Max Financial Services Limited — Interim / Quarterly Report 2022

Aug 10, 2021

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Max Financial Performance Update

Investor Release Q1 FY22 August 10, 2021

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SECTION I

 Max Financial Services : Q1FY22 Key Highlights

Max Financial Services : Q1FY’22 Key Highlights

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Application filed with IRDAI for acquiring residual ~ 5.17% stake from MSI in Max Life, at Rs 85/ share. Significant value
1
creation for shareholders on completion of transaction
2 Consolidated Revenue excluding investment income at Rs 3,420 Cr, grows 27%. Consolidated PAT at Rs 36 Cr, down 80% ,
owing to one-off tax refund, lower operating expenses and lower death claims due to COVID-19 induced lockdown
VNB at Rs 172 Cr grew 53% y-o-y; NBMs (post cost overrun) at 19.7%, 260 bps improvement y-o-y, due to change in
3
business mix
4 MCEV as at 30 [th] Jun 2021 at Rs. 12,290 Cr; Operating RoEV at 13.5%, Including non-operating variances RoEV is 16.3%
5 Max Life market share improved by 63 bps to 11% … growth of 34% against Private Players growth of 26%
6 Max Life raised Rs 496 Cr through non-convertible debentures (NCDs), solvency margin strengthens by 17% to 214%
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Investor Release

Note: Consolidated Revenue including investment income at Rs 5,943 Cr grows 8%

3

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SECTION II

 Max Life Insurance – Business Overview

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Industry Landscape (Q1 FY22): Total Industry grew by 16%, while Pvt. players grew by 26% and LIC b 4%. Max Life not onl rew at 34% but also out erformed industr on 2-Yr CAGR basis as well y y g p y

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YoY Growth basis Individual Adjusted FYP

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FY’20 FY’21 Q1 FY’21 Q1 FY’22 Q1 FY’22 (2 year CAGR)
• Max life grew by 14%
1%
Private Industry 24% 5% 23% 26% on 2-year CAGR basis
YoY growth
while private industry
34% de-grew by 1%
• Claims paid ratio
19%
16% 99.35% at the end of
14%
FY21, one of the best in
6% 5% 3% the industry and best
ever ratio reached
Industry Max Life -4% -2%
• Ranked 18th amongst
‘India’s Best Companies
-18% to Work For’ in 2021
and Ranked 55
amongst ‘Asia’s Best
Companies to Work
Max Life’s private 10% 11% 11% 11% For’ in 2021
market share
Max Life’s total 6% 6% 6% 6% • #2 rank in customer
market share
grievances incidence
rate in FY21
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Source: Life Insurance Council | IRDAI

Investor Release 5

Financial Performance Summary Q1FY22

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Pvt Market Share APE Gross Written Premium AUM
11% 63 bps Rs 875 Cr 32% Rs 3,484 Cr 27% Rs 93,697 Cr 28%
[11%] [Rs 661 Cr] [Rs 2,751Cr] [Rs 73,239 Cr]
Profit Before tax Net Worth Policyholder Cost to Policyholder Expense to
GWP Ratio GWP Ratio
Rs 77 Cr -44% Rs 2,930 Cr 5% 23.4% 147 bps 17.4% 115 bps
[Rs 138 Cr] [Rs 2,781 Cr] [21.9%] [16.2%]
New business margin Operating RoEV Embedded Value^ Solvency
19.7% 260 bps 13.5% 240 bps 12,290 13.5% 197% -15%
[17.1%] [15.9%] [10,670] [212%]
VNB Policies Sold (‘000) New business Sum assured Protection Mix
Individual Group Total
53%
172 111 -10% 43,530 -13% 680 bps
10% 9% 18%
[113] [123] [50,030]
[14%] [11%] [25%]
Figures in [brackets] are for previous year numbers.
^Growth on Embedded value is operating RoEV, * Profit is lower compared to last year due to higher operating expenses (effect of lower base) and lower death claims reporting last year due to lockdownGroup
protection (incl. Group credit life adjusted for 10% for single premium and term business); Investor Release 6
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Investor Release 6

Max Life has delivered strong performance on new business ; Maintained 4[th] rank in the private industry and increased market share by 63 bps

