1、ANNUAL REPORT 2022AIA GROUP LIMITED 友邦保險控股有限公司AIA.COM友邦保險控股有限公司 AIA GROUP LIMITEDSTOCK CODE 1299A HEALTHY ASIAINVESTING INANNUAL REPORT 2022OUR PURPOSE IS TO HELP PEOPLE LIVE HEALTHIER,LONGER,BETTER LIVES.AIA Group Limited and its subsidiaries(collectively“AIA”or the“Group”)comprise the largest inde

2、pendent publicly listed pan-Asian life insurance group.It has a presence in 18 markets wholly-owned branches and subsidiaries in Mainland China,Hong Kong SAR(1),Thailand,Singapore,Malaysia,Australia,Cambodia,Indonesia,Myanmar,New Zealand,the Philippines,South Korea,Sri Lanka,Taiwan(China),Vietnam,Br

3、unei and Macau SAR(2),and a 49 per cent joint venture in India.The business that is now AIA was first established in Shanghai more than a century ago in 1919.It is a market leader in Asia(ex-Japan)based on life insurance premiums and holds leading positions across the majority of its markets.It had

4、total assets of US$303 billion as of 31 December 2022.ABOUT AIANotes:(1)Hong Kong SAR refers to the Hong Kong Special Administrative Region.(2)Macau SAR refers to the Macau Special Administrative Region.(3)Explanations of certain terms and abbreviations used in this report are set forth in the Gloss

5、ary.AIA meets the long-term savings and protection needs of individuals by offering a range of products and services including life insurance,accident and health insurance and savings plans.The Group also provides employee benefits,credit life and pension services to corporate clients.Through an ext

6、ensive network of agents,partners and employees across Asia,AIA serves the holders of more than 41 million individual policies and over 17 million participating members of group insurance schemes.AIA Group Limited is listed on the Main Board of The Stock Exchange of Hong Kong Limited under the stock

7、 code“1299”with American Depositary Receipts(Level 1)traded on the over-the-counter market(ticker symbol:“AAGIY”).Note:(1)As at 31 December 2022.AIA AT-A-GLANCEPresent in 18 MARKETS AND 100%FOCUSED ON ASIATHE LARGEST LISTED COMPANY ON THE HONG KONG STOCK EXCHANGE which is incorporated and headquarte

8、red in Hong Kong(1)THE LARGEST LIFE INSURER IN THE WORLD by market capitalisation(1)NO.1 WORLDWIDE FOR MDRT REGISTERED MEMBERS The only multinational company to top the table for EIGHT CONSECUTIVE YEARSANNUAL REPORT 2022003“ENTERPRISE ARCHITECTURE AWARD”by Forresters 2022 Asia Pacific Technology Awa

9、rdsRANKED TOP 10 in Fortunes 2022“Change the World”list“DIGITAL INSURER OF THE YEAR”by InsuranceAsia News for two yearsProvides protection with total sum assured of over US$2 TRILLIONto people across Asia Benefits and claims of US$16 BILLION in 2022Serving the holders of more than 41 MILLIONindividu

10、al policies and over 17 MILLION participating members of group insurance schemesAIA GROUP LIMITED004CONTENTSOVERVIEW014 Financial Highlights016 Chairmans Statement019 Group Chief Executive and Presidents ReportFINANCIAL AND OPERATING REVIEW026 Group Chief Financial Officers Review052 Business Review

11、067 Risk Management073 Regulatory and International Developments074 Our PeopleCORPORATE GOVERNANCE079 Statement of Directors Responsibilities080 Board of Directors088 Executive Committee093 Report of the Directors106 Corporate Governance Report122 Remuneration ReportFINANCIAL STATEMENTS141 Independe

12、nt Auditors Report149 Consolidated Income Statement150 Consolidated Statement of Comprehensive Income151 Consolidated Statement of Financial Position153 Consolidated Statement of Changes in Equity155 Consolidated Statement of Cash Flows157 Notes to the Consolidated Financial Statements and Material

13、Accounting Policy Information264 Independent Auditors Report on the Supplementary Embedded Value Information268 Supplementary Embedded Value InformationADDITIONAL INFORMATION295 Information for Shareholders298 Corporate Information299 GlossaryANNUAL REPORT 202200520 22HIGHLIGHTSAIA GROUP LIMITED006A

14、IA named#1 MDRT company for eight consecutive years AIA had the largest number of Million Dollar Round Table(MDRT)members for an unprecedented eight consecutive years,testament to the high quality of our agency force and Premier Agency model.AIA launches a US$10.0 billion share buy-back programmeAIA

15、 launched a three-year,US$10.0 billion share buy-back programme,enhancing shareholder returns while retaining the financial strength to invest in significant growth opportunities.AIA LEADS THE INDUSTRY WITH OUR UNRIVALLED DISTRIBUTIONAIA expands our presence in Mainland China and completes our inves

16、tment in China Post LifeAIA China opened a new branch in Hubei and received regulatory approval to prepare a new branch in Henan.AIA also completed our 24.99 per cent equity investment in China Post Life Insurance Co.,Ltd.(China Post Life),which increased AIAs exposure to the growth opportunities in

17、 the Chinese life insurance market.Local markets establish bancassurance partnershipsAIA Vietnam and Vietnam Prosperity Joint Stock Bank extended their exclusive bancassurance agreement for another four years,AIA Cambodia signed a five-year bancassurance partnership with Prince Bank,and Tata AIA Lif

18、e announced a bancassurance partnership with City Union Bank.2022 HIGHLIGHTSANNUAL REPORT 2022007AIA establishes Amplify Health,a pan-Asian Health InsurTech business with Discovery LimitedAIA launched Amplify Health,which will deploy health technology assets,proprietary data analytics and extensive

19、health expertise to transform how individuals,corporates,payors and providers experience and manage health insurance and healthcare delivery.AIA EXPANDS HEALTH OFFERING ACROSS ASIAAIA acquires Blue Cross and deepens The Bank of East Asia partnership AIA acquired Blue Cross(Asia-Pacific)Insurance Lim

20、ited(Blue Cross)and Blue Care JV(BVI)Holdings Limited from The Bank of East Asia,Limited(BEA).AIA and BEA extended the scope of their existing exclusive bancassurance partnership to include personal lines general insurance products.AIA acquires MediCard in the Philippines The acquisition of MediCard

21、 Philippines,Inc.(MediCard),a leading health maintenance organisation,brings new products,customer segments and distribution capabilities,increasing AIAs exposure to the Philippines large and fast-growing health insurance market.MediCard provides significant opportunities for value creation through

22、the deployment of AIAs new Health InsurTech solutions from Amplify Health.AIA GROUP LIMITED008AIA ONE BILLION IS OUR BOLD AMBITION TO ENGAGE ONE BILLION PEOPLE TO LIVE HEALTHIER,LONGER,BETTER LIVES BY 2030Through AIA One Billion,we are reaching far beyond our immediate customer base to improve the h

23、ealth and wellness of individuals and help create a more sustainable future in Asia.In 2022,we brought our Purpose to life further through these creative community initiatives to meaningfully contribute to this ambition.2022 HIGHLIGHTSANNUAL REPORT 2022009AIA Healthiest Schools support young peopleA

24、IA launched the AIA Healthiest Schools programme,which encourages healthy living habits among students aged five to 16 by promoting healthy eating,active lifestyles,mental well-being,as well as health and sustainability in schools in four pilot markets Australia,Hong Kong,Thailand,and Vietnam.AIA Vo

25、ices engage and inspire communities across AsiaAIA launched AIA Voices,a platform for thought leaders to educate,motivate and inspire people to make positive behavioural changes on their health and wellness journey.AIA celebrates 10 years of supporting our communities with Tottenham HotspurAIAs part

26、nership with Tottenham Hotspur has been a powerful vehicle to deepen engagement with AIA customers and communities across the region.Our highly popular football clinics have benefitted 80,000 children with inspiration and advice on living an active and healthy life.AIA also welcomed Son Heung Min an

27、d Cho So Hyun as AIA Ambassadors.AIA grants a second round of scholarship awards to 100 university students in Hong KongAIA granted scholarship awards to 100 university students in Hong Kong as part of our US$100 million scholarship pledge.AIA also donated HK$40 million to support Hong Kong during t

28、he pandemic this year,demonstrating our continued commitment to the local community.AIA GROUP LIMITED010AIA LAUNCHES OURINTEGRATED HEALTH STRATEGYTO MAKE HEALTHCARE MORE ACCESSIBLE,AFFORDABLE,AND EFFECTIVEANNUAL REPORT 2022011Asia is the fastest growing healthcare market,with long-term structural fo

29、rces driving huge demand.Unmatched economic expansion is creating unprecedented levels of wealth for a growing and ageing population.However,while Asia is becoming wealthier,it is not getting healthier.Millions are missing out on necessary medical treatment due to limited access to healthcare and he

30、alth insurance resources.This is the right time for AIA to play a leading role in making healthcare more accessible,affordable and effective for our communities.Our Integrated Health Strategy is a bold new vision that goes beyond fragmented partnerships and ecosystems to deliver simpler customer jou

31、rneys,including how people buy health insurance and navigate the healthcare system.This strategy brings together the unique strengths of AIA to build on our substantial competitive advantages,significantly enhance our core business and capture new opportunities for additional growth.AIA GROUP LIMITE

32、D012Our vision for Amplify Health is to be a leading digital health technology and integrated solutions business,transforming how individuals,corporates,payors and providers experience and manage health insurance and healthcare delivery,improving the health and wellness outcomes of patients and comm

33、unities across Asia.THREE PILLARS OF AIAS INTEGRATED HEALTH STRATEGYIntegration with Outpatient ClinicsAIA can help deliver better health outcomes at lower costs through strategic partnerships with outpatient clinics and direct better healthcare journeys.Personalised Health InsuranceAIA aims to be t

34、he leading provider of personalised health insurance advice and innovative solutions that provide enhanced coverage for customers and greater value.AIA Chinas Retirement Ecosystem 2.0 is enhanced with home-based Retirement Services,Medical Care and Assistance for customers at the“early elderly age”A

35、IA Hong Kongs Health Journey Guardian offers customers comprehensive protection for prevention,prediction,diagnosis,treatment and recoveryAIA Malaysias Total Health Solution enables customers to Live Well,Protect Well and Get WellHealth Technology,Digital and AnalyticsPOWERED BYANNUAL REPORT 2022013

36、Advanced Healthcare Administration and ManagementAIA will provide more effective care management programmes and simpler healthcare journeys for our customers.Personal Case Management in 12 marketsTelemedicine in10 marketsRegional Health Passport in9 markets2.6 million members across in 11 markets an

37、d our wellness programme in Mainland ChinaHealth Technology,Digital and AnalyticsAIA GROUP LIMITED0142022 RESULTS AT-A-GLANCEVALUE OF NEW BUSINESS(1)(7)TOTAL ASSETS AND TOTAL LIABILITIES(8)ANNUALISED NEW PREMIUMS(2)(7)OPERATING PROFIT AFTER TAX(3)(8)TOTAL WEIGHTED PREMIUM INCOME(4)EV EQUITY(5)50001,

