AIA’s first-half new insurance sales rise 20 per cent, as more Chinese customers seek to hedge their risks amid turbulent times

New business rose to US$2.27 billion in the first half, lifted by sales in its main markets of mainland China and Hong Kong

New business conducted in Hong Kong rose 19 per cent, while sales of new policies jumped 34 per cent in mainland China

3-MIN READ3-MIN

AIA’s results cap a strong first half for Hong Kong’s insurance industry, where sales of life and medical insurance policies to mainland Chinese policyholders rose. Photo: Reuters

Published: 10:37am, 23 Aug 2019Updated: 10:39pm, 23 Aug 2019

AIA Group, the world’s second-largest insurer by value, posted a 20 per cent rise in new business for the first half of the year, bolstered by sales of insurance policies to mainland Chinese customers.

New business rose to US$2.27 billion in the first six months, from US$1.95 billion in the same period last year, lifted by sales in its main markets of mainland China and Hong Kong, according to a filing to the Hong Kong stock exchange. Net profit more than doubled to US$3.86 billion, beating a Bloomberg estimate, while operating profit rose 11 per cent to US$4.5 billion.

As much as 40 per cent of the insurer’s business comes from Hong Kong, while 15 per cent comes from China, according to Bloomberg data. New business conducted in Hong Kong rose 19 per cent, while sales of new policies jumped 34 per cent in mainland China.

Business in Hong Kong from independent financial advisers (IFA), through brokers, slowed since the end of June, said AIA Group’s chief executive and president Ng Keng Hooi at a press conference. This was due to fewer mainland Chinese visiting Hong Kong to avoid the city’s ongoing political and social unrest, as well as competition from other insurers.

Hong Kong’s secondary school students during a 22 August 2019 rally in Central, with the AIA-sponsored Hong Kong Observation Wheel in the background. Photo: SCMP/Winson Wong

“We are committed to supporting Hong Kong’s economy for the long term,” Ng said. “We are concerned over recent events and we condemn the use of violence. We support the rule of law, because it is fundamental to the future of Hong Kong. We look forward to a resolution through mutual dialogue.”

Chinese consumers poured their savings into insurance policies during the first half, as growth in the world’s second-largest economy slowed to its slowest quarterly pace since 1992, while concerns are rising that the world is on the brink of a recession. A year-long US-China trade war, culminating in the Trump administration adding duties on another US$300 billion of Chinese exports, effectively taxing every product from China.