HONG KONG, 24 February 2017 – The Board of Directors of AIA Group Limited (“AIA”; or the “Company”; stock code: 1299) is pleased to announce that AIA has delivered excellent results for the year ended 30 November 2016. Highlights are shown on a constant exchange rate basis:
VONB up 28 per cent on constant exchange rates
Operating profit up 15 per cent — Final dividend up 25 per cent
Excellent growth in value of new business (VONB)
- 28 per cent growth in VONB to US$2,750 million
- 31 per cent increase in annualised new premiums (ANP) to US$5,123 million
- VONB margin of 52.8 per cent
Strong operating profit generation
- IFRS operating profit after tax (OPAT) up 15 per cent to US$3,981 million
- IFRS operating earnings per share up 15 per cent to 33.25 US cents
- Embedded value (EV) operating profit up 19 per cent to US$5,887 million
- Operating return on EV (ROEV) increased to 15.4 per cent
Robust cash flow and resilient capital position
- Underlying free surplus generation of US$4,024 million, up 11 per cent
- Free surplus of US$9.8 billion
- EV Equity of US$43.7 billion; EV of US$42.1 billion, up 12 per cent
- Net remittances of US$2.0 billion
- Solvency ratio for our principal operating company, AIA Co., of 404 per cent on the HKICO basis
Significant increase in recommended final dividend
- 25 per cent increase in final dividend to 63.75 Hong Kong cents per share
- Total dividend of 85.65 Hong Kong cents per share, an increase of 23 per cent
Mark Tucker, AIA’s Group Chief Executive and President, said:
“AIA has delivered an excellent set of results in 2016. We have achieved record new business profits, significant earnings growth, strong free surplus generation and a step up in shareholder dividends. Today’s headline figures, with VONB up by 28 per cent, and our consistent track record of year-on-year profitable growth are the direct result of the strong fundamental growth drivers in the Asia-Pacific region, our highly-diversified and resilient business model and our commitment to building a high-quality, sustainable business for the long term.
“The Board has recommended a further step up of 25 per cent in the 2016 final dividend from our higher base in 2015 to 63.75 Hong Kong cents per share. This dividend uplift reflects our excellent financial performance and our confidence in the future outlook for the Group.
“AIA has been in Asia for close to a century. The powerful structural economic, social and demographic changes taking place across the region present an unparalleled opportunity for the Asian life insurance industry and one which AIA, with our distribution reach, trusted brand, financial strength and people capabilities, is in an advantaged position to capture.
“We have made an excellent start to 2017 with strong value of new business growth in the first two months of our financial year. We have clear strategic priorities in place and are committed to building on our strong competitive advantages by helping our customers meet their long-term financial needs through our products and services. This provides us with a strong foundation to deliver profitable growth and long-term value for our shareholders, as we help our customers live longer, healthier, better lives and plan for a brighter future.”
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AIA Group Limited and its subsidiaries (collectively “AIA” or the “Group”) comprise the largest independent publicly listed pan-Asian life insurance group. It has a presence in 18 markets in Asia-Pacific – wholly-owned branches and subsidiaries in Hong Kong, Thailand, Singapore, Malaysia, China, Korea, the Philippines, Australia, Indonesia, Taiwan, Vietnam, New Zealand, Macau, Brunei, a 97 per cent subsidiary in Sri Lanka, a 49 per cent joint venture in India and representative offices in Myanmar and Cambodia.
The business that is now AIA was first established in Shanghai almost a century ago. It is a market leader in the Asia-Pacific region (ex-Japan) based on life insurance premiums and holds leading positions across the majority of its markets. It had total assets of US$185 billion as of 30 November 2016.
AIA meets the long-term savings and protection needs of individuals by offering a range of products and services including life insurance, accident and health insurance and savings plans. The Group also provides employee benefits, credit life and pension services to corporate clients. Through an extensive network of agents, partners and employees across Asia-Pacific, AIA serves the holders of more than 30 million individual policies and over 16 million participating members of group insurance schemes.
AIA Group Limited is listed on the Main Board of The Stock Exchange of Hong Kong Limited under the stock code “1299” with American Depositary Receipts (Level 1) traded on the over-the-counter market (ticker symbol: “AAGIY”).
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Key Performance Highlights
New Business Performance by Segment
- All figures are presented in actual reporting currency (US dollar) and based on actual exchange rates (AER) unless otherwise stated. Change on constant exchange rates (CER) is calculated using constant average exchange rates for 2016 and for 2015 other than for balance sheet items that use constant exchange rates as at 30 November 2016 and as at 30 November 2015.
- Change is shown on a year-on-year basis unless otherwise stated.
- VONB is calculated based on assumptions applicable at the point of sale and before deducting the amount attributable to non-controlling interests. The amounts of VONB attributable to non-controlling interests in 2016 and in 2015 were US$19 million and US$21 million respectively.
- VONB includes pension business. ANP and VONB margin exclude pension business.
- IFRS operating profit after tax and operating earnings per share are shown after non-controlling interests unless otherwise stated.
- Hong Kong refers to operations in Hong Kong and Macau; Singapore refers to operations in Singapore and Brunei; and Other Markets refers to operations in Australia, Indonesia, Korea, New Zealand, the Philippines, Sri Lanka, Taiwan, Vietnam and India. The results of our joint venture in India are accounted for using the equity method. For clarity, ANP and VONB exclude any contribution from India.
- 2015 financial information has been adjusted to reflect the changes in definition of operating profit and accounting policies for real estate with effect from 1 December 2015, as previously highlighted in notes 48 and 49 to the financial statements in our Annual Report 2015.
- For 2016, Korea is no longer disclosed separately as a reportable segment and is now included as part of the Other Markets segment. Prior year comparatives have been adjusted accordingly to conform to current year presentation.
- AIA’s financial information in this document is based on the audited consolidated financial statements and supplementary embedded value information for the year.
This document contains forward-looking statements relating to AIA Group Limited that are based on the beliefs of the Group’s management as well as assumptions made by and information currently available to the Group’s management. These forward-looking statements are, by their nature, subject to significant risks and uncertainties. When used in this document, the words “will”, “future” and similar expressions are intended to identify forward-looking statements. You are strongly cautioned that reliance on any forward-looking statements involves known and unknown risks and uncertainties. Actual results and events may differ materially from information contained in the forward-looking statements.
This document is for information purposes only and does not constitute an invitation or offer by any person to acquire, purchase or subscribe for securities. This document is not, and is not intended to be, an offer of securities for sale in the United States. The securities of AIA Group Limited have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements under the U.S. Securities Act. There is not, and is not intended to be, any public offering of such securities in the United States.