April 2018 Max Group Vision To be the most admired corporate for - - PowerPoint PPT Presentation
Max Financial Services Limited Investor Presentation April 2018 Max Group Vision To be the most admired corporate for service excellence Positive social impact Culture of Service Sevabhav Helpfulness Mindfulness
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Sevabhav Excellence Credibility
Max Group Vision “To be the most admired corporate for service excellence”
Health Insurance, JV with Bupa Plc
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Evolution of Max Group—Strong history of entrepreneurship and nurturing successful businesses
1985 1993 2000
Forays into Penicillin bulk pharma Enters Telecom in JV with Hutchison JV with Gist Brocades (Asia’s largest Drug manufacturer ) Shift from B2B to B2C businesses:
Hutchison
Fund raising ~ USD 360 Mn
2005 2011 2007 2009 2012 2013 2014 2015 2016
NYL exits and JV with MSI in 2012
general insurance group
USD 425 Mn
bn
LHC inducted as JV Partner in MHC
chain in South Africa
for USD 81 Mn in MHC
MHC invests USD 120 Mn
Enter Senior Living business, launch first community in Dehradun with 200 units Max India demerged into 3 listed hold cos Landmark Acquisitions by MHC
USD 40 Mn in 340 bedded Pushpanjali hospital expandable upto 540 beds
USD 100 Mn in 230 bedded Saket City hospital, expandable upto 1200 beds Note: USD rate considered at 64
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Max Group – Corporate Structure
Health & Allied Business Life Insurance Business*
Max Group - Sponsors
Manufacturing & Other businesses Holding Companies Operating Companies
70.75% 50% 51% 100% 51%
Group CSR Arm
30.3% 41.0% 38.1% 100% 100% 100%
Sponsors stake in Max Group holding companies
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Max Group Overview
USD 2.6 billion+ Revenues… 9 Mn Customers… 23,000 Employees… ~65,000 Agents Strong growth trajectory even in challenging times; a resilient & diversified business model Steady revenue growth and cost rationalization leads to strong financial performance Well established board governance….internationally acclaimed domain experts inducted Diversified ownership…..marquee investor base Superior brand recall with a proven track record of service excellence Strong history of entrepreneurship and nurturing successful business partnerships
1 2 3 4 5 6 7
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Max Group : Continues to grow from strength to strength
Group EBITDA (USD Mn)
69 82 97 112 160 FY'13 FY'14 FY'15 FY'16 FY'17
Group Revenue (USD Mn)
1,465 1,664 1,944 2,225 2,625 FY'13 FY'14 FY'15 FY'16 FY'17
Note: Adjusted for one-offs
7 Promoter 30.3% KKR 6.7% Mutual Funds 27.8% FII- Others 22.7% Public 12.4%
Shareholding Pattern as on 31st Mar 18
▪ KKR ▪ Aberdeen ▪ Baron Emerging Market Fund ▪ Vanguard ▪ Wasatch ▪ Jupiter ▪ Norway Government Pension Fund ▪ Reliance Mutual Fund ▪ ICICI Prudential Mutual Fund ▪ Motilal Oswal Mutual Fund ▪ Aditya Birla Sunlife Mutual Fund ▪ HDFC Mutual Fund Shareholding concentrated with Marquee Investors
High pedigree of long term investor base
Number of outstanding shares : 26.84 Cr.
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Indian Life Insurance Industry has evolved rapidly; significant headroom still available for growth due to low penetration and favourable demographic profile
Strong parentage, marquee investors, eminent Board, strong management team and robust governance framework
Differentiated Life Insurer with key strengths of multi-channel distribution, balanced product mix, operational excellence and digital capabilities
One of the fastest growing players with equal emphasis on profitability – Among the top quartile across the comprehensive measures of success
With US 1.1 Bn+ of MCEV as at 30th September 2017, operating RoEV of 17% and new business margin at 18-20% are amongst the best in the industry
Key Summary Messages
Strength in business model recognised through several Awards and Accolades that Max Life Insurance wins every year
0% 2% 6% 15% 25% 34% 36% 50% 57% 52% 46% 37% 38% 38% 49% 52% 10 12 12 13 16 21 40 53 47 55 50 48 47 45 41 44 53 10
FY02 FY01 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY14 FY13
Phase 1
Joyful Entry (2001-2003)
Phase 2
Expansion (2004-2008)
Phase 3
Discovering New Normal (2009 onwards)
(In Rs 000 Cr)
FY15
Source: IRDAI and Life Council for FY 16-17
FY16
Private market share in terms of Ind. Adj. FYP
Private players count
Overview of Life insurance industry in India
11 12 12 13 14 15 17 21 22 22 23 23 23 23 23 4
92% 31%
17%
8% 100% 86% 1% 7%
2%
16% 14%
Growth: Private Growth: Industry
13% 17% 34%
>100% >100%
81% 2%
>100%
19%
>100%
FY17
21% 26%
23
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Industry Landscape (Apr’17-Feb’18): Industry grew by 22% driven by strong
performance of the private players (+28%) and LIC (+15%)
Source: Life Insurance Council | IRDAI
YoY growth Individual Adjusted FYP
8% 21% 27% 22% 8% 25% 21% 24%
Industry Max Life
Max Life’s private market share
FY’16 FY’17 Apr’16-Feb’17 9% 9% 9% 8%
Private Industry YoY growth
26% 28% 14% 25%
Significant proportion of the private industry’s growth driven by higher ULIP contribution.
