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AIA value of new business up 22 percent quarter-on-quarter

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AIA Group Limited (the “Company”; stock code: 1299) announces key new business indicators for the third quarter ended 30 September 2020.

KEY FINANCIAL SUMMARY

= Value of new business (VONB) of US$706 million, up 22 per cent

= Annualised new premiums (ANP) grew 21 per cent to US$1,359 million

= VONB margin of 51.6 per cent, consistent with the second quarter of 2020

= Total weighted premium income (TWPI) up 7 per cent from the third quarter of 2019

 

Lee Yuan Siong, AIA’s Group Chief Executive and President, said:

“The Group has delivered strong sequential growth in the third quarter with VONB up 22 per cent compared to the second quarter, building on the strong momentum as restrictions eased. TWPI grew 7 per cent year-on-year and our in-force business continues to demonstrate resilience with strong persistency.

“The COVID-19 pandemic has been well controlled in many of the markets where AIA operates, following the easing of containment measures. While remote completion continues to account for a significant proportion of new business in some markets, we have generally seen an increase in the proportion of our sales sourced from face-to-face meetings.

“Working practices have changed dramatically as a result of the pandemic. For example, the Group’s travel costs were down 75 per cent in the third quarter compared to last year while collaboration and connectivity across the Group have increased markedly. In the last 30 days, our people conducted close to 280,000 video calls and one million online audio calls, a step change from previous practices.

“Embracing technology, including the associated changes to our ways of working, is an essential part of our strategic goal to transform AIA. While still early in this multi-year journey, we are making good progress.

“Some of our businesses are already highly digital, allowing them to adapt quickly and deliver strong results even during this exceptional operating environment. For example, our joint venture in India, Tata AIA Life, generated excellent year-on-year VONB growth in the third quarter despite the continuing lockdowns, helped by wide adoption of new remote selling capabilities. Moving the recruitment process online at AIA China has also helped achieve very strong growth in new agency recruits in 2020 as we grow capacity across the business.

“We have made significant strategic progress in the last few months. Our Mainland China business achieved a landmark as we successfully completed the conversion to a wholly-owned life insurance subsidiary on 1 October.

“I am delighted that AIA China was recently granted approval by the China Banking and Insurance Regulatory Commission to begin preparations to establish a new branch in Sichuan. This new branch will be our first branch in Western China and is the first step in our ambitious plans to expand the geographical coverage of AIA China.”

“The Group also announced a long-term strategic partnership with Practo Pte. Ltd., India’s leading digital healthcare platform with a network of 70,000 top-tier hospitals and clinics, and Tata AIA Life extended our strategic partnership with IndusInd Bank Limited for a further 10 years.

“I am very proud that AIA continues to provide peace of mind and security to our millions of customers and that our businesses have adapted with speed and agility to the rapidly-changing operating environment. Our teams are working hard every day to deliver our strategic plans and transform AIA into a simpler, faster, more connected organisation. While the near-term outlook for the pandemic continues to be uncertain, I am confident that AIA is well positioned to leverage the structural growth drivers of life and health insurance across Asia, delivering long-term sustainable value for our shareholders and enabling Healthier, Longer, Better Lives for our customers.”

 

SUMMARY FOR THE THIRD QUARTER

In the third quarter of 2020, the Group delivered strong momentum in new business sales. VONB increased by 22 per cent compared to the second quarter of 2020, driven by sequential quarter-on-quarter growth from almost all of our markets. VONB margin was consistent with the second quarter as the reduction from economic assumption changes and geographical mix shifts was offset by reduced acquisition expense overruns as quarterly sales momentum improved. Across our agency businesses, we have continued to build future capacity with new recruits up more than 20 per cent compared to the third quarter of 2019.

While sales volumes during the first nine months of 2020 were lower than for the same period last year, the overall scale of our in-force business has continued to increase. TWPI of US$8,797 million increased 7 per cent compared with the third quarter of 2019. Persistency has remained strong and, in the third quarter, there has been an improvement in the adverse lapse experience in the first half of the year for our operations in Thailand and Malaysia. The positive medical claims experience that we reported for the Group in the first half of 2020 has also normalised in the third quarter and experience was in line with our expectations .

