Shin Kong Financial Holding Co’s (新光金控) life insurance unit yesterday said that it would increase its Taiwan equities portfolio by between NT$10 billion and NT$15 billion (US$314.74 million and US$472.11 million) in the next 16 months.
Shin Kong Life Insurance Co (新光人壽) said it has been adjusting its equities portfolio since the end of last year, with current combined positions valued at less than NT$200 billion.
As part of a portfolio adjustment effort that is to persist until the end of this quarter, the insurer has trimmed its holdings of domestic and international equities by about NT$50 billion, Shin Kong Life senior vice president Sunny Hsu (徐順鋆) told an investors’ conference.
“We have trimmed positions in sectors with dimmer immediate prospects, such as printed circuit boards, LED and touch-panel makers,” Hsu said.
“We intend to weigh in on stocks with high cash dividend yields in sectors, including telecommunications, security systems and services providers, as well as utilities,” Hsu said, adding that the company did not reduce financial sector positions such as Hua Nan Financial Holding Co (華南金控).
However, the company’s investment performance remains in the red, with unrealized investment losses of NT$24 billion, compared with NT$30 billion in unrealized losses at the beginning of this year, Hsu said.
The company’s bullish bets on US financial stocks in anticipation of a US Federal Reserve interest rate hike have also strained its earnings, Hsu said.
Regarding the insurer’s risk-based capital (RBC) ratio, which had fallen to 227 percent at the end of the first half, Hsu said the company would issue debentures to raise funds to improve the ratio.
At the end of last month, the RBC ratio improved to 250 percent as the TAIEX moved higher, he said.
A RBC ratio of less than 250 percent tends to trigger regulatory restrictions on investments.
In the first half, Shin Kong Financial reported a net loss of NT$690 million, or losses of NT$0.1 per share, including NT$3.32 billion in losses from Shin Kong Life and a net income of NT$2.22 billion at Shin Kong Commercial Bank (新光銀行).
Shin Kong Life said it is hoping to achieve a 15 percent compound annual growth rate in first-year premium contributions per sales agent after implementing a new training program with the help of international consulting firms.
The insurer said it is planning to have sales agents aged under 30 make up 45 percent of its sales force.
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