AIA maintains strong capital position in 2024: Fitch

Thanks to a coverage ratio of 262% under the local capital summation method.

AIA has proved to have a robust capital position, consistently strong financial performance, extensive market presence across Asia-Pacific (APAC), and prudent investment strategy, according to Fitch Ratings.

AIA’s consolidated capitalisation remains resilient, supported by a coverage ratio of 262% under the local capital summation method as of mid-2024, significantly above the regulatory minimum of 100%. 

Despite ongoing dividend payouts and share buybacks, including a $2b increase to its total buyback program in April 2024, AIA’s financial leverage remains low, pro forma below 14% as of mid-2024.

In the first half of 2024, AIA’s profitability saw notable improvement, with an annualised return on equity rising to 16.5% from 8.8% in 2023. 

Contributing factors include a $3.78b net gain in new business contractual service margin (CSM) under the new accounting standard and stable returns from investments. 

The company also reported growth in the value of new business (VONB) during the first nine months of 2024, alongside a higher VONB margin.