June Chen and Bloomberg
Pan-Asian insurer AIA (1299) saw its net profit in the first half soared by 47 percent to US$3.31 billion (HK$25.8 billion) compared to the same period a year ago, driven by new business which recorded double-digit growth in 11 markets, led by the Hong Kong market.
It declared an interim dividend of 44.5 HK cents, a 5.2 percent year-on-year increase.
The value of new business or VONB rose 25 percent to a record high of US$2.46 billion in the first six months on constant exchange rate basis, after stripping out the impact of currency fluctuations, on higher sales and increased profitability of new policies.
The numbers put AIA "on track to meet or even exceed consensus expectations of a 17 percent gain for the full year," Bloomberg Intelligence analyst Steven Lam wrote in a note yesterday.
In the mainland, the VONB jumped by 30 percent to US$782 million and in Hong Kong, it surged by 26 percent to US$858 million. However, the VONB saw declines in India, Indonesia, New Zealand and Vietnam.
The results in the mainland modestly beat analyst estimates "on all fronts," Citigroup analysts led by Michelle Ma wrote in a note.
The measure of future profitability of new policies sold climbed to US$2.46 billion in the six months, from US$2.03 billion a year earlier, AIA said in a statement yesterday.
Investors are closely tracking the recovery at the company that accounts for more than 8 percent of the city's benchmark Hang Seng Index, the fourth heaviest weight.
The end of Covid-era restrictions in 2023 unleashed pent-up demand in China and Hong Kong, its two largest markets.
Chinese residents have been turning to insurance as property and stock markets slump and bank savings yield little.
AIA, known for its own agency forces, got a particularly strong lift from its bancassurance partnerships in China in the first half.
With the share of businesses from new Hongkongers reaching double-digit and accompanied by a large protection gap, AIA predicted the demand for local insurance products would remain strong.
Singapore led new business value growth among the remaining markets, up 27 percent. Thailand and Malaysia delivered mid-teen increases during the six months.
The company's share price rose nearly 6 percent yesterday, closing at HK$54.45 apiece.
New business value in Hong Kong surged 26 percent to US$858 million.
BLOOMBERG