Investor Release
Apr’17-Feb’18
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% of Life Insurance in household savings- India
Significant potential to expand both in savings and protection segment
Life Insurance Penetration (Premium as % of GDP), 2016
2.3% 2.7% 7.4% 7.2% 16.2% 16.7% China India South Korea Japan Hong Kong Taiwan
Level of Protection (Sum Assured as % of GDP), 2015
226% 260% 149% 60% 96% Singapore Japan Malaysia India Thailand
Life Insurance Density (Premium per capita – USD), 2016
47 190 2,803 3,599 7,066 India China Japan Taiwan Hong Kong 21.0% 17.0% 16.0% 19.0% 19.0% FY'12 FY'13 FY'14 FY'15 FY'16
Source: "Swiss Re: World Insurance in 2016"
Investor Release
Highly experienced and versatile Board of Directors providing strong and secure foundation
Founder and Chairman Emeritus
Chairman
Director
Director
Kitagawa Independent Director
Independent Director
Murthy Independent Director
Director
Director
and MD
Fellow of the Institute and Faculty of Actuaries. Served as the AA for Max Life from 2005 till 2011 Founder and CEO of Arka Capital Advisors. Previously served as MD and India Head at Warburg Pincus Responsible for Mitsui Sumitomo overseas life insurance business with 30 years of experience A founder team member. Appointed as CEO and Managing Director in November 2008 Founder and Chairman of Max
civilian honor, the Padma Bhushan Seasoned business manager with wide domain expertise built over 27 years in financial services Fellow of the Society of Actuary (FSA). She is a Principal of Erlen Street Corporation, Switzerland Serving on the Board of ONGC, LIC Housing, STCI, Infiniti Retail, APSFC, Max Bupa and NABARD Former IAS officer of 1977 batch and has served the government of India in various capacities Seasoned professional with 29 years experience in financial industries Director
Seasoned professional with 24 years of experience in Corporate Finance and Investment Banking
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Executive Management team with rich experience of insurance and strong Governance Mechanism
Max Life Management Team
Executive Vice Chairman and MD Rajesh Sud (16 years)
Sr Director and Chief Operating Officer (16 years) V Viswanand Director and Chief People Officer (5 years) Shailesh Singh
26 years
Organizations: GE, SRF Finance, Eicher Tractors
Director Marketing & Chief Digital Officer (12 years) Manik Nangia Director & Chief Distribution Officer (4 years) Aalok Bhan
25 years
Organizations: Standard Chartered Bank, ABN AMRO, RBS
Director and Appointed Actuary (8 years) Jose John
17 years
Organizations: Prudential UK Metlife UK
Director and Head - Legal , Compliance and Regulatory Affairs (3 years) Amitabh Lal Das Sr Director and Chief Financial Officer (10 years) Prashant Tripathy
22 years
Organizations: Tata Steel, GE
Director and Chief Investment Officer (3 years) Mihir Vora
21 years
Organizations: HSBC Global Asset Management, ICICI Prudential, Birla Sun Life AMC
23 years
Organizations: ANZ Grindlays Bank
17 years
Organizations: ABN AMRO, ICICI Bank, ICICI Prudential
21 years
Organizations: Yahoo, Sapient
Bank of America, ABN AMRO , ANZ Grindlays
Tenure at Max Life
Quarterly Board Meeting Board Sub Committees
Executive Vice Chairman and MD Executive Mgmt. Committee
Weekly EMC Meeting Monthly Senior Leadership Meeting Monthly Business Reviews Weekly Team / Functional Meetings Council Meetings Cross Functional Connects
Governance Mechanism
Central PMO to drive Strategic Projects 14 Shareholders Meeting twice a year at neutral locations
Shareholder
Monthly Shareholder Calls
Board
