智通财经APP获悉，中金发布研究报告称，维持友邦保险(01299)“跑赢行业”评级，由于全球资本市场表现好于此前预期，上调23/24年EPS 19.4%/14.5%至每股0.52/0.73美元，首次引入25年EPS每股0.75美元。考虑到市场情绪仍待恢复，维持目标价94港元。公司将于3月14日披露2023年全年业绩，该行预计实际汇率下VONB同比+30.8%至40.4亿美元(固定汇率下同比+33%);实际汇率口径下OPAT同比-1.4%，每股股利同比+2%。 ...

智通财经APP获悉，友邦保险(01299)跌近4%，截止发稿跌3.86%，报62.3港元，成交额7.57亿港元。 美银证券发布研报称，预期公司去年新业务价值达41亿美元，按年升31%，意味着上季以实际汇率计算按年升28%。该行表示，这次业绩表现无惊喜，主要是去年首九个月增长已达33%，加上已预计上季出现季节性放缓等因素。该行预料，去年内含价值(EV)按年升1%至690亿美元，税後经营利润大致上维持至64亿美元不变，符合预期。 信达证券指出，在淡化“开门红”的背景下，12月寿险单月保费增速分化主要由于各大公司业务节奏差异。整体来看，我们认为前期行业受到预定利率切换、银保“报行合一”、开门红预收限制等影响保费阶段性承压，但是保险产品具有的“储蓄”+“保障”等属性在当前金融环境下仍具有吸引力。 ...

Financial Performance - Annualized new premium increased by 49% to $3.984 billion[2] - Embedded value operating profit reached $4.423 billion, an increase of 20% per share[2] - After-tax operating profit was $3.272 billion, with a 4% increase per share[2] - New business value grew by 37% to $2.029 billion[5] - Basic free surplus generated reached $3.288 billion, with a 10% increase per share[5] - Total assets of the group amounted to $276 billion as of June 30, 2023[9] - Total weighted premium income grew by 7% to $19,300 million, compared to $18,568 million in the prior year[13] - The operating profit after tax was $3.272 billion, with a year-on-year growth of 4%[43] - The annualized return on equity for shareholders rose to 14.2%[43] - Net profit for the first half of 2023 was $2.25 billion, a 50% increase from $1.54 billion in the same period of 2022[158] - Basic earnings per share rose by 56% to 19.39 cents in the first half of 2023, compared to 12.83 cents in the previous year[158] - Shareholder equity increased by 5% to $48.71 billion, despite dividend payments of $1.67 billion and additional capital returns of $1.97 billion[160] - The company reported a 10% increase in the stock price, impacting equity sensitivity positively[162] Dividends and Shareholder Returns - Interim dividend increased by 5% to HKD 0.4229 per share[6] - The company returned a total of $3.6 billion to shareholders through dividends and share buybacks in the first half of 2023[23] - The company returned $5.536 billion to shareholders through a share buyback program since its initiation[44] - The total capital returned to shareholders amounted to $3.638 billion, with embedded value equity at $70.621 billion as of June 30, 2023[99] New Business Growth - New business value in Hong Kong increased by over 100% compared to the first half of 2022[6] - New business value in China grew by 14% in the first half of 2023[6] - New business value in Malaysia rose by 10%, driven by both agency and partner distribution channels[7] - New business value in mainland China grew by 36%, with active agents increasing by 44%[24] - New business value in Thailand increased by 28%, supported by strong recruitment and productivity improvements[25] - The new business value in mainland China reached $601 million with a profit margin of 50.3%, representing a 14% year-on-year increase[34] - The new business value in Hong Kong surged to $681 million, with a profit margin of 56.9%, reflecting a 111% year-on-year increase[34] - AIA achieved a 62% increase in new business value in the first half of 2023, driven by strategic partnerships with leading banks[47] - AIA's new business value in Hong Kong more than doubled, with double-digit growth in mainland China, ASEAN markets, and Tata AIA Life in India[54] - AIA's China business saw a 14% increase in new business value, driven by double-digit growth in agency business and strong performance in the bank insurance channel[119] - AIA Thailand's new business value grew by 28%, supported by strong double-digit growth from agency and partner distribution channels[120] - AIA Malaysia achieved a 10% increase in new business value, with annualized new premiums also growing by 14%[121] Operational Efficiency and Technology - AIA's technology adoption rate exceeds global benchmarks, with 88% of IT infrastructure hosted on public cloud platforms, enhancing operational efficiency[46] - The direct processing of service requests has increased to 83%, significantly improving customer experience[46] - The group implemented over 250 high-efficiency use cases of AI and data analytics, exceeding the 2020 target, enhancing user experience and customer understanding[78] Market Performance - Revenue from the Chinese mainland market was $4.992 billion, an 18% increase from $4.509 billion year-over-year[181] - In Singapore, new business value grew by 5% in the first half of 2023, with annualized new premiums increasing by 7% and a strong new business value margin of 65.0%[93] - Other markets saw an 8% increase in new business value to $212 million, with eight markets reporting higher new business values, partially offset by a decline in Vietnam[94] Financial Position and Capital Management - The financial position remains strong, with free surplus rising by 12% to $19.898 billion before paying $3.638 billion in dividends and share buybacks[75] - The embedded value equity stood at $70,621 million, reflecting a 1% decrease from $71,202 million[13] - The total embedded value equity increased by 6% to $74.259 billion as of June 30, 2023[42] - Embedded value equity grew by 6% to $74.259 billion, after accounting for dividends of $1.672 billion and share buybacks of $1.966 billion[111] Challenges and Future Outlook - The long-term potential of the insurance business remains strong despite short-term macroeconomic uncertainties, driven by high private savings and low insurance penetration rates in Asia[82] - The company expects higher operating expenses in the second half of 2023 compared to the first half[182] - Non-operating items were minimal at -$35 million, while the impact of exchange rate changes was -$1.261 billion due to the strength of the reporting currency against local currencies[112]

[0 -> 7] Good morning from Hong Kong and welcome to AIA's Interim Results Presentation for 2023. [7 -> 11] I am delighted to announce very strong results in the first half, [11 -> 18] with excellent new business momentum and growth in all of our key financial metrics. [18 -> 21] Let me provide some highlights from the results. [21 -> 31] AIA's Unrivaled Distribution Platform has powered a very strong acceleration of sales momentum in the first half. [31 -> 34] VOND grew by 37% for the group. [34 -> 40] AIA ...

Financial Performance - AIA Group reported a 37% increase in new business value to $2.029 billion for the first half of 2023[3] - Annualized new premiums rose by 49% to $3.984 billion, reflecting strong growth across all distribution channels[8] - Operating profit based on embedded value reached $4.423 billion, representing a 20% increase per share[3] - The net profit for the period was $2,250 million, contributing to a total comprehensive income of $837 million[53] - The company reported a total comprehensive income of $837 million for the six months ended June 30, 2023, compared to a loss of $(6.388) billion for the same period in 2022[67] - The financial expenses related to insurance contracts for the six months ended June 30, 2023, were $(2.995) billion, compared to $3.702 billion for the same period in 2022[65] - The company declared dividends totaling $1,674 million during the period[53] - Share repurchases amounted to $1,966 million, reflecting the company's strategy to return capital to shareholders[53] Assets and Liabilities - Total assets increased by $5.442 billion to $275.913 billion, driven by net cash inflows from investments and changes in the fair value of debt securities[15] - Total liabilities as of June 30, 2023, were $233.637 billion, up from $225.323 billion at the end of 2022[68] - The total financial investments held by policyholders and shareholders increased to $223.466 billion from $218.295 billion as of December 31, 2022[29] - The total fixed income investments (including debt securities, loans, and deposits) reached $168.884 billion as of June 30, 2023, compared to $163.842 billion as of December 31, 2022[29] - Total assets as of June 30, 2023, were reported at $45,111 million, down from $46,499 million at the beginning of the year[53] - Total liabilities and equity increased to $275,913 million from $270,471 million, marking a rise of 2.7%[69] Equity and Shareholder Information - Shareholders' equity decreased to $41.791 billion, down 6% from $44.672 billion at the end of 2022[19] - The company declared a 5% increase in interim dividends per share[3] - The total equity stood at $42,276 million, a decrease from $45,148 million at the beginning of the year[53] - Retained earnings decreased to $45,111 million from $46,499 million, reflecting a decline of 3.0%[69] Investments - Total investments reached $257.795 billion, with policyholder and shareholder investments accounting for 87% of the total[21] - The company experienced a fair value gain of $2.427 billion from debt securities during the first half of 2023[18] - Government bonds and agency bonds increased from $81.441 billion to $85.622 billion, accounting for 51% of fixed income investments as of June 30, 2023, up from 50%[29] - Corporate bonds and structured securities rose from $77.901 billion to $79.053 billion, representing 47% of fixed income investments, up from 48%[29] Cash Flow and Surplus - The group's free surplus increased to $19.898 billion, with free surplus as of June 30, 2023, at $16.260 billion[32] - Basic free surplus generated was $3.288 billion, with a 10% increase per share, driven by higher expected returns due to generally rising interest rates[62] - Cash and cash equivalents decreased from $7.464 billion to $6.013 billion during the same period[30] - Cash and cash equivalents as of June 30, 2023, were $6.666 billion, down from $8.020 billion at the end of 2022[68] Accounting and Regulatory Changes - The company has adopted IFRS 17, which replaces IFRS 4, impacting the measurement and recognition of insurance contracts[77] - The group adopted the revised International Accounting Standard 12 regarding deferred tax related to single transactions, which had no significant impact on the group's financial performance[97] - The group expects that the newly issued accounting standards will not have a significant impact on its financial position or operating performance[97] - The interim financial statements have been reviewed by PwC according to the Hong Kong Institute of Certified Public Accountants' standards[99] Operational Efficiency and Market Strategy - The company reported a significant increase in cash flow from operations, reflecting improved operational efficiency[92] - The company is exploring market expansion opportunities in Asia, aiming to enhance its product offerings and customer base[75] - Future outlook indicates a focus on new product development and technological advancements to drive growth[75] Employee and Share Incentive Plans - As of January 1, 2023, there were 298,985,299 restricted share units available for grant under the plan, which was revised to 286,486,072 units as of June 30, 2023[35] - The subscription price for the restricted share units is set at $1.00 per share[42] - During the six months ended June 30, 2023, a total of 175,718 restricted share units were granted under the 2023 agent share purchase plan[38] - The company did not issue new shares during the reporting period[38] - There were no significant changes in employee numbers, compensation policies, or share incentive plans as disclosed in the 2022 annual report[44]

