AIA Group Limited Aktie

Good morning, and thank you for joining AIA's 2026 interim results presentation. We have delivered a strong set of results with double-digit growth across our key financial metrics. Value of new business increased by 10% to a record high of $3.2 billion. We saw growth across all distribution channels and reportable segments, excluding Thailand, which had an exceptionally high comparative as previously disclosed.

Underlying VONB growth was 14% adjusting for Thailand. AIA's consistent delivery of high-quality new business has accelerated growth in earnings. Operating profit after tax of $4.2 billion was up 13% per share, driving a record operating ROE of 17.5%. And we now expect to exceed our 9% to 11% OPAT per share CAGR target over 2023 through 2026.

Operating cash generation grew strongly with underlying free surplus generation up 10% per share and net free surplus generation up 12% per share. The Board has declared a 10% increase in the interim dividend per share. These results demonstrate that our strategy is working as intended. We are growing fast, returning substantial cash to shareholders, generating higher returns on equity and maintaining a resilient balance sheet with low leverage. Sustained over time, that combination is the key driver of long-term value creation.

Our strong results are underpinned by our position as the leading pan-Asian life and health insurer. But what sets us apart is not just that we operate in the most attractive markets in the world. It is that we combine a long runway for growth with a unique business model and tangible competitive advantages that allow us to capture this significant opportunity consistently and profitably.

Our proven track record of execution is demonstrated by VONB compounding at 17% per annum over the last 3 years while maintaining strong margins. AIA's world-leading Premier Agency is at the core of our growth strategy, contributing 72% of group VONB. We train and develop the highest quality agents, equipping them with the best possible tools to meet customer needs. This is why our tied agency has been the #1 in MDRT globally for the last 12 years with more than double the members of our nearest competitor.

The success of our strategy is evident in our agency's excellent track record of growth achieved through consistent investment in growing active agent numbers and productivity. Continued disciplined execution of this strategy drove first half VONB growth of 11%, excluding Thailand at a very strong VONB margin of 68%.

The significant investments we have already made in technology and AI across recruitment, training, sales and service are delivering strong results. New agency leaders grew by 19% and new recruits by 24%. We are giving them the best possible opportunities to succeed through structured career development and targeted schemes that identify and nurture our most promising talent. And as we bring more AI-powered capabilities into this platform, the opportunity multiplies.

AI helps our agents work more effectively, identify customer needs more precisely and deliver more timely personalized advice. That means the potential of Premier Agency can be unlocked faster than before, supporting continued value creation and sustainable performance over the long-term.

Partnerships complement our Premier Agency by expanding our reach to millions of potential new customers. Our approach is selective, and we focus on a small number of high-quality partnerships that share our ambitions to drive customer value and long-term growth.

Partnership VONB increased by 18% in the first half, supported by double-digit growth in both bancassurance and IFA and broker channels. Bancassurance VONB grew by 15% as we focus on driving higher share of wallet in the affluent and high net worth customer segments. This approach is translating into higher productivity for bank staff with VONB margin remaining healthy at over 45%.

We maintain a disciplined approach to distribution through IFAs and brokers. VONB from this channel grew by 21%, supported by excellent performances in Hong Kong and Singapore. AIA creates financial value by compounding layers of new business, which generate earnings and cash well into the future.

Our first half results show that strong new business flows in recent years have driven a step-up in operating profit growth. As a result of this, we achieved OPAT growth of 13% per share in the first half.

Combined with consistent improvements in the efficiency of our balance sheet, the rise in profits led to a record operating ROE of 17.5%. The strength of the momentum in our earnings gives us confidence in our outlook, and we now expect to exceed our OPAT per share target. Strong new business flows are also driving growing cash generation, as you can see from our surplus generation numbers. Garth will address this in more detail later.

Moving now to the business highlights from our 4 growth engines. AIA China delivered an excellent performance in the first half with VONB growth of 20%. The result was driven by our market-leading Premier Agency, which is our key competitive advantage in the Chinese Mainland. AIA's agents are 3x more productive than the market average, reflecting the depth of customer relationships built on the provision of personalized advice. Premier Agency achieved a 24% increase in VONB and accounted for nearly 90% of new business. We continue to build capacity for future growth with active agents up 14% and active new agents up 25%. This stands out in an industry where agent numbers remain significantly below pre-COVID levels.

We also delivered excellent growth in capital-efficient participating products and protection while maintaining an industry-leading VONB margin of around 60%. We have built excellent momentum in our new geographies, contributing 11% of AIA China's VONB, and we remain on track to deliver our VONB target of 40% compound annual growth to 2030. Together, these results demonstrate the strength of our differentiated model and AIA remains well positioned to capture the long-term growth opportunities in the Chinese Mainland.

Turning now to Hong Kong, where we achieved another record first half result. VONB of $1.2 billion increased by 10% with margin remaining strong at 72%, reflecting our financial discipline. Our Premier Agency accounts for the majority of our business and sets the standard for quality and professionalism.

AIA Hong Kong was once again ranked the #1 MDRT company globally. 30% of agents are MDRT members, following an 18% increase compared with the previous year. First half agency VONB remained stable at a high level, while we continue to invest in recruitment, development and leadership to drive future growth. Active new agents grew by 7% and active new leaders by 22%.

Partnership distribution delivered excellent VONB growth. We saw strong performances in our IFA and broker channel as well as our strategic partnerships with Citibank and the Bank of East Asia.

Closer engagement and tailored propositions for affluent and high net worth customers are driving significantly higher sales productivity. More broadly, AIA Hong Kong's performance reflects the quality of our distribution and the attractiveness of our products across key customer segments.

Let me turn to this now. Our domestic business performed very strongly with VONB up 23%. This was supported by deeper engagement with our more than 3 million existing customers, a large contribution from new Hong Kong residents and average policy sizes increasing by 10%.

VONB from Chinese Mainland visitors was stable against a comparative, which benefited from a surge in demand ahead of product changes in the middle of 2025. Underlying demand remains strong. Second quarter VONB was higher than the first quarter with June the strongest month.

Customer flows also remained strong with more than 25,000 new customers in the first half. Our customer base is diversified with around 2/3 coming from outside the Greater Bay Area. AIA's products offer broad appeal to people seeking attractive long-term returns, protection and diversification.

Many customers have multiple policies with us and the persistency remained high at 99%, while premium finance business accounted for less than 1% of VONB. Yet with only 550,000 customers in total, the potential runway for future growth remains substantial.

AIA Hong Kong's strong track record of growth across distribution channels and customer segments reflects the strength of our business and the depth of demand. Since these attractive fundamentals remain fully intact, I have every confidence that we can continue to deliver attractive long-term growth in this market.

AIA is the leading life insurer across ASEAN, which contributed almost 1/3 of group VONB of more than $1 billion. Our Premier Agency ranks #1 for MDRT and combined with high-quality partnerships, we have a very strong platform for sustained growth across the region.

In Thailand, our largest ASEAN market, VONB grew by 13% in the second quarter. Premier Agency remains the core strength of the business, complemented by very strong growth from our partnership with Bangkok Bank.

Singapore delivered 10% VONB growth, including a 19% increase in the second quarter with growth from both agency and partnership distribution. Malaysia VONB was up by 10% in the first half with growth accelerating in the second quarter on the back of strong contributions from partnerships and continued improvement in agency momentum. The strong performance across our major ASEAN markets reinforces our belief in the long-term growth potential of the region.

Moving now to India. Tata AIA Life delivered another excellent set of results with VONB growth of 31% in the first half as we continue to capture the huge potential in the market. Agency represents 55% of our business in India and delivered excellent VONB growth of 38%. We continue to build scale and invest in future growth as evidenced by the strong increases in active agents, new recruits and new leaders.

We expanded our customer reach with bank and broker distribution and continue to see sales growth with VONB up 23% across these channels. Tata AIA ranks #1 in retail protection and persistency in India, reflecting our focus on delivering high-quality advice and products to our customers.

In summary, today's strong results are a continuation of AIA's exceptional track record of delivering growth across our key financial metrics. Our ability to deliver sustained strong performance reflects our unique position as the leading pan-Asian life and health insurer, delivering growth by capitalizing on the huge opportunity set in the region.

We are focused on driving high-quality profitable new business growth with attractive reinvestment economics that adds further layers of recurring earnings and cash generation. I am confident in our ability to continue to drive future growth and attractive shareholder value creation.

I will now hand over to our CFO, Garth Jones, who will take you through the details of our financial results.

Good morning. I'm delighted to take you through another strong set of results for AIA, demonstrating the quality of the business we have built over many years. Let me start by highlighting 3 things that I see as key in these results.

First, we achieved double-digit growth across new business earnings and cash generation. Second, the profitable new business written over many years is now compounding visibly, driving higher operating profit and free surplus generation. Third, disciplined capital deployment is lifting returns to record levels, and we have continued to both grow strongly and return capital to shareholders. In combination, these results provide clear evidence that AIA's growth model is creating sustained shareholder value.

Let me now take you through the results in more detail. VONB increased to a record $3.2 billion, up by 10%, with growth across all distribution channels and reportable segments other than Thailand. OPAT increased to $4.2 billion, up 13% per share and operating ROE reached a record 17.5%.

This strong result gives us confidence in the outlook, and we now expect to exceed our OPAT per share growth target. UFSG, our key operating measure of cash generation, increased to $3.9 billion, up 10% per share. During the first half, we returned $3.6 billion to shareholders through dividend and share buyback.

Based on this strong performance, the Board has declared a 10% increase in the interim dividend per share, reflecting both our sustained strong performance and our confidence in the future.

Turning to new business. AIA is focused on writing large-scale, high-quality and profitable new business that creates value for both our customers and shareholders. Our proprietary Premier Agency accounted for 72% of group VONB with partnership distribution contributing the remaining 28%.

VONB margin stood at 57.1%, broadly stable compared with prior year. The financial profile of our product mix is highly attractive. Traditional protection products generate underwriting profits while participating in unit-linked products generate recurring fee-based earnings. Together, these products accounted for 96% of group VONB in the first half.

This high-quality product mix generates strong and predictable cash flows with highly attractive returns on the capital we invest. Every dollar of capital invested in new business is expected to generate $4 of distributable earnings within 10 years and with a rapid payback period of just 3 years.

The internal rate of return on our new business investment remains above 20%. Our ability to write profitable new business at scale while maintaining these attractive economics is a key differentiator for AIA, and underpins our confidence in our ability to compound value over time.

Our embedded value clearly demonstrates the financial dynamics of AIA's growth model. Each cohort of profitable new business adds another layer of future earnings and cash generation, supported by prudent assumptions and disciplined management of the in-force portfolio.

EV operating profit increased to $6.6 billion in the first half, up 12% per share. Growth was driven by the higher VONB, increased expected return from our in-force and positive operating variances, reflecting the overall quality of our business and our focused operational management.

As a result, operating ROEV increased by 220 basis points to a record 18%. Investment return variances added $1 billion to EV equity, mainly from positive equity market performance in the period, while exchange rates and other nonoperating items were small.

Overall, EV equity increased by 9% to $87.1 billion before returns to shareholders. After the $3.6 billion of dividend and share buyback, EV equity reached $83.4 billion, up by 6% per share over the first half.

AIA's embedded value reflects the high quality of our in-force portfolio built for many years of profitable new business. Similar to our new business, future earnings from our in-force book are predominantly sourced from protection and long-term savings products, which provide recurring and resilient cash flows.

Our prudent assumptions and active management of the in-force portfolio have consistently resulted in positive operating variances. In the first half, these added $742 million to EV operating profit. This included positive medical claims experience, reflecting claim savings of around $200 million for the half.

At the same time, due to disciplined expense management and continued business growth, our expense ratio has improved by 130 basis points over 2 years to 6.9% this half. Since our IPO, operating variances have been positive every year and have now added over $5 billion to EV equity.

The strong track record and the limited sensitivity to capital market movements demonstrates the prudence of our assumptions and the quality of the in-force portfolio. Overall, our EV provides a prudent and reliable measure of the economic value created for shareholders.

Now moving to the IFRS results. First, on the left-hand side of the slide. The contractual service margin, or CSM, represents the accumulated stock of expected future IFRS earnings from our in-force portfolio. Each new cohort of profitable new business adds a further layer to the stock, which is then released into earnings over time.

During the first half, new business added $4.9 billion, while the expected return contributed a further $1.7 billion. After a release of $3.4 billion of CSM into earnings, together with small other items, including variances and exchange rate movements, the CSM balance increased to $67.8 billion. Underlying CSM growth was 10%, driven by our strong organic growth.

Turning to the right-hand side. Since the adoption of IFRS 17, new business and the expected return on the in-force portfolio have added $38.1 billion to the CSM. After releases of $20.5 billion into earnings, the CSM has increased by a net $17.5 billion, thereby expanding our stock of future earnings, while the release rate has remained broadly stable. This demonstrates how successive cohorts of profitable new business compound over time to support sustained growth in recurring earnings.

The CSM release is the principal contributor to OPAT, our core measure of operating earnings. The greater release into profit due to a higher CSM is the main driver of the 11% increase in insurance service results seen in the first half.

Positive variances also flow into this, reflecting continued disciplined management of expenses and claims, including progress in executing our integrated health strategy. The net investment results after expenses also increased compared with last year. Overall, OPAT increased to $4.2 billion in the first half, up by 13% per share.