Shareholders Meeting interspersed with Board Meetings
To be the most admired life insurance company by securing the financial future
FY 2020-21
Caring Credibility Collaborative Excellence
is right
retirement solutions, delivered by our high quality Agency & Multi channel Distribution Partners
by supporting causes in health and wellbeing. Financial Strength Quality of Advice Service Excellence Superior Human Capital Value Driven Culture Corporate Governance
Vision Goals We Stand for Values Integrity Mission
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Long Term strategy is driven by our vision to be the “Most Admired Life Insurance Company”
» Quality of advice » Human Capital and Leadership depth » Differentiated distribution capabilities » Product suite focused on “Long Term Savings and Protection » Quality of Business » Strong & Distinctive Brand
What are we known for
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Our Strategy: Strengthen multi-channel architecture and leverage technology to continue profitable growth
Continue to chase profitable growth
agency channel and strong Banca relationships
and variablizing costs by leveraging technology
processes and better customer experience
Strong digital footprints Comprehensive multi-channel distribution model
Supported by eminent Board, strong management team and robust governance framework
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Investor Release
Private Market Share 9% [9%] Individual Sales Rs 2,639 Cr [Rs 2,103 Cr] Gross Written Premium Rs 10,780 Cr [Rs 9,216 Cr] AUM Rs 44,370 Cr [Rs 35,824Cr] Profit Before tax Rs 592*Cr [Rs 511 Cr] Net Worth Rs 2,509 Cr [Rs 2,024 Cr] Embedded Value* 6,739 [5,617] Policyholder Expense Ratio 13.4%^ [13.6%] Sum Assured 3,77,572 Cr [2,71,633 Cr] Policies in force (Individual in Lakhs) 39.12 [37.60] Solvency Ratio 309% [343%] Case Size 51,056 [44,566]
9,446 [9,259]
54,283 [45,275] Claim Settlement Ratio 97.1% [96.9%] Protection Mix 4% [3%]
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25% 24% 4% 20 bps 2% 39%
15% 20%
Financial Performance Summary: FY’17
16% 24% 17% 20 bps
60 bps
Figures in [brackets] are for previous year numbers (FY16) ; *Growth on Embedded value is operating RoEV;^ Excludes impact of One-off expense & Merger costs
20%
*FY17 numbers are adjusted for non-repeatable items and one-time non operating gains realization primarily from investment income
Market Share 8% [9%] Individual Adj. Sales Rs 1,876 Cr [Rs 1,590 Cr] Gross Written Premium Rs 7,852 Cr [Rs 6,993 Cr] AUM Rs 50,333 Cr [Rs 40,920 Cr] Profit Before tax* Rs 390 Cr [Rs 549 Cr] Net Worth Rs 2,502 Cr [Rs 2,310 Cr] Share Capital 1,919 [1,919] Policyholder Cost to Gross Premium Ratio^ 21.6% [23.8%] Sum Assured 4,69,067 Cr [3,68,353 Cr] Policies in force (Individual in Lakhs) 39.71 [38.05] Solvency Ratio 280% [330%] Case Size 51,994 [50,794]
9,934 [9,140]
54,405 [51,236] Claim Settlement Ratio 96.01% [95.54%] Protection Mix 5% [4%]
Figures in [brackets] are for previous year numbers (9M’FY17) *Profit before tax for 9M’FY17 was higher due to one-time non operating gains realization primarily from investment income ^Policyholder cost includes policyholder expenses and commission. Policyholder expense ratio is 14.7% for 9M’FY18
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18% 23% 4% 220 bps 9% 27%
2% 6%
Financial Performance Summary 9M’ FY 18
29% 8% 12% 47 bps
101 bps 1%
Investor Release
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Delivering consistent growth in top line and renewals coupled with driving cost efficiencies
Figures in Rs. Cr.
