AIA to start $2.14 billion stock buyback as CFO says momentum strong
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Life insurers are seeking to tap asset diversification demands from mainland investors looking for better returns.
PHOTO: ST FILE
Hong Kong – AIA Group said it will start a US$1.6 billion (S$2.14 billion) share buyback and reported a 17 per cent growth in new business value in 2024 that missed analyst estimates.
The measure of future profitability of new policies sold rose to US$4.71 billion, from US$4.03 billion a year earlier, the Hong Kong-based insurer said in a statement on March 14. That missed the 19.2 per cent average growth estimate of 15 analyst forecasts compiled by Bloomberg.
Life insurers are seeking to tap asset diversification demands from mainland investors looking for better returns amid China’s slowing growth and low interest rate environment. Competition for insurance policy sales is intensifying as the company races against rivals including Prudential to peddle products in the region.
The buyback “reflects the strong momentum in the business”, said chief financial officer Garth Jones. The insurer sees recruitment momentum building into 2025.
“We remain confident in the outlook and we are very well-placed to capitalise on all the opportunities available to us,” he said in a Bloomberg TV interview in Hong Kong.
Factoring in currency fluctuations, AIA’s mainland China unit saw its new business value jumped to US$1.2 billion, a 17 per cent increase, while Hong Kong’s rose to US$1.8 billion, a 23 per cent increase.
In China, the insurer targets affluent customers and “the wealthiest parts” of the market, Mr Jones said. That allows AIA to stay “more resilient through economic cycles”.
Annualised new premiums jumped 12 per cent to US$8.6 billion on an actual exchange rate basis. The growth rate would have been 14 per cent with the currency impact stripped out.
Thailand saw total new business value grow 14 per cent in 2024, while in Singapore the metric expanded 15 per cent and 9 per cent in Malaysia, factoring in currency fluctuations.
The insurer declared a final dividend of 130.98 Hong Kong cents per share. The new buyback is expected to start as soon as possible and to be finished by the end of 2025. BLOOMBERG
