I have always believed that sustainable wealth creation happens when a great management team operates in a large opportunity size with a “right to win”.
In 2013, a National Football League veteran Tom Coughlin and David Fisher brought out a book titled Earn Your Right to Win. It was on preparing so hard and with a detailed structure that you take your chance of winning, as a team or an organisation, above the average.
Max Life Insurance, the fourth largest life insurance company with a market share of 10.6% among private players, has all of the above. Over the last 20 years, it has consistently delivered and outperformed peers on parameters that matter in this sector, such as product, persistency (which measures customer stickiness or the number of times a customer renews his/her policy), productivity, profitability and return ratios.
Its holding company is Max Financial owning 80% stake, with the balance 20% to be held by Axis and its subsidiaries.
While rest of the industry ran after fancy, non-traditional products such as unit-linked insurance plans or ULIPs to chase faster, short-term growth, Max Life stuck to the known and familiar.
To better appreciate this, perhaps we need a quick look at what forms traditional and non-traditional products in insurance. Under traditional comes par products that allow policy holders to participate in an insurance company’s profits