Strong earnings growth, together with disciplined capital management, drove operating ROE up by 200 basis points to a record 17.5%. The growth in CSM and the quality and resilience of our in-force portfolio give us confidence in the earnings outlook, and we now expect to exceed our 9% to 11% OPAT per share CAGR target for 2023 to 2026.

The same compounding dynamic that drives earnings also underpins cash generation. Each new policy that we write adds a future stream of cash flows to our growing in-force portfolio, which emerges progressively over future years.

At the end of the first half, we expect our in-force portfolio to generate $57 billion of distributable earnings over the next 10 years. This is 15% higher than at the end of the first half of 2025, reflecting the addition of profitable new business, together with an uplift from positive variances.

As these distributable earnings emerge, they drive higher operating cash generation. In the first half, UFSG increased to $3.9 billion, up 10% per share. After investment in new business and central costs, net free surplus generation increased to $2.8 billion, up 12% per share.

The stronger growth in net free surplus generation than UFSG reflects the increased capital efficiency of new business written, in particular, the shift in product mix towards participating business in the Chinese Mainland. These results demonstrate the direct progression from profitable new business, to growth in the in-force portfolio, and then into higher earnings and ultimately cash generation.

We follow a clear and shareholder value-focused capital management framework. Our capital management policy targets the return of 75% of annual net free surplus generation through dividends and share buyback. We also regularly review our capital position and return capital in excess of our needs.

Since 2022, we have returned $26.6 billion to shareholders through dividends and share buyback, while continuing to invest in profitable growth. The shareholder capital ratio stood at 210% at 30th of June 2026, following the $3.6 billion returned to shareholders during the first half, in line with our expectations. Our capital position remains very strong, and we retain substantial financial flexibility given our low leverage and high financial strength ratings.

Consistent with our long-established prudent, sustainable and progressive dividend policy, the Board has declared an interim dividend per share of HKD 0.539, which represents an increase of 10% over last year. AIA has increased its dividend every year after IPO, ever since our first dividend in 2011 and including during the COVID period. Our ability to sustain this track record reflects the resilience of our earnings and cash generation from the growing in-force portfolio.

As a reminder, the final dividend and the balance of shareholder returns under our capital management policy will be determined and announced with the 2026 annual results in March 2027.

To conclude, AIA has delivered another strong financial performance in the first half of 2026 with double-digit growth across new business, earnings and cash generation and record operating returns. These results reflect the strength of AIA's platform, the depth of our distribution, the quality of our product mix and the disciplined way in which we manage capital.

AIA is exceptionally well positioned in Asia, the most attractive region in the world for life and health insurance. I'm confident in AIA's outlook with a clear strategy, a proven model and a demonstrable ability to execute effectively. We continue to drive profitable growth, and we are converting this into earnings, cash and shareholder returns with discipline and consistency. Thank you.

Good morning, everyone, from AIA Central in Hong Kong, and welcome to AIA's 2026 Interim Analyst Briefing. I'm Sami Taipalus, the Chief Investor Relations Officer of AIA. With me on the stage, I have Lee Yuan Siong, Group CEO and President; Garth Jones, Group CFO; and Regional Chief Executives, Jacky Chan, Fisher Zhang, Hak-Leh Tan and Leo Grepin. We also have other members of the Executive Committee in the room with us.

We will now begin the Q&A session. [Operator Instructions] Operator, over to you.

[Operator Instructions] And our first question comes from Thomas Wang of Goldman Sachs.

Maybe a couple of ones. I think Hong Kong, obviously, is the focus for this result. Number came, I think, a little bit below consensus. And also, you have -- there's a lot of news flow. So just whether you can give us some update on what's happening on the ground in Hong Kong. And I understand kind of on the MCV segment, I understand the basic, but I'm just wondering whether you have sort of medium-term growth target in mind for the Hong Kong market so we can better track because it's kind of been volatile over the last couple of years.

And then the second point, maybe on the capital planning part. Just wondering, we've kind of been quiet on the M&A front. What kind of target could be attractive for AIA? How are you evaluating the potential M&A opportunities?

Yes. Thank you for your question, Thomas. Now we are confident of our outlook for 2026 overall and for our major markets. I think the demand drivers for our products remain intact, including for CMV business in Hong Kong. We have very strong competitive advantages in the Hong Kong market, including our leading Premier Agency channel, our partnership distribution, our strategic bank partners in Citibank and Bank of East Asia. So we remain very confident of our outlook for Hong Kong. I will hand over to Jacky to elaborate.

Yes, Thomas. I'm very pleased AIA Hong Kong and Macau delivered a set of very strong results in first half, VONB up 10% to record USD 1.2 billion. This was really supported by our strong underlying distribution channel, especially the Premier Agency as we keep emphasizing the key differentiation channel for AIA Hong Kong is our Premier Agents, and it achieved MDRT #1 globally as a company for 24 years and almost 30% of our agents are MDRT.

And as you see in our slide, in fact, after COVID in the last 3 years, we have double-digit growth in our agency VONB and double-digit growth in our agency productivity. And that said, we also have a diversified channel. We have a strong balance sheet distribution channel. We have a strong bancassurance result in this first half this year, and our IFA broker also grew strongly.

I want to emphasize that the 10% growth is against last year first half, a very strong high growth due to product changes in the middle of the year. And our domestic customer segment in first half this year actually grew strongly by 23%. And our Chinese Mainland visitor channel VONB was broadly stable against a very high base in last year.

And in our CMV Chinese Mainland visitor segment, our VONB growth actually is growing quarter-to-quarter from first Q to second Q and June was the highest CMV VONB for the whole first half in Hong Kong and Macau.

As you talk about the recent news flow, actually, since those recent news flow in May, we continue to see good demand from Chinese Mainland visitor business in our Hong Kong result, as you can see that. And also all those kind of news regarding cross-border fund flow or taxation, those are always there. There is no change in those regulatory requirements.

And as I said before, I think many times, the Chinese Mainland visitor business segment has been a major business segment in the Hong Kong life insurance industry for more than 2 decades. And the key reason for it because of the strong underlying structural drivers, including the assess of a diversified global investment opportunity, which supports our long-term life insurance product, and also the access to high-quality advice and more flexible quality decided product and proposition. Those structural drivers remain unchanged.

And as you can see that in the first half of this year, there are more than 25,000 new Chinese Mainland register customer segment customer added to our portfolio, which now have roughly 550,000 customers in our in-force book. This is still -- there is still a big opportunity going forward to grow the CMV customer segment.

And in terms of the medium growth opportunity, I think you also know that we don't provide forecast. And as Yuan Siong pointed out, we see continued strong opportunity in Hong Kong and AIA Hong Kong is well positioned to capture those opportunities.

Thomas, on your question on capital management. As I said, we are very focused on driving strong new business growth that can translate to high-quality earnings and cash returns to shareholders.

We have communicated our capital management policy, and we remain focused on implementing this capital management policy as we have communicated. And the first half results and the past year's results have demonstrated that our strategy is actually working. We have seen a strong VONB growth. We've seen this translate into strong OPAT per share growth.

As we have said this time, we expect to exceed our OPAT per share CAGR target that we communicated to the market. And we have also seen record levels of our ROE of more than 17% ROEV, very record levels as well. I hand over to Garth to elaborate further.

Yes. I mean, we've seen the way in which we've executed the capital management policy has been exactly as we intended. The shareholder capital ratio has reduced as we've increased the buyback, but remains strong.

We've seen how we've returned $3.6 billion to shareholders in the first half. And I think importantly, you see that not only have we seen strong operational execution in the first half on an ongoing basis, but also the way that our disciplined capital management has now also increased the ROE up to 17.5%, a record and up 200 basis points over the same half last year.

So the capital management policy is working, and we see that in the numbers we're showing today. I think in these uncertain times, retaining financial strength is important. But as ever, we look at all ways to create value for our shareholders on an ongoing basis.

Thank you, Thomas. Next question, please.

The next question comes from MW Kim of JPMorgan.

I have 2 questions. So firstly, the long-term bond yields have continued to rise across a number of the markets, including the U.S., while the broad macro environment remains volatile. This may create some noneconomic volatility in the company's reported financial figures. Could you remind us of the key actions company has taken in recent years to reduce that accounting and also the solvency volatility, and how effective these measures have been in recent market environment?

And secondly, on the holding company cash base, the core earning growth was very strong in first half, but capital flow from the subsidiaries appears to have a much smaller than first half '25. Could you help us understand whether this mainly reflect the timing of the remittance, capital management choices at subsidiary level or any other drivers?

Okay. These are 2 financial questions, which I'll hand over to Garth to...

Yes. Thanks, MW.

Thanks, MW.

I mean the actions we're taking are not actions that are new. They are actions we've taken over many years. I think the first thing I'd point you to is our EV sensitivities to interest rates. You see that's very low. And clearly, that reflects the strong ALM management that we have and the prudence in our assumptions also.

I think also if you look at the earnings, again, I think strong earnings growth, we saw 13% per share earnings growth this year in our operating profit after tax. We always say look through to that rather than the net profit because of the volatility. But the change in product mix that we've had towards Par products in China will help more generally because the business will go into VFA rather than GMM.

And as you look at our business, some of the things that we've done, even reducing the shareholder funds over time will also reduce some of the noise between net profit and OPAT. The move to IFRS 17 actually, MW, has helped a lot with that noise as IFRS 17 is more market-based.

So the actions we've taken, you see it in the product portfolio of the new business, and you see it in the product portfolio of the in-force actually because it's been there for many years, and you see it in our sensitivities.

On the holdco cash, I think you have to go back to the first half of '25. We had some capital flows, and it's really about strong liquidity management at the holdco. If you look at the rate for the first half, it's broadly in line with where it normally is.

And I would remind you that the second half is normally higher than the first half and also look at it over the full year. But you can see that the flows from the businesses continue to be strong and meet our needs.

Thank you, MW. Next question, please.

The next question comes from Michelle Ma of Citi.

This is Michelle Ma from Citi Research. First of all, congrats on this set of results despite a very high base for comparison. I have 2 questions. The first is to Jacky. So could you help us to understand how MCV customers' mentality has changed after Decree 837. Do they feel more urgent to buy Hong Kong insurance products or more hesitant? And how do you assess the impact from the recent rumor on the additional 20% tax to be imposed on the Hong Kong insurance or overseas insurance participating for dividends?

And also, there is a kind of regulatory changes in the coming September 1. The Federation of Insurers in Hong Kong, they will unified definition of critical illness. And there may be a stricter standards applied to those kind of minor critical illness diseases. How do you see it change our competitive edge or product competitiveness over our major competitors? So sorry, a bit long, but that's my first question to Jacky.

Second question to Fisher, it's about the Document 65. We know that at the beginning of July, there was a lot of product redesign and new launch of products in the bancassurance channel. There is a lot of business disruptions for our peers in Mainland. Even though bancassurance is not a major distribution channel of AIA in China, how do you see it will impact our business going forward?

Okay. Thank you, Michelle. You have a question for Jacky on competition and demand in Hong Kong. As I said earlier, I think the demand drivers for CMV business remain intact. I think CMV customers purchase -- come to Hong Kong to purchase insurance for access to international investments, diversification for access to better healthcare, better advice. So we continue to see good demand from CMV customers. Now so I hand over to Jacky to elaborate on the product competitiveness.

Yes. Thank you, Michelle. So let me address the product competitive question. Yes, Hong Kong FI is launching a kind of unified definition on CI. And please note that this is a voluntary adoption for the insurance company.

This is something to provide the advice guidance for the insurance company. So it is voluntary. And for AIA, we look at it and we find that, in fact, majority, most of our CI definition are broadly in line with those guidance. And we will continue to consider the innovative design in the proposition, including CI going forward, as we have been doing more innovative product proposition in the past so many years.

May I just also add to the point about the CMV Chinese Mainland visitor business. We continue to see good demand since all those news flow, whether it is Decree number 837 or cross-border, et cetera, et cetera. And tax is never a key driver for the demand of long-term life insurance product in Hong Kong. As Yuan Siong already pointed out, those drivers are really about the access to international diversified investment, which add up our long-term life insurance product and also more diversified or tailored design in proposition and quality advice. And we continue to see a strong good demand of CMV business.

Yes. On China, on Mainland China, we are very pleased with the first half results. VONB growth of 20%, especially pleased with the performance from the agency channel, 24% VONB growth and this is supported by very strong foundation, growth in active agents of 14%, growth in productivity, growth in active new agents. You can see that we are investing into our -- building up our branding Premier Agency in Mainland China. So I'm very confident of the outlook for China in 2026.

Now I caution you to not focus too much on quarterly growth numbers because the quarterly numbers, as you know, is affected by one-off factors and one-off events. So overall, for the year, we are confident of our performance -- of the outlook for China.

Now I hand over to Fisher to talk a bit more in detail about China's performance in the first half year.

Thanks for the question. Firstly, I want to emphasize the overall performance. As Yuan Siong said, we are very pleased about the excellent performance, particularly it's driven by the structural growth driver and AIA China's unique differentiated strategy, particularly in the Premier Agency and also our new BUs great performance.

The unique geography expansion opportunity actually also give us full confidence to deliver sustainable growth going forward.

Your question actually about in the second half, we need to refine a lot of products, actually it is mainly about the bancassurance. Maybe let me elaborate the bancassurance a little bit more.

So firstly, how we look at the bancassurance Actually, as we said several times, we think bancassurance with various new regulation in place, especially like the PIR adjustment mechanism, like the shifting to the Par, like Bao Xing He Yi, actually, the bancassurance is getting more healthy. So we think there is a huge opportunity in the future.

