Par fund size ~50K

ULIP : Healthy mix of Debt and Equity

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Debt Equity
43%
48%
52%
59%
57%
48% 52%
41%
FY 20 FY 21 H1 FY'21 H1 FY'22
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Amount in INR ‘000 Cr

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32% 29% 43%
48%
52%
59%
100
90
57%
78 48% 52%
41%
68
68
62 FY 20 FY 21 H1 FY'21 H1 FY'22
55
49
Controlled : Healthy mix of Debt and Equity
28 32 7% 8% 8% 12%
23
19
FY20 FY21 H1 FY'21 H1 FY'22
ULIP Controlled Fund 93% 92% 92% 88%
FY 20 FY 21 H1 FY'21 H1 FY'22
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More than 95% of debt investments is in sovereign papers and AAA rated securities

Investor Release 13

Max Life has been recognised by a number of Indian and foreign business bodies for its excellence in business, customer service and focus on people

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Business Excellence

Leaders in Quality

Focus on People

• Awarded the Bronze for the YT connected TV campaign under the Campaign during Covid-19 lockdown award category at the Adgully Digixx 2021 awards

• No. 1 in Customer Loyalty survey by IMRB

• Gold at ASQ World Conference

• Winner of IMC Ramkrishna Bajaj National Quality Award

• Awarded Gold for Life Insurer of the Year at Outlook Money Awards 2020

• Winner of CII Industry Innovation Award

• Asia Pacific Quality Organization (APQO) award for global performance excellence

• Won 3 awards for Best use of use of (APQO) award for global performance

• Relationship Marketing in Loyalty excellence

• Program, Best use of Gamification to  Silver Award in ASQ ITEA 2019 for Sell

• enhance Loyalty and Best Use of Data Right for Customer Delight at Axis

• in Marketing Analytics at the Bank

• Customer Fest Awards 2021

• Won 7 awards across various  Silver Award in the 12[th] QCI-DL Shah Quality Awards for Enhancing S2R

• categories including Television, BTL Conversion% Select 60 offices in

• activities, Mobile marketing and Customer service at the 10[th] ACEF Agency. Global Customer Engagement Awards  At CMO Asia Awards , won Best Term

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

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• At CMO Asia Awards , won Best Term Plan Company of the Year

• Won ‘Excellence in Digital Sales - Life Category’ at FICCI Insurance Industry Awards 2020

• Max Life awarded recognized as ‘Challenger’ by NASSCOM AI Gamechangers awards 2021

• Max Life awarded Best Financial team at the 5th Annual Edition of BW Best CFO & Finance Strategy Summit & Awards 2021

• Ranked 55[th] amongst ‘2021 Best Workplaces in Asia’ by

• Great Place to Work®

• Ranked 18[th] amongst ‘India’s Great Places to Work For’ in 2021

• Max Life recognized in India's Best Workplaces in BFSI 202

• Max Life won Gold in Best Use of Internal Communications for

  • ‘Harnessing the Power of Connect, Conviction and Confidence for

  • Employee well-being’ campaign at Fulcrum Awards 2021

• MD and CEO, featured in Impact Digital Power 100: Business Leaders List 2020

• Director and CMO, featured in Impact Digital Power 100 : Marketing Leaders List 2020

Investor Release 14

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SECTION III

 Max Life Insurance – Strategy

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Si nificant ro ress made across ke strate ic riorities g p g y g p

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A B C D
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	d A		M B	M B	C	C	D
Progress achieved INITIATIVES	Predictable & Sustainable growth		Digital Product innovation to drive margins		Customer centricity across the value chain		Digitization for efficiency and intelligence
	Deepen Bancassurance partnerships On-board new distribution partners Scale up existing proprietary channels Opportunistic play for inorganic growth		Increase protection penetration Drive Non PAR saving Tap into new growth opportunities like health and retirements Enhanced investment and mortality risk management		Improve position in 13M and 61M persistency ranking Highest Relationship Net Promoter Score (NPS) in the industry		Continue with digitization agenda across the organisation Build intelligence (AI) in all digital assets Minimize back-office costs
	Strong growth of 23% in Banca channels Continued leadership in protection sales in ecommerce Key Partnerships: Renewbuy.com, Scriptbox, InsuranceDekho, Ind Wealth, Ditto, Tata Motors Insurance Broking, Policy Bachat		Achieved highest ever VNB margin of 29% in Q2 by driving balanced product mix New protection product (Smart Secure) launched in Q1 Launched Anniversary Edition of Smart Wealth Plan (NPAR-Savings) Rider attachment at 24% for H1 FY22; proprietary channels leading with 40% rider attachment rates Critical Illness & Disability Secure Rider (CIDSR), a comprehensive rider covering up to 64 illnesses, launched with ULIP Annuity grew 61% YoY for H1 FY22		Improvement in 13M and 61M persistency 85.2% (+270bps) and 54.6% (+160bps) respectively Claim paid ratio at 99.35% at the end of FY21, among the best in the industry Grievance Incidence Rate of MLI ranked 2 within private industry in FY21 (GIR 31) Highest ever Brand Consideration^ at 68 for Q2 with “always-on” strategy		First life insurer to join Account Aggregator system to access customer’s financial information in a seamless and secure manner; reducing issuance time First life insurance partner to go live on Axis Bank marketplace to ensure seamless customer onboarding Adopted a “Cloud First Approach” for all new workloads; partnered with AWS and Azure as our cloud service providers Max Life Innovations Lab 2.0 – 213 applications received; 4 start-ups were selected to work on different use cases. Currently in POC stage

