The depreciation of the New Taiwan dollar has helped boost investment returns at Shin Kong Life Insurance Co (新光人壽), although its total profits plunged 60 percent annually amid tumbling financial markets, Shin Kong Financial Holding Co (新光金控) told an online investors’ conference yesterday.
The life insurer saw its after-hedge recurring yield rise to 3.77 percent at the end of September, from 2.2 percent a year earlier, and its after-hedge investment return edge up to 3.87 percent from 3.86 percent a year earlier, company data showed.
FOREX GAINS
Photo: Allen Wu, Taipei Times
As the NT dollar has lost value against the US dollar this year, the company in the first nine months generated foreign exchange gains of 0.55 percentage points from its assets denominated in foreign currencies, compared with a loss of 1.75 percentage points a year earlier, the data showed.
Shin Kong Life Insurance invested more in foreign fixed incomes given higher bond yields amid rate hikes, with the ratio of overseas fixed income to its total portfolio rising to 67.3 percent, from 63.7 percent a year earlier, the data showed.
NORTH AMERICAN BONDS
Bonds issued in North America made up 39.7 percent of its total overseas bonds, up from 38.7 percent a year earlier, while European bonds remained flat at about 23 percent and Asian bonds fell to 37.5 percent.
Shin Kong Life Insurance reduced its investment in local stocks, which have tumbled during the first nine months, with the proportion of local stocks in its portfolio sliding from 7.2 percent to 6 percent at the end of September.
Sales of insurance policies denominated in foreign currencies expanded 19.5 percent year-on-year to NT$33.36 billion, accounting for 79.5 percent of all policies, up from a weighing of 78.8 percent a year earlier.
The life insurer said that it would continue to focus on sales of insurance policies denominated in foreign currencies, as such products help it earn more interest spread and reduce its exposure to volatility in the currency exchange rate, it said.
CALL FOR DIVIDENDS
Meanwhile, as Shin Kong Financial’s net profit shrank 52 percent annually to NT$10.37 billion (US$335 million), or earnings per share of NT$0.65, investors at yesterday’s conference asked whether it could distribute cash dividends next year.
The company still has a capital surplus of about NT$18 billion, but it needs to discuss with the regulators whether it could use the funds to distribute dividends, it said, adding that it faces some pressure.
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