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AM Best Affirms Credit Ratings of Nan Shan General Insurance Co., Ltd.

AM Best has 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 of these Credit Ratings (ratings) is stable.

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

Nan Shan General’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), has materially deteriorated as of year-end 2022, due to large claims arising from pandemic insurance products. Unfavourable capital losses from investments and a dividend payout during the first half of 2022 also weakened the company’s capital position. AM Best expects the company to restore its capital strength from explicit financial support provided by its immediate parent, Nan Shan Life Insurance Co., Ltd. (Nan Shan Life), as well as resume its capital growth through the retention of net profits derived from non-pandemic insurance underwriting and investment over the intermediate to long term, based on the company’s business and capital plans. AM Best expects the company’s risk-adjusted capitalisation to restore to a supportive level in the second half of 2023.

Nan Shan General reported a significant net loss of TWD 1.3 billion as of the end of September 2022. AM Best expects the company to record a major loss for full-year 2022, compared with a net profit of TWD 351 million for full-year 2021, predominantly attributed to pandemic insurance claims. AM Best expects the ultimate claims amount to remain stable in the first half of 2023. The company’s monthly gross claims paid has shown a consistent declining trend since November 2022. AM Best considers the pandemic insurance loss as a one-off event, and the company should be able to gradually recoup its losses via the traditionally profitable non-pandemic insurance underwriting and investment results, although it is unlikely to do so over the short to intermediate term.

Nan Shan Life is the third-largest life insurance company in Taiwan in terms of total assets. While Nan Shan General’s business scale is small within Nan Shan Life, the company benefits from parental support in terms of the shared brand recognition, strong distribution support and operating and capital commitments.

Negative rating actions could occur if Nan Shan General exhibits material and sustained deterioration in operating performance, particularly in terms of the non-pandemic traditional underwriting portfolio and investment results. Negative rating actions also could occur if there is a material or continued decline in the company’s risk-adjusted capitalisation; for example, due to adverse deviation from its capital plan or a much faster-than-expected expansion in underwriting risks. Negative rating actions also could occur if Nan Shan Life experiences a significant deterioration in its credit fundamentals, which AM Best would view as having a material negative impact on Nan Shan General.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising 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 © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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