2017 INTERIM RESULTS PRESENTATION 28 July 2017
Disclaimer This document (“document”) has been prepared by AIA Group Limited (the “Company”) and its advisers solely for use at the presentation held in connection with the announcement of the Company’s financial results (the “Presentation”). References to “document” in this disclaimer shall be co nstrued to include any oral commentary, statements, questions, answers and responses at the Presentation. No representation or warranty expressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. The information and opinions contained herein are subject to change without notice. The accuracy of the information and opinions contained in this document is not guaranteed. Neither the Company nor any of its affiliates or any of their directors, officers, employees, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any information contained or presented in this document or otherwise arising in connection with this document. This document contains certain forward- looking statements relating to the Company that are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to the Company’s management. These forward -looking statements are, by their nature, subject to significant risks and uncertainties. When used in this document, the words “anticipate”, “believe”, “could”, “estimate”, “expect”, “going forward”, “intend”, “may”, “ought” and similar expressions, as they relate to the Company or the Company’s management, are intended to identify forward -looking statements. These forward-looking statements reflect the Company’s views as of the date hereof with respect to future events and are not a guarantee of future performance or developm ents. You are strongly cautioned that reliance on any forward-looking statements involves known and unknown risks and uncertainties. Actual results and events may differ materially from information contained in the forward-looking statements. The Company assumes no obligation to update or otherwise revise these forward-looking statements for new information, events or circumstances that occur subsequent to such dates. This document does not constitute or form part of, and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company or any holding company or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part of this document, nor the fact of its distribution, shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. No shares of the Company may be sold in the United States or to U.S. persons without registration with the United States Securities and Exchange Commission except pursuant to an exemption from, or in a transaction not subject to, such registration. In Hong Kong, no shares of the Company may be offered to the public unless a prospectus in connection with the offering for sale or subscription of such shares has been authorised by The Stock Exchange of Hong Kong Limited for registration by the Registrar of Companies under the provisions of the Companies Ordinance, and has been so registered. By accepting this document, you agree to maintain absolute confidentiality regarding the information contained herein. The information herein is given to you solely for your own use and information, and no part of this document may be copied or reproduced, or redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organisation/firm) in any manner or published, in whole or in part, for any purpose. The distribution of this document may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. 2
Value of New Business $1,753m +42% Operating Profit After Tax $2,262m +16% Interim Dividend Per Share 25.62 HK cents +17% Ng Keng Hooi Group Chief Executive Tottenham Hotspur, English Premier League Season 2016/17
1H2017 Excellent Performance Across All Key Metrics Value of New Business Operating Profit After Tax Underlying Free Surplus Gen $1,753m $2,262m $2,307m +42% +16% +13% EV Equity AIA Co. Solvency Ratio Interim Dividend Per Share $47.8b 427% 25.62 HK cents +$4.2b +23 pps +17% 4
Option 1 Agenda 01 INTRODUCTION Ng Keng Hooi, Group Chief Executive 02 FINANCIAL RESULTS Garth Jones, Group Chief Financial Officer 03 MARKET REVIEWS Jacky Chan, Regional Chief Executive Bill Lisle, Regional Chief Executive John Cai, Regional Chief Executive 04 OUTLOOK Ng Keng Hooi, Group Chief Executive Tottenham Hotspur, English Premier League Season 2016/17
