(Reuters) - AIA Group (OTC:AAGIY) reported a 33% jump in its annual value of new business (VONB) on Thursday as the company benefited from strong demand for its insurance products in Hong Kong.
The Asia-focused insurer benefited from a surge in customers from mainland China who travelled to buy offshore products as they look to capitalise on potentially lower premiums and higher returns in Hong Kong.
A comparative shortage of investment channels amid China's weakening yuan has removed the shine off Chinese insurance with an increasing number of mainlanders becoming more and more aware of the advantages involving offshore insurance policies.
Mainland Chinese tourists spent HK$59 billion ($7.54 billion) on insurance policies in Hong Kong last year, according to data from the territory's Insurance Authority.
On a constant exchange rate basis, AIA's VONB, which gauges expected profits from new premiums and is a key barometer for future growth, rose to $4.03 billion for the year ended Dec. 31, from $3.09 billion a year earlier.
Hong Kong, one of AIA's largest contributor in terms of profits for 2023, reported an 82% annual increase in VONB.
VONB in partnership distribution channel in Hong Kong more than tripled compared with the prior year, the company said.
The company's full-year operating profit after tax rose 2% to $6.21 billion.
AIA declared a final dividend of HK$1.19 per share, compared to a final divided of HK$1.13 declared last year.
($1 = 7.8232 Hong Kong dollars)