AIA group and S'pore division report firm growth for FY17

Singapore

PAN-ASIAN life insurance group AIA and its Singapore division turned in a strong performance for the 2017 financial year.

AIA Singapore reported a 12 per cent increase in operating profit after tax to US$504 million (S$664 million) for the year ended Nov 30, 2017, thanks to growth in the scale of its high-quality in-force portfolio, it said on Tuesday.

It also reported US$311 million worth of value of new business (VONB) - a measure of expected profits from new premiums - for FY2017, with a positive second-half performance supported by double-digit VONB growth from its agency channel.

Sales of its regular premium protection business also rose over the year, as it continued its "disciplined approach" to managing its product mix in its partnership distribution channels.

It reported an annualised new premium (ANP) of US$433 million for FY2017.

AIA Singapore said VONB growth in its Singapore division, from its premier agency distribution, was the direct result of an increase in the number of its active agents and improved productivity levels, supported by a high take-up of its digital sales and training tools during the year. More than 90 per cent of its new business applications were submitted digitally through its interactive point-of-sales system (iPoS) in 2017.

"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," AIA Singapore said in a statement.

It also said that its strategic partnership with Citibank, focusing on sellers' productivity and protection needs of the bank's customers, delivered solid VONB growth in its regular premium protection business, though VONB was lower from its single-premium products.

However, direct sales (including digital direct sales) targeting Citibank's large credit card customer base with simplified protection solutions continued to gain traction with very strong double-digit VONB growth, it added.

It said it continued to be the leader in the group insurance market in Singapore, in terms of in-force premium (that is, initial premiums on policies that are still in force), and that it delivered solid VONB growth from attracting new schemes during the year.

Among these was AIA Quality Healthcare Partners, launched in early 2017, which made AIA Singapore the first insurer domestically to establish direct partnerships with the medical community.

Membership and VONB from products integrated with its AIA Vitality wellness programme trebled over the year, it said.

AIA Singapore chief executive officer Patrick Teow said: "Keeping our customers at the heart of everything we do, we are committed to 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."

The AIA Group as a whole reported double-digit growth across its main financial metrics for FY2017.

Its operating profit after tax grew 16 per cent to US$4.6 billion, while its embedded value operating profit rose by 19 per cent to US$7.0 billion.

The group's VONB grew 28 per cent to reach a new high of US$3.5 billion, while its ANP increased 19 per cent to US$6.1 billion.

Ng Keng Hooi, AIA's group chief executive and president, commented: "Today's results are the direct outcome of the scale, quality and breadth of AIA's exceptional businesses across the region and the significant progress we are making in delivering our strategic objectives."

AIA's board recommended a 17 per cent increase in the group's 2017 final dividend to 74.38 Hong Kong cents a share, bringing the total dividend to 100 Hong Kong cents a share.

This reflects "the strength of AIA's financial results as well as our confidence in the outlook for the group", Mr Ng said.