AIA (01299) releases mid-year performance, business value increases by 14% year-on-year to US $2.838 billion, planning to distribute an interim dividend of 49 Hong Kong cents per share.

AIA (01299) released its performance for the six months ending June 30, 2025, with growth rates based on fixed exchange rates. The new business value increased by 14% to 2.838 billion US dollars; the new business value profit margin increased by 3.4 percentage points to 57.7%; annualized new premiums were 4.942 billion US dollars, an 8% increase year-on-year; after-tax operating profit was 3.609 billion US dollars, a 6% increase year-on-year; basic after-tax operating profit per share was 33.94 US cents; and a mid-term dividend of 49 Hong Kong cents per share is proposed. The insurance performance of the Group, as a basic component of the after-tax operating profit, increased by 19% to 3.517 billion US dollars. This strong growth reflects the compounding effect of new business and positive claims experience, demonstrating the Group's focus on underwriting quality business. The operating profit margin is 15.1%, once again reflecting the Group's high-quality and diversified sources of profitability. The Group is confident it can achieve its target of 9% to 11% compound annual growth rate for after-tax operating profit per share for the three years announced in August 2024. The main driver of the growth in after-tax operating profit is the release of contract service margins. Contract service margins are the accumulation of expected future profits, with multiple layers of profitable new business added to a large effective policy portfolio, along with the positive experience brought by underwriting high-quality business, leading to continuous growth in contract service margins. Contributing 3.043 billion US dollars to after-tax operating profit, this drove the basic contract service margin growth for the first half of 2025 to 10.3%. The ending contract service margin is 61.38 billion US dollars. The generated basic free surplus is the main operational indicator measuring the Group's ability to generate cash after taxes, which is 3.569 billion US dollars, a 10% increase per share, supported by positive operational differences, reflecting a usual pattern of higher operational differences in the first half compared to the second half of the year. Lee Yuan Xiang, CEO and President of AIA Group, said: "AIA's outstanding operational and financial performance in the first half of 2025 proves that we have the right strategic priorities to seize unparalleled opportunities in the Asian life and health insurance market. The new business value of the Group achieved strong growth of 14%, with 13 of our 18 markets experiencing growth." "The 'Elite Agents' are at the core of our unparalleled distribution platform, with new business value from agents growing by 17%. This is due to our agents benefiting from the transformative power of generative AI and our investments in technology, driving an increase in active agent numbers and productivity. The scale and quality of our 'Elite Agents' set AIA apart. We have been the top multinational company in the Global Million Dollar Round Table member count for 11 consecutive years, with our numbers exceeding those of the second-place competitor by more than double. Our partner distribution channels support our agent team, and we work closely with leading banks and financial intermediaries in providing tailored solutions for their clients. Following excellent growth in the distribution channel's new business value last year, it increased by 8% in the first half of this year." "We have mentioned multiple times that as profitable new business layers accumulate over time, they support higher long-term growth in profit and cash flow for us. In the first half of the year, this compounding effect accelerated significantly, with after-tax operating profit per share and basic free surplus per share rising by 12% and 10% respectively. Upholding our prudent, sustainable, and progressive dividend policy, the Board has announced a 10% increase in the mid-term dividend to 49.00 Hong Kong cents per share." "Asia is the world's most attractive life and health insurance market. Strong fundamental growth drivers such as continuous wealth accumulation, low insurance penetration rates, and limited social welfare coverage continue to drive AIA's exceptional long-term business prospects. I firmly believe that AIA's diversified regional development and focus on executing strategic priorities rigorously and orderly will continue to create long-term, sustainable value for all our stakeholders."