Axis Bank, Max Financial Services Limited (MFS) and its subsidiary Max Life Insurance Company Limited (Max Life) have inked a confidentiality and exclusivity arrangement in a bid to explore the possibility of Axis Bank entering into a long-term strategic alliance with Max Life, on Thursday.
Max Life is currently India’s largest non-bank owned private life insurer. At present, Max Financial Services presently holds a 72.5 percent stake in Max Life while Mitsui Sumitomo Insurance and Axis Bank hold 25.5 percent and 2.0 per cent stake respectively.
Axis Bank and Max Life have had a successful bancassurance (banca) arrangement for about ten years. The new premium generated via this banca arrangement has aggregated to more than Rs 12,000 crores over this period, while maintaining high persistency. Both companies have invested expansively in product and need-based sales training, thus leading to a constant increase in productivity.
“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,” said Amitabh Chaudhry, MD and CEO, Axis Bank, while welcoming the ongoing discussions.