AIA Group 2025 Annual Report Review: Steady Performance with Some Concerns in Mainland Business

(Source: Meicai.com)

The Hong Kong market drives growth, while mainland operations face challenges.

By/Daily Financial Report Li Jia

As the largest independent listed life insurance group in the Asia-Pacific region, AIA recently publicly disclosed its 2025 annual report, which has garnered significant market attention.

From the core operational data, according to the annual report, AIA achieved total weighted premium income of $46.9 billion in 2025, a year-on-year increase of 12% (the annual growth rate is based on constant exchange rates); annualized new premiums reached $9.484 billion, growing by 9%; new business value was $5.516 billion, up 15%; intrinsic value stood at $76.811 billion, an increase of 8% from the beginning of the year. After-tax operating profit reached a record high of $7.136 billion, a 7% increase year-on-year; net profit attributable to shareholders was $6.234 billion, down 9% year-on-year.

Thanks to the favorable fundamental performance in 2025, AIA has fulfilled its long-term commitment to investors with generous shareholder returns. The group continues its prudent, sustainable, and progressive dividend policy, with the total dividend per share for the fiscal year 2025 reaching HKD 1.9308, a 10% year-on-year increase. More importantly, AIA also provided multidimensional returns to shareholders through a “dividend + buyback” strategy, distributing approximately $2.6 billion in dividends while the board approved a new share repurchase plan totaling $1.743 billion, exceeding investor expectations. According to UBS estimates, this move will bring an overall return rate of approximately 3.9% to shareholders.

However, shortly after the disclosure of the 2025 annual report, many brokerage firms gave “buy” and “hold” ratings but also warned of some risks AIA is currently facing. Dongwu Securities, Ping An Securities, Guoxin Securities, Founder Securities, Guojin Securities, and Everbright Securities all pointed out that AIA faces considerable pressure on the liability side.

For example, Ping An Securities believes that AIA’s new life insurance policies and NBV fell short of expectations; Guoxin Securities and Dongwu Securities expressed similar views, stating that its new premium income is under pressure and the growth rate of premiums is below expectations.

So, how solid is AIA’s “exam paper”? Is its channel and product transformation facing obstacles, and why are there concerns from many research institutions about the liability side?

The Hong Kong market drives growth,

While mainland operations face challenges

In observing the growth drivers and quality of insurance companies, the first step is the annualized new premium metric, where AIA achieved a 9% growth in 2025, indicating that its new sales business capacity and scale increased last year. However, when looking at a longer timeframe compared to the previous two years, the annualized new premium growth rate in 2025 has decreased significantly, as the growth in 2023 and 2024 was 45% and 14%, respectively, marking two consecutive years of decline.

When breaking down by region, the Hong Kong market contributed the most to the annualized new premium, with the highest base at $3.283 billion and the fastest growth rate of 25.83%; followed by Singapore, with a growth rate of 25.75%; Thailand and other markets also saw some growth.

However, it is important to note that the mainland market lagged behind, with annualized new premiums reaching $2.152 billion, the second-highest base after Hong Kong, but down approximately 1% year-on-year. In simple terms, AIA has sold fewer “businesses” in the mainland, which has become a major reason for the group’s overall new premium growth falling short of expectations.

AIA Life is the entity conducting AIA’s business in the mainland market. In 2025, AIA Life fully expanded its operations in four provinces: Shandong, Chongqing, Anhui, and Zhejiang, increasing the number of provincial branches from 9 in 2024 to 12.

In fact, looking solely at the decline in annualized new premiums does not directly indicate that AIA Life’s performance is worsening, as insurance companies ultimately pursue profits (i.e., “new business value”). However, if the scale of new policies does not significantly grow, it is difficult for the new business value, which represents profitability, to increase.

Through the financial report data, we find that the growth of AIA Life’s new business value is also relatively weak, lagging behind in growth among AIA’s numerous Asia-Pacific regional markets.

Data shows that in 2025, the growth momentum of AIA’s new business value primarily came from Hong Kong, Thailand, and Singapore. In particular, the new business value in the Hong Kong market surged by 28% to $2.256 billion; the Thai market grew by 13% to $0.993 billion; Singapore grew by 14% to $0.530 billion. In stark contrast, AIA Life’s new business value only slightly increased by 2%, reaching $1.240 billion.

