Axis bank may pick up 20%-30% stake in Max Life

Mohit Talwar, vice chairman, Max Group and Managing Director, Max Financial Services said, “The proposed long term partnership between Axis Bank and Max Life is a natural evolution of what has been a highly productive and mutually beneficial affiliation. It will infuse fresh impetus into the teams in both companies and will motivate them to serve customers effectively and efficiently. I believe that this will be one of the most value-accretive partnerships in the Indian life insurance industry. ” 

 

Mumbai:

Axis Bank, Max Financial Services Limited (MFS) and its subsidiary Max Life Insurance Company Limited (Max Life) today signed a confidentiality and exclusivity arrangement to explore the possibility of Axis Bank picking up 20 per cent -30 per cent in Delhi based Max Life. 

 

Max Financial Services and Max Life had joint board meeting on Thursday and the former has informed the Bombay Stock Exchange that today it has signed a confidentiality and exclusivity arrangement to explore the possibility of Axis Bank to enter into a long-term strategic partnership with Max Life.

 

The transaction will be subject to applicable regulatory approvals, satisfactory completion of due diligence, execution of definitive documentation and satisfaction of other conditions, including the necessary corporate approvals.

 

The board of Max Life has also extended its existing bancassurance tie-up with Axis bank for another 15 years, The existing bancassurance tie-up with  Axis Bank, contributing more than 54 per cent to Max Life’s revenue, would be expiring in 2021.     

 

Mohit Talwar, vice chairman,Max Group and Managing Director, Max Financial Services said, “The proposed long term partnership between Axis Bank and Max Life is a natural evolution of what has been a highly productive and mutually beneficial affiliation. It will infuse fresh impetus into the teams in both companies and will motivate them to serve customers effectively and efficiently. I believe that this will be one of the most value-accretive partnerships in the Indian life insurance industry. ” 

 

Amitabh Chaudhry, MD and CEO, Axis Bank, said, “At the Bank, we constantly keep assessing various strategic opportunities and we see a potential for greater participation in the under-penetrated life insurance space. We have had a long standing bancassurance relationship with Max Life and the on-going discussions are a step further to deepen and strengthen this strategic partnership. The successful completion of the proposed transaction is expected to create significant value for all stakeholders.”

 
Analjit Singh, Founder and Chairman, Max Group, said,“The Max Life-Axis Bank partnership is a natural. The partnership has already set multiple benchmarks in the life insurance industry for policy sales, customer retention, rigorous training to ensure need-based policy writing, technology integration etc. The strategic interest of Axis Bank in Max Life will lead to the much awaited permanence and allow both companies to work towards an enduring future for policyholders and other stakeholders. We also believe that the potential transaction will provide a fillip to the life insurance sector overall.”

 

Max Life is currently the largest non-bank owned private life insurer in India. Max Financial Services presently holds a 72.5 per cent stake in Max Life while Mitsui Sumitomo Insurance and Axis Bank hold 25.5 per cent and 2.0% stake respectively.


Axis Bank and Max Life have had a successful bancassurace (banca) arrangement for nearly a decade. The new premium generated through this banca arrangement has aggregated to over Rs 12,000 crore over this period, while maintaining high persistency. Both companies have invested extensively in product and need-based sales training, thereby leading to consistent increase in productivity.

 


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