AIA Reports Financial Results for the First Half of 2022

25 August 2022

Strong VONB Momentum in the Second Quarter with Positive Growth in June
Free Surplus up to US$20.6 Billion; OPAT up 4 Per Cent
Interim Dividend up 6 Per Cent

AIA Group Limited (the"Company"; stock code: 1299) today announces financial results for the six months ended 30 June 2022.
Growth rates are shown on a constant exchange rate basis:
New business performance
  • Value of new business (VONB) reduced by 13 per cent to US$1,536 million
  • Strong month-on-month improvement in the second quarter with positive VONB growth in June
  • Robust annualised new premiums (ANP) of US$2,778 million, a decline of 7 per cent
  • VONB margin of 55.2 per cent
  • AIA China returned to VONB growth in July as movement restrictions eased
Earnings and capital
  • Free surplus increased by US$3.6 billion to US$20.6 billion
  • Underlying free surplus generation (UFSG) up 5 per cent(1) to US$3,190 million
  • Operating profit after tax (OPAT) up 4 per cent to US$3,223 million
  • Very strong Group LCSM cover ratio(2) of 277 per cent on the new PCR basis and 567 per cent on the previously reported MCR basis
  • EV Equity of US$72.3 billion after returning US$3.0 billion to shareholders through the share buy-back programme and dividend
  • Shareholders' allocated equity of US$46.8 billion
Interim dividend
  • Interim dividend increased by 6 per cent to 40.28 Hong Kong cents per share
Lee Yuan Siong, AIA's Group Chief Executive and President, said:
"AIA has delivered a resilient performance in the first half of 2022. Sales momentum in the second quarter improved as the temporary disruption caused by the initial outbreak of the Omicron variant declined and we delivered positive VONB growth in June.
"Our growing high-quality in-force portfolio supported an increase in both OPAT and UFSG(1). The Group's financial position remained very strong with free surplus increasing to US$20.6 billion and a Group LCSM cover ratio(2) of 277 per cent despite the significant stress in capital markets. EV Equity was US$72.3 billion, representing an increase of 3 per cent in the first half before the return of US$3.0 billion to shareholders through our share buy-back programme and payment of the 2021 final dividend.
"The Board has declared a 6 per cent increase in the interim dividend to 40.28 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.
"AIA's wide adoption of technology, digital and analytics throughout the Group continues to enhance our business capabilities and resilience. Our agents rapidly switched from in-person to digital remote sales, helping to offset the effect of the initial Omicron wave on face-to-face sales activities, and leveraged our social-media-integrated leads management platforms as a powerful way to generate new customer leads. Agency new business momentum increased month-on-month in the second quarter and we returned to VONB growth in June. In July, AIA was ranked the number one global Million Dollar Round Table (MDRT) multinational for a record eighth year in a row, demonstrating our consistent focus on high-quality and professional advice.
"Our strategic partnerships with leading banks delivered double-digit VONB growth in the first half, driven by very strong performances in Hong Kong, Malaysia and India. Overall, our partnership distribution business reported a positive increase in the first half and strong VONB growth in the second quarter, supported by double-digit growth in Malaysia, Indonesia and the Philippines and a material contribution from our partnership with The Bank of East Asia, Limited (BEA).
"While sales activity in the second quarter for AIA China was substantially affected by stringent containment measures in Shanghai, Suzhou and Beijing, we achieved positive VONB growth across our other geographies. In the first half, VONB was lower due to the restrictions and following a record result in the first half of 2021, which was driven by an exceptionally high level of traditional protection sales, as previously reported. Our high-quality Premier Agency model remained resilient with growth in active agent productivity, new recruits and the overall agency force. As restrictions reduced across our operations, AIA China achieved positive VONB growth in July.
"The Mainland Chinese life insurance market remains significantly underpenetrated and offers tremendous growth potential for AIA. We continue to make strong progress in geographical expansion and our new branch in Wuhan, Hubei province, commenced sales in the first half, making a strong contribution to the excellent VONB growth from our new geographies. In May, we received regulatory approval to prepare a new branch in Henan, the third most populous province in Mainland China.
"In the first half of 2022, AIA Hong Kong delivered 3 per cent growth in VONB, supported by growth in both agency and partnership distribution channels. Sales momentum in our domestic customer segment rebounded from May as daily infections subsided. While travel across the Hong Kong border remains limited, we delivered strong VONB growth from sales to Mainland Chinese visitors through our Macau branch.
"The rest of the Group generated close to 50 per cent of total VONB in the first half of 2022 with progressive improvements in sales activities in the second quarter. In June, our market-leading ASEAN businesses returned to growth with a very strong double-digit increase in VONB.
"Tata AIA Life, our joint venture in India, is well positioned to capture the significant opportunities available in the life insurance market. We achieved excellent VONB growth in the first half, supported by the success of our multi-channel distribution platform. Our highly-digitalised Premier Agency delivered very strong increases in recruitment, agency leaders, active agents and productivity. We continued to strengthen relationships with a wide range of bank partners and brokers and generated excellent VONB growth in our partnership channel.
"I am confident that the long-term prospects for AIA's broad and diverse business remain exceptional. AIA's geographical diversity across Asia and our unrivalled distribution platform are key strengths. We are focused on the disciplined execution of our strategic priorities which will continue to deliver long-term sustainable value for all our stakeholders."
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About AIA
AIA Group Limited and its subsidiaries (collectively "AIA" or the "Group") comprise the largest independent publicly listed pan-Asian life insurance group. It has a presence in 18 markets – wholly-owned branches and subsidiaries in Mainland China, Hong Kong SAR(3), Thailand, Singapore, Malaysia, Australia, Cambodia, Indonesia, Myanmar, New Zealand, the Philippines, South Korea, Sri Lanka, Taiwan (China), Vietnam, Brunei and Macau SAR(4), and a 49 per cent joint venture in India.