At the same time, in recent years, the contribution of the mainland market to the group’s new business value has been continually declining. Data shows that from 2021 to 2025, the proportion of AIA Life’s new business value to the group’s total was 30.6%, 27.2%, 24.1%, 24.0%, and 21.1%, declining for four consecutive years. In contrast, the contribution of new business value from other regions has mostly expanded, with Hong Kong showing significant growth from 20.9% in 2021 to 38.4% in 2025, having surpassed the mainland market for three consecutive years since 2023.

The new business value profit margin, which is the ratio of new business value to annualized new premiums, reflects the profitability level of the policies. In 2025, AIA’s new business value profit margin reached 61.9%, an increase of 3.7 percentage points year-on-year, with significant improvements in markets like Hong Kong and Southeast Asia, particularly in Thailand, which saw a remarkable increase of 11.4 percentage points. However, the mainland market only saw a year-on-year increase of 1.5 percentage points, which is not only weaker than other regional markets but also below the group’s overall growth rate.

From AIA’s operational situation on the liability side, the Hong Kong market stands out, while emerging markets like Southeast Asia, although small in base, are still on a fast upward trajectory. In contrast, the overall performance of the mainland market has not met expectations, leading to AIA Life’s new business value struggling to achieve higher growth, indicating that profit growth in the mainland market has come under pressure.

With multiple pressures from inside and outside,

AIA Life’s growth is limited

Based on the above data changes, further analysis of why AIA’s operational growth in the mainland market has become weak suggests the following three points:

On one hand, AIA Life’s long-standing strategic focus has been on developing protection-type products, which have a high new business value rate. By concentrating on the mid-to-high-end market, its brand has established a clear recognition of “high value, high quality.” The perceived product prices by consumers are relatively high, stemming from both brand positioning and the depth of the protection and services provided.

However, recent market trends are reshaping the competitive landscape. In AIA’s most important mainland market, there has been a significant change in the structure of insurance demand: the demand for savings-type products has surged. In an environment of declining long-term interest rates and volatile capital markets, savings insurance, which has “guaranteed” attributes, has become the main driver of capital absorption and premium scale. In contrast, protection-type products (such as health insurance) have already achieved high market penetration, and due to the impact of residents’ income expectations, growth momentum has noticeably slowed.

Additionally, the overall domestic consumer market is characterized by a “value for money” orientation, and this trend has also permeated the insurance field. Consumers are more price-sensitive, which poses a direct challenge to AIA Life’s traditionally high-priced product lines. The combination of multiple factors has put pressure on AIA Life’s growth model, which relies on high-value protection-type products, and performance growth urgently needs to find new breakthroughs.

On the other hand, Hong Kong insurance, with its flexible policy designs, excels in wealth transfer, tax planning, and privacy protection, effectively hedges against exchange rate risks, and offers global investment channels with higher expected returns, attracting a large number of high-net-worth individuals from the mainland to purchase insurance in Hong Kong.

Financial report data shows that in AIA’s new business value in the Hong Kong market, the contributions from local customers and mainland visitors account for 48% and 52%, respectively, with new business values growing by 21% and 35% in 2025. This indicates that a significant number of mainland customers are traveling to Hong Kong for insurance, and benefiting from this, the new business value from mainland visitors has for the first time surpassed that of local customers, becoming the core driving force behind the value contribution in the Hong Kong market.

In this context, while it helps promote policy sales in AIA’s Hong Kong market, it also leads to a continuous outflow of high-end customers and premiums from the domestic insurance market, directly impacting AIA Life’s high-value business growth.

Finally, the domestic personal insurance market has fully entered a stage of stock competition, with industry premium growth generally under pressure. For AIA Life, while new regions provide expansion opportunities, these markets are already saturated with supply, and the competitive landscape is solid, as companies have been deeply involved for many years. Even with strong channel capabilities, AIA must face the core challenge: how to achieve effective growth in an environment where demand growth is slowing.

Especially in newly entered provinces, the mid-to-high-net-worth clientele, which is a crucial battleground for insurance companies, has been thoroughly penetrated and operated by major players. AIA’s ability to successfully capture a considerable share in relatively mature markets remains highly uncertain, and the actual effectiveness of its regional expansion needs to be continuously observed.

