This article first appeared on GuruFocus .
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Revenue:New business sales grew by 25% to approximately $2.4 billion.
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Net Profit:Record net profit under IFRS 17 of $166 million, a growth of over 400% from $24 million in 2024.
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Operating Profit After Tax (OPAT):Increased by 5% year-on-year to $499 million.
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Leverage Ratio:Reduced to 21.3% at year-end 2025.
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Comprehensive Tangible Equity (CTE):Grew by 18% to approximately $8.7 billion.
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Embedded Value (EV):Increased by 19% to approximately $6.9 billion.
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Contractual Service Margin (CSM):Balance grew by 24% to $6.6 billion.
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Net Underlying Free Surplus Generation (UFSG):Increased by 20% to $857 million.
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Group Prescribed Capital Ratio:265% as of December 2025.
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New Business Contract Service Margin:Grew by 18% to approximately $1.5 billion.
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Value of New Business (VNB):Grew 11% to $945 million.
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Hong Kong and Macau New Business Sales:Increased by 51% to approximately $1.2 billion.
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Japan New Business Sales:Grew by 11% to $132 million.
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Thailand and Cambodia APE:Declined by 6% year-on-year to $577 million.
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Emerging Markets New Business Sales:Grew by 27% to $529 million.
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Release Date: March 16, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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FWD Group Holdings Ltd ( HKSE:01828 ) achieved record financial results in 2025, with new business sales growing by 25% to approximately $2.4 billion.
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The company successfully executed its IPO on the Hong Kong Stock Exchange, raising $466 million, which contributed to a credit rating upgrade to A2 from Moody's.
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FWD Group Holdings Ltd reduced its leverage ratio to 21.3% by refinancing $1.15 billion of debt and using IPO proceeds to reduce leverage by $500 million.
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The company reported a record net profit under IFRS 17 of $166 million, driven by strong new business sales growth and expense discipline.
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FWD Group Holdings Ltd's diversified distribution strategy, including bank assurance and brokerage channels, contributed to significant growth, with the brokerage and IFA channel delivering 51% APE growth.
Negative Points
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The company faced challenges in Thailand and Cambodia, with APE declining by 6% year-on-year due to a focus on quality new business and declining interest rates.
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VNB and New Business CSM in Thailand and Cambodia declined by 18% and 16%, respectively, due to the impact of lower interest rates on margins.
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The emerging markets segment experienced headwinds in Vietnam, which somewhat offset growth in Singapore and Malaysia.
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Operating profit after tax (OPAT) in Japan declined by 5% year-on-year, mainly due to persistency variance in a runoff portfolio.
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The company expects moderate growth in new business sales in 2026 due to high base effects from 2025 and regulatory changes impacting the retail broker channel in Hong Kong.
Q & A Highlights
Q: What is the trajectory of expense overruns from here, and is the 40% margin in the Hong Kong business sustainable given the build-out of the UHNW business? A: Sid Sankaran, Group CFO & COO, explained that the company has made significant progress in reducing expense overruns, particularly in key markets like Thailand, Japan, and Hong Kong, which are now in an underrun position. Emerging markets remain the focus for closing the expense gap. Regarding margins in Hong Kong, he believes they are sustainable due to growth, scale, and the performance of FWD Private.
Q: What is the outlook for the underlying free surplus generation, and can you comment on the company's exposure to private credit investment? A: Sid Sankaran noted that the company has achieved a 20% growth in net underlying free surplus generation (UFSG) and expects it to grow with earnings. The transition to an ESR regime in Japan may impact UFSG by $50-$100 million, but the company is well-positioned for growth. Regarding private credit, the company works with established asset managers and focuses on risk management, with most exposures being investment-grade structured securities.
Q: What is the growth outlook for 2026, especially in Hong Kong and Thailand? A: Sid Sankaran stated that the company expects continued growth in 2026, with moderate growth in Hong Kong due to a high base effect from 2025. Regulatory changes in Hong Kong have impacted the retail space, but the high net worth segment remains strong. In Thailand, moderate growth is expected in early 2026, with a focus on quality business and digital enablement to enhance productivity.
Q: Can you explain the economic assumption changes impacting EV and CSM, and the operating assumption variances? A: Sid Sankaran explained that the economic variances are due to disciplined asset liability management, with IFRS providing a real-time view and EV having a lag. The negative variance on EV is related to interest rate and credit spread updates. Operating variances are seasonal, with no significant concerns, and assumptions are broadly in line with pricing.
Q: What is the impact of AI adoption on the business, and how will it affect costs and distribution channels? A: Huynh Thanh Phong, Group CEO, highlighted that AI and digital transformation are key strategies for FWD. AI is enhancing productivity across the value chain, reducing manual efforts in underwriting, and improving customer service with AI chatbots. Digital tools have improved agency productivity by 40%, and AI integration with partner platforms like SCB EASY is enhancing customer service.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
