PDF Insurance Company Limited Max New York Life

[Pages:2]MAX NEW YORK LIFE INSURANCE COMPANY LIMITED

Background

Max New York Life (MNYL) Insurance Company Ltd is a 26:74 joint venture between New York Life, a Fortune 500 company and Max India Limited, one of India's leading multi-business corporations. New York Life had revenues of US$ 25.69 billion in 2003 and was ranked 185th in the Fortune 500 list. It has over 12,100 employees.

MNYL has a paid up capital of US$ 93.79 million, which makes MNYL one of the highest capitalised life insurers in India. MNYL has adopted prudent financial practices to ensure safety of policyholders'

funds and therefore invests only in debt instruments and meets both Indian and international disclosure norms.

MNYL offers a suite of products comprising 14 life insurance products and 9 options and riders. These products and riders can be customised to over 400 product combinations.

One of the leading private sector life insurance companies in India

MNYL has emerged as one of the country's leading private life insurance companies having recorded a sum assured of over US$ 3.37 billion through over 446,000 policies sold.

MNYL has underwritten a premium of around US$ 45.7 million in 2004 with a premium income of US$ 77.3 million for the year 2004?05. MNYL had a premium income of US$ 48 million for FY 2003? 04, an increase of over 123 per cent over FY 2002? 03. In terms of the number of policies sold, MNYL has underwritten 145,581 policies, an increase of over 87 per cent over FY 2002?03.

MNYL has a team of over 1,500 employees working at 48 offices across 34 cities in India. MNYL has also set up a Centre of Operational Excellence at its corporate office in Gurgaon, Haryana.

After the liberalisation of the life insurance sector in 1990s, private players are garnering an increasing share of the life insurance market. MNYL has managed to capture an overall market share of 0.70 per cent and a share of 5.4 per cent among private life insurers in India.

MNYL voted as one of the top 25 companies to work for in India

Max New York Life was among the top 25 companies to work for in India, according to a recent survey published in Businessworld magazine, "Great

Workplaces In India". There were around 120 companies that took part in the survey and MNYL was ranked at the 20th position.

First life insurance company to be awarded ISO 9001 certification Max New York Life was the first life insurance company in India to be awarded the IS0 9001:2000 certification. ISO certification is internationally recognised as a quality standard that is critical to achieving success in the global marketplace. The certification process was conducted by Bureau Veritas (BVQi), the largest certification body in India.

Factors for Success

Wide range of products MNYL was the first company to offer base products and riders. The company pioneered the introduction of Whole Life policies, which offer customers a permanent insurance cover - from 91 days to 100 years. Whole Life policies provide a prudent balance between risk cover and investment with the centre of gravity towards protection. Max New York Life is also the first company to offer multiple bonus options and the first to offer cash, rather than reversionary, bonus.

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Strong agency force

MNYL's primary channel of distribution is the agency force of over 5,500 individual agents. Agents are selected using a carefully designed programme and are trained for over 152 hours, far in excess of the mandatory 100 hours stipulated by the Insurance Regulatory and Development Authority (IRDA).

The highly trained agency force has amongst the highest productivity of the private life insurance companies. In FY 2003?04, 81 agents were selected for the Million Dollar Round Table (MDRT), an exclusive congregation of the world's top selling life insurance agents. This is an 80 per cent increase over the number of agents selected in FY 2002-03.

Strong support from parent companies MNYL enjoys strong support from parent companies and is one of the highest capitalised private insurance companies in India. The parent companies would also provide a significant portion of further investment requirements till 2008 for MNYL.

High quality service The insurance market was a monopoly and therefore the services provided by the incumbent player were poor. However with the change in market scenario, customers now have a much higher service expectation which is being offered to customers through MNYL's highly trained employees and agents. For example, agents undertake a need analysis with every customer before suggesting a life insurance solution. A Personal Insurance Plan, which gives the customer complete details of his/her policy with a year-on-year summary, is presented even before he/ she buys the policy. Also, all policies are hand delivered by the agent and the customer understands the entire policy and its terms.

provided by the Indian infrastructure sector.

? NYL has a 10 per cent stake in Gujarat Pipavav Port Ltd (GPPL). Maersk Sealand, part of the largest shipping lines and third largest port operator in the world and AP Moller, Denmark, are planning to develop the Pipavav port as a regional hub.

? NYL is a stakeholder in Bharti Tele-Ventures Limited (BTVL), which is a leading player in the Indian telecommunications infrastructure sector.

Future Plans

The global life insurance major is bullish in favour of India over China in its international business plans. The company's vision is to become India's most admired life insurance company.

? Taking advantage of the freedom given to expand, MNYL now proposes to push its business to second-rung towns.

? MNYL is also planning bancassurance tie-ups for expanding its network.

? MNYL has projected a capital requirement of over US$ 22 million every year for the next three to four years. The cumulative investment required to grow the business till FY 2007?08 is to the tune of US$ 133?144 million. Of this, the joint venture partners would invest US$ 76.6 million.

Leveraging the India Advantage

New York Life (NYL), apart from leveraging the low penetration Indian insurance market, is also taking advantage of the large investment opportunities

? NYL plans to raise its stake in MNYL after Budget 2004 announced allowing a hike in foreign partners' holdings from 26 per cent to 49 per cent.

? MNYL is in talks with a number of large banks which might want to forge an "equity-based partnership'' with the company. The insurance company is working at developing its business through bancassurance route.

Max New York Life Insurance Company Limited: AT A GLANCE ? Joint Venture between New York Life and

Max India Limited. ? One of India's leading insurance companies,

1500 employees, recorded a sum assured of over US $ 3.37 billion, sold over 446,000 policies ? Ranked 20th in "Great Workplaces in India" by a survey by Businessworld magazine ? India's first insurance company to be awarded the ISO 9001:2000 certification ? Factors for success: Wide product portfolio, strong agent force, high quality service ? For New York Life India is: A new market for the insurance business as well as an investment opportunity in the infrastructure sector ? Future plans, India: Expand business in second rung towns and develop business through bancassurance tie-ups

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