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Thursday, Jan 30, 2003

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Max NY Life expects premium income to treble

Our Bureau

CHENNAI, Jan. 29

MAX New York Life Insurance Company expects its premium income for the current year to be about three times that of last year. Last year, the company earned a premium income of about Rs 38 crore.

Total (cumulative) sum assured also trebled from Rs 1,560 crore in the calendar year 2001 to Rs 4,410 crore at the end of the calendar year 2002, the CEO and Managing Director of Max New York Life, Mr Anuroop `Tony' Singh, told journalists here today. Over 70 per cent of the policies sold are `whole life policies'.

This "trebling run rate" was evident also in the number of customers, which now stood at around 118,000, he said.

The company proposes to introduce `health riders' to its range of basic policies. These riders would cover specific ailments, with specified payouts. After gaining experience in providing health insurance, the company would introduce more health riders, Mr Singh said. He, however, ruled out MNYL starting a separate company for providing health insurance.

Mr Singh stressed that the performance of insurance companies ought to be evaluated on the basis of the `embedded value' of their portfolios.

He said after the third year, MNYL would publish its `embedded value' in its annual reports— at least three years are needed to calculate the embedded value. `Embedded value' refers to determination of how much profit an insurance company might expect to earn from the policies it has sold. Determining this involves complex calculations using actuarial science and therefore, this would typically be by actuaries.

Mr Singh further said that over a period of time he expected the Insurance Regulatory and Development Authority to make disclosure of the `embedded value' mandatory for all life insurance companies.

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