Nan Shan Life Insurance Co (南山人壽) aims to grow into a regional player after swinging to profit and into the No. 3 spot in its industry by market share one year after it changed ownership, top executives said yesterday.
As of the end of last month, the life insurance company posted NT$7.3 billion (US$243.13 million) in net income, making it the most profitable insurance firm among its domestic peers, thanks to interest and dividend incomes and well-contained hedging costs, Nan Shan vice chairman Du Ying-tzyong (杜英宗) told reporters.
The company probably has the lowest hedging costs among its local peers, but reaps the highest yields from its bond investments, Du said after a public function to mark the first anniversary of its purchase by Ruen Chen Investment Holding Co (潤成投資) from American International Group Inc for US$2.16 billion.
For the first seven months, first-year premiums grew five-fold to NT$118.5 billion, next only to Cathay Life Insurance Co (國泰人壽) and Fubon Life Insurance Co (富邦人壽), company data showed.
The performance followed pledges made a year ago to catch up with Cathay Life and Fubon Life in three years and surpass them in five years, Du said.
Nan Shan’s ambitions are not restricted to the home market.
The insurance firm plans to set up a subsidiary in Vietnam by the end of next year and another in China as it seeks to become a serious player in Asia, company chairman Koay Boon-teik (郭文德) said.
“Now that the company has achieved its goal of becoming profitable last year, with a net income of NT$4.9 billion, it may proceed with expansions abroad, starting with Vietnam and China,” Koay said.
Nan Shan owns a representative office in Vietnam that may be upgraded into a subsidiary late next year, Koay said.
The company has also obtained approval from China to establish a representative office in Shanghai that may start operations in two years and be developed into a subsidiary the following year, he said.
The planned subsidiary in China would be set up with US$10 million in capital and the Vietnamese unit will have less capital, corresponding to its smaller scale, Koay said.
Nan Shan will file an application with stock exchange regulators for an initial public offering in 2014 if the company turns profit for three consecutive years and meets other requirements, he added.
The insurance firm has made drastic business strategy adjustments in the past year, with bancassurance generating NT$55.1 billion in first-year premiums in the period from January to last month, accounting for 46.5 percent of revenue, company data indicated.
The ratio rose to 53 percent last month, compared with 4 percent in August last year before the ownership change.