AIA Group (1299.HK) released its 2025 financial results and held an earnings presentation on March 19. Management reported record-high performance for the year, with significant growth in new business value and shareholder returns. According to the financial report, AIA's new business value increased by 15% to $5.516 billion, while post-tax operating profit reached $7.136 billion, with earnings per share rising by 12%.

However, among AIA's key markets, Mainland China was the slowest-growing region in 2025. The report indicated that the total weighted premium income for Hong Kong, Mainland China, and Thailand markets was $14.726 billion, $11.272 billion, and $5.336 billion, respectively, accounting for 31.4%, 24.0%, and 11.4% of the total. Combined, these three markets contributed nearly 70% (66.8%) of AIA's premium income.

Beyond weighted premium income, AIA also emphasized disclosures on new business performance across its markets. Annualized new premiums and new business value are critical indicators for assessing an insurer's annual operational performance. Annualized new premiums represent the annualized premium income from new policies sold during the reporting period, while new business value reflects the present value of economic benefits these new policies are expected to generate for shareholders over their entire term.

Data revealed that the growth momentum for AIA's new business value in 2025 primarily came from Hong Kong and Thailand: new business value in Hong Kong surged 28% to $2.256 billion, and Thailand saw a 22% increase to $993 million. In contrast, Mainland China's new business value grew only marginally by 2%, reaching $1.240 billion.

More notably, annualized new premiums in the mainland market decreased slightly from $21.68 billion in 2024 to $21.52 billion in 2025. Meanwhile, Hong Kong and Thailand markets achieved growth rates of 25.8% and 9%, respectively, in annualized new premiums during the same period.

AIA Life Insurance is the entity through which AIA operates in Mainland China. In 2025, AIA Life expanded its operations across four provinces: Shandong, Chongqing, Anhui, and Zhejiang, with a 14% increase in newly recruited agents. Why, then, has annualized new premium growth been sluggish in the mainland market? Is the middle class losing interest in insurance purchases?

The situation is more nuanced. Within Hong Kong's new business value, contributions from local Hong Kong customers and mainland visitor customers accounted for 49% and 51%, respectively. Their new business values grew by 21% and 35% in 2025, indicating a significant number of mainland customers are traveling to Hong Kong to purchase insurance policies.

What challenges has AIA faced in the Mainland China market? Influenced by multiple factors including declining interest rates, the integration of reporting and operations in the individual agent channel, and product structure adjustments, the insurance market underwent significant changes in 2025. The difficulty of conducting business through the individual agent channel increased, elevating the strategic importance of the bancassurance channel.

AIA's annual report detailed the shifts in the mainland market: AIA Life's new business value growth exhibited a V-shaped recovery pattern in 2025 – it declined by 4% year-on-year in the first half but rebounded strongly in the second half with a 14% increase. After accounting for changes in economic assumptions, full-year new business value growth settled at 2%.

AIA Life stated that in the second half of 2025, protection-type products contributed 44% of the new business value from the agency channel. The launch of the "盈如意" series, participating products with critical illness riders, leveraged the company's extensive experience in critical illness coverage while incorporating a participating mechanism that allows customers to share in favorable operational results.

Another notable change is that against the backdrop of persistently low interest rates, insurance products, particularly participating policies, are becoming an increasingly popular choice. With substantial household deposits maturing in 2026, insurance products are attracting capital inflows. AIA Life indicated that the new business value growth momentum from the latter half of 2025 continued into the first two months of 2026, during which new business value increased by over 20% compared to the same period a year prior.

AIA Group is a life insurance company primarily operating in Asia across 18 markets, with Hong Kong, Mainland China, Thailand, Singapore, and Malaysia being its major contributors to premium income. In Mainland China, AIA Life currently operates in 14 regions.

On the reporting date, AIA's stock closed at HK$82.80 per share, down 2.07%, matching the decline of the Hang Seng Index.