AIA released a statement early to quash rumors about its financial performance, highlighting that its Hong Kong business was hit by reduced mainland Chinese visitors.
Asia-focused insurer AIA posted a lackluster 1 percent increase in new business value – a measure of future profitability of new policies – and stayed flat at $980 million due to a pullback by its Hong Kong arm in the third quarter. According to a statement, the city’s business value fell by a «double-digit» percentage rate and when excluded, overall business value actually grew 14 percent.
«Some of our markets are experiencing headwinds from the lower interest rate environment, falling consumer confidence and rising political and trade tensions,» the statement said. «In particular, the reduced numbers of mainland Chinese visitors to Hong Kong continue to affect sales.»
Insurance Headwinds
Ongoing unrest in Hong Kong led to negative rumors about AIA’s financial performance which it described as incomplete and inaccurate, though it acknowledged the headwinds. It noted that whilst business to Hong Kong residents actually rose, this was offset by the sales decline to mainland visitors which «broadly tracked» the drop in overall victors to the city in July and August.
More than just sales declines, insurance firms covering Hong Kong policies are set to face major claims from damages and disruption to retail outlets, banks and other businesses totaling up to $77 million – the third-highest amount for a single incident after two major typhoons.
