MaxNYL to up product density

Max New York Life (MaxNYL) will focus on need-based selling of insurance products and work on increasing “product density” as it looks at ways to tackle the economic slowdown and intense competition among life insurance companies.

The company is also working to modify some products in view of the new charge structure proposed by the insurance regulator.

Debasis Sarkar, senior director and chief marketing officer, Max New York Life, said there is a need to understand the risk profiling of customers. “Customer management is crucial during these times and one needs to get back to the customer to check whether the product was sold correctly as the customer should buy a policy for the right reason”. An interesting strategy by MaxNYL has been to increase the ‘density’ of business, which essentially means looking to sell more to existing customers.

“We have adopted this strategy, which is paying off well. On an average our product density is 3 — i.e. an existing policyholder has three of our insurance products. Our recent Customer First initiative has contributed 15% to the agency sales, instead of 8% earlier. This means our existing policyholder is being offered various policies to serve his needs at different points in life,” Sarkar said.

Is this a new way to beat competition? “Well moving from the first to the second policy is difficult. Trigger points are given to agents to cross-sell. Density is important as, during these times, the cost of acquisition of a new customer needs to be kept low. It is all about keeping customer satisfaction during a downturn and as an insurer one needs to go back to the customer more often,” he added. Analysts note that MaxNYL has an agency channel-based business model.

“The company’s profitability remains strongly tied to agency-force productivity. Though its agency force is small compared with key competitors, agent productivity is amongst the highest in the industry,” observed an analyst with Edelweiss.  MaxNYL, which has 712 offices at present, does not plan to physically expand over the next few months.

The insurer is planning to launch a few new products in the children and retirement space over the next few months. About 72% of its mix comprises unit-linked plans. According to Sarkar, the share of its traditional plans in the product mix is likely to go up from 28% at present.