Investor Release 16

^as per Nielsen Brand Track Study

A

Max Life has focused on ensurin rowth in both its Pro rietar and Bancassurance channels g g p y

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Proprietary Channels New Business (APE)

Channel Mix - Max Life has focused on maintaining a balanced distribution mix

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1% 0% 0% 0%
68% 71% 67% 70%
31% 29% 32% 29%
FY20 FY21 H1'FY21 H1'FY22
Proprietary Banca Others
Axis’s
57% 63% 60% 63%
Share
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Amount in INR Cr
1,403
1,282
8%
630
583
FY20 FY21 H1 FY'21 H1 FY'22
Bancassurance Channel (APE)
Amount in INR Cr
3,529
2,838
23%
1,491
1,216
FY20 FY21 H1'FY21 H1'FY22
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Investor Release 17

A

Product mix in proprietary and Bancassurance channels aligned to customer needs; Protection driven across all channels

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Proprietary Channels Product mix - biased towards traditional products and protection for driving margins

Bancassurance Product Mix - has been biased towards ULIPs to cater to target customer segments

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15%
22% 22%
26%
40%
26% 47% 45% 45%
10% 21% 23%
17% ULIP
23% 22% NPAR-S ULIP
26%
NPAR-P 24% 36% 40% 38% NPAR-S
PAR 4% NPAR-P
47%
34% 36% 4% 7% 2% PAR
29% 25%
14% 14% 14%
FY20 FY21 H1'FY21 H1'FY22
FY20 FY21 H1'FY21 H1'FY22
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Investor Release 18

Max Life has a complete suite of products and focus is on selling longer term products along B with improving penetration of pure protection offerings

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Average Policyholder Age Average Policy Term Average PPT
Max Life has products across all categories Product Type (Years) (Years) (Years)
Endowment 35 22 10
5 Protection plans 1 Health plan
4 Income plans 1 Annuity plan ULIP 38 14 9
4 Endowment plans 1 Retirement ULIP
Whole Life 36 64 52
4 ULIP plans 1 Whole life
2 Child plans 4 Riders Money back 27 17 17
Current portfolio [1] biased towards traditional Pure Term 35 37 33
products
Guaranteed
43 19 9
Cancer/ Retirement, products
Health, 1.3% 0.2%
Health 38 20 20
UL, 18.2%
Cancer Insurance 38 29 29
Whole Life,
6.3%
Pension 33 23 23
Term, 15.5% Annuity 62 58 1
Money back, Endowment,
2.0% 52.9% As on 30 [th ] Sep 2021 36 25 16
Guaranteed
Products, 3.5%
Average Average Average
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Investor Release 19

(1) Based on all policies sold till date

Launched Smart Secure Plus (new term plan) and introduced Critical Illness & Disability Secure B Rider (CIDSR) for ULIP attachment

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SMART SECURE PLUS
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Key Features

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Return of Premium

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Premium Break: Option of premium break/ holiday post ten years of policy tenure; available twice during premium payment term

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Special Exit Value: One-time option to exit the policy with an exit benefit of Return of Premiums (for policy term >= 40 years)

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Voluntary Sum Assured Top-Up

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CRITICAL ILLNESS
AND DISABILITY RIDER
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Key Features

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Comprehensive Critical Illness Cover (covering upto 64 illnesses)

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Total and Permanent Disability Variant

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Flexible Payment Option (regular pay or limited pay option)

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Extended Cover

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Max Fit Program (wellness benefit)

