Axis as promoter brings stability: Max Life

Mumbai: becoming a promoter of Max Life has reduced pressure on the life insurance company to diversify its distribution channel. The private lender accounts for 55-60% of the insurer’s sales and this was creating pressure on Max Life to ensure certainty of relationship.

Max Life MD & CEO Prashant Tripathy said that the transaction removed uncertainty over third-party distribution channel. Axis Bank as a promoter makes the private lender a permanent, stable distribution channel.

Axis Bank has been distributing Max Life’s products for almost a decade. Tripathy said that with this bancassurance partnership becoming a joint venture, there will be deeper tech integration and use of analytics-based technology. “Those with deep domain expertise in investment, people & technology and solid track record of retail financial services are going to participate in our board,” he said.

Axis Bank became a co-promoter of Max Life following the private lender’s acquisition of a 13% stake in the life insurance company this week. Max Life’s board will be recast with three Axis Bank nominees. Further, Axis Bank entities will have the right to acquire another 7% in the private insurer.

In February 2020, the partners had announced that Axis Bank and its two subsidiaries — and Axis Securities — collectively own a 12.99% stake in Max Life. The life insurer will carry a tag line stating that it is a Max Financial and Axis Bank JV.

In the last five years, Max Life has been expanding 18-20% year-on-year. The company has been growing its share of premium from the sale of protection policy, which already accounts for 10% of the premium. A large chunk of the protection covers is sold online with 12% of the total premium coming from online sales and half from the company’s website.