Ulips to be a third of our products

With a focus on long-term savings plan and protection, Max New York Life Insurance has planned its traditional and Ulip products to suit the changing market dynamics. In an interview with FE’s Debojyoti Ghosh, the company's chief executive and managing director, Rajesh Sud, says the insurance company is looking at a healthy 33:67 mix of Ulip versus traditional over the next few years.
In the current market what kind of business do you foresee?
The year 2011 will be a year of change and adaptation for the life insurance industry. Life insurance industry will need to focus on and be sold as long term contractual savings and protection tool. It will also need to focus on providing consumers with a much more balanced product portfolio. The true value of a professional dedicated agent advisor will become truly visible since the product changes and disclosure requirements will ensure a higher seller and customer engagement at the time of the sale. Some select customer segments may also use the internet for simple products such as term plans.
Distribution trends may also under go changes. Much of the growth in life insurance is expected from increased agents' productivity.
Are you looking at a change in product mix and cost rationalisation?
A sustainable profitable growth is only possible through customer centricity. We will drive profitability in the business by reducing acquisition expenses and increasing persistency. We will enhance our focus on renewal income which obviously comes at a lower cost. For the period January to August, our product mix has been 30:70 (traditional: lips) and 85:15 for September to December. This significant skew toward traditional products has been mainly due to the limited Ulip offerings. We currently do not have pension and growth Ulips in our range which contributed 40(%) per cent in the first 8 months of 2010. We are looking at a healthy 33:67 mix of Ulip versus traditional over the next few years.
Is there any change in your investment scheme?
There has been no change in our investment philosophy. We follow a prudent investment philosophy to minimise risk.
The investments made by the company are in safe instruments – top 5 debt investments are AAA rated and majority of equity investment are in large cap, which are safe and provide good returns in the long run....