AIA Group, the biggest insurer in Asia-Pacific, said earnings rose to an all-time high last year as demand for higher investment returns from mainland Chinese visitors fuelled record sales in Hong Kong.
Net profit surged 82 per cent from a year earlier to US$6.84 billion, or 62 US cents per share, the company said in a Hong Kong stock exchange filing on Friday, the highest since its listing in the city in 2010. The performance topped market consensus of US$6.345 billion by analysts compiled by Bloomberg.
AIA also announced a new round of US$1.6 billion share buy-back programme, on top of the US$12 billion repurchases completed in February. Its shares dropped 2.4 per cent to HK$61.30 at 9.45am local time after the announcement.
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“AIA is uniquely well-positioned to capitalise on the long-term structural growth potential in the world’s most attractive market for life and health insurance through the consistent execution of our clear and ambitious strategy,” CEO Lee Yuan Siong said in the filing. “I am confident that AIA’s long term business prospects remain exceptional.”
AIA’s value of new business (VONB), a measure of sales and future growth in insurance, rose 18 per cent from a year earlier to a record US$4.71 billion in 2024 Hong Kong and mainland China, its two biggest markets making up 63 per cent of new businesses, recorded strong growth last year, it added.
VONB in Hong Kong rose 23 per cent year on year to a record US$1.8 billion as mainlanders continued to buy policies in the city for better returns and better health protection. The same metric for mainland China increased 20 per cent to US$1.2 billion, it said.
Mainland customers like to buy insurance policies in Hong Kong as the products are sold in US dollars or Hong Kong dollars, allowing policy owners to hedge the risks against a falling yuan. The Chinese currency has weakened 15 per cent against the US dollar over the past two years.
Some 44.5 million travellers visited Hong Kong last year, an increase of 31 per cent from a year earlier as a recovery in tourism gained momentum after the pandemic, according to data published by the Tourism Board. Mainland Chinese made up 77 per cent of the arrivals.
AIA’s three biggest markets in Southeast Asia all reported double-digit VONB growth last year, with Thailand and Singapore charting a 15 per cent gain and Malaysia expanding by 10 per cent.
The insurer proposed to pay a final dividend of HK$1.3098 per share, bringing the full year total payout to HK$1.7548 per share or 9 per cent more than a year earlier.
More from South China Morning Post:
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