THE RACE AGAINST RISK AIA PHILAM LIFE ANNUAL REPORT 2019 AIA PHILAM LIFE ANNUAL REPORT 2019 | 1 CONTENTS We at AIA Philam Life make a positive difference in the lives of Filipinos by giving them peace of mind through the innovative OVERVIEW AIA at a Glance ............................................................................4 protection and long-term savings Philam Life at a Glance .............................................................6 solutions we offer, helping them live Message from Chief Executive Officer ................................8 Healthier, Longer, and Better Lives. Financial Highlights .................................................................11 We are our customers’ partner in BUSINESS REVIEW creating a secure future for them Agency Distribution .................................................................12 and their loved ones. Corporate Solutions .................................................................15 Marketing ....................................................................................16 The strength and stability of our Philam Vitality ...........................................................................18 business makes it possible for us Affiliates and Subsidiaries ....................................................19 to fulfill our commitments to our Investments ...............................................................................20 customers, while access to global Real Estate ..................................................................................20 insight and expertise through our Insurance Operations ..............................................................20 parent company, AIA, enables us Information Technology .........................................................21 to create relevant solutions that Our People ..................................................................................21 Our Management Team...........................................................26 address our customers’ needs. Philam Foundation ...................................................................28 CORPORATE GOVERNANCE Corporate Governance ............................................................30 Board of Directors ....................................................................31 Operating Philosophy ..............................................................40 Enterprise Risk Management ...............................................47 Audit & RPT Committee ..........................................................49 FINANCIAL STATEMENTS Stockholder Information ........................................................52 Financial Statements ..............................................................53 2 | AIA PHILAM LIFE ANNUAL REPORT 2019 AIA PHILAM LIFE ANNUAL REPORT 2019 | 3 OVERVIEW ABOUT AIA AIA AT-A-GLANCE KEY MILESTONES 2019 Presence in The only international life 1919 1998 2014 AIA Celebrates AIA and CBA Execute AIA put down We celebrated the AIA and Citibank formed insurer headquartered and its corporate roots in Asia return to our former a landmark, long-term Its Centennial Year Joint Cooperation listed in Hong Kong and when the group founder headquarters building on and exclusive Our 100-year journey has been one of 18 Markets Mr. Cornelius Vander The Bund in Shanghai. bancassurance Agreement and Extend pioneering growth that has seen Starr established partnership that AIA become the largest independent, Strategic Partnership 100% focused an insurance 2009 encompasses 11 markets agency in We completed the in the Asia-Pacific region. publicly listed, pan-Asian life insurance to 25 years reorganisation driven by group, with a presence across The largest on Asia-Pacific Shanghai. AIA and Commonwealth Bank of AIG’s liquidity crisis in AIA became the Official 18 markets. In 2019, we held a year-long Shirt Partner of Australia (CBA) executed a Joint 1921 2008, leading to the series of centennial-themed activities listed company Tottenham Hotspur Cooperation Agreement enabling Mr. Cornelius positioning of the in all our markets in support of local Football Club to promote AIA to exercise a level of direct Over 14 million Vander Starr Company for a public community charities and special the role of sports management control and oversight on the Hong Hong founded Asia Life listing. causes. Insurance Company, his as a key element of over CBA’s life insurance business in benefit payments healthy living. Stock Exchange first life insurance 2010 Australia. Additionally, AIA Australia’s AIA Group Limited were made during 2019, enterprise in Shanghai. 