Nan Shan Life Insurance Issuer Summary

Report date: 2026-05-14
Issuer: Nan Shan Life Insurance Company, Ltd.
Sector: Taiwan life insurance
Primary credit focus: Issuer credit, insurance financial strength, FX and ALM, regulatory capital, and ranking differences between domestic and offshore Tier 2 subordinated debt

1. Business Snapshot and Recent Developments

Nan Shan Life Insurance Company, Ltd. (Nan Shan Life Insurance; hereafter, Nan Shan Life) is a major life insurer based in Taiwan. The starting point for credit analysis is to view the company not as a bank, securities firm, or general corporate, but as a life insurance issuer with long-duration insurance liabilities backed by very large domestic and offshore investment assets. The key is to assess, in combination, long-term obligations to policyholders, the currency and duration profile of assets and liabilities, guaranteed rates, surrender behaviour, medical and accident claims, offshore fixed-income assets, FX hedging, regulatory capital, and the ranking of subordinated capital securities.

According to the company’s official history, Nan Shan Life was established in July 1963 and is one of Taiwan’s long-established insurers. As confirmed on the official website as of May 2026, the company has more than 4,000 employees, over 30,000 agents, more than 6.7 million policyholders, over 11.7 million in-force policies, 25 branches, and 291 agency offices. Because life insurance depends on long-term contracts and trust, the distribution network, persistency, customer base, brand, and policy administration capabilities feed into premium generation, surrender resilience, and capital-market confidence.

The official homepage presents the company’s 2024 business scale as paid-in capital of NT$147bn, ranking first in the industry; total assets of NT$5.6tn, ranking third; and shareholders’ equity of NT$356.3bn, ranking third. These rankings indicate that Nan Shan Life is not a peripheral player in Taiwan’s life insurance market, but a large insurer closely watched by both capital markets and regulators. However, size does not mean low risk. On the contrary, for an insurer with more than NT$5tn of assets, changes in interest rates, foreign exchange, equities, credit spreads, surrenders, and regulatory capital regimes can have significant effects on capital and earnings.

The central issue since 2025 has been the crystallisation of FX risk from Taiwan dollar appreciation and the related capital reinforcement. Fitch Ratings placed Taiwanese life insurers on Rating Watch Negative in May 2025, and on 14 November 2025 affirmed Nan Shan Life’s IFS at A-, Long-Term IDR at BBB+, and Stable Outlook, removing the Rating Watch Negative. Fitch viewed the company’s earnings and capital profile as supportive of the ratings under its base case, but identified as an important constraint the fact that the company holds US dollar assets in excess of US dollar liabilities and uses them to back Taiwan dollar-denominated obligations. Fitch’s statement that rating pressure could arise if the Taiwan dollar appreciates by more than 10% from the end-3Q25 level is the first issue that should be placed in the credit analysis of the company.

On the capital side, the 2025 USD Tier 2 issuance was a major development. According to information disclosed by Allen & Gledhill, Nanshan Life Pte. Ltd. issued USD395mn of 5.875% Tier 2 subordinated dated capital bonds due 2041 in 2025, followed by a USD258mn tap issue, bringing the single series to USD653mn in total. Nanshan Life Pte. Ltd. is a wholly owned subsidiary of Nan Shan Life incorporated in Singapore, and the bonds are stated to be irrevocably and unconditionally guaranteed by Nan Shan Life. However, the “guarantee” here is not the same credit as a guarantee of senior unsecured debt. The securities are Tier 2 subordinated capital bonds, and Fitch also rates the USD subordinated bonds at BBB, below the issuer rating and insurance financial strength rating.

In 2025, the company continued to acquire new business on the premium side, while earnings and investment results were heavily affected by FX and market movements. According to the company’s 2025 Annual Financial Information, standalone net profit was NT$22.1bn in 2023, NT$42.5bn in 2024, and NT$29.0bn in 2025. FYP is shown in the composition table in the same material as NT$74.7bn in 2024 and NT$82.2bn in 2025, while the December 2025 monthly self-reported figures show cumulative 2025 FYP of NT$92.997bn; the definitional or scope difference has not been reconciled in this report. Total premiums declined slightly from NT$289.7bn to NT$283.5bn. The investment portfolio was broadly flat at NT$5.475tn at end-2025, but the investment yield after hedging and FX declined from 3.83% in 2024 to 2.83% in 2025, while unrealised gains and losses on financial assets deteriorated from a loss of NT$110.6bn to a loss of NT$138.7bn.

In the latest monthly self-reported figures, March 2026 recorded a monthly net loss of NT$2.404bn, while the January-March 2026 cumulative figures showed FYP of NT$22.927bn, pre-tax profit of NT$9.507bn, net profit of NT$8.454bn, and EPS of NT$0.58. Monthly self-reported figures are not audited annual financial statements, and monthly earnings for insurers are prone to volatility from FX, investment valuations, reserves, claims, and hedging costs. Therefore, the March 2026 monthly loss alone should not be read as a deterioration in credit quality. However, it does confirm that from 2025 into early 2026, earnings were not smooth and were sensitive to market and FX conditions.

Nan Shan Life’s current profile is that of a Taiwanese life insurance credit combining a large insurance franchise with structural risks arising from offshore assets, long-duration insurance liabilities, currency mismatch, and Tier 2 subordination. Key figures are summarised in the financial tables below.

2. Industry Position and Franchise Strength

Taiwan’s life insurance market spans long-term savings, protection, medical and accident, foreign-currency policies, investment-linked policies, and annuity products, with agents, bancassurance, digital channels, and corporate/group channels competing for business. For credit analysis, the key is not simply whether premium scale is large, but what products are sold through which channels, with what capital consumption and risk retention. A life insurer’s strength is determined by the combination of policyholder base, product design, distribution quality, persistency, asset management, regulatory capital, and claims-paying ability.