The business that is now AIA was first established in Shanghai more than a century ago in 1919. It is a market leader in Asia (ex-Japan) based on life insurance premiums and holds leading positions across the majority of its markets. It had total assets of US$302 billion as of 30 June 2022.

AIA meets the long-term savings and protection needs of individuals by offering a range of products and services including life insurance, accident and health insurance and savings plans. The Group also provides employee benefits, credit life and pension services to corporate clients. Through an extensive network of agents, partners and employees across Asia, AIA serves the holders of more than 40 million individual policies and over 17 million participating members of group insurance schemes.

AIA Group Limited is listed on the Main Board of The Stock Exchange of Hong Kong Limited under the stock code "1299" with American Depositary Receipts (Level 1) traded on the over-the-counter market (ticker symbol: "AAGIY").
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  1. The 5 per cent growth of UFSG in the first half of 2022 is calculated on a comparable basis. UFSG was US$3,434 million before the effects of the early adoption of the Hong Kong Risk-based Capital (HKRBC) regime from 1 January 2022 and the release of additional resilience margins held by the Group at 1 January 2022 under the previous Hong Kong Insurance Ordinance (HKIO) basis.
  2. AIA's group available capital, group prescribed capital requirement (GPCR) and group minimum capital requirement (GMCR) are calculated based on the Local Capital Summation Method (LCSM). From 1 January 2022, the Group LCSM cover ratio is calculated as the ratio of group available capital to GPCR on the new prescribed capital requirement (PCR) basis. Prior to 1 January 2022, the Group LCSM cover ratio was calculated using the GMCR on the previously reported minimum capital requirement (MCR) basis. Please refer to note 21 to the unaudited interim condensed consolidated financial statements for the first half of 2022 for details.
  3. Hong Kong SAR refers to the Hong Kong Special Administrative Region.
  4. Macau SAR refers to the Macau Special Administrative Region.

AIA Group Limited is incorporated in Hong Kong with limited liability.
"AIA Hong Kong & Macau", "AIA Hong Kong", "AIA Macau", "AIA" or "the Company" herein refers to the Hong Kong Branch and/or Macau Branch of AIA International Limited (Incorporated in Bermuda with limited liability).
"Hong Kong" and "Macau" herein refer to "Hong Kong Special Administrative Region" and "Macao Special Administrative Region", respectively.