Unrest cramps AIA new business growth to 1pcby Kevin Xu
AIA's shares closed 3.68 percent higher despite the tepid performance. Singtao
AIA (1299) announced that the value of new business in the third quarter climbed 1 percent year-on-year to US$980 million (HK$7.66 billion), better than some analysts' expectations, but its biggest market Hong Kong saw a double-digit decline in VONB during the period.
The insurer recorded its smallest ever quarterly growth in VONB - which measures expected profit from new premiums and is a key indicator of growth - as anti-government protests in Hong Kong hit sales of insurance products to mainland visitors.
Growth from proprietary agency and bancassurance channels was offset by a substantial decline in VONB through the retail independent financial advisor channel in Hong Kong.
Excluding Hong Kong, new business grew 14 percent, with mainland China emerging as its "fastest-growing" market in the quarter, AIA said.
AIA posted a double-digit reduction in VONB in Hong Kong in the third quarter."Double-digit VONB growth from domestic customers was offset by a decline in VONB from mainland Chinese visitors which broadly tracked the reduction in overall visitor arrivals to Hong Kong reported in July and August," the insurer said.
VONB in the first nine months increased 13 percent year-on-year to US$3.26 billion.
Meanwhile, annualized new premiums fell 8 percent year-on-year to US$1.44 billion.
Shares of AIA closed 3.68 percent higher at HK$77.5 yesterday despite the insurer's tepid quarterly performance. The stock had fallen 12.1 percent in the third quarter, amid investor worries about the impact of the protests on its business.
AIA joined other companies to flag concerns about the impact of the protests on domestic business, with the city facing its first recession in a decade.
"Some of our markets are experiencing headwinds from the
lower interest rate environment, falling consumer confidence and rising political and trade tensions," the company said in its earnings statement.
"In particular, the reduced numbers of mainland Chinese visitors to Hong Kong continue to affect sales."
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.
Anti-government demonstrations in the SAR, which began in June, have resulted in a sharp drop in tourist arrivals, mainly those from the mainland, hitting sales of luxury goods and insurance policies, among other things.
Source: The Standard
http://www.thestandard.com.hk/section-n ... 1029&sid=2
It's all about "how much you made when you were right" & "how little you lost when you were wrong"