Nan Shan Life Insurance Co. Ltd.

The stable outlook reflects our expectation that Nan Shan Life's capital adequacy will remain sound over the coming two years, given the insurer's moderate premium growth path. That is despite a likely shift in Nan Shan Life's investment allocation toward equity-like investments. We also believe the insurer will maintain close monitoring of its investment risk exposure to prevent further deterioration from the current moderate risk level. In addition, the stable outlook reflects our view that Nan Shan Life's operations will remain independent from its two main shareholders, Taiwan-based Ruentex and Pou Chen Corp. groups, under Taiwan's regulatory framework for financial service sectors. We may raise the ratings if Nan Shan Life demonstrates sustainable restoration of its franchise and business value

...Strong business position as the top three life insurer in Taiwan. We view Nan Shan Life Insurance Co. Ltd.'s business position as strong, given the insurer is one of the top three players by business scale in Taiwan's life insurance sector. Nan Shan Life has maintained a 16%-17% share of this insurance market in terms of total assets in recent years. The insurer's well established scale has also helped underpin its overall competitive position. Resilient distribution network with proactive product strategy is a clear competitive edge. Nan Shan Life's well-established scale has helped to attract good talent in its agent channels and tight relationship with alliance banks, which underpin the resilience of its distribution network. At the same time, the insurer has a proactive mechanism to formulate and execute product strategies to adapt to market condition changes. Capital and earnings remain strong albeit with sensitivity to high investment risks. We expect Nan Shan Life will sustain its...

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