38、0001,5002,0002,5003,0004,0003,5004,50020021US$MILLIONS20224,1543,3662,7653,9553,0922022US$MILLIONS01,0003,0004,0005,0002,0007,0006,000200185,6896,4095,9425,2986,3702022US$MILLIONS010,00020,00030,00040,00060,00050,00070,00080,0002002163,90575,00167,18556,20371,2022022

39、US$MILLIONS01,0002,0003,0004,0006,0005,0007,000200216,5855,6475,2196,5105,4072022US$MILLIONS05,00010,00015,00020,00030,00025,00040,00035,0002002134,00236,85935,40830,54336,1762022US$BILLIONS05000306262340279303264TOTAL ASSETS TOTAL LI

40、ABILITIESOVERVIEWANNUAL REPORT 2022015OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATIONNotes:(1)Value of new business(VONB)is the present value,measured at the point of sale,of projected after-tax statutory profits emerging in the future from new bu

41、siness sold in the period less the cost of holding the required capital in excess of regulatory reserves to support this business.(2)Annualised new premiums(ANP)is a measure of new business activity that is calculated as the sum of 100 per cent of annualised first year premiums and 10 per cent of si

42、ngle premiums,before reinsurance ceded.(3)Operating profit after tax(OPAT)is shown after non-controlling interests.(4)Total weighted premium income(TWPI)consists of 100 per cent of renewal premiums,100 per cent of first year premiums and 10 per cent of single premiums,before reinsurance ceded.(5)Emb

43、edded value(EV)is an actuarially determined estimate of the economic value of a life insurance business based on a particular set of assumptions as to future experience,excluding any economic value attributable to future new business.EV Equity is the total of embedded value,goodwill and other intang

44、ible assets,after allowing for taxes.(6)Based on local statutory basis,before unallocated Group Office expenses and deduction of the amount attributable to non-controlling interests,VONB by segment includes pension business.(7)From 2019 onwards,ANP and VONB for Other Markets include the results from

45、 our 49 per cent shareholding in Tata AIA Life Insurance Company Limited(Tata AIA Life).ANP and VONB for 2018 have not been restated and do not include any contribution from Tata AIA Life.ANP and VONB do not include any contribution from our 24.99 per cent shareholding in China Post Life Insurance C

46、o.,Ltd.(China Post Life).VONB for the Group from 2019 onwards excludes the VONB attributable to non-controlling interests.VONB for 2018 have not been restated and are reported before deducting the amount attributable to non-controlling interests,as previously disclosed.The IFRS results of Tata AIA L

47、ife and China Post Life are accounted for using the equity method.The results of Tata AIA Life and China Post Life are accounted for on a one-quarter-lag basis in AIAs consolidated results.The results of China Post Life starting from the completion of the investment on 11 January 2022 are accounted

48、for in AIAs consolidated results.For clarity,TWPI does not include any contribution from Tata AIA Life and China Post Life.(8)From 2019 onwards,the financial information is presented after the change in AIAs IFRS accounting treatment for the recognition and measurement of insurance contract liabilit

49、ies of other participating business with distinct portfolios.The financial information for 2018 is presented before the above-mentioned changes.2022 BREAKDOWN BY MARKET SEGMENTVALUE OF NEW BUSINESS(1)(6)TOTAL WEIGHTED PREMIUM INCOME(4)ANNUALISED NEW PREMIUMS(2)OPERATING PROFIT AFTER TAX(3)MAINLAND C

50、HINA HONG KONG THAILAND SINGAPORE MALAYSIA OTHER MARKETS27%24%17%10%13%9%22%35%12%12%13%6%24%20%12%10%26%8%21%31%11%10%20%7%OVERVIEWAIA GROUP LIMITED016OVERVIEWAIA is an exceptional company and I am extremely proud of the strength and resilience of our business during a challenging operating environ

51、ment in 2022.Our long history in Asia,through many different market cycles,has provided us with a trusted reputation of supporting our customers when they need us the most.As Asia rapidly emerges from the pandemic,AIAs Purpose of helping people live Healthier,Longer,Better Lives has never been more

52、relevant.CHAIRMANS STATEMENTMr.Edmund Sze-Wing TseIndependent Non-executive ChairmanANNUAL REPORT 2022017OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATIONAIA is the largest pan-Asian life and health insurer and we are uniquely positioned to make an

53、enormous positive difference by materially contributing to the economic and social development of the region.Over our long history,we have been a trusted partner to our customers and our high-quality advice and products bring peace of mind,as well as much-needed financial protection to millions of p

54、eople in Asia.Our substantial competitive advantages built over decades keep us uniquely positioned to capture the large and fast-growing opportunities in life and health insurance in Asia over the long term.Our clear and ambitious strategy aligns our scale,position and influence with the powerful d

55、rivers of growth prevalent in the region and we are confident that our focused execution will deliver sustainable growth for many years to come.In 2022,we experienced an unprecedented year with extraordinary macroeconomic volatility and extensive outbreaks of the Omicron variant of COVID-19 creating

56、 a complex and challenging operating environment.Containment measures and an exponential rise in infections caused disruptions to everyday life.While face-to-face sales of our products in the first half of the year were affected,our digital capabilities allowed us to generate substantial sales over

57、this period and,as restrictions eased,in-person sales rebounded.As normal activities resumed,our key strategic initiatives delivered strong new business momentum in the second half.Although value of new business(VONB)of US$3,092 million was lower by 5 per cent for the full year,VONB grew by 6 per ce

58、nt year-on-year in the second half and all five of our largest operating segments delivered positive year-on-year growth.Underlying free surplus generation(UFSG)of US$6,039 million grew by 7 per cent per share on a comparable basis(1)and operating profit after tax(OPAT)of US$6,370 million increased

59、by 5 per cent per share,reflecting our high-quality,recurring sources of earnings.AIA has a long-standing commitment since our historic initial public offering,to create value by delivering high-quality and sustainable sources of growth,earnings and cash for our shareholders.In March 2022,the board

60、of Directors(Board)approved AIAs first-ever return of capital to shareholders through a share buy-back programme to be conducted over three years of up to US$10 billion.This represents capital that is surplus to our needs,allowing for financial market stress conditions and retention of capital for s

61、trategic and financial flexibility.As of 31 December 2022,we had delivered US$3,570 million in returns to shareholders as part of this programme.The Groups capital position and financial flexibility remained very strong in 2022.Free surplus grew to US$23,679 million at 31 December 2022 before the pa

62、yment of shareholder dividends of US$2,259 million and an additional US$3,570 million return of capital to shareholders during the year from our share buy-back programme,totalling US$5,829 million.Net of these items,free surplus was US$17,850 million at 31 December 2022.EV Equity was US$77,031 milli

63、on at 31 December 2022,before dividends and the share buy-back.EV Equity net of these items was US$71,202 million.Our cover ratio under the Group Local Capital Summation Method(LCSM)was also very strong at 283 per cent on the new prescribed capital requirement(PCR)basis at the end of the year.The Bo

64、ard has recommended a final dividend of 113.40 Hong Kong cents per share,which is an increase of 5 per cent,reflecting the resilience of our financial performance and the Boards continued confidence in the future prospects of the Group.This brings the total dividend for 2022 to 153.68 Hong Kong cent

65、s per share,up by 5.3 per cent.The Board continues to follow AIAs established prudent,sustainable and progressive dividend policy,allowing for future growth opportunities and the financial flexibility of the Group.AIA GROUP LIMITED018OVERVIEWCHAIRMANS STATEMENTAll of AIAs non-executive directors are

66、 independent and together,the Board is united in upholding the highest standards of corporate governance.It is my pleasure to work alongside highly distinguished Board members who contribute extensive and diverse leadership experience from the public and private sectors.We firmly believe that strong

67、 governance,supported by a sound risk management framework,is fundamental to ensuring the sustainability of our organisation.AIAs Operating Philosophy of“Doing the Right Thing,in the Right Way,with the Right People and the Right Results will come”is the bedrock of AIAs culture and is essential to su

68、ccessfully managing risk in an increasingly complex operating environment.Our Purpose also underscores our responsibility to help safeguard a better future for the societies in which we operate by addressing material Environmental,Social and Governance(ESG)issues.I am pleased that,once again,our eff

69、orts have gained us positive recognition.In 2022,Sustainalytics,a global leader in ESG and Corporate Governance research and ratings,ranked AIA in the top 10th percentile of the insurance industry in its ESG Risk Rating assessment.We have been“ESG Industry Top Rated”as well as“ESG Regional Top Rated

70、”by Sustainalytics for two years in a row.I am also delighted that AIA has been included in the 2023 Bloomberg Gender-Equality Index(GEI),making us one of only five Hong Kong-headquartered companies to be included globally.I would like to thank Yuan Siong,our senior leadership team and all of our pe

71、ople for their dedication and tireless efforts in managing our business through the prolonged uncertainties over the last three years.Without them our sustainable success would not be possible.As our markets rebound from the pandemic,I am confident that AIA is ideally positioned to capture the enorm

72、ous opportunities ahead of us by continuing to serve our customers and communities to the best of our abilities.The strong drivers of demand and major demographic trends in the region will continue to generate an increasing need for our products.Our substantial competitive advantages and ambitious s

73、trategy build on these powerful structural drivers of growth,and the long-term prospects for AIA are truly exceptional.Finally,AIAs strong track record of delivering sustainable value for all our stakeholders would not have been possible without the enduring trust of our customers and shareholders.O

74、n behalf of the entire Board,I am deeply grateful for your ongoing support.Edmund Sze-Wing TseIndependent Non-executive Chairman10 March 2023Notes:(1)Growth on a comparable basis for UFSG per share excludes the effects on the growth rate of the early adoption of the Hong Kong Risk-based Capital(HKRB

75、C)regime from 1 January 2022 and the release of additional resilience margins held by the Group at 1 January 2022 under the previous Hong Kong Insurance Ordinance(HKIO)basis.For clarity,the reported figures for UFSG are unadjusted as a result.Growth rates are shown on constant exchange rates as mana

76、gement believes this provides a clearer picture of the year-on-year performance of the underlying business.ANNUAL REPORT 2022019OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATIONGROUP CHIEF EXECUTIVE AND PRESIDENTS REPORTMr.Lee Yuan SiongGroup Chief

77、Executive and PresidentOVERVIEWAIA has delivered a robust performance in 2022 with strong new business momentum growing in the second half of the year,higher free surplus and increased capital returns to shareholders.Our results demonstrate the breadth and diversity of our high-quality portfolio of

78、businesses as well as the structural growth drivers underpinning the enormous need for life and health protection across our markets.Our significant investments in reinforcing AIAs unique strengths ensure that the Group is exceptionally well-positioned to meet the immediate as well as evolving deman

79、ds of our customers and to benefit from the tremendous opportunities as Asia rapidly opens up for further growth.AIA GROUP LIMITED020OVERVIEWAIA has been protecting people for life,securing financial futures into retirement,and improving the well-being of families for more than a century.This has ea

80、rned us a reputation that is synonymous with trust,resilience and doing the right thing through many market cycles.Our unrelenting focus on building AIAs substantial competitive advantages has enabled us to significantly enhance our operations and capture new opportunities for additional growth acro

81、ss each of our 18 markets.The macroeconomic and operating environment since early 2020 has been unprecedented.During this time,we have steadfastly delivered on our key strategic priorities,reinforced our unique strengths and successfully navigated the wide-ranging effects of the COVID-19 pandemic as

