Shinkong Financial Holding Co (新光金控), the nation's eighth-largest financial group by assets, is getting increasingly richer with a robust growth in asset value of its insurance arm last year, the company said yesterday.
Flagship unit Shinkong Life Insurance Co (新光人壽), the nation's third-largest life insurer, is estimated to have embedded value of NT$88.3 billion (US$2.81 billion), or NT$21.70 per share of the value of parent company Shinkong Financial, based on data from the benchmark date of Dec. 31 last year, the company said.
Appraisal value, which takes into account the value of new policies, is estimated at NT$113.3 billion, or NT$27.84 per share, five years from now, it said.
Embedded value refers to the present value of insurance firms, while appraisal value indicates future profits.
Both figures grew compared with NT$62 billion in embedded value and NT$94.1 billion in appraisal value estimated on June 30, 2004.
The insurance market seemed to perform well during the past few years, as bigger rival Cathay Life Insurance Co (國泰人壽), the nation's largest life insurer, said last month that it had embedded value ranging from NT$267 billion to NT$298 billion, and appraisal value of between NT$499 billion and NT$591 billion.
"We think we are doing well," Shinkong Financial spokesman Victor Hsu (許澎) said.
In response to questions about the shrinking value of new policies to NT$7.9 billion from NT$11.2 billion over the same period, Hsu attributed the decline to the change in product mix that saw a rising proportion of lower-yield investment-oriented policy products.
The company has planned to boost sales of more lucrative, conventional policies this year, hoping the move will beef up its profitability, Hsu said.
Shinkong Financial shares closed up 1.7 percent at NT$38.95 on the Taiwan Stock Exchange yesterday.
Analysts, however, were conservative about the outlook for the company's stock, suggesting that investors take a "wait and see" attitude.