So secondly, our strategy is to build a differentiated profitable bancassurance. That's why we say we collaborate with a selected bank partner who have the same vision, same operating philosophy with us. We focus on those affluent and high net worth customers, do more POS management, stringent active management and very importantly, customer relationship management. That's our target differential model.

So since you mentioned since July, actually, the regulator strengthened the Bao Xing He Yi, which means the whole marquee, the bancassurance will shift from the previous more fee driven to the future. It's kind of a comprehensive capability driven.

The insurance company need to do more on the POS management, on the customer management. That is exactly -- you can find the direction of us.

So we have refined all the product to complying all the regular requirements. And this direction, although the whole marquee will have a transition period, but as I said, we are very well positioned to capture this long-term opportunity in future.

So overall speaking, not just the Premier Agency, we also have full confidence in the overall business performance. Thank you.

Thank you, Michelle. Next question, please.

The next question comes from Charles Zhou of UBS Securities.

This is Charles from UBS. I also have a few questions. The first question on the second page of the interim report, I know that Yuan Siong said the group has achieved 17% compound annual growth rate since the first half of 2023, which I believe this also exceeds the investor expectations about mid-teens value of the business growth for the AIA Group. So may I know so how do you see this expectation about the mid-teens growth, including for this year and also in the medium term?

As we know, you only achieved 10% in the first half. That means the growth probably have to accelerate in the second half to achieve this mid-teens expectations. So can you maybe just help us to understand how -- in which market we'll see better growth? And also in the medium term, as you know, right, Hong Kong, China is getting bigger and bigger. So in the medium term, if we are going to achieve, say, mid-teens growth, do you expect the growth will come from Hong Kong, China or maybe more from the Southeast Asia? So that's my first question.

Second question is for Hong Kong. I think the competition in Hong Kong has intensified over the past few years, especially in bancassurance and broker channel, both are gaining shares in Hong Kong compared with agency based on the industry data. So how does AIA plan to sustain its competitive position given AIA's agency dominant model? And how does AIA view the Hong Kong competitive landscape and rapid growth of the bank-backed insurers?

Last, maybe very quickly on AIA China. Just regarding the margin, we saw the margin decline a little bit in China. Can you maybe just elaborate and talk about the margin?

Thank you, Charles. And thank you for bringing us to this slide, which I think is a very important slide because it exactly tells us that we are operating in the best region for life and health and long-term savings insurance business. This is our core business, and we are in the best region.

We have very significant competitive advantages that -- and these competitive advantages, we continue to invest into strengthening these competitive advantages, including building up our Premier Agency, building up our strategic bank partnerships and our partnerships with selective brokers and IFAs.

And we have delivered -- if you go to Slide 15, we have shown that over the long-term, we are able to deliver a very strong record of consistent performance. Yes, in terms of VONB, there was a blip during the years of COVID, but COVID affected the whole world. And you can see that post-COVID, we bounced back very quickly and continue that trajectory of strong growth that's translating to earnings, that's translating to cash returns to our shareholders.

So the thesis for -- the investment thesis for AIA, I think, remains very, very strong. So this is the first thing I'd like to say.

Now in terms of the growth engines. We have -- we operate in 18 markets, but we have identified our 4 key growth engines, mainly Mainland -- Chinese Mainland, Hong Kong and ASEAN and India. So these are our 4 growth engines. And these 4 growth engines continue to deliver good growth.

The power of our diversified pan-Asian platform, all of these 4 growth engines means that we can consistently deliver the kind of growth trajectory that you see in Slide 15. right?

So now on our competitive advantages, clearly, the key competitive advantage for us is Premier Agency. We have the best in the market. I think Jacky and the team have talked about our -- the quality of our Premier Agency, the fact that we have the most number of MDRT globally for 12 consecutive years. We are #1 in MDRT in 11 of our 18 markets. And all these have been very strong, consistent. It's not just 1 year or temporary performances, but consistent performances over the years, right?

Going forward, I think we can further accelerate growth through the use of technology and AI. We believe that technology and AI can be a growth accelerator for our key distribution channels. And this is what we are investing into and we are devoting a lot of time and energy on leveraging AI to improve productivity, to increase access to more customer segments, and to be able to reach customers at the right time in the right locations.

So we remain confident in our outlook for 2026 and beyond. Yes, so that's my answer to your first question.

On the second question about market competition. Again, I go back to the point that we are focused on delivering high-quality growth, right? That translates to earnings, and cash, right? So -- and we believe that if we consistently focus on this high-quality growth that in all our markets, we will become the leading life and health insurer in the market.

We are already the leading life and health insurer in many of our markets that we operate in, but we believe that this focus on delivering high-quality growth will anchor our ability to become the leading insurer in all the markets that we operate in, right?

So this is -- now we know that in Hong Kong, our strength is our Premier Agency and our bank partners in Citibank and Bank of East Asia, they delivered very, very strong performances in the first half of 2026. And we are aware that, as I said, we continue to be very focused on high-quality business. We are aware that in certain markets, there will be companies that will adopt a very aggressive pricing strategies.

There will be companies that will adopt some short-term incentives to drive market share growth. But as I emphasize again and again, we focus on high-quality growth. Specifically about Hong Kong, I will hand over to Jacky to talk about it.

Yes. Thank you, Yuan Siong. Charles, as you point out, Hong Kong competition is intense, but it's always been there because Hong Kong is an international finance center, financial center. And you see that there are almost all those major global financial institutions, they have business in Hong Kong.

So no wonder, there is keen competition here. And as Yuan Siong pointed out, AIA in Hong Kong and Macau, we focus on delivering sustainable quality growth in our business in the long-term. And we do see that our differentiated Premier Agency is a key differentiator, and we sell long-term life insurance and long-term saving product through our Premier Agency channel.

And we also have partnership with our exclusive bank partner, Citi and BEA, and they both also focusing on selling long-term life insurance and long-term saving product.

And in the broker channel, we are also there. Hong Kong, AIA Hong Kong is also having a multi-distribution channel because this is a very diversified financial center. And we selectively partner with roughly 10% of the brokers in Hong Kong who are also aligned with us in the value proposition of long-term life insurance product for our customers.

As you see in the so-called recent -- I believe you see in the recent statistics in the Hong Kong life insurance market, there is a big growth in terms of ANP and mostly driven by single premium and short pay. Short pay, meaning that premium paying period less than 5 years. And I'm sure you see that many of our competitors, they may really do go into that path and the margin will experience a drop.

But in the case of AIA Hong Kong, we delivered a set of strong real ANP growth of 10% amid a very strong margin of 72%. So this shows that our financial discipline and focusing on delivering long-term sustainable quality growth.

On the China margin question, I think you need to look at it in terms of the bancassurance channel and the agency channel. We are very happy with the level of the VONB margin of our agency and bancassurance channel.

Now bancassurance channel, our VNB margin was 35%. Now this compared to years ago where it was like low single digits in the industry. I think this is a very healthy level of VONB margin for bancassurance channel in the Chinese Mainland.

Now with the increased focus on Bao Xing He Yi and other regulations and the moves by the regulator, we believe that the profitability of the bancassurance channel will continue to be at a healthy level. And as Fisher described it just now. Now with the agency channel, our VONB margin stands at 60%. This is a very attractive VONB margin and very -- and we believe it is a market-leading VONB margin for the agency channel in this low interest environment.

If you look at the product mix of our Mainland China -- Chinese Mainland business, it is a very attractive product mix. 35% of the new business is in protection business, 57% in participating savings and 8% in the tax incentivized retirement products. These are products that we like in this low interest rate environment.

And I hand over to Fisher to further elaborate.

Basically, that's all I think firstly, Charles, as you know, we manage the business by focusing on growing the absolute amount of the ANP. So as you can see in the first half, we are very pleased to deliver excellent performance in the ANP, which is 20%.

Secondly, you notice that there is a slight drop in the margin, which is mainly because we further shifted more to the Par. As you know, it's more healthy. You must know, I give you a typical example. Last year, the first half, our CI product was still non-Par CI. But in the second half, we launched the Par CI, which is very well received by the market.

So we continue to shift more healthy product mix. That's the main reason for the margin drop. Last but not least, as Yuan Siong said, we actually maintained a very decent margin. No matter agency around 60%, bancassurance at 75% are all very well above the market. And very importantly, the product mix is healthy.

We are very unique in the protection. It's still a 15% growth. So consider all of this, I have full confidence that we can continue to deliver a decent margin in the future.

Thanks for the question, Charles. Next question, please.

The next question comes from Leon Qi of CLSA.

This is Leon Qi from CLSA Research. Given a lot of my peers have already asked quite a few questions on short-term quarterly dynamics. Today, I would like to ask 3 questions related to a bit longer-term perspective, if I may. First one on financials, second one on AI and third one on strategy and competitive edge.

My first question is on our OPAT. I appreciate that in our preprepared remarks that Garth mentioned that we had a very strong OPAT growth. Finally, the very strong new business growth over the past few years are being released into -- are turning into higher CSM release ratios, which supports our OPAT growth. Does management think this is a sustainable trend?

Or put it differently, are we now starting to see the benefits of this VONB growth over the past few years leading to more visible reported earnings growth in OPAT and possibly in free surplus as well?

Second question is on AI. We highlighted that we have a lot of investments in AI in different areas including sales copilots, management copilots and data-driven lead generation across agency forces. How do we measure the economic return on these investments? Over time, do you expect AI to be primarily reducing customer acquisition costs or improve agency productivity, increase cross-sell opportunities or improve customer retention? In other words, if management could share that which are the best KPIs that captures the value being generated from our AI investments.

And third one is on our strategy and the competitive edge. AI has successfully combined a very productive agency model with investments in digitization and AI capabilities. But looking 5 years ahead down the road, where do you think are the greatest sources of competitive edge that comes from? Is it our proprietary distribution model or customer data, AI-enabled productivity, ecosystem partners or our brand trust?

In particular, I guess this is probably a question for Yuan if possible. Given Yuan Siong, you've been in office for 6 years, have your view towards this question changed over the past 6 years, given actually the industry has changed a lot over the past 6 years.

Okay. I'll just hand over to Garth on your question on OPAT.

Yes. Thanks, Leon. Yes, clearly, we're very pleased to see the step-up in the OPAT growth to 13% growth per share. And as we said, we now expect to exceed our OPAT for growth target. I think that gives you some idea of the confidence we have.

When you look at the OPAT growth, the biggest driver is the release from the CSM. And you saw the 11% increase in the insurance service result with the flow on from the CSM release, that's been fairly stable. And you can see how the successive layers of new business are really driving that OPAT growth. Clearly, our confidence in growing the new business is there. That will drive growth in new business CSM and that, in turn, will drive the CSM release and the OPAT growth.

I think what you see in these results actually is the financial flywheel that we have at AIA, where that new business growth translates into earnings and then ultimately into the UFSG and cash over time.

I think the other thing to point out, I think, in these results is the strong operating performance. You can see that the claims management has been strong. We've got good variances on the claims management with another $200 million of expense savings on the medical claims in particular.

And the reduction in the expense ratio. I mean, the reduction in the expense ratio by 130 basis points over 2 years. I think obviously, that reflects a lot of our investment in technology and making the business more efficient. But it also is a reflection of the growth in the business as well.

So I think we look forward to growing OPAT further. I think, as you say, this getting the new business and then seeing that flow through, you'll see how it comes through in the results as we go forward.

Yes. Now on your 2 questions, one on AI and one on the strategy. We are very excited about what AI can do for the business. We think there are huge opportunities that AI can help us in terms of transforming the business.

We see the value from AI emerging in 3 areas. One is the improvement in the productivity of our distribution channels, in particular, our Premier Agency channel. Second is it is in helping us to uplift the value that we -- the value from our customer base. We have an excellent and very, very high-quality customer base. And the third, clearly is to improve the efficiency and productivity of our employees. Garth talked about the reduction in the expense ratio.

And this is -- the contribution of -- a lot of it came from our investments into technology over the past few years. And I think AI has a potential to help us further improve our efficiencies of our operations.

So overall, I think this is where we see AI creating value for AIA. Personally, I do think that the greatest value that we can extract from AI will come from the improvement in the productivity of our sales force, and this is an area that we are working on with our investments into using AI to empower our Premier Agency channel and to increase the scale and the productivity of this very, very important core advantage -- competitive advantage for strength for AIA in our markets.

Now on your question about the strategy, it is interesting because, yes, I've been in AIA 6 years, more than 6 years now. And we also have a new Chairman who's been on board for 10 months. And since he has been on board, we have gone through a very extensive review of the strategy, supported by our internal strategy team, led by Leo Grepin. And I can say that we are very fully aligned on the strategy of AIA.

We reaffirm our growth strategy. We remain focused on life, health and long-term savings. And we remain very, very focused geographically in our existing pan-Asian footprint. So where we see that there is -- there continues to be tremendous upside and opportunities for AIA as a whole.

In terms of our strategic priorities, we are focused on continuing to meet customer needs through our professional Premier Agency force. And this is a channel where we have clear differentiation. And we are also aligned in terms of our focus of complementing our Premier Agency channel with our long-term strategic bank partnerships and the selective IFA and broker partners that we have.

So very -- I think in terms of the strategy, this is how we are seeing it through the review. We believe that we can further accelerate our growth through the use of our technology. So the growth accelerators for AIA would be the use of technology and AI, in particular, to strengthen and empower our distribution channels and our people and culture.

So this will be the growth accelerators. And all this is anchored by our financial discipline. So all in all, that was after extensive review of our strategy, and it's the right time for us to review it and going forward.

