Max New York Life today launched what it claimed to be one of the cheapest single premium policies in the private sector. It also became the first company to offer a single premium option with 20 and 25 years duration.
The Level Term Policy which comes with a one time premium payment option along with quarterly, half-yearly or annual options.
Max New York Life chief executive officer Anuroop Tony Singh, however, said the company has no intentions to get into a price war with its competitors. "We are offering what we think is the best offer for our customers and do not believe in getting into a price war," he said after the company unveiled its latest offering here.
Commenting on the decline in insurance premium, Singh said it did not entirely depend on the interest rate in the economy but also on scale of operations, expenditures, mortality and morbidity ratio.
He also announced that the joint venture between Analjit Singh-promoted Max India and US-headquartered New York Life will together infuse another Rs 50 crore in their insurance venture, which is expected to double its business in this fiscal to over Rs 76 crore.
Post infusion, the company's equity base will increase to Rs 300 crore from Rs 250 crore at present. While Max India would infuse an additional Rs 37 crore, New York Life would pump in Rs 13 crore in the 74:26 venture that started with an initial capital of Rs 105 crore a year ago.
"Capitalisation will not be a problem for the two promoters. Max India has earmarked Rs 550 crore investment in their insurance venture," Singh said. The additional capital infusion comes in the wake of stiff norms of Insurance Regulatory and Development Authority, which stipulated a solvency margin of 150 per cent for all insurers.
Singh said that Max New York Life is expected to break even in 2007. "We would be in the first quartile of companies which would break even," he said.
The company sold 64,000 policies last fiscal while its sales touched Rs 43 crore on a sum assured of Rs 2,100 crore. About 70 per cent of the products we sold last fiscal were whole-life policies, Singh said.
The company has decided to invest its entire funds in debt papers, which have witnessed a fluctuation in yields following the reduction of bank rate in the last few years.
The 12 private insurance companies have together targeted to acquire 10 per cent market share in the Indian life insurance market now at over Rs 73,000 crore. Life Insurance Corporation alone mopped up over Rs 72,000 crore in premium income last financial year, the first full year of operation for private players.
