AIA profits jump on policy sales
Profits at AIA Group, the largest life insurer in Asia and Hong Kong, rose 24 per cent in the first half as a result of strong growth on the mainland, Thailand and Singapore.
The insurer reported net profits of US$1.31 billion for the six months to the end of May, with the gains mainly driven by a 32 per cent increase in the number of policies sold to US$399 million.
The profit figure included annual growth of 59 per cent in new business in Singapore, followed by a 51 per cent expansion in Thailand and 47 per cent on the mainland.
For Hong Kong, AIA's largest market, the company reported a 27 per cent increase in business. Meanwhile, Malaysia and South Korea had growth of 16 per cent and 8 per cent respectively.
AIA shares yesterday closed up 3.43 per cent at HK$28.65.
Chief executive Mark Tucker said new business and more sales agents would continue to be the firm's future growth engine.
He was not worried about US and European sovereign debt crises hurting AIA's investment income, saying: 'We hold very little in US treasuries and European sovereign debts. We hold some US corporate bonds, which are all blue chips, and we will hold them until their maturities.'
For the first time since listing in October last year, the company declared an interim dividend of 11 HK cents per share. Tucker said he expected the payout to be a third of the full-year dividend, with the remainder payable after the end of the year.
Ben Kwong Man-bun, chief operating officer of KGI Asia, said AIA's core business in Asia would support growth for a few years. 'Economic growth in Asia is better than in the US and Europe, which has supported AIA to develop further,' he said.
'The Asia focus also means the insurer will not suffer from the debt crisis in the US and Europe.'
AIA raised HK$159.1 billion in Hong Kong's largest initial public offering last year.
AIA, established in Asia 90 years ago, was a subsidiary of US insurer American International Group. AIG sold the arm to help repay the US government after being rescued in 2008 during the financial crisis. Kwong said it still held about 30 per cent of AIA.
Tucker said AIG's troubles no longer affected AIA. 'We have no parent - AIG is only our largest shareholder,' he added.