AIA's Half-Year New Business Value Up 10% on Broad-Based Growth

AIA Group reported a 10% increase in its half-year value of new business (VONB), a key metric for future profitability, reaching $3.21 billion on a constant exchange rate basis. The result aligns with market consensus estimates.

The growth was driven by positive contributions across nearly all distribution channels and reportable segments, with Thailand being the sole exception. The company attributed Thailand's decline to an exceptionally strong performance in the prior-year period. Excluding Thailand, VONB grew by 14% year-on-year.

Hong Kong, one of AIA's largest profit contributors, saw its VONB rise 10% during the six-month period, supported by robust demand from both local customers and mainland Chinese visitors. The group's overall VONB margin remained steady at 57.1%.

AIA noted that an improved product mix boosted Hong Kong's margin, but this was partially offset by a shift toward lower-margin participating products in Mainland China and weaker margins in Thailand following unusually high prior-period medical insurance sales.

AIA Group CEO and President Lee Yuan Siong highlighted the region's potential, stating that Asia remains the most compelling growth opportunity for life and health insurance. He pointed to structural tailwinds across the region that are underpinning long-term demand.

The company operates in 18 Asian markets, including Mainland China, Singapore, Malaysia, Indonesia, the Philippines, and South Korea, as well as Australia, New Zealand, and a joint venture in India.

Earlier this month, Hong Kong-listed insurers faced market pressure following reports that Chinese tax authorities had begun levying a 20% personal income tax on returns from Hong Kong insurance policies. This raised concerns that tighter scrutiny of offshore investments could dampen demand from mainland customers.

AIA declared an interim dividend of 53.90 HK cents per share, a 10% increase from the previous year.