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AIA (1299)

Principal Activities

The Group is a life insurance based financial services provider operating in 18 markets throughout the Asia-Pacific region. The Group’s principal activities are the writing of life insurance business, providing life insurance, accident and health insurance and savings plans throughout Asia, and distributing related investment and other financial services products to its customers.

Latest Results

The Group's profit attributable to shareholders for the year ended 31-12-2018 amounted to USD 3.16 billion, a decrease of 52.3% compared with previous corresponding period. Basic earnings per share was USD 0.2631. A final dividend of HKD 0.848 per share and a special dividend of HKD 0.095 per share was declared. Net earned premium amounted to USD 31.91 billion. (Announcement Date: 15 Mar 2019)

Business Review - For the year ended December 31, 2018

DISTRIBUTION

Our proprietary tied agency force is our core distribution channel and the professionalism and scale of our agency is a significant competitive advantage for AIA. In 2018, the focused execution of our Premier Agency strategy delivered VONB growth of 26 per cent to US$2,943 million. We believe that our agents are the most effective means of meeting the financial protection and long-term savings needs of the mass affluent market in Asia. Our ability to attract the highest-quality recruits and provide them with the best training and back-office support across every aspect of agency management is an important driver of our growth. AIA is also at the forefront of providing agents with next-generation digital tools which help to enhance both their professionalism and productivity. The execution of our Premier Agency strategy will continue to be the cornerstone of AIA’s future success.

MDRT membership is an important measure of the quality of our agency and AIA has over 10,000 registered members, which is an increase of 22 per cent compared with 2017. AIA has now been the multinational with the highest number of MDRT registered members globally for four consecutive years, a clear indicator of our success in developing a highly professional, full-time agency distribution.

AIA’s long-term strategic partnerships broaden our access to customers across the Asia-Pacific region. VONB from AIA’s partnership distribution business grew by 11 per cent to US$1,172 million in 2018, building on the exceptionally strong performance from Hong Kong’s retail IFA channel in the first half of 2017, as previously highlighted. In March 2018, we launched our new strategic partnership with Bangkok Bank, the largest bank by total assets and with one of the largest retail banking customer bases in Thailand. This partnership offers a significant opportunity to reinforce our market leadership position in Thailand. In July 2018, the Group announced the completion of the transaction to acquire Sovereign Assurance Company Limited in New Zealand and the beginning of our 20-year strategic bancassurance partnership with ASB Bank Limited (ASB).

We also look to develop non-traditional strategic partnerships with companies that have large existing customer bases and where the arrangements make commercial sense for AIA, such as those we launched during the year with WeDoctor in China and SK Telecom in Korea. Through our partnership with WeDoctor, AIA has gained preferred access to WeDoctor’s services for AIA customers and AIA has become the preferred provider of life and health insurance solutions to WeDoctor’s registered user base of over 180 million Chinese consumers. We also launched AIA Vitality into our strategic partnership with SK Telecom, the nation’s leading telecommunications provider by number of customers. These new partnerships represent additional growth opportunities for AIA by providing us with broader access to new customers and enabling the provision of new digital health and wellness services for our existing policyholders.

In addition, our scale and presence across the Asia-Pacific region place us in a strong position to take advantage of strategic partnership opportunities as they arise. We look for opportunities that will materially extend our distribution reach and rigorously evaluate these opportunities against strict financial and strategic criteria.

BRAND AND MARKETING

AIA’s brand promise to help our customers live Healthier, Longer, Better Lives was launched across all of our markets in 2018. AIA is leading the way in transforming our protection business from that of a passive claims payer to a partner that actively helps our customers improve their health and well-being. This changes the way that customers perceive the purchase of life and health insurance and allows them to see positive, tangible benefits early on in their relationship with AIA. Our approach is fully aligned with the rapidly evolving needs and expectations of consumers in Asia-Pacific and offers significant potential for enhancing the quality and frequency of engagement with our customers and our distribution.

Our stated Purpose is to play a leadership role in driving economic and social development across the region and our new brand promise represents what we stand for as a company. We are actively fostering long-term relationships with our customers to address the protection needs created by rising personal wealth that is leading to an increasing prevalence of lifestyle-related diseases in Asia. Our leadership position in health insurance, integrated with wellness, is at the forefront of these developments and this is an important strategic priority for the Group that will enable us to deliver both positive benefits for our customers and their communities, and help AIA to sustain our long-term growth.

AIA Vitality is our comprehensive science-backed wellness programme. Since its launch in 2013, we have been able to demonstrate positive health outcomes for our customers by encouraging and rewarding healthy lifestyle choices. We also launched AIA Vitality into many of our bancassurance partnerships during the year and total membership of our wellness programmes has exceeded 1.2 million people as at the end of 2018.

