AIA delivers another year of excellent growth

27 February 2018 dot 10-min read
Value of new business up 28 per cent
Operating profit up 16 per cent and final dividend up 17 per cent
EV exceeds US$50 billion for the first time
Hong Kong, 27 February 2018 – The Board of Directors of AIA Group Limited (stock code: 1299) is pleased to announce that AIA has delivered strong results for the year ended 30 November 2017 with double-digit growth across our main financial metrics. Highlights are shown on a constant exchange rate basis:
Excellent growth in value of new business (VONB)
  • 28 per cent growth in VONB to US$3,512 million
  • Annualised new premiums (ANP) increased by 19 per cent to US$6,092 million
  • VONB margin up 4.1 pps to 56.8 per cent
  • PVNBP margin increased to 10 per cent from 9 per cent in 2016
Strong operating profit generation
  • IFRS operating profit after tax (OPAT) up 16 per cent to US$4,647 million
  • Embedded value (EV) operating profit increased by 19 per cent to US$6,997 million
  • Operating return on EV (operating ROEV) up 110 bps to 16.6 per cent
Robust cash flow and resilient capital position
  • EV Equity of US$51.8 billion; EV of US$50.1 billion, up US$8.0 billion
  • Underlying free surplus generation of US$4,527 million, up 13 per cent
  • Free surplus of US$12.3 billion
  • Net remittances of US$2.1 billion
  • Solvency ratio for AIA Co., our principal operating company, of 443 per cent on the HKIO basis
Significant increase in recommended final dividend
  • 17 per cent growth in final dividend to 74.38 Hong Kong cents per share
  • Total dividend of 100.00 Hong Kong cents per share, an increase of 17 per cent
Ng Keng Hooi, AIA's Group Chief Executive and President, said:
"AIA has delivered another strong performance with double-digit growth across our main financial metrics. Value of new business increased by 28 per cent to reach a new high of US$3,512 million and we also achieved strong growth in IFRS operating profit and free surplus. Today's results are the direct outcome of the scale, quality and breadth of AIAs exceptional businesses across the region and the significant progress we are making in delivering our strategic objectives.
"The Board has recommended an increase of 17 per cent in the 2017 final dividend, reflecting the strength of AIA's financial results as well as our confidence in the outlook for the Group.
"AIA has been in Asia for almost a century and we operate in some of the most dynamic and attractive life insurance markets in the world. With our deep roots and long history in Asia, we have aligned our growth strategy with the opportunities created by the unprecedented structural economic, demographic and social changes taking place across our markets. AIA's extensive distribution reach, product innovation, trusted brand and outstanding people capabilities place us in a unique position to help safeguard the financial security of consumers across the Asia-Pacific region.
"Our focus continues to be on the execution of our strategic priorities that will build on our competitive advantages and make a material difference to AIA's future. I am confident that our teams will continue to deliver profitable growth and long-term value for our shareholders as we help our customers live healthier, longer, better lives and plan for a brighter future."
AIA Singapore's Business Results in 2017:
In 2017, AIA Singapore delivered strong profitability with 12 per cent increase in Operating Profit After Tax (OPAT) and continued to drive sustainable long-term business with focus on regular premium products, resulting in an Annualised New Premium (ANP) of US$433M and Overall Value of New Business (VONB) of US$311M. This is due to a strong second-half performance driven by our market leading agency channel. Sales of regular premium protection business also increased over the year with our disciplined approach to managing our product mix in our partnership distribution channels.
Our disciplined execution of our Premier Agency strategy with focus on Million Dollar Round Table (MDRT) qualification yielded strong performance from our market leading Agency channel. By arming our agents with innovative digital sales tools, we transform the way they engage with customers, enhance customer servicing efficiencies and improve agent productivity. These efforts resulted in in the doubling of our MDRT qualifiers between 2014 and 2017, with AIA Singapore having the largest number of MDRT members in Singapore for three consecutive years. This is an industry recognition of the professionalism and dedication of our agents which reinforces our commitment to place customers at the heart of everything we do.  
Our strategic partnership with Citibank produced excellent VONB growth in regular premium protection business, driven by our focus on sellers' productivity and protection needs of the bank's customers. Telemarketing efforts to reach Citibank's credit card customer base with simplified protection solutions continued to gain good traction with strong double digit VONB growth.
Covering one in three working adults as the market leader in group insurance in Singapore in terms of inforce premium, we delivered solid VONB growth from new schemes in 2017. AIA Singapore received the Best Employee Insurance Provider (GOLD) Award at the HR Vendors of the Year Awards for the 12th consecutive year in 2017 for our commitment in partnering our corporate customers to meet their employee benefits needs, helping the workforce live life confidently.
By stepping up efforts to protect Singaporeans with adequate insurance coverage, AIA Singapore leads the protection market in terms of both new business and inforce sum assured. Our total inforce protection sum assured had increased by 6 per cent year on year. 
Patrick Teow, Chief Executive Officer of AIA Singapore, said:
"As a company, we believe in being customer focused. Protecting our customers' health and financial wellbeing, especially during their times of need, is a promise we endeavour to deliver and what insurance is about. We are transforming ourselves from a product provider to become a trusted partner to more than one million AIA Singapore customers on their journey towards healthier, longer and better lives.
I am proud that our efforts through AIA Vitality are significantly cultivating positive behaviours and habits, and improving activity levels of our customers both at home and at work every day. Our active AIA Vitality members together took almost 60 billion steps towards better health in 2017, which is equivalent to walking around Singapore almost 200,000 times! With the broader aim of managing increasing healthcare cost in partnership with stakeholders, we also championed the corporate health and wellness space by spearheading initiatives such as the AIA Vitality Summit to advocate the integral role of business leaders to improve the health, wellbeing and productivity of Singapore's workforce.
Keeping our customers at the heart of everything we do, we are committed in helping them live life confidently by connecting with them through our digital transformation efforts and our promise to serve their evolving needs through innovative products and quality healthcare solutions."
Key initiatives in FY2017 include:
  • AIA Diabetes Care – Protecting Singaporeans with the first-in-market Critical Illness (CI) plan tailored specifically for pre-and type-II diabetics that covers five key diabetes-related complications. This came as the latest initiative in AIA Singapore's broader commitment to contribute to Singapore's war on diabetes, targeting at combating diabetes in Singapore.
  • AIA Quality Healthcare Partners – The first insurer to establish direct partnerships with the medical community and form a network of more than 230 (as at January 2018) trusted and well-qualified medical professionals, to provide enhanced customer experience, quality and affordable healthcare services to Singaporeans. Customers can enjoy benefits such as an appointment-setting service via our AIA Healthcare mobile app, preferential consultation rates and hospital or surgical bill pre-approval. 
  • AIA Vitality Weekly Challenge – Motivating individuals and families to improve their health through a mobile app that rewards AIA Vitality members when they achieve activity targets, to help manage the rise of chronic illnesses from inactivity. Since the launch of AIA Vitality Weekly Challenge in January 2017, the number of AIA Vitality members who exercise increased more than seven-fold.
  • Inaugural Singapore's Healthiest Workplace by AIA Vitality survey, AIA Vitality Summit 2017 and AIA Vitality Dialogue Session - Champion corporate health and wellness space with the inaugural Singapore's Healthiest Workplace by AIA Vitality survey, AIA Vitality Summit 2017 and AIA Vitality Dialogue Session, to advocate the integral role of employers in ensuring the health and well-being of the workforce in Singapore today and in the future. 
- End -
About AIA
AIA Group Limited and its subsidiaries (collectively "AIA" or the "Group") comprise the largest independent publicly listed pan-Asian life insurance group. It has a presence in 18 markets in Asia-Pacific – wholly-owned branches and subsidiaries in Hong Kong, Thailand, Singapore, Malaysia, China, Korea, the Philippines, Australia, Indonesia, Taiwan, Vietnam, New Zealand, Macau, Brunei, Cambodia, a 97 per cent subsidiary in Sri Lanka, a 49 per cent joint venture in India and a representative office in Myanmar.
The business that is now AIA was first established in Shanghai almost a century ago. It is a market leader in the Asia-Pacific region (ex-Japan) based on life insurance premiums and holds leading positions across the majority of its markets. It had total assets of US$216 billion as of 30 November 2017.
AIA meets the long-term savings and protection needs of individuals by offering a range of products and services including life insurance, accident and health insurance and savings plans. The Group also provides employee benefits, credit life and pension services to corporate clients. Through an extensive network of agents, partners and employees across Asia-Pacific, AIA serves the holders of more than 30 million individual policies and over 16 million participating members of group insurance schemes.
AIA Group Limited is listed on the Main Board of The Stock Exchange of Hong Kong Limited under the stock code "1299" with American Depositary Receipts (Level 1) traded on the over-the-counter market (ticker symbol: "AAGIY").