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New Business Premiums (on APE basis)

Renewal Income

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Amount in INR Cr
32%
19%
875
4,957
4,149
661
FY20 FY21 Q1 FY'21 Q1 FY'22
Mkt Share [#] 9.7% 10.8% 10.7% 11.3%
Pvt Ind Rank 4 4 4 4
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Gross Written Premium

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Amount in INR Cr 27%
18%
19,018 3,484
2,751
16,184
FY20 FY21 Q1 FY'21 Q1 FY'22
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Amount in INR Cr 21%
15%
12,192 2,244
1,852
10,600
FY20 FY21 Q1 FY'21 Q1 FY'22
Individual Sum Assured of New business- 13% decline in Q1FY22 due to de-
growth in protection business, however market share improved to 16.1%
Amount in INR Cr
40%
2,22,682
1,83,019
-13%
50,030 43,530
FY20 FY21 Q1 FY'21 Q1 FY'22
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Investor Release 7

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

VNB increased b 53% over last ear aided b increase in mar ins b 260 b s y y y g y p

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Product Mix – Increasing in NPAR savings while maintaining balance

Margins (post-overrun)- Improved by 260 bps due to change in business mix

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360 bps 260 bps
38% 37% 35% 37% 25.2%
21.6%
19.7%
18% 17.1%
18%
30% 27%
11%
5%
13% 25%
8% 5% 9%
14% 14% 18%
9% 10%
30%
19% 22% 17%
FY20 FY21 Q1 FY'21 Q1 FY'22
FY 20 FY 21 Q1 FY'21 Q1 FY'22
PAR Individual Protection Group Protection Non PAR- Savings ULIP
VNB (post over-run)
Amount in INR Cr
39% 53% 2-year CAGR 13%
1,249 172
897
113
FY 20 FY 21 Q1 FY'21 Q1 FY'22
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Investor Release 8

Efficient capital management with consistent returns, best in class among financial services

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Opex to GWP*- Higher opex in Q1 due to lower base effect, improvement of 130 bps over 2-year

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-30 bps 115 bps
17.4%
16.2%
14.5% 14.2%
FY20 FY21 Q1 FY'21 Q1 FY'22
Return on Equity (RoE) [#-] Lower Q1 FY21 claim experience owing to lockdown
caught up in rest of the year, impacting ROE of trailing 12 months
24%
20%
19%
15%
FY 20 FY 21 Q1 FY'21 Q1 FY'22
Normalized for Tax refund and lower Q1 claim
21% 17%
experience
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Solvency Ratio (pre dividend) - Raised 496 Cr in July, strengthening solvency margin by 17% to 214% on June exit position

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212%
207%
196% 197%
150%
Solvency
Limit
FY20 FY21 Q1 FY'21 Q1 FY'22
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Underwriting Profits- Q1 FY21 profits were higher than run rate due to one offs like lower claims owing to lockdown and Tax refund

Amount in INR Cr

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Backbook Surplus NB Strain SH Surplus
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1189 1242
319 255
111 141 89 41
-237 -225
-761
-860
FY20 FY21 Q1 FY'21 Q1 FY'22
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Investor Release 9

* 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

Embedded value grew at 16%, while operating RoEV for Q1 FY22 at 13.5%

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Embedded Value (EV) - EV has grown at 16% driven by growth in value of new business and quality of inforce business

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19%
16%
12,290
11,834
10,670
9,977
FY20 FY21 Q1 FY'21 Q1 FY'22
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Amount in INR Cr

Operating Return on Embedded Value*

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20.3%
18.5%
15.9%
13.5%
FY20 FY21 Q1 FY'21 Q1 FY'22
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Investor Release 10

*The operating RoEV for Q1 FY21 was relatively higher due to positive operating variances in form of tax refund (~Rs 63 Cr) and due to delay in reporting of claims in lockdown

Max Life has consistently grown its Asset Under Management

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Assets Under Management - MLI is the 4[th] largest manager of private LI AUMs, Par fund size ~48K

