AIA denies rumoured South Korea exit

Firm “has never withdrawn from any market around the world”, declares chief executive

AIA denies rumoured South Korea exit

Insurance News

By Gabriel Olano

Pan-Asian insurer AIA banished rumours that it will exit the South Korean market, saying it actually plans to strengthen its unit in the country.

“AIA Group has never withdrawn from any market around the world. Our KRW300 billion (US$260 million) acquisition of a building for the regional office here three years ago illustrates our commitment,” CEO Ng Keng Hooi told reporters at the AIA Health and Wellness Leaders Summit in Seoul.

Ng added that AIA is considering infusing additional capital into its Korean unit, if necessary, in preparation for the country’s adoption of the IFRS 17 accounting standard for insurance contracts. As part of the incoming regulation, insurers must boost their capital bases, placing strain on some firms and their parent groups.

“We have been pre-emptively responding to the changing capital situation,” AIA Life Korea CEO Cha Tae-jin was quoted by the Korea Herald.

“Though it appears to be very unlikely, if the IFRS17 adoption requires a capital increase, we will raise more to meet the needs.”

AIA entered the South Korean market in 1987. For the first half of 2017, it posted a net profit of KRW177.7 billion (US$157.7 billion), double that of the same period in 2016.

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