Life Insurance
Protect your loved ones’ future from life’s uncertainties
{{title}}
{{label}}15 March 2019
VALUE OF NEW BUSINESS UP 22
OPERATING PROFIT UP 13 PER CENT; FINAL DIVIDEND UP 14 PER CENT
HONG KONG, 15 March 2019 – AIA Group Limited (“AIA”; or the “Company”; stock code: 1299) delivered excellent operating performance with double-digit growth across our main financial metrics for the twelve months1 ended 31 December 2018, including very strong growth in value of new business (VONB) of 22 per cent on a constant exchange rate basis, compared with the corresponding twelve-month period ended 31 December 2017.
Growth rates are shown on a constant exchange rate basis below:
Very strong growth in value of new business
Strong operating profit generation
Robust cash flow and resilient capital position
Strong increase in recommended final dividend
Ng Keng Hooi, AIA’s Group Chief Executive and President, said:
“AIA has once again delivered an excellent performance with double-digit growth across our main financial metrics in 2018. Value of new business increased by 22 per cent to reach a new record of US$3,955 million. We also achieved strong growth of 13 per cent in both operating profit after tax and underlying free surplus generation. These very strong results were achieved against a backdrop of economic uncertainty and financial market volatility.
“Our business in China delivered an excellent performance with VONB growth of 30 per cent. I am also delighted that we recently received approval to set up sales and service centres in Tianjin and Shijiazhuang, Hebei. Hong Kong delivered another very strong performance with 24 per cent VONB growth and VONB in Singapore grew by 18 per cent. Thailand returned to growth with VONB up 12 per cent, as our agency transformation delivered tangible results.
“AIA’s agency channel had another excellent year with 26 per cent VONB growth and the Group now has more than 10,000 Million Dollar Round Table (MDRT) members. In partnerships, our bank channel delivered 18 per cent VONB growth and we activated four new strategic partnerships including with Bangkok Bank in Thailand and SK Telecom in Korea.
“Our brand promise, Healthier, Longer, Better Lives, epitomises our commitment to customers as AIA shifts towards being a partner for life with wellness as a key focus. Membership of our wellness programmes exceeded 1.2 million, transforming engagement and delivering meaningful health improvements for our customers.
“These strong results are underpinned by our diversified, robust and high-quality business model together with our relentless focus on capturing the significant opportunities presented by the long-term structural drivers of growth across Asian insurance markets.
“The Board has recommended an increase of 14 per cent in the 2018 final dividend and a special dividend of 9.50 Hong Kong cents per share due to the change in financial year-end date. The dividends reflect the strength of AIA’s financial results and our confidence in the outlook for the Group.
“The scale, quality and breadth of AIA’s exceptional businesses across the Asia-Pacific region, combined with our unrivalled distribution capabilities, trusted brand, financial strength and innovation capabilities, enable us to meet the evolving needs of our customers for protection and long-term savings as we help them to live Healthier, Longer, Better Lives.
“We enter 2019, our centennial year, with confidence about our long-term outlook. AIA has always been committed to providing financial protection and driving economic and social development across the region. Our centenary gives us the opportunity to reaffirm our commitments and our focus on delivering long-term sustainable value for our shareholders.”
AIA Singapore’s Business Results in 2018:
AIA Singapore achieved outstanding growth in 2018 attributed to strong results across all channels.
AIA Singapore maintained its market leadership position in agency distribution and delivered very strong growth in VONB through this core distribution channel. Focused execution of our Premier Agency strategy drove increases in both the number of active agents and productivity, as our professional agents continued to concentrate on meeting customer needs with an emphasis on regular premium protection products.
In 2018, we developed several innovative digital tools including a new mobile application integrated with our propensity models that helps our agents engage with customers more effectively to better meet their needs. The introduction of these tools and our targeted recruitment and training programmes drove active agent growth and increase in productivity.
Our strategic partnership with Citibank delivered excellent VONB growth, with a focus on recruiting and enhancing the productivity of the bank’s insurance specialists to address our customers’ protection needs.
AIA Singapore also remained a market leader in the group insurance market where we secured several new and sizeable corporate client cases during the year. In 2018, for the 13th consecutive year, AIA Singapore won the prestigious Best Employee Insurance Provider (GOLD) Award at the HR Vendors of the Year 2018 Awards.
In 2018, we continued to invest in and enhance our AIA Vitality wellness platform with the introduction of new benefits and launch of a strengthened digital experience via the new AIA Vitality app in December 2018. Endeavours to engage more customers yielded significant increase in AIA Vitality members over the course of 2018.
