Aia Group Limited · HKEX:1299

Aia — FY2016 Earnings Presentation

75 slides from Aia's earnings presentation, Feb 24, 2017

  1. Slide 1: 2016 Annual Results Presentation

    2016 ANNUAL RESULTS PRESENTATION 24 February 2017

  2. Slide 2: Disclaimer

    Disclaimer This document (“document”) has been prepared by AIA Group Limited (the “Company”) and its advisers solely for use at the presentation (the “Presentation”) held in connection with the announcement of the Company’s financial results. References to “document” in this disclaimer shall be cons

  3. Slide 3: Mark Tucker, Group Chief Executive

    Value of New Business $2,750m +28% Operating Profit After Tax $3,981m +15% Final Dividend per Share 63.75 HK cents +25% Mark Tucker Group Chief Executive

  4. Slide 4: 2016 Excellent Performance Across All Key Metrics

    2016 Excellent Performance Across All Key Metrics  Value of new business up 28% to $2,750m  Operating profit up 15% to $3,981m  Underlying free surplus generation up 11% to $4,024m  EV Equity up 11% to $43.7b  AIA Co. solvency ratio of 404%  Final dividend per share up 25% 4

  5. Slide 5: Aligned Growth Platforms and Priorities

    Aligned Growth Platforms and Priorities Growth Growth Growth Drivers Platforms Priorities Large  Sustain competitive advantages in Premier Agency Premier Population  Recruit, develop and promote next generation of agents Agency  Enhance productivity and service through technology Growth  Expand

  6. Slide 6: Asia's Macroeconomic Advantage

    Asia’s Macroeconomic Advantage Unprecedented Structural Monetary Growth Potential Resilience & Fiscal Flexibility Strong & Stable Growth Outlook Domestic Demand Driven Growth Robust Traditional Monetary Policy GDP Growth rate (constant price) GDP growth contribution Central bank policy rate % %, 201

  7. Slide 7: Asia's Unprecedented Growth Opportunity

    Asia’s Unprecedented Growth Opportunity Compounding Growth – Growing GDP and Penetration Penetration Rate = $1 trillion premium 2015 Large and Growing Mortality Protection Gap 7% G7 G7 Asia ex-Japan Thailand Asia Life Potential = $10trn India Malaysia 7x the G7 today China Philippines 2.2x 0% Indone

  8. Slide 8: AIA is in the Right Place at the Right Time

    AIA is in the Right Place at the Right Time Gross Premium by Region ($b) Asia vs G7 Growth and Profitability(1) 10% Equals 2015 GWP, $100b 1,555 Canada 2025E 1,074 Profitability France UK US Asia 680 5% 2015 Japan G7 average 201 Italy 122 Germany 0% Asia Europe North Latin Africa 0% 10% ex-Japan Ame

  9. Slide 9: Clear Strategy, Advantaged Growth Platform

    Clear Strategy, Advantaged Growth Platform Distribution Mix Product Mix Geographical Mix % of VONB % of VONB % of VONB 8% Other 7% Malaysia 30% Partnerships 10% Unit-linked 11% Singapore 11% Other Markets 35% Participating 13% Thailand 18% China 70% Agency Traditional 47% Protection 40% Hong Kong 20

  10. Slide 10: Consistent Execution, Sustained Delivery

    Consistent Execution, Sustained Delivery VONB ($m) OPAT ($m) 2,750 2.1x 3,981 4.1x 2,198 3,556 3,248 1,845 2,839 1,490 2,441 2,244 1,188 1,900 932 667 2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016 EV Equity ($m) Final Dividend Per Share (HK cents) 43,650 63.75 1.7x 39,818 2.9

  11. Slide 11: Garth Jones

    Garth Jones Group Chief Financial Officer

  12. Slide 12: Excellent Financial Results – Across All Key Metrics

    Excellent Financial Results – Across All Key Metrics ($m) 2016 2015 CER AER VONB 2,750 2,198 28% 25% Growth EV Operating Profit 5,887 5,068 19% 16% EV Equity 43,650 39,818 11% 10% Operating Profit After Tax 3,981 3,556 15% 12% IFRS Operating Margin After Tax 18.1% 18.0% 0.1 pps 0.1 pps Earnings Shar

  13. Slide 13: Growth, Earnings, Capital and Dividends

    Growth Earnings Capital and Dividends 13

  14. Slide 14: Sustained VONB Growth

    Sustained VONB Growth ANP ($m) 5,123 +31% VONB ($m) 3,902 2,750 +28% 2,151 2015 2016 VONB Margin 54.1% (1.3)pps 52.8% 2015 2016 2015 2016 Note: Comparatives are shown on a constant exchange rate basis 14