82、 well as its aftermath.Our resilient business performance is a direct consequence of our high-quality diversified portfolio of growth businesses,incomparable distribution platform,innovative products tailored to local market conditions,financial strength and proven management team.I am deeply proud

83、of our employees,agents and partners who have shown unwavering professionalism in supporting our customers and communities during these extraordinary times.In 2022,we paid US$16 billion in claims and benefits and,by helping our customers cope with the challenges and uncertainties they encounter,we p

84、rovided much-needed support for communities.Across the region,there is an undeniable and growing need for personalised life and health insurance products,value-added services and high-quality advice.This immense potential for our business is fuelled by the rapid increases in affluence,healthcare exp

85、enditure and shifting population demographics.The pandemic has accelerated many of these structural trends and higher expectations of quality of life is top of mind for millions of Asians.I firmly believe that the prospects for AIAs business remain as clear and as strong as ever.I have full confiden

86、ce that through the focused execution of our growth strategy and our unmatched financial flexibility,we will continue to create and deliver long-term sustainable value for all of our stakeholders.2022 FINANCIAL PERFORMANCE HIGHLIGHTSFrom the beginning of 2022,outbreaks of the Omicron variant of COVI

87、D-19 affected all of our markets with a sudden and exponential surge in infections and the reintroduction of containment measures impacting our communities,severely dampening consumer demand and reducing distributor activity in the first half of the year.In Mainland China,our largest growth market,p

88、andemic restrictions were in place for most of 2022 and there was a rapid increase in COVID-19 infections towards the end of the year.The Group delivered a robust value of new business(VONB)performance in 2022,with 6 per cent year-on-year growth in the second half as the effects of the initial Omicr

89、on wave subsided.While VONB of US$3,092 million was lower by 5 per cent for the full year,our key strategic initiatives delivered strong new business momentum in the second half of the year.All five of our largest operating segments delivered positive year-on-year growth in the second half and we ac

90、hieved double-digit growth in our combined ASEAN business and Tata AIA Life in India.AIAs balance sheet strength is a direct result of our profitable growth strategy underpinned by consistent financial discipline.The Groups very strong financial position is an important differentiator and a substant

91、ial competitive advantage,particularly during times of considerable capital market volatility.AIA has significant opportunities to invest capital in superior profitable growth that generates increased shareholder value.We are able to move forward with confidence,financing organic new business and va

92、lue-enhancing inorganic opportunities,while delivering attractive shareholder returns.Last March,we began AIAs first-ever share buy-back programme of up to US$10 billion over three years and,as of 31 December 2022,we had repurchased 366 million shares,delivering US$3,570 million in additional return

93、s to shareholders.GROUP CHIEF EXECUTIVE AND PRESIDENTS REPORTANNUAL REPORT 2022021OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATIONUnderlying free surplus generation(UFSG)of US$6,039 million grew by 7 per cent per share on a comparable basis(1).EV E

94、quity was US$77,031 million at 31 December 2022,before the payment of shareholder dividends of US$2,259 million and an additional US$3,570 million return of capital to shareholders during the year from our share buy-back programme,totalling US$5,829 million.EV Equity net of these items was US$71,202

95、 million.Our growing in-force portfolio and the proactive management of our high-quality,recurring sources of earnings underpinned operating profit after tax(OPAT)of US$6,370 million,an increase of 5 per cent per share.The Groups capital position remained very strong with free surplus growing to US$

96、23,679 million before dividends and the share buy-back programme.Net of these items,free surplus was US$17,850 million at 31 December 2022.As at 31 December 2022,the Group Local Capital Summation Method(LCSM)cover ratio(2)remained very strong at 283 per cent on the new prescribed capital requirement

97、(PCR)basis and 552 per cent on the minimum capital requirement(MCR)basis previously disclosed.The Board has recommended a final dividend of 113.40 Hong Kong cents per share which brings the total dividend for 2022 to 153.68 Hong Kong cents per share,an increase of 5.3 per cent compared with 2021.Thi

98、s follows AIAs established prudent,sustainable and progressive dividend policy,allowing for future growth opportunities and the financial flexibility of the Group.Our resilient financial results in an unprecedented market environment demonstrate the strengths of our robust operating model,which is b

99、uilt on differentiated distribution,personalised and valuable propositions,and backed by world-class technology and digital platforms to deliver outstanding customer service.Since July 2020,we have been transforming AIAs significant competitive advantages to fully leverage the powerful structural dr

100、ivers of growth across our markets and ensure we remain well-positioned for future success.TRANSFORMING OUR COMPETITIVE ADVANTAGESAt the heart of our growth strategy is world-class Technology,Digital and Analytics,supporting increased distributor productivity,streamlined operations and enhanced cust

101、omer experience while creating access to new growth opportunities.We are ahead of global financial services benchmarks with more than 86 per cent of our information technology infrastructure hosted in the public cloud.Since we announced our new strategy in 2020,our technology capacity has doubled wh

102、ile delivering cost efficiencies compared with our legacy infrastructure platform.We delivered an additional 111 high-impact use cases in 2022 as we industrialise and deepen our usage of responsible artificial intelligence and analytics across the Group.The number of leads generated through our digi

103、tal tools increased by 30 per cent compared with 2021 and the enhanced quality of these targeted leads improved sales lead conversion rates,generating more than US$500 million in annualised new premiums from our agency and bancassurance channels.Our Unrivalled Distribution remains a distinctive comp

104、etitive advantage for the Group,offering customers professional,high-quality advice and products that are personalised to their needs.Although face-to-face new business activities were affected at the start of the year by the Omicron outbreak,agency new business sales momentum improved from the seco

105、nd quarter and VONB grew by 8 per cent in the second half of the year.Increased adoption of our full range of digital agency tools has ensured the resilience of our proprietary agency model with total number of agents exceeding pre-pandemic levels at the end of 2019.AIA China became the Million Doll

106、ar Round Table(MDRT)company with the most members globally,followed by AIA Thailand and AIA Hong Kong in second and third place respectively.Overall,AIA was the number one MDRT multinational company in the world for a record eighth consecutive year,proving the effectiveness of our differentiated hig

107、h-quality Premier Agency strategy.AIA GROUP LIMITED022OVERVIEWGROUP CHIEF EXECUTIVE AND PRESIDENTS REPORTOur strategic partnerships with leading banks delivered a 10 per cent increase in VONB,driven by growth from Public Bank Berhad(Public Bank)in Malaysia,PT Bank Central Asia Tbk(BCA)in Indonesia,T

108、he Bank of East Asia,Limited(BEA)in Hong Kong and Mainland China,ASB Bank Limited in New Zealand and across all key domestic partnerships in India.Our successful digitally-led model builds on our strong track record of converting in-branch referrals by leveraging customer analytics,digital marketing

109、 platforms and social media to increase leads and increase productivity for our insurance specialists.Our next-generation partnerships with technology companies offer lifestyle-related digital insurance propositions to customers with unmet needs and uses new analytical models to identify suitable cu

110、stomers for referral to our distribution channels for more comprehensive advice and product solutions.Last year,we welcomed 15 additional digital platform partners and acquired more than one million customers,the majority of which were new to AIA.We believe that providing simplified journeys with fa

111、ster turnaround times will deliver a Leading Customer Experience and a range of business benefits including improved customer satisfaction and sustainable profitability.End-to-end straight-through-processing(STP)is crucial to achieving this and,as of December 2022,we had reached 70 per cent STP acro

112、ss the Group,up 12 pps from the previous year.Our re-designed claims processes have resulted in faster and more cashless settlements with 63 per cent of claims settled on the same day as submission and 93 per cent of claims paid digitally across the Group.Our investments in back-office operations,te

113、chnology and artificial intelligence have driven greater automation and more personalised service,resulting in better customer outcomes across our markets.Through our Compelling Propositions we aim to create shared economic value by tying our financial success to community success.We support our cus

114、tomers by helping them save more effectively to meet their financial goals at different life stages,rewarding them for taking actions that positively impact their well-being,and assisting them to access the right medical treatment when needed.The AIA Vitality programme continues to deliver positive

115、impacts on health outcomes to increasing numbers of customers,including a launch in India in 2022.We now have 2.6 million members across AIA Vitality and our wellness programme in Mainland China.With annual healthcare expenditure in our markets on track to exceed US$4 trillion in 2030 and much of th

116、e burden falling to individuals,this is an opportune time to transform health insurance and healthcare in the region.Our new Integrated Health Strategy,announced in August,reinforces the many benefits of our core life insurance business and makes health insurance and health care management more acce

117、ssible,more affordable and more effective.As the leading life and health insurer in Asia,we are in an advantaged position to build on our key competitive strengths to deliver on our Purpose of helping people live Healthier,Longer,Better Lives.INVESTING IN ADDITIONAL GROWTH OPPORTUNITIESOur financial

118、 discipline over time has also ensured that we retain the flexibility to invest capital in inorganic growth opportunities that increase our scale and diversity in the worlds most attractive region for life and health insurance.Amplify Health,our new Health InsurTech business,is the engine that power

119、s our Integrated Health Strategy.Our new company offers a broad suite of services through a full health technology stack,along with the associated intellectual property,data sets and expertise,developed over the last three decades by Discovery Limited,our joint venture partner.Amplify Health materia

120、lly accelerates our capability build in health and creates a new and sustainable competitive advantage as AIA is uniquely positioned to deliver truly personalised health insurance with fully integrated and end-to-end care for our customers.In March,we extended the scope of our distribution partnersh

121、ip with BEA following our acquisition of Blue Cross(Asia-Pacific)Insurance Limited,a leading health insurer,and Blue Care JV(BVI)Holdings Limited,a health services provider with a medical network in Hong Kong.This transaction advances our health strategy in Hong Kong and deepens our distribution par

122、tnership with BEA,bringing new product expertise to support all of AIAs distribution channels in Hong Kong and the Greater Bay Area.ANNUAL REPORT 2022023OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATIONOur focus on bringing comprehensive,affordable

123、and quality healthcare to customers was the driving force behind the acquisition of MediCard Philippines,Inc.(MediCard),a leading Health Maintenance Organisation with an extensive medical service network of over 1,000 partner hospitals and clinics across major cities.MediCard provides health insuran

124、ce and healthcare services to more than 920,000 members across corporate and individual plans in the Philippines and brings new products,customer segments and distribution capabilities to AIA.The completion of our 24.99 per cent equity investment in China Post Life Insurance Co.,Ltd.(China Post Life

125、)enables the Group to access significant upside from additional distribution channels and customer segments that are highly complementary to AIA Chinas strategy.China Post Life brings financial protection to the mass and emerging mass-affluent segments and is the leading bank-affiliated life insurer

126、 in Mainland China.A joint technical assistance advisory committee with dedicated support from AIA Group Office,together with committed business transformation from China Post Life,has achieved a very strong performance in 2022.Since our announcement,China Post Lifes VONB has grown by a multiple of

127、3.8 times from 2020.This has been driven by a strategic shift towards sales of longer-term savings and protection products,which have significantly improved VONB margin,as well as enhancements to distribution productivity.AIA China has also begun sales through Postal Savings Bank of China Co.,Ltd.,a

128、s we deepen our cooperation to bring compelling propositions to more customers.We continue to execute on AIA Chinas expansion strategy,capturing new growth opportunities available only to AIA,as we replicate our high-quality differentiated Premier Agency in our new geographies and deepen our presenc

129、e within our existing footprint.Following our successful launch in Hubei province,we were delighted to receive approval from the China Banking and Insurance Regulatory Commission(CBIRC)to begin preparations for operations in Henan,the third most populous province with close to 100 million residents.

