Good morning and thank you for joining AIA's 2025 Interim Results Presentation. I will take you through our performance in the first half of the year and provide an update on our strategic outlook. Let's begin with the financial highlights. AIA delivered excellent results with double-digit growth across our key financial metrics. Value of new business increased by 14% to a record high of $2.8 billion. Underlying free surplus generation per share grew by 10%, and operating profit after tax per share rose by 12%. We returned $3.7 billion to shareholders in the first half, and today, the Board has declared a 10% increase in the interim dividend per share, highlighting our confidence in future growth. These results demonstrate AIA's ability to deliver compounding new business growth that drives both cash generation and higher earnings for many years to come.
Importantly, our results come from a portfolio of high-quality recurring profit streams anchored in protection, health, and long-term savings that are resilient across economic cycles. In Hong Kong, we achieved record VONB of $1.1 billion, up 24%, with higher momentum in the second quarter. Demand was strong in both the domestic market and from mainland Chinese visitors, with broadly equal contributions, showing how our customer base is diversified and expanding. AIA's Premier Agency remains the No. 1 in Hong Kong and Macau, and continues to be the main driver of growth. VONB from agency increased by 35% to a record high, supported by both a larger active agent base and substantial productivity gains. New recruits were up by 15%, expanding our capacity to capture future demand. Within partnerships, bancassurance VONB grew by 27%, and the IFM broker channels showed solid quarter-on-quarter growth, with VONB up 33% in the second quarter.
Overall, with our distribution leadership and comprehensive product range, AIA Hong Kong remains exceptionally well-positioned for continued growth. Moving now to AIA China, VONB was $743 million in the first half, with growth accelerating to 15% in the second quarter. Our professional Premier Agency is what sets AIA apart, contributing more than 80% of VONB and achieving productivity levels three times the peer average. This is a major advantage in attracting and retaining the very best candidates, positioning us firmly as the No. 1 for MDRT in the market. Recruitment increased 18%, alongside strong growth in new leaders as we continue to expand our market-leading agency. VONB margin remained very strong, at more than 65%, reflecting our differentiated product mix. Traditional protection is our largest product category and sits at the heart of our customer propositions.
Our participating products deliver higher expected returns to policyholders while generating earnings with low sensitivity to interest rates. In addition, we are a leading provider of tax-incentivized private pension products. Selective bank partnerships broaden our reach in the affluent and high-net-worth customer segments, where we sell large average case sizes and see strong profitability. AIA's long-term opportunity in mainland China is unique. We have grown very successfully over many years in our original five regions. Yet, we have still only captured a small proportion of the potential market. With our expansion since 2019, AIA now operates in 14 regions. The nine new regions we have entered grew by 36% in the first half and contributed more than 8% of AIA China's VONB. Looking ahead, we expect new business from these new regions to accelerate with compound annual VONB growth of 40% over the next five years.
Our proven ability to replicate success across regions, combined with the sheer scale of the opportunity, gives us great confidence in our future and in the delivery of our ambition. We have also provided further detail on our mainland China strategy in a separate presentation by Fisher Zhang, our Regional Chief Executive. Turning now to ASEAN, where AIA is the leading life and health insurer. This region represents more than one-third of Group VONB, making this our second-largest growth engine. VONB grew by 20% to over $1 billion for the first time. We delivered strong performances across both agency and partnership distribution channels, with agency VONB up by 22% in the first half and partnerships up by 16%. Our agency is the most professional in the region, while our strategic bank partnerships remain a key long-term asset, giving us scale, reach, and privilege assessed to acquire quality customer segments.
Across ASEAN, AIA is the No. 1 rank for protection. 95% of our VONB comes from traditional protection and long-term savings products, generating high-quality earnings and a VONB margin of around 70%. With our strong competitive advantages, AIA is exceptionally well-placed to meet the growing customer needs in this region. In India, Tata AIA Life delivered another excellent performance with VONB up by 38%. Our business continues to rank No. 1 for persistency, and it is a market leader in retail protection. Agency now contributes more than half of total VONB, with high productivity and a clear focus on quality, making it the most professional in India. Our bank and broker partners complement our agency, extending our customer reach and driving equally strong growth. Tata AIA's protection-focused strategy, leading distribution, and proven execution ensure that we are well on our way to capture India's huge potential.
Today's excellent results are the outcome of a growth strategy that plays directly to AIA's core strengths. Asia is the most attractive region in the world for life and health insurance, and AIA is uniquely positioned to unlock its full potential. The demographics are compelling. By 2030, Asia will have nearly 2.6 billion people of working age and 700 million aged 60 and above. That means a rapidly expanding base of customers with protection, health, and retirement needs. At the same time, wealth generation in the region is unmatched. Personal financial assets in Asia, excluding Japan, are projected to grow at 8% a year, far outpacing other major regions of the world. Healthcare demand is rising sharply. Annual healthcare expenditure across Asia, excluding Japan, is already more than $1.4 trillion, and around 45% of that is out of pocket. This creates a clear role for private insurance solutions.
