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AIA delivers another excellent set of results

Released at: 08:56, 28/02/2018 BUSINESS SPOTLIGHT

AIA delivers another excellent set of results

Mr. Ng Keng Hooi, Group Chief Executive and President: "We are confident in the outlook for the Group"

Double-digit growth in main financial metrics recorded in year ending November 30, 2017.

by Quang Huy

The AIA Group, the largest pan-Asian life insurer, has announced strong results for the year ending November 30, 2017, with double-digit growth in main financial metrics.

It posted a 28 per cent increase in the value of new business (VONB), to $3.51 billion, driven by its two largest markets of Hong Kong and China, prompting the Asia-focused insurer to raise its final dividend.

The group recorded strong operating profit generation, with International Financial Reporting Standards (IFRS) after-tax operating profit rising 16 per cent to $4.65 billion. Embedded value (EV) operating profit increased 19 per cent to nearly $7 billion, while operating return on EV was up 110 bps to 16.6 per cent.

The rise in VONB, a key metric of growth for insurers that measures expected profits on new sales, was on par with analyst’s expectations for the company, which underwent a major leadership change in 2017.

In Hong Kong, AIA’s largest market, VONB grew 34 per cent to $1.56 billion during the reporting period, despite some expectations that a slowdown in demand from Chinese customers would decelerate that business.

China has imposed controls on the purchase of insurance products that hold a cash value, in an attempt to stem capital flight. China remained the company’s fastest-growing market in terms of business growth, with VONB up 60 per cent to $828 million in the period.

“AIA has delivered another strong performance, with double-digit growth across our main financial metrics,” said CEO and President Mr. Ng Keng Hooi. “VONB increased 28 per cent to reach a new high of $3.5 billion and we also achieved strong growth in IFRS operating profit and free surplus. The results are the direct outcome of the scale, quality, and breadth of AIA’s exceptional businesses across the region and the significant progress we are making in delivering our strategic objectives.”

“AIA has been in Asia for almost a century and we operate in some of the most dynamic and attractive life insurance markets in the world,” he went on. “With our deep roots and long history in Asia, we have aligned our growth strategy with the opportunities created by the unprecedented structural economic, demographic, and social changes taking place across our markets. AIA’s extensive distribution reach, product innovation, trusted brand and outstanding people capabilities place the group in a unique position to help safeguard the financial security of consumers across the Asia-Pacific region.

“Our focus continues to be on the execution of our strategic priorities that will build on our competitive advantages and make a material difference to AIA’s future. I am confident that our teams will continue to deliver profitable growth and long-term value for our shareholders as we help our customers live healthier, longer, and better lives and plan for a brighter future.”

AIA Group and its subsidiaries comprise the largest independent publicly-listed pan-Asian life insurance group. It has a presence in 18 markets in Asia-Pacific: wholly-owned branches and subsidiaries in Hong Kong, Thailand, Singapore, Malaysia, China, South Korea, the Philippines, Australia, Indonesia, Taiwan, Vietnam, New Zealand, Macau, Brunei, and Cambodia, a 97 per cent-owned subsidiary in Sri Lanka, a 49 per cent-owned joint venture in India, and a representative office in Myanmar.

The business that is now AIA was first established in Shanghai almost a century ago. It is a market leader in the Asia-Pacific region (excluding Japan) based on life insurance premiums and holds leading positions across the majority of its markets. It had total assets of $216 billion as at November 30, 2017.

AIA meets the long-term savings and protection needs of individuals by offering a range of products and services, including life insurance, accident and health insurance, and savings plans.

The Group also provides employee benefits, credit life and pension services to corporate clients. Through an extensive network of agents, partners and employees across Asia-Pacific, AIA serves the holders of more than 30 million individual policies and over 16 million participating members of group insurance schemes.

In an interview with VET last August, Mr. Hooi said that AIA Vietnam is adopting its global orientation of integrating digital technology into their services and products, introducing a comprehensive healthcare program into the life insurance story. In the future, AIA will continue its digitalization journey in Vietnam.

“We will continue to equip AIA agents with a variety of technological devices, provide more convenience, make customer access services easier, and give customers clear and concise information,” Mr. Hooi said.

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