AM Best affirms the credit ratings of Nan Shan General Insurance Co., Ltd.
AM Best affirms the credit ratings of Nan Shan General Insurance Co., Ltd.

HONG KONG, March 28, 2024—(BUSINESS WIRE)–AM Best affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Nan Shan General Insurance Co., Ltd. (Nan Shan General) (Taiwan). The outlook for these credit ratings (ratings) is stable.

The ratings reflect the strength of Nan Shan General’s balance sheet, which AM Best rates as very strong, as well as its adequate operating results, neutral business profile and appropriate enterprise risk management (ERM).

Nan Shan General’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), has improved significantly and is estimated to be at a very high level by the end of 2023. The result is supported by the capital contribution of TWD 1.5 billion in cash in 2023 from Nan Shan General’s immediate parent, Nan Shan Life Insurance Co., Ltd (Nan Shan Life), to restore Nan Shan General’s capital strength, following large claims arising from pandemic insurance from 2022 AM Best expects Nan Shan General to maintain its level of risk-adjusted capitalization in the short to medium term. Offsetting factors in the balance sheet strength assessment include the company’s increased exposure to catastrophe risks in tandem with increased retention levels in its reinsurance arrangements amid rising reinsurance costs, as well as a moderately high historical dividend payout ratio, although the company has not declared dividends in 2023.

Nan Shan General reported positive operating results in 2023, partially supported by the release of provisions for pandemic insurance claims reserves and positive investment performance. The company’s return on equity has recovered to the high single digits. Nan Shan General achieved double-digit growth in gross written premiums in 2023, mainly due to the expansion of voluntary motor, passenger insurance and commercial lines. The company has increased premium retention in the large voluntary motor line since 2023, which continues to be a key driver of overall underwriting results. This product line shows an increasing trend in its loss ratio, while its net commission expense is expected to increase due to reduced reinsurance commission income.

The company’s bond portfolio continued to contribute stable interest income streams, which helped partially offset the volatility of capital investments in 2023. AM Best expects Nan Shan General to continue to focus on domestic fixed income securities and to maintains a moderate exposure to equity securities with the objective of increasing overall investment returns.

Nan Shan General is a wholly owned subsidiary of Nan Shan Life, which is the third largest life insurance company in Taiwan in terms of total assets. Although Nan Shan General’s business scale is small within Nan Shan Life, the company benefits from parent support in terms of shared brand recognition, strong distribution support, and operational and capital commitments.

Negative rating actions could occur if there is a material decline in Nan Shan General’s risk-adjusted capitalization, for example, due to a much faster-than-expected expansion of underwriting and/or investment risks that outpaces capital and surplus growth, or the company is experiencing large underwriting losses that significantly erode its capital strength. Negative rating actions may also occur if there is a sustained deterioration in the company’s operating results. In addition, negative rating actions could occur if Nan Shan Life experiences a significant deterioration in its credit fundamentals, which AM Best considers to have a material adverse impact on Nan Shan General. Although considered unlikely in the short to medium term, positive rating actions could occur if the company demonstrates sustained improvement in operating results while maintaining an appropriate ERM rating.

Ratings are communicated to rated entities prior to publication. Unless otherwise noted, ratings have not changed since this announcement.

This press release refers to the credit ratings that are published on the AM Best website. For all rating information relating to the release and relevant disclosures, including details of the agency responsible for issuing each of the individual ratings set out in this release, please see AM Best’s Recent assessment activity Web page. For additional information on the use and limitations of credit score opinions, please see Guide to Best Credit Ratings. For information on the proper use of Best’s credit ratings, Best’s performance ratings, Best’s preliminary credit ratings, and AM Best’s press releases, see A guide to the proper use of Best’s ratings and reviews.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2024 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Madison fan
A financial analyst
+852 2827 3416
[email protected]

Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
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James Chan
Director, Analytics
+852 2827 3418
[email protected]

Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
[email protected]

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