Max New York to get Rs 2,400 cr capital

Max New York Life Insurance company (MNYL) will receive a capital infusion of Rs 2,400 crore in the next three to four years.

Ted Mathas, the president and chief operating officer, along with Richard Mucci, chairman and CEO of New York Life Insurance Company (NYL), who were in India to attend the board meeting told Business Standard that they expected MNYL to break even by 2009.

"Both the promoters together have committed a capital of Rs 2,400 crore, which will be infused over 3 to 4 years," said Mathas. The current capital base of the insurance company is Rs 807 crore.

At present, 60 per cent of the new business premium for MNYL comes from Unit Linked Insurance plans while the remaining 40 per cent is from traditional products.

Mathas said that he expected the present demand of Ulips to slow down over a period of three to four years. "Over an extended period, there may be a slowdown in Ulips. Though 60 per cent of our business is from Ulips, a large portion is invested in the balanced portfoilio and not in equities. Therefore we will not be affected by the downward temporary phase whenever it happens," he said.

NYL has insurance operations in 8 countries outside the US. They are Argentina, Mexico, China, Hongkong, Thailand, Taiwan, Korea and India. The Asset under management of NYL is $250 billion.

"The total insurance premium from all operations this year will be $3 billion of which the premium from Indian operations would be $300 million, contributing 10 per cent," said Mathas.

"We are growing at 75 per cent per annum and expect to grow at 50 to 60 per cent for four years. We are looking at alternative ways in reaching out to customers. It could be a bringing products to customers through phone cards, toothpaste, sachets," added Gary Bennett, MD and CEO of MNYL.

The new business premium of MNYL for the first six months of the financial year is Rs 593.42 crore, a growth of 90 per cent.