AIA Group achieved a historic value of new business (VONB) in the third quarter of 2024, driven by strong premium growth. The VONB reached $1.161 billion, marking a 16% increase compared to the previous quarter, as detailed in the insurer’s latest financial report.
The company reported annualized new premiums (ANP) of $2.21 billion, reflecting a 14% year-on-year increase. The margin on a present value of new business premium (PVNBP) basis remained stable compared to the first half of the year. Total weighted premium income (TWPI) also rose by 9%, reaching $10.3 billion for the quarter ending September 30, 2024.
Lee Yuan Siong, AIA’s chief executive and president, noted that the group achieved record VONB for the first three quarters of the year. “The compounding of successive layers of profitable new business drives growth in earnings and cash generation, underpinning our confidence in delivering our financial targets,” he stated, reflecting on the company’s performance.
During Q3, AIA experienced VONB growth across 15 of its 18 markets. Recruitment efforts remained robust, with new agent numbers increasing by 9% year-on-year compared to Q3 2023. VONB from partnership distribution and bancassurance channels also saw a significant rise of 16% during the quarter.
Expansion in Mainland China
Lee highlighted the group’s progress in mainland China, where AIA has received regulatory approvals to establish branches in Anhui and Shandong provinces. In Q3, AIA China achieved a 9% growth in VONB, driven by its agency and bancassurance channels, despite withdrawing certain products ahead of an industry-wide repricing. Agency VONB in China rose by 10%, based on constant exchange rates.
In contrast, AIA Hong Kong reported a remarkable 24% increase in VONB. The domestic customer segment in Hong Kong grew by 28%, while the mainland China visitor customer segment rose by 20%. However, the VONB through retail independent financial advisers (IFA) and broker channels declined, attributed to “intense competition.”
AIA’s Southeast Asian markets collectively reported an 8% increase in VONB for Q3. Additionally, Tata AIA Life, the company’s joint venture in India, returned to positive VONB growth during the quarter, maintaining its leading position in retail protection by sum assured.
Stable Fixed Income Portfolio
As of September 30, 2024, AIA Group’s average credit rating for its fixed income portfolio, held on behalf of policyholders and shareholders, remained stable compared to June 30, 2024. The corporate bond portfolio consists of over 1,700 issuers with an average holding size of $43 million.
At the end of Q3, 2% of AIA’s total bond portfolio was rated below investment grade or not rated, amounting to approximately $3.6 billion—consistent with the previous quarter. Notably, around $72 million of bonds, or 0.04% of the total bond portfolio, were downgraded to below investment grade in Q3.
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