AIA’s New Business Value Increases by 27%, Boosts Buyback by $2 Billion

AIA Group Ltd. has reported a significant 27% increase in new business value in the first quarter, showcasing strong growth in its profitability. The Asia insurer’s measure of future profitability of new policies sold surged to $1.3 billion, up from $1.05 billion a year earlier, taking into account exchange rate fluctuations.

The company also announced an additional $2 billion in share buybacks, bringing the total amount since 2022 to $12 billion. This move, along with a new target to pay out 75% of its annual net free surplus generation, has resulted in a higher distribution to shareholders. As a result, AIA’s shares in Hong Kong saw a more than 7% jump, the most since November 2022.

Despite these positive developments, AIA acknowledged using a broker that relied on unlicensed agents to sell insurance policies. However, the firm clarified that this broker only contributed about 3% of new business value for AIA’s Hong Kong unit in the first quarter.

AIA’s success in the first quarter was attributed to strong performance in its key markets of Hong Kong and mainland China. The company operates in 18 Asia-Pacific markets, with these two regions being the largest contributors to new business and policy sales.

Investors have been closely monitoring AIA’s performance, especially in light of recent regulatory inquiries in the insurance industry. Despite challenges, AIA remains committed to delivering organic new business growth and returning excess capital to shareholders.