What differentiates us is our competitive advantages: unrivaled distribution, innovative propositions, and a leading customer experience, all powered by world-class technology and digital capabilities. This is why AIA is the insurer of choice and Asia's most powerful brand, and it is why we have absolute confidence in our ability to deliver sustainable growth and long-term value for our shareholders. Let me now take you through how we are extending these competitive advantages. AIA's multichannel distribution platform is unrivaled in both scale and quality. Agency continues to be the main source of profitable new business, delivering 73% of the Group's VONB through more than 96,000 active advisors. Our agents are highly professional, building lifelong relationships with customers and advising them as their needs evolve. We are the world's leading agency, having been No. 1 MDRT globally for the last 11 years.
The success of our model is self-reinforcing, as it attracts more high-caliber agents to join AIA, extending our industry leadership further. Fast-growing partnerships provide complementary growth, reaching hundreds of millions of customers through our network of strategic bank and broker partners. Together, our agency and partnership channels create a powerful model that drives long-term growth and sets AIA apart. Our propositions are designed to meet the needs of Asia's rapidly growing middle class and affluent populations. Our solutions are about changing behavior. By rewarding positive choices and integrating health into financial solutions, we create an advantage that goes beyond pure product design. This model is deeply embedded in how we engage with customers, and it cannot be easily replicated. In the first half, we sold new policies to more than 2 million customers, with loyalty from existing policyholders remaining very high.
89% of the Group's VONB comes from protection and fee-based insurance products. Protection generates underwriting earnings unaffected by capital market volatility, while long-term savings deliver fee-based insurance income with limited guarantees. This diversified portfolio is further strengthened by our integrated healthcare strategy, which enhances customer value and supports sustainable profitability. Our ambition is to make healthcare and health insurance more accessible, more affordable, and more effective. AIA is already the leading private health insurer in Asia, and continuous innovation is making our health products more personalized. By integrating more closely with healthcare providers, we help customers receive the right care in the right setting. Our strategy is powered by Amplify Health, our AI-driven health technology and analytics company. In the first half, we delivered higher VONB growth and a 250 basis point improvement in loss ratio, demonstrating tangible progress.
These improvements strengthened customer outcomes, enhanced profitability, and reinforced the long-term sustainability of our health business. Over the past five years, we have built a strong foundation in cloud, digital platforms, and structured data. This means we can now deploy generative AI across the Group at speed and scale. This transformation goes well beyond efficiency gains, it unlocks greater value for our customers, distributors, and operations. For customers, this means more personalized engagement, faster service, and better outcomes. For distributors, it means higher quality leads, smarter product matching, and improved productivity. Our operations benefit from intelligent automation at scale, freeing our people to focus on the relationship-driven work that matters the most. As we expand our uses of AI, these innovations will reinforce AIA's position as a trusted, forward-looking leader in life and health insurance.
In summary, we are executing a growth strategy that plays directly to our core strengths and sharpens our competitive advantages. We are driving strong momentum across key financial metrics, demonstrating our ability to execute with discipline. I'm confident that our ability to deliver compounding new business growth will sustain higher earnings and cash flow generation well into the future. Our growth ambitions are bolder than ever, and with the scale, resilience, and unique advantages we have built, I'm certain we are well-placed to deliver our commitments as we realize AIA's full potential. Thank you. I will now hand over to Garth, who will take you through the financial results in more detail.
Good morning, everyone. I'll now take you through our financial results. As Yuan Siong highlighted, AIA delivered an excellent performance in the first half of 2025, with double-digit growth across our key financial metrics of VONB for new business, OPAT for earnings, and UFSG for cash generation. VONB was up 14% to $2.8 billion. This drove a 290 basis points increase in operating ROEV to 17.8% and growth in EV equity to $73.7 billion. The layering of new business onto our inforce portfolio saw UFSG, our key operating measure of cash generation, increase by 10% per share to $3.6 billion. OPAT also grew to $3.6 billion, up 12% per share, and operating ROE jumped to a record 16.2%. During the first six months, we returned $3.7 billion to shareholders through dividend and share buybacks, which reduced the shareholder capital ratio in line with our expectations to 219%.
Based on this excellent financial performance, the Board has declared an increase in the interim dividend per share of 10%. I'll take you through further details in three sections. First, the embedded value results, which show how we generate increased shareholder value. AIA is dedicated to writing profitable new business, which compounds over time to support higher earnings and cash generation for the long term. VONB growth of 14% came from growth in both volumes and margin, with AMP up 8% and margin up 3.4 percentage points. Our VONB is geographically diverse, with broad-based growth in 13 markets. We also grew both our agency and partnership channels. Our financial discipline, product innovation, and regular repricing, backed by our powerful distribution platform, have delivered a strong track record of new business profitability. However, the high quality of our new business cannot be judged by VONB margin alone.
