Max New York Life Insurance Company Ltd is in talks with a couple of banks for acquiring a strategic stake in them with the objective of using the bank's network for distributing its insurance products. The company is a joint venture between the Max group and New York Life Insurance Company.
Apart from doubling its offices from 113 right now to almost 250 by 2008, the company is also looking at other distribution channels to increase its reach in India.
The managing director of Max New York Life, Gary R Bennett, said in an interview, "We are in talks with a couple of banks now. There are a few banks that are interested in getting into the insurance space in India but have not yet done so. We are talking to some of them."
Bennett said that the company already has a tie-up with Yes Bank. "We would really want the regulator to open up bancassurance so every bank can offer insurance products of more than one bank. That is how it is in the developed world."
Bennett stressed that though the joint venture distributes insurance through 23,000 agent advisors, 3,000 rural agents and five corporate agents, apart from the Yes Bank tie-up, it feels the need to do more distribution through the bank route.
"For example, in Thailand we have a 50:50 joint venture with Siam Commercial Bank, which is the largest bank over there and we use the bank's distribution platform," Bennet explained.
He said, "We know there are restrictions on how much we can hold in a bank in India and we wish to enter into an arrangement within those limits." He stressed that there would not be any investment from New York Life Insurance Company directly – instead it will be invested through Max New York Life Insurance Company Ltd.
Apart from acquiring a stake in a bank the company is also working on a micro-insurance model. In the rural model of distribution that has been tested in Punjab the company has already established tie-ups with 18 cooperative banks.
"For the micro-insurance model we have to look at new ways of distribution and pricing of the product and for that we need changes to be introduced by the regulator. We are presenting our ideas at the Insurance Regulatory Development Authority," Bennett said.