  15. Slide 15: Delivering High-quality Distribution

    Delivering High-quality Distribution Premier Agency VONB ($m) Premier Agency Delivery 1,995  VONB up 21% +21% 1,652  Segmented recruiting and training programmes across the region  Active new agents up 20%  #1 in MDRT worldwide for 2 consecutive years 2015 2016 Partnership Distribution VONB ($m)

  16. Slide 16: Investing Capital at Attractive Returns

    Investing Capital at Attractive Returns IRRs Consistently Above 20% PVNBP Margin by Product 15% 2015 14% 2016 +37% 9% 9% 8% 8% 7% 7% 7% 6% 2010 2016 Overall Traditional Participating Unit-linked Others Protection Decreasing Payback Periods (Years) VONB Margin Movement 5 (5.8) pps +2.3 pps +0.6 pps +

  17. Slide 17: Strong and Resilient Growth Portfolio

    Strong and Resilient Growth Portfolio VONB ($m) 2016 VONB by Market Segment 1,161 +42% Hong Kong 820 Malaysia 7% 536 +54% China 347 Singapore 11% 384 +1% Thailand Hong Kong 382 Other 40% Markets +10% 11% Other 321 Markets 291 2H: +15%(1) 316 Thailand (7)% Singapore 13% 340 China 198 18% +23% Malaysi

  18. Slide 18: Strong Operating Performance Driving Positive Returns

    Strong Operating Performance Driving Positive Returns Mortality and Morbidity Persistency Rate Claims Experience Variances ($m) 95.0% 200 95% 164 149 152 94% 116 124 93% 92% 91% 90% 2011 2012 2013 2014 2015 2016 Expense Ratio Cumulative EV Operating Variances ($m) 8.7% 8.7% 8.7% 1,129 8.5% 8.4% 8.2%

  19. Slide 19: EV Operating Profit up 19% – EV Equity of $43.7b

    EV Operating Profit up 19% – EV Equity of $43.7b 2016 EV Equity Movement ($m) +15% 394 (111) (273) 2,750 (658) (1,124) 2,854 45,705 43,650 EV Operating Profit +19%(1) of $5.9b 39,818 Group Expected VONB Operating Finance Group Investment Exchange Dividend Group EV Equity Return on EV Variances and C

  20. Slide 20: Interest Rates and EV Sensitivity

    Interest Rates and EV Sensitivity AIA Long-term Assumptions vs Market Rates Sensitivity of EV Weighted Average by Geography (1) As at 30 Nov 2016 4.5% 4.0% Interest rates + 50 bps 0.4% 3.5% Interest rates - 50 bps (0.9)% 3.0% 2.5% Equity prices + 10% 1.7% 2.0% Equity prices - 10% (1.7)% 10 Year Mark

  21. Slide 21: Currency Sensitivity

    Currency Sensitivity EV ($m) VONB ($m) 42,114 2,750 (2.6)% 2.6% (3.0)% 3.0% 5% fall in 5% rise in 5% fall in 5% rise in local market local market local market local market currencies vs currencies vs currencies vs currencies vs US dollar US dollar US dollar US dollar 1,081 82 ​ ​ ​ ​ ​ 2016 2016 EV

  22. Slide 22: Strong & Sustained Growth in Profitable New Business

    Strong & Sustained Growth in Profitable New Business VONB ($m) 2,750 2,198 4.1x 1,490 1,845 1,490 1,239 1,260 1,188 1,053 959 932 845 792 667 676 645 533 512 364 399 303 1H2010 2H2010 1H2011 2H2011 1H2012 2H2012 1H2013 2H2013 1H2014 2H2014 1H2015 2H2015 1H2016 2H2016 22

  23. Slide 23: Growth, Earnings, Capital and Dividends

    Growth Earnings Capital and Dividends 23

  24. Slide 24: IFRS Operating Profit up 15%

    IFRS Operating Profit up 15% Operating Margin After Tax 18.0% 18.1% +0.1pps Operating Profit After Tax ($m) 3,981 +15% 3,469 2015 2016 Expense Ratio 8.2% 7.9% (0.3)pps 2015 2016 2015 2016 Note: IFRS operating profit includes the expected long-term investment returns for equities and real estate. Ope

