The Board of AIA Group Limited (the “Company”; stock code: 1299) is pleased to announce the Group's financial results for the six months ended 30 June 2021.
Growth rates are shown on a constant exchange rate basis.
KEY FINANCIAL SUMMARY
- 22 per cent growth in value of new business (VONB) to US$1,814 million
- VONB exceeded pre-pandemic levels in all reportable segments except Hong Kong
- EV Equity of US$70.1 billion, up 5 per cent from 31 December 2020
- Operating profit after tax (OPAT) increased by 5 per cent to US$3,182 million
- Free surplus of US$17.9 billion, up US$4.4 billion from 31 December 2020
- Group Local Capital Summation Method (LCSM) cover ratio(1) of 412 per cent
- Interim dividend increased by 8.6 per cent to 38.00 Hong Kong cents per share
Lee Yuan Siong, AIA's Group Chief Executive and President, said:
“AIA has delivered very strong VONB growth of 22 per cent and an increase in all of our key financial metrics. I am very pleased that VONB exceeded the pre-pandemic levels of the first half of 2019 for each of our reportable segments except Hong Kong, where travel restrictions continue to affect sales to Mainland Chinese visitors.
“Our growing high-quality in-force portfolio supported growth in both OPAT and UFSG. EV Equity and shareholders' allocated equity reached record highs and our very strong financial position is reflected in a significant increase in free surplus and a Group LCSM cover ratio of 412 per cent.
“The Board has declared an 8.6 per cent increase in interim dividend to 38.00 Hong Kong cents per share. This follows AIA's established prudent, sustainable, and progressive dividend policy, allowing for future growth opportunities and the financial flexibility of the Group.
“Our focus on further enabling our business with technology has significantly improved resilience in the face of ongoing pandemic containment measures. Compared to the first half of 2020, our Premier Agency has increased both agent productivity and our number of active agents. We have delivered a 25 per cent increase in our registered Million Dollar Round Table (MDRT) members to more than 16,000. This is our seventh consecutive year of achieving the largest number of registered MDRT members globally.
“AIA's Purpose of helping people live Healthier, Longer, Better Lives comes to life through our compelling propositions which integrate our Health and Wellness Ecosystem and long-term savings solutions. We continue to focus on advancing the key components of our ecosystem to deliver improved health outcomes for our customers.
“We believe that creating distinctive, personalised and meaningful experiences for our customers will generate a range of business benefits. Transforming AIA into a simpler, faster, more connected organisation will support the delivery of our strategic ambitions for the next era of growth, building on the powerful demographic trends and immense opportunities in the life insurance market in Asia. I am confident that the continued execution of our strategic priorities will enable us to generate long-term sustainable value for our shareholders.”
SUMMARY OF THE FIRST HALF
VONB growth was broad-based with all our reportable segments achieving double-digit growth on a like-for-like basis(2), driven by the excellent performance of our agency distribution and increased demand for our protection products. The strong performance of our leading local bancassurance partners supported VONB growth(3) in our partnership channel.
AIA China remained the largest contributor to the Group's VONB and delivered a very strong 20 per cent increase in VONB on a like-for-like basis(4). We have also made rapid progress in our geographical expansion in Mainland China with the launch of our new operation in Sichuan Province and the regulatory approval to prepare for a new branch in Hubei Province.
While travel restrictions continue to limit sales to Mainland Chinese visitors, our Hong Kong business achieved 16 per cent VONB growth in the domestic customer segment, benefiting from our targeted propositions and new growth initiatives. In our Macau branch, Mainland Chinese visitor sales contributed over one-third of total ANP in the first half of 2021, supported by the resumption of the Individual Visit Scheme.
Our business in Thailand achieved excellent VONB growth of 52 per cent compared to the first half of 2020, driven by our successful shift in product mix towards protection and unit-linked products. AIA Singapore's VONB was 32 per cent higher year-on-year despite a tightening of containment measures from May. AIA Malaysia delivered the highest VONB growth among our reportable segments of 89 per cent. While we continued to see ongoing effects of the pandemic in many of our markets, Other Markets reported double-digit VONB growth(3).
We have continued to make excellent progress with our strategic priorities as we embrace the transformation that will further extend our competitive advantages and enable AIA to capture the significant growth opportunities available to us across Asia. The upgrading of our technology to world-class modern architecture and systems has gathered pace as we make targeted investments in digital tools and embed data analytics at scale into our businesses. This transformation is enabling us to significantly enhance the experience of our customers, distributors, partners, and employees while achieving greater growth and efficiency.