American International Assurance (AIA), the pan-Asian life insurance group, has reported a 24 percent hike in its interim net profit for the six months ended May 31.

The company earned $1.32 billion compared with $1.05 billion during the same period last year.

AIA attributed the better-than-expected results to a hike in agent productivity, improving customer retention, enhancing its product mix and deepening distribution channels in the bancassurance business.

The key performance measure of insurance companies, the value of new business (VONB), jumped 32 percent annually to $399 million. The company's VONB margin expanded 2.3 percentage points to 36 percent. Total annualized new premiums (ANP) rose 23 percent to $1.09 billion.

Looking ahead, AIA Group Chief Executive and President Mark Tucker said that the insurer will not be greatly affected by the European and US debt crisis as it has diversified its investment portfolios away from US and European sovereign debts. "The company will focus on our efforts to expand business growth in Asia as the region has robust economic growth and strong insurance needs from the population in the region," Tucker said.

The insurer on Friday declared an interim dividend of HK$0.11 per share and indicating that it can finance it from operating cash-flow generated by the group's businesses.

The interim financial report added that the 2011 interim dividend would represent approximately one-third of the 2011 full-year total dividend. If the AIA projection is correct, this means AIA will distribute a final dividend of HK$0.22 per share, making the total dividend reach HK$0.33 per share for its full fiscal year. "AIA's profit performance exceeded market expectations so the company will be able to maintain a steady increase in its future dividend payouts," Kingston Securities Research Manager Dickie Wong told China Daily, adding that they have an "overweight" rating on the stock.

oswald@chinadailyhk.com

China Daily

(HK Edition 07/30/2011 page2)