AIA POSTS 27% RISE IN NEW BUSINESS PROFIT

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KUALA LUMPUR, 24 March 2016 – Malaysia’s leading life insurer, AIA Bhd. (AIA), recorded yet another sterling financial performance with an increase of 27 per cent in its value of new business (VONB) to RM673 million for the financial year ended 30 November 2015.

This marks the third consecutive year AIA has posted a large increase in VONB, which has grown at a compounded annual rate of 43.6 per cent since 2013. VONB is a key indicator of future profitability for insurers. AIA’s operating profit after tax rose by 8 per cent to more than RM1.0 billion.

The Company outperformed the industry by recording a 10.7 per cent growth in annualised new premiums as compared to the 6 per cent growth achieved by the combined Life Insurance and Takaful segments. This was once again the result of AIA’s focused multi-distribution strategy which saw each of its main business lines post strong growth during the period under review.

Speaking at the media briefing today, Ms. Anusha Thavarajah, Chief Executive Officer of AIA said,

“Our excellent results are a clear reflection of our operating ability and strength during times of market uncertainty and short-term volatility. They are testimony to the solid foundation we have carefully built since the launch of our transformation strategy three years ago.”

AIA’s commendable results were attributed to increased productivity among its agency force and higher recruitment of quality full-time new Life Planners. In the second half of the financial year, the number of active new Life Planners increased by 20 per cent, while active agents selling AIA’s Takaful solutions rose by 40 per cent.

AIA’s Partnership Distribution and Corporate Solutions channels also contributed excellent VONB growth of 33 per cent and 20 per cent, respectively. “We also emerged as the fastest growing player in the Family Takaful and Investment-linked segments, where AIA grew by 34 per cent and 19.7 percent respectively,” Anusha added.

Using VONB as the benchmark, Malaysia was AIA Group’s third largest growth market in the 2015 financial year. Currently, AIA Group is the largest independent publicly listed pan-Asian life insurance group. It operates in 18 markets and serves holders of more than 29 million individual policies and over 16 million participating members of group insurance schemes.

“We enter 2016 with strong momentum and we are well positioned to address Malaysia’s huge protection gap and health deficit. Short-term volatility will not deter us from our purpose which is to partner with our customers as they journey through life,” Anusha said.

She commented that AIA was confident on the life insurance industry’s long term growth prospects which will continue to benefit from the country’s younger demographic, growing middle class population and rapid urbanisation, factors which have contributed to Malaysia’s wide protection gap which is valued at over RM1 trillion. Currently, the average sum assured per person in Malaysia is less than RM40,000 whereas it should be in the region of RM200,000.

Apart from that, Anusha said that although Malaysians are living longer, many are facing a serious health deficit. As the leading provider of private health insurance, AIA has witnessed the deteriorating health trends in the country on the back of the rising incidence of lifestyle-related diseases.

“To better meet the needs of our customers today and in the future, AIA is moving away from the traditional life insurance model of being there for our customers when an unfortunate event occurs to a model of helping Malaysians lead healthier, longer and better lives. We want to be a life insurer and a passionate health advocate.

“This sharper focus on health is a natural progression for our company which is the largest private healthcare provider in Malaysia. We will play an active role in empowering and incentivising Malaysians to take charge of their health by making simple yet sustained changes to their lifestyles on a daily basis,” Anusha explained.

AIA’s concerted efforts in the health space started in 2013 when it launched an innovative portable personal medical plan for employees who were already part of its group insurance scheme. The plan is designed to safeguard the healthcare needs of employees in their retirement years or after leaving their employer’s group scheme.

Last year, the Company enhanced its product offering with two industry-leading health solutions namely A-Plus Med Booster and a comprehensive cancer-specific plan A-Life Cancer360 that have been very well received by customers. The launch of these products were underpinned by integrated marketing campaigns to drive a higher awareness among individuals about their health statuses and cancer-associated risks.

This year, AIA is reinforcing those health messages with the continuation of its popular Health Report Card campaign to reach out to more Malaysians, encouraging them to make a commitment to lead healthier lives.

“We are excited about the enormous opportunities ahead of us and intend to fully leverage our multidistribution capabilities to strengthen our position in the health space while unearthing the potential in this market,” Anusha said.