AIA's new business value jumps 25% in rebound from pandemic slump

[BENGALURU] Asia-focussed insurer AIA Group Ltd reported a 25.1 per cent rise in first-quarter new business value on Friday, as it began to recover from business disruptions caused by the Covid-19 pandemic in its main markets Hong Kong and China.

The value of new business (VONB), which measures expected profits from new premiums and is a key gauge for future growth, rose to US$1.05 billion in the January to March period, from US$841 million a year earlier.

VONB was up 19 per cent on a constant currency basis.

In Asia, insurance firms mainly rely on their army of agents for product sales, which have been dented by lockdowns and social distancing measures put in place by various countries to contain the pandemic.

In the first quarter of 2021, AIA's mainland China business remained the largest contributor to its new business value and achieved "excellent growth" compared with last year, the company said.

"The momentum that returned to our businesses, as movement restrictions eased in 2020, has continued into 2021," chief executive Lee Yuan Siong said.

The insurer recorded double-digit VONB growth from its domestic customer segment in Hong Kong, though coronavirus travel restrictions limited the number of mainland Chinese visitors and weighed on sales.

These visitors, who are often seeking better products and overseas investment opportunities, were an important source of new business for AIA before the pandemic.

China and Hong Kong together account for about half of new business growth globally at AIA, which was founded in Shanghai a little over 100 years ago and was the first foreign insurer to be granted a license in China.

Last year, AIA reported its first annual VONB fall since its 2010 listing in Hong Kong.

REUTERS