Nan Shan Life Insurance Co’s (南山人壽) plan to acquire unprofitable Chaoyang Life Insurance Co (朝陽人壽) would not affect its credit ratings because of Chaoyang’s operations are small, Taiwan Ratings Corp (中華信評) said yesterday.
The Taipei-based insurance company on Monday won a bailout auction for lossmaking Chaoyang for NT$200 million (US$6.33 million) in compensation.
MINIMAL RISK
“In our view, the transaction will have a minimal effect on Nan Shan Life’s capitalization and credit risk profile,” Taiwan Ratings said.
“We expect Nan Shan Life’s risk-adjusted capital adequacy to have sufficient buffer to absorb the additional capital risks following the acquisition,” the local arm of Standard & Poor’s said.
Chaoyang would account for about 1 percent of Nan Shan Life’s assets.
Chaoyang had about 100,000 clients with 123,000 policies, total assets of NT$34.52 billion and longstanding negative net worth prior to the receivership that came after it failed to remedy its capital inadequacy, according to the Financial Supervisory Commission.
Nan Shan has assets valued at NT$3.5 trillion and 6 million customers owning more than 10 million effective policies, the company said on its Web site.
TRANSITION TEAM
Nan Shan said it has put together a transition team to carry out the takeover and integration in a seamless fashion by May 2.
Nan Shan reported NT$7.2 billion in net income for last month, raising total net profit to NT$25.96 billion last year, or earnings of NT$2.58 per share, company data showed.
The performance represented a 14 percent increase from the figures recorded in 2015.
The company attributed the earnings pickup to investments in foreign debts and securities.
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