Strategic transformation has highlights,

Long-term outlook for the mainland market remains positive

In the face of a market environment where the profit growth brought by mainland policies is under pressure, AIA Life’s core response strategy has shifted to “making up for price with volume,” that is, driving the growth of premium scale to support the total new business value. When the improvement in new business value profit margin faces bottlenecks, expanding the premium base becomes the key path to maintaining profit growth.

This adjustment means that in the current stage dominated by savings-type demand, AIA Life strategically balances value and scale, prioritizing the absolute numerical growth of new business value to respond to structural challenges and maintain market position.

Thus, on the channel front, AIA Life has implemented a transformation to “the best agents,” with the agent channel still being core, accounting for about 85% of NBV, as the team continues to grow and improve in quality, with the number of newly recruited agents, active agents, and new active agents increasing year-on-year by +14%, +8%, and +20%, respectively; the bancassurance channel accounts for about 15% of NBV, focusing on wealthy and high-net-worth clientele, driving double-digit growth in average premium per policy.

In terms of regional expansion, AIA Life has laid out in 9 new regions, achieving an NBV of $118 million in 2025, a year-on-year increase of 45%, with an NBV proportion of about 9% in the mainland. Without considering changes in economic assumptions, it is expected that the new regions’ NBV will achieve an average annual growth rate of 40% from 2025 to 2030. Additionally, AIA has formed highly complementary distribution channels and customer groups with Zhongyou Life, further expanding AIA Life’s growth opportunities in the mainland.

In product strategy, the company insists that protection-type products are core, contributing 44% of the agent channel’s value in the second half of the year. At the same time, it actively promotes the transformation of long-term savings products to dividend-type products and has launched dividend insurance combined with critical illness protection and flexible customizable medical insurance. The accompanying service ecosystem is also continuously improving, promoting a 9% increase in the number of large policies for high-net-worth clients.

Regarding future product innovation strategic planning, AIA’s regional CEO and AIA Life Chairman Zhang Xiaoyu further emphasized that AIA is focused on diversification, delving into different customer groups, and advancing cross-border innovation in protection products and services. By the end of 2025, AIA Life has signed contracts with over 500 health and wellness institutions across nine major categories, benefiting over 240,000 customers with wellness manager service rights.

It is evident that AIA Life has established a solid development foundation. In terms of channels, its agent system has a complete closed loop from recruitment, cultivation, to incentive, with overall high team quality; the bancassurance channel has also been strengthened through partnerships with important partners like Postal Savings Bank. On the product level, the company has built a certain reputation in protection-type and high-value products and is continuously extending into dividend savings products. Coupled with the orderly expansion of operating regions, the company’s current core task has shifted to accelerating its expansion pace to narrow the gap with leading competitors in the market.

Correspondingly, its strategic focus is also evolving: from relying on a differentiated advantage built through meticulously cultivating the agent channel, it is gradually shifting to place greater emphasis on enhancing new premium scale and diversifying channel layouts. This adjustment aims to expand market share to address the realistic pressures faced by the overall growth foundation in the highly competitive mainland market.

According to the latest solvency report data, AIA Life completed the transition from old to new accounting standards in 2025, making net profit, net assets, and other indicators not comparable to 2024, achieving insurance business revenue of 82.415 billion yuan in the year, a year-on-year increase of 14.73%; with a net profit of 12.131 billion yuan.

In terms of solvency, as of the end of 2025, its core/comprehensive solvency adequacy ratios were 225.79% and 335.14%, respectively, although there was a significant decline compared to the end of the previous year, it remains at a relatively high level in the industry. Additionally, the latest two quarterly comprehensive risk ratings (IRR) results were both the highest AAA level, reflecting AIA Life’s relatively robust operational status and excellent risk management capabilities.

With the continuous deepening of channel and product strategy transformations, AIA Life’s long-term confidence in the mainland insurance market remains unwavering. AIA’s CEO and President Lee Yuanxiang recently stated, “The mainland has always been the most important market, and the mainland market is the most significant for AIA Group, ranking first in terms of future growth potential and contribution to the group.”