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AIA Singapore's new business value falls 10% in H1; HK, China drive group's growth
INSURER AIA Singapore on Friday posted a 10 per cent year-on-year fall in value of new business (VONB), which is a measure of expected profits from new premiums, to US$135 million for the six months ended May 31, 2017, on a constant exchange rate basis.
The insurer said in Hong Kong regulatory filings that growth in regular premium protection business in Singapore was offset by a continued reduction in single premium sales through the broker channel - something it said reflected product mix management.
Its VONB margin edged up one percentage point to 72 per cent in the first half. Annualised new premiums (ANP), used to measure new business sales, was 11 per cent lower year-on-year at US$187 million.
Total weighted premium income (TWPI), a gauge for the insurer's longer-term business volumes, rose 4 per cent to US$1.14 billion.
Operating profit after tax grew 12 per cent to US$235 million, led by the growth in the Singapore business' in-force portfolio.
At the group level, the insurer's largest market, Hong Kong, as well as its second-largest, China, continued to drive the company's growth.
The group registered a record 42 per cent jump in VONB in the first half to US$1.75 billion, on a constant exchange rate basis.
Its VONB margin crept up 1.8 percentage points to 54.2 per cent, while ANP went up 37 per cent year-on-year to US$3.2 billion.
Operating profit after tax went up 16 per cent to US$2.26 billion, which represents operating earnings per share of 18.87 US cents.
The group has declared an interim dividend of 25.62 Hong Kong cents per share, up 17 per cent in actual exchange rate basis from the year-ago period.
Ng Keng Hooi said in his maiden results briefing since taking over as the group's chief executive and president that AIA has significant competitive advantages created over its long history in Asia.
"We have a clear strategy that is working well and is fully aligned with the substantial opportunities presented by the extraordinary social changes and substantial economic growth taking place across the region. Our strong track record of value creation is the direct outcome of our many experienced teams working collectively to deliver our strategic priorities. We will continue to challenge ourselves and our strategy to ensure we capture the many significant opportunities that the region presents - well into the future."
The insurer said in its outlook that Asian economic growth remains strong and structurally resilient. "The compounding benefits of growing economies and increasing wealth are leading to higher life insurance penetration rates and significant future growth potential for AIA."