130、We were also granted approval by the CBIRC to upgrade our operations in Tianjin and Shijiazhuang and have expanded our presence through additional sales offices.OUR PEOPLEAIAs strong culture of empowerment with accountability is a reflection of our people and a product of the decisions and actions e

131、ach of us takes every day.We have been transforming AIA into a simpler,faster,more connected organisation by reducing organisational layers and implementing cross-functional agile operating models to drive better business outcomes.Attracting technology,digital and analytics talent is crucial to secu

132、ring the execution of our strategic priorities and the overall number of employees with these skill sets has increased significantly,up by 63 per cent since we began our transformation in July 2020.Our new ways of working enable us to innovate at pace while enhancing our business capabilities and op

133、erational resilience.Employee engagement levels for the Group grew to a record high in 2022,and against a backdrop of an unprecedented operating environment,AIA placed in the 94th percentile of Gallups global finance and insurance industry benchmark.We have further cemented our status as an employer

134、 of choice by ranking in the top quartile for the sixth consecutive year,and in the top 10th percentile for the second year running.AIA takes great pride in fostering an inclusive and diverse workplace that believes in always doing better.We were delighted to be recognised for our highly engaged wor

135、kforce and performance-oriented culture as one of only three Asia-based companies out of the 41 global recipients of the Gallup Exceptional Workplace Award.ENVIRONMENTAL,SOCIAL AND GOVERNANCEThe multi-generational nature of our business places sustainability at the forefront of how we operate,and AI

136、A has a vital role to play in addressing material ESG issues in our societies.We are committed to achieving net-zero greenhouse gas emissions by 2050 and are using the latest climate science to set ambitious emissions reduction targets that are expected to be validated by the Science Based Targets i

137、nitiative(SBTi).AIA GROUP LIMITED024OVERVIEWGROUP CHIEF EXECUTIVE AND PRESIDENTS REPORTThe sustainable deployment of our investment portfolio is a vital enabler of our ambitions and our complete divestment from directly-managed listed equity and fixed income exposures to coal mining and coal-fired p

138、ower businesses is a source of tremendous personal pride.Our global ESG leadership is well recognised and,by sustaining the delivery of our Purpose,we can use our scale and influence as the largest pan-Asian life and health insurer to meaningfully contribute to the economic and social development of

139、 the region.OUTLOOKGlobal economic growth slowed in 2022,as the combined effect of supply chain constraints and demand-led inflation proved to be more persistent than expected in developed countries,prompting central banks to accelerate the pace of monetary policy normalisation through rate hikes an

140、d quantitative tightening.The knock-on effects have been felt in reduced living standards,higher borrowing costs and substantial falls in major asset classes globally.External shocks such as the ongoing conflict in Ukraine have the potential to magnify volatility in global capital markets.Managing i

141、nflation remains a key priority for economic policymakers in the West,fuelling uncertainty around the likelihood and depth of any recession in the United States,in particular.In Asia,fiscal easing policies were generally more restrained than in other parts of the world and economies have been compar

142、atively more resilient.Consumer spending has been supported by very low rates of unemployment and greater use of excess savings accumulated during the pandemic.As a result,demand for services increased strongly,particularly from tourism,after three years of social distancing and travel restrictions.

143、Mainland Chinas reopening at the end of 2022 provides a platform for greater economic stability and can help GDP growth return to its potential in 2023.Household consumption is expected to rebound as lower risk aversion and greater certainty reduce high levels of cash savings,becoming an important d

144、river of recovery alongside the natural rebound from increased economic activity following reopening.In Hong Kong,the opening of the border with Mainland China and the rest of the world will reaffirm its status as a vibrant international financial centre and its unique role in connecting East and We

145、st.As the effects of the pandemic recede across the region,we expect to see a continued strong recovery in activity levels and consumer demand.AIA operates in the most attractive markets in the world for life and health insurance.Our resilient set of financial results in 2022 and new business growth

146、 momentum in the second half of the year reflect our substantial competitive advantages,the breadth and diversity of our markets,our financial strength and the quality of our people.The long-term prospects for AIAs business remain exceptional,powered by the structural drivers of rising wealth,low in

147、surance penetration levels and limited social welfare coverage across Asia.I am confident that AIA is uniquely positioned to capture the enormous long-term opportunities in the Asian life and health insurance market and deliver long-term sustainable value for all our stakeholders.Lee Yuan SiongGroup

148、 Chief Executive and President10 March 2023Notes:(1)Growth on a comparable basis for UFSG per share excludes the effects on the growth rate of the early adoption of the Hong Kong Risk-based Capital(HKRBC)regime from 1 January 2022 and the release of additional resilience margins held by the Group at

149、 1 January 2022 under the previous Hong Kong Insurance Ordinance(HKIO)basis.For clarity,the reported figures for UFSG are unadjusted as a result.(2)The Group LCSM cover ratio definition changed from:(i)the ratio of group available capital to the group minimum capital requirement(GMCR)at 31 December

150、2021,to(ii)the ratio of the group available capital to the group prescribed capital requirement(GPCR)from 1 January 2022 onwards.Growth rates are shown on constant exchange rates as management believes this provides a clearer picture of the year-on-year performance of the underlying business.ANNUAL

151、REPORT 2022025026 Group Chief Financial Officers Review052 Business Review067 Risk Management073 Regulatory and International Developments074 Our PeopleFINANCIAL AND OPERATING REVIEWAIA GROUP LIMITED026FINANCIAL AND OPERATING REVIEWGROUP CHIEF FINANCIAL OFFICERS REVIEWAIA has delivered a resilient f

152、inancial performance in 2022.Strong VONB growth momentum returned in the second half of the year.Our capital position remained very strong against the backdrop of an operating environment affected by the emergence of Omicron and volatile capital markets,and our free surplus grew while delivering inc

153、reased dividends and capital returns to shareholders.AIAs unique business model and competitive advantages enable us to capture the immense growth opportunities ahead as our markets rebound from the effects of the pandemic.Growth rates and commentaries are provided on a constant exchange rate(CER)ba

154、sis.Mr.Garth JonesGroup Chief Financial OfficerANNUAL REPORT 2022027OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATIONSUMMARY AND KEY FINANCIAL HIGHLIGHTSThe Group delivered a robust VONB performance in 2022,as the Omicron outbreak affected consumer

155、demand and distributor activity across our markets in the first half of the year.As the effects of the initial wave subsided,our strategic initiatives delivered strong new business momentum into the second half.As a result,while VONB of US$3,092 million was lower by 5 per cent for the full year,in t

156、he second half VONB grew by 6 per cent,all five of our largest operating segments delivered positive year-on-year growth,and we achieved double-digit growth in our combined ASEAN business and Tata AIA Life in India.EV grew by 5 per cent to US$74,694 million and EV Equity grew by 6 per cent to US$77,

157、031 million before the payment of shareholder dividends of US$2,259 million and an additional US$3,570 million return of capital to shareholders during the year from our share buy-back programme.EV operating profit was US$6,845 million,including US$243 million of positive EV operating variances.Non-

158、operating investment return variances were negative US$4,793 million in the first half following a significant fall in major global asset markets as previously reported.Investment variances reduced significantly in the second half to negative US$599 million.The effects of foreign exchange rate movem

159、ents reduced EV by US$2,264 million and were relatively unchanged from the first half,following the exceptional strength in the US dollar reporting currency compared with our local markets.After total shareholder dividends and share buy-back of US$5,829 million,EV was US$68,865 million at 31 Decembe

160、r 2022.OPAT of US$6,370 million grew by 5 per cent per share.All reported segments delivered OPAT growth in 2022 except Thailand.In contrast to our other markets,many customers were treated for COVID-19 in private hospitals during the outbreak of the initial Omicron wave in Thailand,as reported in t

161、he first half.As infections subsided,OPAT for Thailand returned to positive growth in the second half.Growth in our overall in-force portfolio remains the primary driver of higher OPAT,as successive cohorts of new business add to our in-force business and translate into higher earnings over time.Ope

162、rating return on shareholders allocated equity(operating ROE)increased to 13.2 per cent,compared with 12.8 per cent in 2021.Operating margin remained strong and increased to 17.7 per cent reflecting our high-quality sources of earnings and the proactive management of our growing in-force portfolio o

163、f business.Shareholders allocated equity was US$50,634 million,before the payment of shareholder dividends of US$2,259 million and share buy-back of US$3,570 million.Shareholders allocated equity was US$44,805 million at 31 December 2022 after capital returns to shareholders of US$5,829 million in t

164、otal.The execution of AIAs profitable growth strategy since IPO has delivered a substantial increase in free surplus and,as a result,we launched a US$10 billion share buy-back programme in March 2022.The share buy-back represents capital accumulated over time that is surplus to our needs,allowing fo

165、r capital market stress conditions and retention of capital for strategic and financial flexibility.Our capital management framework enhances shareholder returns while retaining the financial strength that allows AIA to continue investing capital in the significant growth opportunities available to

166、us.Over the first ten months of our share buy-back programme,we repurchased 366 million shares for an aggregate value of US$3,570 million as at 31 December 2022.The programme to date has reduced the outstanding share count by 3 per cent.GROUP CHIEF FINANCIAL OFFICERS REVIEWAIA GROUP LIMITED028FINANC

167、IAL AND OPERATING REVIEWThe Groups financial position remained very strong with growth in free surplus to US$23,679 million,before a deduction of US$5,829 million for shareholder dividends and share buy-back.Free surplus was US$17,850 million at 31 December 2022 after capital returns to shareholders

168、,compared with US$17,025 million at 31 December 2021.Underlying free surplus generation(UFSG)was US$6,039 million,an increase of 7 per cent per share on a comparable basis(1).The increase was driven by the continued growth of the in-force portfolio,partly offset by a lower positive claims experience

169、 compared with 2021.Our very strong credit ratings and stable outlook have been affirmed as unchanged by our rating agencies.The Groups Local Capital Summation Method(LCSM)cover ratio(2)was very strong at 283 per cent on the new prescribed capital requirement(PCR)basis.The effect of the share buy-ba

170、ck programme was to reduce the LCSM cover ratio by 13 pps over the year and therefore the ratio was 296 per cent before the return of capital to shareholders.This compares with 291 per cent at 31 December 2021 on a pro forma basis.The Groups 2022 annual results have been calculated and reported befo

171、re the adoption of International Financial Reporting Standards(IFRS)9 and 17 for the consolidated financial statements that will take effect from 1 January 2023.As previously reported,the adoption of these accounting standards has no effect on the underlying economics of our business and therefore w

172、e expect no material changes to the Groups VONB,EV,solvency levels,capital position,UFSG or cash generation and dividend policy.IFRS OPAT and IFRS shareholders allocated equity will remain the Groups key IFRS financial performance metrics following the adoption of the new standards.The preparation o

