(Adds CEO quote, detail on results, share price)
HONG KONG, July 25 AIA Group Ltd,
Asia's second-largest insurer by market capitalisation, on
Friday reported a 23 percent rise in the value of its new
business in the first half of the year, led by strong growth in
Hong Kong and China.
That beat expectations of 20 percent growth, according to
the average estimate of analysts polled by Thomson Reuters.
Value of new business (VONB), a key metric for insurance
companies that measures the present value of future business,
rose to a record $792 million from $645 million a year earlier,
the Hong Kong-based company said.
The first-half new business value was more than the company
recorded for the whole of 2010, Chief Executive Mark Tucker
said, as China contributed 58 percent growth.
"Growth in China was driven by very successful new product
launches, particularly a campaign in the first quarter aimed at
young families," Tucker said in a conference call with media
after the results were announced.
Still, net profit fell 20 percent in the half to $1.55
billion, on a decline in equity investments and the appreciation
of the U.S. dollar against the Asian currencies in which AIA
earns much of its income.
AIA saw an impact on its capital reserves from a one-off
payment of $800 million to Citigroup, for a deal signed
last December that will see the U.S. bank sell only AIA's
insurance products across 11 markets in the Asia-Pacific region.
The insurer beat rivals in an auction to land the
bancassurance deal, seen in the industry as a key channel to
market products in Asia.
The insurer's South Korean business took a hit from an
industry-wide regulatory ban on outbound calls by telesales
agents, the result of a customer information leak from a credit
agency. While AIA's new business growth in the country slowed by
20 percent, Tucker said the insurer still grew sales in South
Korea in the first half while the industry as a whole saw a 50
percent decline in sales.
AIA's shares have risen 5.6 percent in Hong Kong this year,
against a 3.6 rise in the city's Hang Seng Index. On
Friday morning the shares rose 1.5 percent.
The outlook for the rest of the year looks positive, Tucker
said, suggesting fears over macroeconomic disruption in Asia
from U.S. policy changes may have been overstated.
"We don't expect great interest rate movement from the Fed
over the next 6 months or year, it may be some time well into
next year, and overall economies in the region, in Southeast
Asia are robust," Tucker said.
(Reporting by Lawrence White, additional reporting by Tripti
Kalro in BANGALORE; Editing by Stephen Coates, Lisa Shumaker and