Asia-Pacific focus vital to success
Insurance giant AIA Group announced strong results for the financial year ending November 30, 2011.
The main highlight of the results was the 40 per cent increase in value of new business (VONB) to US$932 million. VONB is the group's key performance measure, representing the shareholder value created from new business written during 2011. Another highlight was the 22 per cent increase in annualised new premium (ANP) to US$2.47 billion and a 13 per cent increase in operating profit after tax to US$1.92 billion.
Commenting on the results, Mark Tucker, AIA's group chief executive and president, says that overall, AIA did very well last year across all the key financial measures.
Garth Jones, AIA group chief financial officer, says that the financial position of AIA has remained very strong throughout 2011 and remains very strong today. Total available regulatory capital, as measured under the Insurance Companies Ordinance basis, remained steady at US$6.2 billion; our solvency ratio remains strong at 311 per cent, with the change during the year arising mainly from market movements, he says.
'The credit rating by Standard & Poor on AIA was recently reaffirmed as AA- with stable outlook. Our underlying business is doing very well. We are financially strong and committed to delivering shareholder value through capital growth and dividend returns,' Jones says.
He says the financial results for last year also reflected the combined impact of AIA's powerful distribution platform across Asia-Pacific, its financial and technical strength, and the consistency with which the company was implementing the clear strategy of targeting sustained growth in shareholder value.
Tucker says that during last year the insurance giant concentrated its efforts on building its premier agency sales force and boosting agency productivity to help meet the savings and protection needs of its customers across Asia-Pacific, with a particular focus on promoting the take-up of accident and health cover.
'We have also taken steps to make further improvements in the persistency and additional sales achieved from our in-force book and to enhance our customer service experience,' he says.
'Outside the agency channel, we have focused on developing deeper and more profitable relationships with our distribution partners. We are confident that we have created a powerful base from which to deliver increasing future value for our shareholders.'
AIA's board recommended a final dividend of 22 HK cents per share. This brings the total dividend in respect of the 2011 financial year to 33 HK cents per share.
'This year's level of dividend payment reflects our strong cash-flow position and our commitment to reflect the value achieved for shareholders through dividend returns, and capital growth. It remains the board's intention to self-finance our new business growth while maintaining a prudent and progressive dividend policy,' Tucker says.
Total shareholders' equity increased by 9 per cent last year to US$21.31 billion. Net profit of US$1.60 billion includes the mark-to-market valuation of equity investments as required under the International Financial Reporting Standards. US$500 million of investment gains on bonds, that are not included in net profit, are included in shareholders' equity.
Tucker points out that AIA remains a very attractive growth story with an unmatched opportunity to benefit from strong economic growth, favourable demographic trends and latent demand for savings and protection products in Asia.
'This remains the world's most dynamic region, which has been our home for over 90 years and is our sole area of operation. Our focus on Asia-Pacific markets in which we have a leading position and depth of experience, combined with our financial strength and a highly motivated team, puts us in a very strong position to optimise opportunities for further growth and generate strong and sustainable returns for our shareholders.'
AIA Group and its subsidiaries comprise the largest independent publicly listed pan-Asian life insurance group in the world.
It has wholly-owned main operating subsidiaries or branches in 14 markets in Asia-Pacific - Hong Kong, Thailand, Singapore, Malaysia, China, Korea, the Philippines, Australia, Indonesia, Taiwan, Vietnam, New Zealand, Macau and Brunei, and a 26 per cent joint venture shareholding in India.
The business that is now AIA was first established in Shanghai more than 90 years ago. It is a market leader in the Asia-Pacific (ex-Japan) based on life insurance premiums and holds leading positions across the majority of its markets. It had total assets of US$114.46 billion as of November 30, 2011.