2020-09-15 08:36Financial Performance - New business value decreased by 37% to $1.41 billion, with annualized new premiums down 24% to $2.58 billion[4]. - Operating profit after tax increased by 5% to $2.93 billion, while embedded value operating profit decreased by 13% to $3.88 billion[5]. - Basic free surplus generated during the period was $3.05 billion, up 11%[5]. - The solvency ratio of AIA Co. was strong at 328%, reflecting the company's robust financial position[6]. - Interim dividend increased by 5% to HKD 0.35 per share, demonstrating the company's strong financial health[6]. - AIA Group reported strong financial performance in the first half of 2020, demonstrating resilience amid the COVID-19 pandemic[14]. - The company maintained a prudent and sustainable dividend policy to seize future growth opportunities while ensuring financial flexibility[21]. - The net profit attributable to shareholders was $2,197 million, down from $3,359 million in 2019, a decrease of 34.5%[196]. - Basic earnings per share decreased to 18.22 cents for the six months ended June 30, 2020, down from 27.91 cents in 2019, a decline of 34.5%[196]. Business Operations - The company enhanced digital tools and online capabilities, with over 40% of policies issued in the second quarter completed via remote sales[6]. - The Hong Kong business saw a 68% decline in new business value due to quarantine measures affecting sales[6]. - New business value in mainland China contributed significantly, despite a 13% decline in the first half of 2020[6]. - The company aims to leverage its competitive advantages to provide personalized services and capitalize on growth opportunities in the Asia-Pacific region[6]. - AIA Group operates across 18 markets in the Asia-Pacific region, with most premiums collected in local currencies to mitigate foreign exchange risks[17]. Market Trends - The projected increase of 1.4 billion middle-class individuals in Asia over the next decade presents a sevenfold growth rate compared to other regions, indicating a strong market potential[14]. - The insurance penetration rate in many of AIA Group's markets remains low, indicating a significant opportunity for financial protection products[14]. - AIA's commitment to health and wellness is central to its mission, aiming to assist the public in leading healthier and longer lives[15]. New Business Value - New business value decreased by 37% to $1.41 billion in the first half of 2020 due to pandemic-related restrictions[20]. - New business value in Hong Kong decreased by 68% year-on-year to $306 million, with an annualized new premium of $565 million[26]. - New business value in mainland China was $594 million, with a value profit margin of 81.8%, and an annualized new premium of $726 million[26]. - New business value in Thailand decreased by 7%, but sales momentum began to recover in June following government restrictions being eased[28]. - New business value in Singapore decreased by 24%, primarily due to a decline in sales following the implementation of containment measures[28]. Investment and Assets - AIA Group has a total asset value of $291 billion as of June 30, 2020[7]. - Total assets increased from $284.132 billion on December 31, 2019, to $291.204 billion on June 30, 2020, an increase of $7.072 billion[59]. - Total liabilities increased from $228.737 billion on December 31, 2019, to $233.949 billion on June 30, 2020[62]. - The total equity attributable to shareholders increased by 3% to $56.804 billion as of June 30, 2020, compared to $54.947 billion at the end of 2019[54]. Risk Management and Compliance - AIA's risk management framework includes six components: risk management culture, governance, strategy, underwriting, control, and disclosure[117]. - The company integrates risk management into key business processes, including product cycle approval and strategic planning[118]. - AIA has maintained compliance with the corporate governance code as per the Hong Kong Stock Exchange rules, with one exception regarding reporting mechanisms[119]. Employee and Shareholder Information - As of June 30, 2020, the company employed approximately 23,001 employees, an increase from 22,000 employees as of June 30, 2019[146]. - Total employee benefit expenses for the six months ended June 30, 2020, amounted to approximately $817 million, compared to $780 million for the same period in 2019[146]. - The company reported a total of 1,197,133 stock options granted to the CEO, with an exercise price of HKD 68.10[141]. Future Outlook - The company plans to focus on market expansion and new product development to drive future growth[1]. - The group expects that the newly issued standards will not have a significant impact on its financial position or operating performance[171].