Hong Kong-based AIA foresees recovery in mainland China despite 15 per cent slump in new business value
- The insurer is positive about future growth in the mainland market, says its regional chief executive
- The company reported a 15 per cent drop in first-half new business value, a measure of the future profitability of new policies
AIA foresees a recovery in its mainland China performance, which dragged down its first-half new business value, and says it will proceed with steady expansion into the high-potential market.
AIA’s new business value (NBV), which gauges future profitability from new policies, declined 24 per cent in China to US$563 million in the first six months of 2022, compared with a year earlier, according to interim results released on Thursday. That dragged down AIA’s overall NBV, which slumped 15 per cent to US$1.5 billion in the same period.
The company said NBV returned to positive growth in July as Covid-19 outbreaks in Chinese cities subsided. Across its major markets, the insurer recorded 3 per cent NBV growth in Hong Kong and Malaysia, with the other regions recording drops.
The largest insurer in Hong Kong, AIA will start operations in two central China provinces this year, with a new branch in Wuhan, the capital city of Hubei province, and a new subsidiary in Zhengzhou, the capital of Henan province. AIA is also discussing further expansion into other Chinese cities with local regulators, said Jacky Chan, regional chief executive at AIA.
“We are very confident in the mainland insurance market,” Chan said in a small-group media briefing on Thursday. “The expansion into new provinces is one of the growth drivers for AIA, and we will continue to steadily advance the progress.”