AIA announces financial results for 2022

Pan-Asian insuring giant AIA has announced its financial results for the fiscal year 2022, with the firm noting strong value of new business (VONB) growth momentum, an uptick of 6% in the second half of the year, free surplus up to US$23.7 billion before capital returns of US$5.8 billion to shareholders, operating profit after tax (OPAT) per share up 5%, and a growth of 5.3% for the total dividend per share.

Overall, the firm’s growth rates saw upticks across the board, with AIA’s OPAT reaching US$6.37 billion and an EV equity of US$77 billion before dividends and share buy-back.

Strengths of robust operating model

AIA Group chief executive and president Lee Yuan Siong credited the strengths of “AIA’s robust operating model” for the firm’s resilient financial results in an unprecedented market environment. In particular, while VONB was lower by 5% for the full year, it did pick up in the second half achieving a 6% growth with all five of AIA’s largest operating segments achieving positive growth in VONB.

“Our consistent financial discipline and focus on growing AIA’s high-quality in-force business supported an increase in both OPAT and UFSG,” he said. “The group’s financial position remained very strong despite significant capital market volatility in 2022, with free surplus increasing to US$23.7 billion before capital returns to shareholders and a group LCSM cover ratio of 283%. EV Equity increased by 6% in 2022 to US$77.0 billion before the return of US$5.8 billion to shareholders through the share buy-back programme and dividends.”

AIA’s board recommended a final dividend of HK$113.40 cents per share, a figure which would bring the total dividend to HK$153.68 cents per share, an increase of 5.3%.

As for its specific markets, Lee described their growths individually:

• AIB China: positive growth in second half of 2022 with VONB up by 3%. As is with the group figures, VONB in the market recovered strongly with double-digit YOY growth up to the end of November before the notable rapid increase in COVID-19 infections in December disrupted new business sales activities. The reopening of Mainland China saw new business momentum recover and return to positive rates in the first two months of 2023.
  
  “We continue to execute AIA China’s expansion strategy, capturing new growth opportunities by replicating our high-quality differentiated Premier Agency in new geographies and deepening our presence within our existing footprint,” he said. “We made excellent progress with 50% growth in agency VONB and 31% increase in the number of active agents in Tianjin, Shijiazhuang, Sichuan and Hubei. In January 2022, we launched an additional operation in Hubei and we are also at an advanced stage in preparing for our new provincial branch in Henan. AIA China’s new bancassurance partnership with the Postal Savings Bank of China continued to make good progress.”
• AIB Hong Kong: positive VONB growth of 4% in 2022, supported by growth in agency and partnership channels. The firm’s Macau branch continued to benefit from the resumption of the Individual Visit Scheme with Mainland China. VONB from sales to Mainland China visitors tripled in 2022, accounting for just over 10% of the total VONB of AIA Hong Kong for the fiscal year.
• AIA Thailand: recorded growth of 5% in VONB for the full year, further supported by 19% growth in the second half of 2022. Lee noted higher sales activity levels in both agency and bancassurer channels as new business momentum returned in the second half. Agency in the market remained the leader in 2022, with AIA noting very strong recruitment contributing to an increase in the number of active agents compared with 2021.
• AIA Singapore: higher VONB recorded for the year, with the second half’s 7% growth offsetting its first half performance. Sales activity recovered strongly in the second half of the year following the lifting of pandemic restrictions.
• AIA Malaysia: delivered 15% VONB growth for 2022 with year-on-year growth of 26% in the second half. The very strong performances can be attributed to the adoption of digital tools and the generation of new digital leads.
• Other Markets: the segment was marked by a lower VONB, with a 12% dip recorded for 2022. Despite strong double-digit growth in markets like India, New Zealand, Philippines, Sri Lanka, and Taiwan in the second half, its positive uptick was offset by a decline in Australia, South Korea, and Vietnam. The firm’s joint venture in India, Tata AIA Life, delivered a 52% growth across all distribution channels and ranked as the third private life insurer in the country by the end of December 2022.

“As our markets recover rapidly from the effects of the pandemic, the resilience and professionalism of our agents ensure that our Premier Agency is in a prime position to capitalise on the substantial growth opportunities ahead. In the second half of the year, our agency business regained strong momentum with 8% growth in VONB supported by higher active agent productivity and an increase in the total number of agents compared with 2021,” Lee said.

Bancassurance VONB was also up 10% thanks to AIA’s long-term strategic partnerships with leading banks, including Public Bank in Malaysia, Bank Central Asia in Indonesia, ASB Bank in New Zealand and across all key domestic partnerships in India. Both Bank of East Asia in HK and Mainland China also delivered excellent VONB growth in 2022.

“AIA operates in the most attractive region in the world for life and health insurance.,” he said. “Now more than ever, Asian consumers are acutely aware of the importance of financial security and the need to protect the well-being of their families. I firmly believe that the long-term prospects for AIA’s business remain exceptional. Our dedicated teams will continue to focus on helping people live Healthier, Longer, Better Lives as we execute our strategic priorities to generate long-term sustainable value for all our stakeholders.”

To continue AIA’s growth in key markets within the region, the chief of the Philippine charter is eyeing tax rebates for its insurance products, a model similar to what Malaysia is currently implementing, wherein a rebate is provided to yearly premiums.

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