February 24, 2011 / 10:49 PM / 7 years ago

UPDATE 1-AIA 2010 net profit up 54 pct, but op margins fall

* H2 net profit $1.6 bln vs $1.04 bln consensus

* 2010 solvency ratio 337 pct vs 312 pct in H1 2010

* 2010 new business premiums up 8 pct at $2.02 bln

* 2010 op margins 16.15 pct vs 18.8 pct in H1 2010 (Adds details, quotes)

HONG KONG, Feb 25 (Reuters) - Asian insurance group AIA (1299.HK) beat expectations to report a 54 percent rise in 2010 net profit due to strong growth in its key markets such as Hong Kong, Thailand, Singapore and South Korea.

Reporting its results for the first time as a listed company, AIA’s net profit was $1.6 billion in the second half, up from the previously stated $788 million last year and better than the consensus estimate of $1.04 billion according to a poll of 14 analysts surveyed by Thomson Reuters I/B/E/S.

“The fundamentals for future economic growth of Asian markets remain firmly in place,” the company said in a statement. “If there is scope for regional economic uncertainty, it is in the ability of those markets to sustain their present speed of growth without overheating in the near term.”

The company said its 2010 operating profit before tax clocked in at $2.1 billion, but it was not immediately clear whether there was a one-off payment that boosted overall net profit. Its fiscal year ended in November 2010.

Headed by CEO Mark Tucker, AIA is the recently spun off Asian life insurance arm of American International Group (AIG.N). It raised over $20 billion in Hong Kong last year as its parent company sought to repay the U.S. government bailout.

Along with rival Prudential (PRU.L), the company is focusing its resources on expanding in the rapidly growing South East Asian economies such as Indonesia and the Philippines.

Asia is shaping up to be the new battleground for many insurance companies facing saturated and aging economies in their home markets, with companies such as Dutch financial group ING ING.AS and Sun Life (SLF.TO) also pushing into the region.

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Asia's insurance growth: link.reuters.com/sew28r

China's insurance sector: r.reuters.com/paw26n

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New business as measured by annualised new premiums (ANP) rose 8 percent in 2010 to $2.025 billion, while value of new business was up 22 percent to $667 million, AIA said.

Operating margin, a key performance indicator to measure profitability, fell 2.6 percentage points from the first half to 16.15 percent for the full year, based on Reuters calculations of company numbers.

Solvency ratio, which measures an insurer’s ability to meet its payment obligations, rose to 337 percent from 312 percent in the fiscal first half. Solvency requirements differ depending on the market it operates in, but regulators typically require insurers to maintain an excess of assets over liabilities.

AIA shares have fallen about 4 percent so far this year, largely in line with a similar decline in the benchmark Hang Seng Index .HSI. (Reporting by Kelvin Soh and Lee Chyen Yee; Editing by Charlie Zhu)

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