ULIP : Healthy mix of Debt and Equity

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Debt Equity
43%
52% 50% 57%
57%
48% 50%
43%
FY 20 FY 21 Q1 FY'21 Q1 FY'22
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Amount in INR ‘000 Cr
32% 28% 43%
90 94 52% 50% 57%
73
68 57%
48% 50%
43%
64
62
FY 20 FY 21 Q1 FY'21 Q1 FY'22
52
49
Controlled : Healthy mix of Debt and Equity
19 28 21 30 7% 8% 9% 10%
FY20 FY21 Q1 FY'21 Q1 FY'22
ULIP Controlled Fund 93% 92% 91% 90%
FY 20 FY 21 Q1 FY'21 Q1 FY'22
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More than 95% of debt investments is in sovereign papers and AAA rated securities

Investor Release 11

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

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

▪ Won 3 awards for Best use of use of Relationship Marketing in Loyalty Program, Best use of Gamification to enhance Loyalty and Best Use of Data in Marketing Analytics at the Customer Fest Awards 2021

▪ Won 7 awards across various categories including Television, BTL activities, Mobile marketing and Customer service at the 10th ACEF Global Customer Engagement Awards

• BFSI Smart Tech Awards 2019 - IPQ won the Best Use of Data and Analytics

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

• No. 1 in Customer Loyalty survey by IMRB

• Gold at ASQ World Conference

• Winner of IMC Ramkrishna Bajaj National Quality Award

• Winner of CII Industry Innovation Award

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

• ▪ Silver Award in ASQ ITEA 2019 for Sell Right for Customer Delight at Axis Bank

• Silver Award in the 12[th] QCI-DL Shah Quality Awards for Enhancing S2R Conversion% Select 60 offices in Agency.

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

▪ Ranked 55th amongst ‘2021 Best Workplaces in Asia’ by Great Place to Work®

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

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

• Employee Engagement Leadership Award for “Best use of the Employee Award”

• Employee Engagement Leadership Award for “Best Social Responsibility”

• 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 12

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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
	▪Proprietary sales grew only by 5% due to COVID related restrictions ▪Strong growth of 49% in Banca channels ▪Leadership in protection sales across web aggregators and in Direct purchase ▪Key Partnerships: Ind Wealth, Ditto, Tata Motors Insurance Broking, Policy Bachat		▪VNB Grew by 53% ▪New protection product (Smart Secure) launched in Q1 with cautious approach in underwriting ▪Launched Anniversary Edition of Smart wealth plan ▪Annuity grew 88% YoY for Q1 FY22		▪Improvement in 13M and 61M persistency 85.1% (+320bps) and 54% (+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 67 (YoY: +7) for Q1 with “always-on” strategy		▪100% of all policies digitally sourced – ▪100% recruitment enabled through digital ▪85% requests enabled through digital self service means ▪Max Life Innovations Lab 2.0 – 213 applications received; 4 start-ups were selected to work on different use cases. Currently in POC stage ▪Progressing well on AI and modernizing IT journey

Investor Release 14

^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)

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Amount in INR Cr
Channel Mix - Max Life has focused on maintaining a balanced distribution 2-year CAGR 7%
mix
1,403
1,282
5%
1% 0% 1% 0%
248 260
62%
68% 71% 70%
FY20 FY21 Q1 FY'21 Q1 FY'22
37% Bancassurance Channel (APE)
31% 28% 30%
Amount in INR Cr
FY20 FY21 Q1'FY21 Q1'FY22
3,529 2-year CAGR 16%
Proprietary Banca Others 2,838
Axis’s
57% 63% 56% 63% 49%
Share
612
411
FY20 FY21 Q1'FY21 Q1'FY22
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Investor Release 15

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%
26% 26%
22% 47% 45% 48%
10% 21% 14% 52%
17% ULIP
28%
23% 27% NPAR-S ULIP
NPAR-P 24% 36% 23% NPAR-S
33%
PAR 4% NPAR-P
47% 10%
34% 33% 35% 4% PAR
25% 3%
19%
14% 12%
FY20 FY21 Q1'FY20 Q1'FY21 FY20 FY21 Q1'FY21 Q1'FY22
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Investor Release 16

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,
As on 30 [th ] June 2021
2.0% 52.9% 36 25 16
Guaranteed
Products, 3.5%
Average Average Average
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Investor Release 17

