Good growth potential in China for Asia’s leading insurance giant

AIA Group is Asia’s largest life insurance group, with a presence across 18 markets across the region. It has one of the strongest life insurance franchises in Asia and is among the most profitable life insurance companies in the region, with a protection-biased product portfolio and a high-quality agent network.

The company maintains a leading position in Hong Kong, Thailand and Singapore, while China offers ample long-term opportunities. We believe AIA is a good example of the kind of high-quality financial companies which should benefit from Asia’s favourable demographics and rising incomes.

The China market in particular presents a sizeable long-term growth opportunity and AIA has been gradually expanding its footprint in the country, launching its services in two to three cities each year. It has partnered with banks to distribute its products, invested in digital and aligned its internal structure to the customer journey. With AIA’s strong reputation, the group has recruited high-quality staff – as many as 85% of its newly-hired agents have bachelor degrees or above and a large number of them have studied overseas. The China business is now 40% of the group’s value of new business and 20% of its enterprise value. Despite these figures, AIA has only 1% market share in China – which suggests plenty of room to grow.

China life insurance industry annual premium, RMB bn

Foreign players’ city coverage is smaller than domestic peers

Source: Bloomberg, Company reports, McKinsey, FSSA Investment Managers, as at 30 April 2023.
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