AIA Group (1299) has started growing its business in tier 3 cities in the mainland, which has posted higher growth than certain tier 1 and tier 2 cities, chief executive and president Ng Keng Hooi said yesterday.
"We're starting to grow in tier 3 cities, which are huge with population of between five and 10 million people," he said.
He cited as examples cities such as Zhongshan and Wuxi, where AIA has been operating in the past few years.
"We believe growth in tier 3 cities will be very significant," he said.
He said the volume of business in certain cities can grow by more than 100 percent since they are still small. "China is always an exciting market," he said.
Ng said AIA has a strong presence in big cities, such as the tier 1 city of Guangzhou and the tier 2 cities of Suzhou and Foshan.
AIA has five licenses in the cities of Beijing, Shanghai and Shenzhen, as well as in the provinces of Guangdong and Jiangsu.
Daiwa Capital has raised its target price for AIA to HK$68 from HK$60 on prospects of growth of its business on the mainland.
Daiwa expects AIA to record a 37 percent growth in the value of its new business in the first half of this year, driven by rising income in the mainland as well as AIA's strategy of expansion in tier 2 cities.
It also expects the value of AIA's new business in the mainland to increase by about 90 percent year-on-year in the first half, while that in Hong Kong will grow by about 40 percent.
As of July 1, AIA had 8,324 registered agents as members of its Million Dollar Round Table, up 46 percent from last year.
About 70 percent of AIA's value of new business are to be generated by agents.
Ng said his first month as AIA head since June has been exciting and challenging.
"What Mark [Tucker] left behind is a great company, it's a great legacy," he said.
"My focus is continuing to do what we are doing well. I don't see ourselves making a major shift in our strategy."