2015 AIA Opens New Sales strategic bancassurance partnerships which is incorporated successfully listed on with CBA in Australia and ASB Bank the Main Board of The AIA became the #1 MDRT and Service Centres in helping customers and 1931 Limited in New Zealand were and headquartered Mr. Cornelius Vander Stock Exchange of Hong company in the world. their families to cope with Mainland China extended to 25 years. in Hong Kong Starr founded Kong Limited, the challenges at different ABOUT AIA International Assurance third-largest IPO ever AIA set up sales and service centres life stages Company, Limited globally at the time. in Tianjin and Shijiazhuang, Hebei in AIA and Spurs Extend (INTASCO), in Shanghai. accordance with the pilot programme (1) AIA Group Limited and its AIA meets the long-term savings promoting insurance integration Global Principal Partnership The largest subsidiaries (collectively “AIA” and protection needs of INTASCO established under the Beijing–Tianjin–Hebei or the “Group”) comprise the individuals by offering a range of branch offices in Hong until 2027 Kong and Singapore. Integration Plan. life insurer in Serving the holders largest independent publicly products and services including AIA and Tottenham Hotspur Football listed pan-Asian life insurance life insurance, accident and 1947 2016 Club extended their partnership to of more than The AIA Leadership group. It has a presence in health insurance and savings The Philippine American AIA Granted Approval to the end of the 2026/27 season. The the world Centre opened in 18 markets in Asia-Pacific – plans. The Group also provides Life and General AIA brand will continue to appear Bangkok. Operate in Myanmar 36 million wholly-owned branches and employee benefits, credit life Insurance Company 2011 on the front of the team shirts in all individual policies subsidiaries in Hong Kong SAR, and pension services to (Philam Life) was AIA Group Limited We increased AIA Group’s AIA was granted approval to operate competitions. No.1 Worldwide and over Thailand, Singapore, Malaysia, corporate clients. Through an founded in the became a constituent stake in Tata AIA Life in Myanmar through a 100% wholly- Mainland China, South Korea, extensive network of agents, Philippines. stock of the Hang Seng Insurance Company owned subsidiary. We opened for Limited, a joint venture in AIA Tops The Table for the Philippines, Australia, partners and employees across INTASCO moved its head Index. business in November 2019 and for MDRT Members India, from 26 per cent to 16 million Indonesia, Taiwan (China), Asia-Pacific, AIA serves the office to Hong Kong. We launched a became the first foreign insurer to 49 per cent. Fifth Year Running The only multinational participating members Vietnam, New Zealand, holders of more than 36 million sponsored Level 1 issue a policy in the country. AIA became the only multinational Macau SAR, Brunei, Cambodia, individual policies and over 1948 American Depositary 2017 company to top the table of group insurance INTASCO changed its company in the world to rank number Myanmar, a 99 per cent 16 million participating members Receipt programme. AIA presented the Hong name to American one in terms of the largest number of for five consecutive years schemes subsidiary in Sri Lanka, and of group insurance schemes. Kong Observation Wheel International Assurance 2013 Million Dollar Round Table members a 49 per cent joint venture and the AIA Vitality Park. Company, Limited. AIA completed the full for five consecutive years. in India. AIA Group Limited is listed on integration of the 2018 the Main Board of The Stock 1992 Provides protection to people businesses of AIA and AIA launched new brand The business that is now AIA Exchange of Hong Kong Limited We re-established our across the Asia-Pacific region ING Malaysia. promise: Healthier, was first established in Shanghai under the stock code “1299” presence in China We commenced business Longer, Better Lives with total sum assured of a century ago in 1919. It is a with American Depositary through a branch office in Sri Lanka through the market leader in the Asia-Pacific Receipts (Level 1) traded on the in Shanghai, the first foreign-owned life acquisition of Aviva NDB region (ex-Japan) based on life over-the-counter market (ticker US$1.74 trillion business to receive a Insurance. insurance premiums and holds symbol: “AAGIY”). licence in the country. leading positions across the majority of its markets. It had total assets of US$284 billion as of 31 December 2019. Note: Notes: (1) The largest life insurer in the world by market (1) Hong Kong SAR refers to Hong Kong Special Administrative Region. capitalisation as at 12 March 2020. (2) Macau SAR refers to Macau Special Administrative Region. 4 | AIA PHILAM LIFE ANNUAL REPORT 2019 OVERVIEW ABOUT AIA OVERVIEW AIA AT-A-GLANCE KEY MILESTONES 2019 2019 MILESTONES KEY AT-A-GLANCE AIA Presence in The only international