Nan Shan Life’s franchise is anchored in its long operating history, large agency force, policyholder base, and top-tier scale in Taiwan. The official history states that the company has more than 6.7 million policyholders, equivalent to more than one-quarter of Taiwanese households. The business-scale disclosure on the official website shows that the company ranks near the top of the industry by paid-in capital, total assets, and shareholders’ equity. Fitch also stated in its November 2025 rating commentary that Nan Shan Life was among Taiwan’s top three insurers by new business premiums in 2024 and 1H25, and assessed the company profile as Favourable.

This market position is a clear credit support. For a life insurer, not only new policies but also the continuation of existing policies, long-term policyholder relationships, and maintenance of the agency network affect earnings and capital formation. The 2025 Annual Financial Information shows a 13-month persistency ratio of 97.0% and a 25-month persistency ratio of 94.5% in 2025, which supports the predictability of insurance liabilities, expense recovery, and future premiums unless surrenders rise sharply.

That said, franchise strength does not eliminate market stress. Taiwanese life insurers have long held large foreign-currency assets, including offshore bonds, to support mainly domestic long-term insurance liabilities. Even if the policyholder base is stable, a sharp appreciation of the Taiwan dollar can worsen hedging costs, FX valuation losses, capital, and comprehensive income. Fitch’s decision in 2025 to identify Taiwan dollar appreciation as a key rating issue illustrates the defining feature of the Taiwanese life insurance model: a strong business franchise, but an asset-liability structure exposed to market movements.

On products, Nan Shan Life offers traditional life insurance, health and medical, accident, annuity, investment-linked, foreign-currency, and OIU products. The company’s product page describes a wide range of offerings, including inpatient medical, fixed-benefit, critical illness, cancer, accident, fracture, microinsurance, annuity, long-term care, preventive healthcare, foreign-currency, and investment-linked insurance. This broadens sales opportunities and customer contact points, but from a credit perspective means that risks differ by product. Traditional and savings products carry guaranteed-rate and ALM risk; health and medical products carry medical inflation and claims risk; investment-linked products carry distribution-quality and policyholder-behaviour risk in market downturns; and foreign-currency products carry FX, hedging, and customer-disclosure risk.

Looking at the 2025 FYP mix, regular-pay traditional life insurance accounted for 37.5%, single-premium traditional life insurance for 23.8%, investment-linked products for 22.6%, other products for 14.3%, and annuities for 1.8%. In the total premium mix, regular-pay traditional products accounted for 38.4%, other products for 39.9%, single-premium traditional products for 14.5%, investment-linked products for 6.6%, and annuities for 0.6%. Fitch views the focus on long-term regular-pay, accident, and health products as potentially expanding new business value, while noting that increased sales of investment-linked products compressed the new business value margin in 2025. Therefore, FYP growth should not be treated as unconditionally positive; product mix, margins, capital consumption, claims, and hedging burden need to be assessed together.

Nan Shan Life’s industry position is strong as a major Taiwanese life insurer. However, this report has not obtained sufficient data on precise peer rankings, market share, product-level margins, or claims ratios. Therefore, the description of the company as a “top-tier life insurer” is used only to the extent supported by the official website, Fitch commentary, and company scale, while no definitive claim is made that its product profitability is better than peers or that its capital is thicker than peers.

3. Segment Assessment

Segment analysis for a life insurer cannot simply list revenue and operating profit by business division in the way one might for a general corporate. For Nan Shan Life, the main analytical axes are product type, distribution channel, insurance liabilities, investment assets, reinsurance, capital consumption, and FX risk. Public information does not provide sufficient detail on product-level margins, claims ratios, new business value, surrender rates, or reinsurance terms. This report therefore organises the credit interpretation using the available FYP mix, total premium mix, product descriptions, and rating-agency comments.

The first axis is traditional life insurance. In 2025 FYP, regular-pay traditional products accounted for 37.5%, while single-premium traditional products accounted for 23.8%. In total premiums, regular-pay traditional products accounted for 38.4% and single-premium traditional products for 14.5%. Traditional insurance creates long-term customer relationships, premium income, and future cash flows, but is sensitive to guaranteed rates, surrender values, assumed mortality, assumed expenses, asset yields, and interest-rate movements. In particular, if high-guarantee products were sold in the past, negative spreads can be an issue in low-rate environments, while valuation losses and higher surrenders can become issues in high-rate environments. Given the scale of Nan Shan Life’s traditional products, verification of guaranteed rates and ALM is essential.

The second axis is health, medical, and accident products. The company’s product page states that it offers a broad range of products, including inpatient medical, fixed-benefit, critical illness, cancer, accident, and fracture products. Fitch also views the focus on long-term regular-pay, accident, and health products as contributing to new business value expansion. Health and accident products may reduce reliance on interest-rate guarantees and align with population ageing and medical demand. However, from a credit perspective, profitability cannot be described as strong without reviewing medical inflation, utilisation frequency, treatment costs, claims, reinsurance, and scope for rate revisions. As Taiwan ages, growth in health and medical products is both a growth opportunity and an area that tests the company’s ability to manage claims and pricing revisions.