  25. Slide 25: Resilient and Diversified Earnings

    Resilient and Diversified Earnings 2016 Sources of IFRS Operating Profit(1) High-quality Business  Balanced sources of earnings Return on Net Worth 13%  Majority insurance and fee-based profits  Profitable new business mix Participating  Underpinned by focus on regular premiums and Spread and pr

  26. Slide 26: Profitable Growth – Delivered with Scale

    Profitable Growth – Delivered with Scale OPAT ($m) 2016 IFRS OPAT by Market Segment 1,334 +16% Hong Kong 1,147 Malaysia 7% 768 +17% Thailand 656 Singapore 11% Hong Kong Other 662 34% +17% Markets 564 China 12% 469 +29% China 363 453 Other +6% Singapore Markets 426 17% Thailand 19% 265 +6% Malaysia 2

  27. Slide 27: Strong ROEV and ROE Progression

    Strong ROEV and ROE Progression Profitable New Business Driving ROEV Generating Earnings & ROE Progression EV Operating Profit ($m) OPAT ($m) 5,887 3,981 2.4x 5,068 2.1x 3,556 4,535 3,248 3,975 2,839 3,491 2,441 3,105 2,244 2,412 1,900 2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015

  28. Slide 28: Allocated Equity Movement

    Allocated Equity Movement IFRS Shareholders’ Allocated Equity Movement ($m) +15% 3,981 97 86 (1,124) ( 372 ) 31,128 29,632 26,964 Adjusted Operating Profit Short-term Other Allocated Equity Dividend Other Capital Allocated Opening After Tax Fluctuations in Non-operating Before Paid Movements and Equ

  29. Slide 29: Strong and Sustained Earnings Growth

    Strong and Sustained Earnings Growth OPAT ($m) 3,981 2.1x 3,556 3,248 2,025 1,956 2,839 1,798 1,758 2,441 1,615 1,633 2,244 1,428 1,411 1,900 1,220 1,221 1,119 1,125 969 931 1H2010 2H2010 1H2011 2H2011 1H2012 2H2012 1H2013 2H2013 1H2014 2H2014 1H2015 2H2015 1H2016 2H2016 29

  30. Slide 30: Growth, Earnings, Capital and Dividends

    Growth Earnings Capital and Dividends 30

  31. Slide 31: Solvency Ratio of 404% for AIA Co.

    Solvency Ratio of 404% for AIA Co. Solvency Ratio on HKICO Basis for AIA Co. Ongoing Capital Strength 433% 427% 428%  Resilient solvency position 404%  Prudent HKICO reserves and capital 353% 337% 311%  Strong retained earnings  Including the payment for the increased shareholding in Tata AIA in

  32. Slide 32: Conservative Investment Portfolio – Stable Yield

    Conservative Investment Portfolio – Stable Yield IFRS Operating Profit Investment Return ($m) Total Investments of $137b(2) Real Cash & Cash 5,984 6,424 Equivalents Estate Expected 4% 1% Return for 1,260 1,343 Equities and Equities Real Estate 11% Interest Fixed Income 4,724 5,081 Income 84% Total B

  33. Slide 33: Self-financed Growth at Attractive Returns

    Self-financed Growth at Attractive Returns Free Surplus of $9.8b on the HKICO Basis ($m) +$2.4b 4,024 (1,374) 1,005 (1,124) (161) (116) 9,901 9,782 7,528 Free Surplus Underlying New Business Unallocated Finance Cost Free Surplus Investment Dividend Free Surplus End of 2015 Free Surplus Investment Gr

  34. Slide 34: Increased Returns and Capital Efficiency Since IPO

    Increased Returns and Capital Efficiency Since IPO VONB ($m) New Business Strain as % of VONB 2,750 144% 4.1x (94)pps 50% 667 2010 2016 2010 2016 IRRs Consistently Above 20% Decreasing Payback Periods (Years) 5 +37% 4 2010 2016 2010 2016 34

  35. Slide 35: Disciplined Financial Management

    Disciplined Financial Management VONB ($m) Free Surplus ($m) 2,750 9,782 4.1x 2.0x 4,992 667 2010 2016 2010 2016 New Business Investment ($m) Final Dividend Per Share (HK cents) 1,374 63.75 1.4x 2.9x 958 22.00 2010 2016 2011 2016 35

  36. Slide 36: Step Up in Final Dividend Per Share by 25%

    Step Up in Final Dividend Per Share by 25% Final Dividend Per Share (HK cents) 2.9x 63.75 +25% 51.00 34.00 28.62 24.67 22.00 2011 2012 2013 2014 2015 2016 36

