AIA to expand its insurance sales to 10 Chinese cities and provinces, betting on 226 million middle-class customers for growth
- Hong Kong’s listed insurer says it is targeting to expand to 10 more Chinese provinces, municipalities as it eyes 226 million potential customers
- First-half new business value from China grows to twice the size of Hong Kong, as the city’s growth is stifled by Covid travel restrictions
AIA, the largest insurer in Hong Kong by capitalisation, is planning to expand in mainland China to capture the growth opportunity of a region that contributes to the lion’s share of its operating profit.
The insurer, which traces its roots to 1919 in Shanghai, is awaiting regulatory approvals to expand to 10 more provinces and municipalities in mainland China, with the potential to serve 226 million potential customers with income levels defined as “middle class,” executives said.
The plan shows how China, the first major global economy to emerge from Covid-19 lockdowns, underpins AIA’s corporate earnings as it looks for growth. The new delta strain of the coronavirus disease had been identified in China, resulting in new confirmed cases in Jiangsu and Henan provinces in recent days. Even so, AIA remained confident that China’s near-term growth outlook remained positive, said its regional chief executive Jacky Chan during a media call in Hong Kong.
“We believe that Covid would remain under control in China,” he said. “We saw that our digital sales and our online engagement in China have been well-received (throughout) the pandemic.”
AIA’s first-half net profit rose 47 per cent to US$3.2 billion, beating the analyst estimates in a Bloomberg poll. Sales increased 23 per cent to US$24.2 billion.
New business grew 22 per cent to US$1.8 billion, in stark contrast to the 37 per cent decline a year ago. All 18 markets that AIA operates in, except Hong Kong, said new businesses grew at a faster pace in the first half than pre-pandemic levels. In mainland China, the biggest earnings driver, new business value grew 15 per cent to US$738 million from last year.