Q & A Highlights

Q: What is driving the acceleration in distributable earnings from the in-force business, and which regions are contributing the most? A: Garth Jones (Group CFO) attributed the acceleration to strong results from Hong Kong, particularly driven by positive equity market performance flowing through the participating business. He noted that growth was broad-based across the region, with China also contributing well through its protection business and underlying free surplus generation, but highlighted Hong Kong as the standout performer.

Q: How is AIA sustaining its competitive position in Hong Kong amid intensifying competition, particularly in bank assurance and broker channels? A: Jacky Chan (Regional Chief Executive, Group Chief Distribution Officer) emphasized that AIA's differentiated premier agency model is the key competitive advantage, achieving the number one MDRT ranking globally with nearly 30% of agents as MDRT members. He noted that while competitors are pursuing single-premium and short-pay products with lower margins, AIA delivered 10% VONB growth with a strong 72% margin, demonstrating financial discipline and a focus on sustainable, high-quality long-term growth.

Q: How has the Chinese Mainland Visitor (MCV) customer mentality changed after Decree 837, and what is the impact of recent rumors about additional taxes on Hong Kong insurance products? A: Jacky Chan stated that demand from MCV customers remains strong, with quarter-over-quarter growth in the first half and June being the strongest month. He emphasized that tax is never a key driver for long-term life insurance demand; the structural drivers remain intact, including access to globally diversified investments, high-quality advice, and flexible product design. The company added over 25,000 new MCV customers in the first half, bringing the total to approximately 550,000.

Q: What is the outlook for the OpEx per share growth target, and will new targets be provided after 2026? A: Garth Jones (Group CFO) confirmed that AIA now expects to exceed its 9-11% OpEx per share CAGR target for 2023-2026, having achieved 12% in 2024, 12% in 2025, and 13% per share in the first half of 2026. He explained that the original target was set during the COVID recovery period when IFRS 17 dynamics were unclear, but the earnings trajectory is now clearer, and the company has re-established its track record of growth.

Q: How does AIA measure the economic return on its AI investments, and what are the key KPIs capturing the value generated? A: Yuan Siong Lee (Group CEO) identified three areas where AI creates value: improving distribution channel productivity (particularly the premier agency), uplifting value from the high-quality customer base, and improving employee efficiency. He stated that the greatest value will come from improving sales force productivity, which is the primary focus of current investments. The reduction in the expense ratio by 130 basis points over two years was cited as evidence of technology investments delivering efficiency gains.

Q: What is driving the margin decline in AIA China, and how sustainable is the current margin level? A: Fisher Zhang (Regional Chief Executive - Mainland China, South Korea and Vietnam) explained that the slight margin drop is due to a deliberate shift towards more capital-efficient participating products, such as the launch of participating critical illness products. He emphasized that the company manages for absolute VONB growth, which grew 20% in the first half, while maintaining industry-leading margins of around 60% for agency and 35% for bancassurance, both well above market levels.

Q: How is AIA China navigating the bancassurance transition period following regulatory changes, and how long will the disruption last? A: Fisher Zhang noted that the regulatory changes, including the strengthened "Bao Xing Hui" mechanism, are making the bancassurance channel healthier by shifting from fee-driven to capability-driven models. AIA has refined all products to comply with regulations and is well-positioned to capture opportunities, focusing on affluent and high-net-worth customers through selective partnerships. He expressed full confidence in the overall business outlook despite the market transition period.

Q: What is the outlook for ASEAN markets, particularly Thailand, Singapore, and Malaysia, given the relatively slower growth compared to China and Hong Kong? A: The regional leadership highlighted that ASEAN contributes over 30% of group VONB. Thailand returned to strong growth in Q2 with VONB up 13%, driven by a strong return to protection business growth. Singapore delivered 10% first-half growth with stronger Q2 momentum of 19%, supported by strong agency leadership growth. Malaysia grew 10% in the first half with accelerating Q2 momentum, driven by strong agency recruitment (up 16%) and partnership contributions.

Q: How is AIA evaluating M&A opportunities given its strong capital position and the current market environment? A: Yuan Siong Lee (Group CEO) reiterated that AIA remains focused on implementing its capital management policy, targeting the return of 75% of annual net free surplus generation through dividends and buybacks. Garth Jones (Group CFO) noted that the company has returned $3.6 billion to shareholders in the first half, and the disciplined capital management has driven record operating ROE of 17.5%. While acknowledging that financial strength is important in uncertain times, the company remains focused on creating shareholder value on a consistent basis.

Q: What is the outlook for the Indian market, particularly regarding health insurance opportunities following the Insurance Amendment Act of 2025? A: The regional representative noted that under the current framework, life insurers can offer fixed benefit health products, and the Insurance Amendment Act of 2025 allows the IRDAI to potentially add new classes of insurance business. Tata AIA Life delivered 31% VONB growth in the first half, with agency growing 38% and partnership channels growing 23%. The company maintains the number one position in retail protection and persistency in India, with significant growth potential driven by strong demographics and low insurance penetration.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .