Nan Shan Life Insurance Co (南山人壽) last month posted a net loss of NT$5 million (US$164,355) due to exchange-rate volatility, investment losses and a ban on any new investment-linked policies.
The loss ranked Nan Shan, which last year was the most profitable life insurer in Taiwan, as second-worst for earnings among domestic insurers last month, only better than Shin Kong Life Insurance Co (新光人壽), which posted a net loss of NT$253 million.
Exchange-rate volatility last month caused its hedging costs to rise as the New Taiwan dollar appreciated sharply against the US dollar, Nan Shan said in a statement.
The insurer said that last month, it disposed of some bonds and stocks that were not lucrative, which produced investment losses.
The insurer’s first-year premiums (FYP) last month plunged 59 percent from a year earlier to NT$6.92 billion, after the Financial Supervisory Commission banned it from selling new investment-linked policies from the middle of September due to its failure to resolve problems with its new information technology system.
The policies used to account for about 45 percent of all first-year premiums, data released by Nan Shan and the commission showed.
The insurer’s cumulative first-year premiums fell 8 percent annually to NT$150.56 billion for the first 10 months of the year, Nan Shan data showed.
The insurer’s inability to sell investment-linked policies has put a serious dent in its business, Nan Shan labor union president Yan Ching-lung (嚴慶龍) told the Taipei Times yesterday.
Nan Shan’s pool of foreign currencies shrank without the premiums generated from investment-linked policies — which are mostly denominated in US dollars — and the insurer had fewer funds that could be used for overseas investments, Yan said.
Nan Shan could resume selling the policies after its system is fixed and it passes an inspection by an independent third party, the commission said.
Despite the net losses for last month, the insurer reported a cumulative net profit of NT$38.72 billion for the first 10 months, up 42 percent year-on-year.
That was followed by Cathay Life Insurance Co’s (國泰人壽) net profit of NT$32.63 billion over the same period, Fubon Life Insurance Co’s (富邦人壽) NT$27.43 billion, Shin Kong Life’s NT$13.28 billion, Taiwan Life Insurance Co’s (台灣人壽) NT$14.37 billion and China Life Insurance Co’s (中國人壽) NT$13.87 billion, data showed.
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