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Max-NY Life expands authorised capital to Rs 3 billion

Fakir Chand in Bangalore

Buoyed by a roaring start within 9 months of launching its business, Max New York Life Insurance Company, one of the leading private insurance players, on Tuesday expanded its authorized capital to Rs 3 billion from the present capitalized amount of Rs 2 billion.

At the two-day joint venture's first board meeting held in Bangalore since Monday, the insurance company has also decided to pay up Rs 500 million during the fourth quarter of the current fiscal year (2001-02) and the balance Rs 500 million during the first half of next fiscal (2002-03).

"As per the Insurance Regulatory Development Authority stipulations, we (Max India) will be investing an additional Rs 740 million and our strategic partner (New York Life) will bring in another Rs 260 million to strengthen our position financially and take care of our expansion plans till March 2003," Max NY Life chairman Analjit Singh disclosed in Bangalore on Tuesday.

The company has generated enough business since its inception in April this year to emerge as one of the top three private life insurance players in the country. "The total sum assured against policies sold during the last 9 months is over Rs 10 billion. In Bangalore alone, we have roped in about 4,500 policyholders. We are upbeat about maintaining our leadership position in the years to come," Singh affirmed, but declined to reveal figures for other 8 cities where it operates or the projected target for the first year of its operations.

According to New York Life International chairman and CEO Gary G Benanav, the company has adopted prudent financial practices in line with its values of fiscal responsibility, and to ensure safety of policyholder funds.

"As a matter of principle, we have decided to invest all the funds raised from our policy holders in the form of premium in debt instruments only and keep away from the equity markets for the time being. Besides investing in government securities and long-term bonds, we will also be depositing 1 per cent of the premium income with the RBI for a policyholder's contingency fund while meeting the reporting norms of the Indian and the US regulatory bodies," Benanev said.

With about 1,600 agent advisors and around 350 employees spread over 9 cities across the country, the company will be spreading its tentacles to expand its presence in 3 more cities by March 2002. "Our marketing strategy is to penetrate the hinterland after consolidating and expanding our presence in the top 25 cities networking the country," claimed company's CEO and MD Anuroop Tony Singh.

"Individual agents with domain expertise will be our primary channel for distribution of our 5 innovative products with as many as 7 riders, and more in the pipeline. As against the IRDA-stipulation of 100-hour training necessity, our agents are trained for over 152 hours. What's more, our agents have collectively secured around 98.7 per cent pass rate in the insurance examinations conducted by the IRDA. The quality of our agents is one of our biggest differentiators," Tony Singh claimed.
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