Max New York Life Insurance Co (MNYL) is planning to infuse Rs 750 crore of additional capital in the next 15 months, taking its total capital base to Rs 1,557 crore by end-December 2008.
The six-year old private insurer is also planning to enter health insurance with a defined benefit plan with in a year, and is in the process of evolving a micro-insurance product specifically targeting under-serviced rural households.
“We will infuse Rs 750 crore of fresh capital into the company in the next 15 months,” said Gary Bennett, Managing Director and CEO of MNYL told reporters at a conference in Goa recently.
“We see huge gap in retirement space. We will also revamp the whole product range to make it comprehensive, catering to every need of the customers,” Bennett said.
MNYL’s domestic parent, Max India is expected to raise Rs 1,000 crore this month or the next. “A part of which is expected to flow into MNYL,” Bennett added. The company is a joint venture between the US-based New York Life and the domestic company, Max India Ltd.
Typically insurance companies incur costs of a policy upfront and take at least seven years to cover them. Private insurance industry being in a nascent stage in the country they need fresh capital for growing businesses.
The company is planning to launch products that are suitable for rural and under-serviced households. “There are about 100 million (10 crore) people in this segment. Generic products may not be of help. We are in the process of evolving low-cost entry-level products suitable for them,” Bennett said.
The company is also tying up with co-operative banks and NBFCs to cater to these segments effectively. The company has already tried distribution through non-governmental organisations (NGOs) and rural agency models.
MNYL, which focused on agency-based distribution model since inception, will continue to emphasise on the model.