Welcome to AIA's twenty nineteen Annual Results Presentation. I'm Lance Burbidge, Chief Investor Relations Officer. The ongoing impact of COVID-nineteen virus means that today we are not having our usual face to face meeting. As a reminder, if you wish to ask a question later, you will need to use the telephone dial in facility rather than the webcast. Today's agenda is on Slide three.
Our Group Chief Executive, Ken Rui, will start with the key highlights of the Group's financial performance in 2019 and an update on our strategic progress. Then our Group Chief Financial Officer, Garth Jones, will take you through the financial results in detail. Our three regional Chief Executive and the CEO of AIA China, Fisher Zhang, will update on progress in their respective markets. Kenghui will then set out how AIA is positioned to capture the significant growth opportunities available to us across the Asia Pacific region. Finally, we will open up the session to your questions.
With that, let me pass over to Kenghry.
Thank you, Lance, and good morning, everyone. I'm pleased to be here this morning to present AIA's 2019 annual results. While it has been a challenging year, AIA has continued to deliver growth in all our main financial metrics. Let me begin with the key highlights on Slide five. In 2019, headline value of new business grew by 6% to more than US4.1 billion dollars This supported a further increase in EV equity to billion with 12% Operating profit after tax was up 9% to RMB5.7 billion and our operating return on equity remains strong at 14.4%.
Underlying free surplus generation rose to RMB5.5 billion, an increase of 13% on the prior year. The Board continues to follow our prudent, sustainable and progressive dividend policy and has recommended an increase of 10% in the final dividend. This brings the total dividend to HKD126.6 per share, up 11%. This solid results with growth in all our key financial metrics reflect the continued success of our focus on executing our strategic priorities. While our 2019 results are healthy, they were clearly impacted by the operating environment in the second half.
Slide six shows the contrast in growth between Hong Kong and the rest of the group. Our Hong Kong business saw very strong growth of 19% in the first half, but this was more than offset by the impact of social unrest in the second half. The overall 5% decline reflects a significant fall in sales to Mainland Chinese visitors in the second half, which broadly tracked the decline in visitor arrivals. Our domestic customer segment continued to perform well throughout the year and reported double digit growth. Looking beyond Hong Kong, the group achieved strong growth of 16% in 2019.
AIA China had another excellent year with 27% growth and our other markets also delivered very strong growth of 27% led by Vietnam, The Philippines and Australia. The three RCEs and Fisher will take you through the progress in our markets later on. Overall in a year where our largest business saw a decline of more than 20% in the second half, AIA has still achieved positive growth in VONB. This performance continued to demonstrate the benefits of our unique platform and our focus across the Asia Pacific region. Now on to Slide seven, all of our teams continue to focus on executing our key strategic priorities in 2019.
The scale and quality of our multi channel distribution platforms enable us to provide professional financial advice to millions of customers. Our agency remained the primary source of our new business and generated 34% of the group's VONB. We continue to expand and enhance our premier agency programs with strong results over time as we transform our agencies across the region. Excluding Hong Kong, agency VONB grew by 16% in 2019. Our strategic partnership complements our agency and extend AIA's distribution reach.
In 2019, Bancassurance delivered excellent VONB growth with a substantial contribution to growth from our partnership in Vietnam, Thailand and New Zealand all activated within the past three years. In December, we were pleased to start our new partnership with CBA in Australia. We have had another year in health and well-being as we continue our journey towards being a lifelong partner for our customers. Overall membership of our wellness program has exceeded 1,700,000, up more than 40% in 2019. AIA China launched a medical network for its high end customers and we roll out medic services to Malaysia, Thailand and Indonesia following the great results in Hong Kong and Singapore.
Digital is a key enabler for our business and we continue to invest and leverage technology. In 2019 more than 95% of agency new business was submitted digitally, over 60% of all new business was auto underwritten and more than 80% of customer interactions can be performed digitally. Now on to progress in some of our key growth markets on Slide eight. In Mainland China, we have made significant progress in our geographic expansion. In July, we opened new sales and service centers in Tianjin and Sijiazhuang.
Starting operations in two cities at the same time has confirmed our capabilities and provided valuable experience for our future ambition. We recently announced the intention to subsidiarize AIA China. This conversion will help us take advantage of the opening of China's life insurance market. We have submitted our conversion application and are waiting for CBIRC approval. AIA China has been preparing for some time and subject to regulatory approval the new subsidiary will form the foundation for our geographical expansion plans in Mainland China.
We very much look forward to leveraging our differentiated model and help millions more Chinese families live healthier, longer, better lives. On to our emerging ASEAN markets, Vietnam, Indonesia and Philippines. Our business in Indonesia returned to growth in the second half helped by a strong result from our partnership with BCA. We deliver excellent performances from our businesses in Vietnam and The Philippines with both agency and partnership distribution growing strongly. In all three markets, we are making good progress with quality recurrent programs in agency.
I talk about Tata AIA Live, our Indian JV at the interim results. We have an excellent partner with Tata Sons, the country's preeminent conglomerate. Tata AIA Life is the market leader in pure retail protection sales and our agency productivity is the best in the industry. I'm excited about our progress we have made so far and believe that our efforts are positioning Tata AIA Live to capture the significant long term growth opportunity in India. You will hear more about the potential of this growth markets throughout the presentation this morning.
Now turning to Slide nine, AIA's long track record of delivery has been built on our consistent focus on executing our strategic priorities. Despite near term headwinds, EIA has continued to deliver growth in all our key metrics in 2019. This helps reflect the tremendous hard work from all of our exceptional teams across the group. Now over to Garth, who will take you through the financial details. Garth?
Thanks, Kenhoy, and good morning, everyone. I'll start with Slide 11. KAA's financial performance in 2019 demonstrates our continuing ability to deliver growth across all our key financial metrics. Volume of new business grew by 6% to over $4,100,000,000 EV operating profit of $8,700,000,000 increased by 6% reflecting VONV growth and the comparative opening EV. Operating ROEV remained strong while declining slightly to 15.9% and EV equity increased 12% to nearly $64,000,000,000 Operating profit after tax was up 9% to $5,700,000,000 with operating ROE of 14.4%.
Shareholders allocated equity increased by 15% to $42,800,000,000 after the payment of nearly $2,000,000,000 of dividends driven by the increased operating results and positive mark to market movements in our equity portfolio. Underlying free surplus generation increased by 13% to $5,500,000,000 And the AA Co solvency position remains strong after the impact of the CMLA acquisition in Australia. Based on the strength of these results within the context of the macroeconomic and capital markets environment, while also reflecting our financial resilience and our confidence in the group's prospects. We've recommended an increase of 10% in the final dividend to HKD93.3 per share. Brings the total dividend per share in 2019 to HKD126.6 per share, up 11% on 2018.
The Board continues to follow our prudent, sustainable and progressive dividend policy, while retaining the financial flexibility to fund future growth. These resilient financial results reflect AIA's continuing focus on executing our strategic priorities while citing financial discipline to generate attractive returns. As usual, I'll now provide more detail in the three areas of growth, earnings and capital and dividends starting with growth on slide 13. AAA's portfolio of businesses enables us to capitalize on the attractive growth opportunities that are available across Asia Pacific. Ping He has already noted that our Hong Kong business reported a 5% decline in VONB.