The third axis is investment-linked and foreign-currency insurance. Investment-linked products may transfer part of the investment risk to policyholders, but they also involve distribution quality, complaints in market downturns, surrenders, disclosure obligations, and volatility in fee income. Foreign-currency products may bring the currency composition of insurance liabilities closer to foreign-currency assets, but policyholder-side FX risk and sales regulation need attention. Fitch states that Nan Shan Life is seeking to reduce currency mismatch by increasing sales of US dollar-denominated policies and increasing its allocation to Taiwan dollar assets. This direction is credit positive, but it does not immediately eliminate the existing large offshore fixed-income asset base or the structure identified by Fitch in which such assets back Taiwan dollar-denominated obligations.

The fourth axis is the non-life insurance subsidiary and related businesses. The 2024 annual report confirms that Nan Shan General Insurance is a 100%-owned subsidiary of Nan Shan Life. Non-life insurance is exposed to claims cycles, natural catastrophes, motor insurance, reinsurance, and market competition that differ from life insurance. Relative to the scale of Nan Shan Life itself, the non-life subsidiary is not likely to be a central driver of issuer credit immediately, but it may contribute to product breadth, customer touchpoints, and risk diversification as an integrated insurance group. This report has not obtained standalone financials, combined ratio, or reinsurance protection for the non-life subsidiary, and therefore does not treat it as an active credit support.

Across the product and business axes, the central issue is that Nan Shan Life is not merely a “premium-gathering company” but a company whose credit depends on which insurance liabilities are supported by assets of what currency, duration, rating, and liquidity. Even if FYP rises, credit support is limited if the products are high-guarantee and capital-intensive. Even if health and protection products increase, earnings will be pressured if claims and pricing revisions are insufficient. Even if investment-linked products grow, weak distribution quality and policyholder protection in market downturns can create reputational risk. Accordingly, this report does not view product growth as a growth story, but through the quality of capital, earnings, and insurance liabilities.

4. Financial Profile and Analysis

Nan Shan Life’s financial profile has two sides: it is supported by very large insurance liabilities and investment assets, significant operating scale, and investment-grade ratings, but earnings and capital are sensitive to market and FX movements. When assessing the financials, one should not look only at net profit, but also FYP, total premiums, investment yield, unrealised gains and losses, insurance contract liabilities, total comprehensive income, regulatory capital, bond liabilities, and liquid assets.

According to the 2025 Annual Financial Information, standalone net profit was NT$22.1bn in 2023, NT$42.5bn in 2024, and NT$29.0bn in 2025. Earnings improved significantly year on year in 2024, but declined in 2025. ROAE was 7.07% in 2023, 12.13% in 2024, and 8.12% in 2025, while ROAA was 0.44%, 0.82%, and 0.59%, respectively. For a life insurer, a low-looking ROA is in itself a function of the business model’s large asset base, but the decline in ROAE from 2024 to 2025 suggests that the investment environment and FX burden may have pressured earnings.

On premiums, 2025 FYP was NT$82.2bn, up from NT$74.7bn in 2024. By contrast, total premiums declined slightly from NT$289.7bn in 2024 to NT$283.5bn in 2025. FYP growth indicates new-business generation, but the decline in total premiums points to the need to examine existing policies, product maturities, volatility in single premiums, the investment-linked product mix, and the effects of surrenders or paid-up policies. For a life insurer, credit support is weaker if existing-policy renewal and persistency, product profitability, and capital consumption deteriorate, even when new business is growing.

In the monthly self-reported figures through March 2026, cumulative January-March FYP was NT$22.927bn, pre-tax profit was NT$9.507bn, and net profit was NT$8.454bn. This indicates that new business and earnings were still being generated at the start of 2026. However, March 2026 alone recorded a pre-tax loss of NT$3.076bn and a net loss of NT$2.404bn, showing that monthly earnings are not a stable straight line. Insurers’ monthly self-reported earnings are affected by market valuations, hedging, claims, reserves, and seasonality, and should therefore be rechecked using quarterly, semi-annual, and annual audited or reviewed materials.

The investment portfolio is central to the credit analysis. The standalone investment portfolio at end-2025 was NT$5.475tn, broadly flat versus NT$5.482tn at end-2024. Its composition was NT$3.467tn, or 63.3%, in offshore fixed-income assets; NT$259.4bn, or 4.7%, in domestic fixed-income assets; NT$619.1bn, or 11.3%, in domestic equities; NT$166.0bn, or 3.0%, in offshore equities; NT$234.6bn, or 4.3%, in real estate; and NT$333.2bn, or 6.1%, in cash and cash equivalents. Offshore fixed-income assets are overwhelmingly large, and the company’s credit quality is highly sensitive to Taiwan dollar/US dollar FX, offshore bond yields, hedging costs, credit spreads, and accounting unrealised gains and losses.

Investment yield declined in 2025. Company materials show that the investment yield after hedging and FX declined from 3.83% in 2024 to 2.83% in 2025. Unrealised gains and losses on financial assets deteriorated from a loss of NT$110.6bn at end-2024 to a loss of NT$138.7bn at end-2025. This indicates that even with new business and capital reinforcement in 2025, unrealised losses and yield compression remained on the asset-management side. For a life insurer, unrealised losses do not necessarily translate into immediate cash outflows, but they can become important constraints in surrender stress, regulatory capital, accounting capital, and rating-agency capital models.

On the consolidated balance sheet, total assets were NT$5.418tn at end-June 2025, down from NT$5.624tn at end-December 2024. Cash and cash equivalents were NT$176.6bn, FVTPL financial assets were NT$1.033tn, FVOCI financial assets were NT$250.7bn, financial assets at amortised cost were NT$3.212tn, investment property was NT$215.4bn, and loans were NT$108.8bn. Financial assets account for the majority of total assets, showing that the company’s credit quality as an insurer depends heavily on asset management and accounting classification.

