August 23, 2018 / 10:46 PM / a year ago

Insurer AIA posts 17 percent rise in 1st-half new business value

FILE PHOTO: The logo of AIA is displayed at its office in Hong Kong, China February 24, 2017. REUTERS/Bobby Yip/File Photo

(Reuters) - Asia-focused insurer AIA Group Ltd (1299.HK) on Friday posted a 17 percent rise in new business value for the first half of the year, as it sold more high-margin insurance products in its main markets of Hong Kong and China.

AIA’s value of new business, which measures expected profits from new premiums and is a key gauge for future growth, surged to $1.95 billion in the half-year period ended in June, rising from $1.61 billion a year earlier, the company said.

The insurance firm, whose business was first established in Shanghai nearly a century ago, now has a presence in 18 markets in Asia Pacific. Hong Kong, where AIA is based, accounts for the biggest share of its new business.

China is its second-largest market. AIA has reported strong growth in the world’s second-largest economy in recent quarters helped by a regulatory crackdown on short-term investments packaged as insurance that has hurt many of its local rivals.

The insurer’s other key markets include Australia, Malaysia, Singapore and Thailand.

AIA said its operating profit after tax rose 14 percent in the first half to $2.65 billion, up from $2.23 billion in the year-earlier period, it said in a statement to the Hong Kong stock exchange.

Asia is a key growth region for foreign insurers including Aviva (AV.L), Prudential (PRU.L) and Sun Life (SLF.TO), who are attracted by the region’s lower insurance penetration levels and faster growth rates for insurance premiums.

Canada’s Sun Life expects to double its profit in Asia over the next five years on strong demand for insurance in markets like China where it was keen to raise its ownership in a joint venture, its chief executive said in June.

Reporting by Sumeet Chatterjee in Hong Kong and Devika Syamnath in Bengaluru; Editing by Lisa Shumaker and Chris Reese

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