AIA: beyond the headlines

Built for more than speed

In August, Tiangong Ultra lined up for a 100-metre race at the World Humanoid Robot Games in Beijing crossing the line in 8.64 seconds, comfortably inside Usain Bolt’s 9.58-second world record.

It was a headline-grabbing demonstration of technological progress. The finish, however, was less elegant. After sprinting to the line, robots crashed into the stopping mats. Many collapsed and were carried away on stretchers.

The spectacle offered a useful reminder: speed is different from endurance. Financial markets increasingly operate at extraordinary speed. Passive flows, algorithmic trading and social-media-driven retail activity mean a single headline can trigger a rapid re-pricing of a stock.

Speed has its uses, new information should be assessed promptly, but reacting quickly is not the same as reaching the right conclusion. For a long-term investor, the more important question is rarely whether something has changed today; it is whether that change alters a company’s ability to create value over many years.

A swift reaction

AIA Group, the pan-Asian life and health insurer, is a case in point.

A chart of AIA’s share price over the summer months shows several setbacks, linked to concerns surrounding regulatory change in China. Decree No. 837, released in May by China’s State Council, widened the scope of the country’s outbound investment regulatory regimes, with a past focus on corporate investment extended to include resident individuals. This prompted concern that this might change consumer attitudes towards Hong Kong insurance products.  

Later in the summer, an update from China’s Ministry of Finance and the State Taxation Administration on the rules around individual income tax on offshore trusts prompted more concern around consumer demand for and sentiment towards Hong Kong and overseas insurance products.  Despite no obvious evidence that either of these changes would notably impact AIA, the market's reaction was swift. 

AIA share price

Past 12 months

A different conclusion

Our response was different. Rather than react to the headlines, we sought to test them.  In June we met AIA’s Group Chief Strategy Officer, Leo Grepin, in Hong Kong; in August, shortly after AIA’s interim results, Chief Financial Officer Garth Jones visited our Edinburgh office. Both conversations, alongside our own analysis, pointed to a similar conclusion.

Decree No. 837 introduced a broad framework covering all areas of outbound investment from China from the export of goods and services as well as technologies, but where it related to financial investment, the target was largely unlicensed online brokers facilitating trading in overseas securities. A number of online brokers offering ‘one-tap’ stock investing for retail customers closed shortly thereafter.

Similarly, whilst the headlines around income tax hikes were striking, AIA expressed little need for concern, noting that tax is rarely a key driver of demand for long-term insurance product purchases in Hong Kong. More broadly, we remain of the view, as do AIA, that tightening regulation tends to be focused on those flouting, or acting out with the spirit of existing rules.

However, fears, even if unfounded, can spill over into customer action, or inaction. Importantly in that context, AIA’s first-half results that followed showed no change in customer behaviour, with demand from mainland Chinese visitors remaining resilient through July and August, and applications and premiums continuing to be submitted as before.

That does not mean regulation should be dismissed. Insurance has always been a regulated business, and AIA operates across 18 markets where rules continue to evolve. But the relevant question is whether a development changes the long-term opportunity, and here we believe the answer remains no. Customers buy Hong Kong policies for reasons that extend well beyond yield: access to international assets, healthcare benefits and long-term estate planning all remain intact.

AIA has also navigated shifting regulation for decades, led by a management team with unusually deep experience of it. Chair Mark Tucker was previously chair of HSBC and chief executive of both AIA and Prudential and has held advisory roles at the Bank of England and Hong Kong Chief Executive’s Council of Advisers among others. Chief executive Lee Yuan Siong has an equally relevant background, having held senior roles at Ping An and Prudential after starting his career at the Monetary Authority of Singapore.

Same priorities, four years on

Underneath the headlines, AIA’s strategy has remained reassuringly consistent, in our view. At our 2022 Research Conference, our Head of Research, Alan Lander, interviewed Lee Yuan Siong as Asia emerged from the pandemic. He spoke about extending distribution, investing in technology and capturing growth from an ageing, increasingly affluent Asian population.

Asia-Pacific's demographic dividend

In conversation, he singled out opportunities in India. AIA’s joint venture with the Tata Group offered, he explained, a highly focused and differentiated multi-channel distribution strategy well placed to tap into India’s middle-class population which he noted was expected to double in size to more than one billion by 2030. 

Four years later, the consistency in AIA’s message and focus is striking. The short-term questions facing the company might continue to change, but its strategic priorities remain largely intact.

The first half of 2026 provided further evidence of opportunities being converted into results. Value of new business (VONB) rose 10% to a record $3.2 billion, operating profit after tax grew 13% per share, and return on equity reached a record 17.5%; management now expects to exceed its 2023-2026 profit growth target. Growth was broad-based, with value of new business up 20% in mainland China and 31% at Tata AIA Life in India.

Value of new business

2010 - 1H26

Technology is also contributing more directly than before. In 2022, management described digital tools as a way to make agents more effective rather than replace them; that philosophy has not changed, but its execution has, with AI now embedded across lead generation, agent training, customer matching and claims processing. Few companies can point to such tangible evidence that AI investment is translating into measurable financial returns.

Patience, not passivity

None of this removes the case for scrutiny. Patience, in our view, should never be confused with passivity: it requires continual research, regular engagement with management, and a willingness to revisit assumptions as circumstances change. But neither should a share-price fall be mistaken for evidence that something fundamental has changed.

The fastest response is not always the most considered. The robots on the Beijing track crossed the line at great speed, only to collapse moments later. Similarly, an investment decision made in haste may prove ineffective over time. Long-term investing demands patience and endurance to reap the rewards. We must respond to new information, test it against the evidence and where our conviction remains intact, refuse to let short-term market movements knock us off course. 

This article was written in August 2026.