We are focused on products that deliver for both our customers and our shareholders. Our traditional protection products provide valuable and affordable cover for families and generate underwriting profits that are not driven by capital markets. Participating and unit-linked products target attractive expected long-term returns for customers while delivering fee-based insurance earnings. Close to 90% of VONB comes from these preferred products with a very low average guarantee, reducing sustainable, strong, and predictable cash generation. New business has consistently delivered an IRR above 20%. As we reduce capital intensity, we generate more VONB per dollar of capital we invest in the business. Every dollar we invest is paid back rapidly and generates nearly $4 of distributable earnings in just 10 years.
Our ability to write large-scale, high-quality, and profitable new business with a very attractive financial profile is a key differentiator for AIA and a major factor in our confidence in the Group's future growth. Compounding layers of profitable new business, prudent assumptions, and proactive inforce management together drive higher EV operating profit, which increases EV equity and, in turn, cash generation. EV operating profit grew to $5.9 billion, mainly from the higher VONB and improved operating variances, supported by our management actions on medical business. Since IPO, we have achieved positive operating variances every single year, and in total, these have added $4.6 billion to EV equity, demonstrating the ongoing prudence in our assumptions. As a result of the strong increase in EV operating profit, operating return on EV increased by 290 basis points to 17.8%.
EV equity grew by 8% to $77.4 billion before shareholder returns, with EV operating profit the key driver. Non-operating items were small, as negative investment return variances were largely offset by the positive effects of exchange rates. After the $3.7 billion of dividend and share buybacks, EV equity was $73.7 billion, up 5% per share over the first six months of the year. EV equity represents the value to shareholders of our large inforce portfolio, which we have built from many years of writing high-quality, profitable new business, which compounds over time to support higher earnings and cash generation for the long term. The future earnings from the inforce are mainly from protection and long-term savings products, with recurring and resilient cash flows. The combination of our high-quality product mix and prudent approach to asset liability matching delivers predictable cash flow and low sensitivity to interest rates.
While earnings continue for decades into the future, the inforce is highly cash generative, with close to $50 billion emerging within the next 10 years. From this, we confirm both increased returns to shareholders and organic new business investment, which further grows our stock of future earnings. New business investment in the first half of 2025 supported a $3 billion increase in distributable earnings over the next 10 years, demonstrating the virtuous circle between VONB and higher cash generation. UFSG is our key operating measure of cash generation after tax and is shown before reinvestment in new business and central costs. The key component of UFSG is the expected distributable earnings from inforce business, which increased by 7% in the first half, reflecting growth in the business. Operating variances improved from our proactive inforce management, while the expected return on free surplus reduced due to share buybacks.
Overall, UFSG grew to $3.6 billion, up by 10% per share. Now moving to the IFRS results. The IFRS results provide an accounting view of our business. EV and UFSG are more reflective of shareholder value because they consider regulatory reserves and capital, which drive the earnings that can be distributed to shareholders. Even so, IFRS 17 has some similar concepts to EV, in particular the Contractual Service Margin, or CSM. The CSM represents our accumulated stock of expected future IFRS earnings, with each cohort of new business adding further to this stock. New business CSM grew by 15% and supported strong growth in the CSM balance to $61.4 billion at the 30th of June 2025. The underlying CSM growth, net of releases, increased to 10.3%, demonstrating our strong organic growth.
As a result of stable release rates and a larger stock, the CSM release increased to $3 billion and was the key driver of OPAT. One simple way to understand how OPAT moves from period to period is to look at the drivers of revenue and expenses. A 9% increase in the CSM release and an improvement in operating variances were the main drivers of higher revenue. Improved claims variances were supported by progress in our integrated healthcare strategy, while our disciplined expense management created significant operating leverage. OPAT in 2025 is net of the first-time effect of the OECD global minimum tax regime, with our resulting effective tax rate in line with previous guidance. Overall, OPAT was up 12% per share and increased to $3.6 billion.
Our excellent business fundamentals, consistent execution, and financial discipline mean that we are well on track to achieve our 9%- 11% OPAT per share CAGR target. Strong growth in OPAT and our ongoing capital management actions supported a strong increase in operating ROE, which reached a record level of 16.2%. Comprehensive equity provides a more economic view of IFRS shareholders' equity by adding the CSM on a net of tax basis to include the value of future earnings. New business growth and positive operating variances supported a 9% increase over the first half, and after returning $3.7 billion to shareholders, comprehensive equity was $92.1 billion as at the 30th of June 2025. Finally, capital management. We follow a robust internal capital management framework. Backed by strong financial discipline, our unwavering focus on profitable growth delivers substantial free surplus generation.
This supports a prudent, sustainable, and progressive dividend, and in addition, we look to return capital to shareholders that is surplus to our needs, all while retaining sufficient financial flexibility to capture the huge growth opportunities available to us. AIA's clear capital management policy sets out how we deliver sustainable and growing returns to shareholders over time through dividends and share buybacks. The first part is a payout ratio target of 75% of annual net free surplus generation. The second is a commitment to review our capital position and regularly return capital in excess of our needs. We believe that AIA's ability to deliver across growth, earnings, and cash sets us apart from our competitors. Following our established dividend policy, the Board has declared a 10% increase in the interim dividend per share. In the first half, net free surplus generation after reinvestment into new business was $2.4 billion.