AA China continued its strong track record of growth with a 27% increase and for the first time delivered over $1,000,000,000 of BOMB in a year. AA Thailand delivered 6% growth as we continue to benefit from the FA agency transformation and strong momentum in our long term partnership with Bangkok Bank. Our business in Singapore was flat overall as lower single premiums in the high net worth segment were balanced by growth in regular premium sales. The new quality recruitment program in Malaysia helped deliver solid agency growth and the business reported 7% growth overall. Our other markets achieved a very strong result with 27% growth with contributions to growth coming from our businesses in Vietnam, The Philippines and Australia.
In 2019, we've included our 49% share of the VONB of Tata AI Life in India for the first time. Excluding India and its growth of 66%, other markets growth was very strong at 18%. Our other markets have now grown to be larger than AA Thailand and our third largest geographic segment. Overall, the collective performance from our 18 businesses delivered another year of VONB growth for the group. AA's unique portfolio of businesses, diverse product and high quality distribution enable us to deploy capital at highly attractive rates of return and optimize long term shareholder value.
Slide 14 shows that A and P increased to $6,600,000,000 with more than 90% of A and P sourced from regular premium business. A and P grew by 12% for the group excluding Hong Kong. WMB margin increased by 2.9 percentage points to 62.9%. The increased margin was primarily driven by assumption changes in other with around half of the increase here from the positive effect of the tax rule change in Mainland China, a similar picture to the interim results. New business margin on a PVMBP basis improved from 10% to 11% driven by higher margins in both our participating and traditional protection business.
Our continued focus is on growing total VONB and as I've said many times, we do not target volume or margin alone. Slide 15 shows the movement in EV equity during the year. BOMB growth levels and the comparative opening EV impacted by the stock market fall in 2018 resulted in an EV operating profit increase of 6% to $8,700,000,000 And operating ROEV remained strong at 15.9%. Operating variances remained positive and contributed $634,000,000 Other non operating items added nearly $1,000,000,000 and included currency translation effects. Overall, our EV increased by $7,700,000,000 to $63,900,000,000 after the payments of shareholder dividends of nearly $2,000,000,000 Our closing EV equity is shown after deduction of $6,400,000,000 for additional consolidated reserving and capital requirements and the present value of unallocated group office expenses.
Moving on to Slide 16. KA's continuing positive operating experience reflects the quality of our in force business and confirms the appropriateness of our EV assumptions. Mortality and morbidity claims experience remained positive as is also the case for persistency and expense variances reflecting both our pricing discipline for new business and the proactive management of our existing book. Our EV results continue to demonstrate assumptions. Overall, cumulative operating variances since our IPO have added more than $2,600,000,000 to EV.
Turning to slide 17 and our interest rates basis. NIA's EV methodology uses spot market yields and trends over time to our long term assumptions. Our long term assumptions smooth out short term volatility. However, you will recall that at the interim results, I noted we would likely lower our assumptions at year end if the lower interest rate environment persisted. As such, we have reduced our long term assumptions in several markets and our weighted rate was in line with forward rates at thirty first December twenty nineteen.
As interest rates have moved markedly lower in some markets during the 2020, we may lower our assumptions again and depending on how circumstances develop could potentially make adjustments at the interim rather than at the full year as has been our practice since IPO. We are not immune to short term market volatility. However, our EV sensitivities are small and demonstrate the resilience of the group's EV. To provide further context, we have estimated the EV based on the recent extremely low levels of interest rate using a parallel downward shift in both spot rates and our long term assumptions. For U.
S. Rates, we used a reduction of 140 basis points at all durations since year end resulting in a spot yield of 50 basis points for the ten year treasury bond and a spot yield of 100 basis points for the thirty year. On this basis, the EV would fall by less than 7%. We continue to actively reprice new business to reflect changing environment and make adjustments to our pricing assumptions in light of current expectations of future experience both economic and operating. As with our operating variances, our cumulative investment return variances since IPO are also positive at $850,000,000 Slide 18 clearly demonstrates that over many years we have progressively built a strong long term track record by delivering sustainable profitable growth at increasing scale.
The compounding effect of which means that VONB in 2019 was more than six times the result in 2010. Next earnings and I will turn to our IFRS results on slide 20. Operating profit after tax increased by 9% to $5,700,000,000 This growth reflects the 13% increase in total weighted premium income offset by the unfavorable effects of lower interest rates, high medical claims and operating expenses. Our expense ratio overall increased slightly to 7.3% mainly driven by higher expenses in Australia and New Zealand where the expense ratio is above the group average. Slide 21 shows the breakdown of our operating profit after tax and demonstrates the benefit of our geographic diversity at scale across the region.
AA Hong Kong delivered 6% OPAP growth to $1,900,000,000 as underlying business growth was partially offset by the impact of lower interest rates in the second half particularly on participating business. OPAT from our business in Thailand grew by 3%. Greater scale of the business and improved persistency were offset by adverse medical claims experience and a further fall in interest rates in the second half. AA China's OPEB increased by 28% and exceeded $1,000,000,000 for the first time. Growth in the size of the businesses in Malaysia and Singapore resulted in increased OPEB despite higher medical claims in Malaysia, continuing pressure on the profitability of our HealthShield portfolio in Singapore.
Finally, other markets delivered 2% higher than OPAT as increased earnings due to strong new business growth were offset by deterioration in operating experience in South Korea and higher operating expenses in Australia as I mentioned earlier. In aggregate, OPAP grew by 9% in 2019 with each of our reportable market segments delivering positive growth. I mentioned that Hong Kong participating business saw a significant impact from lower interest rates amplified due to the basis of our current IFRS four accounting policy for this business as I'll now explain. The current treatment estimates the level of policyholder bonuses based on return expectations at the point of sale and maintains bonuses at this level when evaluating liabilities in all future periods despite interest rates and policyholder bonuses changing over time. We are looking at enhancing our accounting policy at the interim results to better reflect the economic position bringing it more in line with market practice and our treatment of segregated participating business.
There's more explanation on slide 62 in the presentation appendix. On the next slide, slide 22, as usual the movement in shareholders allocated equity is shown before the IFRS accounting treatment of AFS bonds. Allocated equity does however allow for other market movements. The increase in allocated equity reflects our solid growth in operating profit, positive mark to market impacts on equities and positive foreign exchange movements partly offset by the payment of shareholder dividends. A one time adjustment was made for the initial adoption of IFRS 16 which added €482,000,000 to opening IFRS equity.
Without this adjustment ROE would have slightly increased. Overall allocated equity was up 16% over the year. On to Slide 23. Our financial discipline over time has delivered increasing returns on equity on both an EV and IFRS basis. Aggressively higher EV operating profit has driven ROEV up four forty basis points since IPO even as our EV equity has grown to be 2.6 times higher.
The same increasing trend committing for OPAP and ROE while shareholders allocated equity has more than doubled. These charts clearly demonstrate the highly attractive financial dynamics and underlying quality of our business. Finally, capital and dividend. Moving from left to right on slide 25. We took control of Cummins shore life in November with a net reduction of $1,000,000,000 in our free surplus as I guided previously.
Underlying free surplus generation increased by 13% to $5,500,000,000 reflecting further growth in the business and continuing proactive management of the in force. As with the expected return on operating EV, UFSG for 2019 uses start of period investment return assumptions and will reflect the changes to long term assumptions made at the 2019 in the 2020. New business investment of $1,500,000,000 was 2% lower than 2018 as the new business strain effect of increased sales volumes was balanced by the impact of the tax rule change in Mainland China. Investment return variances, exchange rates and other items were negative $600,000,000 in aggregate. After the $2,000,000,000 payment for increased shareholder dividends, the closing free surplus was $14,900,000,000 I've said consistently that we hold free surplus to enable investment in new business, take advantage of inorganic opportunities and absorb the effects of capital market stress.
Significant fall in government bond yields in 2019 and further decline in 2020 are an example of success. We provided more details of the effect of investment return variances and other to highlight the impact from lower interest rates particularly in respect of AA Thailand and AA Hong Kong under the Hong Kong insurance ordinance. This is partly offset by a net positive from mark to market gains on equities and other items. I would note that persistent very low interest rates could slow free surplus emergence and remittances from some of our businesses. While the recent drop in U.
S. Government bond yields has had an impact on our free surplus position, group remains financially strong. As of today, the solvency ratio of AIA Co. Remains above 300% and all our businesses meet their prescribed regulatory capital requirements. Overall and after acquisition of CMLA, pre surplus was up slightly over the year.
Slide 26 provides an update as to the changing capital framework in Hong Kong which I outlined at the interim results. Our group supervisor, the Hong Kong Insurance Authority intends to make two major changes that will affect our regulatory capital position. First, the HK will introduce a formal group wide supervision framework for Hong Kong based multinational insurance groups such as AIA. We still expect that this will become effective in July 2020. Second, the HK is also working to replace the existing HKIO solvency requirements with a risk based capital framework.
The HK has recently indicated that the new Hong Kong RBC basis is now expected to be tabled to the legislature in 2022. We estimate that we will first report on this basis in 2024 later than I mentioned at the interims. While this changing capital landscape and its timeline creates uncertainty, we remain confident of the group's capital strength and our strong solvency position. Our primary objective is to achieve profitable new business growth at increasing scale and generate superior sustainable value for shareholders. We aim to demonstrate that our strong growth in value of new business translates over time into earnings growth, increased cash generation and shareholder dividends as shown on this slide and the next slide, Slide 28.
The Board has recommended an increase in the final dividend to HKD93.3 per share bringing the total dividend for 2019 to HKD126.6 per share up by 11% over 2018. The increase considers the strength of these results within the context of the macroeconomic and capital markets environment, whilst also reflecting our financial resilience and our confidence in the Group's prospects. In conclusion on slide 29, the Group's results in 2019 reflect a very strong first half impacted in the second half by external factors particularly in Hong Kong. We delivered growth in all our main financial metrics and we remained financially strong. We continue to invest capital in high quality business with attractive returns and continue to grow VONB.
IFRS operating profit increased further and benefited from the effects of additional scale and geographic diversification. Underlying free surplus generation rose 13 enabling us to finance new business growth and a further increase in the shareholder dividend. Our disciplined financial management and continuing ability to build sustainable value for our shareholders are reflected in today's results. I'll now hand over to Jacky, Hakley, Bill and Fisher who will cover progress in their respective businesses.
Thank you, Garth. Good morning, everyone. I'm very pleased to be here today to present Air Hong Kong's full year results as well as an update on our response to COVID-nineteen in Hong Kong. I will also share with you an overview of our group's premier agency strategy and performance of its regional rollout. Let me first take you through the full year results from Hong Kong.
If you can please refer to Slide 31. While AI Hong Kong delivered very strong 19% VONB growth in the first half, The impact of the social unrest in the second half drove a 5% reduction in VONB for 2019. Our business was supported by double digit growth in VONB from our domestic customers, but it was offset by a decline in VONB mainland Chinese visitor customer segment in the 2019, which broadly track record the reduction in visitors arrival to Hong Kong. ANP decreased by 11% to US2.4 billion dollars while VONB margin increased to 66.1% driven by enhanced profitability in our long term savings and protection product. This year we launched a series of marketing initiative to promote protection product and this focus on protection was also supported by AI Vitality integrated product which saw more than 25% VONB growth during the year.
Agency channel delivered a positive VONB growth in 2019, demonstrating the quality of our people and execution of our premier agency strategy against challenging market backdrop. Our quality recruit and active agents continued to grow throughout the year and we launched AIA Smart, a digital platform that helped improve user experience and enhance agent activity. VONB from our partnership distribution reported double digit growth in the first half, but then experienced a substantial decline in the 2019 due to lower sales from the Mainland Chinese visitor customer segment and increased competition in the retail IFA channel. Now let me give you an update on the latest COVID-nineteen situation for AI Hong Kong. If you could refer to Slide 32.
In the current quarter, we see that people in Hong Kong are generally avoiding public places and are reluctant to conduct face to face meetings as a result of COVID-nineteen. We have also observed a slump in retail business activities with additional impact from Mainland China suspension of the individual visa scheme to Hong Kong and Macau effective January 29. Hong Kong's average daily arrivals from Mainland China dropped by 98% year on year in February with a direct impact on our sales in our Mainland Chinese visitor customer segment. Sales to our domestic customers have been constrained given the reluctance to meet in the. It is critical that we help our agents succeed during these temporary challenges and we have proactively taken a number of supportive measures such as activating iAgency, which increases digital engagement of our agency force by allowing our agents to conduct online recruitment, training, financial review and after sales services as well as remote signature and one time password submission.
We temporary relaxed performance requirement for our agents. We also welcome positive relief measures and acted by the Hong Kong Insurance Authority in light of health concerns from COVID-nineteen. This includes temporary measures in the selling process of tax deductible voluntary health insurance scheme and qualifying deferred annuity policy in order to minimize face to face meeting between insurers and their clients. At AI Hong Kong, we always prioritize the well-being and safety of our customers and the broader community. As a result, we have extended extra coverage to our customers by launching free enhanced protection benefits, one off lump sum diagnosis benefits and a waiver for the usual thirty day wave.
We are also offering complimentary one off lump sum diagnosis and death benefit for frontline cleaning workers who are dedicated to safeguarding the health of our community. As we face these uncertain times together in Hong Kong, I want to reiterate our commitment to Amity, our customers, employees, partners and agents. The importance of our agency channel in Hong Kong cannot be overstated and earlier I mentioned that some of the ways we are supporting our agency force during these near term challenges. Needless to say, AIA is also continuously dedicated to supporting our agency's long term success and I would like to now take you through what we have accomplished during our growth agency transformation and how our premier agency strategy has developed throughout the region. If you could please turn to Slide 33.
AIA's proprietary partner agency remains our primary distribution channel and a core growth engine for the growth. Our differentiated premier agency strategy is a key competitive advantage for AIA and its success is underpinned by an end to end agent customer value chain whereby we begin by recruiting high caliber talent and providing agents with bespoke training and clear career development pathway. We then leverage extensive performance management to further enhance the professionalism and quality of our agency force and improve engagement with customer. We also continuously invest in digital technology that provides effective support for our agents and agency leaders across all of their key activities such as customer acquisition and servicing in order to provide best in class customer experience. In 2011, AIA Hong Kong was our first market to launch the quality recruitment program closely followed by AI China in 2013 and then AI Singapore in 2016.
Since then, we have rolled out these programs regionally to our business in Thailand, Malaysia, Vietnam, Indonesia and The Philippines. Since 2010, our number of active agents has more than doubled and their productivity increased at 2.7 times. These results are testament to our focus on quality recruitment, use of digital tools to enhance agent activity and overall commitment to our differentiated premier agency strategy. In closing, I'm pleased to share with you the results of our resilient Hong Kong business as well as the success of and our long term commitment to the premier agency strategy. Thank you very much.
And now let me hand over to Hak Lei.
Thank you, Jackie, and good morning, everyone. I'll cover the performance of AIA Singapore and AIA Malaysia and provide you with a brief update on the progress we made in AIA Myanmar, the group's newest business unit. Please refer to Slide 35. AIA Singapore delivered $352,000,000 of '19 with a stable VONB margin of 65.5. Overall growth in regular business offset by lower single premium sales from the partnership distribution channel.
In 2019 and for the fifth consecutive year, our agency channel maintained its market leadership with the largest number of MDRT registered members in Singapore. We also delivered a healthy increase in number of active agents contributing leading to modest UMB growth. We remain committed to our Premier Agency strategy, continuing to focus on quality recruitment, professional career development and investment in next generation integrated digital platforms. Our strategic partnership with Citibank delivered double digit VONB growth. This growth was supported by an increase in both the number and productivity of insurance specialists serving the mass affluent and retail customer segments.
We saw a decline in single premium high net worth business especially from our non exclusive channels due to enhanced market competition as we maintain our prudent pricing discipline while focusing on enhancing our product propositions and quality customer service. In 2019, we launched an innovative bespoke wealth solution, which offers a combination of high protection and exclusive access to a select group of leading institutional asset managers. We also launched two critical illness products with first in the market features. The first covers mental illness and the second provides comprehensive protection across all stages of critical illness starting from the diagnosis of chronic conditions. As part of our roadmap towards a seamless customer digital experience, we rolled out a next gen app which fully integrates our customer portal with AIA Vitality program.
Since launch, this has been very widely adopted. Now moving on to AIA Malaysia on Slide 36. Our business in Malaysia continued to deliver positive results in 2019 with VONB growth of 7%. Our focus on transforming the agency channel has delivered strong results with double digit VONB growth. We implemented a new quality recruitment program in 2019, which accounted for half of total new recruits.
Quality recruits are two times more active than standard new recruits, contributing to excellent overall VONB growth from new agents in 2019. Our strategic partnership with Public Bank delivered strong double digit growth from in branch distribution supported by an increase in the number of active insurance specialists. However, partnership distribution growth was offset by lower direct marketing sales due to a decline in consumer confidence for telemarketing. Our Takaful segment contributed to continue to perform well with double digit VONB growth, driven by strong credit life sales from the bank assurance channel. AIA Malaysia continued to strengthen our product propositions in 2019.
We introduced a first in the market mental health benefit to further enhance our award winning innovative health rider. We also launched customer medical case management services through our regional partnership with Medix. Our award winning AIA Vitality program continues to expand rapidly with membership increased by over 40% in 2019. Now let me update you on our latest market AIA Myanmar. November 2019 AIA was granted a license to operate insurance business through a 100% wholly owned subsidiary.
We have made good progress on building a multi channel distribution platform with a strong pipeline for agency recruits and an exclusive long term strategic partnership with IR Financial Group and Max Myanmar Group. We are delighted with a promising start in Myanmar, a market with immense long term potential. In closing, as a market leader in both Singapore and Malaysia with superior distribution channels, comprehensive product propositions and a focus on delivering quality service to our customers, we remain confident that AIA is uniquely positioned to capitalize on the long term growth potential of these markets and to deliver our brand promise of helping our customers live healthier, longer, better lives. With that, I now hand over to Bill for his updates.
Thank you, Hakalei, and good morning, everyone. Let me update you on the progress we've made in Thailand, our other markets and India. Please refer to Slide 38. AIA Thailand delivered 6% of the UMB growth supported by strong sales momentum from both the financial advisor program and our exclusive partnership with Bangkok Bank. Our FA program continues to transform the quality and professionalism of our market leading agency force.
In 2019, FA represented 15% of our total agents in Thailand, however, contributed more than 30% of the total agency VONV. The activity ratio of our new FA agents is more than double that of our standard new agents driven by our focused training and development program. We've also continued to focus on the productivity of our entire agency force resulting in a further reduction in the number of less productive agents. Our strategic partnership, Bank of America Bank delivered very strong VONB growth building on the successful launch of the partnership in 2018. The overall productivity for the partnership was supported by increased training of the in branch insurance specialists well as bank staff across Bangkok Bank's nationwide retail network.
Our market leading position in protection and unit linked products was reinforced by the activation of our regional partnership with Medix in personal medical case management in the affluent customer segmentation segment. Visualization has played a significant role in AA Thailand's continued enhancement of its distribution, customer experience and operational efficiency. In particular, we added new e payment options, which makes it easier for our customers to pay premiums and has also improved persistency. Now
on
to our other markets on Slide 39. Overall, we delivered very strong VONV growth of 27% in 2019. Hence, let me take you through some of the key highlights by markets. AIA Vietnam continued its strong track record of performance with excellent VONV growth. Agency delivered strong VONV growth by increasing productivity through a continued focus on our premier agency strategy.
Our bank assurance channel more than doubled VONV as we increased the number of active insurance specialists in our strategic partnership with VB Bank and our other domestic bank partners. AIA Indonesia's overall VONB declined in 2019 as we continued focusing on transforming our agency. However, our business returned to growth in the second half driven by the strong performance of our strategic partnership with PCA. New recruitment and activity management initiatives helped drive strong growth in a number of active in branch insurance specialists. Our business in The Philippines delivered excellent VONV growth from both our agency and bank assurance channels.
Agency VONV growth was supported by a shift in product mix towards a new traditional protection product with comprehensive critical illness benefits modeled on our flagship protection product in AIA China. Our joint venture with BPI also achieved very strong VONV growth supported by double digit growth in a number of active in branch insurance specialists. Please move to Slide 40. AIA Australia and AIA New Zealand together delivered strong double digit VONV growth despite subdued customer sentiment and a decline in total premiums for the life insurance industry in Australia. In New Zealand, we took control of Sovereign in July 2018 and will complete the final steps of our integration in the 2020.
We had strong VONB growth in the independent financial advisor channel and having launched AI Vitality by integrating the program into our new flagship protection products. On 11/01/2019, we were pleased to announce the execution of the joint cooperation agreement with CBA in Australia, which enables AIA to begin manage and integrate CMLA and as such allows AIA to sell its products to extensive customer base. We also extended our bank insurance partnerships with CBA in Australia and ASB in New Zealand from twenty to twenty five years. AIA Careers BONV decreased in 2019 despite positive growth in A and P as margins fell in the direct marketing channel following a regulatory mandated repricing in the second quarter. We also launched a new digital direct channel aimed at accelerating insurance sales to AIA Vitality members from our strategic partnership with SK Telecom.
AIA Taiwan delivered very strong BUNV growth, primarily driven by strong bank assurance sales, which focused on offering insurance solutions that meet targeted customer needs for legacy planning and retirement. Finally, in our other markets, I will now update you on the progress of our business in India. Please refer to Slide 41. Our JV in India delivered 66% VONB growth. We have a diversified multi distribution channel business with the agency channel, our diversified portfolio of ownerships and our broker relationships all contributing substantially to A and P.
The business differentiates itself in the Indian life insurance market with a protection focused product strategy, where in 2019 we maintained our industry leading position in pure retail protection. In addition, our agency force is the most productive in India. We are committed to continue growing a high quality premier agency that measured on ANP per agent generates five times the productivity of an average agent in the industry. We are executing an end to end digitalization strategy to deliver enhanced capabilities and service that increase digital submission, automate the underwriting process and improve customer experience through self-service. In summary, we are very pleased with the progress of our other markets and we look forward to further strong diversified growth.
Thank you very much. And now let me hand over to Fisher.
Thank you, Bill and good morning everyone. I will update you on AI China's progress in 2019 as well as our initiatives to help our people and communities in response to the recent outbreak of COVID-nineteen. I will also provide more details of AI China's differentiated health and well-being strategy. If you can please turn to Slide 43. In 2019, AI China delivered a very strong performance with 27% increase in revenue B.
We continue to focus on executing our differentiated premium agency strategy through quality recruitment, best in class training and our advanced digital support platforms. These initiatives drove further double digit increase in active agents and higher aging productivity. AIXiOyou, our AI chatbot provide around 250,000 instant response amounts dealing with 95 of all aging inquiries. We have made strong progress with our total health and well-being strategy, enhancing support to our customers across their entire healthcare journey. Our wellness program was enhanced with enriched features and partners.
We upgrade our flagship all in one protection product with expanded coverage benefits and we roll out our hospital network, case management and recovery support. We also launched the innovative products embedded with closing loop end to end solutions of insurance protection with health and medical services. In July 2019, we opened sales and services centers in Tianjin and Shijiazhuang, the capital city of Hebei. Early results are encouraging and our experience has been valuable as we plan for future expansion. Following the announcement of the further opening of Mainland China for foreign lifera, we have applied to convert our Shanghai branch into a subsidiary.
Subject to regulatory approval, this will form the foundation for our geographic expansion plans and we continue our preparation for this opportunity. The sustained outperformance by AI China in an industry context once again demonstrate that we have the right strategy, the right distribution and the right products to benefit from the structural growth drivers in Mainland China's life insurance market. Moving to Slide 44 and the COVID-nineteen outbreak. The spread of COVID-nineteen has impacted customer and business sentiment and people are generally avoiding public places and face to face meetings. AI China has implemented initiatives to support our customers, employees and agency force.
While we canceled the face to face and see activities for safety reasons, we rapidly enhanced our digital platforms to enable agent recruitment, training as well as activity management to be conducted fully online. Our newly enhanced sales portal enables our agents to complete the entire selling process remotely for our key products. We have launched a series of customer engagement, agency recruitment and retention programs to help maintain our agency momentum and retention. Supporting our customer and the communities is a priority for confirmed COVID-nineteen cases. Our customers are entitled to extra death benefits and our all in one policyholders are offered 30% additional summer shop, a new green service channel including special case management services has been launched to support our customers.
We provided free insurance coverage to volunteer medical workers in selected hospitals and we donate medical supplies throughout our partner charity organizations. We have also supported WeDoctor by funding their free online consultation services. In Ana, our staff and our agents are fully committed to supporting our communities and the customers during this current tough times. Next, I want to share some details of AI China's health and well-being strategy and how this further differentiate our business. Please turn to Slide 45.
AI China has been expanding our customer proposition from protection focus to total health and well-being by providing value added support to our customers across their entire healthcare journey from prevention, protection to recovery. Our enhanced wellness program offers a variety of health care activities and rewards to engage with members and to help them live a healthy lifestyle. At the 2019, we had over 500,000 members and they have an upsell ratio more than two times that of non members. We launched our medical network at the 2019 to support our high end customers and we have already directly contract more than six fifty domestic and international providers in major cities with direct billing services. We provide a dedicated services to them when they are in need, including a twenty four hour hotline, priority appointment, claim service and a personal case management.
Our innovative products are tailored to specific customer needs and leverage the services from BitDr and other partners to support our customers throughout their individual medical and recovery journeys. We also roll out our new chronic disease management platform to provide expanded range of the services for our group scheme members, including online consultation, diagnosis, prescription, medicine delivery and claims. In closing, I'm pleased with the strong progress we have made in Mainland China and I'm looking forward to continuing to capture the opportunities available to us. Thank you very much. And now let me hand back to Keng Hui.
Thank you, Fisher. I'm now on Slide 47. I've said many times that AIA is not immune to market volatility and external shocks. While 2019 saw some headwinds, this morning you have heard that we have remained focused on executing our strategic priorities supporting continued growth across our key metrics. The first few months of 2020 have seen the emergence of the COVID-nineteen virus.
Jackie and Tricia covered some of the initiatives to support our agents, our customers and our wider communities. Since late January, we have seen a significant impact on the group's new business sales from reduced face to face meetings. AIA has successfully managed through many different economic cycles over the last century. AIA remains financially strong and in 2019 we paid out more than $14,000,000,000 in benefits and claims to our customers. We have the leading insurance brand in Asia and we exist to support our customers when they need it.
While our business faces near term challenges, we manage AIA for the long term to capture the tremendous opportunities available to us across Asia Pacific. Slide 48 reminds you of the powerful structural drivers that underpin AIA's continuing ability to deliver profitable growth over the long term. Rapid urbanization, increasing wealth and low levels of private insurance continue to drive the substantial growth opportunities available for all of our businesses. Middle class growth provides an additional and powerful structural driver. We are in a midst of a period where more than 1,000,000,000 people will enter the middle class across China, India and our emerging ASEAN countries by 2025.
This structural drivers across all of our markets will generate a rapidly growing need for professional advice, long term savings and protection. Turning to Slide 49, AIA is in a unique position to leverage this incredible Asian potential. We have 100% ownership of nearly all of our businesses across Asia Pacific and our brand and financial strength benefit from our one hundred years history. AIA strategic priorities are fully aligned with the structural growth drivers across our markets. We have worked hard for decades to build our distribution platforms.
Distribution is key and the scale and quality of our platforms are sustainable competitive advantages for AIA. You have heard today how we continue to strengthen and differentiate AIA using digital and value added services. Our results to date are impressive. In 2019, VONB from both agency and partnership distribution was six times the VONB at IPO. Our businesses in Hong Kong and Mainland China each delivered more VONB than the entire group in 2010 and our other market segment has now surpassed Thailand.
While we are proud of these achievements, the scale of our future opportunity is immense and growing. All of AIA's 18 markets offer excellent prospect for delivering sustainable growth for our shareholders. However, I'm particularly excited about our opportunities in Mainland China, emerging ASEAN and India. And AIA's platform enables us to take advantage of all these opportunities at scale. In particular, we have unrivaled distribution strength as shown on Slide 50.