  37. Slide 37: 2016 Financial Results Summary

    2016 Financial Results Summary  Material growth in profitable new business Growth  Significant capital investment at high returns  Improvement in new business capital efficiency  Strong growth in IFRS operating profit Earnings  Increased ROE over time  Diversified and large-scale sources of ea

  38. Slide 38: Gordon Watson

    Gordon Watson Regional Chief Executive

  39. Slide 39: Hong Kong: Another Excellent Performance

    Hong Kong: Another Excellent Performance VONB ($m)  Premier Agency  Delivered excellent VONB growth 1,161 +42%  New recruits up 21% 820  Two-thirds of new recruits aged 35 or below  Registered MDRT members up over 60%  Profitable Partnerships  Significant VONB growth  Strong contribution fro

  40. Slide 40: Other Markets: Delivered Solid Overall Growth

    Other Markets: Delivered Solid Overall Growth VONB ($m)  Double-digit VONB growth Australia 321  #1 ranked in IFA individual life market 291 +10%  Continued strong growth in group insurance 2H: +15%  Double-digit agency VONB growth Indonesia  Focus on quality recruitment and agency activity  P

  41. Slide 41: Bill Lisle

    Bill Lisle Regional Chief Executive

  42. Slide 42: Malaysia: Delivering Excellent Growth

    Malaysia: Delivering Excellent Growth VONB ($m)  Premier Agency 198  Quality recruitment and agency development 161 +23%  Active new agents up 25%  Active agent productivity up more than 20%  90% of new business submissions via iPoS  Agency Takaful ANP up 90%  Profitable Partnerships  Double

  43. Slide 43: Other Markets: Delivered Solid Overall Growth

    Other Markets: Delivered Solid Overall Growth VONB ($m)  Positive VONB momentum over 2H Korea 321  Clear focus on strengthening quality distribution and provision of protection products 291 +10% 2H: +15%  OPAT up 10%  Excellent VONB growth Sri Lanka  Implementation of Premier Agency strategy an

  44. Slide 44: Ng Keng Hooi

    Ng Keng Hooi Regional Chief Executive

  45. Slide 45: Singapore: Strong Agency VONB Growth

    Singapore: Strong Agency VONB Growth VONB ($m)  Premier Agency 340 (7)%  Double-digit agency VONB growth 316  #1 MDRT in Singapore  MDRT qualifiers up 30%  80% of new business submissions via iPoS  Profitable Partnerships  Solid progress from Citibank  Lower single premium broker sales 2015

  46. Slide 46: Thailand: Stable Results

    Thailand: Stable Results VONB ($m)  Premier Agency 384  Recruitment and training programmes targeting 382 +1% young, highly-educated candidates  Financial Adviser programme recruits up 35%  Unit-linked licensed agents up 43%  Around 90% share of unit-linked market  #1 MDRT in Thailand  Produc

  47. Slide 47: China: Sustained Outperformance

    China: Sustained Outperformance VONB ($m)  Premier Agency 536  Differentiated distribution strategy +54%  Focus on quality recruitment, training and leadership development 347  New recruits up more than 50%  New agent productivity up over 20%  Active agents up more than 50%  Products and Cust

  48. Slide 48: AIA China's Unprecedented Growth Potential

    AIA China’s Unprecedented Growth Potential Rapidly Rising GDP per Capita Larger and Wealthier Middle Class (USD, 2016 Current Prices) Non-AIA China AIA China $12k Urban Population 561m 205m 272m $10k Affluent & Mass Affluent 36% $8k 225m Middle 67% Class in 83% AIA China’s $6k Footprint Mass Market

  49. Slide 49: AIA China: Guangdong Example

    AIA China: Guangdong Example AIA Guangdong Agency VONB Growth Guangzhou Foshan All Other Cities AIA Guangdong VONB by City 7.6x Shaoguan Jieyang Shantou Guangzhou Qingyuan 2010 2013 2016 Foshan Huizhou Dongguan Zhaoqing AIA Guangdong’s Significant Potential Jiangmen 3.5 %  Guangdong is the largest

  50. Slide 50: AIA China: Differentiated Strategy and Execution

    AIA China: Differentiated Strategy and Execution Differentiated Distribution & Product Strategy Sustained Outperformance VONB per Agent(1) VONB ($m) 536 3.2x 7.9x 68 Industry AIA China 2010 2016 Source of IFRS Operating Profit OPAT ($m) 469 Return on Net Worth 15% 5.5x Participating and Spread 12% I