173、f the 2022 comparatives under IFRS 9 and IFRS 17 are progressing as planned.After the adoption of IFRS 17,OPAT for 2022 is expected to be within 5 per cent of OPAT under the current IFRS 4 basis.Under IFRS 17,shareholders allocated equity was US$51 billion at 1 January 2022,a reduction of 2 per cent

174、 compared to IFRS 4,and is expected to exceed the IFRS 4 value at 31 December 2022.The transition to IFRS 9 had an immaterial effect on the Groups financial position.The Board of Directors(Board)has recommended a final dividend of 113.40 Hong Kong cents per share,subject to shareholders approval at

175、the Companys forthcoming AGM.This brings the total dividend for 2022 to 153.68 Hong Kong cents per share,an increase of 5.3 per cent compared with the total dividend for 2021.This follows AIAs established prudent,sustainable and progressive dividend policy,allowing for future growth opportunities an

176、d the financial flexibility of the Group.We remain confident in the growth opportunities for AIAs businesses across Asia,allowing us to continue to focus on delivering profitable new business growth,leveraging our competitive advantages and financial strength to invest capital where we see attractiv

177、e opportunities,while maintaining our financial discipline.Notes:(1)Growth on a comparable basis for UFSG throughout the Financial and Operating Review excludes the effects on the growth rate of the early adoption of the Hong Kong Risk-based Capital(HKRBC)regime from 1 January 2022 and the release o

178、f resilience margins held by the Group at 1 January 2022 under the previous Hong Kong Insurance Ordinance(HKIO)basis.For clarity,the reported figures for UFSG are unadjusted.(2)The Group LCSM cover ratio definition changed from(i)the ratio of the group available capital to the group minimum capital

179、requirement(GMCR)at 31 December 2021,to(ii)the ratio of the group available capital to the group prescribed capital requirement(GPCR)from 1 January 2022 onwards.ANNUAL REPORT 2022029OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATIONNEW BUSINESS PERFO

180、RMANCEVONB,ANP and Margin by Segment20222021VONB ChangeUS$millions,unless otherwise statedVONBVONB MarginANPVONBVONB MarginANPYoY CERYoY AERMainland China91669.5%1,3191,10878.9%1,404(15)%(17)%Hong Kong78769.5%1,07875664.0%1,1064%4%Thailand58589.1%65560990.0%6775%(4)%Singapore34965.7%53135664.7%5491%

181、(2)%Malaysia30869.9%44028357.3%49115%9%Other Markets42030.2%1,38451135.9%1,420(12)%(18)%Subtotal3,36561.5%5,4073,62363.2%5,647(4)%(7)%Adjustment to reflect consolidated reserving and capital requirements(52)n/mn/m(57)n/mn/mn/mn/mAfter-tax value of unallocated Group Office expenses(192)n/mn/m(167)n/m

182、n/mn/mn/mTotal before non-controlling interests3,12157.0%5,4073,39959.3%5,647(5)%(8)%Non-controlling interests(29)n/mn/m(33)n/mn/mn/mn/mTotal3,09257.0%5,4073,36659.3%5,647(5)%(8)%Six months ended 31 December 2022Six months ended 31 December 2021VONB ChangeUS$millions,unless otherwise statedVONBVONB

183、MarginANPVONBVONB MarginANPYoY CERYoY AERMainland China35373.0%48437073.3%5053%(5)%Hong Kong46469.6%63544369.6%6015%5%Thailand32593.9%34429786.5%34419%9%Singapore18865.5%28718066.3%2707%4%Malaysia14773.1%20112652.6%23826%17%Other Markets21331.3%67825840.7%629(8)%(17)%Subtotal1,69063.4%2,6291,67463.6

184、%2,5877%1%Adjustment to reflect consolidated reserving and capital requirements(27)n/mn/m(26)n/mn/mn/mn/mAfter-tax value of unallocated Group Office expenses(93)n/mn/m(79)n/mn/mn/mn/mTotal before non-controlling interests1,57058.8%2,6291,56959.6%2,5876%Non-controlling interests(14)n/mn/m(17)n/mn/mn/

185、mn/mTotal1,55658.8%2,6291,55259.6%2,5876%GROUP CHIEF FINANCIAL OFFICERS REVIEWAIA GROUP LIMITED030FINANCIAL AND OPERATING REVIEWThe Group delivered a robust VONB performance in 2022 with 6 per cent VONB growth in the second half of the year.While VONB of US$3,092 million was lower by 5 per cent for

186、the full year due to the effects of the initial Omicron wave in the first half,our strategic initiatives delivered strong new business momentum into the second half.All five of our largest operating segments delivered positive year-on-year growth in the second half and we achieved double-digit growt

187、h in our combined ASEAN business and Tata AIA Life in India.Annualised new premiums(ANP)also grew by 8 per cent in the second half of the year to end the year flat at US$5,407 million.VONB margin on the full year basis reduced by 2.4 pps to 57.0 per cent,driven mainly by a more balanced mix between

188、protection-focused products and savings-oriented products for AIA China compared with 2021.For clarity,VONB for 2022 has reflected both the HKRBC and China Risk-Oriented Solvency System phase II(C-ROSS II)statutory reserving and capital bases;the effects on VONB were immaterial.AIA China returned to

189、 positive growth in the second half of 2022 with VONB up by 3 per cent.VONB in the first half was lower compared with the record result in 2021,as our business was impacted by pandemic containment measures and full year VONB reduced by 15 per cent.We have seen new business momentum recover and retur

190、nto positive growth in the first two months of 2023.AIA Hong Kong achieved 4 per cent VONB growth in 2022,supported by growth from our market-leading agency force and a strong performance from partnership distribution,in particular through the intermediated channels and our exclusive partnership wit

191、h The Bank of East Asia,Limited(BEA).VONB from sales to Mainland Chinese visitors tripled in 2022 and accounted for just over 10 per cent of total VONB for the year.AIA Thailand delivered 5 per cent growth in VONB for the full year,supported by 19 per cent growth in the second half of 2022.We saw hi

192、gher sales activity levels in both agency and bancassurance channels as new business momentum returned in the second half.Our agency remained the market leader in 2022 and we achieved an excellent increase in number of new recruits,contributing to an increase in the number of active agents compared

193、to 2021.AIA Singapore delivered higher VONB in 2022 as 7 per cent growth in the second half offset performance in the first half.Agency channel remained the largest contributor to VONB with both an increase in the number of active agents and productivity improvements in the second half.Our partnersh

194、ip channel achieved a strong performance in 2022.AIA Malaysia achieved 15 per cent VONB growth in 2022,with both agency and partnership channels delivering double-digit growth.We continued to work closely with Public Bank Berhad(Public Bank)to further uplift the activity and productivity of our insu

195、rance specialists through the implementation of enhanced digital tools.Our Other Markets segment recorded a reduction in VONB in 2022 as strong double-digit growth in India,New Zealand,the Philippines,Sri Lanka and Taiwan(China)in the second half was offset by a decline in Australia,South Korea and

196、Vietnam.Further details are included in the Business Review section of this report.ANNUAL REPORT 2022031OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATIONEV EQUITYEV MOVEMENTEV grew by 5 per cent to US$74,694 million,before the return of capital to s

197、hareholders through dividends and share buy-back.The early adoption of the new HKRBC regime and the release of resilience margins increased EV by US$2,379 million and US$885 million respectively,as previously reported in our Interim Report 2022.EV operating profit of US$6,845 million reflected lower

198、 VONB of US$3,092 million and expected return on EV of US$3,869 million compared with 2021.The reduction in expected return on EV was from a lower unwind on the value of in-force business from the early adoption of the HKRBC regime which accelerated the recognition of future profits into free surplu

199、s as previously disclosed,a lower starting EV for the second half following negative market movements in the first half of the year and an increase in capitalised unallocated expenses.Operating return on EV(operating ROEV)was 9.4 per cent.Overall operating experience was better than assumed,deliveri

200、ng US$243 million of positive EV operating variances.Cumulative operating variances have now added US$3.9 billion to EV since our IPO in 2010,demonstrating our consistent strategic focus on writing high-quality business over many years.In 2022,global capital markets experienced a significant fall in

201、 asset prices from rapidly rising interest rates,lower equity markets and widening corporate bond spreads that mostly affected the first half of the year.Investment return variances were negative US$4,793 million in the first half as previously reported.Investment return variances reduced significan

202、tly in the second half to negative US$599 million.Changes to economic assumptions at the end of 2022 following the significant rise in interest rates over the year reduced EV by US$300 million overall.Higher long-term investment return assumptions increased EV by US$1.5 billion,offset by a correspon

203、ding increase in risk discount rates which reduced EV by US$1.8 billion.The effects of foreign exchange rate movements were relatively unchanged from the first half and reduced EV by US$2,264 million,following the exceptional strength of our US dollar reporting currency relative to our local markets

204、.EV was US$68,865 million at 31 December 2022 after shareholders dividends and share buy-back of US$5,829 million in total.GROUP CHIEF FINANCIAL OFFICERS REVIEWAIA GROUP LIMITED032FINANCIAL AND OPERATING REVIEWAn analysis of the movement in EV is shown as follows:2022US$millions,unless otherwise sta

205、tedANWVIFEVOpening EV33,30239,68572,987Purchase price(1)(283)(283)Acquired EV(2)8383Effect of acquisition(200)(200)HKRBC early adoption8,407(6,028)2,379Release of resilience margins2,168(1,283)885HKRBC early adoption and release of resilience margins10,575(7,311)3,264Value of new business(159)3,2513

206、,092Expected return on EV4,838(969)3,869Operating experience variances513(214)299Operating assumption changes(331)275(56)Finance costs(359)(359)EV operating profit4,5022,3436,845EV before non-operating items48,17934,71782,896Investment return variances(5,893)501(5,392)Effect of changes in economic a

207、ssumptions(15)(285)(300)Other non-operating variances(1,530)1,296(234)EV non-operating items(7,438)1,512(5,926)Total EV profit7,639(3,456)4,183Other capital movements(12)(12)Effect of changes in exchange rates(1,149)(1,115)(2,264)EV before dividends and share buy-back39,58035,11474,694Dividends(2,25

208、9)(2,259)Share buy-back(3,570)(3,570)Closing EV33,75135,11468,865Closing EV per share(US dollars)5.87ANNUAL REPORT 2022033OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION2021US$millions,unless otherwise statedANWVIFEVOpening EV28,50336,74465,247Pur

209、chase price(1)(397)(397)Acquired EV(2)266254520Effect of acquisition(131)254123BEA Upfront Payment(3)(258)(258)Value of new business(810)4,1763,366Expected return on EV5,156(754)4,402Operating experience variances626(175)451Operating assumption changes64(78)(14)Finance costs(309)(309)EV operating pr

210、ofit4,7273,1697,896EV before non-operating items32,84140,16773,008Investment return variances1,636(343)1,293Effect of changes in economic assumptions(26)460434Other non-operating variances1,163371,200EV non-operating items2,7731542,927Total EV profit7,5003,32310,823Other capital movements99Effect of

211、 changes in exchange rates(174)(636)(810)EV before dividends35,44939,68575,134Dividends(2,147)(2,147)Closing EV33,30239,68572,987Closing EV per share(US dollars)6.03EV EquityUS$millions,unless otherwise statedAs at 31 December 2022As at 31 December 2021EV68,86572,987Goodwill and other intangible ass