Our marketing and sponsorship activity is focused on associating the AIA brand with healthy lifestyles and encouraging active participation in sport. Our Global Principal Partnership with Tottenham Hotspur Football Club (Spurs) and our Global Ambassador, David Beckham, raise awareness among our customers, partners and employees of our brand promise through social media campaigns, football coaching clinics, customer and employee engagement sporting events and other media opportunities.

Environmental, Social and Governance (ESG) considerations are increasingly front-of-mind for all of our stakeholders. As the largest pan-Asian life insurer, we have an important role to play in helping encourage greater awareness and consideration of ESG issues. AIA supports the recommendations of the Task Force on Climaterelated Financial Disclosures (TCFD), and we also became the first Hong Kong-headquartered asset owner to join the Principles for Responsible Investment (PRI), reflecting our commitment to sustainable investment across our markets. In 2018, we received a “Prime” rating from ISS-oekom and are included in the FTSE4Good Index Series. We were also pleased to be included once again in the Bloomberg Gender Equality Index.

Business Outlook - For the year ended December 31, 2018

Asia’s growth fundamentals remain resilient despite recent volatility in financial markets, geopolitical uncertainty caused by ongoing international trade tensions and concerns over the sustainability of the current economic growth cycle. While global economic growth rates are expected to slow, the strong domestic drivers of demand and major demographic trends in Asia provide positive structural support for the long-term prospects of AIA’s business. US policymakers have responded by putting interest rate rises on hold for the time being and we expect China to continue its transition towards slower but higher-quality economic growth, accompanied by further financial reform.

Asia is expected to account for 90 per cent of the world’s next billion middle-class consumers and the region’s middle-class population on this basis will more than double by 2025. Against the backdrop of an uncertain global macroeconomic and geopolitical environment, the need for our insurance products continues to grow, given low levels of private insurance penetration and social welfare coverage, and we remain focused on executing our strategic priorities.

AIA has been in Asia for a century, operating in some of the most dynamic and attractive life and health insurance markets in the world. As we mark our Centennial year in 2019, this is an opportunity to restate our commitment to safeguarding the financial security of our customers. As the Group looks forward to the next 100 years, our promise of Healthier, Longer, Better Lives is especially relevant to how we will meet the growing needs of customers created by the unprecedented structural economic, demographic and social changes taking place across our markets. By delivering on this promise we will make a real and positive impact on people’s lives.

After 100 years, it is rare that a company can say it is just at the beginning of its journey, but I remain as convinced as ever that AIA has much more to offer our customers, our employees, our partners and our shareholders. Of course, we have a lot to do to capture the opportunities that we have, but I believe we have the right strategy, the right leadership and the best platform from which we can continue to create long-term sustainable value.

I am incredibly excited to be leading AIA into the next 100 years and I look forward to AIA leading a healthier century across the Asia-Pacific region.

AIA is the largest publicly listed pan-Asian life insurance group, with a presence across 18 markets in the Asia- Pacific region. We receive the vast majority of our premiums in local currencies and we closely match our local assets and liabilities to minimise the economic effects of foreign exchange movements. When reporting the Group’s consolidated figures, there is a currency translation effect as we report in US dollars. We have provided growth rates and commentaries on our operating performance on a constant exchange rate (CER) basis, unless otherwise stated, as this provides a clearer picture of the year-on-year performance of the underlying businesses.

Source: AIA (01299) Annual Results Announcement

Business Nature

The Asia Pacific life insurance market is one of the largest in the world with US$358.0 billion of life insurance premiums in 2009, comprising 15.4% of aggregate global life insurance premiums. The region recorded positive GDP growth of 5.0% in 2009, compared to GDP growth rates of negative 10.2% in Europe and negative 2.2% in North America during the same period. Life insurance premiums in the Asia Pacific region grew at a CAGR of 13.5% from 2004 to 2009, primarily driven by strong regional economic growth, favourable demographic changes, social welfare reforms, healthcare demand and insurance market reforms. We believe that the Asia Pacific life insurance market is and will continue to be a growing and attractive market, and that the AIA Group is uniquely positioned to benefit from potential future market growth.

Prospect

Chairman
Edmund Sze-Wing Tse
Contact Info
Company Address:
35/F, AIA Central, No. 1 Connaught Road, Central Hong Kong
Web: www.aia.com
Quote
HSI: 26,179.33 130.61
77.75
1.50 (2.0%)
As of16:15 23 Aug 2019
Open: 77.35 52Wk High: 87.30
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Prev. Close: 76.25 Yield: 1.588%
Volume: 31.51M
Mkt Cap: 921.76B
Turnover: 2.44B NAV: 25.295
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Contact AIA
Company Address:
35/F, AIA Central, No. 1 Connaught Road, Central Hong Kong
Web: www.aia.com

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