Max New York Says Business In 9 Months Topped Rs 1500 Crore

Max New York Life Insurance Company has recorded business in excess of Rs 1,500 crore in the first nine months since it started operations on April 1, 2001.

"With our revenues 20 per cent ahead of expectations, we will be bringing in additional Rs 100 crore to our joint venture," said Max New York Life's chief executive officer and managing director Anuroop 'Tony' Singh.

This will enhance the company's share capital to Rs 300 crore, from the present Rs 200 crore. Pointing to the depreciating rupee, Singh said the additional Rs 100 crore capital will be brought in two tranches, since the funds will be brought in dollar terms.

"Rs 50 crore by March 31, 2002, and another Rs 50 crore thereafter," he added. Max New York Life will confine its investments in the debt market, said Singh. This follows the need to maintain a safe investment policy.

"At this point of time, prudence is more important. The Indian equity market is at present too volatile for various reasons," he added.

Max New York Life's preference for investment in debt is in sync with its foreign partner, New York Life Insurance, which invests only five per cent (Rs 350 crore) of its $173 billion assets in the equity market, showing clear preference for debt.

Many of the new life players have hiked their share capital during the year as they have written new business.

Singh said that more than 90 per cent of the business underwritten by Max New York Life is in the area of wholelife policies. "Our focus is on risk protection," said Singh.

Max New York Life is going slow on the rural front, undertaking business just to meet rural obligations as laid down by the Insurance Regulatory and Development Authority.

"Our strategy now is to focus on the urban side of the business. At a later stage we will fine-tune our rural thrust," said Singh.

Meanwhile, Max New York Life and other life insurance companies, which have favoured investment in the money market, view the need for more instruments of longer tenors in the region of 20-30 years, as they offer more attractive interest rates and match their long-term liabilities.

"Insurance companies need more sophisticated turnover time that offers transactions on a real time basis," said an insurance official.

The present yield curve is flat and discriminates against tenor and risk, he added. There is a need to create that bigger platform which will offer greater choice, faster turnover time and greater ability to discriminate for tenor and risk, he pointed out.