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Mar 2024

Nan Shan Life at 60: Evolving approaches to insurance in a changing world

Source: Asia Insurance Review | Dec 2023

In celebration of its 60th year, Nan Shan Life Insurance stands at the intersection of tradition and transformation. The company’s president Mr Fan Wen Wei shares a forward-looking vision with Asia Insurance Review and explores how demographic changes and societal expectations shape the future of insurance.
By Vincent Liu Liang
 
 
Nan Shan Life’s president Fan Wen Wei shared that internal and external research indicates that by 2022, Taiwan’s aging index had reached 17.6%, and the proportion of the population over 65 is expected to surpass 20% between 2025 and 2030. The low fertility rate in Taiwan poses challenges for the society. As the population ages, the increasing number of elderly individuals in families necessitates care, adding pressure to their family members.
 
Retirement issues come to the forefront, with research indicating that 20% of Taiwanese believe they need at least NT$10m ($310,183) for a comfortable retirement, and 7% think they need NT$20m. With increased life expectancy and early retirement, there’s a much greater demand for retirement funds than before, making the retirement market a significant opportunity for the insurance sector.
 
Moreover, healthcare for the elderly represents another challenge. While the average life expectancy is 83 or 84 years, approximately 8 to 10 of those years are spent in poor health. Consequently, medical expenses account for a substantial portion of the elderly’s outlay, and health insurance becomes a vital field. He mentioned that among Nan Shan Life’s roughly 6.2m customers, tens of thousands receive cancer treatment annually, a common issue particularly in the middle-aged and elderly population, with cancer treatment costs being a significant burden for them.  Beyond physical health concerns, 54% worry more about dementia than cancer, with the high cost of dementia care becoming a considerable burden for families and society.
Mr Fan concluded that although the issues of a declining birthrate and an aging population present challenges, they also offer opportunities for the insurance industry, especially in the areas of retirement funding, medical insurance, and long-term care.
 
Strategies for engaging youth in insurance
As we delved into the psyche of the modern youth, Mr Fan shed light on the profound economic and social pressures faced by the younger generation in Taiwan and globally. Their dwindling confidence in the future, coupled with a contrast to the tenacious spirit of previous generations, poses a unique challenge to the insurance industry.
 
He said that the impact of political and economic uncertainties, the additional family responsibilities due to fewer siblings, and the anxiety these factors generate. Notably, he addressed the pressure of inflation, which often outpaces the income growth rate of young individuals, leading to a decline in their real income.
 
To navigate these challenges, he underscored the importance of educating this demographic on risk planning. He advised that young people should prioritize personal risk planning to safeguard against the financial repercussions of family breadwinners falling ill or encountering accidents. Moreover, he highlighted the responsibility of insurance companies in crafting products that not only offer high value for money and extensive coverage but also cater to the nuanced needs of the youth.
 
Meeting the unique needs of women
Mr Fan highlighted a demographic that deserves special attention within Taiwanese society: women. Acknowledging their pivotal role in the insurance market, he noted the trend among Taiwanese women to delay or forego marriage due to career or family commitments, a shift contributing to a rise in infertility issues. He also observed that women face different health risks compared to men, especially regarding cancer, for which Taiwan’s insurance industry lacks specialized products.
 
To address this gap, Nan Shan Life has introduced insurance plans tailored to women’s needs, including coverage for infertility treatments and in-vitro fertilization, along with health insurance plans designed with women’s specific diseases in mind. He emphasized the company’s commitment to fulfilling female customers’ needs, signalling an ongoing effort to roll out more women-centric insurance products in the future.
 
The ‘Health Guardian Circle’
Mr Fan emphasized during the interview that three years ago, Nan Shan Life introduced the concept of the ‘Health Guardian Circle’ marking a shift from being a mere provider of insurance to becoming a collaborative partner in customers’ health management. He highlighted the company’s enhancement of customer experience through digital services, aiming to foster clients’ health via insurance products.
 
He further explained how the company offers tailored products to clients with different health conditions, such as specialized insurance goods for patients with hypertension, and bespoke insurance plans for diabetics, all designed to promote health and address potential illnesses. For those suffering from critical illnesses or cancer, Nan Shan Life provides resources to help clients obtain suggestions to improve treatment methods and offers second opinion services.
 
He touched on the company’s collaboration with over fifty suppliers, providing a spectrum of services from health maintenance to disability support, catering to clients’ needs at various health stages.
 
New insurance product strategies
In the realm of insurance innovation, Nan Shan Life continues to pioneer with their forward-thinking strategies. Mr Fan revealed that they have over forty insurance policy products that offer spillover-effect policies, particularly in the Health insurance sector. This year, the company has introduced an innovative dental insurance plan that stands out by offering premium discounts to customers who undergo annual teeth cleaning and can provide proof of it.
 
As civilization diseases escalate and the demand for diverse insurance products grows, the company plans to roll out even more novel offerings.
 
Challenges of advanced healthcare
Facing the challenges of treating critically ill patients, Mr Fan believes that the rapid advancement of modern medical technologies offers new opportunities to the industry. He introduced how cutting-edge treatments such as precision targeted drugs and advanced surgical techniques have become more diverse and effective. He said that while technological progress is unstoppable, it is crucial to understand and adapt to these changes, and that people should not fear future serious illnesses due to better treatment options available. However, he also pointed out that insurance products need to evolve with medical advancements; traditional cancer and critical illness policies may no longer suffice.
 
He explained that the company is designing supplemental packages at reasonable prices to complement traditional insurance, adapting to the increased treatment costs brought by new medical methods. He notes that even though traditional insurance might offer coverage of NT$500,000 or NT$1m, modern treatments may require far more, possibly up to NT$2m or NT$3m. Therefore, the company is introducing new supplemental packages to help clients enhance their existing insurance plans to meet the growing financial demands of modern treatment methods.
 
The integration of ESG principles
Nan Shan Life has a longstanding presence in the Taiwanese market, with a history of 60 years.
 
Mr Fan discussed how the company has balanced economic development and corporate social responsibility throughout its long-term business operations.
 
He touched upon the trend towards ESG (Environmental, Social, and Governance) and highlighted how the company promotes health through its insurance products by reducing social burdens, such as through organized health work and health insurance policies. The company has introduced a sustainable strategic themes called “H.E.A.R.T.” to integrate company resources, maximize synergistic effects, and expand social impact.
 
He said that the spirit of H.E.A.R.T. is integrated into Nan Shan Life’s products and services, constituting a significant part of the company’s social responsibility and aligning with the core values of the insurance industry.
 
He also emphasized the insurance industry’s essential role and the need to return to its foundational purpose of providing protection, particularly to low-income groups. Looking ahead, he predicts that within the next five to ten years, insurers will need to focus on designing products that address the needs of an aging population and societies with declining birthrates. Consequently, products offering protection, along with disability and health insurance, are set to become increasingly important. A 
 
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