KUALA LUMPUR, 17 March 2017 – Malaysia’s leading life insurer AIA Bhd. (AIA) recorded its fourth consecutive year of double-digit growth on the back of a 23 per cent increase in value of new business (VONB) to RM815 million for the financial year ended 30 November 2016. It was AIA Group’s third largest growth market after China and Hong Kong.
Since 2013, when the insurer integrated its businesses in Malaysia to form an enlarged entity, AIA has posted significant gains in VONB - a key indicator of the company’s future profitability - as reflected in the performance indicator’s compounded annual growth of 29 per cent over the last four years. The company’s annualised new premiums grew by 25 per cent to RM1.4 billion, while operating profit after tax rose by 6 per cent to more than RM1.1 billion.
Speaking at a media briefing today, Ms. Anusha Thavarajah, Chief Executive Officer of AIA said, “Our consistent track record of year-on-year profitable growth is the direct result of the tremendous growth opportunities present in Malaysia, our diversified and resilient business model and our commitment to building a high-quality, sustainable business for the long term.”
AIA’s strong results were attributed to increased productivity among its agency force, or Life Planners as they are known at AIA, and its selective recruitment of quality full-time Life Planners, which led to a 25 per cent increase in the number of active new recruits last year. Overall, active Life Planner productivity rose by more than 20 per cent in 2016.
AIA’s Family Takaful business registered under AIA PUBLIC Takaful delivered a 47 per cent increase in annualised new contributions (ANC) to emerge as Malaysia’s second largest player in the Family Takaful segment. The strength of AIA’s agency force was also reflected in the 90 per cent growth in ANC contributed by the distribution channel as more Life Planners focused on distributing AIA’s Family Takaful solutions. The number of active Takaful Life Planners increased by 70 per cent to 1,400 in 2016. “We will continue to focus on closing the protection gap in the Bumiputera segment which makes up more than two-thirds of our population, and yet is still one of the most under-protected segments,” Anusha said.
Other channels, namely Partnership Distribution and Corporate Solutions, both contributed double-digit VONB growth of 18 per cent and 12 per cent, respectively. The life insurer continued to build on its strong bancassurance relationship with Public Bank with the introduction of new product solutions with higher coverage amounts. Customised solutions catered to the specific needs of mass affluent customers were also developed to drive AIA’s partnership with Citibank.
On the product side, effective customer segmentation has helped the insurer to reach out to untapped segments. Last year, AIA launched A-Life Signature, a back-to-basics plan that has helped to address the protection needs of the mass affluent segment, which had escaped the attention of insurers until recently.
Moving away from the traditional insurance model, last June, AIA launched AIA Vitality, Malaysia’s first science-backed health programme that integrates health and wellness benefits with AIA’s life insurance and Takaful solutions. “AIA Vitality succeeded in growing its base to over 30,000 members within the first six months, signalling that Malaysians are ready to embrace the programme which actively supports and rewards its members for taking sustainable steps to improve their health,” Anusha said.
This year, the focus of AIA Vitality will expand to include workplace health, an area of growing interest given that declining health trends are impacting productivity at the workplace. The company is also gearing up for the launch of its new e-commerce channel which will further expand its reach to the younger demographic and tech-savvy consumers.
Over the years, AIA has made significant investments in tools, applications and new technologies to improve operational efficiencies and to enhance the customer experience. Recently, the company launched a self-serve portal for its life insurance and Takaful customers that allows them to view their policy details and access their claims, payment history and insurance statements online. A new mobile dynamic underwriting system has also significantly reduced the processing time for new insurance applications from days to minutes now.
AIA remains optimistic about the life insurance industry’s long term growth prospects which will continue to benefit from the country’s younger demographic, growing middle class population and considerably large protection gap. While 56% of Malaysians are insured, there still remains a significant section of the population which is either not insured or under-insured. “The phased implementation of Bank Negara’s LIFE Framework will guide the industry in its efforts to increase the life insurance and Takaful penetration rate to 75 per cent of the population by 2020,” Anusha said.