Chennai: Anuroop 'Tony' Singh, the chief executive officer and managing director of Max New York Life Insurance Company, a 74:26 joint venture between Max India and New York Life International, is a contented man today. The reason: his company has exceeded the expected performance.

Last year the company earned a premium income of Rs 38 crore, selling 64,000 policies besides receiving a handsome income from investments. ''We are among the leading life insurance companies with a sum assured in excess of Rs 3,300 crore and over 1,00,000 customers,'' says the beaming former banker.

A qualified chartered accountant, Singh spent most part of his career in the banking industry before joining Max New York Life. He was earlier the country head (India) and the regional head (consumer banking, Middle East and South Asia) for ANZ Grindlays Bank. For five years he was the country general manager for retail banking at Bank of America and prior to that he was with American Express for 15 years in various capacities.

Fully integrating himself with the insurance industry, Singh is also the managing director (South Asia) of New York Life International and is responsible for the development and success of the company's business in South Asia.

The media-savvy Singh attributes his company's initial success to its strategy to offer the right balance between protection and saving rather than the traditional tax saving route: ''Early indications suggest that Max New York Life is exceeding its expectations on these parameters and will record an impressive embedded value - shareholders' assets or capital and present value of profits expected in the future from the existing business. And positioning it among the first quartile of new life insurance companies.

Excerpts from an interview:

How many policies have you sold this fiscal? What is the average sum assured per policy and the mode of premium payment - monthly / quarterly / annual?
Max New York Life has led the industry in realigning it towards providing the right balance between protection and saving in life insurance products. Over 70 per cent of the company's business is from protection-oriented Whole Life policies, which offer the true value of life insurance.

In September 2002 the company recorded a sum assured of over Rs 3,300 crore and sold over 1,00,000 policies. Max New York Life has, thus, emerged among the top three new life insurance companies in India.

What is the quantum of additional capital infusion you have planned? When will the same be invested?
In December 2001, pleased with the company's performance, the board decided to increase the authorised capital by Rs 100 crore to Rs 300 crore ($62.5 million). Of this additional Rs 100 crore in capital, Rs 50 crore has already been received as of 31 March 2002, thereby raising the paid-up capital to Rs 250 crore ($52 million), which is among the highest in the industry. The next tranche of Rs 50 crore is expected by the end of this financial year.

When do you expect to break even and register profits? Can you explain your investment strategy?
The life insurance business is a long gestation business. The profitability is a function of scale and size of engagement as well. The global industry average for turnaround for new life insurance companies is in the region of 10 years. As per our present projections, we expect to break even by 2008. Towards protecting policyholder funds we have invested only in debt instruments.

What is your bonus strategy? Some of your competitors are assuring returns.
As you may know, bonus is a function of surplus funds available after adjusting for future liabilities and current assets. This is based on actuarial experience. Therefore, based on actuarial experience, we believe that bonuses will be announced not before three years of operations. This is in line with our plans and international standards.

Max New York Life offers innovative and immediate (not reversionary) bonus options, which add value to customers. Bonuses can be received in cash, employed to offset premium, left on deposit with interest, used to buy additional insurance by way of paid-up additions or term insurance.

What about your claims experience?
For the first 12 months of operations, Max New York Life settled 12 claims amounting to about Rs 29 lakh. All claims were settled within 30 days.

Can you elaborate on your rural strategy? How many policies have you sold in rural areas last year?
We recognise the rural market and social sectors as being distinct, requiring different marketing and product strategies. Therefore, we have designed specific products and appointed gram sahayaks in various districts across India. These gram sahayaks help increase awareness of life insurance.

Our Easy Term product provides term insurance for Rs 10,000 for a sum of Rs 100. Max New York Life has met its target of insuring 7,500 lives from the social sector and 7 per cent of the policies in the rural sector. We have met our targets as laid down by the Insurance Regulatory and Development Authority.

What is your communication strategy, and what is your budgeted promotional spend?
Our objective is to build India's most admired life insurance company. We seek to build trust with our customers. Our focus on life insurance and experience of over 158 years has helped position us as life insurance specialists. The marketing strategy is to provide a consistent brand experience across all stakeholders - customers, shareholders, employees, agents, regulator and the public.

The brand experience will be based on our positioning of being a trusted life insurance specialist that can partner the customer for life. We are also sparing no efforts to increase awareness for the true value of life insurance, which lies in risk protection.

How strong is your agency force and how different is your agency commission structure from that of other insurers?
We have over 3,000 agents / advisors. We believe in a quality approach to business and therefore select and train only the best in class people so that they can deliver value to the customer. The company places a lot of emphasis on its selection process, which comprises four stages - screening, psychometric test, career seminar and final interview. The agents are given in-house training to ensure optimal control on quality.

Commission is purely a function of the business that they generate. Given our approach to business it will not be unusual to see some agents earn more remuneration than the managing director of the company.

Apart from individual agents what are the other distribution channels (like corporate agency, bancassurance) you are looking at?
Given the size and diversity of the Indian marketplace, both agency and alternative distribution channels should be deployed. Bancassurance is a bank's strategy first and an insurance company's thereafter. Banks have to lead this distribution model, and life insurance companies can act as catalysts.

Banks that will succeed are those that have a large customer base and strong relationship with customers. The credibility of the bank with the customers in selling third-party products, motivational training, capability of the staff to handle multiple tasks, technology and sound process and systems to support it will ensure the success of this channel. The key will be implementation.