The private sector lender will also nominate three representatives to the board of Max Life Insurance post this development. The three representative are – Rajiv Anand, Rajesh Dahiya and Subrat Mohanty.
Anand heads the retail banking portfolio of Axis Bank while Dahiya heads multiple functions such as Audit, human resources and Compliance. Mohanty is the head of banking operations.
Further, two addition independent directors will join the board of Max Life Insurance, according to the sources.
Axis Bank had announced its intent to purchase a 30% stake in Max Life Insurance for a sum of around Rs. 1530 crore in April last year. The transaction underwent some tweaks to adhere to reserve bank of India and IRDAI recommendations.
As per the current structure, Axis Banks now owns a 13% stake in the life insurer with the option to increase its stake to 20%.
Axis Bank and Max Life Insurance could not be reached for comment at the time of going to press.
With the involvement of Axis Bank as a co-promoter, Max Life Insurance will join the league of bank-sponsored life insurance companies such as
, Prudential Life and SBI Life. It was earlier a standalone private life insurance player that relied on partnerships with other banks to sell its products.
Max Financial Services, a listed company, owns around 87% stake in Max Life Insurance. The remaining stake is held by Axis Bank.
In a precursor to the current deal, Mitsui Sumitomo had swapped its 20% holding in Max Life Insurance with a similar stake in the listed company in December.
Max Life Insurance’s growth has outpaced its private sector peers in the first nine months of financial year 2020-21.
The company has reportedly grown its individual adjusted new sales at 14% during this period.
The insurance sector has witnessed sporadic deal making in the past twelve months. IDBI Bank sold its stake in its joint venture with Dutch life insurer Aegon and
in a recent development. Aegon acquired IDBI’s Bank’s stake to consolidate its holding.
Max Life Insurance and HDFC Life had attempted a merger a few years back before Axis Bank showed interest in the Delhi-based life insurer. Axis Bank’s current chief executive officer, Amitabh Chaudhry, was the chief executive officer of HDFC Life when the merger was being attempted.