(Reuters) – AIA Group Ltd on Friday launched a $10 billion share buyback plan and declared a higher final dividend as new business value jumped 22% in 2021, boosted by strong growth across markets, especially in China and Hong Kong.
The insurer’s value of new business or VONB, which measures expected profit from new premiums and is a key gauge for future growth, rose to $3.37 billion for the year ended Dec. 31, from $2.77 billion a year earlier.
China and Hong Kong accounted for about half of new business growth globally. Mainland China business was the top contributor to VONB, logging a 14% growth, while its Hong Kong business jumped 37%, indicating strong recovery from the pandemic-lows.
Better operating conditions for the Hong Kong-based insurer, which relies on its army of agents, prompted it to announce the buyback plan spread over the next three years.
“The share buyback represents capital accumulated over time that is surplus to our needs, allowing for capital market stress conditions and retention of capital for strategic and financial flexibility,” Group Chief Executive Officer Lee Yuan Siong said.
It also declared a final divided of 108 Hong Kong cents per share, 8% higher than last year, taking the total 2021 dividend to 146 HK cents apiece.
(Reporting by Selena Li in Hong Kong and Sameer Manekar in Bengaluru; Editing by Arun Koyyur)