(1) Based on all policies sold till date

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

C

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Surrender to GWP- Higher surrenders in ULIP

Claims Paid Ratio- One of the best claims paid ratio in the industry

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26%
21% 19%
15%
FY20 FY21 Q1 FY'21 Q1 FY'22
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1 70 9 bps
99.22% 99.35%
98.74%
98.26%
26%
21% 19%
15%
FY'18 FY'19 FY'20 FY'21 FY20 FY21 Q1 FY'21 Q1 FY'22
Persistency-
83% 84% 82% 85%
71% 71% 68% 69%
63% 63% 61% 61% 59% 58% 57% 57%
52% 54% 52% 54%
13th Month 25th Month 37th Month 49th Month 61st Month
11M FY20 11M FY21 Q1 FY'21 Q1 FY'22
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Investor Release 18

C Significant increase in claim experience in Q1 owing to wave 2

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Gross claims- 2.1X from first peak in Q3 FY21

Net claims- 1.6X from first peak in Q3 FY21

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No of claims- 1.3X from first peak in Q3 FY21 Gross claims- 2.1X from first peak in Q3 FY21 Net claims- 1.6X from first peak in Q3 FY21
Figures in Rs. Cr. Figures in Rs. Cr.
13,492 1,031
10,525
563
484
345
4,689
175
126
Q1 FY21 Q3 FY21 Q1 FY22
Q1 FY21 Q3 FY21 Q1 FY22 Q1 FY21 Q3 FY21 Q1 FY22
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• Provisions of ~Rs 500 cr are being used to neutralize the excess COVID claims.

• 91% of eligible employees received first dose of vaccination

▪ Action on Group portfolio:

• ✓ Group Term Life (GTL): Cautious approach – discontinued sourcing new accounts, selective price adjusted renewals of profitable accounts

• ✓ Group Credit: Non-medical limits reduced; re-negotiation & exit from select Group credit accounts

• Range of actions in place to control mortality such as stringent underwriting measures (Restrictions around large sum assureds, higher age and extra mortality for sub standard lives, six-sigma analysis on current UW quality check process, re-evaluation of the underwritten base), mandatory physical medicals - blood tests including HbA1C, TMT

• Increase in premium rates from July’21 on Individual protection plans, group cases are monitored case to case basis

Max Life Insurance 19

Max Life Leader in E-Commerce Protection Sales enabled by higher adoption of digital assets D 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 – 53%

• 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 20

D

Seamless on-boarding of customers through Best-in-Class On-boarding Platform (mPRO); lever in in ration with Bank rtners for customer data ag g teg pa

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B2C On-boarding Platform Frictionless Onboarding mPRO
<$ Secs Top 3 ▪ State of the art Integration stack with third ▪ 100% Digital journey, centralized document
Page Load Time SEO Ranking parties ensures ~ 70% of B2C Term upload and real time dedupe & underwriting
AI enabled Personalized customers are on-boarded without any ▪ 100% adoption
Sales offers document requirement ▪ 75% reduction in QC TAT and ~72% FTR
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Investor Release 21

D

Industry first Digital ecosystem to drive agent Recruitment agenda at scale (mREC); end-to-end agent recruitment platform facilitating faster agent prospecting and onboarding

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New Age responsive web app for 100% Digital Journey powered by Intuitive Dashboard for Funnel Inbuilt supervisory views for Real
digital recruitment with seamless ecosystem integrations like CRIF etc. Tracking time governance
integration with MLI Core systems
Avg campaign leads- 50% reduction Avg. Web Recruitment 40% efficiency Avg new leads every
approx. 3.3k every month in TAT 3K/month in Cost month- ~24k Leads
AI/ML Enabled
auto screening
of profile
Digital
Webinar
Know
Did You
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Investor Release 22

D

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

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Chatbot- MILI
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Website- Self Servicing
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Website Help Center
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Servicing for Sellers

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WhatsApp
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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
60L+ self-service transactions annually 3X increase in number of work types 200k+ transactions on 1.5L+ Cross-Sell leads generated
85% adoption available digitally in 12 months conversational interfaces through digital channels annually
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Investor Release 23