212、ets(4)2,3372,014EV Equity71,20275,001Number of ordinary shares(millions)11,73412,097EV Equity per share(US dollars)6.076.20Notes:(1)Purchase price of Blue Cross as per note 14 to the consolidated financial statements in Annual Report 2022.Purchase price of AIA Everest as per note 5 to the consolidat

213、ed financial statements in Annual Report 2021.(2)Acquired EV from the acquisition of Blue Cross in 2022.Acquired EV from the acquisition of AIA Everest in 2021.(3)Refers to the consideration for the strategic bancassurance partnership with BEA as previously announced in 2021.(4)Goodwill and other in

214、tangible assets are consistent with the figures in the IFRS consolidated financial statements and are shown net of:tax,amounts attributable to participating funds,and non-controlling interests.EV Operating Earnings Per Share Basic20222021YoY CERYoY AEREV operating profit(US$millions)6,8457,896(10)%(

215、13)%Weighted average number of ordinary shares(millions)11,92912,066n/an/aBasic EV operating earnings per share(US cents)57.3865.44(9)%(12)%GROUP CHIEF FINANCIAL OFFICERS REVIEWAIA GROUP LIMITED034FINANCIAL AND OPERATING REVIEWEV Operating Earnings Per Share Diluted20222021YoY CERYoY AEREV operating

216、 profit(US$millions)6,8457,896(10)%(13)%Weighted average number of ordinary shares on diluted basis(millions)(1)11,93812,087n/an/aDiluted EV operating earnings per share(US cents)(1)57.3465.33(9)%(12)%Note:(1)Diluted EV operating earnings per share includes the dilutive effects,if any,of the awards

217、under various share-based compensation plans as described in note 39 to the consolidated financial statements.EV AND VONB SENSITIVITIESSensitivities for EV and VONB to changes in equity price and interest rate movements,including management actions,are shown below.The interest rate sensitivities app

218、ly a 50 basis points movement in current bond yield curves,long-term investment return assumptions and risk discount rates,including the corresponding effect on asset values.EV sensitivities to interest rates at 31 December 2022 increased compared with 31 December 2021.This was due to the effect of

219、the sensitivities on the additional free surplus released from the early adoption of the HKRBC regime as previously disclosed,and the reduced sensitivity of our business units outside of Hong Kong resulting from a higher starting level of bond yields within the central value following the increases

220、seen over 2022.Overall,EV sensitivities to interest rates remained small and VONB sensitivities remained stable compared with 2021.The direction of sensitivities to interest rates vary by market.As at 31 December 2022As at 31 December 2021US$millions,unless otherwise statedEV%ChangeEV%ChangeCentral

221、value68,86572,987Effect of equity price changes10 per cent increase in equity prices1,8172.6%1,8782.6%10 per cent decrease in equity prices(1,821)(2.6)%(1,871)(2.6)%Effect of interest rate changes50 basis points increase in interest rates(1,246)(1.8)%(330)(0.5)%50 basis points decrease in interest r

222、ates1,3472.0%2790.4%20222021US$millions,unless otherwise statedVONB%ChangeVONB%ChangeCentral value3,0923,366Effect of interest rate changes50 basis points increase in interest rates642.1%742.2%50 basis points decrease in interest rates(81)(2.6)%(108)(3.2)%Please refer to Section 3 of the Supplementa

223、ry Embedded Value Information for additional information.ANNUAL REPORT 2022035OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATIONIFRS PROFITOPAT(1)BY SEGMENTUS$millions,unless otherwise stated20222021YoY CERYoY AERMainland China1,4251,3718%4%Hong Kong

224、2,2262,1434%4%Thailand782960(10)%(19)%Singapore7427236%3%Malaysia3933926%Other Markets80478411%3%Group Corporate Centre(2)36n/mn/mTotal6,3706,4093%(1)%US$millions,unless otherwise stated20222021YoY CERYoY AEROPAT6,3706,4093%(1)%Weighted average number of ordinary shares(millions)11,92912,066n/an/aBa

225、sic OPAT per share(US cents)53.4053.125%1%Weighted average number of ordinary shares on diluted basis(millions)(2)11,93812,087n/an/aDiluted OPAT per share(US cents)(2)53.3653.025%1%Notes:(1)Attributable to shareholders of the Company only,excluding non-controlling interests.(2)Diluted OPAT per share

226、 includes the dilutive effects,if any,of the awards under various share-based compensation plans as described in note 39 to the consolidated financial statements.OPAT of US$6,370 million grew by 5 per cent per share.All reported segments delivered OPAT growth in 2022 except Thailand.In contrast to o

227、ur other markets,many customers were treated for COVID-19 in private hospitals during the outbreak of the initial Omicron wave in Thailand,as reported in the first half.As infections subsided,OPAT for Thailand returned to positive growth in the second half.Growth in our overall in-force portfolio re

228、mains the primary driver of higher OPAT,as successive cohorts of new business add to our in-force business and translate into higher earnings over time.Operating ROE increased to 13.2 per cent,compared with 12.8 per cent in 2021.Our operating margin remained strong and increased to 17.7 per cent ref

229、lecting our high-quality sources of earnings and the proactive management of our growing in-force portfolio of business.Further details are included in the Business Review section of this report.GROUP CHIEF FINANCIAL OFFICERS REVIEWAIA GROUP LIMITED036FINANCIAL AND OPERATING REVIEWTWPI by SegmentUS$

230、millions,unless otherwise stated20222021YoY CERYoY AERMainland China7,5926,99912%8%Hong Kong11,23711,904(6)%(6)%Thailand4,1664,4283%(6)%Singapore3,5773,4337%4%Malaysia2,4642,4796%(1)%Other Markets7,1407,6162%(6)%Total36,17636,8592%(2)%TWPI increased by 2 per cent to US$36,176 million compared with 2

231、021.In Hong Kong,TWPI was lower as a cohort of long-term participating policies reached the end of their premium payment terms,while continuing to remain in-force and generate OPAT.All other reported segments delivered positive TWPI growth in 2022 on a constant exchange rate basis.Total recurring pr

232、emiums accounted for over 90 per cent of premiums received.IFRS Operating Profit Investment ReturnUS$millions,unless otherwise stated20222021YoY CERYoY AERInterest income7,6217,5365%1%Expected long-term investment return for equities and real estate3,5603,09518%15%Total11,18110,6319%5%Operating prof

233、it investment return increased by 9 per cent to US$11,181 million compared with 2021,primarily driven by higher opening balances of equities and real estate assets.Operating ExpensesUS$millions,unless otherwise stated20222021YoY CERYoY AEROperating expenses3,2513,03113%7%Operating expenses grew by 1

234、3 per cent to US$3,251 million and the expense ratio was 9.0 per cent compared with 8.2 per cent in 2021.Base salaries accounted for 4 per cent of the increase in operating expenses.Additional projects and investments to accelerate the Groups step change in the use of technology,digital and analytic

235、s as previously reported were the main components of the remaining increase compared with 2021.ANNUAL REPORT 2022037OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATIONIFRS NON-OPERATING MOVEMENT AND NET PROFIT(1)In 2022,global capital markets experien

236、ced a significant reduction in asset prices from rapidly rising interest rates,lower equity markets and widening corporate bond spreads compared with 2021.AIAs IFRS 4 net profit definition includes mark-to-market movements from equity and property investments.While OPAT was higher compared with 2021

237、,net profit was affected by negative short-term movements in these asset classes of US$2,314 million compared with long-term assumptions.The Group uses derivative financial instruments for risk management purposes.While we aim to hedge underlying interest rate exposures on an economic basis,hedge ac

238、counting is not applied,resulting in an accounting mismatch within IFRS net profit.Under IFRS 4,mark-to-market movements on derivative financial instruments are reflected in net profit but these are not fully offset by the corresponding change in the value of the liabilities.The adoption of IFRS 17

239、will eliminate this non-economic accounting mismatch that is created between assets and liabilities in the Groups consolidated financial statements under IFRS 4.Non-operating movements on derivative financial instruments for participating business was negative US$2,003 million in 2022 as shown below

240、.For clarity,this figure would have been zero under IFRS 17.Including this effect,net profit will be at least US$2 billion higher than net profit under IFRS 4.Other non-operating investment return and other items of negative US$1,618 million was mainly from movements in debt securities measured at f

241、air value through profit or loss from increased bond yields and disposals of available for sale debt securities.US$millions,unless otherwise stated20222021YoY CERYoY AEROPAT6,3706,4093%(1)%Short-term fluctuations in investment return related to equities and real estate,net of tax(2)(2,314)(276)n/mn/

242、mReclassification of revaluation gains for property held for own use,net of tax(2)(45)(66)n/mn/mCorporate transaction related costs,net of tax(63)(49)n/mn/mImplementation costs of new accounting standards,net of tax(45)(43)n/mn/mNon-operating movements on derivative financial instruments for partici

243、pating business,net of tax(3)(2,003)207n/mn/mOther non-operating investment return and other items,net of tax(1,618)1,245n/mn/mNet profit2827,427(96)%(96)%Notes:(1)Attributable to shareholders of the Company only,excluding non-controlling interests.(2)Short-term fluctuations in investment return inc

244、lude the revaluation gains for property held for own use.This amount is then reclassified from net profit to other comprehensive income to conform to IFRS measurement and presentation.(3)Participating business refers to the participating funds and other participating business with distinct portfolio

245、s.GROUP CHIEF FINANCIAL OFFICERS REVIEWAIA GROUP LIMITED038FINANCIAL AND OPERATING REVIEWUS$millions,unless otherwise stated20222021YoY CERYoY AERNet profit2827,427(96)%(96)%Weighted average number of ordinary shares(millions)11,92912,066n/an/aBasic earnings per share(US cents)2.3661.55(96)%(96)%Wei

246、ghted average number of ordinary shares on diluted basis(millions)(1)11,93812,087n/an/aDiluted earnings per share(US cents)(1)2.3661.45(96)%(96)%Note:(1)Diluted earnings per share includes the dilutive effects,if any,of the awards under various share-based compensation plans as described in note 39

247、to the consolidated financial statements.MOVEMENT IN SHAREHOLDERS ALLOCATED EQUITYShareholders allocated equity is shown before fair value reserve as management believes this provides a clearer reflection of the underlying movement in shareholders equity over the period,before the IFRS accounting tr

248、eatment of market value movements on available for sale debt securities.US$millions,unless otherwise stated20222021Opening shareholders allocated equity52,06048,030Net profit2827,427Dividends(2,259)(2,147)Share buy-back(3,570)Foreign currency translation adjustments(1,745)(1,301)Purchase of shares h

249、eld by employee share-based trusts(103)(106)Revaluation gains on property held for own use3842Other capital movements102115Total movement in shareholders allocated equity(7,255)4,030Closing shareholders allocated equity44,80552,060Closing shareholders allocated equity per share(US dollars)3.824.30Av

250、erage shareholders allocated equity48,43350,045Shareholders allocated equity was US$50,634 million,before the payment of shareholder dividends of US$2,259 million and US$3,570 million additional return of capital through the share buy-back programme.This compared with US$52,060 million at 31 Decembe

251、r 2021.While we delivered OPAT growth in 2022,this positive contribution to shareholders allocated equity was offset by IFRS non-operating movements driven by short-term movements in capital markets and other non-operating items.After deducting total shareholder dividends and share buy-back of US$5,

