Thank you very much. We will now begin the question-and-answer session. The first question is from Shreya Shivani from CLSA. Please go ahead.

Sir, just wanted to check on two things. First is on the surrender value regulation. We have heard your peers speak about that they are using a different combination of claw-back or progressive commissions and that's how the structures are currently under discussion with distributors. Where are you guys on this conversation? Are the deals sealed? Most of your peers have said that the industry will take another quarter for this entire dynamic to settle down. So, some commentary around that wo uld be useful. And second, sir, on this Axis, use of Axis Bank in the name, Axis in the name, what sort of regulatory approvals are required here? We are saying it can come through in the next quarter. Will RBI be included in approving this? Some color around that would be useful.

Thanks, Shreya. I will take both the questions. On surrender income, my commentary is consistent with what the industry peers are saying. We have had a detailed conversation with a large set of partners already and their proposals which are a combination of all the things that you mentioned. I am very optimistic that from our perspective we will be able to close it in less than one quarter. With smaller distribution partners, we are engaging in that discussion right now. And we are really optimistic that all that will get settled over the next few weeks. As far as the approval of branding is concerned, as you know, we need to go to ROC, followed by an approval from IRDAI for the name change. Those are two approvals which are required. We don't require any approval from RBI. So, hopefully, the turnaround time to do that will be close to 45 days. And I am very optimistic that hence within next quarter we will be able to launch our brand.

The next question is from Swarnabh Mukherjee from B &K Securities. Please go ahead.

So, first, I wanted to understand regarding the margin front. So, if I were to look at Q2 vis-a-vis Q1, this is around 600 basis points improvement that has come through. Just wanted some quantification from your side that how much of this would have come from operating leverage and how much would have come from the product mix. Because at least at macro level, it looks like that product mix have, you know, impact might be relatively smaller, but if you could give more color on that. And also, whether you like a couple of your peers had commented that the yield curve impact were absorbed in terms of the non-PAR products. So, have you done the same as well? And whether that is part of this number, how much in basis points terms maybe had impacted the margin ? That would give us some color on what could be going ahead. And also if your guidance changes because of that, because this margin came out strong in this quarter, whether there would be any change in the guidance? Secondly, sir, in terms I wanted some color on the break up that you generally provide on the sub segments in your proprietary channel, what has been the mix of the direct channel, the e -commerce and the agencies in your prop channel this quarter and the prior year same quarter. So, that would be helpful. And how the commission structures are panning out in the e -commerce channel, because I think for 1H you have mentioned that there has been more than 100% growth in this channel. So, I just wanted to understand that. Just one last one on the structure simplification process risk if you can highlight.

Let me make an attempt to answer some of the questions and I will lean on Amrit to share with you the numbers. I think, with respect to the advantage or margin increase, you may recall that we mention every time that when we come up with our margin numbers, we take expenses on actuals. And hence, if you were to look at last many years, our quarter 1 margins are smallest and every passing quarter the margin builds up. And this quarter was no different. If you remember, we had a 17.5% margin in quarter 1. If you look at our VNB in the first quarter, our VNB was close to 250 crore, now it is more than doubled. So, we do significant more sales in Quarter 2 compared to quarter 1. And hence, there will be a big advantage of leverage, first part. And I don't know if Amrit has those numbers handy. I will give it to him in a second. And the other one is a commentary that I mentioned to you. We have attached significant more riders this quarter to drive our margins up. So, hence, if you look at our product mix, our product mix is more or less similar. We have written similar amounts of ULIP also. But because of higher leverage as well as attachment of riders, we were able to drive more profit. So, riders we generally call as a part of our protection and health proposition. And you will notice that protection and health proposition has significantly increased in the first half. So, that is the big reason why it has happened. But I am going to hand it over to Amrit to give more color as well as talk about responses to other questions.

