Nan Shan Life to maintain improved capital and earnings through 2026

Its product range is now comparable to major players in Taiwan’s life sector.

Nan Shan Life Insurance is expected to maintain its improved capital and earnings over the next two years, according to S&P Global Ratings.

The Taiwanese insurer has sufficient capital adequacy, the ratings agency said.

“Nan Shan Life retains a strong business position in Taiwan's life insurance sector. This is underpinned by the insurer's solid franchise, resilient distribution network, and proactive product strategy,” S&P said.

The resumption of the sale of investment-linked products in 2024 has also helped Nan Shan Life to restore its full product range, which now makes it comparable to other major players in the Taiwan life sector, it added.

“Moderate premium growth focusing on long-tenor, protection type products have underpinned this improvement. In addition, we acknowledge the support of favorable equity market conditions and the insurer's full earnings retention in helping Nan Shan Life to accumulate total adjusted capital over the past two years,” S&P said in its latest ratings review of the insurer, where they raised Nan Shan Life Insurance’s long-term financial strength and issuer credit ratings to 'A-' from 'BBB+'.

Equity exposure has declined under the insurer's more investment strategy since 2022.

Equity exposure fell to 11% of its total invested assets as of mid-2024, down from 14% at end-2021. S&P does not expect Nan Shan Life to materially change its investment mix or pursue a material rise in equity exposure over the next two years.

The insurer's more prudent business growth and investment appetite will also help it maintain its capital and earnings at the same level over the next two years. The

However, the insurer's higher foreign exchange risk exposure by local peer standards somewhat offsets its overall satisfactory financial risk profile, in S&P’s view.

We believe Nan Shan Life will keep its investment risk exposure relatively unchanged through close monitoring and proactive risk control amid volatile market conditions. We anticipate no structural change in the investment mix over the next two years.