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UPDATE 1-AIA profit dips seven percent on weaker Asian shares
February 20, 2014 / 11:22 PM / 4 years ago

UPDATE 1-AIA profit dips seven percent on weaker Asian shares

(Recasts, adds detail on Thailand performance)

HONG KONG, Feb 21(Reuters) - AIA Group reported a seven percent fall in net profit in 2013, as weakness in the region’s equity markets and currencies hit reported earnings at Asia’s No. 3 insurer by market value.

Net profit of $2.82 billion was below the $2.91 billion expected by analysts, according to Thomson Reuters data, but the new-business metric that chief executive Mark Tucker has focused on since the company’s 2010 IPO grew strongly.

AIA said the company’s value of new business, which measures the expected profits from new premiums, rose 25 percent to $1.49 billion in the year ended Nov. 30, up from last year’s record $1.19 billion.

The new-business margin climbed from 43.6 to 44.1 percent, the company said in its annual results filing for the financial year 2013, posted to the Hong Kong Stock Exchange on Friday.

Analysts had feared political tensions in Thailand, AIA’s second biggest market accounting for around a fifth of its growth in new business, would slow sales but the damage was less than expected.

Profits for the group’s Thai unit climbed 12 percent while value of new business rose 11 percent.

Hong Kong-based AIA said on Dec. 19 that it would partner with Citibank to sell life insurance products through the U.S. bank’s branches in 11 markets across Asia.

The 15-year bancassurance deal means AIA will become the exclusive provider of life insurance products to Citi in those markets, decreasing its reliance on sales agents in Asia.

Analysts said AIA’s reported dollar profit was affected by the appreciation of the U.S. dollar against many of the Asian currencies in which the insurer operates. (Reporting By Lawrence White; Editing by Richard Pullin)

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