The Hindu Business Line : Max NY Life to get Rs 800-cr capital infusion

Recently in Jaipur Max New York Life Insurance Company will receive a capital infusion of Rs 800 crore in 2008-09 for fuelling expansion. The company plans to set up 100 more branches this fiscal, with a special focus on South and East India.

Max New York Life (MNYL) is a 74:26 joint venture between Max India and US-based New York Life Insurance and the capital will be infused in the same proportion as the shareholding.

Mr Gary Bennett, Managing Director and CEO, MNYL, said that by 2011 the company plans to hike its capital base to Rs 2,650 crore, expand its agency force to 2 lakh (from 36,500) and have around 25,000 employees (from 7500).

“We plan to have more products in the health and pension segments," Mr Bennett told reporters on a trip sponsored by the company.

On the question of break-even, Mr Bennett said that even as the company continued to see higher growth, break-even would be pushed to 2010.

For the year ended 2007-08, MNYL has reported 74 per cent growth in new business premium at Rs 1,598 crore against Rs 920 crore in the corresponding period last year. Mr Bennett said that the bulk of the company’s business (around 78 per cent) came from Unit Linked Insurance Plans. Despite the downturn in the stock market, the company has shown 90 per cent growth in fourth quarter alone and has raked in new business premium of Rs 550 crore.

New Product

MNYL will soon launch a new ULIP called ‘Smart Assure’. Besides a dynamic fund allocation that seeks to strike a risk-return balance depending on the policy holders’ age, the product has a flexible allocation option. This apart, the company has also launched a new dynamic opportunities fund that will have the option to dynamically allocate up to 100 per cent of the funds in equities or bonds depending on the market conditions.

Global player

MNYL is also emerging as a significant player on the global map of New York Life.

Mr John Harrison, Vice Chairman and CEO Asia Region, New York Life International, said that India accounted for 6 per cent of New York Life’s operating revenues (on an ownership basis) from its non-US businesses. Its operating revenues from international businesses stand at $ 2 billion.

“We expect this contribution to increase to 10 per cent this year. India is the fastest growing insurance market in terms of operating revenues,” said Mr Harrison.