TRANSFERENCIA DE LOS BIENES DEL CONCESIONARIO

FINANCIAL AND OPERATING REVIEW

The cornerstone of our strategy for sustained growth in our agency channel remains focused recruitment backed by best-in-class training programmes. Our high-quality agent selection is driving our recruitment of younger, highly-educated and dynamic candidates into our agency business. Dedicated recruitment teams have been established to identify and recruit people who fit this profile, alongside innovative selection tools and upgraded new agent induction programmes developed through our interaction with LIMRA, a global leader in insurance training and recruitment practices.

Our training programmes have been developed over time to improve our agency training competency through our AIA

Premier Academies. In 2013, we entered into a new

strategic partnership with GAMA International, an association dedicated to supporting the professional development of field leaders in the insurance and financial services industry. Our aim is to further extend our competitive advantage regionally by developing our agency leaders through skills- based professional development experience, peer-to-peer networking and enhancing our proven agency management practices. These initiatives have helped the number of active new agents in 2013 grow by 27 per cent compared with 2012. Million Dollar Round Table (MDRT) qualification is an important external global industry measure of the top financial planners and advisers and remains a benchmark for our Premier Agency platform. We continue to promote qualification through regional events that recognise sales performance and inspire and encourage the highest possible levels of productivity and quality. AIA is the number one ranked Asia-based insurer for MDRT members and our MDRT qualifiers grew by 20 per cent compared with 2012 demonstrating the depth and quality of the growth in our agency force.

AIA continued to invest in iPoS, our industry-leading interactive point-of-sale technology. This pioneering technology enables our agents to reduce their administrative work and optimise their time spent advising existing and potential customers. iPoS has now been deployed to our agents in eight markets – Thailand, Singapore, Malaysia, Indonesia, the Philippines, Sri Lanka, Taiwan and Vietnam. Following the successful implementation of this first phase of the regional roll-out, we have begun the development of the

second phase which incorporates additional tools that assist our agents and agency leaders to manage their agency teams still more effectively.

Partnerships

AIA’s partnership distribution business expands our

distribution reach and creates additional growth opportunities through bancassurance, direct marketing and other

intermediated distribution channels. Our partnership strategy is built around establishing mutually beneficial relationships with our partners that allow us to maintain our disciplined approach to the types of products we sell so that we can achieve the right returns for our customers, our partners and AIA.

This deliberate strategy of balancing growth in the breadth of our distribution channels while meeting our profitability targets has once again delivered excellent results, with partnership VONB growth of 35 per cent compared with 2012 to US$469 million. This growth was driven by increased ANP of 23 per cent and further VONB margin expansion of 3.4 pps to 39.8 per cent compared with 2012, as we improved our productivity and enhanced our business mix by achieving a higher proportion of protection product sales through our partners. Overall, our partnership business accounted for 29 per cent of the Group’s total VONB in 2013.

Bancassurance

In recent years, we have transformed our bancassurance business through the ongoing development of collaborative partnerships with highly-regarded regional and local banks, so that it now represents a substantial part of our

Business Review

AIA Premier Academy organised an annual kick-off seminar to help agents and agency leaders plan ahead in their pursuits of MDRT qualification during the year.

OVE RVI EW FIN AN CI AL A N D O PER AT IN G R EV IE W COR POR AT E G OV ER N ANC E FI NAN CI AL S TA TE M EN TS AD DI TI ONAL IN FO RMA TI ON

overall partnership distribution. We have continued to work closely with our bank partners to increase sales force productivity from the proactive management and expansion of our in-branch specialists, greater network coverage and improvements to our product mix. In 2013, we also began the roll-out of iPoS to partners to further enhance the productivity of our specialists and to broaden the product range available to bank customers.

The successful execution of our bancassurance strategy continued to produce excellent results in 2013, maintaining our strong track record of delivering financially-disciplined growth with an increase in VONB for this channel of 57 per cent compared with 2012 including a margin uplift of 4.0 pps. Our new exclusive relationship with Public Bank provided an important contribution to bancassurance VONB in Malaysia. Public Bank is one of Malaysia’s largest banking groups with over five million customers.

Direct Marketing

Our direct marketing business has continued to make good progress as a result of continuing investments in our people, products and processes. In Korea, we have progressively restructured our operations to target best-in-class direct marketing capabilities with successful recruitment campaigns to attract quality telesales representatives (TSRs). We continued to implement our training and development programmes during the year to bring newly-recruited TSRs up to required levels of productivity.

Other Partnership Channels

AIA’s additional partnership channels include independent financial advisers (IFAs), brokers, private banks and

specialist advisers. We delivered solid overall growth in these

channels during 2013. We continued to develop our Premier IFA model in Australia and this has delivered strong sales growth combined with attractive margins in the individual retail protection market to supplement our group insurance business.