  51. Slide 51: Mark Tucker

    Mark Tucker Group Chief Executive

  52. Slide 52: Sustained Delivery Through Market Cycles

    Sustained Delivery Through Market Cycles 2010 2011 2012 2013 2014 2015 2016  Anaemic GFC  US sovereign  Expansionary  Strengthening US  Lower for longer  US interest rate  China recovery downgrade policy; US QE3 recovery interest rates increase slowdown fears  Deepening  Continued  Europea

  53. Slide 53: AIA Group – Creating Sustainable Shareholder Value

    AIA Group – Creating Sustainable Shareholder Value  Unprecedented long-term structural growth drivers  Advantaged platform and clear strategy  Experienced and proven management team  Strong financial discipline  Consistent, sustainable execution 53

  54. Slide 54: Q&A Session

    Q&A Session

  55. Slide 55: Definitions and Notes

    Definitions and Notes  Actual investment return is the interest income from fixed income investments and actual investment returns of equities and real estate, as a percentage of average fixed income investments, equities and real estate over the period. This excludes unit-linked contracts and cons

  56. Slide 56: Appendix

    APPENDIX , THE REAL LIFE EX COMPANY 41

  57. Slide 57: People – Our Sustainable Competitive Advantage

    People – Our Sustainable Competitive Advantage Staff Engagement and Our People Share Purchase Plan Take Up Global Benchmark  Experienced management team with strong 2011 2016 track record of execution  Local leaders responsible for decisions on the ground  Committed to attracting, developing and

  58. Slide 58: Capital Fungibility

    Capital Fungibility Net Funds Remitted to Group ($m) Group Working Capital ($m) 2,195 8,416 2,143 2,021 7,843 1,733 1,718 6,614 1,583 1,521 5,556 5,185 3,912 2,180 2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016 58

  59. Slide 59: 2016 Working Capital Movement

    2016 Working Capital Movement Working Capital Movement ($m) 260 (310) 2,021 (86) (1,124) (188) 8,416 7,843 Working Net Funds Increase in Payment for Purchase of Cost of Change in Fair Working Capital Remitted Borrowings increased Shares Held by Dividend Paid Value Reserve Capital End of 2015 shareho

  60. Slide 60: 2016 ANW Movement

    2016 ANW Movement ANW Movement ($m) 3,440 (695) 329 (111) (61) (142) (281) (1,124) 18,152 16,544 15,189 ANW Expected Contribution Operating Finance ANW Investment Other Exchange Dividend ANW End of Return to Variances Costs Before Variances Non-operating Rates and Paid End of 2015 ANW from and Non-

  61. Slide 61: 2016 VIF Movement

    2016 VIF Movement VIF Movement ($m) 3,445 65 (212) 120 (271) (586) 25,933 25,570 23,009 VIF Expected Contribution to Operating VIF Investment Other Exchange VIF End of 2015 Return VIF from VONB Variances and Before Variances Non-operating Rates and End of 2016 Assumption Non-operating and Variances

  62. Slide 62: 2016 IFRS Shareholders' Equity and ANW

    2016 IFRS Shareholders’ Equity and ANW Reconciliation of IFRS Shareholders’ Equity to ANW ($m) (9,252) 1,602 (1,743) 336 50 (9,433) 34,984 25,977 16,544 Equity Difference Mark-to-market Deferred Tax Elimination of Non-controlling Group ANW Adjustment to Group ANW End of 2016 Between IFRS Adjustment

  63. Slide 63: Robust Capital Structure

    Robust Capital Structure Solvency Ratio AIA Capital Structure on HKICO Basis for AIA Co. 433% 427% 428% 2016 Leverage Ratio(1) 8.9% 404% 337% 353% Borrowings 311% $3,460m 2010 2011 2012 2013 2014 2015 2016 Solvency Ratio on HKICO Basis for AIA International 385% Total Equity 356% $35,310m 321% 334%

  64. Slide 64: Total Invested Assets

    Total Invested Assets Other Total Invested Assets by Type Participating Policyholder $m Total Funds and Shareholder Total $137.5b Fixed Income 20,537 95,491 116,028 Equities 5,451 9,262 14,713 Fixed income 84% Cash and cash Equities 11% 179 959 1,138 equivalents Cash and cash equivalents 1% Derivati

  65. Slide 65: Conservative and High-quality Fixed Income Portfolio

    Conservative and High-quality Fixed Income Portfolio Total Fixed Income by Type Total Fixed Income by Maturity Total $116.0b Total $116.0b Government & Government 41% >10 Years & 57% Agency Bonds No Fixed Maturity Corporate Bonds 52% 5 - 10 Years 25% Structured Securities 1% 1 - 5 Years 15% Loans an

