Samsung, Sumitomo in New York Life Insurance stake race

Samsung Insurance, Sumitomo Corp and Hitachi are believed to be in the race to pick up a 26% stake in Max New York Life Insurance, currently owned by US-based New York Life.

New York Life is in the midst of consolidating its businesses worldwide and is expected to exit operations in India wholly.

The company has also laid off around 400 staffers at its New York branches.

This 26% stake that New York Life holds is valued at around Rs3,500 crore.

Max New York Life was incorporated in 2000 and is one of India’s largest non-banking private insurers.

The majority partner is the Analjit Singh-promoted Max India, which has 70% share, while Axis Bank has 4% stake.

For the April-December period, the company posted an 18% jump in net profit at Rs972 crore, riding on increased productivity and measures to keep costs low.

Total premium income during the nine months rose 8% to Rs4,470 crore, though new premium income showed a 13% decline at Rs1,282 crore.

Assets under management also increased 18% to Rs15,357 crore.

Significantly, the comapny’s solvency margin stood at a whopping 539% compared with 306% for the corresponding nine months a year ago. That’s more than three times the minimum solvency margin of 150% man-dated by the Insurance Regulatory and Development Authority.

At the end of December, its paid-up capital stood at Rs2,126 crore.

Max New York Life relies on a combination of agency and bancassurance models to sell its products. It has a tie-up with 54 other banks including Yes Bank and Barclays Finance. While agents account for 65% of the sales, the rest comes in through other agencies including banks.