Investor Release 20

Strong focus towards customer measures has helped deliver superior performance across C health arameters and will continue to remain an im ortant riorit p p p y

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Persistency[-] Individual policies excluding single pay/fully paid up policies

Persistency- Individual policies including single pay/fully paid up policies

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82% 84% 82% 85%
67% 67% 69% 70%
60% 60% 56% 56% 49% 50% 61% 61% 58% 58% 53% 55%
13th Month 25th Month 37th Month 49th Month 61st Month 13th Month 25th Month 37th Month 49th Month 61st Month
H1 FY'21 H1 FY'22 H1 FY'21 H1 FY'22
Claims Paid Ratio- One of the best claims paid ratio in the industry
109 bps
99.22% 99.35%
98.74%
98.26%
FY'18 FY'19 FY'20 FY'21
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Investor Release 21

C

Claim ex erience on account of COVID-19. Provisions allowed for robable future claims p p

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H1 FY22 – Claims experience
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Figures in Rs. Cr.
1,394
1,031
841
563
Gross Claims Net Claims Gross Claims Net Claims
Q1 FY22 Q2 FY22
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COVID-19 wave 2 – No. of Deaths and Intimations (Individual + Group)

Intimation Month Death month Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21

• Q2 witnessed highest number of claims, however claims tapered off in September and October compared to month of June and July

• >93% customers (~1.4L sample customers) across all sum assured vaccinated with at least 1 dose[#]

• 98% of all eligible employees vaccinated with first dose of Covid-19 vaccine

• In view of easing COVID conditions, cautious relaxation in UW guidelines being considered (Relaxation in sum assured cap). However structural changes have been brought to improve mortality experience (new and inforce policies) such as tech integration with IIB, enhanced risk scoring model, automated field verification process, audit to curb medical frauds etc.

• Unutilized reserves of ~Rs 235 cr stands at the end of Q2 FY22

#Customers were reached out over calls during the period of Aug and Sept’21. Questions asked – if customer is vaccinated, if yes, then number of doses taken. Customer responses were recorded basis self declaration by customers

Max Life Insurance 22

D

Max Life Leader in E-Commerce Protection Sales enabled by higher adoption of digital assets and embedded intelligence in the entire operating model

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Growth and Awards
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% of customers through ecommerce
(Website + Aggregators)
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• 8x growth over 4 years

• Won the coveted FICCI Insurance Industry award 2020 for Excellence in Digital Sales in Life Category

• Multiple Case Studies with Google (3), Facebook (1) and Adobe (1) across Digital Advertising and Digital Experience

Sharper Prospecting Chase VALUE not Traffic

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• Advertising Optimization signals based on Customer Lifetime Value

• SEO expertise: Share of focus keywords in top3/top5 ranking

• Top 15 keywords Top 3 Search Results – 56%

• Top 100 keywords Top 5 Search Results – 45%

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Personalization
Never Ask Again
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• Home Page Personalized for every user basis the last action by the user

Source: Webmaster Console

Investor Release 23

Seamless on-boarding of customers through Best-in-Class On-boarding Platform (mPRO); D levera in inte ration with Bank artners for customer data g g g p

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B2C On-boarding Platform
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<$ Secs Top 3 Page Load Time SEO Ranking

AI enabled Personalized Sales offers

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Smarter Chase
Frictionless Onboarding
Talk to Customer the way they like
 Remarketing to Customers with an Ad Click  State of the art Integration stack with third
direct landing on journey ( First in Category ) parties ensures ~ 70% of B2C Term
 Leverage Whatsapp for Business to chase in- customers are on-boarded without any
document requirement
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• State of the art Integration stack with third parties ensures ~ 70% of B2C Term customers are on-boarded without any document requirement

• Leverage Whatsapp for Business to chase infunnel prospects

Investor Release 24

Omni-channel Customer Servicing Experience; services simplified through 24*7 digital offerings

D

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Chatbot- MILI Website- Self Servicing Website Help Center Servicing for Sellers WhatsApp Chatbot for servicing Website allowing customers to Extensive personalized guide All servicing options available Servicing options available self-serve for all queries to sellers on WhatsApp 36L+ self-service transactions annually 3X increase in number of work types 350k+ transactions on 83% adoption available digitally in 12 months conversational interfaces

Investor Release 25

D Levera in Di ital & AI to au ment em lo ee ex erience and roductivit g g g g p y p p y

