BEIJING, Dec. 13 (Xinhua) -- AIA Group Ltd, the world's second-largest life insurer by market value, will continue to focus on protection policies and the quality of its business in China to ensure sustainable growth, according to top management.
"We've been very specific and very clear about our China strategy: we focus on quality, not quantity; we focus on productivity and protection policies," said Mark Tucker, CEO and president of AIA Group.
The clear focus, Tucker said, is also the secret of AIA's success in the world's second-largest insurance market.
AIA's new business value, a measure of expected profit from new policies, rose 37 percent to $1.26 billion in the first half of this year. The new business value in Hong Kong soared by 60 percent to $537 million while new business value in the Chinese mainland increased by 56 percent to $278 million, according to the insurer's financial report.
Overall, its operating profit rose by 14 percent in the first half while net profit, which includes on-paper losses from equity investments, declined by 2 percent due to volatility in the stock and currency markets.
AIA's fast growth is also in line with the rapid development of China's insurance market. The country's total income from insurance premiums reached 1.9 trillion yuan ($287.9 billion) in the first six months of 2016, up 37.3 percent year-on-year. The growth rate is much higher than the 17.5 percent in the first half of 2014 and 20 percent in the first half of 2015. The value of insurance premiums in China will reach 5 trillion yuan by 2020, statistics from the China Insurance Regulatory Commission showed.
Looking forward, Tucker is very positive about the market in 2017 as he believed that the opportunities AIA has across the 18 countries it operates in are the best in the world.
"The important point for us is the structural factors, such as demographics, urbanization and rising income. These trends will continue and Asia will continue to grow in the foreseeable future," said Tucker. "We are in the sweet spot of the industry and the sweet spot of macroeconomics across Asia. It's the best place to be, going into 2017."
For Tucker, AIA will have an eye on any possible merger and acquisition opportunities, but says 99 percent of energy will be focused on organic growth.
The fluctuation of the yuan, according to Mark Konyn, chief investment officer of AIA Group, will not change its China investment portfolio as it is all about liability matching.
"The book of business in China, one of our fastest growing markets, is 100 percent denominated in RMB. So all our liabilities and policies are written in renminbi. Following this methodology, the majority, in fact, all of our assets are onshore renminbi," said Konyn. So any yuan fluctuations will not unduly impact the portfolio.
Agents will continue to play a key role, said Joe Cheng, Head of AIA Group's Agency Distribution.
"Our focus is still on getting premier agents through quality recruitment, through training and technology. This is the only way that we can serve our clients better, because our surveys show that there is a high demand for face-to-face interaction," said Cheng.
Products dealing with life and health need to be explained. In Asia, more sophisticated products are demanded by the upcoming middle class and AIA's surveys show that the first point of contact with customers is the agency, Cheng explained. (chinadaily.com.cn)
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