Nan Shan Life Insurance Co (南山人壽) aims to create an investment unit and diversify sales channels in a bid to become the nation’s No. 1 life insurer in five years, after its recent change in ownership from American International Group Inc (AIG) to a local consortium, top executives said yesterday.
“The company will soon set up an investment unit to manage its funds and assets after the pullout of AIG,” Nan Shan vice chairman Du Ying-tzyong (杜英宗) told a media briefing.
The US insurance giant on Thursday last week completed the sale of its 97.57 percent stake in Nan Shan to Ruen Chen Investment Holding Co (潤成投資) for US$2.16 billion, to pay down its debt to the US government.
Du, a former chairman of Citigroup Global Markets Taiwan (花旗環球財務管理顧問), which advised Ruen Chen on the acquisition, said he decided to join Nan Shan to ensure the acquisition would be a success.
“It is a new trend for investment banking executives,” Du said. “As I have grown older, I have learned to better appreciate the importance of life insurance business and want to partake in running an insurer.”
Nan Shan, whose cumulative losses totaled more than NT$15 billion (US$520.41 million) last year, while racking up another NT$3.5 billion in losses during the first half of this year, would need time to become profitable, although it did manage to stay in the black last month as a result of dividend income, Du said.
To expedite that process, Nan Shan tapped former Fuh Hwa Securities Investment Trust (復華投信) president Bond Yang (楊智淵) to be its chief investment strategist. The company’s investment unit will seek to invigorate its real estate, equity, debt and fixed income investments, though low interest rates would continue to pose a challenge, officials said.
To strengthen its financial health, Nan Shan plans to increase capital by more than NT$10 billion by the end of this year, Du said.
Nan Shan also aims to reclaim market share by rebuilding its brand and designing insurance policies that offer better compensation packages to customers, he said.
“We intend to first enhance the firm’s profile in the minds of customers so that they will think of Nan Shan when they want to buy insurance products,” Du said.
Nan Shan, formerly the nation’s second-largest life insurer, aims to catch up with Cathay Life Insurance Co (國泰人壽) and Fubon Life Insurance Co (富邦人壽) in three years and surpass them in five, Du said.
To that end, Nan Shan recruited insurance sales veteran Simpson Hsu (徐水俊) to steer its sales division and turn the company into the top pick for insurance sales agents, he said.
Once Nan Shan is profitable for three consecutive years, it will apply to become a listed company, another demonstration of its long-term commitment as required by the Financial Supervisory -Commission, Du said.
“Nan Shan will then issue new shares rather than trade old shares, thereby resolving concerns that major share holders could cut their stake through trading,” Du said.
Ruen Chen, 80 percent owned by Ruentex Group (潤泰集團), a Taiwan-based conglomerate and 20 percent owned by Pou Chen Corp (寶成工業), a footwear maker, has promised the commission that it will not sell its shares in Nan Shan for the next 10 years.