AIA Group Ltd, one of the largest life insurers in Asia, reported a strong growth in its new business value (VONB) for the first half of 2023, driven by the economic recovery in China and Hong Kong.
VONB up 37% year-on-year
According to its interim results announcement, AIA’s VONB increased by 37% year-on-year to $2.03 billion in the first six months of 2023, compared to $1.54 billion in the same period last year. VONB is a measure of the present value of future profits from new policies sold.
The growth was mainly attributed to the strong performance of its key markets, especially China and Hong Kong, which accounted for more than 60% of the group’s VONB. AIA China’s VONB rose by 14% to $601 million, while AIA Hong Kong’s VONB more than doubled to $681 million, driven by substantial business from Mainland Chinese visitors (MCV).
AIA also saw double-digit VONB growth from its combined ASEAN business and Tata AIA Life, its joint venture in India. The only market that reported a decline in VONB was Korea, which was affected by the COVID-19 pandemic and regulatory changes.
Net earnings up 46%
AIA also reported a 46% increase in its consolidated net earnings to $2.26 billion in the first half of 2023, compared to $1.55 billion in the same period last year. The increase was mainly due to higher operating profit from long-term businesses and higher investment returns.
The group’s total assets increased by 2% to $276 billion as of June 30, 2023, while its total liabilities increased by 3.7% to $234 billion. The group’s solvency ratio remained strong at 415%, well above the regulatory requirements.
Outlook optimistic
Lee Yuan Siong, AIA’s Group Chief Executive and President, said that the group was confident about its future prospects, despite the ongoing challenges posed by the pandemic.
“With the pandemic disruption behind us, the strength of AIA’s unrivalled distribution platform across Asia has powered a return to very strong new business momentum,” he said.
He added that AIA would continue to leverage its digital capabilities, customer-centric products and services, and social responsibility initiatives to capture the enormous opportunities in Asia’s life insurance market.
