HONG KONG • AIA Group, one of the world's largest life insurers by market value, said yesterday that new business rose 28 per cent last year, buoyed by strong customer demand in its main markets in China and Hong Kong.

AIA also announced the setting up of an internal asset management company based in Singapore, which will provide services to investment teams across the region.

In a statement yesterday, the company said the value of new business rose to US$2.75 billion (S$3.86 billion) for the year ending Nov 30, up from US$2.20 billion the previous year. The category measures expected profit from new premiums, and is a key indicator of growth. Annualised new premiums rose 32 per cent to US$5.12 billion in 2016.

The insurer's value of new business in Hong Kong grew by 42 per cent last year, driven by higher demand from its local clients as well as increased purchases from mainland Chinese customers, it said.

The Hong Kong life insurance market has seen very strong demand from customers in mainland China in the last one year, with many looking for better products and overseas investment opportunities to cushion the impact of a weakening yuan.

In the first nine months of 2016, mainland Chinese visitors contributed to 37 per cent of total regular first-year premiums sold in Hong Kong, compared with 22 per cent in the same period a year ago, according to Daiwa Capital Markets.

China and Hong Kong together accounted for about half of new business growth globally at AIA, which was originally founded in Shanghai nearly 100 years ago and was the first foreign insurer to obtain a licence in China. AIA's other major markets include Thailand, Singapore and Malaysia - the South-east Asian countries that have become a battleground for foreign insurers attracted by the region's lower insurance penetration levels.

The company said it would pay a dividend of 63.75 Hong Kong cents per share to shareholders, an increase of 25 per cent.

Operating profit after tax rose 15 per cent to US$3.98 billion.

REUTERS