Shin Kong Financial Holding Co (新光金控) aims to increase sales of foreign-currency insurance policies and wealth management products by a double-digit percentage this year as hedging costs remain a challenge, top executives said yesterday.
The conglomerate, which focuses on life insurance, provided the guidance after reporting net income of NT$13.51 billion (US$462.9 million) for the first two months of this year, or earnings per share of NT$1.31.
The results already surpassed the level for the whole of last year, securing it second place in terms of profitability after Cathay Financial Holding Co (國泰金控), the nation’s largest by market value.
“Hedging costs remain a top challenge for the life insurance unit and the industry as a whole,” Shin Kong Financial vice chairwoman Catherine Lee (李紀珠) told an investors’ conference in Taipei.
The fast appreciation of the New Taiwan dollar against the US dollar last year caught the industry off-guard, Lee said, adding that the uptrend has continued so far this year.
The company’s main subsidiary, Shin Kong Life Insurance Co (新光人壽), is seeking to keep hedging costs at between 1 percent and 1.5 percent this year, compared with 1.55 percent last year, Shin Kong Financial executive vice president Sunny Hsu (徐順鋆) said.
Shin Kong Life’s first-year premiums are forecast to reach NT$110 billion this year, aided by an enlarged sales staff and a continued focus on sales of foreign-currency insurance policies, Hsu said.
To that end, Shin Kong Life plans to hire more sales agents while accelerating its digital migration to increase online customers and transactions by a double-digit percentage, the company said.
Shin Kong Life has more than NT$100 billion in cash and plans to raise its stakes in local equities that pay high dividends, but some with relatively low volatility risks, Shin Kong Financial chief investment officer James Yuan (袁宏隆) said.
The high cash level would allow the insurer to increase holdings in assets abroad that might benefit from interest rate hikes by the US Federal Reserve and other central banks, Yuan said.
Its banking subsidiary, Shin Kong Commercial Bank (新光銀行), aims to boost income by improving its retail banking business and participating in syndicated loans, senior vice president for investor relations Stan Lee (李超儒) said.
Shin Kong Bank is eyeing double-digit percentage growth in sales of wealth management products and fee income from digital banking, Stan Lee said.
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