The third quarter of 2020 marked a historic change for AIA China, beginning with the incorporation of our new subsidiary in Mainland China on 9 July. Our people worked tirelessly on the conversion process, which included coordination with more than 2,000 counterparties and 150 government departments across the country. Within three months of its incorporation, AIA Life Insurance Company Limited assumed operational control of our business in Mainland China on 1 October. This new corporate structure is critical for delivering our ambitious expansion plans and, following regulatory approval, we are now progressing with preparations for our new branch in Sichuan. In the third quarter, VONB from AIA China was broadly similar to the second quarter before allowing for 5 per cent withholding tax, which has been applied since 9 July. AIA China remained the largest contributor to the Group’s VONB. In the first nine months of 2020, we have continued to grow our high-quality Premier Agency force and our disciplined execution has achieved a double-digit increase in new recruits, total agents and also agency leaders.

Our business in Hong Kong delivered modest quarter-on-quarter growth in VONB, driven by increased sales to our domestic customer segment. Sales to Mainland Chinese visitors remained close to zero in the third quarter given the ongoing mandatory quarantine requirement.

AIA Thailand achieved strong quarter-on-quarter growth in the third quarter as sales momentum returned to both agency and bancassurance channels. Our businesses in Singapore and Malaysia delivered excellent quarter-on-quarter growth with VONB more than double the second quarter and also significantly above the third quarter of 2019.

The easing of movement restrictions across many markets supported excellent quarter-on-quarter growth in VONB for our Other Markets segment. Tata AIA Life achieved excellent year-on-year growth on a like-for-like basis despite the ongoing disruption to the Indian economy from the pandemic and has now become the market leader in retail protection business. All of our other individual markets in this segment delivered quarter-on-quarter growth in VONB.

 

OUTLOOK

After the sharp contraction in the global economy in the first half of 2020, some countries have returned to growth in the third quarter, including Mainland China. Economic recovery has diverged significantly at the country level, driven by the effectiveness of pandemic containment measures and government policies as well as the importance and competitiveness of manufacturing industries. The medium-term outlook remains highly uncertain given COVID-19 infections have been rising in many countries and political and trade tensions remain elevated. However, the demand for AIA’s products and services will continue to grow over the long term, powered by the structural drivers of rising wealth, low insurance penetration levels and limited social welfare across Asia. AIA is uniquely positioned through our powerful distribution, differentiated propositions, leading brand and financial strength to capture the enormous long-term opportunities in the Asian life and health insurance market.

 

FOREIGN EXCHANGE VOLATILITY

AIA receives the vast majority of its premiums in local currencies and we closely match our local assets and liabilities to minimise the economic effects of foreign exchange movements. When reporting the Group’s consolidated figures, there is a currency translation effect as we report in US dollars. We have provided growth rates and commentaries on CER unless otherwise stated, since this provides a clearer picture of the underlying performance of the businesses.



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LOLC Al-Falaah unveils pioneering Wadi’ah Gold-Storage Facility with multiple customer benefits

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Sri Lanka’s most awarded and trusted Alternate Financial services brand, LOLC Al-Falaah recently unveiled their ground-breaking new product – the Wadi’ah Gold Loan Facility. This is the 1st time a Finance company in Sri Lanka is offering this facility. Al-Falaah Wadi’ah is a unique gold storage option offered to Al-Falaah’s valued customer base. All gold articles are tested for quality and authenticity using state-of-the art equipment by the company’s experienced staff without causing any damage to the jewellery. A unique ‘Gold Storage Certificate’ with the description of articles, including weight, quality and quantity along with the market value will be issued to the customer when obtaining this facility.

Speaking about the new product, Mr. Shiraz Refai, Deputy General Manager of LOLC Al-Falaah said, “Gold is a favourite investment option at all levels within the concentrated community. The metal is usually pawned, sold or exchanged when in need of cash. As the conventional Pawning options and Gold Loan offering has limitations to cater to the specific needs, as well as contradict with certain beliefs of the community, a concept acceptable and practiced in the industry is introduced by LOLC’s Alternate Financial Services Unit to its valued customer segment”.