On the liability side, insurance contract liabilities were NT$4.580tn at end-June 2025, accounting for most total liabilities. In the June 2025 interim financial statements, the auditors stated that insurance reserves within insurance contract liabilities accounted for 88% of total liabilities, while insurance contract liabilities as a whole accounted for 89% of total liabilities, and identified the calculation of insurance reserves and the adequacy of insurance contract liabilities as key audit matters. This is the most important point in Nan Shan Life’s credit analysis. Not only market risk on the asset side, but also mortality, morbidity, surrender rates, expense ratios, discount rates, guaranteed rates, and estimates of future cash flows on the liability side can have major financial effects.

In the 1H25 income statement, premium income was NT$132.6bn, retained earned premium income was NT$128.1bn, and interest income was NT$70.1bn. Meanwhile, foreign exchange translation losses were NT$223.5bn, the increase in the foreign exchange valuation reserve was NT$38.6bn, and the reclassification gain under the overlay approach was shown as a positive NT$92.3bn, demonstrating large swings in investment- and FX-related items. Operating profit was NT$14.6bn and net profit was NT$14.4bn, but other comprehensive loss was NT$72.8bn and total comprehensive loss was NT$58.4bn. Looking only at positive net profit risks overstating the resilience of the insurer unless comprehensive income and the impact on capital are also assessed.

Capital was pressured in 1H25. Consolidated total equity declined from NT$356.3bn at end-December 2024 to NT$297.9bn at end-June 2025. This is consistent with Fitch’s focus on Taiwan dollar appreciation and capital pressure that year. Fitch stated that Nan Shan Life’s RBC ratio declined from 299% at end-2024 to 276% at end-1H25, but estimated that after subordinated debt issuance, the Prism capital score returned to Very Strong by end-3Q25. In other words, capital may have recovered to an adequate level, but that recovery reflected capital-security issuance and FX assumptions, rather than a naturally stable capital position.

In summary, Nan Shan Life has a large premium base, positive earnings, very large investment assets, and capital-market access, while its capital is sensitive to market movements through investment-yield compression, unrealised losses, FX valuation, comprehensive income, insurance contract liabilities, and RBC decline. Current credit support comes from scale, persistency, investment-grade ratings, capital reinforcement, and Fitch’s removal of the RWN. Credit constraints are the large offshore fixed-income asset base, sensitivity to Taiwan dollar appreciation, the long-duration nature of insurance liabilities, the 1H25 capital decline, and unverified ALM, hedging, and product-level profitability.

5. Structural Considerations for Bondholders

For Nan Shan Life bondholders, the key issues are which entity is the issuer, which entity is the guarantor, and how the debt ranks relative to policyholder obligations. For a life insurer, obligations to policyholders are extremely large, and regulatory capital securities are rated on the premise of loss absorption and subordination. Even when the issuer’s business franchise is strong, bond risk cannot be assessed without confirming the ranking of the individual security, coupon suspension, redemption restrictions, regulatory approvals, and tax and currency terms.

Nan Shan Life itself is a Taiwanese life insurer, and insurance contract liabilities account for most consolidated liabilities. At end-June 2025, insurance contract liabilities were NT$4.580tn, close to 90% of total liabilities. By contrast, bond liabilities were NT$100.3bn, small relative to total assets and insurance liabilities. Looking only at scale, bond liabilities may appear limited, but recovery in an insurer failure and valuation under stress cannot be assessed using simple asset coverage, because policyholder protection, regulatory intervention, subordination provisions, and capital character take priority.

The 2024 annual report confirms that Nan Shan Life owns 100% of Nanshan Life Pte. Ltd. The company is a Singapore subsidiary acquired on 26 July 2024 and became the issuer of the USD Tier 2 subordinated capital bonds in 2025. According to Allen & Gledhill’s disclosure, Nanshan Life Pte. Ltd. issued USD395mn of 5.875% Tier 2 subordinated dated capital bonds due 2041, then issued an additional USD258mn, bringing the total to USD653mn. Nan Shan Life irrevocably and unconditionally guarantees the bonds.

The point to note is that the SPV issuance and parent guarantee structure alone should not lead investors to treat the bonds as senior parent debt. The issued securities are Tier 2 subordinated dated capital bonds and have regulatory capital characteristics. Fitch also rates Nanshan Life Pte. Ltd.’s USD subordinated bonds at BBB, below Nan Shan Life’s Long-Term IDR of BBB+ and IFS of A-. This reflects that the bonds involve not only the insurer’s general creditworthiness, but also subordination, capital character, regulatory loss absorption, and the possibility of coupon and redemption restrictions.

There is also domestic subordinated debt. The corporate-bond section of the 2024 annual report lists undated cumulative subordinated corporate bonds issued in the first tranches of 2016, 2017, and 2018. For example, the first 2016 tranche was NT$25bn, with an initial 10-year coupon of 3.5% and a 1% step-up if not redeemed after 10 years; the first 2017 tranche was NT$7bn, with an initial 10-year coupon of 3.45%; and the first 2018 tranche was NT$10bn. These are funding instruments with capital and subordinated characteristics in the domestic market and need to be evaluated separately from ordinary bank borrowings or senior bonds.

Structural protection for bondholders cannot be measured solely by issuer size. Nan Shan Life’s main repayment sources are earnings from insurance operations, investment income, capital, liquid assets, and market access. However, policyholder obligations, maintenance of regulatory capital, claims payments, surrender response, FX hedging, reinsurance, taxation, and supervisory decisions can affect fund transfers and coupon or redemption payments. For Tier 2 bonds in particular, even when issuer credit quality is maintained, they may not be called in order to preserve regulatory capital, or coupon and redemption may depend on regulatory approval.