  66. Slide 66: Conservative and High-quality Fixed Income Portfolio

    Conservative and High-quality Fixed Income Portfolio Total Bonds by Accounting Classification Total Bonds by Rating(1) Total $109.2b Total $109.2b Average Rating A Other Policyholder & 82% AAA 4% Shareholder (AFS) AA 24% Participating Funds 17% (FVTPL) A 39% BBB 28% Other Policyholder & 1% (2) Share

  67. Slide 67: Government Bond Portfolio

    Government Bond Portfolio Government and Agency Bonds Government and Agency Bonds by Rating(1) by Geography Total $47.8b Total $47.8b Thailand 25% AAA 9% China 25% AA 44% Korea 17% A 33% Singapore 10% BBB 10% Malaysia 6% Philippines 6% BB & Below 4% Others 11% Notes: As of 30 November 2016 (1) For g

  68. Slide 68: Government Agency Bond Portfolio

    Government Agency Bond Portfolio Government Agency Bonds by Rating Rating Total ($m) Total $11.9b Average Rating AA- AAA 1,889 AA 6,272 AAA 16% A 2,146 AA 53% BBB 1,474 A 18% BB and below 151 BBB 12% BB and below 1% Total 11,932 Note: As of 30 November 2016 68

  69. Slide 69: Corporate Bond Portfolio

    Corporate Bond Portfolio Corporate Bonds by Rating Rating Total ($m) Total $60.2b Average Rating A- AAA 285 AAA 1% AA 4,682 AA 8% A 26,530 A 43% BBB 24,758 BBB 41% BB and below(1) 3,929 BB and below (1) 7% Total 60,184 Notes: As of 30 November 2016 (1) Including not rated bonds 69

  70. Slide 70: Structured Security Portfolio

    Structured Security Portfolio Structured Securities by Rating Rating Total ($m) Total $1.1b Average Rating BBB+ AAA 20 AA 92 AAA 2% A 421 AA 8% A 37% BBB 493 BBB 43% BB and below(1) 109 (1) BB and below 10% Total 1,135 Notes: As of 30 November 2016 (1) Including not rated bonds 70

  71. Slide 71: Impairment Experience During Global Financial Crisis

    Impairment Experience During Global Financial Crisis AIA Impairments on 2008 Impairment Charges Invested Assets ($m) as % of Invested Assets 5.6% 142 1.8% 67 1.5% 1.5% 0.3% - 1 - 2007 2008 2009 2010 2011 Co. A Co. B Co. C Co. D AIA 71

  72. Slide 72: Risk Discount Rate and Risk Premium

    Risk Discount Rate and Risk Premium As at 30 November 2010 As at 30 November 2016 Long-term Long-term Risk Discount Risk Risk Discount Risk 10-year 10-year Rates Premium Rates Premium % Govt Bonds Govt Bonds Australia 8.75 5.65 3.10 7.35 3.00 4.35 China 10.00 3.74 6.26 9.55 3.50 6.05 Hong Kong 8.00

  73. Slide 73: Sensitivity Analysis – Allocated Equity

    Sensitivity Analysis – Allocated Equity Interest Rates ($m) Equities ($m) 29,632 29,632 0.7% (0.7)% (3.4)% 3.4% 50 basis 50 basis points points 10% fall in 10% rise in decrease in increase in equity prices equity prices interest rates interest rates 995 219 ​ ​ ​ ​ 2016 (204) 2016 Allocated Equity A

  74. Slide 74: Sensitivity Analysis – EV

    Sensitivity Analysis – EV Sensitivity of EV as at 30 November 2016 Equity prices + 10% 1.7% Equity prices - 10% -1.7% Interest rates + 50 bps 0.4% Interest rates - 50 bps -0.9% Presentation currency 5% appreciation -2.6% Presentation currency 5% depreciation 2.6% Lapse/discontinuance rates + 10% -1.

  75. Slide 75: Sensitivity Analysis – VONB

    Sensitivity Analysis – VONB Sensitivity of VONB as at 30 November 2016 Interest rates + 50 bps 6.4% Interest rates - 50 bps -8.2% Presentation currency 5% appreciation -3.0% Presentation currency 5% depreciation 3.0% Lapse rates + 10% -4.9% Lapse rates - 10% 5.5% Mortality/morbidity rates + 10% -12.

AIA Group — FY2016 Earnings Presentation on 6ix