AIA plans to fast-track China expansion under new president, pins hopes on easing Covid-19 restrictions

Newly appointed president Lee Yuan Siong eyes more licences to expand business in China, targeting 10 to 12 provinces, from three currently

Asia-Pacific’s largest listed-life insurer reports 35 per cent drop in first-half net profit, falling below analysts’ estimates

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AIA Group’s first-half new policy sales were hit by the coronavirus pandemic. Photo: Reuters

Published: 10:00am, 20 Aug 2020Updated: 10:50pm, 20 Aug 2020

AIA Group said that it remains hopeful new business growth will pick up in the second half, as the easing of travel restrictions in China and other Asian markets could help revive sales, which fell 37 per cent in the first-half because of the coronavirus pandemic.

The largest life insurer in Asia by market capitalisation said it was also increasing its investment in China. In June, its Shanghai branch won regulatory approval to be incorporated as AIA’s only wholly owned subsidiary. Group chief executive and president Lee Yuan Siong said the Shanghai subsidiary was planning to apply for more licences to expand to other provinces, including Sichuan and Henan.

Lee, who joined AIA this year from Ping An Insurance (Group) where he was the co-chief executive officer and took over the top role from retiring industry veteran Ng Keng Hooi, said initially the insurer plans to focus on the “10 to 12 most important provinces of China”.

“China is a unique opportunity for AIA. As the only [foreign] life insurer with a wholly owned subsidiary … we are progressing rapidly and we are hopeful of getting more licences,” said Lee.

The expansion plans come even as new business in China fell 13 per cent to US$594 million in the first half. Currently, apart from Shanghai AIA also has a presence in three provinces – Jiangsu, Guangdong and Hebei, and three cities – Beijing, Tianjin and Shenzhen.

But Lee said he has seen signs of business recovering in China in the second quarter onwards, as travel restrictions were largely eased. This is in contrast to other countries in Asia which continue to battle an upsurge in coronavirus cases eight months since the virus first emerged in Wuhan, Hubei province, in late 2019.