AIA Group, the largest insurer in Hong Kong and second-largest in Asia in terms of market value, posted better-than-expected operating profit growth in the first half, thanks to strong new policy sales. Operating profit after tax was US$1.46 billion for the six months ended May, up 15 per cent from a year earlier and beating a market consensus of 11 per cent growth. New business rose 23 per cent to US$792 million. Chief executive Mark Tucker said the insurer "continued to benefit from the growing middle class and increasing demand of insurance products in Asia". Mainland China is AIA's fastest growing market with 58 per cent more new business pulling in US$120 million, putting it jointly with Singapore as its third-largest market. Hong Kong is still the top market, with new business rising 55 per cent to US$260 million, followed by an 11 per cent growth to US$162 million in Thailand. However, new business in South Korea dropped 22 per cent after the regulator banned all insurers from selling their products by phone from January to March following the leakage of personal data at several credit card companies. In December last year, AIA signed a 15-year deal with Citibank to sell its products in 11 Asian markets. Seven markets had rolled out products and four would follow suit in the following months, Tucker said. "This is still at an early stage and the contribution is small now. But this is a deal for 15 years and it would bring business for the long term," he said. Credit Suisse analyst Arjan van Veen said AIA's momentum looked good because the Citibank deal would bring new business and South Korea's telephone sales ban was over. "The key issue is if the strong Hong Kong and China momentum can be maintained," van Veen said, noting that both markets rose more than 50 per cent in the first half. Volatile stock markets worldwide in the first half hurt the valuation of AIA's equity portfolio, resulting in net profit falling 20 per cent to US$1.55 billion. Tucker said the result beat analysts' estimates of a 28 per cent drop. He also said insurers held equities for the long term so it would not be hurt by short-term stock market volatility.