Thanks, Leon for the question. We'll move to the next one, please.

The next question comes from Richard Xu of Morgan Stanley.

A few questions from me as well. First of all, I just want to get back to Hong Kong a little bit. I just want to see the product mix and customer mix. Are we basically seeing a mix from changing to more large ticket items? Or basically where the growth is concentrated, particularly in the MCV business, right? I mean any sort of like changes in demand in terms of the structures? I see it's still healthy growth from a quarter-on-quarter perspective. I want to see if there's any changes there.

And then for ASEAN, I think Charles touched on the question a little bit as well. I mean, it's healthy growth but lagging -- certainly lagging China and Hong Kong, whether there's any initiatives to drive some further growth there. For example, in Malaysia, we're seeing agent productivity of new crews up pretty decently. VONB 10% seems to be lower than those headline numbers. What are the drivers behind that? And any potential pickup in ASEAN growth?

And lastly, obviously, we're expecting to exceed OPAT per share growth target. Are we going to give some new targets after 2026?

Thank you. I'll hand over to Jacky on Hong Kong.

Yes. Very happy to talk about Hong Kong. So when you asked about product mix, product mix is driven by customer need. So it is very clear in the domestic customer segment in Hong Kong due to aging, the need for retirement saving, long-term saving and health insurance. This fundamental continue to drive the customer need for the domestic segment.

And in terms of the Chinese Mainland business segment, as I said before, get access to globally diversified investment, which back up our long-term life insurance and long-term saving product in Hong Kong are really one of the key drivers for the CMV customers.

So basically, in our product mix, we don't see a major change. We still sell a much bigger so-called percentage of sales of product in long-term life and long-term savings, which are fee-based participating products and including our long-term whole life and critical illness protection. They are also under this category is fee-based participating products, and they are generating good return for us.

And in terms of the case size that you asked, roughly, you can see that our domestic customer segment, the average case size increased by roughly 10%. It is mainly driven by higher case size from an increasing segment within the domestic customer segment, which have been mentioned before, those are the new Hong Kongers. The new Hong Kongers now make up roughly 30% of our domestic customer segment, and they are continuously growing.

And in the Chinese Mainland visitor customer segment, our average case size roughly stable, increased a little bit from USD 20,000 to USD 21,000. So it's broadly roughly the same since after COVID.

So I would say that those strong underlying structural demand for the customer need continue to drive a very solid good demand from both domestic segment and Chinese Mainland visa segment.

ASEAN is a key growth engine for AIA, especially our key markets of Thailand, Singapore and Malaysia. ASEAN has consistently contributed to more than 30% of our VONB. We have very, very strong brand power in this -- in the ASEAN region.

In Thailand, we are #1 for protection. We're #1 for unit-linked. In Singapore, we are #1 for protection. We're #1 for corporate solutions. In Malaysia, similarly, we are #1 for protection and for corporate solutions. We have a leading Premier Agency channels. We are most MDRT in these markets. So clearly, a very, very important growth engine for AIA, and I will ask Hak-Leh to talk a bit about these markets in detail. Yes.

Thank you, Yuan Siong. Thank you, Richard, for the question. Yes, ASEAN is a significant growth engine for AIA Group contributing to more than 30% of the overall group VONB.

Maybe starting with Thailand, as previously reported, the first quarter VONB was lower because of extremely high comparative same period last year. But we are very pleased that the business returned to strong growth in second quarter, where VONB was up 13%.

If you look at the mix of our business, we continue to have a very healthy product mix, where 75% of total VONB are actually from traditional protection business. In fact, we have more than 50% of market share in Thailand for protection, particularly health and critical illness business.

And second quarter this year, we see a strong return to growth of protection business overall in Thailand. So the fundamental of business in Thailand remains very strong. Our Premier Agency, which is market leading, continue to grow in number of new recruits as well as number of new leaders, riding on the very successful financial advisor programs that have been in place for the last several years.

And our business is also well complemented by our strategic partnership with Bangkok Bank. So overall, we are fully confident in AIA Thailand's ability to meet protection and long-term savings needs of the Thai population.

Maybe just moving on very quickly to Singapore. As you can see, Singapore continued to grow, 10% for first half with stronger momentum in the second quarter of 19%. The 10% first half growth of AIA Singapore was against a very strong base in first half 2025.

As Yuan Siong mentioned, we are the market leader in Premier Agency. And just like Thailand, the Premier Agency continue to grow. We are particularly encouraged by the strong growth in number of new leaders that's critical for the sustainable future growth of agency in Singapore.

We also achieved good growth from our partnership distribution, particularly strong growth from Citibank as well as strong support from the broker and IFA reflecting the strength of our proposition, both protection and long-term savings proposition.

So overall, we are pleased with our performance in Singapore. We believe we are well positioned to ride on the growth potential.

Moving on to Malaysia. Malaysia went through a period where a period, especially in the first half last year, where our agency force has to devote a substantial proportion of their attentions and effort to advise their customers as a result of the regulatory changes to the health insurance business in Malaysia.

We are pleased that since then, the momentum of our business in Malaysia has gathered has increased quarter-by-quarter. First half this year, our business grew by 10%, and that was also underpinned by a stronger growth of 13% in second quarter this year.

So as Yuan Siong mentioned, we retained our market leadership in Malaysia. We are #1 in protection. We are #1 in overall health insurance business. And we're also extremely pleased to see the strong growth momentum from our agency channel, particularly in the number of new recruits. New recruit increased by 16% first half this year. And that reflects the success of agency model in Malaysia, which we believe will put us in a great position to meet both protection and long-term savings needs of our customers in Malaysia.

On the OPAT target, we -- since we communicated the target externally, we have achieved 12% per share in 2024 and then 12% per share in 2025 and now the first half of 2026, 13% per share. So we are -- as I said earlier in my speech, we expect to exceed the 9% to 11% target that we put out 2 over years ago. I hand over to Garth to talk further.

Yes. Thanks, Richard. Thanks, Yuan Siong. Yes, clearly, the context of the target that we gave out in the context of the time was we were coming out of COVID. And I think the IFRS 17 had just been introduced.

So there was some confusion as to how the financial dynamics of the business would work and how that would flow into the earnings and what the trajectory would be.

If we look now, you see that the dynamics I described earlier to Leon's question are coming through. We've reestablished our track record of growth. And from the results in this half, again, you see how the VONB growth is translating into earnings growth and then into cash and UFSG growth and so on.

So the earnings trajectory going forward is clearer now and how IFRS 17 works with the results is clear.

Great. Thank you, Richard. I think we've got time for one more question probably.

The last question comes from Michael Chang of CGSI Securities.

Can you hear me?

We can hear you, Michael.

Yes.

Sure. All right. Actually, I have got 3 questions, if I may. So the first one is just on the VIF monetization. I note that the distributable earnings from the in-force business really accelerated this half. It's up 16%. Full year last year was up 7%. So what's really driving this acceleration, which regions and which cohorts of business that you have written in past years?

Secondly, on the non-Hong Kong, China regions, just a few questions. Thailand in 1Q, I think it was mentioned that VONB margins can remain above 90%. First half, you delivered 96%. Thailand is one of the highest margin regions. How sustainable are those margins?

Secondly, in relation to Singapore, wealth management has been a very strong growth driver. Can I just understand the outlook on that front in terms of targeting that segment? And also on the India health insurance opportunity, I think one of your peers is quite excited about expansion on the Indian market.

And then finally, my last question will just be on a comment by Fisher earlier on bancassurance in a transition period in Mainland China. That obviously has been disruptive to sales in 2Q. How long in terms of managing expectations because we also have to talk to investors, how long should we be managing expectations of investors in terms of the duration of this disruptive period? I mean, will it last until the end of 3Q?

I think there's 5 questions. So maybe I think we just pick 3 questions to answer, okay, in the interest of time. So on distributable earnings, Garth, can you just talk about that?

Yes, yes. I mean the distributable earnings we see coming from good results from Hong Kong. And clearly, the equity market performance that we had has helped to drive that through the Par business, in particular, going forward.

We've also seen good growth from the other markets across the region. But yes, Hong Kong would be one of the primary sources. We've also seen, obviously, good growth from China in the underlying free surplus generation because of the way that we have protection business and the way that flows through the numbers. So yes, it's a broad-based performance, but I think Hong Kong will be the one that really stands out, if anything. Yes.

And then Hak-Leh on the Thailand VONB margin.

Thanks, Yuan Siong. Thanks, Michael, for the question. As you know, our focus is always to grow the absolute dollar VONB as opposed to just the margin or ANP volume alone.

I want to first state that the VONB margin of AIA Thailand remains very strong. As you can see, the 70% of our business are from traditional protection. And we have a market share of more than 50% in the protection business, particularly health and critical illness.

While there was a slowdown in first half because of the high comparative first -- sorry, first quarter because of high comparative first quarter last year, we are very pleased to see that our protection business beginning to grow again in second quarter this year.

And having said all that, we are also actively enhancing our long-term protection business to meet the increasing demand of the affluent and high net worth individuals in Thailand. So overall, we really believe that the fundamental of business remains very strong. We will continue to grow protection business through our market-leading agency force as well as to grow long-term protection to the affluent and high net worth segment through our bancassurance partnership with Bangkok Bank as well as our agency force.

Yes. And finally, India is a very exciting long-term opportunity for AIA. It's growing very strongly. We are increasing our presence in the market. We are the #1 in terms of retail sum assured. We have market-leading VONB margin in India.

Our agency channel contributes to 55% of the VONB of the Tata AIA. And we are growing our Premier Agency force very strongly. And Leo, maybe you want to add a few points about India?

Yes. Michael, more specifically on your question around the opportunity in health. As you know, currently in India under the current framework, life insurance companies can offer fixed benefits health products as opposed to indemnity or reinsurance or reimbursement products.

Now within the Insurance Amendment Act of 2025, the IRDA now has the opportunity to add new additional classes of insurance business to various licenses, but they haven't notified of any new clarity around that at this point in time.

So within that framework, Tata AIA currently competes very strongly, offering a range of health and critical illness solutions that are complemented with wellness solutions like Vitality and Health Buddy. And that strategy has been very successful. We see tremendous upside potential in the Indian market, driven by very strong underlying growth drivers such as very strong demographics, increasing household income and low penetration of life insurance.

And so Tata AIA is very focused on executing on that strategy. And as Yuan Siong has mentioned, that's been very successfully executed the last several years that's shown very strong growth. And again, the first half of this year delivered very strong results with 31% VONB growth in the first half, well balanced across our Premier Agency with 38% VONB growth and our partnership distribution channel with 23% growth.

So we're very, very pleased with the performance of that business. And within the current framework, we see significant growth potential going forward.

Yes. I'll just end by saying again that we are very confident in our outlook for 2026 and beyond. The demand drivers in this best region for life and health insurance remain powerful and intact, including for MCMV business in Hong Kong. We have an excellent track record of delivering high-quality growth that translates to earnings and cash returns to shareholders. Thank you very much.

Thank you, everyone, for dialing in. We have no more questions now. So we'll call it or end it at that. Please get in touch with us in IR if you have any further questions. Thank you.

Ladies and gentlemen, this concludes AIA's 2026 interim result Q&A session. Thank you for your participation.

Good morning, and thank you for joining AIA's 2025 Annual Results Presentation. Today, we have announced record results with double-digit growth in new business, earnings and cash generation and a new share buyback of $1.7 billion. This performance demonstrates AIA's ability to convert our competitive advantages into strong growth for shareholders.

Let me start with the financial highlights. Value of new business increased by 15% to a record $5.5 billion. EV Equity rose to $79.7 billion, up by 14% per share, and this is after returning $4.7 billion to shareholders during the year. Underlying free surplus generation grew by 11% per share and operating profit after tax was up by 12% per share, on track to meet or exceed our 2026 growth target. The Board has recommended a 10% increase in the final dividend per share and approved a new share buyback of $1.7 billion in accordance with our capital management policy.

As you can see, we are delivering compounding new business that drives both cash generation and earnings growth. This performance reflects the execution of a clear and consistent strategy. It is fully aligned with Asia's long-term structural growth drivers and built on competitive strengths that are developed and enhanced over many years. Each of these strengths reinforces the other. And taken together, they are incredibly difficult to replicate. And this is what gives me confidence in AIA's ability to capture the significant opportunities across our markets. You can see this most clearly when we look at our individual businesses.

In Hong Kong, we delivered record VONB of $2.3 billion, an increase of 28%. Our Premier Agency continued to lead the market with almost 25% of agents achieving MDRT membership. Agency contributed 70% of Hong Kong's VONB, growing by 26%. This reflected a 9% increase in active agent head count and a 14% rise in productivity. New recruits grew by 12%, supporting growth in future capacity, while MDRT qualifiers rose by 20%, reinforcing our focus on professionalism and quality. Partnerships VONB in Hong Kong grew by 46%. Within this, bancassurance delivered 41% growth, supported by improved customer targeting and higher productivity.

And our IFA and broker channel grew by 49% from deeper engagement with preferred brokers driving an increased share of wallet. Demand remained very strong from both domestic and Mainland Chinese visitor customers. Across both segments, our focus is on sustainable growth through regular premium protection and long-term savings solutions. The domestic business, which accounts for around half of our VONB grew by 21%. The outlook for future growth is strong as we add new customers and deepen relationships with our 3 million existing customers, meeting even more of their needs.

