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

AM Best has commented that 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) remain unchanged in view of the negative impact from pandemic insurance claims on the company’s financials as of the end of September 2022, based on AM Best’s expectation of the company’s business and capital plans over the short to intermediate term.

Nan Shan General’s reported capital and surplus declined by more than half during the first nine months of 2022 to TWD 2.0 billion. The main drag was a net loss of TWD 1.3 billion attributable to significant claims related to pandemic insurance products, as well as negative changes in other comprehensive income due to unfavourable capital market conditions. Nonetheless, the company’s local solvency ratio remained above the regulatory minimum as of the end of September 2022.

The company has experienced material adverse claims arising from pandemic insurance products and has provisioned additional claims reserves in the third quarter of 2022 for its in-force pandemic products based on more conservative assumptions. Nan Shan General’s ultimate claims amount remains uncertain and depends on Taiwan’s infection rate development and potential changes in the government’s pandemic policies in the next few months. AM Best expects the company will continue to maintain its solvency ratio above the regulatory minimum over the short to intermediate term as its risk-adjusted capitalisation remains supportive of the business plan.

Nan Shan General’s business scale is small within its parent, Nan Shan Life Insurance Co., Ltd, but it benefits from the distribution support from the parent’s life agency force in sourcing the majority of its premium revenue, in particular for personal line products such as voluntary motor. Moreover, AM Best views the parent as resourceful and willing to provide explicit and implicit financial support to Nan Shan General when needed.

AM Best will continue to monitor closely the pandemic insurance claims development and hold discussions with Nan Shan General’s management to evaluate any subsequent implications on the company’s rating fundamentals. Negative rating actions could occur if the company’s business and capital plans adversely deviate from AM Best’s expectation, to a point that the company’s risk-adjusted capitalization no longer supports the very strong balance sheet strength assessment.

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 © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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