Financial Performance - Total assets of AIA Group reached $303 billion as of December 31, 2022[3]. - AIA Group's total assets reached US$71,202 million in 2022, reflecting a robust financial position[54]. - The company achieved a post-tax operating profit of US$5,689 million in 2022, indicating a strong performance in the insurance sector[32]. - The group reported a post-tax operating profit of USD 6.37 billion, representing a 5% increase per share, supported by a growing effective policy portfolio and active management of high-quality recurring earnings[136]. - The basic free surplus generated was $6.039 billion, with a year-on-year growth of 7% per share on a comparable basis, while post-tax operating profit reached $6.370 billion, reflecting a 5% increase per share[92]. - The company maintains a strong financial position with a free surplus growth to USD 23.679 billion, excluding dividends and share buyback plans[136]. - The return on equity for shareholders increased to 13.2% from 12.8% in 2021, reflecting strong operational profit margins of 17.7%[188]. - The local capital coverage ratio was reported at a strong 283% based on the new prescribed capital requirements[70]. - The local capital coverage ratio was very strong at 283%, down 13 percentage points due to the share buyback program[191]. Shareholder Returns - The company launched a $10 billion share buyback program aimed at enhancing shareholder returns while maintaining financial strength[19]. - The company returned $3.570 billion to shareholders as part of a three-year share buyback program, with a total capital return of up to $10 billion approved by the board[69]. - The board proposed a final dividend of HKD 1.134 per share, reflecting a 5% increase, resulting in a total annual dividend of HKD 1.5368 per share for 2022, up 5.3% from 2021[121][137]. - Shareholder equity was $50.634 billion, not including dividends of $2.259 billion and share buybacks of $3.570 billion, resulting in a net shareholder equity of $44.805 billion as of December 31, 2022[160]. Market Presence and Growth - AIA Group serves over 41 million individual policyholders and more than 17 million group insurance participants[5]. - AIA Group's total insurance coverage exceeds $20 trillion, reflecting its significant market presence[15]. - In 2022, AIA Group reported a total weighted premium income of US$6,370 million, reflecting a growth compared to previous years[32]. - The total weighted premium income for the year was reported at $36.176 billion, reflecting the company's strong market position in the life and health insurance sector[68]. - The new business value decreased by 5% to $3.092 billion for the year, but showed a 6% year-on-year growth in the second half of the year, with all five operating segments recording annual growth[68]. - The company achieved a 10% growth in new business value through strategic partnerships with leading banks, benefiting from collaborations in Malaysia, Indonesia, Hong Kong, and India[111]. - The new business value for 2022 decreased by 5% to $3.092 billion, although there was a 6% increase in the second half of the year[186]. - The new business value in mainland China reached USD 916 million with a profit margin of 69.5%, while annualized new premiums were USD 1.319 billion, reflecting a year-on-year decrease of 15% at constant exchange rates[166]. Health Insurance Initiatives - AIA Group's health insurance market expansion includes the acquisition of MediCard Philippines, enhancing its distribution capabilities in the growing health insurance market[21]. - AIA Group's comprehensive health strategy focuses on making healthcare services more accessible, affordable, and efficient[26]. - AIA Group's health plans in mainland China have 2.6 million members, demonstrating significant market penetration[50]. - AIA Group's health insurance initiative, "AIA One Billion," aims to improve the health of individuals across Asia, contributing to sustainable development[41]. - The company launched the "AIA Health Campus Program" in Australia, Hong Kong, Thailand, and Vietnam, targeting health promotion among students aged 5 to 16[42]. - The acquisition of Blue Cross (Asia) Insurance Limited and BOC Medical Services Limited expands the distribution partnership with East Asia Bank, enhancing AIA's health strategy in Hong Kong and the Greater Bay Area[145]. - AIA's acquisition of MediCard Philippines, Inc. provides access to a network of over 1,000 partner hospitals and clinics, serving over 920,000 members, thus enhancing product offerings and distribution capabilities[146]. Digital Transformation and Technology - The company has been recognized as the "Digital Insurer of the Year" for two consecutive years by InsuranceAsia News[5]. - The group achieved a straight-through processing rate of 70% by the end of 2022, an increase of 12 percentage points from the previous year, enhancing customer experience and operational efficiency[142]. - The company aims to develop Amplify Health into a leading digital health technology and integrated solutions business, enhancing healthcare delivery across Asia[78]. - The group’s technology capabilities have doubled since the announcement of its new strategy in 2020, with over 86% of IT infrastructure hosted on public cloud, leading to cost efficiencies[138]. - The digital tools implemented led to a 30% increase in new sales targets, generating over $500 million in annualized new premiums from the agency team and bancassurance channels[109]. Strategic Partnerships and Acquisitions - The company expanded its market presence by establishing a five-year bancassurance partnership with Prince Bank in Cambodia and extending its partnership with Vietnam Prosperity Joint Stock Bank for an additional four years[36]. - The company has established exclusive bancassurance partnerships to enhance its distribution network[9]. - The company completed the acquisition of a 24.99% stake in China Post Life Insurance, enhancing its distribution channels and customer base in mainland China[174]. - AIA Group's investment in China Postal Insurance is part of its strategy to expand its presence in the mainland market[19]. Environmental, Social, and Governance (ESG) Commitment - The company has been recognized for its commitment to ESG issues, ranking in the top 10% of the insurance industry by Sustainalytics[72]. - The company aims to achieve net-zero greenhouse gas emissions by 2050 or earlier, with ambitious reduction targets verified by the Science Based Targets initiative (SBTi)[176].

Business Performance - New business value decreased by 13% to $1.536 billion, but showed significant improvement in June with a recovery in growth [3]. - New business value for the first half of 2022 was $1,536 million, a decrease of 13% compared to $1,814 million in the same period of 2021 [7]. - AIA Group's new business value for the first half of the year was USD 1.536 billion, reflecting a decline due to the impact of the COVID-19 pandemic, but sales momentum improved in June [15]. - The overall new business value in the ASEAN markets showed very strong double-digit growth in the second quarter [4]. - New business value in AIA's Hong Kong operations increased by 3% in the first half of 2022, driven by growth in agency and partner distribution channels, with the new business value margin rising to 69.3% [32]. - New business value in Thailand decreased by 9% to $260 million, with a profit margin decline of 9.8 percentage points to 83.8% [105]. - New business value in Singapore decreased by 6% to $161 million, but the profit margin improved by 2.7 percentage points to 65.9% [107]. - New business value in Malaysia increased by 7% to $161 million, with a profit margin improvement of 5.4 percentage points to 67.2% [109]. - New business value in other markets decreased by 15% to $207 million, with a profit margin decline of 3.1 percentage points to 29.1% [111]. Financial Metrics - Free surplus increased by $3.6 billion to $20.6 billion, with basic free surplus rising by 5% to $3.19 billion [3]. - Operating profit based on embedded value for the first half of 2022 was $3,953 million, a decline of 2% from $4,092 million in the same period of 2021 [7]. - The embedded value of equity as of June 30, 2022, was $72,326 million, down 1% from $75,001 million as of December 31, 2021 [7]. - The group's operating profit after tax increased by 4% to USD 3.223 billion, while the generated free surplus grew by 5% to USD 3.190 billion on a comparable basis [16]. - The basic earnings per share for the first half of 2022 was $26.49, a decrease of 2% from $27.97 in the first half of 2021 [7]. - The net loss attributable to shareholders was $571 million, a significant decrease from a profit of $3.245 billion in the previous year [50]. - The company reported a net operating profit attributable to shareholders of $3,243 million for the six months ended June 30, 2022, compared to $3,223 million in the same period of 2021, reflecting a slight increase of 0.6% [192]. Capital and Solvency - The group’s local capital coverage ratio was very strong at 277% based on new capital requirements [3]. - The local capital coverage ratio based on specified capital requirements was 277% as of June 30, 2022, down from 291% as of December 31, 2021 [7]. - The group’s local capital solvency ratio sensitivity shows a 10% increase in equity prices would improve the ratio by 3 percentage points, while a 10% decrease would reduce it by 4 percentage points [77]. - The group has adopted the Hong Kong risk-based capital regime effective January 1, 2022, which has impacted the solvency ratios [81]. - The group’s available capital includes $5.82 billion in approved senior notes as of June 30, 2022 [73]. Shareholder Returns - After returning $3 billion to shareholders through share buybacks and dividends, the embedded value equity stood at $72.3 billion [3]. - Interim dividend increased by 6% to HKD 0.4028 per share, reflecting a prudent and sustainable dividend policy [4]. - The board declared an interim dividend increase of 6% to HKD 0.4028 per share, reflecting strong business performance and confidence in future prospects [16]. - AIA Group announced a share buyback program of up to USD 10 billion, marking a significant step in its profitable growth strategy [15]. - Shareholder equity decreased by $2.280 billion to $46.788 billion, after accounting for dividends of $1.650 billion and share buybacks of $1.342 billion [52]. Market Expansion and Strategy - The strategic partnership with leading banks recorded double-digit growth in new business value, particularly in Hong Kong, Malaysia, and India [4]. - The company continues to expand its market presence, with new branches opening in Wuhan and Zhengzhou, enhancing distribution channels through strategic partnerships [102]. - The company established new partnerships with technology firms, successfully attracting over 500,000 new customers through collaborations, with over 70% being new clients [99]. - The group aims to expand its business across all 18 markets, leveraging exclusive partnerships and a broader range of products to capture new customer segments [20]. Operational Efficiency - The company’s digital and analytical capabilities have enhanced business resilience and sales performance during the pandemic [4]. - The number of agents increased, contributing to a recovery in new business sales momentum in the second quarter [17]. - The overall agent workforce showed growth, with significant increases in productivity attributed to digital tools and customer-centric platforms [101]. - In the first half of 2022, over 40% of new policies were issued through digital remote sales tools, highlighting the effectiveness of digital strategies during client interaction restrictions [95]. Economic and Market Conditions - Despite macroeconomic uncertainties, the long-term outlook for the group's business remains strong, supported by its competitive advantages and financial strength [23]. - The company reported a fair value loss related to available-for-sale financial assets for the six months ended June 30, 2022, was $26.02 billion, compared to a loss of $7.25 billion for the same period in 2021 [171]. - The company continues to monitor developments related to the OECD's Base Erosion and Profit Shifting 2.0 initiative, which may adversely affect its effective tax rate [92].