D AI smarts delivering intelligence to enhance customer experiences and risk selection

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Business First Integrated AI AI integration across Max Life
Machine Learning New Business Purchase & Issuance Servicing & Retention
& Deep Learning
C-360
Proactive Customer Engagement & Retention
360 Risk assessment with Persistency, Fraud &
Customized customer offers with propensity & with DL based recommendations
Speech AI
Product recommendation Mortality risk prediction
(ASR & STT)
P-Track
Upfront Query Resolution with unified
Vision AI Upfront policy issuance visibility with issuance
intent prediction and response bot
Computer Vision Automated document verification & Financial analysis
probability & TAT
& OCR with OCR
HUB
Conversational AI
NLP & BOTs Customer insights and sentiment for sales Renewal Income & Persistency Forecasting &
effectiveness with Speech Analytics Computer Vision based Auto verification Real time monitoring
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AI Foundations

Dedicated AI Team (AI works) AI Accelerator program for 1 with talent from top institutes 2 partnerships & Investment with new 3 (IIT/ISB) Age AI startups

Getting Data Rich with partnerships with bureaus to better understand 4 customer needs & fuel AI

Data Lake & Cloud Strategy with AWS to enable advance AI use cases

16

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SECTION IV

 Max Life Insurance – ESG

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Our Sustainabilit Strate revolves around four illars y gy p

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Engaged with external and internal stakeholders to discuss on ESG parameters and developed Max Life’s Sustainability Framework

Identified key focus areas and material issues pertaining to Max Life

Four Pillars of Approach to Sustainability

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A B Digital C D
Green Operations
Work Ethically & Sustainably Care for People & Society Financial Responsibility
▪ ▪ ▪ ▪
Robust Corporate Diversity & Inclusion Sustainable Investing Waste Management
Governance
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• Employee Development

• Financial Empowerment

  • Water Management

• Ethics & Compliance

• Digital Initiatives

• ▪ Ethical usage of Data

• Health & Wellness programs

• Product responsibility

• CSR Initiatives ▪ Customer feedback integration

• Energy efficiency

• Emissions control

Investor Release 26

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Key Focus Areas: Work Sustainably & Ethically

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

• Average board experience > 30 years

• Information security and cyber security compliant with ISO guidelines

• Platforms, mechanisms, channels in place for grievance addresses, incident investigations and corrective actions, for example - MyVoice, Ethics Hotline & Disciplinary Action policy (for agents and employees).

• Ethics Hotline is a dedicated whistle-blower platform, which is managed by an independent external partner

• Max life has management approved policy as defined in the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”)

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• 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. The Company has laid down its Business code of conduct by adopting the following practices and policies:

• I. Employment conduct

• II. Compliance to Laws, Rules, and Regulations

• III. Compliance Self-Certification

• IV. Framework for Managing Conflict of Interest

• V. Whistle-blower Policy

• VI. Anti-Bribery and Anti-Corruption Policy

• VII. Anti-Money Laundering/Counter – Financing of Terrorism Policy

• VIII. Information Security Policy

• IX. Gifts, Meals, and Entertainment Policy

Working Sustainably & Ethically

Investor Release 27

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Ke Focus Areas: Care for Peo le & Societ y p y

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Diversity Inclusion

• Gender diversity at Max Life improved to 23.3% as on FY21

• Initiatives and programs launched to develop women employees for future career development roles

• ▪ Awareness and sensitization programs launched on D&I initiatives

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Employee Development

• In FY’21 employees underwent close to 29000 training man days across 50 training programs

• We promote internal talent mobility and in FY’21, 45% of our mid to senior roles were closed internally

• In June 2021, Max life was ranked as the 18th Best Company to work for in India by Great Places to Work Institute

Health & Well-being

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

• Tied up with hospitals for Vaccination camps for employees across India

• During Covid, a dedicated support helpdesk was set up with 8-employees and 22 regional Covid Response Officers across states for 24/7 support to employees

Care for People

• Direct empanelment of Doctors and Health service providers to ensure all employees and their families have access to doctors, required pathology tests conducted at home, ambulance services on call, etc

