VALUE OF NEW BUSINESS UP 22 PER CENT; OPERATING PROFIT UP 13 PER CENT; FINAL DIVIDEND UP 14 PER CENT
HONG KONG, 15 March 2019 – AIA Group Limited (“AIA”; or the “Company”; stock code: 1299) delivered excellent operating performance with double-digit growth across our main financial metrics for the twelve months1 ended 31 December 2018, including very strong growth in value of new business (VONB) of 22 per cent on a constant exchange rate basis, compared with the corresponding twelve-month period ended 31 December 2017.
Growth rates are shown on a constant exchange rate basis below:
Very strong growth in value of new business
- 22 per cent growth in VONB to US$3,955 million
- Annualised new premiums (ANP) increased by 15 per cent to US$6,510 million
- VONB margin up 3.7 pps to 60.0 per cent
Strong operating profit generation
- Operating profit after tax (OPAT) up by 13 per cent to US$5,298 million
- Embedded value (EV) operating profit increased by 23 per cent to US$8,278 million
- Operating return on EV (operating ROEV) up by 110 bps to 16.3 per cent
Robust cash flow and resilient capital position
- EV Equity of US$56.2 billion; EV of US$54.5 billion, up US$3.7 billion
- Underlying free surplus generation of US$4,945 million, up 13 per cent on a comparable basis
- Free surplus of US$14.8 billion
- Net remittances of US$2.8 billion
- Solvency ratio for AIA Company Limited (AIA Co.) of 421 per cent on the HKIO basis
Strong increase in recommended final dividend
- 14 per cent growth in final dividend to 84.80 Hong Kong cents per share
- Total dividend (excluding special dividend) up 14 per cent to HK$1.14 per share
- A special dividend of 9.50 Hong Kong cents per share
Ng Keng Hooi, AIA’s Group Chief Executive and President, said:
“AIA has once again delivered an excellent performance with double-digit growth across our main financial metrics in 2018. Value of new business increased by 22 per cent to reach a new record of US$3,955 million. We also achieved strong growth of 13 per cent in both operating profit after tax and underlying free surplus generation. These very strong results were achieved against a backdrop of economic uncertainty and financial market volatility.
“Our business in China delivered an excellent performance with VONB growth of 30 per cent. I am also delighted that we recently received approval to set up sales and service centres in Tianjin and Shijiazhuang, Hebei. Hong Kong delivered another very strong performance with 24 per cent VONB growth and VONB in Singapore grew by 18 per cent. Thailand returned to growth with VONB up 12 per cent, as our agency transformation delivered tangible results.
“AIA’s agency channel had another excellent year with 26 per cent VONB growth and the Group now has more than 10,000 Million Dollar Round Table (MDRT) members. In partnerships, our bank channel delivered 18 per cent VONB growth and we activated four new strategic partnerships including with Bangkok Bank in Thailand and SK Telecom in Korea.
“Our brand promise, Healthier, Longer, Better Lives, epitomises our commitment to customers as AIA shifts towards being a partner for life with wellness as a key focus. Membership of our wellness programmes exceeded 1.2 million, transforming engagement and delivering meaningful health improvements for our customers.
“These strong results are underpinned by our diversified, robust and high-quality business model together with our relentless focus on capturing the significant opportunities presented by the long-term structural drivers of growth across Asian insurance markets.
“The Board has recommended an increase of 14 per cent in the 2018 final dividend and a special dividend of 9.50 Hong Kong cents per share due to the change in financial year-end date. The dividends reflect the strength of AIA’s financial results and our confidence in the outlook for the Group.
“The scale, quality and breadth of AIA’s exceptional businesses across the Asia-Pacific region, combined with our unrivalled distribution capabilities, trusted brand, financial strength and innovation capabilities, enable us to meet the evolving needs of our customers for protection and long-term savings as we help them to live Healthier, Longer, Better Lives.
“We enter 2019, our centennial year, with confidence about our long-term outlook. AIA has always been committed to providing financial protection and driving economic and social development across the region. Our centenary gives us the opportunity to reaffirm our commitments and our focus on delivering long-term sustainable value for our shareholders.”