Insurer AIA posts jump in first-half new business value, raises dividend

AIA said in June it had agreed to buy a 25 per cent stake in China Post Life Insurance for US$1.86 billion.
AIA said in June it had agreed to buy a 25 per cent stake in China Post Life Insurance for US$1.86 billion.ST PHOTO: KELVIN CHNG

HONG KONG (REUTERS) - Insurer AIA Group raised its interim dividend on Tuesday (Aug 17) and posted a jump in first-half new business value, as it recovered from pandemic-led business disruptions in its main markets of China and Hong Kong.

The Asia-focused insurer's value of new business (VONB), which measures expected profits from new premiums and is a key gauge for future growth, rose by 22 per cent to US$1.81 billion (S$2.45 billion) in the January to June period.

VONB jumped 24 per cent in AIA's largest market of mainland China, helping the company increase its interim dividend by 8.6 per cent to 38 Hong Kong cents per share.

"All reportable segments exceeded pre-pandemic levels of the first half of 2019, except Hong Kong, where ongoing travel restrictions have affected new business sales to Mainland Chinese visitors," chief executive Lee Yuan Siong said.

In Asia, insurance firms mainly rely on their army of agents for product sales, which have been dented by lockdowns and social distancing measures put in place by various countries to contain the coronavirus pandemic.

AIA said in June it had agreed to buy a 25 per cent stake in China Post Life Insurance for US$1.86 billion, as the insurer hopes to sell services to a broader range of customers.