Axis Max Life to act on listing after monsoon session, eyes margin stability
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As Axis Max Life gears up for a potential direct listing following amendments to the insurance law, Managing Director and CEO Prashant Tripathy discusses the company's growth strategy, evolving product mix, distribution performance, and regulatory developments in an interview with Shilpy Sinha. Edited Excerpts:We want to benchmark ourselves against the private industry's growth, with a goal to consistently outperform by 300–400 basis points. I would not read too much into April's numbers, for us or the industry, as it is typically the smallest month, coming right after a heavy March. Distributors tend to be slower in April. We grew at 24%, which I am pleased with, while the private industry grew around 2%. Things should pick up from here. I expect private industry growth to be in the low teens, and we should grow 300–400 basis points ahead of that.While we have consistently outpaced the private industry, you are right that growth has been slower than in previous years. That said, by the end of the fiscal year, both the industry and we delivered strong numbers, the private sector grew 15%, while we grew around 20%. For two consecutive years, Axis Max Life has posted 18% growth, almost double the private industry's average. Our market share has increased to 9.8%, up 37 basis points.Yes, we are very optimistic. It is not just the regulator-our shareholders, promoters, and management are aligned on this. Given our current structure, where our holding company is listed, collapsing the structure to directly list Axis Max Life is the efficient path. We are working towards it and are hopeful that the Insurance Amendment Bill will enable us to proceed. Once that is approved, we will move quickly.Yes, immediately. That is what we have conveyed to the regulator. I appreciate the regulator's push for more listed insurers, not only to foster competition, but also for greater transparency and investor confidence. We are ready and would be among the first to go for a direct listing. Our current structure is suboptimal, and a direct listing makes strategic sense.Our philosophy has always been to work within a target margin range while focusing on growth. We are not looking for high margins of 27–28%. Our target range is 24–25%, and we delivered 24% this year. If we achieve higher margins, our VNB (Value of New Business) growth will exceed sales growth. But 24–25% is the corridor we aim to operate in.Our proprietary channels performed very well, growing by 30%. Bancassurance grew by around 13%. With Axis Bank , there were some challenges around product mix, which we have been actively addressing.Yes, and it's not just us, this is a industry trend. Due to liquidity concerns, banks focused more on building deposits, with fee-based income, including insurance, taking a back seat. But this is changing. Deposit growth is picking up, and we expect renewed focus on fee income. For Axis Bank, we are targeting a rise in contribution to around 15%. Besides Axis Bank, which is a key promoter and strong partner, we have longstanding relationships, like the one with Yes Bank and have also added several new banking partners in recent years. Collectively, these will continue to drive growth.Non-PAR products slowed industry-wide due to strong equity market performance and rising yields. As markets stabilize, we expect a renewed focus on non-PAR products from our side. Last year, ULIPs accounted for 46% of our product mix. This year, we expect non-PAR to increase by 3–4%, with par products also gaining. Our ideal product mix would be- ULIP at 35–40%, non-PAR around 30%, par at 15–20%, with the remainder split between annuity and protection products.
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