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empApp Workplace Ely Kudos meCube
Employee App with self service Workplace for organizational Empowering Employees Kudos platform to appreciate/ Mobile based search to
modules for Leave management, engagement, surveys, polls, recognize co workers access the MLI policies, SOP
Employee Letters celebrate achievements library
3.5L self-service transactions Facebook Case Study on 80K employee requests 6.4K
96% adoption Engagement and Adoption self-served through Bot e-recognitions/month
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Investor Release 26

Max Life has implemented cutting edge AI application at scale enabling superior business D outcomes across the customer touchpoints

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New Business
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Purchase & Issuance
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Servicing & Retention
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Deep Learning
Speech Analytics
Shield Early Claim & Customer
engine for Customer
Fraud risk prediction Engagement,
insights, call sentiment,
Engine Retention &
call effectiveness
Persistency
Agent performance
analysis
Upfront Persistency
Risk Prediction and
Engagement
Customized customer recommendation Resolution with
offers with propensity unified intent
prediction & Product prediction and
recommendation Computer Vision auto response
engine based Photo and bot
liveliness
verification
Machine Learning
Diagnostic center based Renewal
analytics and fraud Automated document Income &
prediction and verification & Financial Persistency
monitoring analysis with OCR Forecasting & Real
time monitoring
VOX- Transcription & NLP I2i engine- 3X Conversion
Accuracy (Hindi, English, Rate in High Propensity prediction email volume automatically
Hinglish) Leads handled by Bot
QCheck
Solutions
across value
Learning
Capabilities chain
ASR & NLP
Vision AI Conversational AI
Prediction
Computer Vision NLP & Bots
& OCR
Upfront Query
Deep AI
Machine
Learning
Speech AI
90% 3X 100% 40k
Real time Risk Core Converse – monthly
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NLP: Natural Language Processing ASR: Automatic Speech Recognition

Max Life Insurance 27

Max Life is aggressively modernising core and data foundations leveraging cloud and has D taken a “Cloud First Approach” for all new workloads

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Cloud Data & Analytics Platform

Cloud Foundation

Legacy Modernization

• Data Lake Foundation &

Customer 360

• Data Catalogue

• Lift & Shift and Transform

• Lift & Shift and Transform  Treasury, HR, Contact Center,

• All customer journey facing Communications, AML assets already on cloud

• AI/ML based Intent

Prediction & Cross-sell

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DR 100% for application migrated

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Real-time Backup

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Provisioning from 8 weeks to 2-3 Days

Max Life Insurance 28

D

Buildin Di ital Muscle throu h Innovation Labs g g g

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Partners Use cases Shortlisted for POC Partners POC Outcome Speech Recognition Selected POCs are in Smart Underwriting progress and under scaleup phase Smart hiring / training of Agents / Sales force Document Parsing Health & Wellness Personalized Videos for Customers Group Policy Admin Portal Non/Minimally Invasive Medical Testing Digital Twin NVEST Online Digital Ecosystem

400[Applications received for Innovation Labs 1.0 & 2.0]

Max Life Insurance 29

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SECTION IV

 Max Life Insurance – ESG

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Care for People & Community
Green Operations
Diversity & Inclusion Employee Development Health & Wellness programs CSR Initiatives Financial Empowerment Waste Management Water Management Energy efficiency Emissions control
        
Work Ethically & Sustainably Financial Responsibility
Robust Corporate Governance Ethics & Compliance Digital Initiatives Ethical usage of Data Sustainable Investing Product responsibility Customer feedback integration
      
ESG
Four Pillars of Approach to Sustainability
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Ke Areas : Work Sustainabl & Ethicall Care for Peo le & Societ y y y | p y

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Work Sustainably & Ethically

Board Composition  

• Diverse Board composition with Independent Directors in Board (~50%MFSL; ~30%- Max Life Insurance)

• Average board experience > 30 years

Care for People & Community

Diversity Inclusion

• Max Life recognized amongst the Top 100 Great Place to Work for Women in the Large Companies category

• Gender diversity at Max Life is currently at 24%

• Launched e-learning awareness and sensitization programs on D&I for the organization

Data Privacy & Security

• Information security and cyber security compliant with ISO guidelines

Employee Development

• In FY’21 employees underwent close to ~34000 digital learning hours

• Max life ranked as the 18th Best Company to work by GPTW

Legal, Ethics & Compliance policies

• Platforms, mechanisms, channels in place for grievance addresses, incident investigations and corrective actions and policies

• Dedicated whistle-blower platform managed by independent external partner

• The company has Board/board committee approved Business Code of Conduct, Anti Bribery, Gifts and Meals policies, along with certain other policies to drive the Ethical culture at workplace

