AIA Group has reported its financial results for the year ended December 31, 2019, with 6% growth in value of new business (VONB) to US$4.15 billion.
According to a statement from the insurer, the group’s VONB grew 16% for all markets, excluding its home market of Hong Kong. This illustrates the impact of the social unrest in Hong Kong, which dominated the second half of 2019. The unrest led to a sizeable decline in sales from mainland Chinese visitors, a major revenue stream for many insurers in Hong Kong.
Meanwhile, annualised new premiums (ANP) went up by 2% to US$6.58 billion, and VONB margin increased by three percentage points to 62.9%.
AIA’s profit after tax grew by 9% to US$5.741 billion, while underlying free surplus generation grew by 13%, and embedded value equity grew by 12%. The solvency ratio for AIA Company Limited remained strong at 362% on the HKIO basis, after the effect of the acquisition of The Colonial Mutual Life Assurance Society Limited (CMLA) in Australia.
AIA chief executive and president Ng Keng Hooi said that the company has submitted an application for regulatory approval to convert its Shanghai branch into a subsidiary. Subject to regulatory approval, this will form the new foundation for AIA’s geographical expansion plans in mainland China, which began with the opening of new sales and service centres in Tianjin and Shijiazhuang, Hebei during 2019.
“Over the last century, AIA has successfully managed through many different economic cycles. Some of our markets are facing near-term headwinds from the lower interest rate environment and the past two months have seen COVID-19 emerge as a new global risk,” said Ng. “We have seen a significant disruption in the group’s new business sales in the first quarter from reduced face-to-face interactions and have taken a number of proactive measures including a rapid acceleration of digital platforms to further support agency recruitment, training and sales activities.
“AIA’s agency recruitment pipeline in Mainland China remains strong. Our local businesses in affected areas have also been assisting communities with enhanced benefits and expedited claims procedures. Our thoughts are with the families and communities who have been affected by this public health emergency.”
