AIA Group 1H profit up 9% over Hong Kong, China biz growth
AIA Group Limited, the thirdlargest Asia-based insurer by market value, which runs a 97 percent subsidiary in Sri Lanka, saw its after tax operating profit increasing by 9.0 percent to US $ 1.96 billion for the six months ended May 31, 2016, a statement released to the media on the financial results of the group showed.
The operating earnings per share have increased by 14 percent to 16.34 US cents.
The group performance has largely been supported by the business growth seen in markets in Hong Kong and China.
The value of new business (VONB) - a measure of profitability of new policies used by the group - saw growing by 31 percent to US $ 1.26 billion from the same period last year, while the margin of these businesses has also increased by 2.4 percent to 52.7 percent
The VONB in Hong Kong jumped 60 percent year-onyear (YOY) to US $ 537 million making the home market the insurer’s biggest.
Meanwhile, the Chinese market’s – the second biggest market – VONB grew by 49 percent YOY to US $ 278 million.
The Chinese market grew despite the restrictions placed by the Chinese regulators in purchasing insurance policies in Hong Kong in a bid to control capital outflows on the back of a slowing economy.
Meanwhile, the annualized new premiums (ANP) during the 1H16 have grown by 31 percent YOY to US $ 2.36 billion.
Commenting on the performance, AIA Group Chief Executive and President Mark Tucker made his bets on the future prospects offered in the Asian region for its growth.
“Asia is the most attractive and dynamic region in the world for life insurance. We are operating in markets that continue to offer sustainable economic growth, increased disposable incomes, powerful demographic and urbanization trends and very low insurance penetration rates,” Tucker said in an earnings release.
AIA, which operates in 18 markets across Asia, forayed into Sri Lanka with the purchase of a 92.3 percent stake in then AVIVA NDB Insurance in a deal valued at US $ 109 million.
After three years into the acquisition, AIA Insurance Lanka PLC disposed of its fully-owned subsidiary, AIA General Insurance Lanka Limited to concentrate on the life business.
Tucker did not rule out further penetration into the region.
“Our focus remains on executing our strategic priorities aimed at expanding the reach and increasing the effectiveness of our proprietary agency and partnership distribution channels,” he said.
Meanwhile, AIA Group declared an interim dividend of 21.90 Hong Kong cents a share – a 17 percent increase from the year earlier.
THE VONB IN HONG KONG JUMPED 60 PERCENT YEAR-ON-YEAR (YOY) TO US $ 537 MILLION MAKING THE HOME MARKET THE INSURER’S BIGGEST