New Delhi: Rajesh Sud was promoted last month as chief executive and managing director of Max New York Life Insurance Co. Ltd, a joint venture between Max India Ltd and New York Life Insurance Co. In an interview, Sud, who was earlier deputy managing director, spoke about his plans to widen the company’s reach in the next three years. Edited excerpts:
What is the key challenge before the company today?
I have been part of the company since (its) inception. We have in place a very strong growth strategy, which entails rapidly multiplying our business objectives—whether it is opening new offices to (increase the number to) 1,600 from the current 475 to improving premium income four-five times by 2011. This will entail hiring almost 300,000 agents and over 25,000 employees, and commitment of capital in excess of Rs3,600 crore. The biggest challenge for us will be to execute this plan.
How much do you expect to grow this fiscal?
Rapid expansion: Sud says the challenge will be to be able to execute their plan of hiring 300,000 agents and setting up 1,125 new offices by 2011. Ramesh Pathania / Mint
We are growing currently at about 65% over last year. This compares very favourably with the private life (insurance) industry which otherwise has seen about 40-42% growth rate this year.
So, we are significantly ahead of the market as far as the private players are concerned. The overall life insurance industry has seen a little bit of a dip on account of LIC (Life Insurance Corp. of India). We intend to maintain this margin of growth and continue to lead the private market growth rates.
What’s your investing strategy in a declining market?
Most of the funds that we invest are on behalf of the client. So, when customers choose a plan they give us the proportion of the allocation (in) the way they want to spread their investment risks. Depending on customers’ choice...we go with what their recommendations are.
Currently, given the overall liquidity, we are not experiencing any redemption pressures. There is no spike seen in the past six months… In general, because we look at the timing and to some extent opportunities that come from time to time, we would hold about 15-20% of the money in cash, currently.
What new lines of business are you looking at?
Within the life insurance space itself there is a tremendous opportunity. This is clearly an underpenetrated market despite all that happened in the past eight years with private growth. Still, we are currently at 4% of the GDP (gross domestic product) which is contributed to by life insurers.
When we are compared with most of the countries, there is significant growth potential—almost to the point of doubling it from where it is right now.