Health & Well-being

• We provide Counselling & Mental Well-Being sessions to employees & family members through third party health services partnerships

• Supported surgeries of 7 underprivileged children in Mewat, Haryana with congenital heart disease. Conducted live virtual event with the beneficiaries and their parents

Community Programs

• 50,000 Safety kits distributed to Police and Defence officials, healthcare workers, frontline workers in state administration and education sector

• 150+ employees led volunteering initiatives under “Joy of Giving” that benefitted 3400 people through education, Defense Personnel Support, Poverty alleviation

• 30+ employees delivered sessions on health, Covid awareness & financial independence

Max Life Insurance

32

Ke Areas : Financial Res onsibilit Green O erations y p y | p

Financial Responsibility

Responsible Product Offerings

• Specially designed micro insurance products cater to socially and economically weaker sections. In FY21, we covered ~18 lakh lives

• Lower premiums offered to women policyholders

• Introduced a wellness app encouraging our customers to be active

Responsible Investments

• As per our responsible investment approach, we only invest in companies with the best governance structure and policies

• We are initiating discussions with investee companies on their ESG practices, as part of our goal to be fully ESG compliant in our investment decision making process

• We have a comprehensive stewardship policy and disclose a detailed summary of our voting actions on a quarterly basis.

Integrating Customer Feedback

• We continuously focus on integrating feedback from policyholders in our services. That is reflected in our NPS ratings, as per Kantar studies. Company NPS improved from 26 in FY18 to 45 in FY21

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Green Operations

Energy Efficiency

• Home Office (HO) building is a LEED Platinum certified building with “5 star rating” in health and safety by British safety council

• Solar systems are installed in Home Office building

Waste Management

• Dry and wet waste segregation process is implemented in HO

• Replaced disposable cups with ceramic cups . Saved ~9 lacs paper cups in Home Office in FY21

• Saved 800 Kgs of plastic garbage bags at HO in FY21 due to replacement of plastic dustbins with steel dustbins and Garbage bags savings

Water Conservation

• 100% water is recycled in HO.

• Water aerators are installed to help conserve water by 60%

Emissions Control

• To keep environmental health and air quality, placed ~2100 indoor plants in HO in FY21

• Beautification & greening project ongoing at MG Road in Gurugram. Engaged with an NGO partner for greening and maintenance of the central verge of the 4.5 Km GMDA stretch

Max Life Insurance 33

Key strategic shifts in our ESG journey

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Indicators Key Metric for ESG Indicators Key Targets
Digital
Digital enablement (Self Servicing) in Business transactions 90% of all self servicing operations to be digital by FY25
Operations
Diversity &
Overall Gender Diversity Ratio Achieve 30% gender diversity ratio by FY25 (23% in FY21)
Inclusion
Workforce Number of Digital Learning hours to upskill and reskill
Improve total training hours by ~3X by FY25
Training employees
Number of beneficiaries due to our CSR activities under
CSR activities Target 5 Lakh+ beneficiaries by FY25 (1 Lakh+ in FY21)
Pehal and Max Foundation
100% ESG integration in all investment research and decision
Responsible
ESG integration & Compliance^ in Investment Decision Making making by FY23 | 75% of equity portfolio to be ESG compliant at
Investments
all times from FY23
Carbon
Reduce carbon footprint and achieve Carbon Neutrality To achieve carbon neutrality by FY28
Neutrality
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*ESG Integration refers to evaluation of ESG risks and opportunities for each company in the portfolio ^ESG compliance refers to all ESG rating categories excluding severe risk category , as per rating agency scores

Investor Release 34

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SECTION V

 Max Life Insurance – MCEV Disclosures: H1 FY’22

Ke Results y

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The Embedded Value[1] (EV) as at 30[th] September 2021 is Rs 12,988 Cr.

The Operating Return on EV (RoEV) over H1 FY22 is 16.5% , which increases to 18.0% after excluding one-off impact of COVID19. Including non-operating variances, the total RoEVis 20.5%[2] .

The New Business Margin (NBM) at actual cost for H1 FY22 is 25.3% , with Value of New Business (VNB) written over the period being Rs 546 Cr .

Notes:

1 Max Life’s Embedded Value (EV) is based on a market consistent methodology. However, they are not intended to be compliant with the MCEV Principles issued by the Stitching CFO Forum Foundation (CFO Forum) or the Actuarial Practice Standard 10 (APS10) as issued by the Institute of Actuaries of India.

