2025-08-21 02:00Financial Data and Key Metrics Changes - AIA Group reported a 14% increase in the Value of New Business (VONB) to a record high of $2,800,000,000, with underlying free surplus generation per share growing by 10% and operating profit after tax per share rising by 12% [1][21] - The operating return on embedded value (ROEV) increased by 290 basis points to 17.8%, while operating return on equity (ROE) reached a record 16.2% [21][31] - The company returned $3,700,000,000 to shareholders in the first half, with a declared 10% increase in interim dividend per share [2][22] Business Line Data and Key Metrics Changes - In Hong Kong, VONB reached $1,100,000,000, up 24%, driven by strong demand from both domestic customers and mainland Chinese visitors [2][3] - AIA's agency channel in Hong Kong saw a 35% increase in Direct Operating New Business (DOMB), supported by a larger active agent base and productivity gains [3] - AIA China reported VONB of $743,000,000, with growth accelerating to 15% in the second quarter, primarily driven by the professional primary agency [4][6] Market Data and Key Metrics Changes - The ASEAN region contributed over one-third of the group's VONB, with a 20% increase to over $1,000,000,000 for the first time [7] - In India, Tata AIA Life achieved a VONB growth of 38%, maintaining its position as a market leader in retail protection [9] Company Strategy and Development Direction - AIA's strategy focuses on high-quality recurring profit streams in protection, health, and long-term savings, which are resilient across economic cycles [2][12] - The company aims to replicate its success in Mainland China, expecting a compound annual growth rate (CAGR) of 40% in new business from newly entered regions over the next five years [6][60] - AIA is leveraging its multichannel distribution platform and innovative product offerings to meet the growing needs of Asia's middle class and affluent populations [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in AIA's ability to deliver sustainable growth and long-term value for shareholders, citing strong fundamentals and a robust capital management policy [20][37] - The company highlighted the compelling demographics in Asia, with a rapidly expanding customer base for protection, health, and retirement needs [10][11] Other Important Information - AIA's integrated health care strategy is enhancing customer value and supporting sustainable profitability, with a focus on personalized health products [15][16] - The company has made significant investments in technology, including generative AI, to improve customer engagement and operational efficiency [18][19] Q&A Session Summary Question: TSR guidance for 2026 and significance of India's new business value - Management acknowledged the importance of TSR and highlighted the direct returns to shareholders through increasing dividends and share buybacks [42][47] - Regarding Tata AIA's contribution, it was noted that India's new business value is still below 5% of the total group new business value [43][50] Question: Growth ambition for AIA China and sustainability of ROE and ROEV - Management confirmed the ambitious 40% CAGR target for new regions in China, emphasizing a balance between stretch and quality [57][60] - The record high ROE and ROEV were attributed to high-quality new business and effective management of the in-force book [68][70] Question: Impact of competitive landscape changes in Hong Kong - Management indicated strong fundamentals in Hong Kong, with continued growth expected despite competitive pressures [93][96] - The launch of a new innovative long-term savings product was well received, contributing to sustained demand [89][98] Question: Future capital management and shareholder returns - Management reiterated a commitment to a prudent and progressive dividend policy, with flexibility to return excess capital to shareholders through dividends and buybacks [101][102]