Nan Shan General’s high dividend payout to slow organic growth

AM Best it to continue to focus on domestic fixed-income investments.

Nan Shan General Insurance Co., Ltd.’s balance sheet strength remains very strong, bolstered by improved risk-adjusted capitalisation, as measured by AM Best’s Capital Adequacy Ratio at year-end 2024.

The company’s capital position was supported by earnings growth and partial profit retention. 

However, AM Best noted that the insurer’s moderately high dividend payout ratio is likely to slow the pace of organic capital growth in the near term.

In 2024, the company reported a notable increase in operating results, driven by stable underwriting and investment performance. 

Return on equity rose to double digits, whilst premium growth outpaced the broader market, led by gains in voluntary motor, travel, and commercial lines. 

Despite a higher premium retention level in some segments, loss experience remained stable. 

The company expects gradual improvement in underwriting profitability over the next three years, anchored by strong performance in personal lines and commercial liability business.

On the investment side, Nan Shan General recorded better returns, with interest income from its bond portfolio helping to stabilise performance. 

AM Best anticipates the company will continue to focus on domestic fixed-income investments whilst maintaining moderate equity exposure to enhance returns.