AIA Group Limited (AAGIY) Q4 2024 Earnings Call Transcript

2025-03-16 10:14:01 ET

AIA Group Limited (AAGIY)

Q4 2024 Results Earnings Conference Call

March 13, 2025, 09:00 PM ET

Company Participants

Lee Yuan Siong - Executive Director and Group Chief Executive and President

Garth Jones - Group Chief Financial Officer

Lance Burbidge - Chief Investor Relations Officer

Fisher Zhang - Regional Chief Executive

Biswa Misra - Group Chief Technology and Life Operations Officer

Jacky Chan - Regional Chief Executive and Group Chief Distribution Officer

Leo Grepin - Regional Chief Executive and Group Chief Strategy Officer

Tan Hak Leh - Regional Chief Executive

Conference Call Participants

Charles Zhou - UBS Securities

MW Kim - J.P. Morgan

Thomas Wang - Goldman Sachs

Richard Xu - Morgan Stanley

Kailesh Mistry - HSBC Global Banking & Markets

Michelle Ma - Citigroup

Michael Chang - CGS International Securities

Michael Li - Bank of America Securities

Presentation

Lee Yuan Siong

Good morning and a warm welcome to AIA's annual results presentation. I am delighted to report that AIA has delivered an excellent financial performance in 2024. We achieved double-digit growth across our key metrics for new business, earnings and cash generation, demonstrating the benefits of our growth strategy.

Let me now take you through the highlights. Value of new business was up by 18% to a record high of $4.7 billion, building on the strong momentum we have generated in previous years. EV equity increased to $71.6 billion, up by 9% per share after returning $6.5 billion to shareholders. Operating profit after tax also reached a record high, up by 12% per share, and underlying free surplus generation, our key operating measure of cash generation, grew by 10% per share. Following our capital management policy, the Board has recommended an increase of 10% in the final dividend per share and announced a new share buyback of $1.6 billion.

As you can see, we are delivering profitable new business growth which is driving both strong earnings and cash flow generation. In this way, we create a virtuous circle, funding further capital investment in organic new business, growing our large stock of future earnings and delivering cash returns to shareholders.

Premier agency is the main driver of profitable growth for the group, contributing 74% of our VONB. We have the world's leading agency, which has ranked number one globally by MDRT members for the last 10 years, and we hold the top position in nine markets. In 2024, agency delivered 16% VONB growth, driven by higher activity and productivity, combined with an increase in VONB margin. Recruitment was also up by 18% with positive growth across the vast majority of our markets.

These strong results are the direct outcome of AIA's Premier Agency strategy, designed to enhance both customer satisfaction and agent performance. We attract high-quality and motivated individuals, equipping them with extensive training and leading digital tools to support their long-term career growth with AIA.

A highly professional agency enables AIA to advise sophisticated and affluent customers on their more complex needs, improving customer experience and increasing demand for our services.

In turn, this attracts more high-caliber agents to join AIA, creating a self-reinforcing cycle, contributing to our industry leadership and delivering high-quality new business growth at attractive returns for shareholders. This is what sets AIA apart.

Our fast-growing profitable partnerships also present a valuable growth opportunity for AIA and our partners. In 2024, VONB was up by 28% to $1.3 billion driven by an excellent performance in bancassurance, which grew by 39%. We have a proven model of partnering with leading banks for the long-term, reflecting the aligned growth ambitions of both partners.

Integrating AIA's leading technology enables us to run advanced analytics models that better target customers, making our professional insurance specialists even more productive. In this way, we drive long-term regular premium business with attractive margins and returns. As a result, over the last three years, VONB through our bancassurance channel has more than doubled, with an increase in margin to more than 40%.

AIA's extensive network of high-quality strategic partners significantly extends our reach, creating opportunities to engage with more than 100 million target customers across Asia, providing a growing source of profitable new business. Our twin distribution engines drive growth across the Group and I will now take you through the highlights of our performance by market segment. ...

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