Max Life Insurance sees green shoots in bank-led sales amid COVID-19

Max Life Insurance, the country’s fourth-largest private life insurer, is seeing green shoots in despite the Coronavirus (COVID-19) outbreak. The green shoots are thanks to the insurance sales through bank branches.

In an interaction with Moneycontrol, V Viswanand, Deputy Managing Director, Max Life Insurance said customer walk-ins at the bank branches have resumed.

“From the last week of April, we have seen customers walking into the bank branches for sales. This is true for both our bancassurance partners Axis Bank and Yes Bank, though Axis Bank has seen a higher share of customers,” he added.

For Max Life, Axis Bank contributes 55 percent of the business (as per 9MFY20 data) while the other banks including Yes Bank contribute 12 percent. Axis Bank has 4,415 branches across India. The bank had recently announced that it will buy 29 percent in the life insurer.

For Axis Bank, retail fee income stood at Rs 1,062 crore in Q4FY20. Of this, 19 percent came from insurance and mutual fund distribution.

The life insurer collected new business premium of Rs 5,583.59 crore in FY20, an increase of 8.2 percent on a year-on-year basis. Max Financial Services is the holding company of Max Life.

Viswanand said while Max Life had seen walk-ins to bank branches plummet almost 95 percent by March-end, now about two-third of customers have restarted visiting the bank branches.

“Customers who have been visiting the bank branches (especially Axis Bank) have been cross-sold our products as well,” he added.

Also read: Live updates from COVID-19 outbreak in India

Banks have been categorised as essential services despite the COVID-19 lockdown to minimise spread.

Due to COVID-19, face-to-face business traditionally done through agents has come to a halt across insurance companies. This is being replaced with electronic sales.

At Max Life, the company is working through a core team for managing the COVID-19 pandemic. Viswanand said the business has moved from ‘face-to-face’ to ‘home-to-home’.

“Under our plan, about 10,000 of the top 40,000 agents of Max Life have been being trained on selling online including how to pitch, explaining product features as also cross-selling,” he added.

As far as April 2020 new policy sales are concerned, Viswanand said the numbers were ‘flat’ compared to a year-on-year basis, although he didn’t specify exact numbers. This could mean the numbers are similar to the same period in the previous year. In April 2020, Max Life sold 25,266 policies with a new premium of Rs 201.55 crore.

As a part of the cost savings exercise, Max Life has decided that the increments for FY21 will be on hold for six months.

“The company is going ahead with all junior-level promotions. However, this process for middle and senior management is on hold until H1. However, Max Life is paying the full bonuses and incentives that are due,” he added.

For Max Life, the business is slowly moving online. Viswanand said there has been a 15 percent increase in the website transaction.

“Overall, there has been a rise in search traffic for life insurance over the past few weeks. Protection plans are in demand due to the awareness around term plans following the COVID-19 situation. Our idea is to find growth through cross-selling to our customers,” he added.

For Max Life, Viswanand said 20 percent of the new premiums in April came from protection plans. Protection refers to pure term plans that pay a lump-sum amount to the dependants of the policyholder in case he/she dies during the policy term.

Life insurance companies saw a 32.2 percent year-on-year (YoY) decrease in the new premium collection to Rs 25,409.30 crore in March 2020 amidst the coronavirus pandemic leading to a lockdown across the country. However, for the entire financial year (FY20), the life insurers saw a 20.6 percent YoY increase in first-year premiums at Rs 2.58 lakh crore.