Hong Kong-based insurer AIA Group reported a 13% increase in operating profit after tax per share to $4.2 billion for the first half of 2026, as new business value climbed 10% to a record $3.2 billion.
The company’s operating return on equity reached a record 17.5%, up 200 basis points year-over-year, while operating return on embedded value rose to 18%, an increase of 220 basis points. Embedded value equity before shareholder returns totaled $87.1 billion, up 9%, while post-dividend and buyback equity stood at $83.4 billion, a 6% increase.
AIA upgraded its outlook, now expecting to exceed its 9%-11% compound annual growth rate target for operating profit after tax per share from 2023 through 2026. The insurer returned $3.6 billion to shareholders via dividends and buybacks in the first half, with an interim dividend of HKD 53.9 cents per share, a 10% increase.
Regional performance showed double-digit growth across most markets. Mainland China’s value of new business surged 20%, driven by a 24% rise in Premier Agency VONB, which accounted for nearly 90% of new business. Active agents in China increased 14%, with new agents up 25%, while new geographies contributed 11% of the country’s VONB. Hong Kong and Macau VONB rose 10% to HKD 1.2 billion, with domestic business up 23% and average policy sizes increasing 10%.
ASEAN markets contributed over 30% of group VONB, exceeding $1 billion. Thailand’s VONB grew 13% in the second quarter, while Singapore and Malaysia both reported 10% gains for the half. India, through Tata AIA, delivered a 31% increase in VONB, with agency distribution up 38% and bank and broker channels rising 23%. Premier Agency accounted for 72% of group VONB, with partnerships contributing the remaining 28%.
The insurer’s product mix remained heavily weighted toward traditional protection, participating and unit-linked policies, which comprised 96% of VONB. Operating free surplus generation rose 10% per share to $3.9 billion, while net free surplus generation increased 12% per share to $2.8 billion. The share capital ratio ended the period at 210%, above the 200% threshold, with AIA targeting to return 75% of annual net free surplus generation to shareholders.
Shares slipped 1.51% in pre-market trading to $71.90, following a 1.64% decline in real-time HKD terms to 71.80. The stock is trading near the lower end of its 52-week range, roughly 3.6% above the low of $68.95 and 22% below the high of $92.15. The price-to-earnings ratio stood at 15.62, with an estimated EPS of $0.3995.