2 The return on EV over H1 FY22 is calculated as 9.8% (growth in EV) annualized to 20.5%.

Investor Release 36

Pro ression of Embedded Value g

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12,988
11,834
11,047
10,069
9,066
8,277
2,770 2,768 2,919
H1 FY21 FY21 H1 FY22
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Net Worth (NW) Value of Inforce (VIF)

1. EV as at H1 FY22 represents an increase of Rs 1,154 Cr from the EV of Rs 11,834 Cr as at FY21; implying a growth of 9.8% (annualized to 20.5%) over the period.

2. EV as at FY21 is post allowing for final shareholder dividend of Rs 177 Cr for FY21.

Investor Release

37

Note: Figures in Rs Cr. and may not add up due to rounding

EV movement anal sis: March 2021 to Se tember 2021 y p

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478 -93 223 12,988
546
11,834
Operating RoEV: 16.5%
10,069
9,066
2,769 2,919
Opening EV Value of Unwind Operating Variance Non-Operating Variance Closing EV
New Business
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• The Operating Return on EV (RoEV) over H1 FY22 is 16.5% , which increases to 18.0% after excluding one-off impact of COVID19.

• Operating return on EV is mainly driven by new business growth and unwind.

• Non-operating variances are mainly driven by positive economic variances during the period.

Investor Release 38

Note: Figures in Rs Cr. and may not add up due to rounding

Value of New Business and New Business Mar ins as at 30[th] Se tember 2021 g p

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Description	H1 FY21	H1 FY22	Y-o-Y growth
APE1	1,815	2,158	19%
New Business Margin (NBM) (post cost overrun)	24.2%	25.3%	+110 bps
Value of New Business (VNB) (post cost overrun)	438	546	24%
} The New Business Margin (NBM) has increased by circa 110 bps to 25.3% for H1 FY22 as compared to 24.2% for H1 FY21. The increase in margins is primarily driven by favorable change in business mix.

1 Annual Premium Equivalent (APE) is calculated as 100% of regular premium + 10% of single premium.

2 The VNB is accumulated from the point of sale to the end of the reporting period (i.e. 30th September 2021), using the beginning of quarters’ risk free yield curve.

Investor Release 39

Note: Figures in Rs Cr. and may not add up due to rounding

Value of New Business (VNB) and New Business Margin (NBM) Walk

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I- 1 24.2% - +1.1% NBM -->	25.3%

Investor Release 40

Note: Figures in Rs Cr. and may not add up due to rounding

Sensitivit anal sis as at 30[th] Se tember 2021 y y p

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Sensitivity	EV	EV	New business	New business
	Value (Rs Cr)	% change	**VNB (Rs Cr)	NBM**
Base Case	12,988	-	**546	25.3%**
Lapse/Surrender - 10% increase	12,865	(1%)	537	24.9%
Lapse/Surrender - 10% decrease	13,125	1%	553	25.6%
Mortality - 10% increase	12,773	(2%)	524	24.3%
Mortality - 10% decrease	13,178	1%	567	26.3%
Expenses - 10% increase	12,875	(1%)	512	23.7%
Expenses - 10% decrease	13,125	1%	580	26.9%
Risk free rates - 1% increase	12,817	(1%)	568	26.3%
Risk free rates - 1% reduction	13,108	1%	529	24.5%
Equity values - 10% immediate rise	13,129	1%	546	25.3%
Equity values - 10% immediate fall	12,846	(1%)	546	25.3%
Corporate tax Rate - 2% increase	12,730	(2%)	530	24.5%
Corporate tax Rate - 2% decrease	13,246	2%	562	26.0%
Corporate tax rate increased to 25%	11,288	(13%)	439	20.4%

1. Reduction in interest rate curve leads to an increase in the value of assets which offsets the loss in the value of future profits.

2. Risk free rate sensitivities under new business allow for the change in the value of assets as at the date of valuation.

Investor Release 41

Note: Figures in Rs Cr. and may not add up due to rounding

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ANNEXURES

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Delivering consistent growth in top line and renewals coupled with driving cost efficiencies

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Financial Performance FY20 FY21 H1 FY’21 H1 FY’22
19% 18%
Individual APE 4,116 4,907 1,804 2,127
15% 19%
Renewal Premium 10,600 12,192 4,789 5,706
Gross Premium 16,184 18% 19,018 7,283 21% 8,815
Policyholder expense to GWP 14.5% 27 bps 14.2% 15.4% 11 bps 15.5%
Ratio
5 bps
15 bps
20.8% 20.7% 21.6% 21.7%
Policyholder Cost to GWP Ratio
21 bps
Expense to average AUM 3.8% 20 bps 3.6% 3.5% 3.7%
(Policyholder)
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Note: Figures in Rs Cr.