We expect a similar seasonal pattern of net FSG in 2025 as in previous years. The total 2025 net FSG will determine the overall shareholder payout for the year from the first part of the capital management policy. The final dividend and the balance of the 75% target payout will be announced at the 2025 annual results. Now moving to our capital position, which is best viewed through free surplus and the shareholder capital ratio. Looking at the development of free surplus since the start of 2022, when we commenced our first share buyback program, you can see three major components. You can also see that variances over time and our inorganic capital investments have both been small. The first component, net FSG, after investments made into organic new business at highly attractive returns, has generated $14.5 billion of capital.
This net FSG comfortably supported the second component, $8.6 billion of shareholder dividends. Our commitment to return excess capital resulted in the third component, which saw us deploy a further $13.3 billion through share buybacks. In aggregate, we have returned $22 billion to shareholders through our disciplined capital management. As a result, you can see that our shareholder capital ratio has reduced progressively in line with our expectations and stood at 219% at 30th of June 2025. In conclusion, the Group has delivered an excellent financial performance in the first half of 2025, with double-digit growth across our key financial metrics of new business, earnings, and cash generation. We remain confident in our outlook. AIA is exceptionally well-positioned to capture the enormous growth opportunities in Asia, the most attractive region in the world for life and health insurance.
We believe that our strong balance sheet, financial flexibility, and clear growth strategy set us apart, while our proven track record gives us great confidence in our execution capabilities. We are focused on driving high-quality, profitable new business growth with highly attractive reinvestment economics. This adds further substantial layers of recurring earnings and cash generation well into the future that, in turn, will generate highly attractive returns for shareholders. Thank you.
From AIA Central in Hong Kong, and welcome to our 2025 Interim Results Analyst Briefing. I'm Lance Burbidge, Chief Investor Relations Officer for the AIA Group. Together with me on stage today are Lee Yuan Siong, our Group Chief Executive and President, Garth Jones, our Group Chief Financial Officer, and our four Regional Chief Executives, Jacky Chan, Hak Leh, and Leo. We have other members of our Group Executive Committee with us in the room.
Before we start the Q&A, let me just remind you that we've shared on our website a separate video on AIA China's growth strategy. I hope if you haven't had a chance to watch it, you will be able to later. With that, we can begin our Q&A session. If you want to ask a question, please make sure you're logged in to the Zoom webinar. Operator, over to you, please.
Thank you. Ladies and gentlemen, if you wish to ask a question, please click the hand-raising button and wait for your name to be announced. After I call your name, please press the unknown button shown on your screen and ask your questions. If at any time you need to cancel your request, please unclick the hand-raising button. Let's proceed. Our first question comes from M.W. Kim of J.P. Morgan. M.W., please press the unknown button shown on your screen and ask your question.
Good morning, and thank you for taking my question. First of all, congratulations on the strong region in the first half, and we really appreciate the new update on China's mid-term growth strategy with clear guidance. I have two questions. One is about the TSR. That is about the 2026 figure. The challenge aspect is that when you consider 75% of net free surplus generation for 2026 TSR, it appears to be somewhat lower than other financial stocks in Hong Kong. However, over the past few years, as mentioned in the presentation slide and as a part of the company's capital management policy, one component of TSR is to return a portion of the surplus capital to the shareholder on a regular review basis. Could you provide some guidance on 2026 TSR on that basis? The other one is about India.
The company mentioned that Tata AIA delivered a strong 38% growth in the new business value in the first half of 2025. Additionally, the company highlighted this joint venture as one of the top three private life insurers in India. Could you please remind us how significant India's new business value is in relation to the total group new business value at this stage? Is it closer to the 5% of group VONB or still below that level? Also, when can you expect a separate disclosure for India business, please? Thank you.
Thank you, Kim. Like you, I'm quite pleased with the results that we are announcing for the first half of 2025. As Garth shared, we grew our VONB by 14%, and that's off the back of very strong growth in 2024 and 2023. I'm quite pleased with that. At the same time, in terms of some of our operating metrics like operating ROEV of 17.8% and operating ROE of 16.2%, these are at record highs. We have also achieved a 10% per share growth in underlying free surplus generation per share, and hence, our board has recommended a 10% per share growth in the interim dividend. I saw your question about TSR. I'll hand over to Garth to talk about it, and I'll invite Leo to talk about India. Thank you.
Yeah, thanks, MW. I think that there are sort of two points to make, really. The first is if you look at the direct returns to shareholders, we've seen increasing dividends. We saw another 10% increase, and you saw the buybacks that we've done, $3.7 billion in total return to shareholders in the first half. In July, we had the stub of the buyback, the $1.6 billion buyback, so that was another $350 million. There's that direct returns. I think beyond that, you should look at the ROE, which has increased to 16.2%, a substantial increase in the ROE through our capital management, and in the ROEV to 17.8% because ours is based not only on the dividend and so on, but it's also you have to think about the growth in the balance sheet over time. You've seen very strong growth in the balance sheet in the first half.
