HONG KONG (Reuters) - AIA Group, Asia's third-largest life insurer by market capitalisation, reported a record 24 per cent annual rise in the value of new business as it reaped the rewards of an expanded China salesforce and strong growth in Hong Kong.
AIA said the company's value of new business, which measures expected profits from new premiums and is a key yardstick for growth, rose to US$1.85 billion (S$2.51 billion) in the year ended Nov. 30, up from last year's record US$1.49 billion.
The insurer's operating profit grew 38 per cent in China, the biggest rise among its markets, after it increased its salesforce of active new agents by 42 per cent.
Net profit rose 22 per cent to a record US$3.45 billion, above analysts' expectations of US$3.2 billion, according to Thomson Reuters data.
AIA was the first foreign player to be granted a licence in China, and the results show the success of the agency strategy it pioneered as regulatory restrictions have curbed selling via banking channels.
Under chief executive Mark Tucker, the former Asian business of US insurer AIG that listed in 2010 has created the region's largest life insurance network, signed a 15-year distribution deal with Citigroup, and become the biggest foreign life insurance player in mainland China.
Supportive government policy and increasing awareness of insurance products have created a favourable environment for life insurers in China, Jefferies analyst Baron Nie said in a note published before the earnings.
Analysts had predicted a strong set of results thanks to strong growth in sales in China, and the impact of the distribution deal with Citi that came into effect last year in AIA's main markets of Hong Kong and Singapore.
The 15-year bancassurance deal meant AIA became the exclusive provider of life insurance products to Citi in those markets, decreasing its reliance on sales agents in Asia.
Such deals have become an important tool for insurers in Asia, allowing them to tap banks' vast branch networks when demand for insurance products is booming.
Analysts had warned ahead of the result that AIA's reported dollar profit would be hit by the appreciation of the US dollar against many of the Asian currencies in which the insurer earns its revenues.