Financial Performance - AIA Group's total assets reached $340 billion as of December 31, 2021[2]. - AIA Group reported a new business value of US$4,154 million in 2021, an increase from US$3,206 million in 2020[25]. - The annualized new premiums reached US$6,585 million in 2021, compared to US$5,624 million in 2020, reflecting a growth of approximately 17%[28]. - Total weighted premium income for 2021 was US$63,905 million, up from US$52,429 million in 2020, marking a growth of about 22%[27]. - The operating profit after tax was US$34,002 million in 2021, an increase from US$26,393 million in 2020, representing a growth of approximately 29%[29]. - The company recorded a 37% growth in new business value driven by strong performance in the local customer base in Hong Kong[68]. - The net profit for 2021 increased by 28% to $7.427 billion, compared to $5.779 billion in 2020[100]. - The company experienced a 28% increase in total profit to $7.427 billion, compared to $5.779 billion in 2020[99]. - The average shareholder equity increased by 10% to $50 billion, with an operating return on equity of 12.8%[93]. - The company recorded a positive investment return variance of $1.293 billion, offsetting negative foreign exchange movements of $810 million[84]. Growth and Market Expansion - The Greater Bay Area, with a population of 86 million and a GDP of $1.7 trillion, presents significant growth potential for AIA Group[11]. - AIA Group has invested in China Post Insurance, acquiring a 24.99% stake to enhance growth opportunities in the mainland life insurance market[11]. - AIA Group has expanded its regional presence in mainland China by opening branches in Hubei and Sichuan provinces, replicating its successful "Best Agency" strategy[13]. - The company plans to expand its operations in Wuhan, Hubei, with a population of nearly 60 million, marking a significant milestone in its growth strategy[155]. - AIA's new business value in Hong Kong surged by 37%, supported by enhanced agent productivity and a new partnership with East Asia Bank[141]. - Thailand's new business value grew by 34%, with the profit margin increasing by 19.4 percentage points due to a focus on regular premium unit-linked and protection products[77]. - AIA's new business value in Malaysia surged by 26%, driven by strong performance in agency and partner distribution channels[78]. Sustainability and Corporate Responsibility - The company has committed to achieving net-zero greenhouse gas emissions by 2050 or earlier, reflecting its long-term commitment to sustainability[14]. - AIA Group completed its divestment from coal mining and coal-fired power companies in October 2021, seven years ahead of schedule[15]. - The company has awarded its first 100 scholarships to university students in Hong Kong as part of its commitment to invest $100 million over the coming decades[17]. - AIA Group's new environmental, social, and governance strategy focuses on five pillars: health and wellness, sustainable operations, sustainable investments, employee and culture, and effective governance[14]. - The company has been recognized for its strong ESG performance, ranking in the top two percentile by Sustainalytics and receiving a "Prime" rating from ISS[42]. Digital Transformation and Technology - The company achieved a digital channel processing rate of 75% for claims submissions and service requests in 2021[20]. - The adoption rate of cloud technology exceeded 70%, surpassing the average in the insurance industry[21]. - The company is focused on leveraging technology and digital analytics to optimize operations, with over 100 large projects utilizing AI and analytics[53]. - AIA's cloud technology adoption exceeded 70% of IT infrastructure by the end of 2021, up from 39% the previous year, aiming for 90% cloud application[175]. - The digital recruitment application iRecruit's adoption rate among agents increased to 63%, supporting agent recruitment and productivity[176]. - The Claims EZ platform in Singapore automated claims assessment, with 60% of processes requiring no human intervention and over 55% of small claims paid within 24 hours[182]. Customer Engagement and Experience - AIA Vitality program saw a 73% year-on-year increase in membership, reaching approximately 2 million members across ten markets[22]. - The "AIA Vitality" program recorded a 45% increase in new business value, reaching $633 million in 2021, with total membership nearing 2 million[187]. - The company launched the integrated digital platform "One Experience" in mainland China, enhancing customer engagement and personalizing services[179]. - AIA's customer experience strategy focuses on seamless multi-channel interactions, leading to increased customer retention and new sales opportunities[195]. - Customer feedback has driven significant improvements, with nearly 60% of customer transactions completed within one day as of December 2021[196]. Financial Management and Shareholder Returns - The board proposed a final dividend of HKD 1.08 per share, an increase of 8%, bringing the total dividend for 2021 to HKD 1.46 per share[39]. - The company plans to return up to $10 billion in capital to shareholders through a share buyback program over three years, contingent on market conditions[40]. - The free surplus has significantly increased to $24.8 billion as of December 31, 2021, since the company's IPO in 2010[39]. - The company paid dividends totaling $2,147 million in 2021, up from $1,997 million in 2020[118]. - The company plans to release additional flexible reserves, which is expected to increase the intrinsic value by $2,379 million and the free surplus by $4,403 million[130]. Employee Engagement and Organizational Development - AIA Group's employee engagement survey in 2021 showed a participation rate of 97%, ranking in the 90th percentile of Gallup's global financial and insurance industry benchmark[199]. - The company is transforming into a simpler, faster, and more connected organization to support its ambitious growth objectives[200]. - AIA Group's talent strategy successfully attracts, retains, and develops top talent, making it a preferred employer in its business markets[199]. - The employee sentiment remains positive, reflecting the effectiveness of the company's organizational and talent strategies[199]. - The company anticipates that hundreds of employees will join empowered teams to lead AIA Group into new ways of working over time[200].

[Group Chief Executive and President's Report](index=9&type=section&id=%E9%9B%86%E5%9C%98%E9%A6%96%E5%B8%AD%E5%9F%B7%E8%A1%8C%E5%AE%98%E5%85%BC%E7%B8%BD%E8%A3%81%E5%A0%B1%E5%91%8A) [Overall Performance & Strategic Highlights](index=9&type=section&id=%E6%95%B4%E9%AB%94%E6%A5%AD%E7%B8%BE%E8%88%87%E7%AD%96%E7%95%A5%E4%BA%AE%E9%BB%9E) AIA achieved strong performance in H1 2021 with growth in key metrics, driven by technology transformation and strategic partnerships 2021 H1 Key Financial Indicators | Indicator | 2021 H1 (USD million) | Y-o-Y Growth (Constant Exchange Rate) | | :--- | :--- | :--- | | Value of New Business (VONB) | 1,814 | 22% | | Operating Profit After Tax (OPAT) | 3,182 | 5% | | Underlying Free Surplus Generation | 3,374 | 6% | | Embedded Value (EV) Equity | 70,102 | 5% | | Free Surplus | 17,900 | 28% | | Group LCSM Coverage Ratio | 412% | 38 pps | | Interim Dividend (HK cents per share) | 38.00 | 8.6% | - Except for Hong Kong, the **value of new business in all reported segments exceeded pre-pandemic levels** of H1 2019, with the Hong Kong business affected by travel restrictions[4](index=4&type=chunk)[14](index=14&type=chunk) - The company accelerated its technology upgrade, with **over 50% of its infrastructure migrated to the cloud**, significantly improving customer service and distribution efficiency[5](index=5&type=chunk)[16](index=16&type=chunk) - A **15-year exclusive bancassurance partnership was established with The Bank of East Asia**, and an agreement was made to subscribe for a 24.99% stake in China Post Life Insurance to expand market coverage and growth opportunities in Mainland China[16](index=16&type=chunk) [Financial and Operating Review](index=12&type=section&id=%E8%B2%A1%E5%8B%99%E5%8F%8A%E7%87%9F%E9%81%8B%E5%9B%9E%E9%A1%A7) [Group Chief Financial Officer's Review](index=12&type=section&id=%E9%9B%86%E5%9C%98%E9%A6%96%E5%B8%AD%E8%B2%A1%E5%8B%99%E7%B8%BD%E7%9B%A3%E5%9B%9E%E9%A1%A7) This section details AIA's H1 2021 financial performance, including VONB, embedded value, IFRS profit, balance sheet, capital position, and dividend policy [Overview and Key Financial Summary](index=12&type=section&id=%E6%A6%82%E8%A6%81%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) AIA delivered strong H1 2021 financial results with a 22% increase in VONB and a 5% rise in operating profit after tax, supported by a robust capital position 2021 H1 Key Financial Summary | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | Y-o-Y Change (Constant Exchange Rate) | | :--- | :--- | :--- | :--- | | Value of New Business (VONB) | 1,814 | 1,410 | 22% | | Operating Profit After Tax (OPAT) | 3,182 | 2,933 | 5% | | Underlying Free Surplus Generation | 3,374 | 3,049 | 6% | | Embedded Value (EV) Equity | 70,102 (at end of period) | 67,185 (at end of period) | 5% | | Free Surplus | 17,907 (at end of period) | 13,473 (at end of period) | 28% | | Group LCSM Coverage Ratio | 412% (at end of period) | 374% (at end of period) | 38 pps | | Dividend per Share (HK cents) | 38.00 | 35.00 | 8.6% | - The growth in value of new business was broad-based, with **all reported segments exceeding pre-pandemic levels of H1 2019**, except for Hong Kong[19](index=19&type=chunk) - The company entered into a **15-year exclusive bancassurance partnership with The Bank of East Asia** and agreed to invest $1,860 million for a 24.99% stake in China Post Life Insurance to expand its market presence[21](index=21&type=chunk) [New Business Performance](index=13&type=section&id=%E6%96%B0%E6%A5%AD%E5%8B%99%E8%A1%A8%E7%8F%BE) VONB grew 22% to $1,814 million in H1 2021, driven by geographic diversification and multi-channel distribution, with a notable increase in VONB margin 2021 H1 New Business Performance Overview | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | Y-o-Y Change (Constant Exchange Rate) | | :--- | :--- | :--- | :--- | | Value of New Business (VONB) | 1,814 | 1,410 | 22% | | Annualised New Premiums (ANP) | 3,060 | 2,579 | 13% | | VONB Margin | 59.0% | 54.4% | 4.2 pps | - The agency channel's **VONB grew by 25%**, accounting for 82% of the Group's total VONB[4](index=4&type=chunk)[19](index=19&type=chunk)[23](index=23&type=chunk) - **Mainland China's VONB grew by 20%** on a like-for-like basis, Hong Kong's local customer segment VONB grew by 16%, and Thailand, Singapore, and Malaysia grew by 52%, 32%, and 89% respectively[5](index=5&type=chunk)[24](index=24&type=chunk) [Embedded Value Equity](index=15&type=section&id=%E5%85%A7%E6%B6%B5%E5%83%B9%E5%80%BC%E6%AC%8A%E7%9B%8A) Embedded value equity reached a new high of $70,102 million as of June 30, 2021, a 5% increase from year-end 2020, driven by strong operating profit and positive investment returns Embedded Value Equity and Operating Profit | Indicator | June 30, 2021 (USD million) | Dec 31, 2020 (USD million) | Change (Constant Exchange Rate) | | :--- | :--- | :--- | :--- | | Embedded Value (EV) Equity | 70,102 | 67,185 | 5% | | EV Operating Profit | 4,092 (H1) | 3,878 (H1) | 1% | | EV Operating Return | 12.9% (annualised) | 12.9% (annualised) | (0.3) pps | - EV operating profit included a **positive operating variance of $363 million**, reflecting the Group's overall experience continuing to be more favourable than embedded value