(Reuters) -Hong Kong-based insurer AIA Group reported a 13% rise in its first-quarter value of new business (VONB) on Wednesday, bolstered by its regional unit, which saw strong demand from local customers and visitors from Mainland China.
Chinese investors, facing limited domestic options and a weakening yuan, are increasingly turning to offshore insurance policies as an alternative investment vehicle.
AIA said its proprietary Premier Agency model, the insurer’s elite in-house sales force that generated more than 75% of its first-quarter VONB, drove further increases in agent activity and productivity.
Hong Kong, one of AIA’s largest contributors in terms of profits, reported a 16% annual increase in VONB for the reported quarter.
Mainland Chinese travellers boosted the Asia-focused insurer’s performance by purchasing offshore policies in Hong Kong, attracted by competitive premiums and higher potential returns.
AIA’s VONB, which gauges expected profits from new premiums and is a key barometer for future growth, came in at $1.50 billion on a constant exchange currency basis in the three months ending March 31, compared with $1.33 billion a year ago.
“Despite capital market volatility and geopolitical tensions, high levels of private savings, growing yet ageing populations, low insurance penetration and limited welfare coverage continue to be powerful structural growth drivers in Asia, and create substantial demand for insurance products,” AIA said.
(Reporting by Roushni Nair in Bengaluru; Editing by Shailesh Kuber, Mohammed Safi Shamsi and Rashmi Aich)
