Nan Shan profit rebound may not lift capital fast enough

Premium expansion has outpaced the industry average for 3 straight years.

Nan Shan General Insurance Co., Ltd. is expected to maintain its balance sheet strength assessment over the medium term, AM Best said.

This will be supported by an insurance risk profile characterised by personal lines and small- to medium-sized commercial accounts, prudent investment allocations and a sound reinsurance programme placed with highly rated reinsurers.

However, the insurer’s relatively modest capital base and a moderately high dividend payout ratio may slow capital growth over time.

On the insurance side, underwriting performance improved in 2025, contributing to favourable operating results. 

The company has recorded premium growth above the industry average for three consecutive years, mainly driven by voluntary motor, travel and commercial lines. 

Personal lines remain the core of the business, accounting for about 74% of gross premiums written.

Profitability was supported by positive underwriting margins in motor insurance and strong growth in travel insurance. 

The company’s combined ratio improved to 90.0%, whilst its net operating expense ratio declined to 37.2%, both the lowest levels in the past five years. Return on equity remained at a double-digit level.

Investment income also supported overall performance, with gains from equities and stable interest income from bonds. 

The insurer is expected to continue focusing on domestic fixed-income assets whilst maintaining moderate exposure to equities.