Nan Shan Life Insurance Co, Taiwan's third-largest life insurer, anticipates a rebound for the industry with the Federal Reserve (Fed) ending its interest rate increases and as a four-year ban on selling investment-linked products was lifted.
Mr Yin Chong-yao, Chairman of Nanshan Life, now has a “very positive” outlook for the industry. “The Fed will have to cut rates this year and that would certainly help the insurance sales,” Mr Yin said in a recent interview.
While the exact timing is uncertain, the company believes rate cuts will likely occur in the first half of the year, he said. The lifting of the ban on investment-linked products will also allow the firm to offer a full range of products, such as investment-linked options, and help it gain market share, according to Mr Yin.
Taiwan’s life insurance premium income experienced a record 21% decline in 2022 and a further 6.3% dip in the first 11 months of 2023, according to industry data, attributed to high interest rates and tightening insurance regulations.
The firm is now looking at snapping up US corporate bonds to take advantage of wide spreads and increased issuance, he said.
As with other insurers, Nan Shan Life will also need to replenish capital. The company is looking to do an initial public offering, but doesn’t have a timetable for that, the Chairman said.
Mr Yin said the “elephant in the room” is still the new regulatory regime in Taiwan but, in the long term, this will ensure more stable operations for the industry.
In November 2023, S&P Global Ratings affirmed the company’s BBB+ rating, and projected resumed business growth for the next two years.
According to the company’s third-quarter financial report, Nan Shan Life had total assets of US$176 billion, reported Bloomberg.