Max New York To Double Equity Capital By 2008

Max New York Life Insurance Company is scaling up its business operations to be among the top four life insurers in the country.

Max New York Life will nearly double its equity capital by December 2008 as it expands its presence in emerging towns, increases sales force at its branches, expands distribution reach, launches health insurance and micro-insurance products and develops products customised for different distributions channels.

The life insurer would infuse Rs 750 crore by December 2008 to add to its current capital base of Rs 807 crore, according to MD and CEO, Gary Bennett, with Rs 75 crore being invested every quarter.

The company, a 74:26 joint venture between Max India and US-based New York Life, had launched operations in April 2001.

“We will significantly deepen our presence by setting up 150 new offices and expanding to more than 200 cities by 2008. Of the 150 branches, 50 branches will be by set up next quarter”, said Bennett.

The insurance company currently has 175 offices in 122 cities. It has a sales force of 6,032 people in eight offices and aims to expand this to 24 offices by the end of 2008.

Of the non-agency distribution, which contributes 25 per cent to the new business premium of the life insurer, bancassurance contributes 5 per cent. The company is aiming to strengthen its distribution tie-ups by customising products specific to each distribution.

“There will be significant opportunities to leverage in bancassurance with the bulk of US and European banks likely to enter in 2008-09. Moreover, IRDA has set up a committee to consider allowing one bank to sell products of more than one insurance companies,” said Bennett.

“We aim to reach 100 million unserved population through differentiated products, which will be a combination of protection and investment, as their needs are different from the middle class. We will enhance our presence in the retirement space,” he said.

Speaking about health insurance plans, Bennett said, “We are reviewing the marketplace and opportunities and hope to launch health products in the first quarter of 2009. The products will be hospital cash specific to the defined benefit space. We could look at a health savings account kind of a products too. The products will be easily issued over the counter (OTC) and simple to explain.”

“We are also working on products specific for HNIs, loan products, reverse mortgage products and deposit products that can go with bank products,” he added.

Max New York Life aims to increase the agent activity ratio to 70 per cent by year end from the current 67 per cent.

The company sold 18 lakh policies till September 2007, with a sum assured of Rs 55,000 crore. It has 30 base products and 28,500 agents. The company plans to break even in 2009.