The Hindu Business Line : Max NY Life plans micro policies for urban market

Puri, April 1 Max New York Life is planning to tap the urban population with a range of new micro life insurance policies that it plans to launch by June.

“The project is still at a nascent stage and we will file with the IRDA shortly. We will be in a situation to finalise on the details within the next 45 days. The plan is basically to tap the 30 per cent of the country’s population situated at the bottom of the pyramid,” Mr Kenneth Sannoo, Senior Vice-President, Head (North & East), said here.

“The life insurance policies will be aimed at the grassroot labour class with premiums as low as Rs 50-100. Even a rickshaw-puller can be a potential customer,” he said.

The company already has a micro insurance product called ‘Easy-term policy’ aimed at the rural poor, which it sells through SHGs and NGOs and in tie-ups with Peerless and Nirmal Chhaya. Last year, the company had sold almost 17,000 such policies with premiums ranging from Rs 50 to Rs 500, said Mr R.P. Singh, Senior Vice-President. Currently, almost 20 per cent of the company’s business comes from the rural market, he added.

The company has tie-ups with YES Bank, 12 district cooperative banks of Andhra Pradesh and one in Rajasthan, and is also looking to collaborate with cooperative banks in the eastern region to sell low-end products, a company official said.

Distribution network

For the implementation of the micro insurance project in the urban market, the distribution network of the company needs to be revamped on a large scale. “We will come up with a totally new innovative distribution concept,” Mr Sannoo said. Currently, about 30 per cent of the company’s business occurs through bancassurance and additional distribution chains, and the rest through agency network.

For the new micro-insurance policies, however, direct selling will be more viable over bancassurance, a company official clarified. “We will have to utilise multi-distributional channels like an SHG or an NGO where the underprivileged visit frequently, in line with our rural policy,” he added.

The company plans to add 100 new offices in the country by the end of the year, of which eight will be in the East, he said. It has currently 233 offices all over India, of which 39 are located in villages. Almost 17 per cent of the company’s business comes from the East where it has 24 offices at present, he added.

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