Nan Shan plans big real-estate investment

Nan Shan Life Insurance Co (南山人壽), one of the nation's top three life insurers, plans to invest around NT$25 billion (US$810 million) in the nation's real-estate market in the belief that the once-gloomy property sector is taking off, the company's chief executive said yesterday.

The life insurer, a member of the American International Group (AIG), currently only places 2 percent of its working capital in real estate, including a power center in Zhonghe (中和), Taipei County, and the Hewlett-Packard Building on the capital's Fuxing North Rd.

"We want to increase the investment level on properties by around three percentage points to 5 percent, because this sector is bouncing back from its previous low point and interest rates are too low," said Frank Chan (陳潤霖), president and CEO of Nan Shan.

Good locations

Nan Shan's total assets amounted to over NT$896 billion at the end of March.

"We are actively looking for good locations in Taipei to serve as our own offices. Also, we plan to invest in ideal places around the nation, such as in Changhwa County and Kaohsiung, to earn rental income," Chan said.

The Hong Kong-born Chan expects a return on assets of at least 4.5 percent.

Nan Shan uses nearly half of its working capital for purchases of government bonds, which totaled NT$410 billion as of the end of May and account for 15.5 percent of the total government bonds offered.

"This highlights our contributions to society and our determination to boost the domestic economy," company spokesperson April Pan (潘玲嬌) said.

In addition, Nan Shan expects to raise its overseas investment ceiling from 32 percent to 50 percent as soon as the relevant regulations have been put into practice, Chan said.

The Financial Supervisory Commission on Tuesday made public its draft amendments to the Insurance Law (保險法), which includes easing limits to allow domestic insurers to appropriate a maximum of 50 percent of their working capital to invest in foreign markets.

Bond investment

The draft will be sent to the Cabinet for review by the end of this month and is expected to be approved in the next legislative session, the Insurance Bureau said.

"We'll increase bond investments in overseas markets, but the stock-investment level will be capped under 4 percent," Chan said.

Chan made the remarks on the sidelines of a press conference yesterday which marked the first time representatives of all eight of AIG's local members showed up together in a demonstration of their united intent to tap into the nation's potential market.

The eight units include Nan Shan, AIG Credit Card Co (友邦信用卡), AIG Finance (Taiwan) Co (友邦資融), AIG Investment Corp (友邦投顧), AIG Securities Investment & Trust Co (友邦投信), AIU Insurance Co (美國環球產險), American Life Insurance Co (美國人壽) and United Guaranty Mortgage Indemnity Co (聯合保證保險).

As these eight companies' combined assets amount to NT$985.3 billion, rivaling most financial-holding companies, AIG is not in a rush to expand into banking channels, Chan said.

Instead, it will concentrate on strengthening its insurance products and services with the possibility of investing in or acquiring local insurers, he said.