Axis Max Life Insurance aims to maintain its new business margin in the 24% to 25% range in the current financial year, according to Chief Financial Officer Amrit Singh.
The value-of-new-business growth will be 300–500 basis points higher than the market growth rate, he told NDTV Profit in a conversation on Wednesday.
The VNB is a key metric used in the insurance industry to evaluate the profitability of an insurer through its new businesses. It primarily takes into account the present value of the expected future profits generated from policies sold during a financial year.
"We expect some moderation due to overall market weakness affecting ULIP designs, which will likely favour traditional products. We expect margins to remain in the 24% to 25% range," Singh said.
The company achieved a 20% increase in individual-adjusted first-year premiums in FY25, which was two times the industry's 10% growth rate and 500 basis points above that of the private insurers, according to Singh.
This follows a strong FY24, where the company grew at 16% against an industry average of 8%. "Over the two years, we've sustained an 18% growth rate, making us one of the fastest-growing life insurers among top players," he said.
The company's Q4 margin reached 28.1%, surpassing market expectations and improving sequentially from 23.2% in Q3. This was driven by optimised product designs and a focus on margin-accretive categories. For FY25, margin stood at 24%, aligning with market guidance, despite some pressure from a shift towards unit-linked insurance plans.
Commenting on the impact of new surrender value regulations introduced in October 2024, he said Q3 saw a 100-basis-point hit to margins. However, product tweaks and pricing adjustments in Q4 largely mitigated this. "Going into FY26, we don't expect a significant impact on our margin profile," he said.
Axis Max Life climbed to the number four spot in market ranking in FY24 and has held the third position for the past six to seven months, he said. Singh underlined the focus on expanding distribution through proprietary channels such as agency, direct selling and e-commerce.
These now contribute 45% to the annual premium, compared to 34% to 35% a few years ago. These channels grew at a two-year CAGR of 27%, with 26% growth in FY25 alone. The Axis Bank channel, a key partner, grew by approximately 10% and contributes around 48% to the company's AP.
The protection segment grew by 35% in FY25. Singh anticipates some moderation but targets growth above 20% in FY26, building on the post-Covid recovery. The protection segment is a strategic priority alongside health and annuity products, he said.
Regarding the proposed merger of Max Financial into Max Life, he expressed optimism about simplifying the corporate structure. It will depend on amendments to the Insurance Act, which are anticipated to be tabled in the monsoon session of Parliament.
"Once there is clarity on that, we will engage with the regulator. Any scheme of arrangement or a merger process is a 12–18-month journey post that," he added.
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