2022-09-21 08:32Business 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].