Insurance company Max New York Life had assumptions of a 15 to 20% increase in its premium collection between 2010 and 2011, after realizing the 2009 new business premium income stayed in the moderate status. The business has also taken on a 10-year tactical Bancassurance partnership with Axis Bank in efforts to increase sales.
To solidify the joint venture, Max India, which holds 74% of the stake in the company, decided to sell 4% of it to Axis. As a result, the stake acquisition will lower Max India’s shareholding to 70% in the insurance scheme.
According to Max India’s chief executive officer and managing director, Analjit Singh, the partnership is proof of the company’s commitment to bring the partnership and the business to a higher level. In addition to this, Singh also stressed the point that the stake partnership is not a financial venture.
Shikha Sharma, managing director and chief executive of Axis Bank, in turn, said that the concept of the venture was to have a common ground in expanding the business jointly. The bank’s stake in Max New York Life will reflect such an effort.
While Max New York Life has not yet paid premium for the partnership, both companies are still looking forward to getting profit from it, this is according to Max New York’s CEO and MD, Rajesh Sud. The insurer’s paid capital was about Rs 1,900 crore and the fixed month end value in March 2009 was at Rs 2,284 crore.
Tags: business growth, max new york life