Insurer AIA Group's third-quarter new business value falls 5 percent

Hong Kong-based insurer AIA Group (1299) reported a 5 percent drop in its third-quarter value of new business on Friday, as growth moderated from an "exceptionally high" level a year earlier.

Mainland China, AIA's second-largest market in terms of new business sales, reported a 33 percent fall in the value of new business in the three months ended September 30, reflecting a high base of prior-year comparison when customers brought forward purchases ahead of industry-wide repricing in September last year.

VONB from mainland China was also hurt by a double-digit decline in the new business value of its bancassurance segment.

AIA Hong Kong saw a 3 percent decline in new business value, impacted by strong sales in July last year. 

Some Chinese mainland visitor customers adopted a wait-and-see approach amid extensive news coverage of offshore investments, the company said.

Earlier this year, the Chinese authorities started imposing a 20 percent tax on returns from Hong Kong insurance policies held by mainland residents.

As a result, the insurer's VONB, which gauges expected profits from new premiums and is a key barometer for future growth, fell to US$1.42 billion on a constant exchange rate basis in the quarter, compared with US$1.48 billion a year ago.

"The run-up to these results featured an intense discussion of the pressures created by last year's +40 percent growth in Hong Kong, so this contraction was near-universally expected," said Jefferies.

Reuters

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