VONB from Mainland Chinese visitors increased by 35%, mainly driven by sales to more than 50,000 new customers. We now have around 530,000 MCV policyholders, highlighting the enormous potential remaining for future growth from new and returning customers. With the leading distribution platform and a comprehensive product range, AIA's Hong Kong business is exceptionally well positioned to meet growing demand well into the future.

Moving now to AIA China. VONB in 2025 exceeded $1.2 billion. For the full year, growth reflects economic assumption changes, but momentum accelerated materially in the second half to 14%. This strong momentum has continued into 2026 with combined VONB for January and February up more than 20% year-on-year. AIA's geographical expansion in Mainland China provides a unique long-term growth opportunity. Since 2019, we have established operations in 9 additional regions, including 4 new launches in 2025, adding almost 200 million potential customers within our target market. VONB from these new regions increased by 45% to $118 million, accounting for more than 9% of AIA China's total. Looking ahead, we expect VONB from new geographies to grow by 40% per annum over the next 5 years to more than $600 million by 2030.

Our differentiated professional Premier Agency sets AIA China apart, contributing 85% of VONB in 2025. Agent productivity is 3x the market average, built on long-term relationships and the provision of personalized advice. This results in a more advantaged product mix and an industry-leading VONB margin of 65%. Our Premier Agency model is fully digitally enabled and increasingly powered by AI. This helps to raise professionalism as we attract and retain the best candidates while driving scale and productivity.

In 2025, active agents increased by 8% and new recruits grew by 14%. New agency leaders were up by 40%, strengthening the foundations for continued growth. Alongside agency, selective bank partnerships broaden our reach in the growing affluent and high net worth segments, delivering higher average case sizes and attractive profitability. Our solid foundation and strong momentum give me confidence in AIA's ability to capture the large and growing opportunity in Mainland China.

Turning to ASEAN, where AIA is the #1 life and health insurer. We delivered VONB of $2 billion in 2025, representing 34% of the group's total. Thailand, our largest market, achieved VONB of $1 billion, up 13%, driven by a strong agency performance and double-digit growth from partnerships. We have also provided a separate presentation on AIA Thailand's growth strategy, setting out how we intend to capture the tremendous life and health insurance opportunities in that market.

VONB from Singapore increased by 14% to over $0.5 billion with agency growth of 10% and partnerships up 31%, including strong momentum from offshore business. In Malaysia, performance improved in the second half as agency productivity and recruitment began to recover. Partnerships VONB grew by 17% in 2025 with strong results in bancassurance and our market-leading corporate solutions business.

Across ASEAN, Premier Agency is our main source of new business, delivering a high-quality product mix, and we are the leader in protection products across the region. Overall, the quality of our distribution and product mix position AIA well to meet the evolving customer needs across the region. In India, Tata AIA Life delivered another excellent performance with VONB increasing by 33%. The business continues to focus on quality, ranking #1 for persistency and retail protection. Our agency is the market leader and contributed around 60% of VONB.

Agency VONB grew by 44%, supported by improvements in activity levels, leader development and recruitment. Bank and broker partnerships are complementary to our agency distribution, extending customer reach and driving additional strong growth. Overall, Tata AIA Life's focus on protection, disciplined distribution and consistent execution ensure we are well on our way to capturing India's huge potential. Across the group, this consistent focus on quality distribution underpins our performance. AIA's proprietary Premier Agency is the core driver of profitable new business, contributing 73% of the group's total VONB. Our agents build lifelong relationships with customers focused on meeting evolving needs through trusted advice and best-in-class products.

We have the world's leading tied agency, which has been the #1 MDRT globally for the last 11 years. This is the outcome of a differentiated strategy honed over decades that supports high-quality profitable new business growth, attractive agent incomes and higher shareholder returns. The success of our model is self-reinforcing as it helps us to hire and retain the best agents, further extending our industry leadership. Continued investment in talent development and advanced digital tools has driven growth in agent numbers and a step-up in productivity. This has laid the right foundation to further strengthen our Premier Agency leadership through the use of artificial intelligence.

Our agents provide ongoing reassurance and support through face-to-face guidance that helps individuals and families navigate complex choices and adapt as circumstances change. AI enables deeper customer engagement and helps agents focus on what matters most, high-quality, tailored advice grounded in empathy, accountability and understanding.

AIA+, our all-in-one customer super app now manages interactions for more than 23 million users, providing powerful insights on needs and preferences. In 2025, our customer data mart captured and structured around 200 million customer interactions, enabling advanced analytics and more personalized and targeted engagement. As a result, we provided 5 million actionable leads to agents with a 17% conversion into sales. These leads generated more than $2.1 billion of VONB. This highlights how technology and analytics are amplifying our long-term advice-led model, supporting higher productivity and sustainable growth across our distribution.

Fast-growing partnerships extend our reach to hundreds of millions of potential customers through strategic bank partnerships. We focus on selective high-quality partnerships aligned around shared growth ambitions and long-term value creation. By integrating AI's technology and analytics capabilities into partner channels, we are able to improve customer targeting, proposition relevance and productivity. As a result, bancassurance VONB has more than doubled over the past 3 years from higher numbers of active insurance sellers, increased productivity and enhanced profitability with 45% margin. Together, our agency and partnership channels create a powerful distribution model that supports long-term growth and advances our purpose of helping people live healthier, longer, better lives.

By delivering protection and long-term savings solutions that support financial security at every stage of life, we help customers guard against unforeseen risks, accumulate wealth and plan for the future. And we do this through best-in-class products, combined with an ecosystem of health and wellness services that is backed by personalized professional advice.

In 2025, we added 2.3 million new customers, while existing policyholders accounted for around 50% of the group's new business through repeat purchases. 91% of the group's VONB comes from protection and fee-based insurance products, ensuring sustainable and resilient earnings and cash generation for AIA's shareholders. In closing, today's record results demonstrate that we are executing a clear strategy that leverages our core strengths, deepens our competitive advantages and delivers sustainable shareholder value. Our ambitions are bolder than ever and the scale and resilience of our business ensure we are well placed to realize AIA's full potential.

I will now hand over to Garth, who will take you through the financial results in more detail. Thank you.

Good morning, everyone. I'll now take you through our excellent performance with double-digit growth across our key financial metrics. VONB increased by 15% to $5.5 billion, driving EV Equity up by 14% per share to $79.7 billion after returning $4.7 billion to shareholders during the year. UFSG, our key operating measure of cash generation, rose by 11% per share, while under IFRS, operating earnings were up 12% per share. Through strong profit growth and our disciplined capital management, both operating ROEV and ROE increased to over 15%.

Following the group's excellent performance, the Board has recommended a 10% increase in the final dividend. This brings the total dividend for 2025 to HKD 1.93 per share, also up 10%. Under our established capital management policy, the Board has also approved a new share buyback of $1.7 billion. The increased dividend and new share buyback reflect our confidence in AIA's future prospects and financial strength.

I will go through more details of the financial performance in 3 sections. First, the embedded value results to show how we create shareholder value. AA's growth strategy is focused on writing profitable new business, which compounds over time to support higher earnings and cash generation for the long term. VONB was up 15% from 9% ANP growth and a 3.6 percentage point increase in VONB margin, driven by proactive product mix shifts and repricing. Agency distribution was the group's primary growth engine, delivering a 13% increase in VONB. Partnership distribution grew by 22%, including strong double-digit growth from both bancassurance and our intermediated channels.

With the majority of our markets delivering double-digit increases in VONB, we again saw broad-based growth in 2025. AIA's product strategy creates value for both our customers and our shareholders. Traditional protection products generate underwriting profits that are not dependent on capital market movements, while participating in unit-linked solutions generate stable fee-based insurance income. Over 90% of our VONB is generated from these most attractive product lines with very low average guarantees and strong and predictable cash generation.

Our new business is capital efficient with $3.8 of VONB generated for every dollar invested. And as we've reduced capital intensity, so the ratio has increased. The financial profile of new business is very attractive with rapid emergence of distributable earnings, driving high IRRs and short payback periods. Our capability to deliver large-scale, high-quality, profitable new business sets AIA apart and underpins our confidence in the group's future growth. By consistently adding layers of profitable new business supported by prudent assumptions and active management of the in-force portfolio, we grow EV Equity and in turn, cash generation.

Higher VONB was the main driver of a 13% per share increase in EV operating profit to $10.9 billion. The successful execution of our integrated health care strategy and discipline in expense management supported greater positive operating variances, which added over $300 million to EV operating profit. As a result of the strong growth in operating profit, ROEV increased by 90 basis points to 15.8%. Over the year, EV Equity increased by 14% per share after $4.7 billion paid to shareholders through dividends and buybacks. EV operating profit was the main contributor to the higher EV Equity.

Investment variances were positive following an improvement in the second half, reflecting favorable equity market movements in Mainland China, Hong Kong and Thailand. Positive nonoperating items of $1.7 billion mostly represent the effect of exchange rates. Net of shareholder returns, EV Equity finished the year at $79.7 billion. AIA's strong track record of positive operating experience demonstrates the prudence in our assumptions and the quality of our in-force business.

Overall, consistently favorable operating variances have added $4.4 billion to EV Equity since our IPO. While AA is not immune to capital markets, you can see from the small sensitivities shown here that our EV remains highly resilient to short-term market volatility. A 50 basis point increase or decrease in interest rates has less than 1% impact on the group's embedded value. We also have a substantial allowance for risk in our discount rates, making EV Equity a prudent estimate of the economic value to shareholders from the in-force business.

Similar to our new business, future earnings from our in-force book are predominantly sourced from protection and long-term savings products, which provide recurring and resilient cash flows. The in-force is highly cash generative with earnings continuing for decades into the future. Over $53 billion is expected to emerge over the next 10 years. This figure is up 14% over the year as we added another layer of high-quality new business. Our strong cash generation allows us to both increase returns to shareholders and reinvest in growing new business, which further expands our stock of future earnings.

UFSG is our key operating measure of cash generation and is shown before reinvestment in new business and central costs. The key component of UFSG is the expected distributable earnings from the in-force business, which increased as we added new business written over the year. As a result of our proactive in-force management, operating variances improved compared with 2024. After allowing for the first-time effect of global minimum tax, UFSG grew by 11% per share.

Moving on to the IFRS results. Similar to embedded value, continued growth in high-quality new business adds successive layers of future profit to the CSM balance, which is gradually released into earnings over time. New business CSM grew by a very strong 17% and underlying CSM growth accelerated to 10.5%. Together with positive variances and currency effects, the CSM balance increased to $64.9 billion at the end of 2025. As a result of a stable release rate and the larger stock, the CSM release increased by 10% to $6.2 billion. The CSM release remained the principal contributor to OPAT, our core measure of operating earnings.

Operating profit after tax increased to $7.1 billion. The higher CSM release and positive operating variances drove an 18% increase in the insurance service results, which added more than $1 billion to OPAT. This was partially offset by a small reduction in the net investment result, reflecting the effect of share buybacks, higher financing costs and tax. Overall, OPAT increased by 12% per share, putting us on track to meet or exceed our 2026 target.

Strong growth in OPAT and our ongoing capital management actions supported a 70 basis points increase in operating ROE to 15.5%. After returns to shareholders, allocated equity increased by 10% per share to $47.5 billion. Comprehensive equity adds the CSM on a net of tax basis on to shareholders' equity, which provides a more economic view of shareholders' equity by including the value of future earnings. Comprehensive equity increased by 15% per share to $97.9 billion at the end of 2025.

Finally, capital management. We follow a robust internal capital management framework. Backed by strong financial discipline, our unwavering focus on profitable growth delivers substantial free surplus generation. This supports a prudent, sustainable and progressive dividend. In addition, we look to return capital to shareholders that is surplus to our needs, while retaining sufficient financial flexibility to capture the huge growth opportunities available to us. AIA's clear capital management policy sets out how we deliver sustainable and growing returns to shareholders over time through dividends and share buybacks.

Strong growth in UFSG supported an increase in net free surplus generation of 14% per share. As I mentioned earlier, despite the strong increase in VONB, a proactive shift towards less capital-intensive products, most notably in Mainland China, saw a reduction in new business investment to $1.4 billion. Adjusting for unallocated expenses, finance costs and other items, net free surplus generation was $4.5 billion. As intended by our capital management policy, the shareholder capital ratio reduced over the year and remained strong at 221%.

With respect to the 2025 financial year, total returns to shareholders under our capital management policy amount to $4.3 billion. Based on our excellent financial performance, the Board has recommended a 10% increase in the final dividend per share, which results in total dividends of $2.6 billion for the year. The Board has also approved a new share buyback of $1.7 billion. This comprises $0.7 billion to meet the 75% net FSG target and an additional $1 billion following a further review of the group's capital position. In aggregate, total returns to shareholders in respect of the 2025 financial results are $4.3 billion, up 13% per share compared with 2024.

Our ability to write large-scale, high-quality and profitable new business with a very attractive financial profile is a key differentiator for AIA. Successive cohorts of profitable new business compound over time, adding substantial layers of recurring earnings to our large in-force book, driving UFSG and OPAT growth. With another excellent financial performance in 2025, we delivered double-digit growth across our key financial metrics of growth, earnings and cash generation and further extended our strong track record. Since 2010, dividends and share buybacks now amount to $40 billion. We believe that AIA's ability to deliver compounding growth across new business, earnings and cash sets us apart.

