For long term, Ulips are a good option

Max New York Life is steadily working towards bringing out policies for the aam aadmi. The company today launched an insurance and savings product for the rural and semi-urban population - Max Vijay. In an interview with Neha Pathania, deputy-managing director of the insurance company, Rajesh Sud, discusses the growth of the insurance sector and where Max New York Life stands in the growth map.
Excerpts:

What is your view about the life insurance market? How safe are the unit-linked insurance policies (ULIP) in the current volatile market conditions?
The market is growing steadily and strongly. The penetration levels have increased. Over the next five to 10 years, the growth is expected to be 30 to 35 per cent. Ulips offer protection and flexibility. The option of a Ulip, however, depends on the choice a customer wants to make with regard to investment. For instance, if a customer wants to invest in a secured fund or a balanced fund depends on his risk appetite. Another good thing is that Ulips provide the switch over option. From a long-term perspective, Ulips are the option to go for.

You seem aggressive in your efforts in the rural market. You recently tied up with Indian Oil for the same and today you launched the 'Max Vijay' product. Any particular reasons?
Not any particular reason as such, but we are targeting rural and low-income households. The reason may be the opportunities available in the under-serviced markets.

Any issues you would like the Insurance Regulatory and Development Authority to address?
I have witnessed progressive regulation from the Irda. Recommendation in the past from our side has been further spread of insurance through banks. There should be multiple insurance arrangements with banks. Another thing that needs to be addressed is how capital may be calculated in solvency issues.

How many branches are you planning to set up in the coming years? Are you planning to scale up your capital base?
We are planning 250 new offices every year from now till 2011. So, a total of 1,600 offices are planned in different locations by 2011. As far as capital infusion is concerned, we plan to scale it up to Rs 3,600 crore from the present Rs 1,232 crore capital employed.

What are your popular products? Any new segments you plan to foray in?
Our life products are popular. There has been buoyancy in the life maker Ulip plan also. As far as new segments are concerned, we have recently introduced health insurance this March. Retirement and health offerings have been the new forays.