HONG KONG (REUTERS) – Insurer AIA Group said on Thursday (March 12) the growth in value of new business slowed to 6 per cent last year as anti-government protests in Hong Kong weighed on sales, and it signalled a brief but significant impact from the coronavirus outbreak.
“A number of our markets are facing headwinds from the lower interest rate environment and the impact of Covid-19,” the company said, adding that the speed of recovery and the extent of any long-term impact remain uncertain.
AIA’s new business value, which measures expected profits from new premiums and is a key gauge for future growth, rose to US$4.15 billion (S$5.79 billion) in 2019, up from US$3.96 billion a year earlier, according to its earning statement.
The Hong Kong-based company, which reported more than 20 per cent annual growth in new business value in the last few years, was expected by analysts to post a rise of 8 per cent to US$4.28 billion, as per Refinitiv data.
Anti-government protests in the Chinese-ruled territory, which began in June last year, have led to a sharp drop in tourist arrivals, mainly from the mainland, hitting sales of luxury goods and insurance policies, among other things.
AIA and other insurers in Hong Kong get a large share of their sales from selling insurance products to China visitors, who are seeking better products and overseas investment opportunities.
The value of new business in Hong Kong fell 5 per cent to US$1.62 billion, impacted by a decline in sales from mainland Chinese visitors in the second half of 2019.
China and Hong Kong together account for about half of new business growth globally at AIA, which was originally founded in Shanghai nearly 100 years ago and is the first foreign insurer to be granted a licence in China.
The Asia-focused insurer, which in November named Lee Yuan Siong from Chinese rival Ping An Insurance as its CEO, has a business presence in 18 markets in the Asia Pacific, including Australia, Indonesia and Malaysia.
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