AIA new business value soars 27%, Hong Kong-based insurer adds US$2 billion to buy-back plan

AIA Group posted a 27 per cent actual exchange-rate jump in new business value in the first quarter, led by growth in Hong Kong and mainland China, while announcing an additional share buy-back.

The measure of future profitability of new policies sold surged to US$1.3 billion, from US$1.05 billion a year earlier, the Asia insurer said in a statement Monday. Annualised new premiums jumped 23 per cent to US$2.4 billion.

Stripping out the effect of exchange-rate fluctuations, new business value surged 31 per cent while annualised new premiums rose 26 per cent. Its Hong Kong new business value jumped 43 per cent, while in mainland China, the measure expanded 38 per cent, on a constant exchange-rate basis.

The firm will add US$2 billion to the existing US$10 billion buy-back programme, “in view of AIA’s very strong financial position and our confidence in our future operational and financial delivery”, Lee Yuan Siong, group CEO, said in the statement. The company set a fresh target to pay out 75 per cent of its annual net free surplus generation, which will result in a higher distribution to shareholders through dividends and share buy-backs, starting from this year’s annual results.

AIA operates in 18 Asia-Pacific markets, while counting its home base of Hong Kong and mainland China as the largest contributors of new business and policy sales, by a wide margin. The year-ago quarter provided a low base for comparison, as the two markets were just emerging from Covid-19-era disruptions, such as mandatory quarantine for cross-border travellers and other social-distancing measures.

By the first quarter, mainland Chinese visitor arrivals in Hong Kong had recovered to 71 per cent of the 2018 level, Citigroup analysts led by Michelle Ma wrote in a note last week. Mainland Chinese visitors and local residents contributed “broadly similar” shares to the unit’s new business value growth in the three months, the company said.