Inks 10-year strategic tie-up with Axis Bank.
After seeing new business premium income stay flat last year, Max New York Life expects a 15-20 per cent increase in premium collection in 2010-11 and has entered into a 10-year strategic bancassurance tie-up with Axis Bank to help boost sales.
In order to strengthen the partnership, Max India, which currently owns a 74 per cent stake in the insurance company, is selling 4 per cent to Axis Bank.
Axis Bank’s stake purchase will reduce Max India’s shareholding to 70 per cent in the insurance venture. “The stake partnership underlines our commitment to grow this business together, since both partners have some skin in the game. This is not a financial investment,” said Analjit Singh, managing director and CEO, Max India.
“The idea was to have some common interest in growing the business together. So our stake in Max New York Life will reflect that,” said Shikha Sharma, MD & CEO, Axis Bank.
Max New York Life has not paid premium for this bancassurance relationship. “We have not paid any premium for the tie-up. We both look forward to benefit from the relationship,” said Rajesh Sud, MD and CEO of Max New York Life. The paid-up capital of the insurer is around Rs 1,900 crore, while the embedded value at the end of March 31, 2009, stood at Rs 2,284 crore.
Axis Bank will consider selling products of multiple insurers after the insurance regulator allows open architecture. “The agreement does allow us to offer products of other manufacturers and we would look at that option as and when the regulations allow,” Sharma added. She added there was no roadmap to increase stake in the life insurance company as of now.
“We spoke to New York Life and they did not want to reduce their stake below 26 per cent. We were fine with that,” said Analjit Singh.
On the Ulip issue, Singh added Irda should continue to regulate these products. “We believe Irda is able and should continue to be the sole regulator of unit-linked insurance plans,” said Singh.
During the last financial year, the insurer saw 0.22 per cent increase at Rs 1,848 crore in new business sales.
