AIA says has approval to open representative office in Myanmar

AIA Group, Asia’s third-biggest insurer, said on Wednesday that it was planning to open a representative office in Myanmar, as part of a strategy of targeting demand in fast-growing Southeast Asian economies.

AIA’s chief executive, Mark Tucker, told reporters on a conference call that the company had received “provisional approval” to open the representative office, which he described as a “listening and observing post”.

“It clearly once was a very attractive market and will be again,” Tucker said.

A representative office allows a company to establish a presence in a country but does not permit a company to conduct business.

AIA rival Prudential has previously expressed interest in Myanmar, whose insurance market could eventually produce US$1.6 billion (HK$12.4 billion) in annual premium revenues.

Southeast Asia’s young populations, relatively high rates of savings and fast-growing economies are have become increasingly attractive for life insurers that have been hurt by low interest rates and an economic slowdown in the West.

AIA last year bought insurance businesses in Sri Lanka and Malaysia. It said on Wednesday that it would establish a medium-term note programme to refinance part of its Malaysia acquisition.

The company also reported a 27 per cent rise in its value of new business last fiscal year. That metric, which measures the present value of future business, rose to US$1.19 billion (HK$9.23 billion) in the year ended November 30, while its new business margin climbed 6.4 percentage points to 43.6 per cent. AIA’s net profit was US$3.02 billion (HK$23.4 billion) or 18 cents per share.

Analysts on average had expected per-share earnings of 22 cents, according to Thomson Reuters data.

Shares of AIA, which is headquartered in Hong Kong, were up 2.1 per cent in morning trade, compared with a 0.6 per cent rise in the benchmark Hang Seng index.