AIA Singapore’s value of new business (VONB) rose 27 per cent on the year to US$219 million for the first half ended Jun 30, from US$173 million in the year-ago period, on a constant exchange-rate basis.
The growth in VONB – a measure of expected profits from new premiums – came amid strong performances across all distribution channels, as well as higher sales of long-term savings products, said the insurer in an earnings announcement on Thursday (Aug 22).
AIA Singapore’s distribution channels include its agency force and AIA Financial Advisers.
Wong Sze Keed, chief executive officer of AIA Singapore, said: “AIA Singapore achieved very strong business performance in the first half of 2024, demonstrating growth across value of new business, annualised new premium, total weighted premium income and operating profit after tax.”
Targeting the wealth market
AIA Singapore continues to target the wealth market. It launched a product last year to tap growing long-term savings opportunities for affluent clients in Singapore and abroad, offering access to global fund managers.
In April this year, it opened the AIA Wealth Centre, providing comprehensive wealth management services to affluent and high-net-worth individuals in both domestic and regional markets.
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Its insurance agent segment recorded a 31 per cent increase in VONB. The use of digital tools contributed to higher productivity and more active agents.
New recruits in Singapore were up by 19 per cent, said the insurer. For the first half, the insurer had 499 new consultants, with fresh graduates and mid-career switchers making up the majority, it added.
It also noted that the recruits focused on a range of areas during their initial training, such as product knowledge, professional development, and learning how to use its digital tools.
After completing their training, the recruits have the option to become a high-net-worth adviser, a corporate solutions adviser that provides insurance solutions to companies, or a health adviser who specialises in health insurance products.
AIA Singapore’s VONB margin slipped 12.6 percentage points to 52.4 per cent in the first half, due to a change in product mix, with a higher proportion of lower-margin and long-term savings products being sold.
Annualised new premiums (ANP), which is used to measure new business sales, was 57 per cent higher year on year at US$417 million.
Total weighted premium income, a gauge for the insurer’s longer-term business volumes, rose 12 per cent on the year to US$2.2 billion.
Operating profit after tax inched up 2 per cent to US$343 million. AIA noted that the marginal increase was a result of lower investment income on surplus assets due to more remittances to the Group Corporate Centre segment last year.
This segment carries out AIA’s corporate functions, shared services and eliminations of intra-group transactions.
A 25% increase
At the group level, AIA registered a 25 per cent increase in VONB in the first half to US$2.5 billion, on a constant exchange-rate basis.
Its VONB margin went up 3.3 percentage points to 53.9 per cent, while ANP rose 17 per cent on the year to US$4.5 billion.
Operating profit after tax rose 7 per cent to US$3.4 billion.
This translates to an operating earnings per share of US$0.3018, up 10 per cent from US$0.2819 previously.
The group declared an interim dividend of HK$0.445 per share, up from HK$0.4229 previously.
Lee Yuan Siong, AIA’s group chief executive and president, said that the group will continue to build on its competitive advantages to capture growth opportunities to generate long-term sustainable shareholder value.
