AIA boosts buyback, targets 75% payout in 2024

AIA is expected to maintain robust risk management practices, S&P Global says.

AIA Group has decided to boost its share buyback is anticipated to slow down the company's capital accumulation, as more funds will be directed towards outgoing capital in the form of dividends and buybacks, said S&P Global Ratings.

The group planned to $12b from $10b and aims for a payout ratio target of 75% of annual net free surplus generation starting in 2024.

Consequently, AIA may increasingly rely on softer forms of capital, like policyholder capital reserves and hybrid debts, making it more susceptible to market fluctuations.

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Despite these shareholder-friendly actions, AIA is expected to maintain robust risk management practices in its pan-Asian growth strategy and asset allocation. 

In the first quarter of 2024, AIA's new business value surged by 31% to $1.3b, with an increased new business margin of 54.2%. 

These positive metrics underscore its strong business presence across the Asia Pacific region.