, Taiwan
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Nan Shan holds 12% market share in Taiwan's insurance

The insurer's total capital increased due to narrower unrealised losses in 2023

Nan Shan Life Insurance has shown a favourable company profile, strong capitalisation, low leverage, and stable profitability, according to Fitch Ratings. 

The Taiwanese insurer has faced a negative spread between investment yields and the cost of liabilities due to high guaranteed rates from past saving-type policies. However, this negative spread has gradually narrowed over the past three years as investment yields have slightly increased.

The rating agency also ranks Nan Shan Life's company profile as 'Favourable', noting its established brand and position as Taiwan's third-largest life insurer by premium income and total assets in 2023, with a 12% market share. 

Health products accounted for around 31% of its premium income in 2023. The company profile score is 'a' under Fitch's credit factor scoring guidelines.

Nan Shan Life's capitalisation remains strong with a risk-based capital ratio of 280% at the end of 2023 (2022: 292%) and a net worth ratio of 6.7% (2022: 5.6%). 

The insurer's total capital increased due to narrower unrealised losses in 2023. Fitch estimated the insurer's capital score, measured by its Prism Global model, to be above the 'Strong' category at the end of 2023. 

However, this score is sensitive to interest-rate risk and return assumptions used in embedded value calculation. Nan Shan Life's financial leverage ratio was 13% in 2023 (2022: 12%).

Nan Shan Life's return on equity averaged 9% over 2021-2023, maintaining strong profitability through a focus on health products and a shift from single-premium policies to long-term regular paid policies and protection products. 

The insurer's investment return has been less volatile compared to peers, due to a lower proportion of equity investments.

Nan Shan Life's risky-assets ratio, including various types of stocks and bonds, fell to 135% by the end of 2023 (2022: 145%) due to a recovery in total capital. 

The investment portfolio mainly consists of fixed-income securities, with a lower proportion of equity investments, resulting in moderate investment risk.

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