Investor Release 43

Healthy and consistent profitability creating value to all the stakeholders while maintaining solvenc above re uired levels y q

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Financial Performance
FY20 FY21 H1 FY’21 H1 FY’22
-15%
-11%
Profit(before Tax) 598 510 165 148
32% 29%
AUM 68,471 90,407 77,764 100,090
360 bps 110 bps
21.6% 25.2% 24.2% 25.3%
New Business Margin (Post
Overrun)
19%
MCEV (post dividend)^ 9,977 11,834 11,047 18% 12,988
180 bps 50 bps
Operating RoEV 20.3% 18.5% 17.5% 18.0%
Solvency Ratio 242%07 11% 196242% 207% 4% 211%
Figures in Rs. Cr.
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^Arrow represents growth in Operating RoEV

Investor Release 44

Performance u date- H1’FY22 p

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Key Business Drivers	Unit	Quarter Ended	Quarter Ended	Q-o-Q Growth	Period Ended	Period Ended	Y-o-Y Growth
		Q2 FY'21	Q2 FY'22		H1 FY'21	H1 FY'22
a)Individual APE	Rs.Crore	1,145	1,263	10%	1,804	2,127	18%
b) Grosswrittenpremium income	Rs.Crore	4,532	5,331	18%	7,283	8,815	21%
First yearpremium		1,127	1,228	9%	1,749	2,032	16%
Renewal premium		2,937	3,461	18%	4,789	5,706	19%
Single premium		468	642	37%	746	1,078	44%
c) Shareholder Profit (PreTax)	Rs. Crore	27	71	160%	165	148	-11%
d)PolicyHolder Expense to GrossPremium	%	14.9%	14.3%	60 bps	15.4%	15.5%	-11 bps
e) Share Capital	Rs. Crore				1,919	1,919	0%
f)Individual Policiesin force	No.Lacs				44.55	46.28	4%
g) Sum insuredin force	Rs. Crore				1,098,156	1,109,313	1%
h) Grievance Ratio	%				31	41	32%

Investor Release 45

Protection – Ex ansion in both case size and number of olicies sold p p

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Case Size (INR’000)

NoPs (INR’000)

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Non PAR- Saving PAR Ind Protection ULIP Non PAR- Saving PAR Ind Protection ULIP
646
76
82 597
69
131
64
106
145 146
156 134
219
183
22 25
19 284
19 259
46
66
59 75 53
59 149
224
122 70
60
106 104 57
96 95
147
84 76
59
FY20 FY21 H1 FY'21 H1 FY'22 FY20 FY21 H1 FY'21 H1 FY'22
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Investor Release 46

Definitions of the EV and VNB

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Market consistent methodology

• The EV and VNB have been determined using a market consistent methodology which differs from the traditional EV approach in respect of the way in which allowance for the risks in the business is made.

• For the market consistent methodology, an explicit allowance for the risks is made through the estimation of the Time Value of Financial Options and Guarantees (TVFOG), Cost of Residual Non-Hedgeable Risks (CRNHR) and Frictional Cost (FC) whereas for the traditional EV approach, the allowance for the risk is made through the Risk Discount Rate (RDR).

Components of EV

The EV is calculated to be the sum of:

• Net Asset value (NAV) or Net Worth: It represents the market value of assets attributable to shareholders and is calculated as the adjusted net worth of the company (being the net shareholders’ funds as shown in the audited financial statements adjusted to allow for all shareholder assets on a market value basis, net of tax).

• Value of In-force (VIF): This component represents the Present Value of Future expected post-tax Profits (PVFP) attributable to shareholders from the in-force business as at the valuation date, after deducting allowances for TVFOG, CRNHR and FC. Thus, VIF = PVFP – TVFOG – CRNHR – FC.

Covered Business

• All business of Max Life is covered in the assessment except one-year renewable group term business and group fund business which are excluded due to their immateriality to the overall EV.

Investor Release 47

Components of VIF (1/2)

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Present Value of Future Profits (PVFP)

• Best estimate cash flows are projected and discounted at risk free investment returns.

• PVFP for all lines of business except participating business is derived as the present value of post-tax shareholder profits from the in-force covered business.

• PVFP for participating business is derived as the present value of shareholder transfers arising from the policyholder bonuses plus one-tenth of the present value of future transfers to the participating fund estate and one-tenth of the participating fund estate as at the valuation date.