Accordingly, a unique feature has been introduced to the Al-Falaah Wadi’ah Gold Storage facility offering the Customer the benefit of obtaining an interest-free maximum Cash-Advance in the industry at zero mark-up against the gold storage certificate value for any emergencies. In addition, for the convenience of the customers, the Gold storage facility period is extended from 3, 6 and 12 months without any requirement for a deposit and the custodial fees are comparatively competitive. The stored gold articles will also be offered a free Takaful cover with a reassurance of highest safety and security.

The Al-Falaah Wadi’ah gold storage facility will be initially available at selected branches including Wellawatta, Akkaraipattu, Kalmunai, Pottuvil, Grandpass, Maradana, Mawanella, Matara, Nawalapitiya and Negombo. Al-Falaah aims to make the facility available across all LOLC Finance branches and dedicated Al-Falaah centers island-wide by the end of the 1st quarter of 2021.

Commenting on the new Al-Falaah Wadi’ah Gold loan facility, Nishantha Jayasekera, Chief Manager, SME Unit & Head of Gold Loan Business of LOLC Finance said, “The main aim of this facility is to give financial-access to the grass-root level clients who do not have direct access to banking & finance, but require small cash advances to develop daily businesses and self-employment. Through this product and its value added features, we hope to cover all segments of the population”.

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LANKATILES donates high-end ventilator to Colombo North Teaching Hospital

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A Rs. 4.3 million ventilator has been donated to the Coronary Care Unit of the Colombo North Teaching Hospital, Ragama, by LANKATILES, the country’s leading tile manufacturer.

The machine was described as a high-end, world-class piece of equipment suitable for all patient groups.

Present at the official hand-over were Mr Mahendra Jayasekera, Managing Director of Lanka Walltiles PLC and Lanka Tiles PLC, Dr. S. P. A. Liyanage Ranaweera, Director of Colombo North Teaching Hospital, and Dr. Sanjeewa Rajapakse, Consultant Cardiologist of the hospital.

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The company said this was a commitment it is ready to stand by at all times in the interests of the country.

 

 

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Sampath Bank hosts Central Bank’s ‘MatarataQR’ event to promote QR code use

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Matara, April 3rd, 2021: Sampath Bank PLC recently hosted the Central Bank of Sri Lanka’s (CBSL) MatarataQR event, in a bid to drive awareness and increase acceptance and usage of LANKAQR, the common Quick Response (QR) code standard for the country that was introduced in 2020.

Encouraging consumers to adopt the use of QR codes in their day-to-day transactions, the event was held at the Sanath Jayasuriya Grounds in Matara under the patronage of the Chief Guest, Dullas Alahapperuma, Minister of Power and Guest of Honour, D. Kumaratunga, Director – Payments and Settlements, Central Bank of Sri Lanka; along with senior officials from the CBSL, other commercial banks and financial institutions. Sampath Bank was represented by Nanda Fernando – Managing Director; Tharaka Ranwala – Senior DGM – Operations / Group Chief Marketing Officer and Ajith Salgado – Group Chief Information Officer.

At the event, the Bank actively promoted its ‘WePay’ mobile wallet which helped attract more customers while also onboarding new merchants. A 25% cash back was on offer for payments at over 200 merchants in Matara on the day, made via the LANKAQR enabled WePay digital mobile payment app.

“We are very proud to partner with the Central Bank to host this event that will highlight the safety, convenience and speed of getting onboard the LANKAQR payment standard to the people of Matara. These benefits, coupled with the advanced digital banking solutions offered by Sampath Bank, make it a simple choice to migrate to digital payment technology and we warmly invite the merchants in Matara to come experience the benefits of adopting this new method of payments,” said Nanda Fernando, Managing Director, Sampath Bank PLC.

Sampath Bank is a 100% local bank that has deeply rooted itself in the lives of the people of Sri Lanka. Established in 1987, the bank has become a state-of-the-art financial institution that continues to be a market leader today thanks to its constant innovation and customer focused approach to business. It has introduced many firsts to the Sri Lankan banking sector including introducing ATMs to Sri Lanka, extended banking hours and slip-less banking to name a few. The Bank is steadily transforming itself into a ‘tech company engaged in banking,’ from the traditional approach of a bank engaged in technology.

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