AIA expects sales in China to take a significant hit from coronavirus pandemic after profit doubles in 2019
- Up to 40 per cent of new business sales in China could be at risk of being affected as AIA still relies heavily on agents to sell policies
- AIA’s new business grew at the slowest pace since 2010 as the social unrest in Hong Kong caused sales to Chinese visitors to sink in the second half
Insurer AIA Group expects new business to take a significant hit in China as the coronavirus pandemic prevents sales agents from pitching directly to clients.
“While our online sales have been successful, it could not completely [replace] face-to-face meetings in China, which accounts for 40 per cent of our sales,” said chief executive and president Ng Keng Hooi on a conference call after AIA reported profits had doubled in 2019.
The Hong Kong-listed company said that new business last year grew by just 6 per cent to US$4.15 billion, compared to 22 per cent the previous year. It was weakest pace of annual growth in new business since 2010. The slower pace of growth was caused by a drop in sales to mainland Chinese visitors to Hong Kong because of the city’s social unrest during the second half.
Hong Kong’s largest insurer by market capitalisation said that it had so far not seen any unusual claim patterns in mainland China resulting from the coronavirus that causes the Covid-19 respiratory disease. The virus has affected more than 80,000 people in China and claimed over 3,000 lives in the country.
“[During] the first quarter of 2020, a number of our markets are facing headwinds from the lower interest-rate environment and the impact of Covid-19,” it said.
On Wednesday, the World Health Organisation officially declared it a pandemic, as the pathogen has now spread to 114 countries causing over 4,000 deaths.