assumptions[19](index=19&type=chunk)[25](index=25&type=chunk) - The growth in embedded value was achieved after the payment of the **2020 final dividend of $1,558 million**[19](index=19&type=chunk)[28](index=28&type=chunk) [Embedded Value and Value of New Business Sensitivity](index=17&type=section&id=%E5%85%A7%E6%B6%B5%E5%83%B9%E5%80%BC%E5%8F%8A%E6%96%B0%E6%A5%AD%E5%8B%99%E5%83%B9%E5%80%BC%E6%95%8F%E6%84%9F%E5%BA%A6) This analysis shows that embedded value is sensitive to equity price changes, while the value of new business is positively impacted by rising interest rates Embedded Value Sensitivity (June 30, 2021) | Scenario Change | EV Change (USD million) | Percentage Change | | :--- | :--- | :--- | | 10% increase in equity prices | 1,312 | 1.9% | | 10% decrease in equity prices | (1,307) | (1.9)% | | 50 bps increase in interest rates | 90 | 0.1% | | 50 bps decrease in interest rates | (533) | (0.8)% | Value of New Business Sensitivity (June 30, 2021) | Scenario Change | VONB Change (USD million) | Percentage Change | | :--- | :--- | :--- | | 50 bps increase in interest rates | 50 | 2.8% | | 50 bps decrease in interest rates | (66) | (3.6)% | [IFRS Profit](index=17&type=section&id=%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E6%BA%A2%E5%88%A9) Operating profit after tax grew 5% to $3,182 million in H1 2021, while IFRS net profit increased significantly by 47% due to positive investment fluctuations 2021 H1 Operating Profit After Tax (by segment) | Segment | 2021 H1 (USD million) | 2020 H1 (USD million) | Y-o-Y Change (Constant Exchange Rate) | | :--- | :--- | :--- | :--- | | Mainland China | 722 | 640 | 4% | | Hong Kong | 1,055 | 1,005 | 5% | | Thailand | 485 | 478 | (1)% | | Singapore | 339 | 303 | 8% | | Malaysia | 194 | 148 | 25% | | Other Markets | 391 | 333 | 12% | | **Total** | **3,182** | **2,933** | **5%** | 2021 H1 IFRS Net Profit | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | Y-o-Y Change (Constant Exchange Rate) | | :--- | :--- | :--- | :--- | | Operating Profit After Tax | 3,182 | 2,933 | 5% | | Net Profit | 3,245 | 2,197 | 47% | - Excluding the impact of withholding tax on our China business and the normalisation of claims, **operating profit after tax grew by 8%**[20](index=20&type=chunk)[34](index=34&type=chunk) 2021 H1 Earnings Per Share | Indicator | 2021 H1 (US cents) | 2020 H1 (US cents) | | :--- | :--- | :--- | | Basic Operating Earnings Per Share | 26.37 | 24.33 | | Basic Net Profit Per Share | 26.90 | 18.22 | [IFRS Balance Sheet](index=22&type=section&id=%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) Total assets grew to $329,891 million as of June 30, 2021, with a stable and high-quality financial investment portfolio dominated by fixed-income assets Consolidated Statement of Financial Position Summary (June 30, 2021) | Indicator | June 30, 2021 (USD million) | Dec 31, 2020 (USD million) | Change (Actual Exchange Rate) | | :--- | :--- | :--- | :--- | | Total Assets | 329,891 | 326,121 | 1% | | Financial Investments | 272,619 | 271,467 | – | | Cash and Cash Equivalents | 7,149 | 5,619 | 27% | | Total Liabilities | 270,474 | 262,453 | 3% | | Total Equity | 59,417 | 63,668 | (7)% | - The fixed income portfolio (excluding government bonds) maintained an **average credit rating of A-**, with below investment grade or unrated bonds accounting for only 2%[51](index=51&type=chunk) - The carrying value of equity securities **increased by $4,542 million**, primarily driven by new purchases and positive market value movements[51](index=51&type=chunk) [Liabilities](index=26&type=section&id=%E8%B2%A0%E5%82%B5) Total liabilities increased to $270,474 million as of June 30, 2021, reflecting in-force portfolio growth and an increase in borrowings Liabilities Overview (June 30, 2021) | Indicator | June 30, 2021 (USD million) | Dec 31, 2020 (USD million) | | :--- | :--- | :--- | | Total Liabilities | 270,474 | 262,453 | | Insurance and Investment Contract Liabilities | 241,135 | 235,952 | | Borrowings | 9,182 | 8,559 | | Gearing Ratio | 13.4% | 11.9% | - The increase in borrowings was mainly due to **net proceeds of $1,121 million from the issuance of medium term notes and securities**, partially offset by redemptions of $502 million[53](index=53&type=chunk) [Equity](index=26&type=section&id=%E6%AC%8A%E7%9B%8A) Total equity attributable to shareholders decreased by 7% to $58,944 million as of June 30, 2021, primarily due to fair value reserve reductions from rising bond yields Total Equity Attributable to Shareholders (June 30, 2021) | Indicator | June 30, 2021 (USD million) | Dec 31, 2020 (USD million) | | :--- | :--- | :--- | | Total equity attributable to shareholders of AIA Group Limited | 58,944 | 63,200 | | Change (Actual Exchange Rate) | (7)% | | - The reduction in the fair value reserve reflects unrealised gains on available-for-sale debt securities and is excluded from shareholders' allocated equity for a clearer representation[54](index=54&type=chunk) [Capital](index=27&type=section&id=%E8%B3%87%E6%9C%AC) AIA maintained a strong capital position in H1 2021 with a Group LCSM coverage ratio of 412% and growing free surplus to support future growth [Regulatory Capital Requirements](index=27&type=section&id=%E7%9B%A3%E7%AE%A1%E8%B3%87%E6%9C%AC%E8%A6%8F%E5%AE%9A) AIA fully complied with all regulatory capital requirements and was designated as an insurance holding company under Hong Kong's new group-wide supervision framework - AIA Group Limited became a **designated insurance holding company on May 14, 2021**, subject to the Hong Kong group-wide supervision framework[20](index=20&type=chunk)[55](index=55&type=chunk) - Hong Kong's new risk-based capital regime is expected to take effect on January 1, 2024, under which the company anticipates maintaining a **very strong regulatory capital position**[15](index=15&type=chunk)[19](index=19&type=chunk)[55](index=55&type=chunk) [Free Surplus](index=27&type=section&id=%E8%87%AA%E7%94%B1%E7%9B%88%E9%A4%98) The Group's free surplus grew to $17,907 million as of June 30, 2021, driven by strong underlying free surplus generation and positive investment return variances Free Surplus Movement Overview | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | | :--- | :--- | :--- | | Opening Free Surplus | 13,473 | 14,917 | | Underlying Free Surplus Generation | 3,374 | 3,049 | | Free Surplus Used to Fund New Business | (921) | (703) | | Investment Return Variances and Other Items | 3,919 | (3,899) | | Dividends | (1,558) | (1,452) | | Closing Free Surplus | 17,907 | 11,771 | - **Underlying free surplus generation grew by 6%**, primarily driven by the continued growth and active management of the in-force portfolio[4](index=4&type=chunk)[20](index=20&type=chunk)[56](index=56&type=chunk) [Group Local Capital Summation Method (LCSM) Solvency Position](index=28&type=section&id=%E9%9B%86%E5%9C%98%E7%95%B6%E5%9C%B0%E8%B3%87%E6%9C%AC%E7%B8%BD%E5%92%8C%E6%B3%95%E5%84%9F%E4%BB%98%E8%83%BD%E5%8A%9B%E7%8B%80%E6%B3%81) The Group LCSM coverage ratio was very strong at 412% as of June 30, 2021, with a surplus of $51,231 million, benefiting from the new group-wide supervision framework Group LCSM Solvency Position | Indicator | June 30, 2021 (USD million) | Dec 31, 2020 (USD million) | | :--- | :--- | :--- | | Group Available Capital | 67,675 | 59,830 | | Group Minimum Capital Requirement | 16,444 | 16,013 | | Group LCSM Surplus | 51,231 | 43,817 | | Group LCSM Coverage Ratio | 412% | 374% | - Group available capital includes **$2,858 million of subordinated securities and $5,810 million of approved senior notes**[58](index=58&type=chunk) Group LCSM Coverage Ratio Sensitivity (June 30, 2021) | Scenario Change | Coverage Ratio Change (pps) | | :--- | :--- | | 10% increase in equity prices | 2 | | 10% decrease in equity prices | (2) | | 50 bps increase in interest rates | 12 | | 50 bps decrease in interest rates | (22) | [Reconciliation between Group LCSM Surplus and Free Surplus](index=30&type=section&id=%E9%9B%86%E5%9C%98%E7%95%B6%E5%9C%B0%E8%B3%87%E6%9C%AC%E7%B8%BD%E5%92%8C%E6%B3%95%E7%9B%88%E9%A4%98%E8%88%87%E8%87%AA%E7%94%B1%E7%9B%88%E9%A4%98%E4%B9%8B%E9%96%93%E7%9A%84%E5%B0%8D%E8%B3%AC) This section reconciles the Group LCSM surplus of $51,231 million to the free surplus of $17,907 million, which better represents the Group's capital position from a shareholder perspective Reconciliation of Group LCSM Surplus to Free Surplus | Indicator | June 30, 2021 (USD million) | Dec 31, 2020 (USD million) | | :--- | :--- | :--- | | Group LCSM Surplus | 51,231 | 43,817 | | Free Surplus on a consolidated basis | 17,907 | 13,473 | - Key adjustments include eligible debt capital, differences in capital requirements for AIA's China business, and reflecting a shareholder's view of capital[65](index=65&type=chunk) [Local Solvency Requirements](index=30&type=section&id=%E7%95%B6%E5%9C%B0%E5%84%9F%E4%BB%98%E8%83%BD%E5%8A%9B%E8%A6%8F%E5%AE%9A) All of AIA's branches and subsidiaries complied with their respective local regulatory capital requirements as of June 30, 2021 - All regional market operating units **complied with local regulatory capital requirements**[66](index=66&type=chunk) [Holding Company Financial Resources](index=31&type=section&id=%E6%8E%A7%E8%82%A1%E5%85%AC%E5%8F%B8%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) Holding company financial resources increased to $12,919 million as of June 30, 2021, supported by net fund inflows from subsidiaries and net proceeds from debt issuance Holding Company Financial Resources Movement | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | | :--- | :--- | :--- | | Opening Holding Company Financial Resources | 12,388 | 8,630 | | Net Flow of Funds to Holding Company | 1,908 | 24 | | Net Increase in Borrowings | 619 | 1,055 | | Dividends Paid | (1,558) | (1,452) | | Closing Holding Company Financial Resources | 12,919 | 8,814 | [Global Medium Term Note and Securities Programme](index=32&type=section&id=%E5%85%A8%E7%90%83%E4%B8%AD%E6%9C%9F%E7%A5%A8%E6%93%9A%E5%8F%8A%E8%AD%89%E5%88%B8%E8%A8%88%E5%8A%83) AIA increased its Global Medium Term Note and Securities Programme to $12 billion and issued a total of $1.25 billion in subordinated perpetual resettable securities in H1 2021 - The Global Medium Term Note and Securities Programme was **increased to $12 billion**[70](index=70&type=chunk) - Two tranches of subordinated perpetual resettable securities were issued in H1 2021, totaling **$750 million and S$500 million**[70](index=70&type=chunk) [Credit Ratings](index=32&type=section&id=%E4%BF%A1%E8%B2%B8%E8%A9%95%E7%B4%9A) AIA and its principal operating company, AIA Co., maintained strong credit ratings from Moody's, Fitch, and S&P, with upgrades from Moody's and S&P for the Company - AIA Co. holds financial strength ratings of **Aa2 from Moody's, AA from Fitch, and AA- from S&P**[71](index=71&type=chunk) - The Company's issuer credit ratings were **upgraded to A1 by Moody's and A+ by S&P**, with stable outlooks[71](index=71&type=chunk) [Dividend](index=32&type=section&id=%E8%82%A1%E6%81%AF) The Board declared an 8.6% increase in the interim dividend to 38.00 HK cents per share, reflecting a prudent, sustainable, and progressive dividend policy - The interim dividend was **increased by 8.6% to 38.00 HK cents per share**[4](index=4&type=chunk)[15](index=15&type=chunk)[72](index=72&type=chunk) - The dividend policy is **prudent, sustainable, and progressive**, supporting future growth and financial flexibility[4](index=4&type=chunk)[15](index=15&type=chunk)[72](index=72&type=chunk) [Regulatory and International Developments](index=33&type=section&id=%E7%9B%A3%E7%AE%A1%E5%8F%8A%E5%9C%8B%E9%9A%9B%E7%99%BC%E5%B1%95) As an Internationally