This report has not obtained the Offering Circular, trust deed, coupon deferral, write-down, conversion, regulatory call, tax, approval conditions from the FSC or relevant authorities, change of control, cross default, or negative pledge for the USD Tier 2. Therefore, it does not make a final investment judgement on the individual bond. As an issuer, Nan Shan Life is an investment-grade insurer, but Tier 2 investors need to evaluate issuer credit, security ranking, regulatory capital features, currency, hedging, and call likelihood separately.

6. Capital Structure, Liquidity and Funding

Nan Shan Life’s capital and liquidity are large in absolute scale. However, a life insurer’s capital must be viewed as a buffer against insurance liabilities, investment assets, FX, interest rates, equities, hedging, and regulatory models. As shown during the Taiwan dollar appreciation episode in 2025, even a company with total assets above NT$5tn and total equity around NT$300bn can see capital metrics move over a short period due to FX, rates, and comprehensive income.

Consolidated total equity was NT$297.9bn at end-June 2025, down from NT$356.3bn at end-December 2024. This is consistent with the total comprehensive loss of NT$58.4bn in 1H25. Even when net profit is positive, shareholders’ equity and regulatory capital can be pressured if FVOCI, the overlay approach, FX, hedging, and interest-rate movements feed through to capital. For a life insurer, positive net profit and stable capital are not the same thing.

Fitch’s capital assessment is important for understanding the company’s current position. Fitch stated that Nan Shan Life’s RBC ratio declined from 299% at end-2024 to 276% at end-1H25. The drivers cited were unrealised FX losses from the sharp Taiwan dollar appreciation in May 2025 and capital consumption from new business growth. On the other hand, Fitch estimated that after the USD395mn subordinated-bond issuance in September 2025, the Prism capital score had returned to the Very Strong category at end-3Q25, and that the USD258mn tap issue in November would further reinforce capital. Therefore, in the rating agency’s view, capital recovered, but it remained sensitive to FX assumptions.

In the standalone investment portfolio at end-2025, cash and cash equivalents were NT$333.2bn, up sharply from NT$115.8bn at end-2024. This is positive for liquidity. However, insurer liquidity cannot be assessed by cash alone. Surrenders, maturities, claims, hedge collateral, derivative margin, unrealised losses on asset sales, regulatory encumbrance of assets, and capital maintenance can all interact. The price at which offshore fixed-income assets, domestic and offshore equities, real estate, and other assets can be monetised under stress has not been confirmed.

On funding, the company has accessed the offshore USD Tier 2 market in 2025 in addition to domestic subordinated debt. This supports the view that, as a Taiwanese life insurer, it has access to international capital markets. In particular, the issuance of USD Tier 2 after the 2025 FX stress, and Fitch’s view that the Prism capital score improved, are credit positive as evidence of capital-reinforcement capacity. However, capital securities rank lower for principal and interest, and also increase issuer leverage and interest burden. The ability to raise capital is positive, but if capital becomes too dependent on capital securities, loss-absorption risk for subordinated-bond investors increases.

The central constraints on liquidity and capital are currency mismatch and regulatory capital transition. Fitch states that Nan Shan Life holds US dollar assets far in excess of US dollar liabilities and uses them to back Taiwan dollar-denominated obligations. However, this report has not obtained a currency breakdown of insurance liabilities, and the ratio of foreign-currency insurance liabilities to Taiwan dollar insurance liabilities has not been confirmed. The 2024 annual report states that the company is preparing for regimes including IFRS 17, ICS, and IFRS S1/S2, and capital requirements and liability valuation after transition cannot be assessed only using the old RBC framework. Because this report has not obtained the quantitative impact after transition, the company’s capital headroom is viewed conservatively.

Overall, Nan Shan Life’s capital and liquidity have sufficient market access and cash and investment assets for an investment-grade life insurer in normal conditions. However, capital metrics can move over a short period if Taiwan dollar appreciation, higher hedging costs, interest-rate movements, equity declines, higher claims, and regulatory capital transition overlap. Bond investors should continue to monitor RBC, Prism, total equity, the FX valuation reserve, unrealised gains and losses, cash, short-term debt, and Tier 2 issuance and call trends.

7. Rating Agency View

Ratings are useful external assessments for organising Nan Shan Life’s credit quality. However, for insurers, there are many rating types, and it is important not to confuse the scales. Insurance financial strength ratings, issuer ratings, national-scale ratings, and individual subordinated-debt ratings each assess different risks. A high national-scale rating indicates relative position within Taiwan, but does not have the same meaning as the same symbol on an international scale. IFS is closer to the ability to pay policyholder obligations and differs from IDR and Tier 2 ratings.

The company’s official Credit Ratings material shows, as of 26 November 2025, Standard & Poor’s at A- / Stable, Taiwan Ratings Corp. at twAA+ / Stable, and Fitch Ratings at A- / AA(twn) / Stable. The official material is useful for confirming rating levels, but this report has not obtained the detailed rationale texts from S&P or Taiwan Ratings. Therefore, S&P’s A- is treated as an officially displayed rating level, and upgrade/downgrade triggers or detailed capital assessment are not asserted.

For Fitch, the rating commentary dated 14 November 2025 was confirmed via a TradingView / Reuters republication. According to that commentary, Fitch affirmed Nan Shan Life’s IFS at A-, National IFS at AA(twn), Long-Term IDR at BBB+, and National Long-Term Rating at AA-(twn), with Stable Outlooks, and removed the Rating Watch Negative that had been in place since May 2025. Fitch also rated the Taiwan dollar subordinated debt at A+(twn) and the USD subordinated capital bonds issued by Nanshan Life Pte. Ltd. at BBB. The original Fitch page could not be directly obtained, so the RBC, Prism, and sensitivity points are based on the Fitch comments republished in that article.

