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Max Life Insurance CEO, Prashant Tripathy affirmed that Axis Bank is expected to increase its stake in the insurance company through a proposed deal. The stake is likely to obtain around 20 per cent in the coming 12-18 months.
At present the two subsidiaries of the Bank, Axis Capital Ltd and Axis Securities Ltd along with Axis Bank holds 12.99 per cent in Max Life Insurance since the approval of the deal in April. The Axis entities are now the co-promoters of Max Life with three board seats.
According to PTI, Prashant Tripathy informed, “Axis Bank is to increase to 19.99 per cent in tranches. 13 per cent is already done over the next two quarters.” He further stated that they will seek approval for the balance 7 per cent to reach around 20 per cent following which it will be the ownership of Axis Bank. Regarding the timeline to complete the transfer of the remaining stake he proposed that it must take place within 12-18 months.
The proposed deal suggests that the Axis entity will posses the rights to obtain an additional stake of up to 7 per cent in the insurance company in one or more tranches, subject to regulatory approvals. Tripathy confirmed that the tagline will have the name of Axis Bank as the joint venture partner, however there will be no variation in brand.
Expressing about collaboration Prashant Tripathy voiced that they are coming up with a new strategy for future growth and are working hand in hand as a common team to assure that the company grows faster than the industry. He stated that they are working together to look at product mix to drive Axis channel so that the result is favourable for both the customers and the company. Furthermore, he asserted that they are working on analytics area to leverage on each other strengths.
Prashant Tripathy affirmed that the company have launched 14 products or product variance in the previous year and thereby increased the margin by 3.60 per cent in the year 2020-2021.
The insurance company registered a growth of 22 per cent in its total new businesses premium to Rs.6,826 crore in the financial year that ended in March 2021. The renewal premium income of the insurer increased by 15 per cent to Rs.12,192 crore taking the gross premium to Rs.19,018 crore, leading to an increase of around 18 per cent from the previous year. The company experienced a gain of 19 per cent to Rs.4,907 crore in respect to individual APE (adjusted premium equivalent) .
Max Life Insurance’s post-tax shareholders profit dropped by 6 per cent to Rs.523 crore in 2020-21 from Rs.539 crore in the previous year.