Life in Asia

24 February 2017 By Quentin Webb

The Asian insurance juggernaut has weathered the clampdown on Chinese capital outflows well, clocking up another bumper year. New business soared 28 pct and a key profit measure rose 15 pct. But management’s confidence is not quite matched by its dividend plans.

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AIA Group, the Hong Kong-listed life insurer, on Feb. 24 reported a 28 percent rise in new business for the year ending Nov. 30, 2016, excluding currency effects, and lifted full-year dividend payments by 23 percent.

The value of new business (VONB), a key yardstick for growth, rose 28 percent to $2.8 billion on a constant-currency basis. Operating profit after tax, a measure of profitability that is unaffected by swings in the value of AIA's investment portfolio, rose 15 percent on the same basis to $4.0 billion.

AIA, which has a market value of about HK$591 billion ($76 billion), lifted its dividend to 85.7 Hong Kong cents per share. Chief Executive and President Mark Tucker said this reflected "our excellent financial performance and our confidence in the future outlook". Chief Executive and President Mark Tucker said this reflected "our excellent financial performance and our confidence in the future outlook".

The surge in new business was driven by Hong Kong and mainland China, where VONB leapt 42 percent and 54 percent respectively, before foreign-exchange movements. AIA's other major markets are Thailand, Singapore and Malaysia.

Shares in AIA rose 0.9 percent in early trading in Hong Kong to HK$49.50 a share.

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