×

Despite China market rout, AIA stays bullish

The meltdown in Chinese stocks last month will not dent the growth story in the world's second-biggest economy, the boss of AIA Group told CNBC Asia's "Squawk Box" on Friday.

Stock markets in the mainland went on a rollercoaster ride in June, with the benchmark Shanghai Composite index losing as much as 30 percent and falling into bear market territory.

While a recovery seems to be in place, with the Shanghai bourse on course for a seven-session winning streak on Friday, there are analysts who remain skeptical, such as hedge fund manager Ray Dalio who has turned bearish on China .

But the world's second-largest life insurer by market capitalization remains unnerved.

"We've seen incredible volatility [but] all of these are blips," Mark Tucker, group CEO and president of AIA, said. "There may be a short-term dent in sentiment, but it doesn't derail growth and it doesn't derail the fundamental story in China, which to us is still very positive and very strong."

Read MoreFor insurer AIA Group, Asia is a sweet spot

The 58-year-old, who took over the reins as AIA's boss in 2010, also remains confident on the prospects of Asia.

"Our business is 100 percent focused on Asia-Pacific and we are as confident in the region's economic growth as we've ever been," he said.

"Debt levels are low, deficits are low, the basis of leverage is low [and] central bank policies are strong. All of these are positive aspects for Asia relative to the rest of the world. Things may slow a little, but the fundamentals remain in place and we stay very confident," Tucker told CNBC.

Asia has evolved into a key battleground for global insurers in recent years, underpinned by a confluence of factors, including rapid economic growth, an ageing population and changing attitudes toward previously taboo topics such as death.

The region will likely account for 40 percent of the global insurance market by 2020, according to projections by reinsurance company Munich Re released in May. The region will also be home to five of the top-10 primary growth markets, such as China and India, the report said.

Signage adornes the American International Assurance (AIA) building in Hong Kong.
Antony Dickson | AFP | Getty Images
Signage adornes the American International Assurance (AIA) building in Hong Kong.

Upbeat earnings

On Friday, the insurer, which used to be part of American International Group (AIG), reported an on-year rise of 21 percent in the value of new business for the first-half of 2015, on the back of strong sales in Hong Kong and China.

The company's value of new business –which measures expected profits from new premiums and is a key yardstick for growth – rose to $959 million from $792 million a year earlier. The insurer's profits after tax rose 12 percent to $1.6 billion.

Tucker attributes the upbeat results to the company's diversified portfolio: "Different products for different seasons, different distribution for different people and different geographies. The diversification effect is incredibly powerful and gives a tremendous boost [to earnings] when one of our geographies doesn't perform well."

The Hong Kong-listed stock receded more than 1 percent late Friday, succumbing to the selling pressure in the broader Hang Seng index on the back of a negative finish on Wall Street overnight and a sharp drop in a preliminary gauge of Chinese factory activity.

Year-to-date, AIA shares have risen 22.71 percent.

— Reuters contributed to this report