Active Insurance Group, AIA is actively involved in the development of the IAIS Common Framework, including the Insurance Capital Standard (ICS) - AIA has been designated as an **Internationally Active Insurance Group (IAIG)** and participates in the development of the IAIS Insurance Capital Standard (ICS)[73](index=73&type=chunk) - Hong Kong's risk-based capital regime is expected to take effect from **January 1, 2024**[74](index=74&type=chunk) - The OECD's BEPS 2.0 Pillar One is expected to **exclude financial services**, while Pillar Two will introduce a global minimum tax rate of 15%[74](index=74&type=chunk) [Business Review](index=34&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) AIA delivered strong and broad-based business growth in H1 2021 with a 22% increase in VONB, driven by digital distribution and regional market expansion [Overview and Key Business Summary](index=34&type=section&id=%E6%A6%82%E8%A6%81%E5%8F%8A%E4%B8%BB%E8%A6%81%E6%A5%AD%E5%8B%99%E6%91%98%E8%A6%81) AIA reported strong and broad-based business performance in H1 2021 with a 22% increase in VONB, as all reported segments recorded double-digit growth on a like-for-like basis - **Value of new business (VONB) grew by 22%** in H1 2021[75](index=75&type=chunk) - All reported segments recorded **double-digit growth** on a like-for-like basis[75](index=75&type=chunk) - Remote sales capabilities and strategic initiatives enhanced business resilience[75](index=75&type=chunk) [Distribution](index=34&type=section&id=%E5%88%86%E9%8A%B7) The agency channel's VONB grew by 25% in H1 2021, supported by the continued enhancement of the digitalised agency value chain, while partnership distribution also showed strong growth - **Agency channel VONB increased by 25%**[76](index=76&type=chunk) - **Partnership distribution channel VONB grew by 8%** on a like-for-like basis[76](index=76&type=chunk) - AIA ranked **number one globally in the Million Dollar Round Table (MDRT)** for the seventh consecutive year[76](index=76&type=chunk) [Regional Markets](index=34&type=section&id=%E5%9C%B0%E5%8D%80%E5%B8%82%E5%A0%B4) AIA China's VONB grew 20% on a like-for-like basis, while Hong Kong's local customer segment grew 16%, and Thailand, Singapore, and Malaysia delivered excellent growth of 52%, 32%, and 89% respectively - **Mainland China's VONB grew by 20%** on a like-for-like basis[77](index=77&type=chunk) - **Hong Kong's local customer segment VONB increased by 16%**[77](index=77&type=chunk) - **VONB in Thailand, Singapore, and Malaysia grew by 52%, 32%, and 89%** respectively[77](index=77&type=chunk) [Distribution Platforms](index=35&type=section&id=%E5%88%86%E9%8A%B7%E5%B9%B3%E5%8F%B0) AIA achieved significant VONB growth through its Premier Agency network and strategic partnership distribution channels, supported by investments in digital tools and platforms [Agency Force](index=35&type=section&id=%E4%BB%A3%E7%90%86%E9%9A%8A%E4%BC%8D) Agency channel VONB grew 25% to $1,574 million, with ANP up 16% and VONB margin increasing to 76.0%, driven by digital tools and remote sales capabilities Agency Channel New Business Performance | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | Y-o-Y Change (Constant Exchange Rate) | | :--- | :--- | :--- | :--- | | Value of New Business (VONB) | 1,574 | 1,194 | 25% | | Annualised New Premiums (ANP) | 2,069 | 1,708 | 16% | | VONB Margin | 76.0% | 69.9% | 5.6 pps | - **Remote sales capabilities facilitated over one-third of agency channel policy sales** in H1 2021[79](index=79&type=chunk) - Social media integration helped agents identify **over 1 million new sales leads**, generating over $100 million in ANP[79](index=79&type=chunk) [Partnership Distribution](index=36&type=section&id=%E5%A4%A5%E4%BC%B4%E5%88%86%E9%8A%B7) Partnership distribution VONB grew 8% on a like-for-like basis, with ANP up 8%, though the VONB margin decreased due to a higher contribution from Australian group insurance business Partnership Distribution New Business Performance | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | Y-o-Y Change (Constant Exchange Rate) | | :--- | :--- | :--- | :--- | | Value of New Business (VONB) | 352 | 335 | (1)% | | Annualised New Premiums (ANP) | 991 | 871 | 8% | | VONB Margin | 35.5% | 38.4% | (3.2) pps | - Excluding the one-off contribution from Commonwealth Bank of Australia, **partnership distribution VONB grew by 8%** on a like-for-like basis[81](index=81&type=chunk) [Bancassurance](index=36&type=section&id=%E9%8A%80%E8%A1%8C%E4%BF%9D%E9%9A%AA) The bancassurance channel recorded double-digit VONB growth, with excellent performance from strategic bank partnerships in Thailand and Malaysia - **Strong double-digit growth in productivity** was recorded from Bangkok Bank in Thailand, Public Bank in Malaysia, and BCA in Indonesia[82](index=82&type=chunk) - New product propositions and efficient online sales processes were launched with **Citibank in Hong Kong and Singapore**[82](index=82&type=chunk) - Following Citibank's announced exit from retail banking outside Hong Kong and Singapore, the company is discussing future arrangements for the bancassurance partnership[82](index=82&type=chunk) [Digital Platforms](index=36&type=section&id=%E6%95%B8%E7%A2%BC%E5%B9%B3%E5%8F%B0) AIA leverages digital platforms through strategic partnerships with technology and leading consumer companies to offer online product purchases and identify customer needs through data analytics - Strategic partnerships have been established with technology and leading consumer companies with **large active user bases**[83](index=83&type=chunk) - New partnerships include **TNG Digital in Malaysia and Tiki Corporation in Vietnam**[83](index=83&type=chunk) [Regional Markets Summary](index=37&type=section&id=%E5%9C%B0%E5%8D%80%E5%B8%82%E5%A0%B4%E6%91%98%E8%A6%81) AIA demonstrated strong performance across its key Asian markets, with significant VONB growth in Mainland China, Hong Kong's local customer segment, Thailand, Singapore, and Malaysia [Mainland China](index=37&type=section&id=%E4%B8%AD%E5%9C%8B%E5%85%A7%E5%9C%B0) AIA China's VONB grew 20% on a like-for-like basis to $738 million, exceeding pre-pandemic levels, driven by enhanced agent productivity and geographical expansion Mainland China Business Performance | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | Y-o-Y Change (Constant Exchange Rate) | | :--- | :--- | :--- | :--- | | Value of New Business (VONB) | 738 | 594 | 15% | | Annualised New Premiums (ANP) | 899 | 726 | 14% | | Operating Profit After Tax (OPAT) | 722 | 640 | 4% | - On a like-for-like basis, **VONB grew by 20%**, exceeding pre-pandemic levels in 2019[5](index=5&type=chunk)[77](index=77&type=chunk)[84](index=84&type=chunk) - The **Sichuan branch opened**, and approval was received to prepare for a Hubei branch, continuing the geographical expansion strategy[5](index=5&type=chunk)[14](index=14&type=chunk)[24](index=24&type=chunk)[77](index=77&type=chunk)[85](index=85&type=chunk) [Hong Kong](index=38&type=section&id=%E9%A6%99%E6%B8%AF) AIA Hong Kong's local customer segment VONB grew 16%, but overall VONB increased by only 2% to $313 million, offset by the decline in sales to Mainland Chinese visitors Hong Kong Business Performance | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | Y-o-Y Change (Constant Exchange Rate) | | :--- | :--- | :--- | :--- | | Value of New Business (VONB) | 313 | 306 | 2% | | Local Customer Segment VONB | - | - | 16% | | Operating Profit After Tax (OPAT) | 1,055 | 1,005 | 5% | - Sales to Mainland Chinese visitors at the Macau branch gradually increased, accounting for **over one-third of total ANP**[5](index=5&type=chunk)[24](index=24&type=chunk)[77](index=77&type=chunk)[86](index=86&type=chunk) - A **15-year bancassurance partnership with The Bank of East Asia** was launched in early July 2021[16](index=16&type=chunk)[21](index=21&type=chunk)[87](index=87&type=chunk) [Thailand](index=38&type=section&id=%E6%B3%B0%E5%9C%8B) AIA Thailand's VONB grew by an excellent 52% to $312 million, significantly above pre-pandemic levels, with a substantial increase in VONB margin to 93.5% Thailand Business Performance | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | Y-o-Y Change (Constant Exchange Rate) | | :--- | :--- | :--- | :--- | | Value of New Business (VONB) | 312 | 199 | 52% | | VONB Margin | 93.5% | 63.9% | 29.6 pps | | Operating Profit After Tax (OPAT) | 485 | 478 | (1)% | - A successful shift in product mix towards **protection and unit-linked products** drove a significant increase in the VONB margin[5](index=5&type=chunk)[24](index=24&type=chunk)[77](index=77&type=chunk)[88](index=88&type=chunk) - Strategic bancassurance partner **Bangkok Bank recorded double-digit VONB growth**[89](index=89&type=chunk) [Singapore](index=39&type=section&id=%E6%96%B0%E5%8A%A0%E5%9D%A1) AIA Singapore's VONB grew 32% to $176 million, with double-digit growth from both agency and partnership distribution channels Singapore Business Performance | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | Y-o-Y Change (Constant Exchange Rate) | | :--- | :--- | :--- | :--- | | Value of New Business (VONB) | 176 | 127 | 32% | | VONB Margin | 63.2% | 59.3% | 3.9 pps | | Operating Profit After Tax (OPAT) | 339 | 303 | 8% | - The **Premier Agency strategy and digital recruitment platforms** significantly boosted agent productivity, with over 60% of new recruits sourced digitally[5](index=5&type=chunk)[24](index=24&type=chunk)[77](index=77&type=chunk)[91](index=91&type=chunk) [Malaysia](index=39&type=section&id=%E9%A6%AC%E4%BE%86%E8%A5%BF%E4%BA%9E) AIA Malaysia delivered excellent VONB growth of 89% to $157 million, representing a 20% increase over H1 2019, with a significant rise in VONB margin Malaysia Business Performance | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | Y-o-Y Change (Constant Exchange Rate) | | :--- | :--- | :--- | :--- | | Value of New Business (VONB) | 157 | 81 | 89% | | VONB Margin | 61.7% | 50.5% | 11.3 pps | | Operating Profit After Tax (OPAT) | 194 | 148 | 25% | - **Excellent VONB performance from the agency channel** was complemented by strong growth in the partnership distribution channel with Public Bank[5](index=5&type=chunk)[24](index=24&type=chunk)[77](index=77&type=chunk)[93](index=93&type=chunk) [Other Markets](index=40&type=section&id=%E5%85%B6%E4%BB%96%E5%B8%82%E5%A0%B4) The Other Markets segment reported VONB of $253 million, a 10% increase after excluding a one-off contribution from Commonwealth Bank of Australia, with strong growth in Indonesia, South Korea, and Vietnam Other Markets Business Performance | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | Y-o-Y Change (Constant Exchange Rate) | | :--- | :--- | :--- | :--- | | Value of New Business (VONB) | 253 | 240 | (1)% | | Operating Profit After Tax (OPAT) | 391 | 333 | 12% | - Excluding the one-off contribution from Commonwealth Bank of Australia, **VONB grew by 10%**[24](index=24&type=chunk)[77](index=77&type=chunk)[95](index=95&type=chunk) - **Indonesia, South Korea, and Vietnam** recorded double-digit increases in VONB[5](index=5&type=chunk)[24](index=24&type=chunk)[77](index=77&type=chunk)[95](index=95&type=chunk) - A **10-year exclusive life and health insurance partnership agreement** was reached with Tiki Corporation in Vietnam[97](index=97&type=chunk) [Corporate Governance](index=42&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) [Compliance with the Corporate Governance Code](index=42&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) For the six months ended June 30, 2021, AIA complied with all applicable code provisions of the Corporate Governance Code, with the exception of the reporting mechanism for the