Thanks, Prashant. Swarnabh, so from quarter 1 to Quarter 2 walk, the 600-basis point improvement that you see, 500 basis point of that comes out of operating leverage and also strong volume growth that we have continued experience in the quarter. And around 100 basis point is a mix of the riders which we have been successfully able to actually attach across our product forms. And the second question that you actually asked was on the yield curve impact. Look, the yield curve impact is a regular course of business. There is a yield curve movement which will happen, and we will respond to those yield curve movements. We have done some bit of it during this first half. The non-PAR pricing has been adjusted at various points in time, though the movement in the last month has been a bit sharper. But keeping an overall view of competitive intensity and competitive actions, we will also continue to take those calls with respect to adjusting our non - PAR rates for the customers as well. I think you asked a question on the contribution coming out of our different channels. The agency has at an overall level contributed around 21%, 22% last year. It has a similar level this year as well. The CAT channel also contributed around 9% last year. It is at similar levels this year as well. And the e-commerce contribution is actually up from 9%. It has moved to 15%. So, there is the e -commerce growth which you can see of over 105% in the first half is causing to an improvement of share of the e- commerce business. Any additional?

Yes, a couple of things. One was whether there is any change in the margin guidance that you had given because of the better margin profile that came through this time and maybe the ri der attachments are growing. So, they would like to change that. And the second is on the structure simplification process, if there is any progress, if you want to share.

So, I think on guidance, we will stick to whatever we had been saying at the start of the year. You will appreciate that it's not a normal period that we are entering into from a regulatory disruption that has come in play and it will require this quarter 3 some bit of stabilization to happen. But keeping the overall guidance in view that we do aspire for double-digit VNB growth and a strong AP E growth and VN B margins would be an outcome of some of those things. So, we will kind of continue holding to those particular guidance.

On the structure simplification, we don't have any updates beyond whatever we have shared so far. We are working and we are observing.

Do you have any timelines in mind for that?

I think the moment we have visibility to timelines, we will come back to you. It is going to be a time-consuming process, and I think we will make an attempt to do that over the next few quarters is the way I will put it.

The next question is from Supratim Datta from Ambit. Please go ahead.

So, my first question is on the growth side. ULIP has been growing very strongly and this has not been the case only for you but across the sector, ULIP has been growing very strongly. Just wanted to understand what in your experience suggests that when the market slows down or when things start to stabilize, how easy is it to switch from ULIP to other products and what could be some of the levers that you could use to shift the growth from one product to the other, if you could give some color on that and what your past experience suggests, particularly given we could enter a period where you could see rate cuts as well ? If you could g ive some color on how life insurance products during rate cut period plays out, that would be very helpful. And the next question is on the EV walk. So, there seems to be a positive operating variance that you have been holding for this half. Just wanted to understand that what has resulted in this positive operating variance? If you could give some color on that, that would be helpful.

So, I will take that. I think growth from U LIP definitely is a phenomenon and this is not happening for the first time. In the past also, there is a strong correlation on ULIP growth with respect to market uptake and over the last few quarters we have seen the share market perform well and hence ULIP picks up. In past, we have witnessed that life insurance industry has been able to maneuver the change quite well and so have we. There have been many quarters where... where our growth or our ULIP mix will go up to between 40 % to 45 %, it will fall between 35% to 40%, but we have more or less maintained that trajectory. I don't expect a big impact on account of ULIP transition. If at all, it will be very marginal. In terms of EV walk and operating variance, positive variance, operating variance , which is a minor number, is because of some of the upsides that we have seen from our mortality experience.

And just one clarification. So, on the name change or rebranding, would it be a joint name that you are proposing like Axis Max or Max Axis, or how would that be? If you could give some color.

I think your expectation is correct . I can't tell you whether it will be Axis Max, Max Axis, but yes, it is going to be a combination of both the names.

The next question is from Prayesh Jain from Motilal Oswal. Please go ahead.

Sir, firstly, just extending the point on the rebranding, which channels do you, in the survey or the feedback that you would have received from the third party, which channels would you expect to benefit the most out of this? And we have already kind of been delivering very strong growth on APE front . So, on this base also from a , say, two to three-year perspective, what would be your growth aspirations considering the rebranding?

