New business drives up AIA earnings 10pc | South China Morning Post
  • Fri
  • Mar 27, 2015
  • Updated: 4:41pm

New business drives up AIA earnings 10pc

PUBLISHED : Saturday, 28 July, 2012, 12:00am
UPDATED : Saturday, 28 July, 2012, 12:00am
 

AIA Group has posted a higher-than-expected 10 per cent increase in first-half profit, powered by strong new business growth across Asia except South Korea.

The locally listed life insurer, the largest in Hong Kong and third-largest in Asia in terms of market capitalisation, reported net profit for the six months to May 31 of US$1.44 billion.

The company, which reports earnings in US dollars, told the Hong Kong exchange it would pay an interim dividend of 12.33 HK cents. If trading conditions were in line with the company's current forecast, the interim dividend would be about one-third of the full-year payout, chief executive Mark Tucker said.

The group said it sold more new policies during the period under review, and the value of new business rose to US$512 million, up 28 per cent from the year-earlier period.

Tucker said first-half new business growth was driven by an expanded agency sales team. 'The continuing momentum and strong growth are a testament to the effective execution of the clear strategic objectives we have put in place since our listing. We will continue to focus on delivering quality new business growth through our premier agency sales force and profitable partnerships,' Tucker said.

Almost all markets in Asia reported a rise in new sales except South Korea, where new premiums fell 30 per cent to US$104 million, which Tucker blamed on restructuring, saying he expected a quick recovery.

Hong Kong and Thailand are its largest markets, both posting 9 per cent new premium growth, with Hong Kong's new premium business in the first half at US$243 million and Thailand at US$244 million.

The fastest-growing market was Singapore, which shot up 27 per cent to US$152 million.

Kenny Lee Yiu-sun, chief executive of First China Securities, said the outlook for AIA was positive. 'AIA's operations span Asia, which is a high growth area worldwide and many people don't yet have insurance cover in the region. This provides good growth opportunities,' he said.

AIA is tipped as a suitor for ING Groep's Asia insurance business in a deal that could top US$7 billion.

ING is selling its Asian life insurance and asset management units to repay bailout funds it received from the Dutch government during the 2008 financial crisis. Tucker refused to comment on the ING deal, only saying 'our first-half growth was mainly driven by organic growth'.

AIA's Hong Kong listing was the result of the bailout of its major shareholder, American International Group (AIG), which received a US$182.3 billion US government bailout in late 2008.

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