Despite that, you've also seen the improved capital metrics as well. I think ROE and ROEV should really be where you're focusing your attention if you think about the future rather than looking at the TSR in the way you did.
Good morning, MW, and thanks for your question on India. As you highlighted, we're very pleased with the excellent performance of Tata AIA this past period. In terms of a separate disclosure on India, we're not yet ready to proceed with that at this point in time or indicate a timing for it. I'd just like to highlight and reinforce the performance that we're seeing with Tata AIA. We've been delivering very strong performance, but performance with quality. If you look at VONB growth, it's been excellent, driven by both AMP growth in agency as well as banker and the broker segment and improving margins.
Our growth in agency is on the back of very strong fundamentals, double-digit growth in our number of active agents, our number of leaders, and our broker and banker growth is also very broad-based, in particular with a couple of new partners we've added over the past year. Improving margins with strong fundamentals. Operating margins are improving with strong improvements in cost efficiency, as well as a big focus on product mix, which is also fueling those margins. We're seeing this being delivered with very strong quality. Tata AIA continues to be the number one insurer in India in terms of persistency. We also continue to be the number one in total sum assured in India, which reflects our leadership and our focus on protection. Finally, also number one in terms of MDRT this past year, reflecting our focus on Premier Agency. Thank you.
Thanks, Leo. In terms of its scale, obviously this is at the 49%, it's about 1/3 of other markets in the first half of the year.
Does that answer the questions, MW?
Yes, thank you so much.
Great, thank you. Next question, please.
The next question comes from Charles Zhou of UBS Securities. Charles, please press the unknown button shown on your screen and ask your questions.
Okay, thanks. First of all, congratulations on a very solid set of results. I have three questions. The first one, we see a very ambitious growth for AIA China, 40% CAGR from 2025 to 2030 in the new regions. Can you maybe share a little bit more colors about this target? The second question, we also see the annualized operating ROEV is 18% and operating ROE is 16%. Both, I think, are record high. What are the key drivers behind, and are these levels sustainable going forward? The third question, perhaps it's a bit difficult, but I have to ask, if at all possible, I would like to touch on the topic of Mark Tucker's new role as the Chairman, who will join AIA on October 1. This is also a key area of interest for the investors.
I'm keen to see if there's any initial thoughts on what this means for AIA's future direction, mainly on three aspects. First is about the business growth strategy in terms of geographical focus, organic and inorganic growth, and also distribution focus. Second is the capital management policy. Third is the senior management setup. Thank you.
Thank you, Charles, for your three questions. First, on the question of the VONB growth ambition for the new provinces or new geographies in China, as you know, this has always been a question that many investors have asked us. What are all these new provinces? What are they going to do for AIA in terms of that can be material? I'd just like to share with you, first of all, that this ambition has been set bottom-up, came from the business unit. Based on my experience in China, looking at this 40% CAGR over the next five years, I think it's a very good ambition. I think it's quite stretching, 40% CAGR. At the same time, it demonstrates that the business unit is thinking about building this, achieving this growth on strong foundations, delivering it in a sustainable and based on high quality.
It's a good balance between stretch and quality and strong foundations. I really actually commend the business unit for setting this ambition for the new. Please I'll invite Fisher to talk about it a bit more.
Thanks, Yuan Siong, and thanks, Charles, for the question. I think we are very confident to replicate our success across the new BUs. A couple of factors. The first one is the potential. I think the new BUs have a great business potential. If we look at those factors like urbanization, rising affluence, demographic change, and also the huge base of our target customers, I think it's a great potential for us. I wouldn't go through the details in this category. I think the second line is very important. It's the key success factors, those key drivers. We are very solid in the key drivers. We believe there are three key things. The first one is a proven business model, which are our Premier Agency model and also the differential bankers' model. You know they are very disciplined in SQ there.
There is a new BU acceleration program on the way. The third is a scalable operating model. Our true share service office works very well, almost fully digitalized if you look at our STP ratio. We are accelerating the generative AI to further improve the efficiency and effectiveness. The last one is about the strong talent preparation. We are recently refining our target operating model. I introduced a new Chief Expansion Officer. It's a dedicated team looking at this. We have about 100 strong talents in our program for future GM and also the DOA. Lastly, I think it's about the strong track record. This time we show some details to you. Actually, for the first half, our new BUs have increased by 36%. For the past three years, the CAGR is more than 40%. Quite good progress.
For the new four, which are Zhejiang, Anhui, Shandong, and Chongqing, we launched the business in May. We already accumulated more than 1,700 strong talents, and the new agents are joining us. Combining all this potential, our solid key drivers, and also our strong track record, we think, as Yuan Siong said, we set this aspirational target. We think it's aspirational and also achievable.