252、829 million,shareholders allocated equity was US$44,805 million at 31 December 2022.Sensitivities to foreign exchange rate,interest rate and equity price movements are included in note 37 to the consolidated financial statements.ANNUAL REPORT 2022039OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GO

253、VERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATIONIFRS BALANCE SHEETConsolidated Statement of Financial PositionUS$millions,unless otherwise statedAs at 31 December 2022As at 31 December 2021Change AERAssets Financial investments239,485281,876(15)%Investment property4,6004,716(2)%Cash and cash equiv

254、alents8,9694,98980%Deferred acquisition and origination costs30,04628,7085%Other assets19,94819,5852%Total assets303,048339,874(11)%Liabilities Insurance and investment contract liabilities230,684251,283(8)%Borrowings11,2069,58817%Other liabilities22,60818,06925%Less total liabilities264,498278,940(

255、5)%Equity Total equity38,55060,934(37)%Less non-controlling interests454467(3)%Total equity attributable to shareholders of AIA Group Limited38,09660,467(37)%Shareholders allocated equity44,80552,060(14)%Note:(1)Before the reclassification for disposal group held for sale as described in note 45 to

256、the consolidated financial statements.Movement in Shareholders EquityUS$millions,unless otherwise stated20222021Opening shareholders equity60,46763,200Net profit2827,427Fair value losses on assets(15,116)(6,763)Dividends(2,259)(2,147)Share buy-back(3,570)Foreign currency translation adjustments(1,74

257、5)(1,301)Purchase of shares held by employee share-based trusts(103)(106)Revaluation gains on property held for own use3842Other capital movements102115Total movement in shareholders equity(22,371)(2,733)Closing shareholders equity38,09660,467Number of ordinary shares(millions)11,73412,097Closing sh

258、areholders equity per share(US dollars)3.255.00GROUP CHIEF FINANCIAL OFFICERS REVIEWAIA GROUP LIMITED040FINANCIAL AND OPERATING REVIEWTotal InvestmentsUS$millions,unless otherwise statedAs at 31 December 2022Percentage of totalAs at 31 December 2021Percentage of totalTotal policyholder and sharehold

259、er215,96285%253,58586%Total unit-linked contracts and consolidated investment funds39,37015%40,05914%Total investments255,332100%293,644100%Unit-Linked Contracts and Consolidated Investment FundsUS$millions,unless otherwise statedAs at 31 December 2022Percentage of totalAs at 31 December 2021Percent

260、age of totalUnit-linked contracts and consolidated investment funds Debt securities6,40216%6,66017%Loans and deposits3121%3651%Equity investments(1)31,29280%31,90980%Cash and cash equivalents1,2933%1,0762%Derivative financial instruments7149Total unit-linked contracts and consolidated investment fun

261、ds39,370100%40,059100%Note:(1)Includes equity shares,interests in investment funds and exchangeable loan notes.ANNUAL REPORT 2022041OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATIONPolicyholder and Shareholder InvestmentsUS$millions,unless otherwise

262、 statedAs at 31 December 2022Percentage of totalAs at 31 December 2021Percentage of totalParticipating funds and other participating business with distinct portfolios(1)Government bonds12,0865%11,0924%Other government and government agency bonds10,0785%11,3725%Corporate bonds and structured securiti

263、es42,89220%55,69722%Loans and deposits2,6001%2,6991%Fixed income investments67,65631%80,86032%Equity investments(2)22,63510%29,18512%Investment property and property held for own use1,1001%1,081 Cash and cash equivalents2,0181%1,3171%Derivative financial instruments2331,190Subtotal participating fun

264、ds and other participating business with distinct portfolios93,64243%113,63345%Other policyholder and shareholder Government bonds42,17519%44,90118%Other government and government agency bonds17,3608%19,3458%Corporate bonds and structured securities34,95016%51,01320%Loans and deposits5,7323%6,2472%F

265、ixed income investments100,21746%121,50648%Equity investments(2)10,3415%9,9234%Investment property and property held for own use5,7783%5,6982%Cash and cash equivalents5,6583%2,5961%Derivative financial instruments326229Subtotal other policyholder and shareholder122,32057%139,95255%Total policyholder

266、 and shareholder215,962100%253,585100%Notes:(1)Participating business is written in a segregated statutory fund with regulations governing the division of surplus between policyholders and shareholders.Other participating business with distinct portfolios,representing Hong Kong participating busines

267、s,are supported by segregated investment assets and explicit provisions for future surplus distribution,although the division of surplus between policyholders and shareholders is not defined in regulation.(2)Includes equity shares,interests in investment funds and exchangeable loan notes.GROUP CHIEF

268、 FINANCIAL OFFICERS REVIEWAIA GROUP LIMITED042FINANCIAL AND OPERATING REVIEWASSETSTotal assets decreased by US$36,826 million to US$303,048 million at 31 December 2022 as positive net investment cash inflows were offset by negative fair value movements on debt securities due to a significant increas

269、e in government bond yields,widening of corporate bond spreads,and a fall in equity markets.Fixed income investments,including debt securities,loans and term deposits held in respect of policyholders and shareholders,totalled US$167,873 million at 31 December 2022 compared with US$202,366 million at

270、 31 December 2021.Government bonds and other government and government agency bonds decreased to US$81,699 million from US$86,710 million due to a significant increase in government bond yields and represented 49 per cent of fixed income investments at 31 December 2022,compared with 43 per cent at 3

271、1 December 2021.Corporate bonds and structured securities reduced to US$77,842 million from US$106,710 million accounting for 46 per cent of fixed income investments at 31 December 2022,compared with 53 per cent at 31 December 2021 following a significant increase in government bond yields and widen

272、ing of corporate bond spreads.The average credit rating of the fixed income portfolio excluding government bonds remained stable at A-compared with the position at 31 December 2021.The corporate bond portfolio is well diversified with over 1,900 issuers and an average holding size of US$40 million.A

273、t 31 December 2022,2 per cent of the total bond portfolio was rated below investment grade or not rated,representing approximately US$3 billion in value.Approximately US$360 million of bonds,representing 0.2 per cent of our total bond portfolio,were downgraded to below investment grade in 2022 and t

274、here were no material impairments in the year,reflecting AIAs overall high-quality investment portfolio.Equity investments held in respect of policyholders and shareholders totalled US$32,976 million at 31 December 2022,compared with US$39,108 million at 31 December 2021.The decrease was mainly due

275、to negative mark-to-market movements offsetting new investments during the year.In the second half of the year,the Group invested in GLP Capital Partners Limited with AIAs shareholders interest of US$1.8 billion at 31 December 2022 as part of the Groups investment strategy in private market opportun

276、ities.Cash and cash equivalents increased by US$3,980 million to US$8,969 million at 31 December 2022 compared with US$4,989 million at 31 December 2021.Other assets were broadly stable at US$19,948 million at 31 December 2022 compared with US$19,585 million at 31 December 2021.ANNUAL REPORT 2022043

277、OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATIONLIABILITIESTotal liabilities reduced to US$264,498 million at 31 December 2022 from US$278,940 million at 31 December 2021.Insurance and investment contract liabilities reduced to US$230,684 million a

278、t 31 December 2022 compared with US$251,283 million at 31 December 2021 in line with the negative mark-to-market movements in equity assets backing unit-linked and participating policies.Borrowings increased to US$11,206 million at 31 December 2022,due to net proceeds of the issuance and redemption

279、of medium-term notes and securities totalling US$1,653 million.The leverage ratio,which is defined as total borrowings expressed as a percentage of the sum of total borrowings and total equity,was 22.5 per cent at 31 December 2022,compared with 13.6 per cent at 31 December 2021.The increase has been

280、 largely driven by the reduction in total equity as shown in the following section.On transition to IFRS 17,the leverage ratio will be defined as total borrowings expressed as a percentage of the sum of total borrowings,total equity and contractual service margin net of reinsurance and net of taxes.

281、On this revised basis,the leverage ratio at 1 January 2022 was 8.6 per cent,down from 13.6 per cent under IFRS 4 and is expected to reduce by at least 5 pps at 31 December 2022 compared to IFRS 4.Details of commitments and contingencies are included in note 42 to the consolidated financial statement

282、s.EQUITYTotal equity attributable to shareholders includes a fair value reserve of negative US$6,709 million,which mainly reflects unrealised market movements on debt securities held as available for sale.Under IFRS 4,falls in bond asset values are not fully offset by falls in insurance contract lia

283、bilities,as the liabilities are determined based on long-term investment return assumptions locked in at the point of sale.This creates an accounting mismatch that leads to volatility in reported total equity.The adoption of IFRS 9 and IFRS 17 which will take effect from 1 January 2023 will resolve

284、a large part of the non-economic accounting mismatches that are created between assets and liabilities in the Groups consolidated financial statements under IFRS 4.Shareholders allocated equity is shown before fair value reserve as management believes this provides a clearer reflection of the underl

285、ying movement in shareholders equity over the period,before the IFRS accounting treatment of market value movements on available for sale debt securities.Shareholders allocated equity was US$44,805 million at 31 December 2022.In 2022,the significant increase in both government bond yields and corpor

286、ate bond spreads led to a reduction in fair value reserve of US$15,116 million.Total equity attributable to shareholders was US$38,096 million at 31 December 2022 after total shareholder dividends of US$2,259 million and the US$3,570 million additional return of capital through the share buy-back pr

287、ogramme.On transition to IFRS 17,shareholders allocated equity and shareholders equity will be US$51 billion and US$56 billion,a reduction of 2 per cent and 7 per cent respectively compared to IFRS 4.Shareholders allocated equity and shareholders equity at 31 December 2022 are expected to be higher

288、under IFRS 17 compared to IFRS 4.The transition from IAS 39 to IFRS 9 had an immaterial effect on the Groups financial position.GROUP CHIEF FINANCIAL OFFICERS REVIEWAIA GROUP LIMITED044FINANCIAL AND OPERATING REVIEWCAPITALFREE SURPLUSThe Groups free surplus is the excess of adjusted net worth over r

289、equired capital,including consolidated reserving and capital requirements,adjusted for certain assets not eligible for regulatory capital purposes.Free surplus enables the Group to invest in organic new business growth,take full advantage of inorganic growth opportunities and absorb the effects of c

290、apital market stress conditions.The Groups financial position remained very strong with free surplus increasing to US$23,679 million before total shareholder dividends and share buy-back of US$5,829 million.As free surplus is the assets held in excess of statutory liabilities and capital requirement

291、s,lower bond values from rising interest rates are not offset by a corresponding reduction in statutory liabilities and capital requirements.The overall effect from investment return variances and other items was a reduction in free surplus of US$5,093 million,reflecting higher bond yields and lower

292、 equity markets.Free surplus was US$17,850 million at 31 December 2022 after capital returns to shareholders.The following table summarises the change in free surplus:US$millions,unless otherwise stated20222021Opening free surplus17,02513,473Effect of acquisitions(1)(200)(312)BEA Upfront Payment(2)(

293、258)Investment in China Post Life(1,860)Release of resilience margins3,400HKRBC early adoption4,403UFSG6,0396,451Free surplus used to fund new business(1,274)(1,712)Unallocated Group Office expenses(250)(273)Finance costs and other capital movements(371)(300)Free surplus before investment return var