Scale quality and breadth of our distribution platform makes it very difficult to replicate. Proprietary agency remains our core distribution channel. You heard from Jackie about our ongoing drive to improve agency quality and how we leverage technology. This helps to ensure that our agents are able to meet the growing demands of our customers. The agency is complimented by our expanding group of strategic partners including some of the leading financial players in our markets.
We have started a multi year digital transformation of how we work with our strategic bank partners. In spite of our excellent results since IPO, we are not complacent and continue to focus on enhancing our capabilities. Across all of our markets, distribution is key to assessing the tremendous opportunities for profitable growth that are available to AIA. Finally, Slide 51. AIA is a unique company in the right place at the right time.
We have significant and sustainable competitive advantages, clear and aligned strategic priorities and we continue to focus on execution. AIA also benefit from an experienced and proven management team. Although I will soon be leaving that team, I'm delighted to be passing the role of Group Chief Executive and President on to Lee Yan Xiong. Yan Xiong brings invaluable experience, skills and talent to AIA and I'm certain that he will drive the group to new heights. He's here with us today and I would like him to say a few words.
Thank you, Kengri. I'm very excited to take on the role of leading AIA, a company which I have long admired. It is my job to take advantage of the immense opportunity in Asia. Today I will not talk about my vision for AIA that is for later. After less than two weeks at AIA, it is already clear to me the depth of talent across the group and I'm really looking forward to leading this incredible organization.
Thank you, Yan Xiong. As you know, I will retire from my role as a Group Chief Executive and President in May. I've been privileged to lead this remarkable group for the past three years as we have continued building on our track record since IPO. Our focus on executing our strategic priorities has enabled AIA to deliver continued growth across all of our key financial metrics in 2019. I'm confident that AIA is ideally positioned and will continue to deliver long term value for our shareholders as we help our millions of customer live longer, better life healthier, longer, better life.
Now over to you for questions. Thank you.
Thank you, sir. We will now poll for questions. Our first question comes from Kailesh Mishra from HSBC in Hong Kong. Thank you.
Hi, good morning. Thank you for taking my questions. The first one is on interest rates predictably. So just to clarify the sensitivity that Garth gave, the greater than 300% solvency ratio and 7% EV down, that was for marking to market earlier this week. And was that for interest rates and equities and other asset classes or just interest rates?
Related to that, obviously, we have the sensitivities for new business embedded value, IFRS four, lower interest rates, but that's a parallel shift. Can you help us understand what the impact would be for a slightly more flatter yield curve environment? And on Slide 62, what is the message here? Is it that if you change the accounting, then the impacts that we saw in 2019 will not recur because you would make that change at the outset. But in order to achieve that, would you have to take a step change reduction in the OPAT to adjust to that accounting standard?
The second question is effectively around new business sales. Just wanted to understand, I understand obviously restrictions on movement will have an impact. How much of that has been offset by online sales, if at all? Because clearly, can do most things it would appear online. But obviously, I just wanted to understand if there has been a substitution effect or if that still remains a work in progress?
Thank you.
Let me get Garth to answer on the interest rate. Obviously, there's a lot of volatility out there. It's on daily basis, yes. Garth, and then I'll answer on the online sales.
Thanks, Carlos. A few questions there. Clearly, the business that we sell is long term savings and protection business rather than spread products. And we have both a robust financial position. I said that our solvency at AIACO was above 300% and all our businesses meet their prescribed capital requirements.
That's because we have a liability led approach to matching our assets and liabilities as closely as possible. The sensitivity I gave was to give some indication of the embedded value if interest rates moved. That was done by looking at a shift in interest rate. I mentioned a shift of 140 basis points reduction across the entire yield curve and also obviously adjusting the risk discount rates. So on that basis, this EB would fall less than 7%.
For our new business, obviously we actively reprice obviously and reflect the changing environment as we adjust our pricing assumptions based on expectations of future experience both economic and operating. We also obviously invest in other things than government bonds. We have portfolio of bonds, corporate bonds that you see in the portfolio and equities with a large part of our business being a business where we can adjust the returns for policy holders through policy holder bonuses. So obviously any impact in market fluctuations emerges as investment variances in the EV analysis movement and we've seen that the cumulative variances since IPO are €850,000,000 positive. In terms of the one time change, there'll be a slight adjustment and then obviously we'll explain how that works through at the interim.
We can go into more detail offline as to how exactly that works. But the big difference is that the instead of the bonuses being fixed and the difference between the assumptions we have in setting the bonuses and the interest rate that we currently have coming straight through, then we have a basis whereby we would reflect that as we do with our other power funds effectively. It's technical. I'm happy to take it offline or you can talk to us.
Your Kalish, on your question on online sales, obviously, because of the challenges of doing face to face meetings and all that, our business has shifted towards more digital and online. I just want to mention just China because China is the one that is most affected, the whole country is being locked down during the whole period of the period until more really and the China team under the leadership of Fisher has been very quick to move a lot of people more to online, yes. As it turns out, the online way of doing things has very quickly got a lot of our agents back into active activities. For instance, in term of online morning meeting for agents, 70% of our agents log in online to participate in the meeting. Recruitment activity is very high and there are many who join recruiting seminars that we run-in China and there's very strong recruitment of new agents that continue.
On the sales side, unfortunately there is some impact due to what is happening there. As you know, most of our sales in the past are done face to face by the agent. People our agents are slowly shifting towards online sales. I would say that recently we see the number going up to about 60% of our sales are done online, okay, without any face to face interaction. But still it takes a bit more time for a lot more of the sales to move to online.
It's not going to completely replicate what has been done in the past year, but we are pleased to see the development in China and where it is to.
Okay. Can I just briefly come back on that second point about sales done online? Has it led to a shift in the type of product that was sold, I. E, are you selling a different product mix online versus what you would have done if it was face to face? And I'm not sure if Garth answered the question around the impact of a flatter yield curve.
Let me address the question on online. There's no change in terms of the products mix I think it's all about allowing our people to do digital signature and sign off the whole deal. So yes, it works out well. But as I said, our business has always been done via agency on a face to face basis. That is the strength of our business in China.
So in a way the face to face part is still very critical here. And over time, we hope to see that improving. Garth on that?
Yes, yes. I think you gave the sensitivity, Kailesh, and I also gave an indication that that would result in ten year U. S. Treasury rates of 50 bps and 100 bps at the thirty year and flat thereafter.
Okay? Thank you very much.
Thank you. Our next question comes from Thomas Wang from Goldman Sachs. Thank you.
Hi, good morning. Few questions around bond yield and interest rate. Firstly, for Gus, just clarify a bit more, firstly on EV, 50 to 7%, what if you don't change risk discovery, what would be the EV sensitivity there? Secondly, on that accounting change, you are a lot in the policyholder bonus assumptions and assume interest rate assumptions, are you a lot unlocking all other assumptions as well as they most mortality, morbidity improvement. So I'm assuming you're locking all of my assumptions there.
