AIA new business seen rising up to 30pc

Business | Staff reporter 13 May 2021

Six investment banks estimate new business value growth for AIA (1299) in the first quarter at between 15 percent and 30 percent year-on-year, driven by business in the mainland.

The estimates came ahead of the insurer announcing first-quarter results tomorrow.

New business value for the first quarter is expected to range between US$967 million (HK$7.52 billion) and US$1.03 billion.

Morgan Stanley expects AIA to see growth of new business value of 22 percent, jumping by around seven percentage points, thanks to Asian currencies rising against the US dollar. Among them, business from the mainland and Malaysia are both expected to rise by over 30 percent in constant exchange rates, while Hong Kong may suffer a 1-percent drop.

But while new business has been slowing among all mainland insurers, Credit Suisse predicts AIA China's new business value will expand by 30 percent in the first quarter.

Although the scale of AIA's mainland business unit is modest, its agents there are considered to be of higher quality and the company is expected to outperform it peers in the future, the firm says.

Meanwhile, Goldman Sachs puts its first-quarter new business value at US$974 million, suggesting a year-on-year growth of 10 percent in constant exchange rates.

In spite of a year-on-year decrease in Hong Kong business last year due to cross-border restrictions, the investment house sees a strong growth of 27 percent and 26 percent in its mainland and Malaysia businesses respectively.

Goldman Sachs also says that AIA's high-end customer demand will be seen to have remained strong if the overall growth reaches 15 percent or more.

The company had reported in March that new business value for the first two months of this year was seen to have grown by 15 percent compared to the period in 2020.

In 2020, AIA's new business value in constant exchange rates shrank by 27 percent from the previous year to US$841 million during the first quarter.

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