New York Life Insurance Company (New York Life) has agreed to sell its 26% stake in Max New York Life, New York Life’s insurance operation in India, to Mitsui Sumitomo Insurance Co., Ltd., (Mitsui Sumitomo) a Tokyo-based insurance holding company.
The sale is expected to close at the end of the third quarter and Moody’s sees the transaction as credit positive for New York Life and credit neutral for Mitsui Sumitomo.
A startled cognizance over ten years ago about the increasingly important emerging markets caused many companies, in myriad industries, to expand their international operations in order to keep up with the trend of globalization. At that time New York Life expanded operations by acquiring stakes in companies across Asia and North and South America.
Max New York Life, which began in April of 2001 as joint venture between New York Life and Max India limited offers an array of long-term savings and protection projects for individuals as well as groups through agency distribution. Max New York Life evolved to become one of four large private life insurance companies in India, a country where the state-owned Life Insurance Company of India holds 70% of the market.
Although Max New York Life has been profitable since its inception it is a minor component of New York Life’s overall earnings. The sale will create a small amount of capital however, the real reward of selling the stake will be that New York Life will be able to channel their focus to their North American operations namely Mexico which has become New York Life’s strongest international market.