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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

3Q results for the 9 months ended 30-09-2019. No dividend was declared. (Announcement Date: 28 Oct 2019)

Business Review - For the six months ended June 30, 2019

Distribution

AGENCY

AIA’s core distribution platform is our proprietary agency network. Our agents are a key competitive advantage for AIA, providing professional advice and high-quality service to our customers as we meet the protection and long-term savings needs of the rapidly-growing middle class population across Asia.

In the first half of 2019, our continued execution of AIA’s Premier Agency strategy delivered 21 per cent growth in VONB to US$1,708 million, accounting for 72 per cent of the Group total. ANP grew by 10 per cent to US$2,221 million and VONB margin increased to 76.9 per cent.

Our Premier Agency strategy is underpinned by quality recruitment platforms with targeted selection and comprehensive training programmes, which aim to further enhance professionalism and uplift the productivity of our agents across the Group. For example, our Financial Advisers (FA) programme in Thailand and a new programme in Malaysia that was launched at the beginning of the year have demonstrated success with significantly higher activity and productivity than standard new recruits. We also continued to review and increase our minimum standards to transform our existing agency force. Focused execution of these initiatives delivered solid growth in both the number of active agents and productivity for the Group in the first half of 2019.

Another key element of our Premier Agency strategy is investing in innovative technology and digital tools to support our agents, increase operational efficiency and improve customer experience. New advances include systematic talent profiling and selection within our digital recruitment platform, which manages the recruitment pipeline from end to end. Our Master Planner app in China provides comprehensive digital support for our agency leaders and enables efficient activity management.

In the first half of 2019, we further embedded our proprietary propensity models that can identify and highlight potential customer needs into our agency support applications. These models now support many of our customer campaigns and enable our agents to drive higher existing customer repurchases. In Hong Kong, more than 15 per cent of total agency VONB from existing customers in the first half of 2019 was generated from high propensity leads shared through our digital platform. Our online eLearning platform also includes live stream features that provides mobile product training to agents. We continued to drive greater adoption of our digital tools across the Group and over 95 per cent of total policies sold through agency in the first half of 2019 were submitted via our interactive Point of Sale (iPoS) technology.

In July 2019, Million Dollar Round Table (MDRT) announced its annual ranking of the world’s top companies by registered members. AIA now has more than 12,000 members, representing 22 per cent growth over last year, and is the largest multinational company by members for the fifth year running. This achievement clearly demonstrates the quality, professionalism and scale of our agency.

PARTNERSHIPS

AIA’s partnerships business is an important part of our differentiated distribution platform and a strategic priority for the Group. We have established long-term distribution partnerships with many prominent financial institutions and industry leaders across the region that extend our market reach and provide us with exclusive or preferred access to millions of potential new customers in the Asia-Pacific region. We also have many non-exclusive partnerships with banks and intermediaries where our strategy is to continually strengthen our relationships by providing dedicated support across the sales-to-service customer value chain and targeted propositions that meet the needs of our partners’ specific customer segments.

In the first half of 2019, VONB from partnerships grew by 17 per cent to US$665 million and accounted for 28 per cent of the Group total. VONB margin increased to 54.4 per cent and ANP grew by 6 per cent to US$1,222 million.

Our extensive network of strategic bancassurance partnerships with leading domestic and multinational banks across the region delivered excellent VONB growth in the first half of 2019. Our partnerships with Bangkok Bank Public Company Limited (Bangkok Bank) in Thailand and ASB Bank Limited (ASB) in New Zealand have made strong progress to become material contributors to the Group’s overall bancassurance VONB growth, as we leveraged our regional experience to accelerate implementation. We also worked closely with Citibank, N.A. (Citibank) in Hong Kong and Singapore to expand our propositions to their credit card customers and improve the quality of customer referrals by introducing analytics-enabled leads generation.

Our intermediated channels, including IFAs, brokers, private banks and specialist advisers, delivered double-digit growth in the first half of 2019 despite increasing competition in some of our larger IFA markets. Our bespoke support models and unique propositions, including AIA Vitality, continue to be key differentiators for AIA in these channels.

In direct marketing, VONB reduced as we continued to shift away from traditional telemarketing sales models. We are developing new capabilities for customer acquisition and leveraging data analytics to improve conversion. We also began to test new sales models for digital leads from non-traditional partners. For example, we piloted sales campaigns in Korea to offer integrated insurance propositions to AIA Vitality members who signed up through our strategic partnership with SK Telecom.

