Mercuries Life Insurance Co’s (三商美邦人壽) embedded value (EV) of NT$72.92 billion (US$2.43 billion) last year on the back of first-year premium increases suggests an increase of 24.6 percent from a year earlier, senior executives said yesterday.
The updated figures translated into an industry-leading EV per share of NT$59.4 — based on the number of common shares in circulation — which is up 17.6 percent from the previous value assessment a year earlier, chief financial officer Winston Yang (楊棋材) said.
EV represents the value of an insurance company’s future profits plus its adjusted net asset value.
Since insurance policies are long-term contracts in which policyholders pay a premium to be covered against a possible future event, such as death, EV numbers are an important indicator of a life insurer’s future profitability and financial standing.
The results place Mercuries ahead of China Life Insurance Co (中壽), whose EV stands at NT$43 per share and Taiwan Life Insurance Co (台壽保) at NT$45 per share, according to company data.
The three insurers do not belong to a financial conglomerate and reportedly have no intention of joining one — now that Taiwan Life has scrapped an agreement to merge with CTBC Financial Holding Co (中信金).
Mercuries has about NT$4.5 billion in unrealized property gains, with NT$2.1 billion being qualified for net worth enhancement under new accounting rules, Yang said.
However, Mercuries does not want to book the gains to inflate its earnings, but instead will seek to strengthen its financial performance through business growth, chief executive officer Roy Meng (孟嘉仁) said.
The chief executive dismissed speculation from media outlets that Mercuries intends to develop into a financial holding company by acquiring nearly 10 percent of shares in Greater Tainan-based Kings Town Bank (KTB, 京城銀行).
The share purchase is a capital investment, and existing rules block the possibility of mergers and acquisitions, Meng said.
The Financial Supervisory Commission has barred life insurers from seeking board seats in companies in which it has capital investments or the ability to interfere in company operations, Meng added.
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