Thank you very much. That's a very good question you asked, and it is something very, very strategic. From our point of view, of course, Max Life Insurance is a prominent brand . Within life insurance space, we are seen as experts in life insurance, and we have had an incredible journey so far. However, Axis is a larger financial services conglomerate, and it has presence in many, many more cities, tier 2, tier 3, smaller part of India where perhaps Max Life brand is not as strong. And hence, we kick started , and this is not really something which was guidance from shareholders. Actually, management team picked up this exercise to look at any opportunities that may arise by having the strength of Axis Bank associated with Max Life Insurance and we actually talked to almost everybody. As you know, we are expanding in smaller cities. We opened 100 branches over the last one year . We talk to agent advisors . We talk to current customers. We talk to prospective customers . We talk to employees of Axis Bank, sellers of Axis Bank, seller for other banks. And I think across all cohorts, we found that the strength of both brands coming together was more prominent than Max Life on its own. So, hence, the management team made a request to our Axis set of shareholders along with Max's shareholders to allow us to use a brand which kind of carries the strength of both the brands together. And I am very happy and lucky that it's been allowed. So, we will take that on board. It also, in a way, answers some of the questions that investors and analysts have over and over again come and ask us about seriousness, the ownership of the agenda of Max Life Insurance growth by Axis Bank. I would like to unequivocally communicate that it is reflective, the ownership of the agenda, the growth of Max Life's agenda by Axis Bank is quite vested in the decision that Axis Bank has chosen to lend its name brand to Max Life Insurance. It goes to that extent. So, it serves to the purpose of really reflecting and demonstrating to the entire world that both the companies are going to work together, and we have very deep interest in building life insurance business in India. I think the advantage, a distinct advantage that we are going to get is also with sellers of Axis Bank where we have an open architecture situation. And I think having a common brand or having Axis brand attached to Max Life Insurance will definitely give some bit of distinctive advantage to Max Life Insurance in the minds of the sellers. We already are in the counter-share range of 65% to 70% and we have maintained that. Over and over again, there have been questions around it. We have maintained it. So, honestly, from all counts, I think this was a very positive decision that I was personally passionate about and I am happy that they're moving in that direction. Our growth has been strong. Your observation is right. We are doing very well, and I think with these changes or with the strategic decisions that we are doing, one will make an attempt to grow even faster. We have deep aspirations to be among the top three players and I think we will continue to pursue that journey with strength and with determination.

Thanks for that elaborate answer. And secondly, from a VNB margin perspective in the second half, how do you see this panning out given that the surrender charges would kind of come in and probably you will have a rebranding cost that would come into your numbers, and also the commission structures are still being discussed and not yet finalized? So, do we see the margins kind of coming up in Q3 and then kind of possibly a more normalized number in Q4 ? How do we see the margin kind of panning out? And from a, say, again, from a two to three -year perspective, do we see that the VNB CAGR would be similar to the A PE CAGR or how should we kind of look at from a two to three-year perspective?

Yes, I think margin is something which is quite dear to us. And on all the discussions that we do internally, margin finds a very important place. However, over the last two or three years, you would have seen that we are trying to balance market share growth with margin. One would be very happy if we are near about 24%, 25% margin, yet being able to maintain the growth trajectory on APE the way we are doing. Last year, the margin was 26.5. The year began without any surrender impact. We had given guidance of being between 25 to 26, that kind of number, close to about 25%. The surrender guidelines have come, and we have spoken about 100 -200 basis point impact. So, really, I think our margin should be in the range of 23 to 24 for the full year basis. I am being bold in giving some kind of guidance in a very fluid environment. So, with one quarter here or there, I think on a run rate basis, we should try and make or try and come close between 23%, 24% for the year. That will be our attempt. And over a medium-term basis, when I say medium term, over three to four quarters, we should try to cover up this d elta which has come. And as demonstrated in this quarter, we have several initiatives which are running to optimize for margin. So, we will continue to do that. I think the cost of rebranding; I would count it out because that's honestly going to be a one-off cost. And hence, you know, one should look at margins independent of that. But you are right. The next two quarters will be in that sense, especially this quarter is going to be dynamic because of how surrender income regulations are settling. But one would definitely make an impact in a very genuine effort to hold the margin at the levels where we are or improve further.

Now, this last question. How has the first 22 days of October been under the new regulations with respect to growth or with respect to product mix, any difference from what you would have seen in the first half?