We remain confident in our outlook. AIA is exceptionally well positioned to capture the enormous growth opportunities in Asia, the most attractive region in the world for life and health insurance. Our strong balance sheet, financial flexibility and clear growth strategy give us great confidence in execution. We're focused on driving high-quality profitable new business growth with highly attractive reinvestment economics. This adds further substantial layers of recurring earnings and cash generation that in turn will generate highly attractive returns for shareholders well into the future. Thank you.

Good morning from AIA Central in Hong Kong, and welcome to AIA's 2025 Results Analyst Briefing. My name is Sami Taipalus, and I'm delighted to be joining you today in my new role as AIA's Group Chief Investor Relations Officer.

With me on the stage today, I have -- we have Lee Yuan Siong, Group CEO; Garth Jones, Group CFO; and other Regional Chief Executives, Jacky Chan, Fisher Zhang, Hak-Leh Tan and Leo Grepin. We also have other members of the Group Executive Committee with us in the room. Before we begin the Q&A session, I want to highlight that we have a separate video on AIA Thailand's growth strategy, which we published on the website today. If you haven't had time to look at it yet, please do so later.

We will now begin the Q&A session. [Operator Instructions] Operator, over to you.

[Operator Instructions] And our first question comes from Thomas Wang of Goldman Sachs.

Congrats on the results. I have 2 questions. Firstly, so I think we welcome definitely the color on 2026 for Mainland China in the first 2 months, also for Thailand on the first quarter. Just wondering if you could give us some color on Hong Kong because that's obviously very, very strong growth in 2025. How do you see growth momentum trending in the first couple of months? And what's your outlook?

And the second question, thank you for the additional video in Thailand -- around Thailand. It's definitely a highlight over the last few years. Just wondering, I'm sure you're working on expanding some of the initiatives that you deploy in Thailand into other markets. I'm just wondering from your perspective, how you think about the success in Thailand? How much is kind of down to your execution? And what -- how are sort of the market-specific factors that played into your success?

The reason I'm asking is that if you deploy -- obviously, if you deploy some of the initiatives to other markets, they may not be successful as in Thailand. So I'm just trying to get a sense of how much you may need to kind of fine-tune that strategy in other markets.

Thank you, Thomas. I'll just start with a few comments, and I'll hand over to Jacky on Hong Kong. Very happy with the performance by Hong Kong. We did develop very broad-based momentum across customer segments and excellent performance across our all distribution channels. As you know, we have the market-leading agency force, which contributes to 70% of AIA Hong Kong's VONB. Number one, MDRT, 25% of our agents in Hong Kong are MDRT qualifies and all the fundamental drivers of agency is performing strongly. In terms of demand, we have a very -- we are very positive on the outlook for demand growth, both in domestic and MCV segments. Maybe Jacky, yes.

Yes. Thank you, Yuan Siong. I just want to add that the Hong Kong and Macau momentum is very strong in 2025. First half VONB grew by 24% and second half VONB grew by [ 42% ]. And as we launched innovative participating product in July last year, and that was getting a lot of attraction and also traction in the market, and that actually continue. And we continue to see that both our Premier Agency and our selected partnership with both our bancassurance partner, Citibank, BA and our selected partners in IFA and brokers area, all this channel continue to maintain strong momentum going into the first quarter of this year.

Thank you, Thomas. Also on Thailand, clearly, Thailand is a very important market for us, and Thailand has delivered strong performance in 2025, VONB growth of 13%. In fact, Thailand has been growing consistently over many years. Our VONB in 2025 was double the level of 2019 pre-COVID level [indiscernible].

[Technical Difficulty]

Full year basis, the growth of AIA Thailand was broad-based. We saw strong growth in life, health, medical across both [indiscernible] and agency channel. In fact, our market-leading agency channel continued to grow in scale and in productivity with an increased market share of close to 44%. Likewise, our strategic partnership with Bangkok Bank growth in productivity as well as case size through our segment focused proposition strategy. So overall, we are a clear leader in Thailand with an extremely strong track record of delivery. And as you can see from the presentation that was uploaded this morning, we have a very clear growth strategy...

[Technical Difficulty]

Thank you, Thomas. I do encourage you all to watch the video on Thailand. If you look at the video, you see that a lot of what we are doing in Thailand is very similar to what Fisher introduced in the China video in last year. So this demonstrates that we are learning from the best practices across our markets and industrializing it across the AIA Group, yes.

The next question comes from MW Kim of JPMorgan.

I would like to ask 2 questions, one on solvency capital and one on India. So firstly, following the strong capital return, the solvency ratio lowered to the 221% as of the December 2025 with more ambitious growth initiative planned for 2026 and additional share buyback announced. Could you please share your year-end solvency ratio projection? Is 200% of the required capital still the company's target capital ratio?

On India, the India JV delivered another strong new business value increase 33%. Could you please share the time line for providing stand-alone disclosure on India business? Additionally, do you view the regulatory environment, including GST, the exemption and potential changes to upfront stage commissions as supportive of the growth outlook in India?

Thank you, Kim. I'll just start again with a few comments, and I'll hand over to Garth on the capital question. As you know, we have executed consistently on our capital management framework over the recent years, leading to a much more optimal balance sheet and higher returns on capital.

So maybe I'll hand over to Garth to elaborate.

Yes. Thanks, MW. You can see that the capital management framework that we set out is doing exactly what we expected it to. You have the 75% of net free surplus generation, the increase in the dividend, prudent, sustainable and progressive and an additional $1 billion, that brings the total payout to $4.3 billion for the year, which is up 13%. With the payout, you'll see that the shareholder capital ratio reduces.

I should say that the 200% that we have mentioned before, it's not an absolute limit. It's not a target. It's a measure, and we say we want to be comfortably above that 200%. It may dip below that in certain stress situations, but we'd look at the situation as that happened. I think the key thing is for us that we're actively managing the balance sheet, actively managing the capital position. You see the strong OPAT growth, 12% OPAT growth that's in excess of our 9% to 11% OPAT target. We're on track to either meet or exceed that OPAT target. Combined with the capital actions we've taken have driven an increase in ROE up to 15.5%.

And with that, you can see that we are doing all we can to create shareholder value by not only growing the business, but actively managing the capital position to an optimal place. We remain very strong. You see good flows from the businesses, good remittances, HoldCo cash is good. So overall, the business is in a great financial shape, and we're very confident about the way we'll look in the future.

Yes. On India, another excellent performance with VONB up by 33%. So I hand over to Leo to discuss India further. Thank you.

Thank you for the question on India. As you've noted, we've been delighted by the performance of our joint venture this year, as Yuan Siong mentioned, up 33%. That growth has been broad-based across our agency channel, which was up 44% last year with very strong quality of the business, very strong recruiting double-digit, leader growth double-digit, active agents double-digit. And then also our partnership distribution channel, which also showed 21% growth last year in VONB.

And on the back of our banca partnerships, where we're seeing increasing productivity of our insurance specialists as well as our brokerage partnerships where we continue to have the #1 wallet share across the leading brokerage firms. So very broad growth and importantly, for us, very high-quality growth. Our agency remains #1 in MDRT in the country. We remained #1 in persistency, and we're very focused on growing protection, which is reflected on us being the #1 life insurer in terms of retail sum assured. So overall, very strong momentum for the business.

And you referred to some recent regulatory changes and as well as broader reform. Broadly, MW, we view this as quite supportive of the growth of the industry. The recent GST reform, in our view, is a progressive step in increasing affordability for life insurance in the country and supporting the development of the industry. Similarly, we've seen an amendment of the Insurance Act in December of last year with, for example, some measures to increase foreign investments in life insurance in India. And we see all of these as liberalization of the industry, which we think will be conducive to continued profitable growth.

Okay. Great. Before we go to the next question, we understand that there's been a bit of an audio issue. So we're going to repeat the answer on Thailand that Hak-Leh gave earlier.

Thank you. AIA Thailand delivered another year of strong VONB growth. VONB was up 13% to USD 1 billion, which is more than double the pre-COVID level. Our market-leading agency force in Thailand continue to grow in scale and productivity. We've been #1 MDRT in the market since IPO. And by end of 2025, our market share of agency is in excess of 40%.

Partnership distribution continue to grow strongly. Our strategic partnership with Bangkok Bank grow in case size as well as activity, built upon our segment-focused strategy for the bank's various customer segments. As you can see from the presentation that we uploaded this morning, AIA Thailand remains a clear market leader with an extremely strong track record of recovery -- of delivery, apologies. We remain very optimistic about the growth potential in Thailand, and we have a clear strategy that's built upon our various competitive advantages to fully serve the Thai market.

The next question comes from Charles Zhou of UBS Securities.

This is Charles Zhou from UBS. I have 3 questions. First of all, I think congratulations for a solid set of results. The first one is about AI. I think in U.S. and European markets, AI is making material progress in reshaping the insurance industry, such as AI automated insurance distribution and also autonomous driving, et cetera. So how do you view the potential AI disruption on AIA? And also, could you please maybe briefly outline the key AI use cases already in place today? And also how your AI strategy could evolve over the next couple of years?

My second question is about the growth outlook for the whole group. I think for 2025, the 15% growth was strong, although part of that reflects some temporary tailwinds. For example, the regulatory changes in Hong Kong, second, third quarter and also first quarter in Thailand. So looking through those one-offs, how confident are you in sustaining the mid-teens value of new business growth this year? And also what are the key growth drivers behind?

My last question is related to China. On Page 8 of your slide, for China, I think glad to see very strong momentum of over 20% value of new business growth year-on-year in the first 2 months. So may I know if it is largely driven by bancassurance? The major domestic peers are accelerating the bancassurance development to capture the so-called deposit migration opportunity. But I think AI has been focusing on the premium agency and protection products. So what is your distribution channel strategy? And also, how do you view the deposit migration in China?

Thank you, Charles. I'll take the first question on AI, then I will hand over to Fisher to talk specifically about how we are using AI in China. Very excited on opportunities for AI. I think it aligns and it augments and elevates our agents' core proposition, which is providing trusted and personalized advice and will definitely improve efficiency and productivity. Over the years, the more than $800 million of TDA investments that we have put in has placed us in a very good position.

Our strong technology foundation, our large pool of structured data enable a range of AI and digital tools that are already delivering benefits to the business. We have the scale, we have the industry knowledge, with the proprietary data, we have the financial resources to work alongside leading global technology providers to further improve distribution productivity, customer experience and operational efficiencies through the use of AI.

Our Premier Agency offers personalized advice on products which are critical to customers' physical and financial well-being in a highly regulated environment, making trust and accountability a key to our offering. And this is hard to replicate with tech alone. We believe that AI will augment and elevate our Premier Agents.

I'll hand over to Fisher to talk a bit more about how AI is empowering our agency force in China.

Okay. Thanks, Yuan Siong. Let me quickly talk about how we use AI to transform -- continue to transform our Premier Agency. As you know, there are 2 major development journey for the agency. One is the sales and the other is leader development. For the sales journey, as I introduced in the interim result, in addition to the normal AI training, AI recruitment, AI road player, we are able to provide the leads to the agent, help them to nurture needs from the cold to warm to hot and provide with actionable customer insight. And since then, we continue to evolve.

Now with advanced agency, data mart, we are able to provide the agent with personalized development plan benchmarked against those successful MDRTs and write down our advanced customer data mart for each the agents' customer, we can develop a personalized engagement plan, including how to better serve, how to better engage, how to upsell and cross-sell. We already saw some early impact. One indicator for the new agent success has been improved 20% in 2025.

As for the leader development journey, the similar logic and a similar approach. We are now able to provide the leader with a personalized development plan benchmarked against those successful leaders. And for their team members, we can provide the leaders with predictive insight based on the leading behavior data. And also, we can provide each member the personalized development plan. As you can see, our number of leaders -- new leader has increased by 40%, which is great in the last year. I think the AI support is a key enabler.

So with more data, enriched knowledge library, enhanced capability, we are developing intelligent AI. It will be no longer just a passive system. It will be a partner and adviser. It can provide timely, proactive, personalized and predictive support to agent and leader. I think the AI definitely will transform the agency channel and will definitely increase the agency value and the customer value significantly in the future.

Thank you, Fisher. Just add on to this Fisher's sharing, by saying that we have actually set up a dedicated group innovation office in 2024 to provide a very structured approach to launch prototypes in individual markets and to industrialize it across our markets. And you see some of what Fisher discussed about in China, in our Thailand video as well.

So now on your question about the growth outlook, I just want to say that we are confident about the very confident of our outlook going forward. We achieved very strong results, record VONB and the growth accelerated in the second half, all this supported by very strong foundational drivers. The growth, as we discussed today was broad-based. We have a diversified pan-Asian platform, very attractive markets with high growth potential. And in the majority of the markets, we have a leading market position.

We have the world's leading Premier Agency channel, and this is our core growth engine. 73% of our group's VONB comes from our Premier Agency channel. And we have a complementary profitable partnerships, which provide additional revenue streams for AIA. As you know, we are very focused on writing high-quality new business and with a very high-quality product mix with a very attractive new business economics. And I would also like to say that I believe that we also have the best talent in the industry in the region with very strong execution focus. So this gives me the confidence in the outlook for AIA going forward.

On your third question on China, Again, China delivered a record VONB of $1.2 billion in fiscal year 2025. Very happy to see momentum recover. Actually, last year, when we reported in the first half of 2025 for China, we explained that driven by economic assumption changes, the growth was impacted, but the underlying growth of the business was very strong. And in 2025, second half, we saw the growth return to 14%, and the momentum continued into 2026 January and February. And this growth is driven by -- across the existing and new geographies and also across Premier Agency and bancassurance channels.

