The Hindu Business Line : Max NY Life sees India business growing fast

Mr Ted Mathas, President and Chief Operating Officer, New York Life Insurance, said the US major was committed to see the capital base of its Indian operations increase by around two times in the next three to four years.

“India is our fastest growing operation in the world. We expect India to account for 10 per cent of New York Life’s total new business premium of $3 billion in 2007,” said Mr Mathas.

New York Life expects the proportion of its Indian operations to rise significantly in the next few years. The US insurer, which has $250 billion of total assets, operates in eight countries outside the home turf.

“The emerging markets are showing substantial growth and the Indian demographics favour robust growth,” he said.

Max New York Life registered a growth of 90 per cent in its new business premium for the first six months of the fiscal at Rs 593 crore.

Mr Mathas said that Max New York Life’s strategy to have a diversified portfolio of traditional as well as unit-linked insurance plans (ULIPs) would prove to be prudent in the long run.

Currently, around 60 per cent of Max New York Life’s business comes from ULIPs while the rest is from traditional policies.

This is in contrast to many of its peers, which have over 90 per cent of their premium coming from ULIPs.

“In India, a disproportionate amount of premium is going into the equity market. The bull run in the stock market is sustainable and when the market slows down you realise the prudence of a more diversified strategy,” he said.

On the effects of the sub-prime crisis, Mr Mathas said the tremors will continue to be felt for the next 12-18 months.

“Many of the US investment banks are yet to write off their bad credit. This will put some pressure on the US bond market and in turn affect the stock market. Insurers offering variable annuities that offer guaranteed benefits will then be affected,” he said