(Bloomberg) – AIA Group Ltd. said it will start buying back shares for $1.6 billion and report a 17% increase in value in new businesses last year, missing analyst estimates.
The Hong Kong-based insurer said in a statement Friday that the future profitability of the new policy rose to $4.71 billion from $4.03 billion a year ago. This missed the average growth estimate of 15 analyst forecasts compiled by Bloomberg, which is estimated at 19.2%.
Life insurance companies are seeking to take advantage of the asset diversification demand of mainland investors, hoping to seek better returns in an environment where growth is slowing in China and lower interest rates. Competition for sales is intensifying as the company competes with competitors including Prudential Plc.
CFO Garth Jones said the buyback “reflects a strong momentum in the business.” Insurance companies will build recruitment momentum until 2025. “We have confidence in the outlook and we are very conducive to leveraging all the opportunities available to us,” he said in an interview with Bloomberg in Hong Kong.
AIA’s mainland Chinese units have changed in currency volatility, with its new business value jumping to $1.2 billion, a 17% increase, while Hong Kong’s business value increased to $1.8 billion, a 23% increase.
In China, insurance companies target wealthy customers and the “richest part” of the market, Jones said. This allows AIA to “be more resilient through economic cycles”.
New premiums each year jumped 12% on the real exchange rate basis to $8.6 billion. As currency impacts phase-out, the growth rate will be 14%.
Thailand’s new business value grew 14% in 2024, while in Singapore, Malaysia’s metrics expanded by 15% and 9% and took into account currency volatility.
The insurer announced a final dividend of 130.98 Hong Kong cents per share. New repurchases are expected to begin as soon as possible and be completed by the end of 2025.
(Updated CFO comments in the fourth paragraph of Bloomberg TV’s interview)
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