Marketing

All of our marketing activities focus on our purpose-led brand promise: Healthier, Longer, Better Lives, which underpins the power, relevance and resonance of AIA’s brand. AIA was named the leading insurance brand in Asia in June by Campaign Asia, a major regional marketing publication.

Our partnership with Tottenham Hotspur (Spurs) is a powerful platform for promoting the AIA brand, as well as engaging with our customers and agents. We were delighted that Spurs reached the UEFA Champions League final in June, further increasing the visibility of AIA’s brand. In July, we announced a further extension of our partnership with Spurs until 2027. AIA’s Global Ambassador, David Beckham, continues to provide additional support for AIA’s brand promise with in-market appearances and media campaigns that generate millions of views and encourage adoption of a healthy lifestyle.

CUSTOMER ENGAGEMENT

AIA Vitality continues to transform the way customers interact with AIA. On average we now receive data from 700,000 workouts each day and we register over 10,000 new fitness devices each week. To date, we have received over 5.4 million health assessments. Our behavioural data analysis shows a positive impact on our AIA Vitality members’ health, with the proportion of members who have moved from an unhealthy to a healthy range in body mass index (BMI) and cholesterol level reaching 21 per cent and 40 per cent respectively.

Across the Group, we increasingly use research and analytics to better understand the evolving needs of our customers, helping to enhance our distribution with targeted communications and more relevant offerings for the customers. Data enrichment and enhanced customer marketing create more upselling opportunities and help to improve customer retention.

Customer analysis in some of our largest markets provides a better understanding of the key factors that deepen customer engagement, including optimal contact frequency and preferred communication channel. Ongoing collaboration with search engine providers has delivered dramatically higher online visibility in several of our markets.

PROPOSITION INNOVATION

Our aim is to become a lifetime partner to our customers, moving beyond the traditional insurer role as a simple claims payer with enhanced capabilities across all aspects of AIA’s customer interaction. Our wellness programmes transform customer engagement, encourage healthy living and help to prevent illness. We have multiple partners across our markets that help us to provide enhanced access to medical diagnosis and deliver the best and most appropriate treatment for our customers. Also, we continue to help our customers through their treatment with personalised case management and ongoing support in recovery and rehabilitation.

In the first half of 2019, we made further enhancements to AIA Vitality, including sleep tracking, and we have begun the activation of our regional exclusive partnership with Medix, providing personal case management for customers beyond Hong Kong and Singapore.

We launched AIA Vitality in New Zealand in August and the overall membership of our wellness programmes across the Group exceeded 1.5 million members at the end of June 2019, an increase of 23 per cent since the end of 2018. The Group now offers 83 protection products integrated with AIA Vitality. Hong Kong and Singapore both launched a single customer portal combining policy and AIA Vitality wellness information, while Korea launched an AIA Vitality platform that offers a new digital experience and helps deepen customer engagement.

AIA Vitality has been instrumental in activating our non-traditional partnership with SK Telecom in Korea, helping attract younger customer segments with its focus on health and wellness. In Korea, we launched seven integrated products and recorded nearly 1.2 million AIA Vitality mobile app users through joint marketing programmes with SK Telecom.

AIA is developing new and enhanced product offerings to better meet customers’ needs. In 2019, we launched a breast cancer product in China, designed in partnership with WeDoctor and incorporating end-to-end online and offline services including diagnosis, treatment, prescription delivery and rehabilitation. AIA Singapore introduced the first critical illness plan in the market to cover mental illness and we expanded our innovative health product to our Takaful and bancassurance customers in Malaysia.

Business Outlook - For the six months ended June 30, 2019

The Asian region continues to deliver solid economic growth, driven by economic diversity and supported by proactive macro policy actions. Some markets are experiencing headwinds from recent market volatility, political and trade tensions, slowing economic growth and a lower interest rate environment. However, the structural drivers of demand for protection and long-term savings remain strong across our markets. A rapidly increasing middle-class population, progressive urbanisation, rising wealth and increasing longevity together will continue to widen the protection and retirement gaps, driving demand for life and health insurance products. AIA’s 100-year history and regional presence, coupled with powerful distribution, product innovation and exceptional brand recognition, provide an unrivalled platform to continue creating long-term sustainable value.

Source: AIA (01299) Interim 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: 28,948.00 -108.42
85.30
1.30 (1.5%)
As of10:51 20 Jan 2020
Open: 85.75 52Wk High: 88.50
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Prev. Close: 86.60 Yield: 1.496%
Volume: 10.31M
Mkt Cap: 1,046.90B
Turnover: 879.03M 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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