294、iances,dividends and share buy-back28,77215,209Investment return variances and other items(5,093)3,963Free surplus before dividends and share buy-back23,67919,172Dividends(2,259)(2,147)Share buy-back(3,570)Closing free surplus17,85017,025Notes:(1)Purchase price of Blue Cross of US$283 million as per

295、 note 14 to the consolidated financial statements in Annual Report 2022,less acquired free surplus of US$83 million.Purchase price of AIA Everest of US$397 million as per note 5 to the consolidated financial statements in Annual Report 2021,less acquired free surplus of US$85 million.(2)Refers to th

296、e consideration for the strategic bancassurance partnership with BEA as previously announced in 2021.ANNUAL REPORT 2022045OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATIONUNDERLYING FREE SURPLUS GENERATION(UFSG)UFSG is a financial operating metric t

297、hat measures the expected amount of free surplus generated from in-force business over the year before investment in new business,unallocated Group Office expenses,finance costs,investment return variances and other non-operating items.UFSG was US$6,039 million,an increase of 7 per cent per share on

298、 a comparable basis,before the effects of the early adoption of the HKRBC regime and the release of resilience margins held by the Group under the previous HKIO basis.These increased free surplus by US$4,403 million and US$3,400 million respectively,as reported in our Interim Report 2022.The acceler

299、ated recognition of future free surplus upon early adoption of the HKRBC regime correspondingly reduced UFSG by US$468 million in 2022.The increase in UFSG on a comparable basis was driven by the continued growth of the in-force portfolio,partly offset by a lower positive claims experience compared

300、with 2021.Free surplus invested in writing new business of US$1,274 million decreased by 22 per cent,mainly as a result of the greater capital efficiency of new products sold in Hong Kong under the HKRBC regime.Underlying Free Surplus GenerationPer share basisUS$millions,unless otherwise stated20222

301、021YoY CERYoY AERYoY CERYoY AERUFSG on a comparable basis before the effects of HKRBC early adoption and release of resilience margins6,5076,4516%1%7%2%HKRBC early adoption and release of resilience margins(468)n/mn/mn/mn/mUFSG6,0396,451(2)%(6)%(1)%(5)%Underlying Free Surplus Generation Per ShareUS$

302、millions,unless otherwise stated20222021YoY CERYoY AERUFSG6,0396,451(2)%(6)%Weighted average number of ordinary shares(millions)11,92912,066n/an/aBasic UFSG per share(US cents)50.62 53.46(1)%(5)%Weighted average number of ordinary shares on diluted basis(millions)11,93812,087n/an/aDiluted UFSG per s

303、hare(US cents)50.59 53.37(1)%(5)%GROUP CHIEF FINANCIAL OFFICERS REVIEWAIA GROUP LIMITED046FINANCIAL AND OPERATING REVIEWGROUP LCSM SOLVENCY POSITIONThe group-wide supervision(GWS)Capital Rules set out the capital requirements and overall solvency position for the Group under the GWS framework.These

304、requirements are based on a“summation approach”and are referred to as the Local Capital Summation Method(LCSM).Under the LCSM,the group available capital and group required capital are calculated as the sum of the available capital and required capital for each entity within the Group according to t

305、he respective local regulatory requirements,subject to any variation considered necessary by the Hong Kong Insurance Authority(HKIA).Prior to 1 January 2022,the Group LCSM surplus and cover ratio were based on minimum capital requirements(MCR basis).The group minimum capital requirement(GMCR)is the

306、sum of the minimum capital requirement of each entity within the Group.The Group LCSM surplus was defined as the excess of the group available capital over the GMCR.The Group LCSM cover ratio was calculated as the ratio of the group available capital to the GMCR.Applying the changes in disclosure re

307、quirements from the HKIA,the Group LCSM surplus and the Group LCSM cover ratio are now based on prescribed capital requirements(PCR basis).The group prescribed capital requirement(GPCR)is the sum of the prescribed capital requirement of each entity within the Group,and represents the level below whi

308、ch the HKIA may intervene on grounds of capital adequacy.The Group LCSM surplus is now defined as the excess of the group available capital over the GPCR and the Group LCSM cover ratio is calculated as the ratio of the group available capital to the GPCR.The use of GPCR in these revised definitions

309、is more relevant for shareholders when assessing the capital position of the Group and brings the LCSM capital requirements more in line with the capital requirements currently used within the EV.The Group available capital increased from US$67,611 million at 31 December 2021 to US$70,698 million at

310、 31 December 2022.The positive effects from the early adoption of the HKRBC regime,the release of resilience margins held by the Group and the adoption of C-ROSS II were partially offset by the effects of movements in capital markets and capital returns to shareholders.The GMCR decreased from US$16,

311、948 million at 31 December 2021 to US$12,810 million at 31 December 2022 mainly due to the adoption of C-ROSS II during the year.ANNUAL REPORT 2022047OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATIONGROUP LCSM COVER RATIOOn the new PCR basis as at 3

312、1 December 2021,the pro forma Group LCSM cover ratio was 291 per cent compared with 399 per cent on the MCR basis reflecting higher capital requirements under the new PCR basis.On the new PCR basis as at 31 December 2022,the Group LCSM cover ratio remained very strong at 283 per cent despite signifi

313、cant capital market volatility and the effect of the share buy-back which reduced the ratio by 13 pps.The table shows a summary of the Group LCSM solvency position as at 31 December 2022.US$millions,unless otherwise statedAs at 31 December 2022As at 31 December 2021Group LCSM cover ratio(PCR basis)(

314、1)283%291%Group LCSM cover ratio(MCR basis)(1)552%399%Group available capital70,69867,611 Tier 1 capital(2)45,508n/a Other Than Tier 1 capital25,190n/aGroup prescribed capital requirement(GPCR)24,989n/aGroup minimum capital requirement(GMCR)12,81016,948Group LCSM surplus(PCR basis)(3)45,709n/aGroup

315、LCSM surplus(MCR basis)(3)n/a50,663Senior notes approved as contributing to group available capital(4)5,6535,820Notes:(1)The Group LCSM cover ratio definition changed from(i)the ratio of the group available capital to the GMCR at 31 December 2021(MCR basis),to(ii)the ratio of the group available cap

316、ital to the GPCR from 1 January 2022 onwards(PCR basis).The Group LCSM cover ratio(PCR basis)as at 31 December 2021 is shown on a pro forma basis.The Group LCSM cover ratio(MCR basis)is included in the table for reference.(2)Group Tier 1 capital is maintained in excess of GMCR.Group Tier 1 capital t

317、o GMCR ratio was 355 per cent at 31 December 2022.(3)The Group LCSM surplus definition changed from group available capital less GMCR at 31 December 2021 to group available capital less GPCR from 1 January 2022 onwards.(4)The amounts shown represent the carrying value of medium-term notes and securi

318、ties contributing to group available capital.These are counted as Other Than Tier 1 capital under the GWS Capital Rules.(5)The Group LCSM cover ratio(PCR basis)and Group Tier 1 capital to GMCR ratio refer to eligible group capital resources coverage ratio and tier 1 group capital coverage ratio as d

319、efined in D.S/10 of Guideline on Group Supervision(GL32)respectively.At 31 December 2022,the group available capital includes the following items,which are not included within Group Tier 1 capital:(i)US$3,726 million(1)of subordinated securities.Subordinated securities with a fixed maturity receive

320、full capital credit up to the date that is 5 years prior to the date of maturity,with the capital credit then reducing at the rate of 20 per cent per annum until maturity.Perpetual subordinated securities receive full capital credit unless they are redeemed;and(ii)US$5,653 million(1)of senior notes

321、issued before designation that have been approved by the HKIA as capital.Prior to maturity,the approved senior notes receive full capital credit until 14 May 2031,after which the capital credit reduces at the rate of 20 per cent per annum until 14 May 2036.Note:(1)The amounts represent the carrying

322、value of medium-term notes and securities contributing to group available capital.These are counted as Other Than Tier 1 capital under the GWS Capital Rules.GROUP CHIEF FINANCIAL OFFICERS REVIEWAIA GROUP LIMITED048FINANCIAL AND OPERATING REVIEWGROUP LCSM COVER RATIO SENSITIVITIESGroup LCSM cover rat

323、io sensitivities arising from changes to the central assumptions from equity price and interest rate movements and applied consistently with those in EV,are shown below.Interest rate sensitivities apply a 50 basis points movement in current bond yield curves and the corresponding movement in discoun

324、t rates applied to the calculation of liabilities.The amount of eligible debt capital is equal to the carrying value and is unchanged in the sensitivity calculations.As at 31 December 2022Central value283%Impact of equity price changes10 per cent increase in equity prices4 pps10 per cent decrease in

325、 equity prices(5)ppsImpact of interest rate changes50 basis points increase in interest rates(6)pps50 basis points decrease in interest rates5 ppsRECONCILIATION BETWEEN GROUP LCSM SURPLUS AND FREE SURPLUSAIA considers free surplus on consolidated basis a more representative view of the capital posit

326、ion of the Group from a shareholder perspective.The table below shows a reconciliation between the Group LCSM surplus and free surplus on consolidated basis.The main reason for the movements in reconciliation adjustments compared with the prior year were the move from using the MCR basis to the PCR

327、basis and the effects of early adoption of the HKRBC regime and introduction of C-ROSS II regime.US$millions,unless otherwise statedAs at 31 December 2022As at 31 December 2021Group LCSM surplus(1)45,70950,663Adjustments for:Eligible Other Than Tier 1 debt capital(9,379)(9,588)Different capital requ

328、irements under EV for AIA China(2)(5,622)(7,733)Reflecting shareholders view of capital(3)(7,353)(9,902)Free surplus on a business unit basis23,35523,440Adjustment to reflect consolidated reserving and capital requirements(5,505)(6,415)Free surplus on consolidated basis17,85017,025Notes:(1)Group LCS

329、M surplus definition changed from group available capital less GMCR at 31 December 2021 to group available capital less GPCR from 1 January 2022 onwards.(2)Adjustment from C-ROSS solvency basis to China Association of Actuaries(CAA)EV basis in line with local requirements.(3)Reflects change from GPC

330、R to EV required capital and the removal of participating fund surplus as at 31 December 2022.Reflects change from GMCR to EV required capital and the removal of participating fund surplus as at 31 December 2021.ANNUAL REPORT 2022049OVERVIEWFINANCIAL AND OPERATING REVIEWCORPORATE GOVERNANCEFINANCIAL

331、 STATEMENTSADDITIONAL INFORMATIONLOCAL SOLVENCY REQUIREMENTSThe Groups individual branches and subsidiaries are also subject to supervision,including relevant capital requirements,in the jurisdictions in which they and their parent entity operate.The local operating units were in compliance with the

332、 capital requirements of their respective entity and local regulators in each of our geographical markets at 31 December 2022.The changes in local solvency requirements are summarised as follows:Hong KongThe HKIA is in the process of developing amendments to the HKIO to cater for the new HKRBC regim

333、e with an expected effective date of 1 January 2024.In a letter dated 8 April 2022,the HKIA approved the request to early adopt the HKRBC regime for AIA International,our principal operating entity in Hong Kong,with an effective date of 1 January 2022.The effects of early adoption are shown throughout this report where relevant.For clarity,the other operating entities in Hong Kong,including AIA Co