• Appropriate allowance for mark-to-market adjustments to policyholders’ assets (net of tax) have been made in PVFP calculations to ensure that the market value of assets is taken into account.

• PVFP is also adjusted for the cost of derivative arrangements in place as at the valuation date.

Cost of Residual Non-Hedgeable Risks (CRNHR)

• The CRNHR is calculated based on a cost of capital approach as the discounted value of an annual charge applied to the projected risk bearing capital for all non-hedgeable risks.

• The risk bearing capital has been calculated based on 99.5 percentile stress events for all non-hedgeable risks over a one-year time horizon. The cost of capital charge applied is 4% per annum. The approach adopted is approximate.

• The stress factors applied in calculating the projected risk capital in the future are based on the latest EU Solvency II directives recalibrated for Indian and Company specific conditions.

Investor Release 48

Components of VIF (2/2)

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Time Value Of Options and Guarantees (TVFOG)

• The TVFOG for participating business is calculated using stochastic simulations which are based on 5,000 stochastic scenarios.

• Given that the shareholder payout is likely to be symmetrical for guaranteed non-participating products in both positive and negative scenarios, the TVFOG for these products is taken as zero.

• The cost associated with investment guarantees in the interest sensitive life non-participating products are allowed for in the PVFP calculation and hence an explicit TVFOG allowance has not been calculated.

• For all unit-linked products with investment guarantees, extra statutory reserves have been kept for which no release has been taken in PVFP and hence an explicit TVFOG allowance has not been calculated.

Frictional Cost (FC)

• The FC is calculated as the discounted value of tax on investment returns and dealing costs on assets backing the required capital over the lifetime of the in-force business. Required capital has been set at 170% of the Required Solvency Margin (RSM) which is the internal target level of capital, which is higher than the regulatory minimum requirement of 150%.

• While calculating the FC, the required capital for non-participating products is funded from the shareholders’ fund and is not lowered by other sources of funding available such as the excess capital in the participating business (i.e. participating fund estate).

Investor Release 49

Key Assumptions for the EV and VNB (1/2)

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Economic Assumptions

• The EV is calculated using risk free (government bond) spot rate yield curve taken from FBIL[1] as at 30[th] September 2021. The VNB is calculated using the beginning of respective quarter’s risk free yield curve (i.e. 31[st] March 2021 and 30[th] June 2021 respectively).

• No allowance has been made for liquidity premium because of lack of credible information on liquidity spreads in the Indian market.

• Samples from 30[th] September 2021 and 31[st ] March 2021 spot rate (semi annualized) yield curves used are:

Year	1	2	3	4	5	10	15	20	25	30	40
Sep-21	3.90%	4.40%	4.96%	5.55%	5.91%	6.34%	7.02%	7.16%	7.26%	~~AM~~ 7.36%	7.27%
Mar-21	3.83%	4.22%	5.17%	5.58%	6.10%	6.46%	6.99%	7.09%	6.92%	6.93%	6.23%
Change	0.07%	0.18%	-0.21%	-0.03%	-0.19%	-0.12%	0.03%	0.07%	~~A ~~ 0.34%	0.43%	1.04%

Demographic Assumptions

The lapse and mortality assumptions are approved by Board committee and are set by product line and distribution channel on a best estimate basis, based on the following principles:

 Demographic assumptions are set to reflect the expected long term experience.

 Any one-off impacts expected, including those due to COVID19, are allowed through additional provisions/allowances.

Investor Release 50

1 Financial Benchmark India Pvt. Ltd.

Key Assumptions for the EV and VNB (2/2)

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Expense and Inflation

• Maintenance expenses are based on the recent expense studies performed internally by the Company. The VIF is reduced for the value of any maintenance expense overrun in the future. The overrun represents the excess maintenance expenses expected to be incurred by the Company over the expense loadings assumed in the calculation of PVFP.

• Future CSR related expenses have been taken to be 2% of post tax (risk adjusted) profits emerging each year.

• Expenses denominated in fixed rupee terms are inflated at 6.0% per annum.

• The commission rates are based on the actual commission payable, if any.

Tax

• The Corporate tax rate is the effective tax rate, post allowing for exemption available on dividend income. Tax rate is nil for pension business.

• For participating business, the transfers to shareholders resulting from surplus distribution are not taxed as tax is assumed to be deducted before surplus is distributed to policyholders and shareholders.

• Goods and Service tax is assumed to be 18%.

• The mark to market adjustments are also adjusted for tax.

Investor Release 51