AIA Group Limited (01299.HK) achieved its best-ever quarterly New Business Value (NBV) in the first quarter of this year.
The first-quarter report released on April 29 shows that AIA's NBV for the first quarter increased by 31% to $1.327 billion at constant exchange rates, setting a new quarterly record. AIA also announced details of its optimized capital management policy, including an additional $2 billion to the existing $10 billion share repurchase program.
From a premium perspective, AIA's annualized new premiums for the first quarter of this year grew by 26% to $2.449 billion. Benefiting from a positive shift in the product mix, its NBV margin rose to 54.2%, an increase of 2.1 percentage points year-on-year at constant exchange rates. Driven by multiple channels, AIA's NBV for the first quarter grew by 31% to $1.327 billion, creating the company's highest quarterly NBV in its history.
By channel, AIA's agency channel NBV for the first quarter saw a 20% increase, driven by an increase in the number of active agents and productivity. The partner distribution channel's NBV grew by 70%, with both bancassurance and retail independent financial advisor channels showing strong performance.
In terms of regional distribution, all reported segments achieved double-digit growth in NBV. Notably, AIA's business in Mainland China saw a 38% increase in NBV, mainly benefiting from double-digit growth in agency channel NBV and continued growth in bancassurance business. Additionally, new branches established after geographical expansion have brought in new business increments.
AIA's business in Hong Kong achieved a 43% increase in NBV, with the NBV margin rising from 58.1% in the second half of 2023 to 64.3%. The new business value contributed by local Hong Kong and Mainland visitor customer groups was roughly equal, with both achieving double-digit growth. The new business value from Mainland visitor customers continued to maintain momentum and exceeded the level of the fourth quarter of 2023.
AIA Group Chief Executive Officer and President Lee Yuan Xiang said, "We will continue to focus on driving profitable new business growth, which will have a significant impact on shaping AIA's financial future through increased future profits, generated free surplus, and greater shareholder value."
In the first-quarter report, AIA also announced an optimized capital management policy, which mainly includes two points: First, targeting a payout ratio of 75% of the annual free surplus net amount, starting from the full-year 2024 performance, to return capital to shareholders annually through dividends and share repurchases. Second, regularly reviewing the capital position and returning capital that exceeds the group's needs.
AIA gave an example in the first-quarter report, stating that if the free surplus net amount generated in 2023 was $3.9 billion, the first point of the optimized capital management policy could generate $2.9 billion in capital returns for shareholders, equivalent to 75% of the generated free surplus net amount, including $2.3 billion from dividends for the full fiscal year of 2023 and $600 million returned through share repurchases.
Based on the second point of regular capital position review, AIA announced that the board of directors has approved an additional $2 billion to the existing share repurchase program, increasing the total to $12 billion. The newly added $2 billion share repurchase target will be carried out as soon as practicable and is expected to be completed in approximately 12 months."These actions highlight our systematic approach to returning capital that exceeds our needs, while continuing to create new business growth that can deliver attractive returns," said Li Yuanxiang.