Thank you, Charles. On your question on the record high operating ROEV and operating ROE, I'm very pleased with what we achieved. You asked about the drivers. Clearly, the primary driver for this is to write high-quality, profitable new business. I think Garth explained at length about what he means by high-quality, profitable new business that generates layers of future earnings and cash. The second very important driver clearly is the management of our highly profitable inforce book that has been accumulated over many, many years. We've seen that our inforce book is largely in what we call traditional protection or products that are based on fee-based income that's resilient to capital market movements. Thirdly, I think it's really about the disciplined capital management. I will hand over to Garth to elaborate further.
I think you got it well there, Yuan Siong, when you've seen in the first half that great progress has been made on all of those, and the results come through in the ROE improvement and the ROEV improvement with the profitable new business growth being very strong, the operating variances also improving, and the capital actions that we've taken during the first half. All adding up to a very strong and a very attractive position for ROE and ROEV.
Charles, on your third question about Mark Tucker, I must say that our current Chairman, Dr. Edmund Zhi, the rest of the Board of Directors, and myself, we are very pleased that we are able to get Mark Tucker to join us as the incoming Chairman. He'll be coming in October. Mark will be based in Hong Kong, but knowing Mark, he'll be traveling extensively across the region and globally to promote AIA with all the major stakeholders. We're identifying Mark as the incoming Chairman. The Board ran a very, very thorough process that started in the middle of last year. We appointed an external consultant to help with the search, and the Board set up a working committee that comprised the Chairs or the previous Chairs of our Board committees.
I was also in the working committee, and when we identified Mark as the preferred top target, Edmund and I, we both approached Mark, and through many conversations, we were able to come to agreement with him that he will join us this year in October. Your questions about his priorities, I would suggest maybe we leave to when Mark has arrived in October. In my conversations with Mark, I think he has made very clear to me that he'll be focusing on three areas. One, which is governance. Secondly, he's on strategy. Thirdly, he's on leadership development. The details, maybe you wait until Mark arrives. Thank you.
Thanks, Yuan Siong. I'll get the answers to your questions, Charles.
Yes, thank you.
Question, please.
Sure. The next question comes from Thomas Wang of Goldman Sachs. Thomas, please press the unknown button shown on your screen and ask your question.
Thank you. Morning, everyone. Congrats on a good set of numbers. A couple of questions. Firstly, I think China's margin was a positive surprise. We're now almost back to 60% margin. That's despite all the economic assumption changes. Can you just help to give a little bit more color? What drove that margin change on a year-on-year basis? When we think about this, another round of repricing action coming in the third quarter, how do we see margin heading for next year? The second question on Hong Kong, obviously, there's some sort of promotion ahead of the 1st of July. How much of growth in the second quarter do you see kind of as a sustainable level? What do you sort of views on both MCV and domestic sales in Hong Kong? Thank you.
Thank you, Thomas, for your question. On the China margin, I think really it's about our differentiated strategy and model in China. We have the market-leading Premier Agency channel. We have a very differentiated bancassurance model. In terms of the products that we sell, I think we have shown that we have a very differentiated product mix that comprises 43% traditional protection, 41% participating, which is very low interest guarantees, and the tax-insured device. We're also a leading writer of tax-insured device products.
In terms of the new business economics itself, I think Garth explained that although we focus on, I think the market focuses a lot on the value of new business margin, we also look at other metrics that reflect the quality of the new business, and that includes the IRR, the capital efficiency of the new business, the future generation of cash, and how fast the cash return is generated. These are indicators that we look at in terms of managing the quality of our new business. Specifically on the China VONB margin, I'll hand over to Fisher to talk about it.
Okay, thanks, Yuan Siong, thanks, Thomas. I think the margin change is mainly driven by several key factors, like economic assumption change, especially the investment return assumption. We proactively shift to participating products. As you can see from the presentation, we actually, in the first half, have successfully shifted basically all the long-term saving products to participating products. These two factors actually drag down the margin. These two actually have been offset by another factor. Our proactive reprice product by lowering the cost of guarantee. Basically, the margin is these three factors are kind of flat. Another factor is we proactively shift more products to the longer premium payment policies. Last year, we sold some three-year pay policies, but this year, we reduced a portion and shifted more to the longer pay.
These actually help the customer because it's more affordable for them, and also the customer is more sticky to other companies. These actually increase the margin a little bit. Together with all these factors, the margin we have observed a bit improved. Talking about the future, you know we have consistently said we manage the business by focusing on the absolute amount of revenue per month rather than look at the margin or the volume only. What I can say is, as Yuan Siong said, our product is quite well-balanced, and our agent is very capable. We will definitely ensure our decent margin and manage the business very well. Thank you.
Hong Kong is our largest segment, and we've seen a very strong demand for our products in Hong Kong, both from the mainland Chinese visitors and also from Hong Kong domestic. As you can see, in terms of MCVs, it grew by 30% in the first half, and domestic grew a strong 18% in the first half of 2025 as well. I'll hand over to Jacky to talk about Hong Kong.
