Sunday May 05, 2024
Sunday May 05, 2024
Thursday, 21 March 2024 00:06 - - {{hitsCtrl.values.hits}}
AIA Group Ltd., has posted impressive results for the year ended 31 December 2023.
Growth rates are shown on a constant exchange rate basis:
Value of new business (VONB) grew by 33% to $ 4,034 million with Mainland China, Hong Kong, ASEAN ex-Vietnam and India deliveribng double-digit VONB growth.
Annualised new premiums (ANP) increased by 45% to a record high of $ 7,650 million.
VONB margin of 52.6% for the year with an increase in the second half compared with the first half.
AIA said embedded value (EV) operating profit of $ 8,890 million, up 37% per share; operating return on EV (ROEV) of 12.9%, up significantly from 9.4% in 2022; operating profit after tax (OPAT) of $ 6,213 million, up 2% per share and underlying growth of 7% per share.
Additionally underlying free surplus generation (UFSG) of $ 6,041 million, up 5% per share, EV Equity up 7% before returning $ 5.9 billion in dividends and share buy-back; EV Equity of $ 70.2 billion after capital returns to shareholders, up 2% per share; free surplus of $ 16.3 billion at 31 December 2023 and very strong Group LCSM coverage ratio(4) of 275% on the GWS basis and 335% on the shareholder basis.
AIA also announced final dividend of 119.07 Hong Kong cents per share; Total dividend of 161.36 Hong Kong cents per share, up 5% and .$ 3.6 billion returned to shareholders through the share buy-back programme in 2023.
AIA’s Group Chief Executive and President Lee Yuan Siong said: “AIA has delivered excellent VONB growth and a strong financial performance overall. With continued strong business momentum post the pandemic across the Group, we grew ANP by 45% to a record high and VONB was up 33% to more than $ 4 billion. Our diversified business portfolio and unrivalled distribution platform have enabled us to generate higher VONB from our key growth engines of ASEAN, Hong Kong, Mainland China and India as well as double-digit growth from 10 markets.
“Our consistent financial discipline and focus on growing AIA’s high-quality in-force business supported growth in all our other key financial metrics with increases in EV operating profit, EV Equity, OPAT and UFSG on a per share basis. EV Equity increased by 7% to $ 76.1 billion before the return of $ 5.9 billion to shareholders through dividends and share buy-back. AIA’s capital position remained very strong with free surplus of $ 16.3 billion and a Group LCSM coverage ratio(4) of 275%.”
“The Board has recommended a final dividend of 119.07 Hong Kong cents per share, which brings the total dividend to 161.36 Hong Kong cents per share, an increase of 5% from 2022. This follows AIA’s established prudent, sustainable and progressive dividend policy, allowing for future growth opportunities and the financial flexibility of the Group.”
“AIA’s excellent new business performance was underpinned by our powerful and unrivalled distribution platform. Our differentiated Premier Agency is a key competitive advantage for AIA and delivered excellent VONB growth of 23%, driven by an increase in the number of active agents and increased productivity. Our extensive network of strategic distribution partners helps us extend our market reach and generated a 58% increase in VONB, supported by excellent performances in both the bancassurance and retail independent financial adviser (IFA) channels.”
“AIA China delivered VONB growth of 20% across the whole of 2023. We saw excellent new business momentum once the disruptive effects of the pandemic subsided with a 28% increase in VONB from February to December. Supported by a favourable shift in product mix within our long-term savings business and product repricing, VONB margin increased in the second half compared with the first half of 2023.”
“AIA China’s Premier Agency achieved double-digit VONB growth across both our established operations and new branches(5), driven by the commitment to our Premier Agency strategy with a continued focus on quality recruitment and new agent development. Since we began our geographical expansion in 2019, we have now doubled AIA China’s footprint to 10 geographies following the launch of our new operation in Zhengzhou, Henan in May 2023. By replicating our effective and scalable model, our new branches delivered a 55% increase in VONB in 2023 and their contribution exceeded 5% of AIA China’s total agency VONB in the second half.”
“Mainland China continues to offer tremendous opportunities for life and health insurance. In 2023, AIA China deepened its cooperation with strategic bank partners and VONB from its bancassurance channel more than trebled. Our 24.99% investment in China Post Life enables us to capture the significant value available from additional customer segments that are highly complementary to AIA China’s strategy. While not included in our VONB result, China Post Life reported 17% year-on-year growth in VONB(6) in 2023.”
“AIA Hong Kong achieved an excellent performance with VONB up by 82%, supported by growth in both our domestic and Mainland Chinese visitor (MCV) businesses and across our agency and partnership distribution channels. The Hong Kong business was the largest contributor to the Group’s VONB in 2023 as we captured the very strong demand of the MCV segment following the full resumption of normal travel in February 2023. We continued to increase the number of active agents and work closely with our distribution partners to leverage the sustainable and growing opportunities from the MCV segment, which contributed around half of AIA Hong Kong’s VONB in 2023.”
“Our largest operation in the ASEAN markets, AIA Thailand, continued its strong track record with a further 21% increase in VONB. The excellent new business performance was driven by growth from both our market-leading agency and strategic partnership with Bangkok Bank. The consistent execution of our Premier Agency strategy drove excellent growth in the number of new recruits and double-digit increases in both the number of active agents and agent productivity.”
“In Singapore, AIA generated a 10% increase in VONB for 2023. Our focus on agent recruitment and productivity uplift enabled us to deliver a strong increase in the number of new recruits and higher agent productivity. AIA Singapore also recorded excellent VONB growth in our partnership channels, supported by a strong performance from Citibank, N.A. and new business from other partners, which are focused on affluent and high net worth customers.”
“AIA Malaysia reported solid VONB growth of 7% with increases from both agency and partnership distribution channels. Our enhanced propositions that meet the evolving protection needs of our customers have helped deliver higher agent activity and productivity in our Premier Agency. Our bancassurance partnership with Public Bank delivered double-digit VONB growth in 2023, as we collaborated to increase penetration of the bank’s high net worth banking customer segment and increased the number of insurance specialists.”
“VONB of our Other Markets segment was stable in 2023 compared with 2022. Strong underlying growth of the segment was offset by lower VONB from Vietnam. As previously reported, negative consumer sentiment continued to impact the life insurance industry in Vietnam through the year. Excluding Vietnam, Other Markets grew VONB by 15% in 2023. Tata AIA Life delivered another year of excellent VONB growth across all distribution channels and ranked as the third largest private life insurer in India for 2023.”
“Asia is the most attractive region in the world for life and health insurance, where the strong fundamental drivers of demand and major demographic trends provide powerful support for the long-term prospects of our businesses across the region. I am confident that the need for AIA’s insurance products will continue to grow strongly and that our clear competitive advantages, multiple growth engines and unmatched financial flexibility will enable AIA to generate long-term sustainable value for all our stakeholders while we help people live healthier, longer, better lives.”