Fitch’s positive assessment centres on the company profile, new-business growth, diversified distribution channels, stable risky-asset exposure, and capital reinforcement. Fitch states that Nan Shan Life was one of Taiwan’s top three insurers by new business premiums in 2024 and 1H25, and that it has a distribution network including roughly 33,000 agents, bancassurance, and e-commerce platforms. The company profile is assessed as Favourable, and the large life insurance franchise is a rating support.

At the same time, Fitch’s most important constraint is FX risk. Fitch states that Nan Shan Life holds US dollar assets in excess of US dollar liabilities and uses them to back Taiwan dollar-denominated obligations. This asset-liability currency mismatch pressures capital and earnings if the Taiwan dollar appreciates rapidly and sustainably. However, the currency breakdown of insurance liabilities has not been confirmed in this report. Fitch explicitly states that rating pressure could arise if the Taiwan dollar appreciates by more than 10% from the end-3Q25 level. This is consistent with the central issue in this report.

Fitch also presents both sides of the capital position. In 1H25, Taiwan dollar appreciation and new business growth reduced the RBC ratio from 299% at end-2024 to 276% at end-1H25. On the other hand, after the USD395mn subordinated-debt issuance in September 2025, Fitch estimated that the end-3Q25 Prism capital score was in the Very Strong category, and expected it to be further reinforced after the USD258mn tap issue in November. Therefore, Fitch’s rating affirmation is not a simple optimistic view that capital is sufficient, but an assessment of the tension between capital reinforcement and FX risk.

For downgrade sensitivities, Fitch identifies cases in which material FX losses deplete the FX reserve and capital buffers, the company cannot maintain a Strong capital score under the Prism Global Model, or ROE declines to 3% for a prolonged period. For upgrade sensitivities, a meaningful reduction in unhedged FX exposure is an important condition, and upside from earnings improvement alone is limited.

The rating-agency view and the analysis in this report are broadly aligned. The large franchise, persistency, and capital-market access are supports, while the large offshore fixed-income asset base, the currency mismatch identified by Fitch, unrealised losses, and the assumption-dependent nature of insurance liabilities are constraints. The distinctions among IFS A-, IDR BBB+, USD Tier 2 BBB, national-scale AA(twn), and S&P A- should be maintained throughout.

8. Credit Positioning

Nan Shan Life’s credit positioning is best framed as a major Taiwanese life insurer with international investment-grade insurance financial strength, but one that requires careful incorporation of FX, capital, insurance-liability, and subordinated-debt-ranking risks. Looking only at the business franchise, the policyholder base, agency network, asset scale, capital scale, FYP, and ratings are all consistent with a large issuer. At the same time, the fact that it was placed on Rating Watch Negative during the 2025 Taiwan dollar appreciation episode showed that the company’s credit quality is sensitive to market and FX assumptions.

Within the peer group, Nan Shan Life is a top-tier Taiwanese life insurer, and Fitch views it as one of the top three by new business premiums in 2024 and 1H25. The official homepage also states that it ranks third in the industry by total assets and shareholders’ equity. However, this report has not conducted a detailed peer comparison against Cathay Life, Fubon Life, KGI Life, Taiwan Life, and others, and therefore does not assert that Nan Shan Life is the “strongest” or “relatively weak.” A comparison would need to assess RBC, FX reserve, offshore-asset ratio, hedging costs, Prism score, capital securities, FYP, persistency, and unrealised gains and losses on a consistent basis across companies.

For international investors, Nan Shan Life’s senior or issuer credit is an investment-grade insurance credit, based on the combination of Fitch IDR BBB+, the displayed S&P rating of A-, and Fitch IFS A-. However, the USD Tier 2 is rated BBB by Fitch, below the issuer rating. This indicates that, while the company’s insurance franchise is recognised, subordination, capital character, currency, regulatory risk, and coupon restrictions should be reflected in pricing. The issuer-credit view and the investment decision on Tier 2 securities should be separated.

No buy, hold, sell, or avoid recommendation is made on relative value because this report has not confirmed market price, spread, yield, OAS, comparable same-tenor bonds, comparable insurance subordinated debt with similar ratings, or Taiwan financial-institution Tier 2 comparables. The USD Tier 2 has an investment-grade rating, but it must be priced to reflect FX mismatch specific to Taiwanese life insurers and subordinated capital features.

9. Key Credit Strengths and Constraints

Nan Shan Life’s credit strengths are its large franchise in Taiwan’s life insurance market, business scale, capital-market access, persistency, and investment-grade ratings. Established in 1963, with more than 6.7 million policyholders, over 11.7 million in-force policies, more than 30,000 agents, total assets of approximately NT$5.6tn at end-2024, 2025 FYP of NT$82.2bn, a 13-month persistency ratio of 97.0%, and a 25-month persistency ratio of 94.5%, the company is not a peripheral insurer. The USD653mn Tier 2 issuance in 2025 also supports the view that the company can reinforce capital after stress. The official rating list showing S&P A-, Fitch A- / AA(twn), and Taiwan Ratings twAA+ also reinforces market recognition as an investment-grade insurance credit.

The largest constraints are FX and ALM, insurance liabilities, and investment assets. At end-2025, 63.3% of the investment portfolio consisted of offshore fixed-income assets, and Fitch stated that US dollar assets significantly exceeded US dollar liabilities and were used to back Taiwan dollar-denominated obligations. Insurance contract liabilities were NT$4.580tn at end-June 2025, and the auditors identified insurance reserves and liability adequacy as key audit matters. Including domestic equities of NT$619.1bn, offshore equities of NT$166.0bn, and real estate of NT$234.6bn, market risk on the asset side and assumption dependence on the liability side set the ceiling for capital, ratings, and subordinated-debt evaluation.