Honestly, I think that's something which I will be running afoul talking about the growth rate. Let the IRDAI numbers come at the end of the month. I think it requires your patience. I don't have any reasons to worry.

We take the next question from Sukant Garg from Equ ible Research. Please go ahead.

Just a little bit old school questions here. What would be the bind rate currently in the policy Max Life Insurance?

Can you repeat your question?

What would be the bind rate, the policy conversion rate against the quotes that's been generated?

We have the conversion rates, Amrit.

It's generally 10% conversion rates is what we observe.

And it varies by channels also.

And it does vary depending upon channel, bank conversion rates are slightly higher. E-commerce conversion rates are more tougher , and agency conversion rates and direct link conversion rates are between 8% to 10%.

So, 10% is the overall for the quote generated against the policy conversion. That could be said.

That's right. Customer meetings are done to policy converted.

That is 10%.

Yes.

And what would be the revenue per policyholder and average cost per claim approximately?

Sorry, revenue and what? Claims per policy you asked.

Revenue per policyholder and average cost per claim currently.

The ticket sizes you mean. You mean the ticket size of every policy?

Yes.

That's right.

Yes, 1 lakh per ticket size on the regular policies. Sorry, I don't have the answer to the second question. If you could email me and Amrit, we will come back to you with specific answers if that works.

I mean, if you are looking for case sizes in the investor release on Page #46, we do provide average ticket size per policy. On average, as Prashant mentioned, it is Rs. 1 lakh for all products put together, but it does vary depending upon the product that is being sold. So , it can be as low as 40,000 in a protection design going up to as high as Rs. 1.50 lakh in our annuity kind of design.

The next question is from Madhukar Ladha from Nuvama Wealth Management . Please go ahead.

Just I am not sure whether any of the previous participants have touched upon this. But can you talk a little bit about what is driving growth within the proprietary channel, so the online channel and the agency channel , if you could give what is the growth for each online direct and the agency?

We seem to have lost the line from Mr. Madhukar. We will move to the next question. The next question is from Avinash Singh from Emkay Global. Please go ahead.

So, growth has impressed in the first half. And the growth is coming across channels and to be fair even product-wise growth is quite good. Now when you move to H2 , there are kind of a couple of external factors that we get including your surrender regulation changes probably maybe limited, but some disruption on the product side and also some negotiation on the payouts. Additionally, the month of October is a very festive kind of a month where you have the Dasara, Diwali led disruption. So, how are you seeing the growth trend so far? And what sort of expectation will you have that, I mean, in this background? What kind of a growth I mean that you can deliver in terms of the APE in H2 or rather for the FY '25?

You asked a very relevant question. The good part is it just doesn't apply to Max Life insurance. It is true of industry. And hence, I will peg my response to the industry growth rate. Whatever is the industry growth rate we will try to grow substantially more than, like, for example, the industry growth rate was 24%, we grew 34. So, one would like to have a plus 5% to plus 7% delta with respect to private industry growth rate. Let me put it that way. Very optimistic that the changes in regulation is not going to have a material impact on growth rates and we are at least from our side internally not cutting down on our growth expectations. So, one would make an attempt to maintain the trajectory of growth the way we have done in the first half. We are quite committed actually on a double -digit teens kind of VNB growth rate, and we will target that. Earlier, Avinashji, I did mention that one would make an attempt to hold the margin like we have done in Quarter 2 , despite having the surrender impact. But yes, you are right, there is some moving pieces, but I can only pivot back to every such regulatory changes. You can go back in history. Each time it has happened, Max Life Insurance has come out stronger. So, that gives me a lot of optimism. And basis all the discussions that we have done, made changes, etc., I think we are reasonably confident of what we are talking about.

Next question is from Sanketh Godha from Avendus Spark. Please go ahead.

