Results filed at the Hong Kong Stock Exchange show the value of new business (VONB), a measure of projected future profitability of new policies, grew to US$1.5bn in November from US$1.2bn a year previously. However, net profit fell by 7% year on year.
The company recorded double-digit growth in the value of new business in each of the markets that it operates and attributed this to a “careful management of the mix of new business volume and margin”.
Annualized new premium grew by 24% to US$3.3bn with Hong Kong and Korea reporting 29% and 43%, growth respectively. VONB margin increased to 44.1% compared with 43.6% in 2012.
Mark Tucker, AIA’s group chief executive and president, said: “Our ability to achieve year-on-year growth of this magnitude demonstrates the power of AIA’s franchise, the resilience of our operating model, the consistent execution of our well-established growth strategy and the advantages of our exclusive focus on the Asia-Pacific region.”
The company said it witnessed “significant growth” across both agency and partnership distribution channels in 2013 with agency VONB up by 24% to US$1.1bn and VONB for partnership distribution growing by 35% to US$469m compared with 2012.
“Asia continues to provide one of the most attractive and resilient life insurance markets in the world,” Tucker said.
Citing the growth opportunities in Asia due to its favourable demographics, rising middle and high-income households, Tucker said: “AIA is exceptionally well-positioned to capitalise on these opportunities given the quality and scale of our distribution platform…Our focus remains on the provision of high-quality products and services to meet the rapidly-increasing regular savings and protection needs of our customers throughout the region.”
The company said it would focus on organic growth but is not shy of any “value-enhancing” inorganic opportunities that may arise, as it did recently in December with the acquisition of ING Malaysia and entry into Sri Lanka as the second-largest life insurance company.
AIA also said it has made an $800m payment to Citibank as part of a 15-year bancassurance deal which was agreed at the end of last year. Under the deal, the bank will offer the insurer’s products in 11 markets in the Asia-Pacific region, including Hong Kong, Singapore, Thailand, China, Indonesia, the Philippines, Vietnam, Malaysia, Australia, India and Korea, reaching 13m customers.