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Care for Society

• 4 virtual CSR volunteering sessions conducted in Q1 FY22 on financial literacy, health, hygiene & Covid Safety with a participation of 400 beneficiaries

• Conducted food distribution drives in Jamshedpur and desktop installation drives in schools for Kids (Asha School, Birpur) in Q1 FY22

• 600 migrant workers in Siliguri were distributed ration

• Continue to impact society through specific initiatives on environmental preservation (56000+ trees planted in FY21), Financial Literacy sessions, malnutrition curbing programs, Joy of Giving, etc

Investor Release 28

Ke Focus Areas: Financial Res onsibilit y p y

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Responsible Product Offerings

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▪ Specially designed micro insurance products cater to socially and economically weaker sections. In FY21, we covered ~18 lakh lives (sum assured of 4,563 crores)

▪ Lower premiums offered to women policyholders. Currently, 28% of our individual life policies cover women

▪ Launched a Critical Illness rider to cover up to 64 critical illness in FY21. A lump sum payout on diagnosis under this policy complements any existing health insurance

▪ Introduced a wellness app which encourages our customers to be active

Responsible Investments

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▪ As part of current investment decision process, we look at the Governance aspects of the investee company in great detail, actively vote on resolutions and engage with investee companies on important matters. We will continue to follow the current rigorous emphasis on Governance and include the social and environmental aspects in our research and analysis

▪ As a responsible investor, post-investment, MLI monitors the financial performance as well the governance practices of investee companies on a regular basis

▪ Implemented a stewardship policy and also disclose a detailed summary of our voting actions under the stewardship code on a quarterly basis. The Audit Committee maintains oversight on the voting mechanism

Customer Feedback Integration

▪ Focus on integrating customer feedback through Net Promoter Score - improvement in Net Promoter Score continued in Q1 FY22

Financial Responsibility

Investor Release 29

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Key Focus Areas: Green Operations

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Energy Efficiency

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

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• Home Office building (Fulfilment center) initiated double glazing tinted glass material for building façade for maximum use of natural daylight

• 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 and saved ~9 lacs paper cups in Home Office in FY21

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▪ 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

• Saved 60% water by installing Sensor based taps in washrooms at HO

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• 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

Green Operations

Investor Release 30

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SECTION V

 Max Life Insurance – MCEV Disclosures: Q1 FY’22

Ke Results y

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The Embedded Value[1] (EV) as at 30[th] June 2021 is Rs 12,290 Cr.

The Operating Return on EV (RoEV) over 3M FY22 is 13.5% . Including non-operating variances, the total RoEV[2] is 16.3% .

The New Business Margin (NBM) at actual cost for 3M FY22 is 19.7% , with Value of New Business (VNB) written over the period being Rs 172 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 for 3M FY22 is calculated as 3.9% (growth in EV) annualized to 16.3%.

Investor Release 32

Pro ression of Embedded Value g

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12,290
9,436
2,854
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11,834
10,670
9,436
9,066
7,894
2,776 2,768 2,854
Q1 FY21 FY21 Q1 FY22
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Net Worth (NW) Value of Inforce (VIF)

1. EV as at 3M FY22 represents an increase of Rs 456 Cr from the EV of Rs 11,834 Cr as at FY21; implying a growth of 3.9% (annualized to 16.3%) over the period.

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

Investor Release 33

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] June 2021 g

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Description	Q1 FY21	Q1 FY22	Y-o-Y growth
APE1	661	875	32%
New Business Margin (NBM) (post cost overrun)	17.1%	19.7%	+260 bps
Value of New Business (VNB) (post cost overrun)	113	172	53%
} ▪The New Business Margin (NBM) has increased by circa 260 bps to 19.7% for Q1 FY22 as compared to 17.1% for Q1 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 June 2021), using the beginning of quarters’ risk free yield curve.