Company Secretary - The Company complied with all applicable provisions of the Corporate Governance Code during the reporting period, **except for the reporting mechanism of the Company Secretary**[99](index=99&type=chunk) - The Group Company Secretary reports to the Group General Counsel, who in turn reports directly to the Group Chief Executive[99](index=99&type=chunk) [Compliance with the Model Code](index=42&type=section&id=%E9%81%B5%E5%AE%88%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The Company has adopted a policy for securities transactions by directors and chief executives on terms no less exacting than the Model Code, with all directors confirming compliance - The Company has adopted a **Policy for Transactions by Directors and Chief Executives** on terms no less exacting than the Model Code[100](index=100&type=chunk) - All Directors, including the Group Chief Executive, have **confirmed compliance** with the Model Code and the transaction policy[100](index=100&type=chunk) [Changes in Directors' Information](index=42&type=section&id=%E8%91%A3%E4%BA%8B%E8%B3%87%E6%96%99%E8%AE%8A%E5%8B%95) This section discloses changes in directors' information during the six months ended June 30, 2021, including awards and changes in appointments for several directors - **Mr. CHOW Chung Kong** was awarded the Grand Bauhinia Medal by the Hong Kong Government on July 1, 2021[101](index=101&type=chunk) - **Mr. George YONG-BOON YEO** resigned as a director of New Yangon Development Company Limited and retired as a Senior Adviser to Kerry Logistics Network Limited[101](index=101&type=chunk) - **Mr. Cesar Velasquez PURISIMA** was appointed as an Independent Director of Bank of the Philippine Islands (BPI) and BPI Capital Corporation[101](index=101&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares and Underlying Shares](index=43&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E9%A6%96%E5%B8%AD%E5%9F%B7%E8%A1%8C%E5%AE%98%E6%96%BC%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B8%AD%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2021, the Company's directors and chief executive held interests in the shares and underlying shares of the Company, including ordinary shares, RSUs, and share options Directors' and Chief Executive's Interests in Shares and Underlying Shares of the Company (June 30, 2021) | Director Name | Number of Shares or Underlying Shares (Long Position) | Class | Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Mr. LEE Yuan Siong | 633,095 (Ordinary Shares) | Ordinary Shares | < 0.01 | | | 2,318,686 (RSUs) | Ordinary Shares | 0.02 | | | 1,661,659 (Share Options) | Ordinary Shares | 0.01 | | Mr. Edmund S.W. TSE | 3,330,400 (Ordinary Shares) | Ordinary Shares | 0.02 | | Mr. Jack SO Chak Kwong | 130,000 (Ordinary Shares) | Ordinary Shares | < 0.01 | - Mr. LEE Yuan Siong's RSUs include compensation for unvested long-term incentive awards and deferred payments forfeited upon leaving his former employment[104](index=104&type=chunk) [Interests and Short Positions of Persons Other than Directors or Chief Executive in Shares and Underlying Shares](index=44&type=section&id=%E8%91%A3%E4%BA%8B%E6%88%96%E9%A6%96%E5%B8%AD%E5%9F%B7%E8%A1%8C%E5%AE%98%E4%BB%A5%E5%A4%96%E7%9A%84%E4%BA%BA%E5%A3%AB%E6%96%BC%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B8%AD%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2021, substantial shareholders including JPMorgan Chase & Co., The Bank of New York Mellon Corporation, The Capital Group Companies, Inc., and BlackRock, Inc. held interests and short positions in the Company's shares Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company (June 30, 2021) | Shareholder Name | Long Position (L) (Shares) | Short Position (S) (Shares) | Percentage of Total Issued Shares (L) | | :--- | :--- | :--- | :--- | | JPMorgan Chase & Co. | 1,110,600,642 | 22,351,209 | 9.18 | | The Bank of New York Mellon Corporation | 1,096,258,164 | 301,796,828 | 9.06 | | The Capital Group Companies, Inc. | 1,087,914,261 | - | 8.99 | | BlackRock, Inc. | 629,705,868 | 2,007,714 | 5.20 | - JPMorgan Chase & Co.'s interests include roles as an approved lending agent, investment manager, controlled corporation, and trustee[109](index=109&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=45&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2021, except for purchases by trustees for employee share schemes - **Neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities**[111](index=111&type=chunk) - Under the ESPS and RSU schemes, trustees purchased **738,388 and 6,719,800 shares** respectively, for a total consideration of approximately $96 million[111](index=111&type=chunk) [Share-based Remuneration](index=46&type=section&id=%E4%BB%A5%E8%82%A1%E4%BB%BD%E7%82%BA%E5%9F%BA%E7%A4%8E%E7%9A%84%E5%A0%B1%E9%85%AC) AIA continued to implement various share-based remuneration schemes in H1 2021, including RSU, share option, employee share purchase, and agency share purchase schemes to align employee and agent interests with long-term company goals [Long-term Incentive Schemes](index=46&type=section&id=%E9%95%B7%E6%9C%9F%E7%8D%8E%E5%8B%B5%E8%A8%88%E5%8A%83) The Company adopted new RSU and share option schemes in 2020, both with a 10-year term, to replace the previous schemes that terminated in 2020 - The **2020 RSU Scheme and 2020 Share Option Scheme** were adopted in 2020, each with a 10-year term[112](index=112&type=chunk) - In H1 2021, the Company granted RSUs and share options to employees, directors, and executives under the new schemes[112](index=112&type=chunk) [Restricted Share Unit (RSU) Scheme](index=46&type=section&id=%E5%8F%97%E9%99%90%E5%88%B6%E8%82%A1%E4%BB%BD%E5%96%AE%E4%BD%8D%E8%A8%88%E5%8A%83) A total of 9,373,814 RSUs were granted under the 2020 RSU Scheme during the six months ended June 30, 2021, with previously granted units under the terminated 2010 scheme remaining in effect - In H1 2021, a total of **9,373,814 RSUs were granted** under the 2020 RSU Scheme[113](index=113&type=chunk) - As of June 30, 2021, the cumulative vested RSUs represented **0.049% of the issued shares** on the RSU base date[113](index=113&type=chunk) - Group Chief Executive and President, Mr. LEE Yuan Siong, holds **1,468,714 unvested RSUs** as compensation for forfeited long-term incentive awards from his former employment[114](index=114&type=chunk) [Share Option Scheme](index=49&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) A total of 1,849,222 share options were granted under the 2020 Share Option Scheme during the six months ended June 30, 2021, with the total number of shares available for issue under the schemes representing approximately 2.46% of issued shares - In H1 2021, **1,849,222 share options were granted** under the 2020 Share Option Scheme[118](index=118&type=chunk) - As of the date of this report, the total number of shares available for issue under the share option schemes is **297,419,376, representing approximately 2.46% of issued shares**[118](index=118&type=chunk) - Group Chief Executive and President, Mr. LEE Yuan Siong, holds **1,197,133 outstanding share options** with an exercise price of HK$68.10[119](index=119&type=chunk) [Employee Share Purchase Scheme (ESPS)](index=53&type=section&id=%E5%83%B1%E5%93%A1%E8%B3%BC%E8%82%A1%E8%A8%88%E5%8A%83) The Company adopted a new ESPS in August 2020, allowing eligible employees to purchase Company shares and receive matching restricted share purchase units, with 738,389 matching units granted in H1 2021 - The **2020 ESPS was adopted on August 1, 2020**, with a term of ten years[124](index=124&type=chunk) - In H1 2021, a total of **738,389 matching restricted share purchase units were granted**[124](index=124&type=chunk) - The total number of new shares issuable under the ESPS shall not exceed **2.5% of the issued shares** as of May 29, 2020[124](index=124&type=chunk) [Agency Share Purchase Scheme (ASPS)](index=54&type=section&id=%E4%BB%A3%E7%90%86%E8%B3%BC%E8%82%A1%E8%A8%88%E5%8A%83) The Company adopted a new ASPS in February 2021, allowing eligible agents to purchase Company shares and receive matching restricted share subscription units, with 146,711 matching units granted in H1 2021 - The **2021 ASPS was adopted on February 1, 2021**, with a term of ten years[125](index=125&type=chunk) - In H1 2021, a total of **146,711 matching restricted share subscription units were granted**[126](index=126&type=chunk) - **1,192,355 new shares were issued** due to the vesting of awards under the 2012 ASPS[126](index=126&type=chunk) [Employees](index=55&type=section&id=%E5%83%B1%E5%93%A1) As of June 30, 2021, there were no material changes in the Group's number of employees, remuneration policies, share incentive schemes, or training programmes from those disclosed in the 2020 Annual Report - Information on the number of employees, remuneration policies, share incentive schemes, and training courses **remained materially unchanged** from the 2020 Annual Report[127](index=127&type=chunk) [Financial Statements](index=57&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Report on Review of Interim Condensed Consolidated Financial Statements](index=57&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E7%9A%84%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) PricewaterhouseCoopers has reviewed the interim condensed consolidated financial statements for the six months ended June 30, 2021, and concluded that nothing has come to their attention that causes them to believe the statements are not prepared in accordance with HKAS 34 and IAS 34 - **PricewaterhouseCoopers has reviewed** the interim condensed consolidated financial statements[129](index=129&type=chunk) - The review concluded that **nothing indicated the financial statements were not prepared in accordance with HKAS 34 and IAS 34**[131](index=131&type=chunk) [Interim Consolidated Income Statement](index=58&type=section&id=%E4%B8%AD%E6%9C%9F%E5%90%88%E4%BD%B5%E6%94%B6%E5%85%A5%E8%A1%A8) AIA's total revenue for H1 2021 increased to $24,194 million, with net profit attributable to shareholders reaching $3,245 million 2021 H1 Interim Consolidated Income Statement Summary | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | | :--- | :--- | :--- | | Total Revenue | 24,194 | 19,664 | | Net Premiums and Fee Income | 17,248 | 16,133 | | Investment Return | 6,780 | 3,381 | | Total Expenses | 20,482 | 17,092 | | Profit Before Tax | 3,714 | 2,574 | | Net Profit | 3,269 | 2,183 | | Net profit attributable to shareholders of AIA Group Limited | 3,245 | 2,197 | 2021 H1 Earnings Per Share | Indicator | 2021 H1 (USD) | 2020 H1 (USD) | | :--- | :--- | :--- | | Basic Earnings Per Share | 0.27 | 0.18 | | Diluted Earnings Per Share | 0.27 | 0.18 | [Interim Consolidated Statement of Comprehensive Income](index=59&type=section&id=%E4%B8%AD%E6%9C%9F%E5%90%88%E4%BD%B5%E5%85%A8%E9%9D%A2%E6%94%B6%E5%85%A5%E8%A1%A8) AIA recorded a total comprehensive expense of $2,638 million for H1 2021, primarily due to fair value losses on available-for-sale financial assets and negative foreign currency translation adjustments 2021 H1 Interim Consolidated Statement of Comprehensive Income Summary | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | | :--- | :--- | :--- | | Net Profit | 3,269 | 2,183 | | Fair value (losses)/gains on available-for-sale financial assets | (4,092) | 2,742 | | Foreign currency translation adjustments | (813) | (679) | | Total other comprehensive (expense)/income | (5,907) | 1,082 | | Total comprehensive (expense)/income | (2,638) | 3,265 | | Total comprehensive (expense)/income attributable to shareholders of AIA Group Limited | (2,646) | 3,262 | - **Fair value losses on available-for-sale