Patrick Teow, Chief Executive Officer of AIA Singapore, said:
“AIA Singapore recorded strong performance in 2018, achieving sustained business success reflected in outstanding growth in both Value of New Business (VONB) and Annualized New Premium (ANP).
We remain unwavering in our commitment to make a positive difference to the lives of our customers and their families. In 2018, on top of our efforts to deepen customer engagement with AIA Vitality, we launched Personal Medical Case Management service through our exclusive partnership with Medix, expanded the AIA Quality Healthcare Partners network and increased the number of participating hospitals with pre-approval claim services. These were part of the company’s concerted approach to provide a comprehensive and innovative health and wellness proposition for our customers.
In 2018, we continued to invest in Singapore’s health and financial wellbeing through innovations and initiatives, as well as intensify our efforts to transform our business in the areas of data and digitalization. This is our commitment to meet the evolving needs of our customers and help them live healthier, longer and better lives as we celebrate AIA’s centennial in 2019.”
Key innovations and initiatives in 2018 to meet the evolving protection and financial needs of customers include:
We encouraged the community to stay active and healthy by engaging in health and wellness initiatives such as Fitness Fest by AIA, The Music Run™ by AIA, KidZania Singapore’s “AIA at the Stadium”, and the ‘What’s Your Why’ campaign with David Beckham, our Global Ambassador for healthy living.
- 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 in 1919. 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$230 billion as of 31 December 2018.
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 33 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”).
Contacts
Investment Community
Lance Burbidge
+852 2832 1398
Evelyn Lam
+852 2832 1633
Feon Lee
+852 2832 4704
Rachel Poon
+852 2832 4792
News Media
Stephen Thomas
+852 2832 6178
Mark Walters
+852 2832 1978
Emerald Ng
+852 2832 4720
Joanna Ash
+65 6530 0863
Elizabeth Wong
+65 6530 0891
1The Company announced the Group’s audited consolidated results for the thirteen-month period ended 31 December 2018 today. In February 2018, the Board resolved to change the Company’s financial year-end date from 30 November to 31 December. Accordingly, the current financial period-end date of the Company is 31 December 2018. The 2018 consolidated financial statements adopting the new year-end date is for the thirteen-month period ended 31 December 2018 with the comparative figures prepared based on the twelve-month period ended 30 November 2017. For details, please visit www.aia.com for the Company’s 2018 Annual Results Announcement published today.
APPENDIX
Financial Summary
Key Performance Highlights
New Business Performance by Segment
Singapore
Notes:
(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 the twelve months ended 31 December 2018 and for the twelve months ended 31 December 2017 other than for balance sheet items that use CER as at 31 December 2018 and as at 31 December 2017.
(2) Change is shown on a year-on-year basis compared with the corresponding twelve-month period ended 31 December 2017, 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 the twelve months ended 31 December 2018 and in the twelve months ended 31 December 2017 were US$27 million and US$22 million respectively.
(4) VONB includes pension business. ANP and VONB margin exclude pension business.
(5) OPAT is shown after non-controlling interests unless otherwise stated.
(6) The growth rates of underlying free surplus generated are calculated on a comparable basis before the reduction of US$263 million in the twelve months ended 31 December 2018 relating to the change in reserving and capital requirements for consolidation purposes following the subsidiarisation of AIA Korea.
(7) Total dividend of HK$1.14 per share for the twelve months ended 31 December 2018 does not include the special dividend for the additional month in the accounting period due to the change in financial year-end.
(8) 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.
(9) AIA’s financial information in this document is based on the audited consolidated financial statements and supplementary embedded value information for the twelve months ended 31 December 2018, unless otherwise stated.
This document contains forward-looking statements relating to AIA Group Limited that are based on the beliefs of the Group’s management as well as assumptions made by and information currently available to the Group’s management. These forward-looking statements are, by their nature, subject to significant risks and uncertainties. When used in this document, the words “will”, “future” and similar expressions are intended to identify forward-looking statements. You are strongly cautioned that reliance on any forward-looking statements involves known and unknown risks and uncertainties. Actual results and events may differ materially from information contained in the forward-looking statements.
This document is for information purposes only and does not constitute an invitation or offer by any person to acquire, purchase or subscribe for securities. This document is not, and is not intended to be, an offer of securities for sale in the United States. The securities of AIA Group Limited have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements under the U.S. Securities Act. There is not, and is not intended to be, any public offering of such securities in the United States.
###