Ind Adj. FYP Renewal Premium Gross Premium FY 16 FY 17
2,103 2,639
Financial Performance
6,334 7,114
9M’FY17 9M’FY18
1590 1,876 4,709 5,214 9,216 10,780 6,993 7,852
25% 18% 12% 11% 17% 12%
Policyholder cost to Gross Premium Ratio 23.8% 21.6% 22.5% 23.5%
94 bps 220 bps Investor Release
FY 16 FY 17 Financial Performance
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Healthy and consistent profitability creating value to all the stakeholders while maintaining solvency above required levels
Figures in Rs. Cr.
AUM Profit(before Tax)* Solvency Ratio 343% 309%
511 768 549 390
280% 330%
35,824 44,370 40,920 50,333
50% 29% 24% 23% Abs 34% Abs 50%
9M’FY17 9M’FY18
*Higher 9M’FY17 profit is due to one-time non operating gains realization primarily from investment income
Investor Release
Expense to average AUM (Policyholder) 4.0% 4.3%
23 bps
4.1% 3.9%
24 bps
Rs in Cr 21
Assets under management- 23% increase Y-o-Y (crossed 50,000 Crore)
Linked fund vs Controlled fund Debt vs Equity Debt portfolio exposure to AAA rated debt is well above the regulatory requirement of 75%
Investor Release
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58% 55% 54% 47%
3% 4% 4% 5%
11% 9% 10% 9% 28% 32% 32% 40% FY 16 FY 17 9M'FY17 9M'FY18 PAR Non PAR- Protection Non PAR- Savings ULIP
Product mix basis Ind. AFYP
Balanced product mix with enhanced focus on long term saving and protection contribution
Investor Release
As on 31st Dec 2017
*PPT: Premium Payment Term
23 24 14 64 17 31 19 15 30 21 57 34 37 36 28 35 43 39 37 35 63
Product Type Average Policy Term (Years) Average Policyholder Age (Years)
Average Average
Average PPT* (Years)
Average
Endowment ULIP Whole Life Money back Pure Term GMIP/GIP Health Cancer Insurance Pension Annuity
11 10 53 16 30 9 15 30 21 1
35 25 16
Balanced product mix with focus on long tenor life coverage
Investor Release
Continuous improvement in persistency^ Steady retention capabilities High quality business franchise
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21% 21% 23% 24% FY16 FY17 9M'FY17 9M'FY18
Surrender to GWP
86% 89% 90% 89% FY16 FY17 9M'FY17 9M'FY18^
Conservation Ratio*
Superior customer outcomes and retention with continuous improvement across all quality parameters
79% 67% 58% 56% 43% 80% 70% 60% 55% 53% 83% 70% 62% 57% 53% 81% 73% 60% 58% 53%
13th Month 25th Month 37th Month 49th Month 61st Month FY16 FY17 9M'FY17 9M'FY18
*Conservation Ratio : Current year total renewal premium(excluding Group)/(total first year individual regular premium of previous year+ renewal premium (excluding group) of previous year-previous year premium from term completed policies, matured policies and policies which has ceased to exist due to death) Investor Release ^9M’FY18 conservation ratio and persistency lower due to one time impact of demonetisation in FY 17 and subsequent IRDAI notification for extending grace period.
Comprehensive multi-channel distribution with consistent contribution from proprietary channels
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Distribution mix basis Ind. AFYP
32% 29% 33% 31% 58% 58% 57% 56% 9% 12% 10% 13% 1% 1% 1% 1% FY 16 FY 17 9M'FY17 9M'FY18 Proprietary Axis Bank Other Banks Others
Investor Release
Highly efficient and productive agency channel with focus on quality of advice Strong Banca relationship with consistent growth
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Active Agent productivity (Rs ‘000 pm) Branch productivity (Rs Lakhs pm) 22.5 24.4 23.2 23.2 FY16 FY17 9M'FY17 9M'FY18
Highly efficient and productive agency channel and strong banca relationships with consistent growth
1,387 1,814
FY16 FY17
1,037 1,266
9M'FY17 9M'FY18
46.9 69.3 67.9 79.5 FY16 FY17 9M'FY17 9M'FY18
Investor Release
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efficient sales processes and better customer experience
Transforming Digital Interface
now being processed with 0 physical documents)
selling ; device mobility & voice enabled forms planned for sellers
digital assets (Corporate website, mSite, Buyonline) to single unified digital asset Re-imagining Fulfillment
insurability to provide frictionless journey
been applied digitally through fulfillment tool