Investor Release 34

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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NBM --> 17.1% - +2.6% 19.7%
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Note: Figures in Rs Cr. and may not add up due to rounding

Investor Release 35

Sensitivit anal sis as at 31[st] March 2021 y y

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Sensitivity	EV	EV	New business	New business
	Value (Rs Cr)	% change	**VNB (Rs Cr)	NBM**
Base Case	12,010	-	**1,249	25.2%**
Lapse/Surrender - 10% increase	11,886	(1%)	1,232	24.9%
Lapse/Surrender - 10% decrease	12,135	1%	1,263	25.5%
Mortality - 10% increase	11,812	(2%)	1,197	24.1%
Mortality - 10% decrease	12,210	2%	1,300	26.2%
Expenses - 10% increase	11,896	(1%)	1,165	23.5%
Expenses - 10% decrease	12,124	1%	1,332	26.9%
Risk free rates - 1% increase	11,800	(2%)	1,309	26.4%
Risk free rates - 1% reduction	12,175	1%	1,158	23.4%
Equity values - 10% immediate rise	12,112	1%	1,249	25.2%
Equity values - 10% immediate fall	11,908	(1%)	1,249	25.2%
Corporate tax Rate - 2% increase	11,779	(2%)	1,210	24.4%
Corporate tax Rate - 2% decrease	12,242	2%	1,287	26.0%
Corporate tax rate increased to 25%	10,484	(13%)	938	18.9%

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 36

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 Q1 FY’21 Q1 FY’22
19% 31%
Individual APE 4,116 4,907 660 864
15% 21%
Renewal Premium 10,600 12,192 1,852 2,244
Gross Premium 16,184 18% 19,018 2,751 27% 3,484
Policyholder expense to GWP 14.5% 27 bps 14.2% 16.2% 115 bps 17.4%
Ratio
147 bps
15 bps
20.8% 20.7% 21.9% 23.4%
Policyholder Cost to GWP Ratio
6 bps
20 bps
Expense to average AUM 3.8% 3.6% 3.5% 3.6%
(Policyholder)
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Note: Figures in Rs Cr.

Investor Release 38

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 Q1 FY’21 Q1 FY’22
-15%
-44%
Profit(before Tax) 598 510 138 77
32% 28%
AUM 68,471 90,407 73,239 93,697
360 bps 260 bps
21.6% 25.2% 17.1% 19.7%
New Business Margin (Post
Overrun)
19%
9,977 11,834 10,670 14% 12,290
MCEV (post dividend)^
180 bps 240 bps
Operating RoEV 20.3% 18.5% 15.9% 13.5%
Solvency Ratio 242%07 11% 196242% 212% 15% 197%
Figures in Rs. Cr.
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^Arrow represents growth in Operating RoEV

Investor Release 39

Performance update- Q1’FY22

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Key Business Drivers	Unit	Year Ended	Year Ended	Y-o-Y Growth
		Q1 FY’21	Q1 FY’22
a) Individual APE	Rs. Crore	660	864	31%
b) Gross written premium income	Rs. Crore	2,751	3,484	27%
First year premium		621	804	29%
Renewal premium		1,852	2,244	21%
Single premium		278	435	57%
c) Shareholder Profit (Pre Tax)	Rs. Crore	138	77	-44%
d) Policy Holder Expense to Gross Premium	%	16.2%	17.4%	-115 bps
f) Share Capital	Rs. Crore	1,919	1,919	0%
g) Individual Policies in force	No. Lacs	44.20	45.95	4%
h) Sum insured in force	Rs. Crore	9,62,127	10,91,320	13%
i) Grievance Ratio	Per Ten thousand	34	31	-9%

Investor Release 40

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
78
597
69
131
54
106
140
145
156
125 183 219
23
22
19 17
76
66
59 59 149
224
123
111
21
25
106 107
96 97
147 61 40
84
22
28
13 24
FY20 FY21 Q1 FY'21 Q1 FY'22 FY20 FY21 Q1 FY'21 Q1 FY'22
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Investor Release 41

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 42

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 43

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 44

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] June 2021. The VNB is calculated using the beginning of respective quarter’s risk free yield curve (i.e. 31[st] March 2021).

• 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] June 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
Jun-21	4.05%	4.65%	5.17%	5.60%	5.89%	6.49%	6.98%	7.43%	7.61%	~~AM~~ 7.35%	7.51%
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	0.22%	0.43%	0.00%	0.01%	-0.21%	0.03%	-0.01%	0.34%	~~A ~~ 0.69%	0.43%	1.28%

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 45

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 46