I'll hand over to Fisher to elaborate.

Okay. Thanks, Charles, for the question. I think there are several questions here. Number one, you asked about the January and February. The answer is quite short. It's the momentum of the agency and the bancassurance are all very good. So it's driven by both channel and the agency remain the core channel and the core contributor for the growth. So that's the number one question.

Number two, you asked about the channel strategy. I think particularly in the bancassurance, I know quite a lot of the domestic company are pushing more the bancassurance. I want to mention a couple of points. Number one, I think the bancassurance channel, as you know, is getting more healthy because some regulatory requirements like [Foreign Language], which is kind of alignment with reporting and actual use of the expense and also to reduce the bank fee, reduce the [ PIR ] and now gradually shift to par. So the bancassurance is getting healthy.

But number two, our strategy is to build a differentiated profitable bancassurance. So we keep emphasize that our strategy is we work with selected partners. We are doing the deeper collaboration. We focus on those affluent and high net worth customers. And very importantly, we clearly implement those activity management, and we are now exploring the data-based customer-driven strategy. So I think as you can see, our bancassurance channel, the profit margin -- the revenue margin is 36% in the last year. So that's our bank strategy.

But last but not least, I also want to emphasize the Premier Agency is still our core strategy. It's still our core advantage, our main channel strategy. I'm very pleased to see the solid growth fundamentals in 2025. As you can see, our number of active new agents increased by 20%, our number of new leader increased by 40%. That's lay a very good foundation for the future growth. So overall speaking, regarding the channel strategy, I think the Premier Agency is our core channel and the differentiated profitable bancassurance is highly complementary.

Number -- the third question is talking about the deposit migration. I think, firstly, we do notice this trend. And I think it's a good opportunity for the life insurance industry because now more customers are willing to consider the insurance. And in particular, we also noticed that high net worth is a unique opportunity. That's why we continue to strengthen our high net worth solutions. We continue to strengthen our high net worth ecosystem, those innovate in those position and also the ecosystem best service.

But lastly, I also want to emphasize our response to the deposit migration is very selective and disciplined. As you know, our product strategy, we focus on the protection and the long-term saving. We try to provide a comprehensive suite of the product and supported by those ecosystem best service and together with our professional advice service to satisfy the customer with different needs at a different life stage and the financial stage. So we are not volume driven. So overall speaking, I think for this, our attitude is we are and try to make use of this opportunity but remain committed to our core strategy.

Yes. Just a minor correction to Fisher's answer. The VONB margin of our bancassurance channel in China is 35%.

The next question comes from Kailesh Mistry from Deutsche Bank.

First one, simple one, active agent numbers. How did they change in Thailand, Singapore and Malaysia? Number two, Singapore NBV, what proportion of that comes from offshore? Why do customers buy offshore products in Singapore? Is it similar to Hong Kong? And where are they coming from? And what's the outlook for growth in that offshore segment?

And then on the share buyback, just coming back to the earlier question. If I look at Slide 97, is the way to think about this that at the end of the year, you bring the solvency ratio back down towards 200% and then the following year, you reload and then do it all over again. Is that the best way of thinking about how you distribute this excess amount above the 75% payout ratio?

And then sorry, lastly, just on -- coming back to AI and tech. Obviously, you've done a lot of great stuff on -- through your TDA initiatives, et cetera, to prepare for this. But specifically, how are you thinking about the threats and the opportunities from these LLMs that may end up moving the younger generation towards greater personalization and/or price comparison, so on and so forth?

Thank you for your question, Kailesh. Good to see you again. Good to hear from you again. Yes, Premier Agency is our core distribution channel. We have the world's leading agency and contributes 73% of group VONB. And we have #1 MDRT globally for the last 11 years consecutively. And #1 in many of the markets that we operate in, including the markets that you referred to just now. So in terms of active agent numbers, I'll hand over to Jacky to talk about.

Yes. In fact, I'm very happy to say that we keep tracking all our Premier Agency across our business unit. And if you look at our Slide 12, you talk about growing headcount, growing new recruit, growing new leaders and growing new active agent productivity. I just want to add that our number of active agents did have consistent growth across our major markets. So Thailand, Singapore, Malaysia, too.

Thank you. And then I hand over to Hak-Leh to talk about Singapore. Again, Singapore delivered very strong results in 2025.

Thank you, Yuan Siong. Thank you, Kailesh. Yes, Singapore delivered a strong VONB growth of 14% in 2025, which was the third consecutive year of strong double-digit growth. As you can see, we have a very broad-based approach in Singapore. It's a multichannel distribution with agency remain the core. Our agency force has been #1 MDRT for 11 consecutive years and continue to grow in both quality and scale. The number of new recruit increased by close to 20% in 2025. Likewise, we also saw a very healthy growth in number of new leaders.

Just in terms of the mix of business, as I mentioned, we have a very broad-based business. We serve both the domestic as well as the offshore market through our agency channel as well as partnership distribution. our product mix span the traditional product, unit-linked as well as participating product. Singapore being a financial hub, we experienced strong growth in offshore business from -- mostly from the region. But I would say, overall, the business in Singapore are still majority from the domestic market to meet the both protection and long-term savings needs.

Garth, the capital?

Yes. Thanks, Kailesh. Yes. I think with the capital management framework well set out, you can see that the net free surplus generation piece is dealt with through the 75% mechanism. And then what we do is we look at the situation each year where we are and look if there's anything in excess of that, that we will return to shareholders. You saw the additional $1 billion that gave us $1.7 billion overall for the buyback today. I think we're obviously very comfortable with the 200% level, and we assess that. It's -- in some ways, it's a mechanism that makes it more accessible, Kailesh.

I think one thing that perhaps helps is to say that we tend to think of it in terms of the absolute amounts. I think the disclosures you referred to will show how the absolute amounts of each item have moved, including just natural growth in the business. I think that's probably a better guide for you.

Yes. And on your question on AI, as I explained earlier, I'm very excited about the opportunities afforded by AI to augment and elevate our Premier Agency channel. As I explained, our Premier Agency channel, agents offers personalized advice on products which are critical to customers' physical and financial well-being in a highly regulated environment. So trust and accountability is key to our offering, and this is hard to replicate with our technology alone.

In fact, a customer survey that we did recently tells us that 85% of our survey customers still prefer advice from trusted advisers and only 2% will opt for pure digital or AI model. So again, we believe that the investments that we are making into AI, as described by Fisher, will really elevate and augment our Premier Agency channel.

The next question comes from Leon Qi of CLSA.

This is Leon Qi from CLSA. I have 3 questions today, if possible. Firstly, I want to ask about the capital efficiency. I appreciate in our -- on our slides, Page 21, we have a chart on our capital efficiency. Our VONB per dollar generated from new business investment actually improved a lot. Just wondering how much it has to do with our new product mix. I do understand that, for example, in Mainland China, our participating products is making a much larger portion of our products. So I just want to understand how much is the contribution from product mix and if there are other significant factors behind these significant capital efficiency improvement?

And secondly, I want to ask about our Hong Kong partnership channels. Very good to see that last year, both our IFA and also bancassurance channel grew more than 40% year-on-year. Interestingly, earlier this week, one of the other Hong Kong insurers has given a very aggressive picture on the Hong Kong broker channel so far this year. And the other Hong Kong insurer seems to be -- seems to have a very different view on the market. So it will be very helpful for us to know our stance on the IFA channel in Hong Kong this year and what is our strategy in this channel?

And thirdly, last but not least, I do appreciate our additional disclosure on Thailand and our dedicated video on this interesting market. We have highlighted both our FA and also bancassurance channel in Thailand. But how do we try to materialize the significant opportunities there? I mean, other than Bangkok Bank, which has been very conducive to our results, do we have plans to explore new partners? What about the broker channels there? Agency channel, I understand FA has been doing great. Any new initiatives on the product front? So what's our plan for the next stage of our Thailand business, which has been very successful over the past few years. So what's next in Thailand?

Thank you, Leon, for your question. I'll just start off by saying that we are committed to designing products that address the protection, the long-term savings, life and health insurance needs of our customers across different life stages. We are also committed to writing profitable new business, which will deliver sustainable cash returns to shareholders. So you can see that the new business economics of the new business that we write each year is very, very attractive. We have ample capital resources to support our new business growth ambitions. Garth outlined our capital management framework. And one of the priority uses of the capital is really to support new business growth.

Now specific to your question on capital efficiency, I'll hand over to Garth.

Yes. Thanks, Yuan Siong. And thanks for the question, Leon. Yes, you can see that the business is highly capital efficient, and we've improved the capital efficiency progressively, not only in terms of the VONB efficiency, but also if you think about it, the IRRs are still very attractive, short payback periods. And importantly, when you look at the cash return in the first 10 years that we get a good cash return from the business as well. So very attractive reinvestment economics in terms of the new business, and that's the first port of call for any excess we have.

To your specific question, you're quite right that the capital intensity as it were, came down over the year. What is driving that, as always, is a mixture of product and country. It's not just product alone. On the product side, the biggest driver there was the move to participating products in China. On the country side, we clearly had more business in Hong Kong with its strong growth, our largest market, and that is a very capital-efficient business. So there's a country and a product mix. But needless to say, we continue to look at ways in which we can improve the capital efficiency even further, product by product, country by country.

In terms of Hong Kong, we have a leading position in Hong Kong, the leading brand for insurance in Hong Kong. We -- as I highlighted just now, very strong performance across customer segments, very strong performance across distribution channels. Premier Agency, our core channel, I'm very proud of this agency, 25% of our agents MDRT qualifies in 2025. And we have a very good portfolio of partners, whether it's bank partners or whether it's IFAs in Hong Kong that we work closely with. And I'll hand over to Jacky to elaborate.

Yes. Thank you for the question. So I also take this opportunity to say that in Hong Kong and Macau, we do have a strategy for IFA broker, which is a selected partnership with a high-quality, preferred IFA and brokers. So you know there are thousands of brokers in Hong Kong, but we don't contract them all. We are very selective. And you also recall that early last year, AIA Hong Kong, I think from now, we're still the only one. We have stepped up our requirement for the brokers to have transparency for referral fee payment to those cases that come from referral business.

And as you know, the Hong Kong AIA also set up some regulatory requirement, including a referral fee cap, including commission spreading. And for AIA, we have been spreading commission for broker for years. We have been giving not just first year, but also spread it to renewal. So in fact, I'm very happy that since last year, with this strategy of partnering with preferred brokers really drive up, I would say, its flight to quality. And our share of wallet actually deepened with our preferred partners and the VONB growth from IFA and broker grew 49%. I want to say that this strong momentum continue into first quarter this year.

On Thailand, again, we are the #1 life and health insurer in Thailand with the leading insurance brand. Our Premier Agency channel, which is our core distribution channel, again, it has a dominant market position in Thailand. And we are also working with a number of bank partners in Thailand.

I'll hand over to Hak-Leh to elaborate. Thank you.

Thank you, Yuan Siong. Thank you, Leon, for the question. Yes, we are a clear market leader in Thailand with significant competitive advantages across a wide spectrum. of the business. As Yuan Siong mentioned, our agency force remains our core distribution channel. We are particularly proud of the strong and continuous growth of our FA program. The FAs are the program that grow highly productive and professional agents and FA is now contributing to more than 40% of our agency force and our agency force is more than 40% of the industry. And despite that, we believe there is still significant room to grow both in scale as well as quality of our agency force in Thailand so that we can serve the market, both the mass affluent as well as high net worth market even better.

In terms of our product proposition, our focus has been on protection and long-term savings. In fact, in third quarter last year, we launched an innovative long-term savings plan for the affluent and high net worth segment, and that's gained very strong traction. In fact, by December 2025, our new product contributed to more than 10% of our total long-term savings business, and we see enormous potential to further broaden the scope of our proposition to gain an even bigger share of the affluent and high net worth segment as what we've seen in several other markets.

So overall, with our clear market positioning and a clear strategy as what you can see in the presentation that we uploaded this morning, we are very confident that AIA Thailand is uniquely positioned to continue to grow our business in Thailand and continue to serve the customers better.

The next question comes from Gary Lam of HSBC.

Two questions, if I may, 1 big, 1 small question. The bigger question is perhaps, can we understand how does the management sort of see the impact from the Middle East conflict? Maybe part of that is I can see in Slide 85, over the last year, there's an increase in equity allocation from your investment portfolio. Would you -- with some of the elevated market volatility, adjust the sort of investment mix of the portfolio? I mean more broadly, which are the key channels that you would focus on like interest rate channels, distribution channels as a potential impact -- implications there?

Question number two is part of a follow-up on the Hong Kong business. On VONB, if my calculation is right, actually for the group, it might have slowed down to 10% growth relative to 18% or 19% growth in the first 9 months. So can we understand the key driver underneath, is it primarily on Hong Kong, China? And particularly on Hong Kong, I hear, of course, Fisher's comment that we have been following the commission spread sort of rules similar to HKIA's. But what should we sort of as an understanding of the likely slowdown of Hong Kong 4Q VONB momentum, I guess, particularly maybe on IFA and broker channel. Just trying to differentiate what are the one-off factors versus whether it's a fundamental like just not as strong as before in terms of the momentum.

Thank you, Gary. On the Middle East, like many, we are monitoring developments very closely. And we also, like many hope for a peaceful resolution. We have no direct operating or investment exposure to Iran. And our exposure to the broader Middle East is very small, and we have disclosed it this time now. So any impact to AIA would be indirect through movements in the global capital markets rather than any direct exposure, right? So -- but given the very long-term nature of our business, we manage our investments through a disciplined asset liability matching approach. So this helps reduce the impact of market volatility on both profitability and our balance sheet.