Prashant, you said that your rider attachment is around 45%, which helped in the margin expansion. So, just wanted to understand what is the internal target you have, and to what extent it can negate the impact of say, surrender rules or product mix change to support the margins. 45 is already a very big number . Whether you see this number going meaningfully further up compared to what it is today ? That's on riders, first question. The second question is on annuity. It seems to have slowed down a bit, if I look at the numbers. Is it because last year you had a group and now you have not got it, that led to that moderation? If you can give a split between that number, annuity business into group annuity and individual annuity, and how individual annuity have behaved, that will be useful. And the last question is on cost. See, the growth has been 31%, but the overall cost has increased by 280 basis point on a year-on-year basis. So, ideally, there should be still an operating leverage given the kind of growth we have had. So, just wanted to understand is this cost because of capacity addition, like many more people in Axis Bank, or your investment in prop channel is still happening. If that is the case, then future investment leverage, or sorry, this operating leverage for these investments made in the channel, how do you see to play out going ahead? These are my three questions.

I will take the first one and then I will request somebody to focus on the next two. In terms of rider attachments, Sanketh, in our organization, we have chosen protection and health as a very critical area of growth. And we are very deeply working on improving penetration and we count that as protection, meaning pure protection, either return of premium kind protection or normal protection. We held products and we have an offering called SEWA, which was very, very good in terms of margin contribution as well as sales. And then the third one is riders, which we are trying very hard to attach to. A large part of the rider attachment that we did in last quarter was with ULIP design, which we sold through banks. We are at this point of time trying to rebalance the overall mix, and the efforts are on to reduce the proportion of ULIP, a nd we are seeing reasonable success in doing so. So, we will continue to work on optimizing the margin. If the ULIP proportion goes up, we will try to attach riders so that we are able to preserve margin or reduce or optimize the product mix in a manner that ULIP proportion goes down and the proportion of non -PAR goes up. Those will be attempts as you would appreciate these are moving pieces and continuous efforts are made actually to optimize our product mix so that the margin outcomes are optimal. For question two and three, I am going to hand over to Amrit to respond.

So, Prashant , a small follow -up. Is it fair to assume these riders' margins are meaningfully superior compared to even the protection in the overall country average?

It will be aligned to protection and a tad higher than protection , a nd significantly higher than company average.

I think on the two questions that you asked, one was on annuity and the second one operating leverage in the subsequent quarters. Annuity, as we did mention in the opening remark and also in the presentation, the retail annuity has grown at 18% for first half. But the group annuity, because we actually experienced a very large deal last year, a single one-off deal last year, there is a large decline in group annuity at the moment, around 60% decline. But if you adjust for that large deal, then there is a 60% growth. We are quite optimistic that this group annuity business also will pick up in the subsequent quarters as it kind of takes away the effect of that one specific large deal.

Amrit, can you split off your annuity into group and retail percentage mix?

So, around 173 is retail and 12 odd crore is group annuities for Super annuation annuities, on APE basis. This is APE, right?

Yes, 173 crore is retail and 12 crore is group. That's the way I see it.

Yes. On operating leverage, you are right. Actually, historically, you would have seen that as quarters progress where sales volume increases and OPEX, operating leverage kicks in , there is an improvement in margin which happens. We do experience anywhere between 200 to 300 basis point expansion in margins from what you have seen in Quarter 2 going forward as well because of that.

No, Amrit, my question was half to half comparison, that is first half last year to first half year. You had a growth of 31%, but ideally the cost ratio should have come down, but it has increased. So, wanted to understand this cost increase is largely because of man addition in Axis or investment in prop and how it will play out if you believe the investments are being done upfront, then how you see it playing out going ahead?

Right, so the total expense that has increased , which is around 28% increase , and obviously the individual business has grown by 31% . The APE has grown by 31% . The 28% increase, the OPEX, pure OPEX is actually around 21%, 22% increase and there is a large commission increase that is evident which some bit of it is rebase lining of commission between lines which is actually happening and planning out , and also the fact that we are aggressively pursuing some of the new accounts and group credit life businesses where generally the commission ratios are higher. Now with respect to OPEX, pure OPEX, there is obviously an increase which has been done towards the distribution workforce across our channels , and that distribution workforce does start showing up productivity gains as time progresses, whether it is in agency, whether it is in direct teams or whether it is in the new relationships of banks that we have added. So, that is largely the overall contours of how OPEX is panning out.

Next question is from Madhukar Ladha from Nuvama Wealth Management . Please go ahead.