The fourth constraint is security risk in subordinated capital debt. Nan Shan Life’s USD Tier 2 is supported by the issuer’s franchise, but Fitch rates it BBB, below the IDR. Even with an issuer guarantee, the Tier 2 subordination, coupon suspension, redemption restrictions, regulatory approvals, and capital features must be confirmed. Investors should not buy solely on the issuer name as if the security were senior debt.

Finally, there are disclosure constraints. The 2025 Annual Financial Information is useful, but it is not a full set of audited 2025 annual financial statements. The June 2025 interim financial statements are detailed but not full-year statements. The detailed November 2025 reports from S&P and Taiwan Ratings, the USD Tier 2 Offering Circular, product-level NBV, claims ratios, hedging costs, ALM gap, and guaranteed rates have not been obtained. The framework is sufficient for an initial issuer_summary, but additional confirmation is required before investing in individual bonds or taking a large position.

10. Downside Scenarios and Monitoring Triggers

The first realistic downside scenario for Nan Shan Life is sharp Taiwan dollar appreciation. In a structure where US dollar assets significantly exceed US dollar liabilities, rapid Taiwan dollar appreciation can worsen FX valuation losses, hedging costs, the FX valuation reserve, regulatory capital, and comprehensive income. Fitch stated that rating pressure could arise if the Taiwan dollar appreciates by more than 10% from the end-3Q25 level. Investors need to monitor USD/TWD, hedging costs, the FX valuation reserve, RBC, Prism, total equity, unrealised gains and losses, and policyholder surrender rates together.

The second scenario is interest-rate and ALM stress. If low interest rates persist, reinvestment yields may be insufficient relative to guaranteed rates on legacy policies, leaving negative spread risk. If interest rates rise sharply, bond valuation losses, capital decline, higher surrenders, hedge collateral, and liquidity pressure can become issues. Because Nan Shan Life holds large offshore fixed-income assets, US rates, Taiwan rates, asset and liability duration, accounting classification, and the economic value of amortised-cost assets need to be assessed together. This report has not confirmed the ALM gap, which is a top priority for the next update.

The third scenario is a simultaneous deterioration in claims, surrenders, and risky assets. Growth in health, medical, and accident products may reduce reliance on interest-rate guarantees, but underwriting profit can be pressured if medical inflation, utilisation frequency, delayed rate revisions, or insufficient reinsurance emerge. The 2025 13-month persistency ratio of 97.0% and 25-month persistency ratio of 94.5% are favourable, but if FX losses, rising rates, competing products, and distribution-quality issues overlap, higher surrenders could feed through to asset sales, realisation of unrealised losses, liquidity, ALM, and capital. Because the company also holds domestic equities of NT$619.1bn, offshore equities of NT$166.0bn, and real estate of NT$234.6bn, capital effects under combined market declines and credit-spread widening should also be monitored.

The fourth scenario concerns regulatory capital transition and subordinated-bond terms. IFRS 17 and Taiwan’s transition to a new capital regime could change insurance-liability valuation, capital requirements, earnings recognition, product design, hedging strategy, and dividend and capital-raising policies. The USD Tier 2 is 5.875% capital debt maturing in 2041, and the first call date, step-up, regulatory call, tax call, coupon suspension, loss absorption, redemption approval, ranking of the issuer guarantee, and fund transfers between the SPV issuer and the Taiwan parent need to be confirmed. Even if issuer credit quality remains intact, non-call risk, coupon conditions, and spread movements are directly relevant to returns on the individual bond.

11. Credit View and Monitoring Focus

At present, Nan Shan Life can be viewed as a large insurance issuer with a top-tier franchise in Taiwan’s life insurance market, an adequate premium base, investment-grade ratings, and capital-market access. After the 2025 Taiwan dollar appreciation stress, Fitch removed the Rating Watch Negative, and capital was reinforced through the USD Tier 2 issuance, so it is reasonable to view the near-term credit direction as stabilised. However, that stability includes FX assumptions and capital reinforcement through capital securities; it does not mean that capital is naturally accumulating at a thick level.

The supports are more than 6.7 million policyholders, over 11.7 million in-force policies, more than 30,000 agents, top-tier total assets and shareholders’ equity in Taiwan, high persistency, and access to international capital markets. The constraints are the large offshore fixed-income asset base, the currency mismatch identified by Fitch, insurance contract liabilities of NT$4.580tn, assumptions around guaranteed rates, surrender rates, and claims, unrealised gains and losses, and regulatory capital transition. FYP growth alone should not be viewed as credit improvement; product profitability, ALM, hedging, and RBC/Prism also need to be tracked.

For Tier 2 investors, it is important to separate issuer credit and security risk. Nan Shan Life is a large investment-grade life insurer, but Nanshan Life Pte. Ltd.’s USD Tier 2 is rated BBB by Fitch and carries subordinated capital characteristics, regulatory loss absorption, and possible redemption and coupon restrictions. Even with an issuer guarantee, the specific guarantee ranking, coupon suspension, write-down, redemption approval, and regulatory approval conditions should be confirmed in the Offering Circular and trust deed.