Thank you, Yuan Siong, and we are very pleased that with the AIA Hong Kong and Macau report first-half result, delivered VONB growth of 24% and is broad-based growth. Both MCV customer segment and domestic customer segment have double-digit growth. You can also see that all this growth is driven by a very strong underlying driver, especially the number one agency in the Hong Kong market. We are number one MDRT Hong Kong Macau and also number one MDRT globally for the membership year 2025. The agency force continues to grow from strength to strength, full increase in active agents, 15% increase in new recruits. This underlying driver actually continues to propel our business strongly. In fact, you can see that AIA Hong Kong Macau delivered double-digit growth in the first quarter and another very strong double-digit growth in the second quarter.
We do benefit from the higher demand for our participating products, especially for the month of June. You know in Hong Kong, AIA Hong Kong, we don't compete on newsletters. We compete on the innovative product proposition. Effective July 1, AIA Hong Kong Macau, we launched a new innovative long-term saving product, and this product is very well received in the market through all our channels. With the strong underlying drivers of our Premier Agency and selected quality partners, AIA Hong Kong Macau is well positioned to capture the growing opportunity going forward.
Thanks, Jacky. Thanks for the questions, Thomas. Does that answer them? I'll take that as a yes. Next question, please.
The next question comes from Richard Xu of Morgan Stanley. Richard, please press the unknown button shown on your screen and ask your question.
Thank you for the opportunity for the questions. Also, congratulations for the very solid results. I got three questions. One is on Hong Kong. I mean, obviously, there's some change in the competitive landscape, right, because of these, I guess, broker channels' excessive sales in the second quarter. Do we see any impact in our second half demand? Any of that loading? Also, will that change our pace of sale for the second half of this year? On China, 40% CAGR is obviously very impressive with expectations. I'm just wondering whether there's any inflection point. I mean, obviously, there's been a lot of preparations. The sales have been very strong. Any periods of potential acceleration over the next several years? Essentially, whether the 40% CAGR will be smoothly paced over the next five years, where there's going to be some acceleration or slowdown.
Lastly, on the, I guess, free surplus at the moment, you know, it's come down to seems like somewhat comfortable levels. Do we expect more of a dividend as a main channel for, I guess, shareholder returns, or will buybacks still be considered next year? Thank you.
Okay, thank you, Richard, for your question on Hong Kong. I'll hand over again to Jacky to talk about this topic that seems to be attracting a lot of interest. Yeah, very pleased to see that, you know, in AIA Hong Kong Macau, actually, the Premier Agency contributes more than 70% of our sales, and we have very strong fundamentals to continue to grow. Our partnership distribution also gives us a double-digit growth in the first half of the year, driven by a very strong result from our BUA and also a quarter-to-quarter increase from our Citibank. Our broker channel in Hong Kong, we have a quarter-to-quarter performance growth and also deliver for the whole first half growth. This was, of course, also driven by the stronger demand for participating products in the month of June in the broker channel.
As I said, we launched a new innovative long-term saving plan effective July 1, and that plan was very well received in the market by all our channels, which include the IFRS and broker channel. We continue to see the strong momentum already built in our IFRS and broker channel. We continue to be very careful in managing our financial performance and make sure that we deliver quality new business through all our channels. Thank you, Richard, on your question on the VONB ambition for the new geography, the new branches. As I said before, I think this is a good ambition. It balances stretch and the focus on quality. I'd like to remind you also that over the period of the first half of 2022 to 2025, the new geographies actually grew by 46%. I wouldn't say that that implies that it will grow at that kind of pace.
I just remind you of that. I also invite you to take a look at the video that we've uploaded where Fisher, or it could be Fisher, or it could be his AI, who's presenting on our AIA China strategy. Hopefully, that will give you clarity on how we intend to deliver the strong growth ambitions for the new geographies, as well as to deliver strong, sustainable growth in our existing, our original five branches. I also like to remind you that we still, at the end of 2030, despite the strong growth in the new geographies, the original five will still be contributing to the bulk of the VONB from AIA China. Then, third question to Garth.
In terms of returns to shareholders, besides any change in the share price, clearly, then we have the dividends and buybacks. We've set out in our capital management policy, clearly, the target of 75% of net free surplus generation to be paid through a combination of dividends and buybacks. We've also said our dividend policy for many years has been prudent, sustainable, and progressive. You can see from the very first dividend, it's been prudent, sustainable, and progressive. On top of that, we'll look at the business and the balance sheet and look at if there is any capital in excess of our needs. We'll also return that to shareholders. If you look back from 2022 onwards, we've returned a total of $22 billion, of which $8.6 billion has been through dividends and $13.3 billion has been through share buybacks.
We have flexibility and tools to manage the capital effectively and to provide the best returns possible for shareholders. Clearly, the best way we can deploy capital is in organic growth. That's where we get the highest returns. You can see how we've done that in the first half very well.
Thanks, Garth. Does that answer your questions, Richard?
Thank you very much.
Thank you. Next question, please.
