The Board bears the ultimate responsibility for the formulation, approval and establishment of the investment policy of the Company.The Company’s Investment Committee (IC) is a management committee which the Board has delegated the authority to manage,maintain and monitor the investment assets of the insurance funds of the Company. The IC is also responsible for ensuring that the investment policy and the fund mandates of the Company are implemented in an appropriate manner.
The investment policy is formulated based on the needs of its insurance business and reflects relevant regulatory requirements. The formulation and implementation of the investment policy is an ongoing process, which includes a formal annual review by the Board in terms of overall risk tolerance, long-term risk-return requirements and solvency position, following review and recommendation by the IC.
Strategic Asset Allocation (SAA) targets and Tactical Asset Allocation (TAA) are proposed by the IC and approved by the Board. The SAA targets and TAA ranges define the long term investment objectives of the Company, while the TAA defines a range around the SAA targets within which investment managers can operate to reduce risk and / or benefit from market opportunities in the near term.
The Company only takes risks that it and the AIA Group understand and can manage effectively. Investment in any securities, financial instruments and other investment titles must follow the relevant policies, principles, processes and procedures for the respective asset class established by AIA Group Investment department and AIA Group Risk department. The Company will only invest in securities and geographic markets where it and the Group has the expertise, resources, systems and infrastructure to ensure that it is able to evaluate the risk, price and monitor each investment. Where it or the AIA Group does not have expertise or resources, the Company will outsource the management to a third party manager and the Company and AIA Group will ensure that it has the expertise and resources to evaluate and select the appropriate manager and carry out regular performance monitoring.