On August 22, AIA Group Limited (1299.HK) took the lead in releasing the first interim report of listed insurance companies.
During the reporting period, AIA Group's annualized new premiums totaled USD 4.546 billion, an increase of 14.11% year-on-year (all at actual exchange rates); post-tax operating profit was USD 3.386 billion, an increase of 3.48% year-on-year.
Liabilities continued to rebound, with two key indicators, Annualized New Premium (ANP) and New Business Value (NVB), showing growth for two and a half consecutive years.
More than half of the premiums were contributed by mainland China and Hong Kong.
The annualized new premiums from mainland China and Hong Kong were USD 1.382 billion and USD 1.272 billion respectively, accounting for a total share of 58.38%; the new business value was USD 0.782 billion and USD 0.858 billion respectively, accounting for a total share of 62.47%.
Lee Yuanxiang, CEO and President of AIA Group, pointed out at the performance conference that there are still huge opportunities in mainland China.
&#34;Regional expansion is still ongoing,&#34; Lee Yuanxiang said. &#34;In the first half of the year, we launched operations in three new cities in Sichuan and Hubei provinces. We believe we can continue to grow strongly throughout the economic cycle.&#34;
During the reporting period, AIA Group's mainland subsidiary, AIA Life, saw a 30.12% year-on-year growth in new business value, a 15.65% increase in annualized new premiums, and a 6.3 percentage point increase in new business value profit margin.
The strong demand from mainland customers also contributed to the growth of AIA's business in Hong Kong.
Since the resumption of cross-border travel between Hong Kong and the mainland early last year, Hong Kong insurance has attracted a large number of mainland visitors with its flexible design and higher returns.
The Hong Kong Insurance Authority disclosed that in the first quarter of this year, new premiums from mainland visitors reached a five-year high, increasing by 62.6% year-on-year to HKD 15.6 billion.
Lee Yuanxiang revealed, &#34;The demand from mainland Chinese tourists and Hong Kong residents is strong, with detailed customer segmentation.&#34;
AIA Hong Kong contributed USD 0.858 billion in new business value, leading in all markets. Both the local customer base in Hong Kong and the new business value brought by mainland visitors saw growth rates of over 20%.
<h2>Channel Strengthening Boosts Performance</h2>
Looking at various indicators, AIA Group's operations have rebounded from the post-pandemic low.
Firstly, liabilities have grown for two and a half consecutive years.
During the reporting period, the annualized new premium growth rate was 14.11%, although lower than the 43.41% in the same period last year, it has significantly improved compared to the negative values in the first half of 2020 and 2022.
The new business value, which reflects the long-term value of policies, accounts for 21%, a decrease of 11.1 percentage points from the same period last year, but still remains at a relatively high level.
Secondly, post-tax operating profit surpassed the same period in 2021.
During the reporting period, AIA Group's post-tax operating profit was USD 3.9 billion, surpassing the same period in the past three years.
However, this figure still lags behind the USD 5.94 billion in the same period of 2020.
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<h2>Debt-side warming is due to the strengthening of sales channels.</h2>
AIA Group Limited's core sales channel is individual insurance called &#34;Optimal Agent.&#34;
In 1992, AIA Shanghai introduced the agent model to the mainland.
In the era when the life insurance industry relies on scale expansion, the &#34;big in, big out&#34; agent model quickly opened up the market. Ping An, PICC, and CPIC followed suit two years later. The individual insurance channel has become the undisputed mainstream in the subsequent development of insurance sales.
Around 2020, with the popularization of the Internet and the refinement of customer needs, the &#34;quantity over quality&#34; approach failed, leading to a sharp decrease in the number of agents from nearly tens of millions at the end of 2019 to millions today.
However, in the past year, several insurance companies have indicated that their agent teams have stabilized.
AIA Group Limited's interim report revealed, &#34;We achieved double-digit growth in new business value in the mainland, Hong Kong, and ASEAN markets, thanks to the increase in active agents.&#34;
Currently, the core of insurance sales is shifting from scale to efficiency.
AIA Group Limited disclosed that the company has prioritized high-quality recruitment as a strategic priority. &#34;We have developed an exclusive recruitment plan, providing digital support training for newly recruited agents to support full-time, professional, and high productivity roles.&#34;
For example, providing agents with data analysis such as customer lifecycle management, needs and recommendations, to optimize cross-selling opportunities.
AIA Group Limited revealed that the average number of policies held by customers of its mainland subsidiary, AIA China, is 6.
This also demonstrates the cross-selling capabilities of the &#34;Optimal Agent.&#34;
Distribution channels have also seen growth.
During the reporting period, AIA Group Limited's distribution channel achieved a 26% annualized growth rate in new premiums and a 39% growth rate in new business value.
The increase in the new business value profit margin of the bancassurance channel is due to cooperation with banks.