So you have to replace everything to the current assumptions. Is that the case? And if that's the case, that would mean your liability going forward will be moving with your investment result and operating variances? And then one last bit of clarity on what's your relative liability ratio at this moment? What would that roughly look at?
Thank you.
Garth, you want to answer that? Maybe some of
these you may have to take offline with Thomas, especially the accounting treatment. I think the important thing to notice there is in the accounting treatment, what we're saying is as on Slide 62, you'll see that the current accounting treatment under IFRS four effectively assumes that policyholders' bonuses based on the investment expectations at the point of sale and then those bonuses do not change. They're basically set at issue. What happens in practice is that as we have done with our equities and the treatment of equities in the IFRS four accounts As equities move, bonuses move and that's reflected in the IFRS four accounts now. What we haven't to date is reflected the way that interest rates then impact bonuses, But the intention is to do that to make it more reflective of the economics.
But the other assumptions to answer the question would be remain at the locked in level. It's not a case of unlocking. It's just a case of presentation in the IFRS four accounts.
And your EV, if you don't move, don't change
Yes. Well, you have the sensitivities in the pack And on risk discount as you will see from as we progressively changed our investment assumptions over the years, the difference between the risk free and the risk discount rate reflects the risk inherent in producing the profits that emerge and that usually changes consistently.
Thank you. Our next question comes from Charles Zhang from Credit Suisse. Thank you.
Hi, thank you. Hi, guys. I also have a question for you about the sensitivity that you show in your presentation. You mentioned that 50 bps decrease in interest will lead to 1.3% deduction for embedded value. Can you maybe explain to us, do you mean that you just reduce both the interest rate and also the rate discount rate?
And also how do you trade with the adjusted net worth? And also for this one, do
you assume
that for the equity and other things are unchanged? Do you also consider I mean I mean, is there any other factors they consider maybe policyholders return will also be reduced because of the lower yield? I mean, what you offer to your customers and etcetera. Can you maybe just give us I mean, maybe more colors on this one? So this is the first question.
The second question is about I think mentioned several times about the distribution is very unique for AIA. So maybe can you give us some colors about how the recruitment now in Hong Kong and also in China? And lastly, I know that, you know, we should not, you know, solely focus on your value of new business margin but I think for China the margin is already 94%, 93%, 94%. And some of other China insurance company also mentioned about, intensified competition from small and medium sized company, particularly for the protection products. So what is the overall value of new business sales and also the margin outlook in China?
Thank you.
Yes, I'll take the EV question first because that's very simple. I think the critical thing to remember is that the EV is an economic approach. And so as you reduce the interest rates there in sensitivity or you increase the rates in sensitivity then risk discount rates will change accordingly reflecting the same risk involved in producing the future cash flows and also policy holders and so on to all be consistent. It's looking forward and taking an economic approach whereas the IFRS four accounts are non economic. You can see further details on Page two zero two of the accounts.
Yes. First, Charles, on the margin, I'll say you actually answered the question. Yes, We don't focus on margin. We focus on the absolute VONB number. We expect competition all the time.
As we have shared with you, our differentiated strategy in terms of our agency in China allow us to sell products protection product on a consistent and long term basis. That's what we have been doing. Let me pass over to Fisher in terms of the agency recruitment and then after that perhaps Jackie can talk about the Hong Kong recruitment as well. Just to say that earlier I mentioned that because of the online approach the recruitment has been strong. Me pass over to Fisher.
Fisher?
Okay. Thank you, Kung As Kung Hui said, AI China has responded very quickly with a comprehensive initiative to support our agency force. For example, we enhanced our digital platform and leverage our rare solutions on mobile and meeting and also Internet based video conference and broadcasting to conduct online agency recruitment, interview, I think a fully online. Our aging are very high quality and the MRO is very good. As Kunpreet said, we do have a very strong recruitment during this lockdown period.
I also want to talk about the competition. At BI China, we have stayed focused on executing our differentiated strategy, the premium agency strategy and also our total health and awareness proposition. AI China has the most productive agency force amongst the key player. For example, revenue per agent is 4.9 times industry average. I think our full time professional agents can provide high quality advice and are better able to serve the needs of our customer.
Our differentiated total health and awareness solutions, incorporated with our protecting and long term saving product position, are designed to meet the specific needs of our customer who high value the professional service offered by our premium agent. So I think the competition has been and we've always been there, but we are confident that our differentiated strategy will continue to set AI China apart and put us in advantaged position. That's all. Thank you. Let me pass to Jackie.
Yes, thank you. In respect of AI Hong Kong agency, I have to say that we believe we're one of the best agency force in the world. This is really a model under our PIMAC agency strategy. And as I said before, in 2019, our number of active agent and equipment in Hong Kong continue to grow throughout 2019. And in the current challenging environment because of COVID-nineteen, Hong Kong agency force absorbed a number of digital tools.
This is really a good testing of this situation. Our agency force in Hong Kong conduct e morning meeting, they go through iAcademy e training and including recruitment, we also have iRecruitment go through digital tools to recruit agents. So in the past one or two months, we continue to be able to recruit agent. I have to say that in view of this COVID-nineteen, the impact is more social distancing. So there is still an impact on this because of people avoiding face to face content.
But I have to say that we are really one of the best agent force in the world and we are well positioned to capture the long term opportunities we have in Hong Kong.
Charles, I have to say this, okay. Jackie is very modest. He says he's one of the best. I have been in this business forty years. The Hong Kong agency is the best in the world to me.
And they've been very, very strong despite all the challenges that we are facing. Last year, the domestic business in Hong Kong grew by double digit. And I'm confident that when all the short term impact of what we are seeing over, our Hong Kong business will continue to grow and will be strong going forward into future. We have always talked about our agency, our premier agency, our differentiated agency in China, our agency in Hong Kong and all our agency all over our markets, all our markets, we are always focused on premier agency. We are not following other companies.
Other companies, they focus on pure numbers. We look at only premier agency, highly productive agents. That is the difference between AIA Group and a lot of our competitors. And that is a difference that continue to help us grow on a sustainable basis going into the future.
Thank you, Our next question comes from Leon Qi from Thank you.
Hi, thanks. This is Leon Qi from Daiwa. I also have three questions today. Firstly, I want to follow-up on the COVID-nineteen impact on China. I just want to go to a bit more specifics.
I presume that currently in China, most of the new recruits are predominantly done online. Are we actually seeing any significant changes in the profile of these agents, what are education background, ages, previous work experience, etcetera, while we are done these recruits online versus previously mostly offline? And also interestingly, Fisher just now mentioned WeDoctor. I understand that the new business contribution contribution from from WeDoctor might still be insignificant for us, but are we really seeing a pickup in the momentum in this kind of innovative channel recently given the virus outbreak and the lockdown situation in many cities in China? Well, secondly, it's about our new branches.
I understand that our Tianjin and Shijiazhuang branches became operational all things last August. Is it possible if management could share with us some differences in terms of the agency background, productivity and product mixes in these new areas versus our existing footprint in China? We just want to look at our strategy in these new areas. And lastly, I still want to follow-up on the accounting changes related to the participating funds. Want to confirm with management that on Page 62 of the presentation deck, on the bottom right, we are taking liabilities lower to reflect the lower policyholder basis.