The monitoring focus is the audited 2025 annual financial statements, 2026 quarterly disclosures, USD/TWD, the FX valuation reserve, RBC, Prism, unrealised gains and losses, hedging costs, guaranteed rates, asset and liability duration, surrender rates, claims ratios, reinsurance, and the terms of the USD Tier 2 and domestic subordinated debt. At present, continued monitoring as an “investment-grade major Taiwanese life insurer” is appropriate, but investment decisions should separately assess price, spread, terms, liquidity, call likelihood, and comparisons with peer insurance Tier 2 securities.

12. Short Summary & Conclusion

Nan Shan Life Insurance is a top-tier Taiwanese life insurer with a long operating history, a large policyholder and agency base, investment-grade ratings, and continued access to capital markets. Its credit quality is supported by the franchise, persistency, and ability to reinforce capital, but the analysis needs to distinguish the large offshore fixed-income asset base, the currency mismatch with insurance liabilities, long-duration insurance liabilities, investment-asset risk, and the ranking difference of USD Tier 2 subordinated debt. The issuer has stabilised, but Taiwan dollar appreciation, hedging costs, RBC/Prism, ALM, claims, and individual subordinated-bond terms are the key monitoring points that could change the credit view.

13. Sources

Primary Sources

• Nan Shan Life Insurance Company, Ltd., Company History, accessed 2026-05-14.
  https://www.nanshanlife.com.tw/nanshanlife/en/about-company/
• Nan Shan Life Insurance Company, Ltd., official English homepage, accessed 2026-05-14.
  https://www.nanshanlife.com.tw/nanshanlife/en/index/
• Nan Shan Life Insurance Company, Ltd., Product page, accessed 2026-05-14.
  https://www.nanshanlife.com.tw/nanshanlife/en/product/
• Nan Shan Life Insurance Company, Ltd., Leading Records page, accessed 2026-05-14.
  https://www.nanshanlife.com.tw/nanshanlife/en/leading-records/
• Nan Shan Life Insurance Company, Ltd., 2025 Annual Financial Information, published 2026-03, accessed 2026-05-14.
  https://www.nanshanlife.com.tw/nanshanlife/portal-api/File/10940
• Nan Shan Life Insurance Company, Ltd. and subsidiaries, Consolidated Financial Statements and Independent Auditors' Report, June 30, 2025 and 2024, accessed 2026-05-14.
  https://www.nanshanlife.com.tw/nanshanlife/portal-api/File/9865
• Nan Shan Life Insurance Company, Ltd., monthly self-reported Financial Information, December 2025 and March 2026, accessed 2026-05-14.
  https://www.nanshanlife.com.tw/nanshanlife/en/financial-information/
• Nan Shan Life Insurance Company, Ltd., 2024 Annual Report, accessed 2026-05-14.
  https://www.nanshanlife.com.tw/nanshanlife/portal-api/File/9465
• Nan Shan Life Insurance Company, Ltd., Company Information / Credit Ratings, accessed 2026-05-14.
  https://www.nanshanlife.com.tw/nanshanlife/portal-api/File/6230

Rating Agency And Transaction Sources

• Fitch Ratings, Fitch Affirms Nan Shan Life's IFS Rating at 'A-'; Removes Rating Watch Negative, 2025-11-14, re-published by TradingView / Reuters, accessed 2026-05-14.
  https://www.tradingview.com/news/reuters.com%2C2025-11-14%3Anewsml_FIT9PSRJ%3A0-fitch-affirms-nan-shan-life-s-ifs-rating-at-a-removes-rating-watch-negative/
• Allen & Gledhill, Issue of US$653 million subordinated dated capital bonds by Nanshan Life Pte. Ltd. guaranteed by Nan Shan Life Insurance Co., Ltd., 2025-12-15, accessed 2026-05-14.
  https://www.allenandgledhill.com/sg/perspectives/articles/31697/issue-of-us-653-million-subordinated-dated-capital-bonds-by-nanshan-life-pte-ltd-guaranteed-by-nan-shan-life-insurance-co-ltd

Internal Working Data

• issuer_summary/issuers/nan_shan_life_insurance/data/nan_shan_life_insurance_key_metrics_20260514.json
• issuer_summary/issuers/nan_shan_life_insurance/working/nan_shan_life_insurance_20260514_writing_plan.md

Unverified / Pending

• The audited 2025 annual financial statements, detailed notes, end-2025 RBC ratio, and TW-ICS transition impact have not been obtained. The 2025 Annual Financial Information is an important source, but it has not been treated as a full set of audited annual financial statements.
• The full text of the detailed reports dated 26 November 2025 from S&P Global Ratings and Taiwan Ratings has not been obtained. Only the ratings displayed in the official rating list have been confirmed.
• The original Fitch Ratings page dated 14 November 2025 could not be directly obtained at the time this report was prepared; RBC, Prism, FX sensitivity, and related points were confirmed using Fitch comments republished by TradingView / Reuters.
• The Offering Circular, trust deed, coupon deferral, write-down, conversion, regulatory call, tax, regulatory approval conditions, and individual covenants for the USD Tier 2 subordinated bonds have not been confirmed.
• For 2025 FYP, the NT$82.2bn figure based on the composition table in the Annual Financial Information coexists with cumulative NT$92.997bn in the December 2025 monthly self-reported figures; the definitional or aggregation-scope difference has not been reconciled.
• The currency breakdown of insurance liabilities, and the ratio of foreign-currency insurance liabilities to Taiwan dollar-denominated insurance liabilities, have not been confirmed.
• Asset and liability duration, guaranteed rates, surrender rates, product-level NBV, claims ratios, scope for medical-insurance rate revisions, reinsurance programme, and detailed hedging costs have not been confirmed.
• Market price, spread, yield, OAS, relative value versus peer or same-rated bonds, and the market assessment of call likelihood have not been confirmed.