Investment Community News Media
Lance Burbidge +852 2832 1398 Stephen Thomas +852 2832 6178
Feon Lee +852 2832 4704 Allister Fowler +852 2832 1978
Rachel Poon +852 2832 4792 Emerald Ng +852 2832 4720
  Joanna Ash +65 6530 0863
  Elizabeth Wong +65 6530 0891

Financial summary
Performance highlights
New business performance by segment
(1) All figures are presented in actual reporting currency (US dollar) and based on actual exchange rates (AER) unless otherwise stated. Change on constant exchange rates (CER) is calculated using constant average exchange rates for 2017 and for 2016 other than for balance sheet items that use CER as at 30 November 2017 and as at 30 November 2016.
(2) Change is shown on a year-on-year basis unless otherwise stated.
(3) VONB is calculated based on assumptions applicable at the point of sale and before deducting the amount attributable to non-controlling interests. The amounts of VONB attributable to non-controlling interests in 2017 and in 2016 were US$22 million and US$19 million respectively.
(4) VONB includes pension business. ANP and VONB margin exclude pension business.
(5) IFRS operating profit after tax and operating earnings per share are shown after non-controlling interests unless otherwise stated.
(6) Hong Kong refers to operations in Hong Kong and Macau; Singapore refers to operations in Singapore and Brunei; and Other Markets refers to operations in Australia (including New Zealand), Cambodia, Indonesia, Korea, the Philippines, Sri Lanka, Taiwan, Vietnam and India. The results of our joint venture in India are accounted for using the equity method. For clarity, TWPI, ANP and VONB exclude any contribution from India.
(7) AIA's financial information in this document is based on the audited consolidated financial statements and supplementary embedded value information for 2017.