AIA launches US$10b buyback as new business value rises 22%

[BENGALURU] AIA Group on Friday launched a US$10 billion share buyback plan and declared a higher final dividend as new business value jumped 22 per cent in 2021, boosted by strong growth across markets, especially in China and Hong Kong.

The insurer's value of new business or VONB, which measures expected profit from new premiums and is a key gauge for future growth, rose to US$3.37 billion for the year ended Dec 31, from US$2.77 billion a year earlier.

China and Hong Kong accounted for about half of new business growth globally. Mainland China business was the top contributor to VONB, logging a 14 per cent growth, while its Hong Kong business jumped 37 per cent, indicating strong recovery from the pandemic-lows.

Better operating conditions for the Hong Kong-based insurer, which relies on its army of agents, prompted it to announce the buyback plan spread over the next three years.

"The share buyback represents capital accumulated over time that is surplus to our needs, allowing for capital market stress conditions and retention of capital for strategic and financial flexibility," group chief executive officer Lee Yuan Siong said.

It also declared a final divided of 108 Hong Kong cents per share, 8 per cent higher than last year, taking the total 2021 dividend to 146 HK cents apiece. REUTERS