The Hindu Business Line : India ahead of China in New York Life global plans

THOUGH the scales are mostly tipped in favour of China as an investment destination compared to India, New York Life International (NYLI) thinks differently. The global life insurance major is betting in favour of India over China in its international business plans.

"There are bigger opportunities in India than China (for the life insurance business)," said Mr David J. Skinner, Chief Executive (Asia Region), NYLI, in an exclusive interview to Business Line.

NYLI international, one of the largest life insurance companies in the world, is the foreign partner holding 26 per cent stake in the Indian insurance venture, Max New York Life (MNYL).

Mr Skinner said that both India and China figure at the top of NYLI's global business strategy.

"There are really two markets with tremendous growth potential - India and China - in that order of preference," he added.

India is a more favoured destination because the entire country has been made available for business right from the time the insurance sector was opened, he said. "In China, expansion requires separate approvals for each city. India opened up all at once, which will ultimately benefit both customers and the companies."

On whether he was disappointed over the opposition to the Government's move to raise foreign direct investment (FDI) cap in insurance from 26 per cent to 49 per cent, Mr Skinner said that NYLI international was not desperate to hike its stake in the Indian venture.

"We are perfectly happy to play the game as the Government thinks is appropriate. We see this (equity holding in MNYL) as a terrific investment. We will own whatever the Government and the regulator allow. If we can own more it would be good."

Mr Skinner said that taking advantage of the freedom given to expand, MNYL now proposes to push its business to second-rung towns.

"For us, the question now is not whether do that (to spread to smaller cities) but how to do it. We are looking at balancing depth and breath in our penetration."

In recent months, the company has already established presence in cities such as Amritsar, Rajkot, Nagpur, Indore, Jalandhar, Jaipur, Nashik and Aurangabad.

"We are planning more aggressive expansion to some other smaller cities."

Mr Skinner said that he was delighted at the way business is shaping up in India.

"Our (MNYL's) business during the first seven months of calendar year 2004 is more than double of what it was during the same period in the previous year. The surge is validating our business model."

Mr Skinner said that the next major distribution thrust could come by way of bancassurance tie-ups.

"We are working on bigger deals (tie-up with banks). We wanted the agency channel to be established firmly before expanding to other channels. We will make our mark in bancassurance."

Unlike other companies that have entered into tie-ups with large banks, MNYL has only put in place a distribution tie-up with a smaller entity - Thane Janata Sahakari Bank.