financial assets** were the main reason for the negative total comprehensive income[137](index=137&type=chunk) [Interim Consolidated Statement of Financial Position](index=60&type=section&id=%E4%B8%AD%E6%9C%9F%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2021, AIA's total assets grew to $329,891 million and total liabilities increased to $270,474 million, with total equity standing at $59,417 million 2021 H1 Interim Consolidated Statement of Financial Position Summary | Indicator | June 30, 2021 (USD million) | Dec 31, 2020 (USD million) | | :--- | :--- | :--- | | Total Assets | 329,891 | 326,121 | | Financial Investments | 272,619 | 271,467 | | Deferred acquisition and origination costs | 28,374 | 27,915 | | Cash and Cash Equivalents | 7,149 | 5,619 | | Total Liabilities | 270,474 | 262,453 | | Insurance Contract Liabilities | 228,276 | 223,071 | | Borrowings | 9,182 | 8,559 | | Total Equity | 59,417 | 63,668 | | Total equity attributable to shareholders of AIA Group Limited | 58,944 | 63,200 | - Within financial investments, **available-for-sale debt securities** represent the largest portion, followed by equity securities[139](index=139&type=chunk) [Interim Consolidated Statement of Changes in Equity](index=62&type=section&id=%E4%B8%AD%E6%9C%9F%E5%90%88%E4%BD%B5%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) Total equity attributable to shareholders decreased by $4,256 million to $58,944 million in H1 2021, mainly due to fair value losses on available-for-sale financial assets and dividend payments 2021 H1 Interim Consolidated Statement of Changes in Equity Summary | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | | :--- | :--- | :--- | | Opening Shareholders' Equity | 63,200 | 54,947 | | Net Profit | 3,245 | 2,197 | | Fair value (losses)/gains on assets | (5,097) | 1,826 | | Dividends | (1,558) | (1,452) | | Foreign currency translation adjustments | (819) | (710) | | Closing Shareholders' Equity | 58,944 | 56,804 | - **Fair value losses and foreign currency translation adjustments** were the main factors contributing to the decrease in shareholders' equity[142](index=142&type=chunk) [Interim Consolidated Statement of Cash Flows](index=64&type=section&id=%E4%B8%AD%E6%9C%9F%E5%90%88%E4%BD%B5%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For H1 2021, AIA generated net cash from operating activities of $3,094 million, resulting in a net increase in cash and cash equivalents of $1,630 million 2021 H1 Interim Consolidated Statement of Cash Flows Summary | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | | :--- | :--- | :--- | | Net cash provided by operating activities | 3,094 | 3,266 | | Net cash used in investing activities | (197) | (668) | | Net cash used in financing activities | (1,267) | (530) | | Net increase in cash and cash equivalents | 1,630 | 2,068 | | Cash and cash equivalents at end of financial period | 6,929 | 5,762 | - Cash inflows from operating activities were mainly from adjustments to profit before tax, while cash outflows from investing activities were primarily for intangible asset payments and increased interests in joint ventures[146](index=146&type=chunk) - Cash outflows from financing activities were mainly affected by dividend payments and interest payments on medium term notes and securities[146](index=146&type=chunk) [Notes to the Unaudited Interim Condensed Consolidated Financial Statements](index=66&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed notes to the H1 2021 financial statements, covering accounting policies, segment information, financial instruments, capital structure, risk management, and other key disclosures [1. Corporate Information](index=66&type=section&id=1.%20%E5%85%AC%E5%8F%B8%E8%B5%84%E6%96%99) AIA Group Limited, incorporated in Hong Kong on August 24, 2009, is the largest pan-Asian independent publicly listed life insurance group, operating in 18 markets - **AIA Group Limited was incorporated in Hong Kong** on August 24, 2009[148](index=148&type=chunk) - The Group is the **largest pan-Asian independent publicly listed life insurance group**, with a presence in 18 markets[6](index=6&type=chunk)[148](index=148&type=chunk) - Its principal business is life insurance, accident and health insurance, and savings plans, as well as related investment and other financial services products[6](index=6&type=chunk)[148](index=148&type=chunk) [2. Basis of Preparation and Statement of Compliance](index=66&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E5%8F%8A%E5%90%88%E8%A6%8F%E8%81%B2%E6%98%8E) The interim condensed consolidated financial statements are prepared in accordance with HKAS 34 and IAS 34 and should be read in conjunction with the 2020 annual financial statements - The interim condensed consolidated financial statements are prepared in accordance with **HKAS 34 and IAS 34**[149](index=149&type=chunk) - New standard amendments, such as **"Interest Rate Benchmark Reform – Phase 2"**, had no material impact on the Group[150](index=150&type=chunk) - The financial statements are unaudited but have been **reviewed by PricewaterhouseCoopers**[150](index=150&type=chunk) [3. Exchange Rates](index=68&type=section&id=3.%20%E5%8C%AF%E7%8E%87) This section presents the average and period-end exchange rates used to translate the local currencies of AIA's principal overseas operations into US dollars Average Exchange Rates for Principal Overseas Operations (local currency units per US$1) | Business Unit | Six months ended June 30, 2021 | Six months ended June 30, 2020 | | :--- | :--- | :--- | | Mainland China | 6.47 | 7.03 | | Hong Kong | 7.76 | 7.76 | | Thailand | 30.82 | 31.60 | | Singapore | 1.33 | 1.40 | | Malaysia | 4.10 | 4.25 | Period-end Exchange Rates for Principal Overseas Operations (local currency units per US$1) | Business Unit | June 30, 2021 | June 30, 2020 | | :--- | :--- | :--- | | Mainland China | 6.46 | 7.07 | | Hong Kong | 7.77 | 7.75 | | Thailand | 32.03 | 30.88 | | Singapore | 1.34 | 1.40 | | Malaysia | 4.15 | 4.28 | [4. Operating Profit After Tax](index=69&type=section&id=4.%20%E7%A8%85%E5%BE%8C%E7%87%9F%E9%81%8B%E6%BA%A2%E5%88%A9) AIA's operating profit after tax for H1 2021 was $3,206 million, with $3,182 million attributable to shareholders, reconciled from the net profit of $3,269 million 2021 H1 Reconciliation of Operating Profit After Tax to Net Profit | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | | :--- | :--- | :--- | | Operating profit after tax | 3,206 | 2,958 | | Net non-operating items | 63 | (775) | | Net profit | 3,269 | 2,183 | | Operating profit after tax attributable to shareholders of AIA Group Limited | 3,182 | 2,933 | - Operating profit excludes **short-term fluctuations between the expected long-term investment return and the actual investment return** on equity and real estate investments[155](index=155&type=chunk) [5. Total Weighted Premium Income and Annualised New Premiums](index=70&type=section&id=5.%20%E7%B8%BD%E5%8A%A0%E6%AC%8A%E4%BF%9D%E8%B2%BB%E6%94%B6%E5%85%A5%E5%8F%8A%E5%B9%B4%E5%8C%96%E6%96%B0%E4%BF%9D%E8%B2%BB) AIA's total weighted premium income increased to $18,511 million in H1 2021, and annualised new premiums grew to $3,060 million 2021 H1 Total Weighted Premium Income and Annualised New Premiums | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | | :--- | :--- | :--- | | Total Weighted Premium Income (TWPI) | 18,511 | 16,926 | | Annualised New Premiums (ANP) | 3,060 | 2,579 | | First Year Premiums | 2,412 | 2,162 | | Single Premiums | 3,046 | 2,249 | | Renewal Premiums | 15,794 | 14,539 | - **TWPI is a performance measure of turnover** for the period, while **ANP is a performance measure of new business**[156](index=156&type=chunk) [6. Segment Information](index=72&type=section&id=6.%20%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) AIA's operating segments are defined by geographical markets, with Hong Kong and Mainland China being the largest contributors to operating profit after tax in H1 2021 2021 H1 Operating Profit After Tax by Segment | Segment | 2021 H1 (USD million) | 2020 H1 (USD million) | | :--- | :--- | :--- | | Mainland China | 722 | 640 | | Hong Kong | 1,055 | 1,005 | | Thailand | 485 | 478 | | Singapore | 339 | 303 | | Malaysia | 194 | 148 | | Other Markets | 391 | 333 | | Group Corporate Centre | (4) | 26 | | **Total** | **3,182** | **2,933** | 2021 H1 Key Operating Ratios by Segment | Segment | Cost-to-income Ratio | Operating Margin | Operating Return on Shareholders' Allocated Equity | | :--- | :--- | :--- | :--- | | Mainland China | 5.9% | 18.2% | 31.4% | | Hong Kong | 3.6% | 18.4% | 16.3% | | Thailand | 6.1% | 23.2% | 14.5% | | Singapore | 6.4% | 19.6% | 16.0% | | Malaysia | 9.1% | 16.6% | 17.9% | | Other Markets | 13.5% | 10.7% | 8.6% | | **Total** | **7.8%** | **17.3%** | **12.8%** | - Following the conversion of AIA's China business to a wholly-owned subsidiary, future dividends will be subject to a **withholding tax at the applicable rate in Mainland China (currently 5%)**[160](index=160&type=chunk) [7. Investment Return](index=77&type=section&id=7.%20%E6%8A%95%E8%B3%87%E5%9B%9E%E5%A0%B1) AIA's investment return increased significantly to $6,780 million in H1 2021, driven by interest income, dividend income, and net gains on financial instruments 2021 H1 Investment Return Breakdown | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | | :--- | :--- | :--- | | Interest income | 3,681 | 3,443 | | Dividend income | 539 | 459 | | Total investment income | 4,304 | 3,989 | | Net realised gains on available-for-sale debt securities | 1,103 | 926 | | Net gains/(losses) on financial instruments at fair value through profit or loss | 1,027 | (1,603) | | Investment return | 6,780 | 3,381 | - The significant increase in investment return was primarily driven by **positive net gains on equity securities and realised gains on available-for-sale debt securities**[171](index=171&type=chunk) [8. Expenses](index=78&type=section&id=8.%20%E9%96%8B%E6%94%AF) AIA's total expenses increased to $20,482 million in H1 2021, with net insurance and investment contract benefits being the largest component 2021 H1 Expense Breakdown | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | | :--- | :--- | :--- | | Total expenses | 20,482 | 17,092 | | Net insurance and investment contract benefits | 16,070 | 13,031 | | Commission and other underwriting expenses | 2,267 | 2,157 | | Operating expenses | 1,439 | 1,242 | | Finance costs | 176 | 143 | 2021 H1 Employee Benefit Expenses | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | | :--- | :--- | :--- | | Wages and salaries | 751 | 664 | | Share-based remuneration | 39 | 48 | | Pension costs | 67 | 53 | | Other employee benefit expenses | 75 | 52 | | **Total** | **932** | **817** | - Finance costs primarily arise from **medium term notes and securities, repurchase agreements, and lease liabilities**[174](index=174&type=chunk) [9. Income Tax](index=80&type=section&id=9.%20%E6%89%80%E5%BE%97%E7%A8%85) AIA's income tax expense for H1 2021 was $445 million, with corporate income tax rate changes enacted in the Philippines and Sri Lanka 2021 H1 Income Tax Expense | Indicator | 2021 H1 (USD million) | 2020 H1 (USD million) | | :--- | :--- | :--- | | Current income tax – Hong Kong profits tax | 86 | 77 | | Current income tax – Overseas | 595 | 213 | | Deferred income tax on temporary differences | (236) | 101 | | **Total** | **445** | **391** | - The corporate income tax rate in the **Philippines was adjusted from 30% to 25%**, effective July 1, 2020[177](index=177&type=chunk) - The corporate income tax rate in **Sri Lanka was adjusted from 28% to 24%**, effective January 1, 2020[177](index=177&type=chunk) [10. Earnings Per Share](index=80&type=section&id=10.