has significantly improved by 40- 50% Digital Marketing and E Commerce
116% growth in YoY Annualized Premium without adjustment
seamless offline sales
entered through the digital door contributing 64% of total Sum Assured Seller Ecosystem
advisors enabled on mobile based tool for effective sales conversations and predictable revenues
data based insights for assistance in right solutioning
customer servicing tool (mPower) launched in Dec to increase agent productivity & customer retention
Areas of leverage for digital technology
Investor Release
Percentage of customers through digital door
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New Customer Acquisition through the digital channel
(ECS, bank transfer & Internet)
YoY growth in Online Renewal Premium
5% 11% 9% 19%
FY'16 FY'17 9M FY'17 9M FY'18
Investor Release
15% 113% 69% 116%
FY'16 FY'17 9M FY'17 9M FY'18
16 33 19 49
FY'16 FY'17 9M FY'17 9M FY'18
YoY Growth in Sales* NOP’s (‘000)
Fulfillment: Growth in direct to customer ecommerce sales
*Sales basis Ind. Annualized premium without adjustment
Business Impact
Lead scoring model to predict propensity
Filtering high fraud, high risk policies using predictive analytics Predictive modelling to identify risky policies for lapse and plan targeted intervention Targeted customer engagement strategy for cross sell Using a recruitment model to identify quality seller pool Sales Force Management Customer Acquisition UW Risk and Policy Issuance Lapse Risk & Retention Cross-Sell Superior Quality of Book Revenue Enhancement Revenue Enhancement
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Analytics center of excellence - Predictive models deployed across the value chain
Improvement in lead conversion from 3% (Pre-model) to 5% (Post-model) Highest conservation ratio Analytical campaigns account for more than 10%
sales Crude Death Rate reduction from 3.6 to 1.4 Improvement in quality hiring
Investor Release
NAV 2,398 NAV 2,610 NAV 2,547 NAV 2,414 VIF 4,192 VIF 4,532 VIF 4,532 204 306 20 21 196 Opening EV Value of New Business Unwind Operating variance Non-Operating Variance Closing EV (before interim dividend) Proposed Interim dividend Closing EV (after interim dividend)
6,590 6,946 7,142
30 Note: Figures in Rs Cr.
EV movement analysis: March 2017 to September 2017
Operating RoEV: 16.8%
payment of the interim dividend, the closing EV will be Rs 6,946 Cr.
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Awards and recognitions for Max Life
Best use of six sigma in banking and financial sector
Best Life Insurance company Best business leader – Sumit Rai
“Industry First” trend setter
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Setting higher benchmark with every award
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Finance Industry at World Quality Congress - Global Awards
Prize in Service, IT and ITES category at the 11th edition of CII - National Competition on Six Sigma
ratios”
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Awards and Accolades
* NACH: National Automated Clearing House ; POS TAT: Policy Operations servicing turnaround time
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Annexure
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Rank Company Individual new business premium (Rs Cr) Apr’17-Feb’18 Apr’16-Feb’17 Growth (%) Private Market Share (%) 1 SBI Life 6,865 5,057 36% 23.0% 2 ICICI Pru Life 6,637 5,702 16% 22.3% 3 HDFC Life 3,923 2,785 41% 13.2% 4 Max Life 2,468 1,996 24% 8.3% 5 Kotak Life 1,182 855 38% 4.0% 6 Bajaj Allianz 1,162 786 48% 3.6% 7 Tata AIA 1,061 771 38% 3.6% 8 PNB MetLife 995 799 25% 3.3% 9 Birla Sunlife 800 707 13% 2.7% 10 Canara HSBC OBC 684 461 48% 2.3% Others 4,025 3,345 20% 13.5% Private Total 29,803 23,263 28% LIC 22,737 19,700 15% Grand Total 52,540 42,963 22% Market Share of private players 56.7% 54.1%
Max Life maintains 4th rank among private players
Key Business Drivers Unit Quarter Ended Q-o-Q Growth 9 months Ended Y-o-Y Growth Dec'16 Dec'17 Dec'16 Dec'17
a) Individual Adjusted Premium
654 764 17% 1,590 1,876 18% b) Gross written premium income
2,775 3,044 10% 6,993 7,852 12% First year premium 659 754 14% 1,591 1,853 16% Renewal premium 1,852 1,978 7% 4,709 5,214 11% Single premium 264 312 18% 693 785 13% c) Shareholder Profit (Pre Tax)
