Ex-AIG Unit AIA Group’s Growth Jumps in Q3 as Insurance Demand Rises

October 14, 2011

AIA Group Ltd, Asia’s No.3 insurer, said growth accelerated in the third quarter, with its value of new business rising 53 percent as strong performance in markets such as Malaysia helped boost earnings.

The insurer’s value of new business (VONB) rose 53 percent to $245 million in the three months ending August, it said in a filing to the Hong Kong bourse. VONB, a key indicator that measures profitability of new business, rose 32 percent in its fiscal first half.

“It is an impressive set of numbers,” said Stanley Tsai, an analyst at Keefe, Bruyette & Woods in Hong Kong. “While part of it is because of a lower base in Q3 last year, continued re pricing and a move away from lower margin products are all helping to boost earnings.”

Underlying group VONB margins rose 4.5 percentage points to 36 percent from a year ago, but remained largely flat from the first half, the insurer said. It also said its number of agents had increased, but did not give further details.

With its relatively young population and high savings rate, Asia has increasingly become the next battleground for insurance companies such as AIA and rivals Prudential and China’s Ping An .

AIA is the Asian life insurance unit spun off by American International Group Inc, which still owns about a third of the company. It raised more than $20 billion in a Hong Kong offering last year.

“Rising affluence is profoundly important in extending the scope for long term savings and, with accelerating health care costs further increasing demand for medical protection across the region, consumers are seeking greater security and stability which will also benefit AIA,” it said in the statement.

AIA shares have risen about 24 percent since its IPO in October last year, versus a 19 percent decline in the benchmark Hang Seng index.

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