%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) AIA's basic earnings per share for H1 2021 was 26.90 US cents, and basic operating profit after tax per share was 26.37 US cents 2021 H1 Earnings Per Share | Indicator | 2021 H1 (US cents/share) | 2020 H1 (US cents/share) | | :--- | :--- | :--- | | Basic earnings per share | 26.90 | 18.22 | | Diluted earnings per share | 26.85 | 18.20 | | Basic operating profit after tax per share | 26.37 | 24.33 | | Diluted operating profit after tax per share | 26.33 | 24.29 | - The calculation of diluted earnings per share considers the **potential dilutive effects of share options, restricted share units**, and other items[180](index=180&type=chunk)[182](index=182&type=chunk) [11. Dividends](index=82&type=section&id=11.%20%E8%82%A1%E6%81%AF) The Board declared an interim dividend of 38.00 HK cents per share for the six months ended June 30, 2021, totaling approximately $590 million 2021 H1 Dividend Declaration and Payment | Dividend Type | Amount per Share (HK cents) | Total Amount (USD million) | | :--- | :--- | :--- | | Interim Dividend (Declared) | 38.00 | 590 | | Final Dividend (Paid) | 100.30 | 1,558 | - The interim dividend was declared after the reporting date and has **not been recognised as a liability**[184](index=184&type=chunk) [12. Intangible Assets](index=83&type=section&id=12.%20%E7%84%A1%E5%BD%A2%E8%B3%87%E7%94%A2) As of June 30, 2021, AIA's intangible assets had a net carrying amount of $2,569 million, primarily comprising goodwill, computer software, and distribution and other rights Net Carrying Amount of Intangible Assets (June 30, 2021) | Asset Class | Net Carrying Amount (USD million) | | :--- | :--- | | Goodwill | 1,607 | | Computer software | 317 | | Distribution and other rights | 645 | | **Total** | **2,569** | - A significant portion of distribution and other rights relates to the **bancassurance partnership with Citibank**[187](index=187&type=chunk) - Following Citibank's announced exit from retail banking outside Hong Kong and Singapore, the company is **discussing future arrangements for the bancassurance partnership**[187](index=187&type=chunk) [13. Financial Investments](index=84&type=section&id=13.%20%E9%87%91%E8%9E%8D%E6%8A%95%E8%B3%87) AIA's financial investment portfolio, totaling $271,604 million as of June 30, 2021, consists of debt securities, equity securities, and loans and deposits Financial Investment Portfolio (June 30, 2021) | Asset Class | Total (USD million) | | :--- | :--- | | Debt securities | 197,029 | | Equity securities | 65,106 | | Loans and deposits | 9,569 | - The fixed income portfolio (excluding government bonds) maintained an **average credit rating of A-**[51](index=51&type=chunk) Carrying Amount of Financial Instruments Subject to IBOR Reform (June 30, 2021) | Benchmark | Non-derivative financial assets (USD million) | Non-derivative financial liabilities (USD million) | Net derivative financial assets/(liabilities) (USD million) | | :--- | :--- | :--- | :--- | | USD LIBOR | 1,518 | - | (73) | | SOR | 904 | (371) | 23 | | THBFIX | - | - | 45 | [14. Derivative Financial Instruments](index=87&type=section&id=14.%20%E8%A1%8D%E7%94%9F%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7) AIA uses derivative financial instruments to manage financial risks such as foreign exchange and interest rate risk, with a total notional amount of $39,874 million as of June 30, 2021 Derivative Financial Instruments Overview (June 30, 2021) | Category | Notional Amount (USD million) | Fair Value Assets (USD million) | Fair Value Liabilities (USD million) | | :--- | :--- | :--- | :--- | | Foreign exchange contracts | 12,148 | 173 | (332) | | Interest rate contracts | 8,879 | 415 | (249) | | Others | 18,938 | 327 | (1,255) | | **Total** | **39,874** | **915** | **(1,836)** | - The majority of derivative instruments are **transacted over-the-counter and are used to provide economic hedges**[196](index=196&type=chunk) - The Group has recorded **cash collateral of $170 million and debt securities collateral of $1,489 million** for liabilities on derivative transactions[201](index=201&type=chunk) [15. Fair Value Measurement of Financial Instruments](index=89&type=section&id=15.%20%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7%E5%85%AC%E5%B9%B3%E5%80%BC%E8%A8%88%E9%87%8F) AIA classifies its financial instruments by fair value hierarchy, with the majority of its financial assets measured at fair value falling into Level 2 Fair Value of Financial Assets (June 30, 2021) | Classification | Total Carrying Amount (USD million) | Total Fair Value (USD million) | | :--- | :--- | :--- | | At fair value through profit or loss | 103,752 | 103,752 | | Available-for-sale | 159,298 | 159,298 | | At cost/amortised cost | 22,795 | 22,791 | | **Total** | **285,845** | **285,841** | Fair Value of Financial Liabilities (June 30, 2021) | Classification | Total Carrying Amount (USD million) | Total Fair Value (USD million) | | :--- | :--- | :--- | | At fair value through profit or loss | 14,856 | 14,856 | | At cost/amortised cost | 20,549 | 21,387 | | **Total** | **35,405** | **36,243** | Fair Value Hierarchy of Financial Assets Measured at Fair Value on a Recurring Basis (June 30, 2021) | Level | Amount (USD million) | Percentage | | :--- | :--- | :--- | | Level 1 | 58,058 | 22.1% | | Level 2 | 197,923 | 75.2% | | Level 3 | 7,069 | 2.7% | | **Total** | **263,050** | **100.0%** | [16. Cash and Cash Equivalents](index=95&type=section&id=16.%20%E7%8F%BE%E9%87%91%E5%8F%8A%E7%8F%BE%E9%87%91%E7%AD%89%E5%83%B9%E7%89%A9) As of June 30, 2021, AIA's cash and cash equivalents totaled $7,149 million, an increase of 27% from year-end 2020, primarily held for recently announced transactions Cash and Cash Equivalents (June 30, 2021) | Category | June 30, 2021 (USD million) | Dec 31, 2020 (USD million) | | :--- | :--- | :--- | | Cash | 4,260 | 2,877 | | Cash equivalents | 2,889 | 2,742 | | **Total** | **7,149** | **5,619** | - The increase in cash and cash equivalents mainly reflects **funds held for the purchase consideration of recently announced transactions**[52](index=52&type=chunk)[214](index=214&type=chunk) [17. Insurance and Investment Contract Liabilities](index=95&type=section&id=17.%20%E4%BF%9D%E9%9A%AA%E5%8F%8A%E6%8A%95%E8%B3%87%E5%90%88%E7%B4%84%E8%B2%A0%E5%82%B5) As of June 30, 2021, AIA's insurance contract liabilities totaled $228,276 million, and investment contract liabilities were $12,859 million Insurance Contract Liabilities (June 30, 2021) | Category | June 30, 2021 (USD million) | Dec 31, 2020 (USD million) | | :--- | :--- | :--- | | Deferred profit | 27,166 | 24,972 | | Deferred income | 2,039 | 1,751 | | Policyholders' share of surplus in participating business | 30,259 | 31,151 | | Future policyholder benefits | 168,812 | 165,197 | | **Total** | **228,276** | **223,071** | - The increase in insurance and investment contract liabilities reflects the **growth of the in-force portfolio and positive market value movements** of equity investments backing unit-linked and participating policies[53](index=53&type=chunk) [18. Borrowings](index=95&type=section&id=18.%20%E5%80%9F%E8%B2%B8) As of June 30, 2021, AIA's total borrowings were $9,182 million, a 7% increase from year-end 2020, primarily comprising senior notes and subordinated securities Borrowings Overview (June 30, 2021) | Category | June 30, 2021 (USD million) | Dec 31, 2020 (USD million) | | :--- | :--- | :--- | | Senior notes | 6,321 | 6,824 | | Subordinated securities | 2,850 | 1,735 | | Other loans | 11 | - | | **Total** | **9,182** | **8,559** | - In H1 2021, the company issued **$750 million and S$500 million of subordinated perpetual resettable securities**[70](index=70&type=chunk)[218](index=218&type=chunk) - The company holds **$2,290 million in undrawn unsecured committed credit facilities**, with no outstanding borrowings at the reporting date[219](index=219&type=chunk) [19. Liabilities under Repurchase Agreements](index=97&type=section&id=19.%20%E5%9B%9E%E8%B3%BC%E5%8D%94%E8%AD%B0%E7%9A%84%E5%82%B5%E9%A0%85) As of June 30, 2021, AIA's liabilities under repurchase agreements were $3,447 million, a significant increase from year-end 2020 Amount of Financial Investments Involved in Repurchase Agreements (June 30, 2021) | Category | June 30, 2021 (USD million) | Dec 31, 2020 (USD million) | | :--- | :--- | :--- | | Debt securities – AFS | 3,200 | 1,444 | | Debt securities – FVTPL | 248 | 232 | | **Total** | **3,448** | **1,676** | - Liabilities under repurchase agreements amounted to **$3,447 million**[222](index=222&type=chunk) - The Group has pledged **$16 million of debt securities and holds $26 million of cash collateral**[222](index=222&type=chunk) [20. Share Capital and Reserves](index=98&type=section&id=20.%20%E8%82%A1%E6%9C%AC%E5%8F%8A%E6%BA%96%E5%82%99%E9%87%91) As of June 30, 2021, AIA had 12,097 million ordinary shares in issue with a share capital of $14,159 million Share Capital Overview (June 30, 2021) | Indicator | June 30, 2021 (million shares) | June 30, 2021 (USD million) | | :--- | :--- | :--- | | Issued ordinary shares | 12,097 | 14,159 | - During the period, **505,584 shares were issued under the Share Option Scheme** and **1,192,355 shares were issued under the Agency Share Purchase Scheme**[224](index=224&type=chunk) - The Employee Share Trust holds **30,635,796 shares** of the Company[224](index=224&type=chunk) - The fair value reserve includes the **net cumulative change in the fair value of available-for-sale securities**[225](index=225&type=chunk) [21. Group Capital Structure](index=100&type=section&id=21.%20%E9%9B%86%E5%9C%98%E8%B3%87%E6%9C%AC%E7%B5%90%E6%A7%8B) AIA's capital management objective is to maintain a strong capital base to support business development and meet regulatory requirements, with a Group LCSM coverage ratio of 412% as of June 30, 2021 - The capital management objective is to maintain a **strong capital base to support business development** and meet regulatory capital requirements[227](index=227&type=chunk) Group LCSM Solvency Position (June 30, 2021) | Indicator | June 30, 2021 (USD million) | | :--- | :--- | | Group Available Capital | 67,675 | | Group Minimum Capital Requirement | 16,444 | | Group LCSM Surplus | 51,231 | | Group LCSM Coverage Ratio | 412% | - Group available capital includes **$2,858 million of subordinated securities and $5,810 million of approved senior notes**[228](index=228&type=chunk) [22. Risk Management](index=102&type=section&id=22.%20%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) AIA faces credit, interest rate, equity price, currency, and liquidity risks, which are managed through rigorous underwriting, economic-based management, limits, and a liquidity framework - The Group is exposed to **credit risk, interest rate risk, equity price risk, currency risk, and liquidity risk**[233](index=233&type=chunk) - Credit risk is managed through internal ratings and underwriting procedures, while interest rate risk is managed through asset-liability duration management[233](index=233&type=chunk)[234](index=234&type=chunk) Sensitivity Analysis (June 30, 2021) | Scenario | Impact on profit before tax (USD million) | Impact on total equity (before tax effect) (USD million) | | :--- | :--- | :--- | | 1

| --- | --- | |---------------------------------------------------|---------------| | | | | | | | HEALTHIER ER | | | 、 量 健康 | 久·好生活 | | 2020 年報 友邦保險控股有限公司 AIA GROUP LIMITED | 股份代號 1299 | | --- | --- | --- | |-----------------------------------------------------------------------------------------------------------------|---------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------ ...