Is the magnitude of that revisions on the liability side exactly the same as the SSI changes? Just want to confirm if this is the case. Thank you.
Leon, let me answer the question around the new branches and then I will pass the question on COVID-nineteen and so we doctor to Fisher and then of course Garth to answer the last bit here. I was there at the branch opening for both Tianjin and Xijiazhuang. I can tell you the quality of the agent is as good as all our other agents. The number of percentage of our agents who are graduates and all, they are consistent, the same as what we see in our other branches. So we are very pleased with the new joiner in both these branches.
But let me pass over to Fisher to talk about the agents recruited online and also WeDoctor thing, yes.
Okay.
Thank you, Kunghui. For the first question, the recruitment during this COVID-nineteen period, I think the short answer is no. We want to sacrifice the quality. We look at the experience of the last month is as good as past. With the second question about I want to point out that WeDoctor is not just China.
It's a strategic partner. The partnership with WeDoctor presents an excellent opportunity to further improve our customers' healthcare experience in Mainland China by accessing their marketing leading network of healthcare specialists and hospitals. We have started to offer with doctors' healthcare service package to our policyholders since last year, including online consultation and employment, hospitalization arrangements and health assessment. We gradually deepen our cooperation with our doctor. For example, we launched the two single disease insurance product for breast cancer and leukemia, the two very important customer segments.
This kind of product provides end to end solution via a closed loop of service, medicine service and insurance protection. In September, the breast cancer protection product won the outstanding case of financial service award granted by the Asian Financial Corporation Association. And as I mentioned earlier, in addition, we all launched the chronic disease management platform, which we talked about our group scheme members in last year. Platform provides a wide range of service including online consultation, diagnosis and the prescription drug delivery. And we expect to continue to strengthen this kind of the cooperation, which can benefit for the customers of the two parties.
That's all. Thank you.
Jonathan? Yes. I think again going back to this accounting treatment for the par funds, I think the critical thing to remember is that the IFRS four accounts are not economic. And so what we are looking to do with this change is to make the IFRS four accounts and the presentation of them more reflective of the economics. If you think about it, do that already for the equities for example where the policyholder bonus are locked in and then we have a variation against what we expected from the equities as a movement.
So similarly, you'd expect that as we go forward there'll be a difference between the interest rates that were assumed in setting the bonuses and the interest rates that are currently prevalent. And there will be a variation in the actual bonuses against the bonuses that were expected and that will now flow through into the accounts and be more reflective of the actual position. It's very similar to the way that we do the statutory participating funds in other markets. And if you think that the current lower interest rates will reduce bonuses, then the liabilities otherwise would have stayed the same and so what this should do is increase OpEx slightly.
Thanks, Garth. We'll take the last two questions.
Thank you. Our next question comes from Ken Fan from CICC in Shanghai. Thank you.
Thank you. This is Dan from CICC. I have two quick questions for Hong Kong market. The first is, has there been a visible change in the product mix in the second half twenty nineteen Hong Kong given less and less new business are coming from MCV? Also, could you put some color on the current status of the agents including morale, maintenance, living standard of agents and provided they had to live off much lower income for the past six months?
Should we worry about that? Thank you.
Thanks, Dan. Let me pass this over to Jackie since this is a Hong Kong question. Jackie?
Yes, thank you. First of all, in respect of the product mix and I have to say that in 2019, our RMB margin increased because of the shift to more profitable long term protection and long term saving product and that was already the second half impact of 2019. And we remain financially disciplined in managing our product through all kinds of product repricing in view of the emerging and current situation. And with respect of the agency force, I have to say that we haven't seen any impact in the attrition of our agents. And as I said, the number of active agent and the number of recruitment in 2019 grow throughout the whole year.
And in the current situation, we believe this is a temporary situation and we already activate all kinds of digital tools and also support our agency force. I also want to say that for Hong Kong, the Hong Kong government is also very supportive. They launched the VHIF and QTAP sales throughout over the digital platform. So we are of course, we are fully supportive of this measure and we will continue to discuss and work with our regulatory authority to expand the product offering. So, so far, we haven't seen any impact in persistency or agent attrition.
Yes, I just want to add to say that obviously the coronavirus thing is the most changing thing facing the world today. Our expectation is it is temporary, but yes, significant impact as we say in our announcement in our businesses. So first quarter in terms of the new business will be disrupted. But I just want to say that the team has been very proactive in terms of moving a lot of our activities into digital online. We have business contingency plans and incident management in all our markets.
I must say that I'm proud that our people manage this whole thing this whole disruption well. Clearly, the safety of our people and our agency is top in our mind. And we'll do all we could to ensure that our people go through this disruption and come out stronger than when we enter this particular situation. So I'm pleased that everyone working very hard to make sure that we minimize the impact on our business. Obviously, during this period, there's a lot of our staff, we give them flexibility to work from home, particularly in both Hong Kong and China.
China obviously is mandated by the government at one stage. I want to say that in China things are getting back to normal. This week all our staff in our branches in China has gone back to office. During the lockdown period, they can't do it, but now are back to office. So we can't say how long the impact will be, but you can see that both the government of China and Hong Kong has taken some very firm and strong measure to try to stop this virus.
Last question.
Thank you. Our next question comes from Jenny Zhang from Morgan Stanley in Hong Kong. Thank you.
Hi, Benjamin. Thanks for your time this morning. Two questions. One is also probably on this new yield trend, but slightly from a different perspective. Are you expecting a significant change for the product strategy in Hong Kong in general, given the kind of declining yield and maybe potential implementation of the Solvency II in a couple of years.
Are you seeing anyone exiting from kind of guaranteed segment? We understand that for AIA, have some hard funds with probably low guarantees. Are you expecting that to change over time to maybe moving products? And if you can give us some breakdown say how big your savings product in Hong Kong that would be great. The second question is probably on China.
So we're applying for this China subsidiarization. When do you expect this to be complete? In terms of impact, we understand there's gonna be some capital release. Can you give us some color around that? And maybe give us some full perspective of this change, any tax implications or other benefits you can enjoy being a subsidiary going forward for your China expansion?
Thank you very much.
Let me get Gar to answer Jenny, your first question.
I think Jenny, your first question was around our product strategy, I believe, in Hong Kong. That will remain as it already is. It's focused on protection and long term savings. We sell a variety of products, and I don't think there's an expectation to dramatically shift that product mix from the current mix. We'll continue to sell the products that we're selling.
The savings products are predominantly participating products and they're based on long term to create bonuses and returns for our policyholders.
Jenny, as you know, the announcement on the opening the full opening of the China market only recently. The opening was from 01/01/2020. So we are delighted that the market is fully open to foreign players. We have been waiting for this for many years as you know. We have been asked many times will this come, so it comes and we have submitted our application to subsidiarize at the December.
So now it's with CBIRC to again, our business subsidized. Once we get approval, our plan is to submit for new geographies. So I think the whole process has gone as smoothly as we are hoping for. And I would expect hopefully all these things to be done before I retire. So I'm sure it will get done soon.
So we are hopeful that we are making good progress in this area. Okay.
Thank you, everyone. And if you have further questions, obviously, come through to Investor Relations.
Thank
Thank you. You for your patience. This concludes your conference. Thank