AIA's new business rises 16pc in quarter

Cici Cao

AIA Group (1299) announced the value of new business of US$1.16 billion (HK$9.02 billion) for the third quarter, an increase of 16 percent year-on-year, thanks to its third-quarter annualized new premiums which grew by 14 percent to US$2.2 billion.

It announced the value of new business of US$3.62 billion in the first nine months, an increase of 22 percent year-on-year, with a 6.76 billion ANP in the period, an increase of 16 percent year-on-year.

VONB margin rose by 0.8 percentage points year-on-year to 52.2 percent in the third quarter, while the margin saw a growth of 2.4 percentage points year-on-year to 53.3 percent in the first nine months.

Its Hong Kong unit delivered 24 percent VONB growth, driven by increases of 28 percent from the domestic customer segment and 20 percent from the mainland Chinese visitor customer segment.

AIA China achieved 9 percent VONB growth, with increases from both agency and bancassurance channels. The combination of higher active agent numbers and increased agent productivity led to a 10 percent agency VONB growth.

AIA reported growth from 15 of its 18 markets.

Lee Yuan-siong, AIA's group chief executive and president, said AIA's continued focus on executing strategic priorities has further enhanced its competitive advantages, supporting double-digit VONB growth from both our agency and partnership distribution channels.

AIA's average credit rating of the fixed income portfolio held in respect of policyholders and shareholders remained stable at A-level as of September, compared with the situation as of June.

The corporate bond portfolio is well diversified, with over 1,700 issuers and an average holding size of US$43 million.

Nearly US$72 million of bonds, representing 0.04 percent of the total, were downgraded to below investment grade in the third quarter.

Citibank announced it maintained a buy rating for AIA, with a target price of HK$99 in a research report.

Goldman Sachs issued a research report and maintained a buy rating for AIA with a target price of HK$93, as its VONB for the third quarter maintained solid growth momentum in all major markets.

AIA announced plans to repurchase 996,800 shares at a price between HK$61.35 and HK$62.8 per share, involving a capital of over HK$61 million.

Shares of AIA rose 0.41 percent to HK$61.45 apiece yesterday.