Tuesday, August 2, 2016

AIA Delivers Excellent Growth in the First Half of 2016

The Board of Directors of AIA Group Limited (“AIA”; or the “Company”; stock code: 1299), the parent company of Philam Life recently announced that the Group’s unaudited consolidated results for the six months ending 31 May 2016 reveals that is has strong operating profit growth and progressive dividend with VONB up 37 per cent on constant exchange rates .

Record growth in value of new business (VONB) (on a constant exchange rate basis) • 37 per cent growth in VONB to US$1,260 million
• 31 per cent increase in annualised new premiums (ANP) to US$2,355 million
• VONB margin up 2.4 pps to 52.7 per cent

Strong operating profit growth (on a constant exchange rate basis)
• Embedded value (EV) operating profit up 28 per cent to US$2,896 million
• IFRS operating profit after tax (OPAT) up 14 per cent to US$1,956 million
• IFRS operating earnings per share up 14 per cent to 16.34 US cents



Robust cash flow and capital position
• Underlying free surplus generation of US$2,073 million, up 12 per cent on constant exchange rates
• Free surplus up 10 per cent in the first half to US$8.2 billion, after payment of 2015 final dividend
• EV Equity of US$41.7 billion; EV of US$40.1 billion, up 5 per cent in the first half
• Solvency ratio for AIA Co. of 381 per cent on the HKICO basis after taking into account the payment for our increased shareholding in Tata AIA

Progressive interim dividend
• 17 per cent increase in interim dividend to 21.90 Hong Kong cents per share

Mark Tucker, AIA’s Group Chief Executive and President, said:
“AIA has delivered an excellent set of results with record VONB growth of 37 per cent on a constant exchange rate basis in the first half. The strength of this performance reflects the disciplined execution of our growth strategy, the resilience of our operating model and our commitment to building a high-quality, sustainable business for the long term. This has enabled us to deliver a strong and consistent track record of year-on-year growth notwithstanding an uncertain global macroeconomic and capital market environment.

“Asia is the most attractive and dynamic region in the world for life insurance. We are operating in markets that continue to offer sustainable economic growth, increased disposable incomes, powerful demographic and urbanisation trends and very low insurance penetration rates. AIA is exceptionally well placed to benefit directly from these significant and robust drivers of life insurance growth across our region. We have a highly-diversified and resilient business model underpinned by our market-leading brand and the financial strength to enable us to capture these opportunities. “Our focus remains on executing our strategic priorities aimed at expanding the reach and increasing the effectiveness of our proprietary agency and partnership distribution channels. We shall continue to find innovative ways to broaden our range of products and provide customers with the critically important protection and savings support they need.

“The Board has declared a 17 per cent increase in the interim dividend for 2016. This demonstrates once again our strong financial performance and our confidence in the future outlook for the Group. The consistent execution of our strategy and the strong fundamentals in the region will enable us to continue to generate sustainable value for our shareholders.”

Ariel G. Cantos, Philam Life CEO, said:

“The excellent first half 2016 performance of our parent company, AIA, reflects the Group’s financial strength and proven track record of growth. We are proud of AIA Group’s long tradition of leadership in Asia Pacific and strong commitment to excellence and innovation.” The Philippine American Life and General Insurance (Philam Life) Company is the Philippine subsidiary of AIA.

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