The Board of AIA Group Limited (the "Company"; stock code: 1299) is pleased to announce the Group's financial results for the year ended 31 December 2022.
Growth rates are shown on a constant exchange rate basis:
New business performance
- Value of new business (VONB) was US$3,092 million for the full-year 2022
- VONB grew by 6 per cent in the second half as the effects of the initial Omicron wave subsided
- AIA China delivered positive VONB growth in the second half and into the first two months of 2023
- All five of the largest operating segments delivered positive VONB growth in the second half
Earnings and capital
- Free surplus increased to US$23.7 billion before returning US$5.8 billion in dividends and share buy-back
- Underlying free surplus generation (UFSG) of US$6,039 million, up 7 per cent(1) per share
- Operating profit after tax (OPAT) of US$6,370 million, up 5 per cent per share
- EV Equity of US$77.0 billion before dividends and share buy-back
- Very strong Group LCSM cover ratio(2) of 283 per cent on the new PCR basis (552 per cent on MCR basis)
Overall expected positive impact of IFRS 9 and IFRS 17 compared with IAS 39 and IFRS 4(3)
- No material change to OPAT for the full-year 2022
- Net profit for the full-year 2022 to be at least US$2.0 billion higher
- Shareholders' allocated equity and shareholders' equity as at 31 December 2022 to be above the IFRS 4 levels
- Significant reduction in leverage ratio
Dividends and share buy-back programme
- Final dividend of 113.40 Hong Kong cents per share
- Total dividend of 153.68 Hong Kong cents per share, up 5.3 per cent
- US$10.0 billion share buy-back programme announced in March 2022 remains on track
- US$3.6 billion returned to shareholders through the share buy-back programme in 2022
Lee Yuan Siong, AIA's Group Chief Executive and President, said:
"Our resilient financial results in an unprecedented market environment demonstrate the strengths of AIA's robust operating model, which is built on our differentiated distribution and personalised propositions. New business momentum improved strongly in the second half of 2022 as the effects of the initial Omicron wave subsided and normal activities resumed. While VONB of US$3,092 million was lower by 5 per cent for the full year, we delivered 6 per cent growth in the second half with all five of our largest operating segments achieving positive VONB growth.
"Our consistent financial discipline and focus on growing AIA's high-quality in-force business supported an increase in both OPAT and UFSG(1). 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(2) of 283 per cent. EV Equity increased by 6 per cent 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.
"The Board has recommended a final dividend of 113.40 Hong Kong cents per share which brings the total dividend to 153.68 Hong Kong cents per share, up 5.3 per cent. This follows AIA's established prudent, sustainable and progressive dividend policy, allowing for future growth opportunities and the financial flexibility of the Group.
"AIA China returned to positive growth in the second half of 2022 with VONB up by 3 per cent. VONB was lower in the first half compared with the record result in 2021, as most of our geographies were subject to stringent pandemic movement restrictions. In the second half, VONB recovered strongly with double-digit year-on-year growth up to the end of November before the rapid increase in COVID-19 infections in December disrupted new business sales activities. Following the reopening of Mainland China, we have seen our new business momentum recover swiftly and return to positive VONB growth 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. We made excellent progress with 50 per cent growth in agency VONB and 31 per cent 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.
"AIA Hong Kong recorded an increase in VONB of 4 per cent in 2022, supported by growth in both our agency and partnership channels. Our Macau branch continued to benefit from the resumption of the Individual Visit Scheme with Mainland China. VONB from sales to Mainland Chinese visitors tripled in 2022, accounting for just over 10 per cent of total VONB of AIA Hong Kong for the year, and strong momentum has continued into the first two months of 2023.
"AIA Thailand delivered 5 per cent growth in VONB for the full year, supported by 19 per cent growth in the second half of 2022. We saw higher sales activity levels in both agency and bancassurance channels as new business momentum returned in the second half. Our agency remained the market leader in 2022 and we achieved very strong recruitment, contributing to an increase in the number of active agents compared with 2021.
"AIA Singapore reported higher VONB for 2022 as the 7 per cent VONB growth in the second half more than offset the first half performance, reflecting a recovery in sales momentum. AIA Malaysia delivered 15 per cent VONB growth for 2022 with year-on-year growth of 26 per cent in the second half of the year. Our very strong performances from both agency and partnership distribution channels were supported by the adoption of digital tools and the generation of new digital leads.
"VONB of our Other Markets segment was lower by 12 per cent for 2022 as strong double-digit growth in India, New Zealand, the Philippines, Sri Lanka and Taiwan (China) in the second half was offset by a decline mainly in Australia, South Korea and Vietnam. Tata AIA Life, our joint venture in India, delivered 52 per cent VONB growth across all distribution channels and ranked as the number three private life insurer in the country as at 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 per cent growth in VONB supported by higher active agent productivity and an increase in the total number of agents compared with 2021.
"In 2022, AIA's long-term strategic partnerships with leading banks generated a 10 per cent increase in bancassurance VONB, driven by growth from Public Bank in Malaysia, Bank Central Asia in Indonesia, ASB Bank in New Zealand and across all key domestic partnerships in India. The Bank of East Asia in Hong Kong and Mainland China delivered excellent VONB growth in 2022. Overall our partnership distribution delivered positive VONB growth for the year.
"I am pleased to see the accelerated delivery of our key strategic priorities in 2022, enabled by our significant investments in technology, digital and analytics (TDA), has supported increased distribution productivity, enhanced customer experience and more personalised propositions for consumers. We have an unrelenting focus on leveraging our substantial competitive advantages, which enable us to enhance our operations and capture new opportunities for additional growth across each of our 18 markets.
"AIA operates in the most attractive region in the world for life and health insurance. 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."