(Bloomberg) — AIA Group Ltd. said it will start a $1.6 billion share buyback and reported a 17% growth in new business value last year that missed analyst estimates.
The measure of future profitability of new policies sold rose to $4.71 billion, from $4.03 billion a year earlier, the Hong Kong-based insurer said in a statement on Friday. That missed the 19.2% 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 policies sales is intensifying as the company races against rivals including Prudential Plc 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 capitalize 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 $1.2 billion, a 17% increase, while Hong Kong’s rose to $1.8 billion, a 23% increase.
In China, the insurer targets affluent customers and “the wealthiest parts” of the market, Jones said. That allows AIA to stay “more resilient through economic cycles.”
Annualized new premiums jumped 12% to $8.6 billion on an actual exchange rate basis. The growth rate would have been 14% with the currency impact stripped out.
Thailand saw total new business value grow 14% in 2024, while in Singapore the metric expanded 15% and 9% 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.
(Updates with CFO comments from Bloomberg TV interview from fourth paragraph)
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