So, I just wanted to get a sense of what is driving growth within proprietary channels, the online agency and direct sub -sort of channel growth out there. And second, if you look at the new business strain, that has also gone up substantially. I mean, it is good to see that the back book surplus has grown , but new business trend has actually gone up quite sharply in this quarter and in the first half. So, any particular reason on that ? Is it more resolving driven or is it more sort of higher commission payouts or something of that sort of actually payouts going up o ver there? Some color on that will be helpful. And can you break down the economic variance between fixed income and equity?

I will request Amrit, you take this, the question.

So, you asked three questions. The first one is actually what is driving the growth across our proprietary channels. In agency, clearly our top agent engagement programs and overall top agent momentum is very strong and that is actually helping us. In addition to the fact that the expansion of capacity , which is helping with productivity gains coming through the years, is also an aiding force in what has been driving the growth momentum within agency channels. In direct selling teams , actually it is to do with more and newer pools of customer segments to whom we have started doing cross -sell and up -sell, which is actually aiding that growth. And those new pools have come as some of the customers wh o are unmapped at Axis franchise, customers whom we have had now e -commerce relationships. Those kinds of additional pools have helped. And obviously we have invested in people to go and kind of tap into these pools across our cities and that is enabling the growth momentum in the direct channel. And largely in the e -commerce channel, I think we did mention around two years back that savings is a business that we are now entering into. And there has been strong savings momentum in that particular channel and which we have from not being present two years back have kind of come to a pol e position with respect to the counter share that we own in that particular market. That has helped. And the underlying protection growth we continue to remain leaders in that business on a whole. So, that's the first one. I think the second question you asked was on the strain. You saw a rise in strain. The reason for the strain increase, one obviously is higher sales in protection, group credit life, and ULIPs which actually intrinsically have higher NB strain. And that's largely the reason why the strain has grown. It's a factor of business mix and business growth coming out of these specific segments. And all these segments, unit-linked, credit life, and protection have higher strains initially unlike participating design policy. Last question you asked was on the economic variance. What proportion? Two-third of that is attributable to equity gains and one-third to the debt gains.

The next question is from Nidesh from Investec. Please go ahead.

The question is on e -commerce channel. So, what is driving such sharp growth in the channel almost 100% Y -o-Y? Definitely, we must be gaining significant counter share. So, what we are doing to drive that? And second is if you can break down the e -commerce channel, what percentage of business is coming from your own website, from the e -commerce channel, in the e- commerce channel?

Thank you, Nidesh. And greetings to you. I think we historically on the e -commerce channel, this you remember, we were always very good on protection. We have been number one protection for many years and that was our area of focus. However, our presence on saving space was quite limited, and we were like a fourth player if we were to add leaving some protection together. About a year, year and a half ago we decided that we need to be comprehensive , this is an area of growth . And if you look at our analyst presentations , you will find the number one initiative as being leader in the e-commerce space . So, we took tangible steps to consolidate our presence in the saving space, and that's been the key reason of our growth. Generally, we sell a combination of ULIP with non-PAR on e-commerce platforms. And over last few quarters, I think index-linked designs have been very famous or very popular, and that's driven our growth at e-commerce. On the direct website , that's something that we always try to rebalance , and my sense is we will have close about 30 % to 35 % of this sale actually comes from directly our website.

So, that would also be a pretty large number, 30% of your e-commerce.

Yes, it's growing. Both are growing quite rapidly. Both the aggregator space as well as our own website, both of them have grown remarkably.

Yes, direct growth is up 90% and aggregators are also around 110%. So, both have grown quite handsomely.

And from a product level margin perspective, if you sell through aggregator or if you sell through other channels, how differential is the product level margins?

I think it comes similar, Nidesh. Honestly, it comes similar, not very different. Even coming to our website also requires investment in terms of generating traffic and search etc.

Thank you. We will take that as the last question . I would now like to hand the conference back to the management team for closing comments.

Thank you everyone for attending our Earnings Call. We continue to look forward to more such interactions and have a good day.

Thank you very much. On behalf of Max Financial Services Limited, that concludes the conference . Thank you for joining us . Ladies and gentlemen , you may now disconnect your lines.