(Reuters) – AIA Group on Thursday reported a 33% rise in annual value of new business (VONB), benefiting from strong demand for insurance products in Hong Kong.
The Asia-focused insurer benefited from a surge in customers from mainland China to buy offshore products to potentially lower premiums and increase revenue in Hong Kong.
Due to the relative lack of investment channels due to China's weaker renminbi, more mainland residents are realizing the benefits of offshore insurance contracts, and insurance in China has lost its luster.
Last year, mainland Chinese tourists spent HK$59 billion ($7.54 billion) on insurance policies in Hong Kong, according to data from the Hong Kong Insurance Bureau.
AIA's VONB (constant exchange rate basis), which measures expected profits from new premiums and is a key barometer of future growth, was $4.0 billion in the year ended December 31, up from $3.09 billion a year earlier. The amount increased to $30 million.
Hong Kong, one of the largest contributors to AIA in terms of profits in 2023, reported an 82% annual increase in VONB.
According to the company, VONB, its affiliated sales channel in Hong Kong, has more than tripled compared to the previous year.
The company's full-year operating profit after tax increased 2% to $6.21 billion.
AIA declared a final dividend of HK$1.19 per share, compared to last year's final dividend of HK$1.13.
(1 dollar = 7.8232 Hong Kong dollars)
(Reporting by Roshan Thomas and Rushni Nair in Bengaluru and Serena Lee in Hong Kong; Editing by Shonak Dasgupta)