So also AI, as you can see, we maintain a very strong capital position, and we calibrate this against a wide range of very severe stress scenarios, which supports our resilience in times of uncertainty. So AIA, we've been around for a long time. We are a long-term business, and we have proven to be very resilient through multiple cycles and challenges. So I think that's how -- that's our answer for your question on Middle East.

Now in terms of the performance of the group, again, like I said before, very strong performance in 2025, record VONB supported by very strong foundational drivers. Second half actually accelerated growth in second half accelerated versus first half. We have said many times, there are many seasonal factors affecting -- unique factors affecting quarter. So we don't really manage on a quarter-by-quarter basis. The foundational drivers of our business remain very strong, and we are confident of the outlook going forward.

The next question comes from Michael Li of BoA Securities.

This is Michael Li from Bank of America. And congratulations on the solid results. I have 2 questions. The first question is about private credit. So I see the slide you have on your slide, you disclosed the size, you disclosed the percentage. But I still want to confirm something that have you ever talked to your asset managers, those private credit asset managers, if any kind of liquidity limits currently in their funds and if any quality issues in their funds? And what kind of measures we will take in the next like few quarters in terms of like private credit investment, will it increase or will it decrease?

The second thing is still about China business. So I think Fisher answered the questions about China bancassurance business. I think the bancassurance, the definition of bancassurance in AIA and other banks -- other insurers could be very different. You focus on your target clients, high net worth -- and the margin at like 35%, while others at like 10% to 15% margin. So my question is, are you interested in the 10% to 15% margin bancassurance business? Are you interested in the mass market in China if you want to develop your business in those less developed provinces?

Okay. Thank you, Michael. I think you have a specific question on private credit. But before handing over to Garth to talk about the private credit, I just again emphasize that given the long-term nature of our business, so we manage our investments through very disciplined asset liability matching approach. We have very long-term liabilities, very strong balance sheet and large recurring premium. So we have ample financial and liquidity flexibility, right?

So private market assets actually form an attractive part of the overall matching strategy, providing us with enhanced long-term returns and diversification. So our private asset portfolios are diversified across strategies and across many asset managers. And we do a lot of testing. And in terms of the liquidity requirements and stress test, we actually take a very conservative approach by assuming 0 liquidity and no recovery value from our private assets. So we are quite comfortable with the quality and allocation of our private market portfolios.

On private credit, actually, it's an even smaller proportion. Maybe Garth, [indiscernible].

Yes. Thank you, Yuan Siong. I think as you said, the stress tests are extreme. But you can see the key thing is that it's just 2% of our non-par and surplus assets. It's part of our asset liability matching, which we have a very disciplined asset ALM structure and so on. We're in constant dialogue with the fund managers. We only deal with a very large and a select group of managers and not only in terms of their outlook, but where they're investing and so on. So we think if managed properly, private credit can be an attractive asset class.

Perhaps I could ask our CIO, Chief Investment Officer, Dr. Mark Konyn, to perhaps add a little more color. Mark?

Yes. Thanks, Garth, and thanks for the question, Michael. Private credit, obviously, is an asset class that has grown very significantly as a result of changes in the regulatory framework in -- particularly in the United States in the banking industry. And we've kept abreast of those developments very closely. If you think about, as Yuan Siong has mentioned, the underlying ethos of our investment program is to back our long-dated liabilities, both in terms of long-term returns, cash flow, FX exposure, duration exposure. In that context, the private credit has a role to play, but it's relatively small, as Garth says, about 2% of the asset base.

We have established a number of strategic relationships with key providers, largely in the U.S., but not only the U.S. And if you look back at our program, fixed income really is a core competency within our organization and particularly credit. We've developed our own credit capabilities for underwriting going back decades. And if you look across that period, we've suffered de minimis levels of default through that whole period. And this is because of the quality of our underwriting, the risk controls that we apply and the constant reviewing and reporting that we have internally to make sure at all times we understand our exposure.

We are extending that approach to private credit. And our teams internally over the last several years have been working closely with our asset management partners to make sure that we understand the exposures that we've got and that we are comfortable with the exposures to Garth's point. If you think about the exposure that we do have, over 60% is to senior secured lending. And this remains the sort of underpin of what we're doing.

Obviously, we're conscious of what's going on in the market. It's largely related to retail investors who perhaps didn't fully appreciate the nature of the investments. But I think as Yuan Siong has said as well, liquidity is a key focus for us, and we are not dependent on our private asset program for liquidity.

On your question on China, AIA China, we have a very robust operating model, a very differentiated Premier Agency channel and a very selective and differentiated partnership distribution channel as well. We are very focused on serving the life and health insurance and long-term savings needs of middle class and affluent families in Mainland China. Many of our -- on average, the middle class and affluent customers of our agencies of our Premier Agents in China, on average, have 5 products with AIA, AIA China.

We are also in a very unique position whereby we are able to expand into new geographies. Since 2019, we have entered 9 new provinces, giving us access to 200 million additional middle class and affluent customers. And we will continue to expand our footprint across China. So AIA China really are very much focused on the life and health insurance and long-term savings needs of middle class and affluent customers.

The next question comes from Michael Chang of CGSI Securities.

It's Michael here. I have maybe 3 questions. First one is directed at Yuan Siong -- sorry, I have 3 questions here. First one is directed at Yuan Siong. Yuan Siong, just taking a look at the briefing thus far, the questions and taking a look at AIA across time because talking to investors pre-pandemic, AIA, just looking at the VONB growth, it seems to be at a different level from right now. And right now, looking at the outlook, there's a lot of uncertainties introduced by distortions caused by regulation in Hong Kong, in Mainland China. Some of your peers have tried to reduce the uncertainty about the outlook with guidance on, say, new business CSM or VONB. What do you think of the necessity of providing forward guidance on, say, key important metrics? So that's one.

Secondly, I really appreciate the changing of the wording of the guidance of the operating EPS growth targets, 9% to 11% from 2023 to 2026. But having said that, if I go with that range, this only applies -- only implies 3% to 9% operating EPS growth for 2026, which I would think should be easily exceeded at least on my forecast. How should we think about the operating per share growth going forward? Because the CSM is clearly recovering. I think the metrics are clearly improving from the point of AIA.

And maybe the last question then relates to the capital front because that's been another area of focus. If I take a look at the required capital under the shareholder capital ratio, there's clearly a slowdown in the required capital growth. It's up 8% year-on-year in 2025. Last year it was up 13%. I think that's pretty much a shift to par. And if I hear what Garth and Yuan Siong said just now about calibrating this against a severe stress situation, it's clearly that par products can absorb stress much better. Just want to understand, firstly, under what conditions would AIA consider changing that are prudent comfortably above 200% capital ratio level? And then on the leverage front, say if you're considering acquisitions, could there be change in the leverage as well, leverage ratio?

Okay. Thank you, Michael. On your question about forward guidance, I think you can see that in 2025, and even earlier years since COVID, we have delivered a very strong performance, and I believe sustainable performance in our key financial metrics, including VONB, EV Equity, OPAT and ROEV and ROE are at record levels now. So I think we operate in markets, as I said, with highly attractive growth opportunities for Asia. We are pan-Asian diversified business that gives us greater diversification. And these markets -- in these markets, the majority of them, we actually have market-leading positions with a very strong competitive advantages, including our Premier Agency channel. So I think the record speaks for itself in terms of the ability to deliver strong, consistent performance across market cycles, right?

Now in terms of the OPAT per share target, I just remind you that, first of all, we are actually quite well progressed to meet or exceed this OPAT per share growth target, which was set for 2023 to 2026. As you recall -- you may recall, this target was introduced during the transition from IFRS 4 to IFRS 17. And it was to help the market better understand the impact of the transition of the 2 accounting standards, which is not -- which is actually pretty complex. So that's -- which is why the main consideration at that time for us to give this OPAT per share target.

Now by the end of 2026, you will have 5 years of historical data with which to more accurately model the IFRS 17 earnings trajectory. And with the transparency of the IFRS 17 model, I think it is quite entirely doable. And on the capital question, I'll hand over to maybe Garth.

Yes. Thanks, Michael. On the required capital, there are a number of things that drive the required capital. Clearly, product is one of those and participating business, you have to remember that has to be added to the in-force business. So there's a slow progression as you change the mix of business. Required capital also depends, obviously, on things such as interest rates and our strategic asset allocation that goes behind that and any regulatory changes.

We continually review that. We've reviewed it in the past and we look at our stress tests. That's where we came up with the comfortably above 200% level. We're very happy with that level at present, and it's part of our overall capital framework.

Okay. Great. Michael, did that cover your question?

Leverage, sorry, I forgot to cover leverage, Sami. We're very comfortable with our leverage levels, Michael. We're very comfortable with our ratings. We clearly have some headroom within the ratings, but we like where we are. We have strong financial flexibility, and we feel that the current leverage level is appropriate. We added some more debt during the year. But obviously, as the business grows, then the leverage ratio will move along. But we're very comfortable where we are.

We have time for 1 final question.

The last question comes from Richard Xu of Morgan Stanley.

I got 2 questions. One is back to Hong Kong. So we're seeing some, obviously, RMB appreciation in the beginning of the year. Is there any impact on the Hong Kong business temporarily? And also, obviously, we heard there are some changes on the commission distribution to the agencies, whether that will impact the competitive landscape in Hong Kong or recruiting or some of these business growth in the near term, I guess, medium term as well?

And secondly is on China, we see healthy outlook in the first couple of months. Can we get a little bit more on sort of like the volume versus margins and product mix on that front? And also on China, a lot of the domestic life insurance are still heavily investing in health services, et cetera. Are we expanding any services or product on that front as well?

Okay. Thank you, Richard. On your question on Hong Kong and the demand, as I said at the beginning, in terms of the outlook for demand, both from the domestic and the overseas segment, and overseas segment, actually MCV is the vast majority. The outlook for demand from these 2 segments is very, very strong. And we are very confident of the -- that there will be sustained demand coming from these 2 segments. So any short-term movements in exchange rate actually does not affect this strong demand for Hong Kong insurance products.

So maybe Jacky, he's closer to the market. He may like to elaborate further.

Yes. I'd just like to add that the MCV business to Hong Kong has been here for more than 2 decades, and we went through different cycles of RMB appreciation, depreciation. And in fact, the demand of MCV customer to the Hong Kong insurance product is largely from the attractive proposition available in Hong Kong and also the demand for the diversification of wealth management to Hong Kong. So we really don't see the RMB appreciation has any major impact to our business.

And as to your question on commission spending requirement, in fact, AIA Hong Kong has been applying a kind of commission spending already because of encouragement of servicing of our agent to the existing customer and also align more in the long-term interest of the customer. We are already applying renewal kind of compensation. So the necessary change to our compensation actually is minimal, and it doesn't affect any of our business momentum from the agency force.

Yes. And on the question on China, in terms of like the VONB in the January and February, we do not disclose this information. And -- but in terms of like your question on the proposition development in the Mainland China market, I hand over to Fisher to talk about.

So thanks for the question. Number one, I think we are focused on the protection and long-term savings. As I said, we provide a comprehensive suite of the product supported by ecosystem-based service. So maybe let me talk about the product first. As you know, AIA China is almost the very few insurance companies who are still very keen on the protection. So we have observed -- even in the last year, we observed a double-digit growth in the CI. We continue to innovate in the product.

I'll give you some typical example. Number one is our par CI is very well received in the second half of last year because with the par, it can address upside potential. And then number two, we developed a module-based medical. That one is also very well received by the market because we put the different key elements like VIP room, advanced drugs into the each module. So the customer can based on their affordability to choose a different package. We call it the DIY medical. That is very well received by the market.

And very importantly, I want to also let you know in this year, the Shanghai government launched a pilot, allow the personal account of the social medical insurance to buy the commercial insurance through the agency. We are the first one to be chosen. And now we already sold to the more than 10,000 customers. That is very good. We continue to also innovate in the long-term saving like deferred annuity, immediate annuity, quite a lot of new innovation in the product side.

And secondly, I want to talk about the ecosystem-based service. As you know, we -- since 8 years ago, we already started to build a solid comprehensive ecosystem, including the hospital network, the health care ecosystem and also the retirement-related ecosystem. We can provide a tailored service and take retirement as an example, in the strong capable period, less capable period, December period, terminal period. So it's a very flexible tailor. And we also provide a timely consider service. So that kind of a service has a strong enabler and empowerment to our strong proposition.

So we also continue to strengthen the different segment. Number one, I'll give you a typical example. We are the first company to go to the substandard segment. We developed the [ SIOCI ], which is very well received by the customer. And I just mentioned the high net worth segment. We continue to innovate. Recently, we launched the -- take the service example, we launched the private family hospital. And for the product, we collab with the trust, we launched the Insurance Trust 3.0.

So in summary, I want to let you know our high-level strategy is we, again, a comprehensive suite of product is number one. And number two, equipped by strong ecosystem-based service. And number three, please don't forget, that is our core advantage. professional adviser service by our Premier Agency and differentiated profitable bancassurance. I think that's a basic summary.

All right. Thanks for the questions, Richard. I think that's what we've got time for today. If there are any follow-up questions or any further questions, please feel free to get in touch with us in Investor Relations. Thank you.

Ladies and gentlemen, this concludes AIA's 2025 Annual Results Q&A session. Thank you for your participation.