Hong Kong, 12 March 2020 – AIA Group Limited (the "Company"; stock code: 1299) today announces financial results for the year ended 31 December 2019.

 

Growth rates are shown on a constant exchange rate basis below:

 

 

 

 

 

 

 

 

 

 

"AIA has delivered a resilient performance in 2019, despite a challenging operating environment, with continued growth in all our main financial metrics. Headline VONB growth of 6 per cent was the result of very strong growth in the first half of the year set against a second half significantly affected by social unrest in Hong Kong. VONB grew strongly at 16 per cent excluding Hong Kong. Operating profit after tax increased by 9 per cent, underlying free surplus generation grew by 13 per cent, and EV Equity grew by 12 per cent.

 

"Our wholly-owned operation in Mainland China once again delivered a very strong performance with 27 per cent growth in VONB. I am also pleased that OPAT from Mainland China exceeded US$1 billion for the first time, illustrating the attractive financial dynamics of our business. Following the announcement late last year of the further opening of Mainland China to foreign life insurers, we submitted an application for regulatory approval to convert our Shanghai branch into a subsidiary. Subject to regulatory approval, this will form the new foundation for our geographical expansion plans in Mainland China, which began with the opening of new sales and service centres in Tianjin and Shijiazhuang, Hebei during 2019.

 

"The 5 per cent VONB reduction in Hong Kong reflected a decline in sales from Mainland Chinese visitors in the second half of 2019, broadly tracking the fall in the number of visitor arrivals as previously highlighted. Our domestic customer segment in Hong Kong continued to deliver a strong performance with double-digit VONB growth for the year.

 

"VONB growth in Thailand and Malaysia was supported by our Premier Agency strategy and bancassurance partnerships. Other Markets achieved 27 per cent growth in VONB, led by strong performances in Australia, the Philippines and Vietnam.

 

"AIA's proprietary agency distribution delivered 11 per cent VONB growth as we focused on our quality recruitment programmes to drive an increase in the number of active agents. Our partnership distribution business reported slightly lower VONB as strong VONB growth in the bancassurance channel was offset by a significant decline from the retail IFA channel in Hong Kong in the second half. Excluding Hong Kong, agency distribution VONB grew by 16 per cent and partnership distribution VONB increased by 19 per cent for the year.

 

"The Board has recommended a 10 per cent increase in final dividend for 2019 to 93.30 Hong Kong cents per share, following AIA's established prudent, sustainable and progressive dividend policy allowing for future growth opportunities and the financial flexibility of the Group within the context of the immediate macroeconomic and capital markets environment.

 

"While our insurance benefits provide financial support to our millions of customers when they need it most, we continue our journey of moving beyond the traditional transaction-focused insurance model towards being a lifelong partner to our customers. The further growth in the membership of our wellness programmes to 1.7 million reflects our commitment to helping millions of people live Healthier, Longer, Better Lives.

 

"Over the last century, AIA has successfully managed through many different economic cycles. Some of our markets are facing near-term headwinds from the lower interest rate environment and the past two months have seen Covid-19 emerge as a new global risk. We have seen a significant disruption in the Group's new business sales in the first quarter from reduced face-to-face interactions and have taken a number of proactive measures including a rapid acceleration of digital platforms to further support agency recruitment, training and sales activities. AIA's agency recruitment pipeline in Mainland China remains strong. Our local businesses in affected areas have also been assisting communities with enhanced benefits and expedited claims procedures. Our thoughts are with the families and communities who have been affected by this public health emergency.

 

"The strong domestic drivers of demand and major demographic trends in Asia provide powerful structural support for the long-term prospects of AIA's business. We have unrivalled distribution capabilities and a diversified, high-quality portfolio of businesses across 18 markets, the latest addition being our recently- launched operation in Myanmar, and we are continuing our preparations for further geographical expansion in Mainland China. The need for AIA's insurance products will continue to grow strongly given rising incomes, low levels of private insurance penetration and limited social welfare coverage and I am confident that AIA is ideally positioned to deliver long-term sustainable growth."

 

In 2019, amidst the challenging macroeconomic environment, AIA Singapore delivered profitable performance through our continued focus on regular premium business.

 

 

We are committed to our Premier Agency strategy with an ongoing focus on quality recruitment, professional career development and investing in next-generation integrated digital platforms. Continued execution of our strategic priorities has enabled AIA Singapore to maintain its market leadership in agency distribution with the largest number of MDRT registered members in Singapore. During the year, we delivered an increase in the number of active agents which supported modest VONB growth from our agency.

 

Our strategic bancassurance partnership with Citibank delivered double-digit VONB growth supported by increased number and higher productivity of insurance specialists from the mass affluent and retail segments. Overall VONB was lower from our partnership distribution as we maintained our disciplined approach to the pricing of single premium high net worth products through our broker and non-exclusive bancassurance channels in the face of strong competitive pressures.

 

Our group insurance business also had a double-digit VONB growth as we remain the leader in the industry in terms of both new and in-force premiums. In 2019, for the 14th consecutive year, AIA Singapore won the prestigious Best Employee Insurance Provider (GOLD) Award at the HR Vendors of the Year 2019 Awards.

 

Ensuring the affordability of health protection solutions remains our priority, as we invest in numerous initiatives to support customers throughout their entire health journey. We continued to focus on proactively mitigating the effects of claims inflation on our HealthShield medical insurance portfolio through the introduction of deductibles, active re-pricing and strengthened relationships with key medical providers in the market.

 

We improved our customers' digital experience with the launch of a new online platform that enables our agents to facilitate all customer requests digitally. We also rolled out major enhancements to our customer app, My AIA SG, with full integration with our award-winning AIA Vitality wellness programme to provide a seamless digital customer experience. My AIA SG has been widely adopted by our customers and over 70 per cent of customer service requests are now submitted and responded to digitally.

 

 

"AIA Singapore delivered profitable performance, reflected in growth in both IFRS Operating Profit After Tax (OPAT) and Total Weighted Premium Income (TWPI), despite the challenging macroeconomic environment.

 

Our fundamentals remain strong and we will continue to invest in product innovations and strategic partnerships to deliver on our commitment of helping Singaporeans live healthier, longer, better lives. At AIA, we always have our customers' best interests at heart, and we actively find new ways to make a difference to our customers' lives.

 

Market-first initiatives launched in 2019 include:

 

 

As part of our efforts to encourage holistic wellness in 2019, we hosted 15,000 attendees at our inaugural AIA GLOW Festival which featured a charity fun run, yoga for all levels, healthy bites and masterclasses, live music from local and global performing artists, and activities for all members of the family. We also engaged the community to come together to keep active while having fun at Fitness Fest by AIA, contributing to a healthier population where more than 4,000 fitness enthusiasts gathered for a 12-hour fit-a-thon.

 

As AIA enters a new century in 2020, customer-centricity remains our driving force to propel the sustainable growth of our business. This includes a continued focus to protect our customers against healthcare challenges including the Covid-19 outbreak, as well as a more tailored approach to retirement and long-term savings for different segments of our customer base. We are committed to upholding our promise of helping our customers live healthier, longer, better lives, in good and bad times, so everyone can enjoy peace of mind when they need it the most."

 

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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 SAR, Thailand, Singapore, Malaysia, Mainland China, South Korea, the Philippines, Australia, Indonesia, Taiwan (China), Vietnam, New Zealand, Macau SAR, Brunei, Cambodia, Myanmar, a 99 per cent subsidiary in Sri Lanka, and a 49 per cent joint venture in India.

 

The business that is now AIA was first established in Shanghai 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$284 billion as of 31 December 2019.

 

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 36 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").