Garth Jones Group Chief Financial Officer
Excellent Financial Results – Across All Key Metrics ($m) 1H2017 1H2016 CER AER VONB 1,753 1,260 42% 39% Growth EV Operating Profit 3,456 2,896 21% 19% EV Equity (1) 43,650 10% 47,832 8% Operating Profit After Tax 2,262 1,956 16% 16% IFRS Operating ROE (2) 14.2% 13.8% n/a 0.4 pps Earnings Shareholders’ Allocated Equity (1) 32,196 29,632 7% 9% Underlying Free Surplus Generation 2,307 2,073 13% 11% Capital & AIA Co. HKIO Solvency Ratio (1) 427% 404% n/a 23 pps Dividends Interim Dividend per Share (HK cents) 25.62 21.90 17% 17% Notes: 7 (1) Comparatives for balance sheet items are shown against the position as at the end of the 2016 financial year (2) On an annualised basis
Growth Earnings Capital and Dividends 8
Significant Profitable New Business Growth ANP ($m) 3,196 VONB ($m) +37% 2,329 1,753 +42% 1,238 1H2016 1H2017 VONB Margin 54.2% 52.4% +1.8 pps 1H2016 1H2017 Note: 9 1H2016 1H2017 Comparatives are shown on a constant exchange rate basis
Delivering High-quality Distribution Premier Agency VONB ($m) Premier Agency Delivery 1,231 ▪ VONB up 35% ▪ Active new agents up 22% +35% 912 ▪ Active agent productivity up more than 20% ▪ #1 MDRT worldwide for 3 consecutive years 1H2016 1H2017 Partnership Distribution VONB ($m) Profitable Partnership Expansion 608 ▪ VONB up 45% ▪ 33% of Group VONB +45% 418 ▪ Exceptional performance in IFA channel ▪ Double-digit bancassurance VONB growth 1H2016 1H2017 Note: 10 VONB comparatives are shown on a constant exchange rate basis
Investing Capital at Attractive Returns PVNBP Margin by Product 1H2016 16% 15% 1H2017 IRRs Consistently Above 20% 10% 9% 8% 8% 8% 8% 7% 7% +21% Overall Traditional Participating Unit-linked Others Protection VONB Margin Movement (1.9) pps +3.2 pps (0.2) pps +0.4 pps 52.7% 54.2% 1H2016 1H2017 1H2016 Product Geographical Channel Others including 1H2017 VONB Mix Mix Mix Assumption VONB 11 Margin Changes Margin
Strong and Resilient Growth Portfolio 1H2017 VONB by Market Segment China Hong Kong $828m $434m Malaysia 6% +54% +65% Singapore 7% Other Markets Thailand Thailand 9% $184m $173m Hong Kong 45% (3)% Other +36% Markets 10% Singapore Malaysia $135m $104m China (10)% +24% 23% Note: 12 Growth rates are shown on a constant exchange rate basis
Strong Operating Performance Driving Positive Returns Mortality and Morbidity Persistency Rate Claims Experience Variances ($m) 96% 126 95% 110 95% 97 87 83 94% 79 69 93% 92% 91% 90% 1H11 1H12 1H13 1H14 1H15 1H16 1H17 Expense Ratio Cumulative EV Operating Variances ($m) 1,267 9.1% 1,129 8.8% 8.7% 8.4% 8.2% 8.0% 735 7.6% 487 379 255 144 1H11 1H12 1H13 1H14 1H15 1H16 1H17 2011 2012 2013 2014 2015 2016 1H17 13
EV Operating Profit up 21% – EV Equity of $47.8b 1H2017 EV Equity Movement ($m) (983) 485 1,224 138 (60) 1,753 1,625 47,832 47,106 EV Operating Profit $3.5b 43,650 +21% (1) Group Expected VONB Operating Finance Group EV Investment Exchange Dividend Group EV Equity Return on EV Variances Costs Equity Before Return Rates and Paid EV Equity End of 2016 Non-operating Variances Other Items End of 1H2017 Variances Note: 14 (1) On a constant exchange rate basis
Profitable New Business Driving Increased ROEV Operating ROEV (1) EV Operating Profit ($m) 3,456 17.1% +520 bps 11.9% 2.9x 1,209 1H2010 1H2017 1H2010 1H2017 Note: 15 (1) On an annualised basis
Interest Rates and EV Sensitivity AIA Long-term Assumptions vs Market Rates Sensitivity of EV Weighted Average by Geography (1) As at 31 May 2017 46,273 4.5% (1.6)% (1.1)% 0.4% 1.6% 4.0% 10% fall in 50 basis 50 basis 10% rise points points in equity equity 3.5% increase prices decrease prices in interest in interest rates rates 3.0% 2.5% 2.0% 167 736 1H2017 EV 10 Year Market Forward AIA Long-term Assumption (10-year Govt Bond) (10-year Govt Bond) (739) (499) Note: 16 (1) Weighted average interest rates by VIF of Hong Kong, Thailand, Singapore, China, Malaysia and Korea
Strong & Sustained Growth in Profitable New Business VONB ($m) 2,750 1,753 5.8x 2,198 1,490 1,845 1,490 1,260 1,239 1,188 1,053 932 959 845 792 667 676 645 533 512 399 364 303 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 17
Growth Earnings Capital and Dividends 18
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