AIA Group Limited stated that the company has reached exclusive partnerships with Citibank and Bank of East Asia in some regions. The partnership with Bank Central Asia in Indonesia has been extended to the end of 2038.
At the same time, a technology-driven bancassurance strategy has been implemented.
For example, in the strategic partnership with Bank of East Asia in mainland China, the introduction of technology tools and health checks has supported the growth of annualized new premiums, average policy premiums, and activity rates.
<h2>Continuously Strengthening Presence in Mainland China</h2>
For AIA Group Limited, mainland China is a stronghold second only to Hong Kong in importance.
During the reporting period, the annualized new premium scale in mainland China has surpassed that of Hong Kong.
After the &#34;substitution reform,&#34; AIA China continues to advance its layout in mainland China and will launch the &#34;New Five-Year Plan&#34; in 2023.
In April of that year, the Henan branch was approved to open; within the year, the Shijiazhuang Central Support Company of AIA China was upgraded to a branch, and the Luzhou and Yichang Central Support Companies were approved for establishment.
The regional expansion speed is also accelerating, with the Xiangyang, Luzhou, and Yichang Central Support Companies opening in January, March, and April respectively.
With a replicable operating model, AIA China achieved a 44% growth in new business value in individual insurance in the first half of the year in five new development regions: Tianjin, Hebei, Sichuan, Hubei, and Henan.
In addition to expanding branch offices, AIA China successfully acquired a controlling stake in an office building project located in the Central Business District (CBD) of Beijing in January
Regarding the high-quality development of the mainland market, AIA Life CEO Zhang Xiaoyu stated that development is the top priority.
&#34;We pay close attention to the company's business structure, differentiated competitive capabilities, talent reserves, and development progress,&#34; Zhang Xiaoyu said. &#34;There are three goals: first, to be a sample of high-quality development; second, to focus on customers, differentiated channels, and regional expansion to achieve business development; third, to gather innovation, agility, efficiency, and talent development to achieve organizational development.&#34;
Specifically, adhere to being &#34;customer-driven.&#34;
Li Yuanxiang stated that the company's target customers are &#34;resilient middle class and affluent customers in the region.&#34;
For this group of people, service experience is particularly important.
AIA Life expressed to TradeWind01 that the company will promote &#34;customer-driven&#34; as a whole, including aspects such as corporate culture, product design, service processes, organizational structure, resource allocation, and company operations from the front, middle, to back end.
For example, emphasizing end-to-end customer experience, providing differentiated solutions for customers at different stages, with different spending power, and different family situations, and offering a one-stop service including services such as &#34;Beijing-Shanghai-Guangzhou Express&#34; and &#34;Special Case Management System&#34; through a &#34;self-built team + diverse partners&#34; model.
During the reporting period, AIA Life's new business value increased by 30.12% year-on-year to USD 782 million.
Due to adjustments in assumptions, the actual growth rate may be even higher.
AIA Insurance stated that the company's new business value in 2023 was not restated using economic assumptions for the first half of 2024. If calculated on a comparable basis, the growth rate of new business value would be higher than reported.
However, during the development process, the phenomenon of &#34;increased revenue but not increased profit&#34; is more prominent.
TradeWind01 found that while annualized new business premiums increased by 15.65% year-on-year and new business value increased by 30.12%, AIA Life's after-tax operating surplus decreased by 0.72% year-on-year.
This figure is greatly affected by exchange rates. If a fixed exchange rate is used instead of the actual exchange rate, the after-tax operating surplus will increase by 4% year-on-year.
Profit is under pressure, possibly due to the low interest rate environment.
AIA Insurance revealed that the growth portion of the effective policy portfolio in the Chinese market was offset by the impact of declining interest rates.
AIA Insurance did not disclose specific investment returns in the Chinese market. However, the company's overall investment performance net amount was USD 1.744 billion, a 2% decrease year-on-year.
Looking ahead, AIA Insurance remains optimistic about the growth potential in mainland China. &#34;As the plan continues to be implemented, we believe that the growing middle class population in mainland China will be within our coverage.&#34;
TradeWind01 will continue to monitor AIA Life's strategies and performance in mainland China in the future

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On August 22, AIA Group Limited took the lead in releasing the first interim report of listed insurance companies.
During the reporting period, AIA Group Limited's annualized new premiums totaled 4

- Prudential Insurance (1299.HK) released the first interim report among listed insurance companies on August 22.
- Annualized new premiums totaled $45.46 billion, up 14.11% year-on-year; post-tax operating profit reached $3.386 billion, a 3.48% increase.
- Over half of the premiums came from Mainland China and Hong Kong, with significant growth in key metrics and a focus on expanding in Mainland China for future opportunities.

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