AIA experiences strong growth in new business value

Bigger buy-back program announced

AIA experiences strong growth in new business value

Insurance News

By Roxanne Libatique

AIA Group has reported a substantial 27% jump in new business value (NBV) for the first quarter, bolstered by significant growth in Hong Kong and mainland China.

According to SCMP’s report, AIA’s NBV – a key indicator of future profitability from newly sold policies – reached US$1.3 billion, up from US$1.05 billion a year ago. Annualised new premiums also saw a notable increase, jumping 23% to US$2.4 billion.

Adjusting for exchange-rate fluctuations, the NBV climbed 31%, with annualised new premiums increasing by 26%. Hong Kong led the way with a 43% increase in NBV, while mainland China saw a 38% rise.

AIA Group’s additional US$2 billion share buy-back

The company also announced an additional US$2 billion share buy-back, which expands an existing US$10 billion program.

AIA CEO Lee Yuan Siong said the buy-back reflects the company’s strong financial standing and confidence in future performance. The insurance giant has also set a target to distribute 75% of its net free surplus through dividends and buy-backs, starting with this year’s annual results.

Performance of AIA Hong Kong and mainland China

AIA operates in 18 Asia-Pacific markets, with Hong Kong and mainland China as its largest contributors to new business and policy sales.

The company benefited from the recovery of mainland Chinese visitor arrivals in Hong Kong, which reached 71% of 2018 levels, following a year marred by COVID-19 disruptions.

In mainland China, insurance is gaining traction as a wealth management tool, contributing to AIA’s growth. The company’s success with tax-deferred pension products has persisted, and analysts project an 18% increase in Thailand’s new business value.

AIA reported that over 60% of its Hong Kong unit’s NBV from mainland Chinese visitors in the first quarter was generated by its own agents. Additionally, the Hong Kong unit was found to have topped 10 market share segments in the Provisional Statistics on Hong Kong Long Term Insurance Business for 2023.

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