00:00That value for new business metric, the most important one in your earnings, and the number
00:04even better for China, up 26%. So can this momentum be maintained into the second half?
00:13Thank you, Paul. Thanks for having me on the show. Yeah, we're very pleased with the results
00:17we're posting today. Right across the portfolio, you're seeing growth. You saw, as you said,
00:23our value of new business grew to a record high of $3.2 billion. And we've also seen strong growth,
00:31double-digit growth in our earnings and in our cash production. So with that, we're very happy,
00:38we're very pleased. We saw a 13% growth in our operating profit after tax per share. And we've
00:45seen our rate of return, our ROE, growing to 17.5%. That's a record. So you're seeing not only a
00:54strong operating profit, but also you're seeing the impact of our disciplined capital management
00:59coming through in our numbers. As you say, we had growth right across the portfolio in our four
01:05growth engines of mainland China, grew by 20%. We saw growth in Hong Kong, we saw growth in ASEAN,
01:13and we saw growth in India. So the business is performing very well. You see that in the numbers
01:18that you see today. And you also see our confidence in the future. We grew the dividend again by a
01:24further 10%. And we've now grown the dividend every year since IPO, even through the COVID years. So
01:31we're confident in the future. And our outlook is positive.
01:36The period also brought a couple of policy changes from China, which threw a couple of challenges up for
01:42AIA as well. You know, can you tell us a bit more about the momentum for Chinese visitor sales? Because
01:48you know, the changes were the tightening of cross border trading tax collections on dividends from
01:52insurance policies as well. Talk to us about how you've navigated that and what it means for the
01:58momentum of that Chinese mainland traffic.
02:03Yeah, we focus on the fundamentals of the business, Paul. And what we see is our products and services meet
02:10the
02:11real demands of people, their real needs. People come to Hong Kong for a range of reasons. And they buy
02:18our
02:18products not really for tax reasons. They buy our products so that they can access high quality health and
02:26protection products. They can access financial planning solutions, access to a diverse range of
02:32investments, and get trusted professional advice from our advisors. So we see continued demand for that
02:39business. And we've seen that through a range of environments over the past 20 years. Since the
02:45news flow started more recently, there's a lot of noise around at the moment. We saw that there's
02:51continued demand since that started in May. We saw that the second quarter was stronger than the first quarter.
02:59And our highest month was June. So we're confident that that demand will continue into the future.
03:07The Chinese government doesn't necessarily share your views on the motivations of those Chinese
03:14visitors. Can you foresee any further potential tightening of those rules?
03:23The rules around this business have been in place for some 20 years now, and we've seen continued demand
03:28throughout. We continue to see demand from the mainland Chinese visitors, but also actually in the domestic
03:36segment in Hong Kong, that grew by 23% in the first half. And we've seen demand actually right across
03:43our
03:43portfolio. Clearly, the mainland Chinese visitors is a part of our portfolio, but we have a broad-based
03:49business. And the fundamental demands are still there. As I say, it's a business that's been around for a long
03:55time. We believe that it will continue to have strong demand.
04:01Now, earlier this year, AIA said it's also trying to build up its high net worth business. Can you give
04:05us an update on
04:06how that is progressing and where a lot of those new clients are based?
04:12Yeah, we've seen that business has been growing well. People come to Hong Kong and Singapore in particular to grow
04:20the
04:20business. We see that the solutions that we have are very attractive to our customers. Clearly, they have a great
04:28trust in AIA as a brand. We're very secure, and we look after our customers. We give them great advice
04:36and great
04:37customer service. So the international centers of Hong Kong and Singapore continue to grow. And it's part of Hong Kong's
04:45efforts to
04:46continue to be a global financial center. We're very supportive of that. Hong Kong is our home, and it's a
04:53great place to do business. We
04:55believe it will continue to be so. And indeed, it will go from strength to strength.
05:00Well, we need to mention Singapore as well. That was a bright spot, good growth and new business there as
05:05well. Can you talk to us about the
05:06outlook for that market? And would you be putting more resources into ASEAN more generally?
05:14Yeah, the Singapore business, as you say, has performed very well. We saw a strong performance from both our agency
05:20and
05:20partnership business. There was a strong demand for our saving solutions. We have stewardship funds where we look after the
05:28investment decisions for our clients in order that they can meet their long term needs. We continue to be very
05:34committed to
05:35ASEAN. We continue to invest. We see that there's been growth in the first half. And with that, we're a
05:42leader in ASEAN. We have the best
05:44agency force in ASEAN, I believe. And we've been, you know, we've been number one MDRT. That's a measure of
05:50agent quality for many years in ASEAN. And for AIA globally,
05:57we've been number one MDRT globally for 12 years now. So ASEAN is a core growth engine for us. As
06:05I say, we also have the growth engines of China, Hong Kong, and
06:09India as well. India grew by 31% in the first half. We see a tremendous growth path for that
06:16business as well. So overall, we're very optimistic about the
06:19future. And we believe that the business will go from strength to strength in the future.
06:25And how about your appetite for the private debt asset class as well? And how do you see that growing
06:31as a proportion of your business?
06:35Yeah, the way that we approach our investments, Paul, is to make sure in a prudent and secure way, we
06:43focus first on our liabilities. There's clearly another noise in the market day to day. For
06:48instance, we've seen a lot of movements in interest rates today. But we're not here to make long, short bets
06:55on interest rates. We're here really for the long term. And we match
06:58our liabilities with our assets in order to reduce volatility and risk.
07:04So with that, we pass that to our investment colleagues who invest the money very prudently. If you look at
07:11private credit, for example, it's less than 3% of our portfolio.
07:16But the majority of that is in senior secured lending. We believe it's good business. Clearly, we manage it prudently.
07:24Private assets are a very good
07:26asset for us, particularly for the long term. They'll continue to be a part of the portfolio.
07:31We increased our allocation slightly. But, you know, we have a diverse range of assets and predominantly they're fixed income
07:40in nature.
07:42Garth, really appreciate your time today and your insights.
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