205 154
549 390
d) Policy Holder Expense to Gross Premium % 12.7% 13.5% 80 bps 15.5% 14.7% (78) bps e) Policy Holder Cost to Gross Premium % 21.1% 20.6% (57) bps 23.8% 21.6% (220) Bps f) Conservation ratio* % 95.9% 84.7% (>100) bps 90.4% 88.7% (>100) bps g) Average case size(Agency) Rs. 49,944 60,688 22% 46,283 53,260 15% h) Case rate per agent per month No. 0.22 0.19
0.22 0.19
i) Number of agents (Agency) No. 51,236 54,405 6% j) Share Capital
1,919 1,919 0% k) Individual Policies in force
38.05 39.7 4% l) Sum insured in force
368,353 469,067 27% m) Grievance Ratio Per Ten thousand 229 119 NA
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Performance update- Q3’FY18 and 9M’FY18
Investor Release * In Q3’FY 18 conservation ratio lower due to timing impact of demonetisation in Q3’FY 17 and subsequent IRDAI notification for extending grace period
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Overview of the components of the EV as at 30th September 2017
Note: Figures in Rs Cr. And may not add up due to rounding
Net worth and EV VIF
Present Value of Future Profits (PVFP) Rs 5,226 Cr Value of Inforce (VIF) Rs 4,532 Cr
Time value of financial options and guarantees Frictional cost
Net Worth Rs 2,610 Cr
Market value of Shareholders’ owned assets over liabilities
EV Rs 7,142 Cr
Cost of residual non-hedgeable risks
TVFOG Rs 17 Cr CRNHR Rs 585 Cr FC Rs 92 Cr
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Value of New Business and New Business Margins as at 30th September 2017
Note: Figures in Rs Cr.
by shift in product mix towards protection oriented products.
pronounced during H1 leading to lower new business margin on actual costs. The new business margin for H1 FY18 on managements’ expectation of sales and costs for full year FY18 would be close to 20% compared to 18.8% for full year FY17.
1 Annual Premium Equivalent (APE) is calculated as 100% of regular premium + 10% of single premium. 2 The VNB is accumulated from the point of sale to the end of the reporting period (i.e. 30th September 2017), using the beginning of respective quarter’s risk free yield
curve.
Description H1 FY17 H1 FY18 Y-o-Y growth APE 1 951 1,131 19% Value of New Business (VNB)2 (actual costs) 176 204 16% New Business Margin (actual costs) 18.5% 18.1%
39 Note: Figures in Rs Cr.
Sensitivity analysis as at 30th September 2017
Sensitivity EV VNB Value (Rs Cr) % change Value (Rs Cr) % change Base Case 7,142
7,015 (2%) 192 (6%) Lapse/Surrender - 10% decrease 7,278 2% 217 6% Mortality - 10% increase 7,053 (1%) 195 (5%) Mortality - 10% decrease 7,232 1% 214 5% Expenses - 10% increase 7,085 (1%) 193 (6%) Expenses - 10% decrease 7,200 1% 215 5% Risk free rates - 1% increase 6,965 (2%) 216 6% Risk free rates - 1% reduction 7,305 2% 189 (8%) Equity values - 10% immediate rise 7,194 1% 204 Negligible Equity values - 10% immediate fall 7,091 (1%) 204 Negligible
the risk free rate reduction sensitivity and increases under the risk free rate increase sensitivity.
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Key Assumptions for the EV and VNB (1/2)
Economic Assumptions
The VNB is calculated using the beginning of respective quarter’s risk free yield curve (i.e. 31st March 2017 and 30th June 2017).
Indian market.
value of future cash flows of those bonds.
Demographic Assumptions
The lapse and mortality assumptions are approved by a Board committee and are set by product line and distribution channel
and proposed management actions on such assumptions.
1 Fixed Income Money Market and Derivatives Association of India
Year 1 2 3 4 5 10 15 20 25 30 + Sep 17 6.36% 6.45% 6.64% 6.70% 6.75% 6.97% 7.44% 7.64% 7.62% 7.59% Mar 17 6.36% 6.57% 6.68% 6.88% 6.78% 7.21% 7.38% 8.14% 7.93% 7.26% Change 0.01%
0.06%
0.33%
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Key Assumptions for the EV and VNB (2/2)
Expense and Inflation
for the value of any maintenance expense overrun in the future. The overrun represents the excess maintenance expenses expected to be incurred by the Company over the expense loadings assumed in the calculation of PVFP.
Tax
to be deducted before surplus is distributed to policyholders and shareholders.