2012 Results Presentation CREATING SUSTAINABLE VALUE 27 February - PowerPoint PPT Presentation

2012 Results Presentation CREATING SUSTAINABLE VALUE 27 February 2013

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Agenda Presenter Position Topic Mark Tucker Group Chief Executive 2012 Group Review Garth Jones Group Chief Financial Officer 2012 Financial Results Gordon Watson Regional Chief Executive Hong Kong, Korea & Group Insurance Ng Keng Hooi Regional Chief Executive Singapore, Malaysia & China Huynh Thanh Phong Regional Chief Executive Thailand & Other Markets Creating Sustainable Value Mark Tucker Group Chief Executive Q&A 3

2012: Another Year of Delivery  Delivered record results – again  Executed clear priorities  Continued proven growth strategy  Extended leadership position  Engaged in value enhancing initiatives 4

2012: Excellent Financial Performance FY2012 FY2011 YoY $m VONB 1,188 932 27% 43.6% 37.2% 6.4 pps VONB Margin Value 2,696 2,472 9% ANP 31,408 27,239 15% Embedded Value TWPI 15,360 14,442 6% Expense Ratio 8.7% 8.7% - IFRS Results Operating Profit After Tax 2,159 1,922 12% Net Profit 3,019 1,600 89% Shareholders’ Equity 21,313 26,697 25% Capital & HKICO Solvency Ratio 353% 311% 42 pps Dividend Dividend per Share (HK cents) 37.00 33.00 12% 5

2012: Clear Strategy – Well Executed  Expanded Premier Agency and partnership engagement Distribution  Broadened product range and enhanced profitability Product  Improved customer targeting and sales to existing customers Customer  Ongoing local empowerment and launched innovative technology Organisation  Sustained profitable growth momentum and strong capital position Financial 6

Distribution: Premier Agency Delivery VONB (1) ($m) VONB Margin (1) Premier Agency  Key competitive advantage  Quality recruitment focus 939 54.0%  AIA Premier Academy expansion +16% +4.6 pps 49.4%  Strategic partnership with LIMRA 811  Agency leadership development  Number of active agents up 7%  MDRT growth of 11% FY2011 FY2012 FY2011 FY2012 Note 7 (1) VONB and VONB margin by distribution are shown based on the local statutory basis and exclude unallocated Group Office expenses and corporate pension business.

Distribution: Profitable Partnerships Expansion VONB (1) ($m) VONB Margin (1) Partnership Expansion  Profitable channel diversification  Bancassurance execution 348 36.4%  Disciplined pricing +59% +10.0 pps  VONB more than doubled 26.4%  New long-term bank agreements 219  Direct marketing expansion  Focused approach to IFA channel with VONB up by more than 50% FY2011 FY2012 FY2011 FY2012 Note 8 (1) VONB and VONB margin by distribution are shown based on the local statutory basis and exclude unallocated Group Office expenses and corporate pension business.

Product: Quality VONB Growth VONB (1) ($m) Margin Enhancement and Others 1,188 +9% Product Mix Improvement Underlying +3% Volume Growth +17% (1) 932 FY2011 VONB FY2012 VONB Note (1) VONB movement excludes the effect of a single large Australian group insurance scheme which came into effect in 3Q 2011. 9 The VONB movement splits shown are rounded and multiplicative.

Customer Experience: Creating Sustainable Value Improving the Customer Experience Highly Engaged Customers Creates Sustainable Value Buy Significantly More  Customer Experience programme Uplift in additional new premium sales by level of engagement expanded to cover 10 markets 2.3X  Focus on areas that make a material difference to profitability and experience 2X  Sustainable revenue growth from new business referrals and cross sales  Additional 500,000 policies sold to existing customers in 2012 Low Medium Low High Level of Customer Engagement 10

Financial: Sustained Momentum Across All Metrics Free Surplus VONB ($m) EV ($m) OPAT ($m) Generated ($m) 31,408 2,159 2,845 1,188 1,922 932 2,485 27,239 24,748 1,699 667 2,107 FY2010 FY2011 FY2012 FY2010 FY2011 FY2012 FY2010 FY2011 FY2012 FY2010 FY2011 FY2012 11

2012 Group Review Mark Tucker 2012 Financial Results Garth Jones Gordon Watson 2012 Business Review Ng Keng Hooi Huynh Thanh Phong Mark Tucker Creating Sustainable Value 12

2012 Financial Results Value Creation IFRS Results Capital and Dividends 13

2012: Record New Business Performance ANP ($m) 2,696 VONB ($m) 2,472 +9% 1,188 +27% 932 FY2011 FY2012 VONB Margin 43.6% 37.2% +6.4 pps FY2011 FY2012 FY2011 FY2012 14

2012: Record ANP Annualised New Premium (ANP) ($m) 813 (1) 766 696 644 635 612 594 582 543 512 503 450 437 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Growth FY2012 v FY2011 +9% Rates Note 15 (1) Including ANP from a single large Australian group insurance scheme which came into effect in 3Q 2011.

2012: Record Margin VONB Margin 43.6% 44.3% 42.6% 37.2% 32.6% 38.2% 36.0% 28.3% 33.7% 31.7% 28.7% 28.0% 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 Margin FY2012 v FY2011 +6.4 pps Uplift 16

VONB Margin: Positive Actions on Mix and Pricing VONB Margin Increase 6.4 pps 1.1% (0.9)% 6.2% 43.6% 37.2% FY2011 Product and Geographical Mix Assumption FY2012 VONB Margin Portfolio Mix Changes and VONB Margin Other Items 17

2012: Record VONB VONB ($m) 1,188 676 932 533 667 512 545 399 364 314 303 231 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 Growth FY2012 v FY2011 +27% Rates 18