The next question comes from Michelle Ma from Citibank. Michelle, please press the unknown button shown on your screen and ask your question.
Thank you, Yuan Siong, for giving me this opportunity. This is Michelle Ma from Citi Research. I have three questions. First, as Yuan Siong just mentioned, for China business, the bulk part is still with the original five regions. Given we have a very high growth target, 40% for the coming five years, how do we think about the original five regions, which still accounted for 92% of mainland China's VONB? That's the first question. Second question is, Fisher said for the new regions, which obtained license last year, we already seen 1,700 agents in that, four areas. That's really impressive. Just wondering, have we adopted a different recruitment approach? Have we been trying something new in these four areas? Because just within one year, our average each region has already recruited more than 400 agents. That's really impressive.
If that's the case, will we expand or extend this experience to other regions, like the five developing regions in China? The last one is with Malaysia. Because of the regulation updates on the product repricing in December last year, actually, that took a lot of time of our agents to explain what happens to our customers. That dragged down the first half agency channels' growth. Just wondering, from a management perspective, how long this negative impact will last? Because we've seen very strong growth in the partnership channel. Just rough estimates of the timing of impact on the agency channel. Thank you.
Thank you, Michelle. I will hand the two questions on China to Fisher. I encourage you to watch the video.
Okay, thanks, Yuan Siong, thanks for the question. I think let me tell a little bit about the first half performance. Actually, you see that especially the second quarter is gaining momentum. The reported basis is back to the positive growth, and like for like is 15% growth. Actually, if you look at not just the participating products shift, if you look at the agency foundation, we are very good. Number of recruiting increased by 18%. Number of active new agents increased by 11%. The most important thing, which is the future manpower growth engine, is new leader increased by 71%. I want to point out that all of these actually are majorly from the existing five views because existing five views is still more than 90% of the share. We are seeing a very good momentum and a very good foundation.
This time, you know, we especially talk a little bit more about the new view because it's quite new. We think our existing views, they have a strong track record. We do expect they can still deliver very solid, strong growth in the future. As Yuan Siong said, I will highly recommend you can watch my video, my presentation. That is delivered by my digital avatar. I may have a future opportunity to introduce more about that generative AI. That shows you know I
really believe the potential of the mainland China market is still huge, and we have a unique growth opportunity. We are in a unique position to catch that opportunity in China. Our premier agency differentiates the bank accounts model and unique geography expansion. I think that that's my answer. We still, in short, still believe and are confident our existing BU can deliver strong growth in the future. As for the second question, for the new BUs, thanks for your encouragement. I also think when 7,700 is a very good achievement. I want to confirm we are very disciplined. We never sacrifice our quality. We follow the original standard and, frankly speaking, especially for this new city, we are more stringent. The selection is very stringent, standard is very high, and in this 700, 1,700 is almost all a bachelor's degree. I think it's very good.
I also want to point out we are not doing it from scratch. We already have so many agents in different areas. Some of them, because I'm from Anhui, I know quite a lot of Anhui means actually they worked in Beijing, worked in Shanghai. We do have some aging agency leaders who worked in developed cities. This time when we opened the new license, actually they are very willing to refer their family, their friends to us. That kind of program actually helped us a lot. We definitely will replicate that kind of practice into the future. I also want to point out the good recruitment achievement is also because of our strong branding. Our strong branding, strong differential capability in the premier agency. I think that's our key.
Your quick question on Malaysia, first I'd like to say that we have a very high-quality business in Malaysia. I think our agency is also the number one agency in Malaysia for the last nine years. We have a very good, excellent partnership with Public Bank. Our agency channel, the underlying momentum of the agency channel, I think is healthy. The first half is really a temporary disruption. If you look at the underlying, you know, performance of the agency channel, it is healthy. I'd like to hand over to Hak Leh to talk about Malaysia.
Thank you, Michelle, for the question. Yes, as you correctly pointed out, AIA Malaysia's VONB was lower in the first half of 2025, and that was very much because of the slowdown in the sales of individual health business as a result of Malaysia's industry-wide review on health insurance. During that period, our agents devoted a substantial amount of their time serving customers to helping them understand various options available to them under the reform. This is clearly the right thing to do. We are very proud of what they're doing, although it's taken a fair bit of their time from focusing on sales activities during that period. I'm really pleased to see that the medical clearance experience in the first half has actually improved quite substantially because of heightened public awareness of the underlying issues, as well as the effective implementations of the numerous cross-continental measures.
All this has contributed to strong OpEx growth of our Malaysia business in the first half. In terms of new business, we are beginning to see new medical sales achieve positive month-on-month growth in the second quarter of this year. We're also encouraged by the very strong recruitment momentum of our market-leading agency force, nine times number one MDRT. Recruitment recovered strongly in the second quarter this year. In fact, our Takaful agency is now back on positive year-on-year growth at the end of the first half. Overall, as Yuan Siong Lee highlighted, our new business portfolio in Malaysia remains of high quality and profitable, with a very strong focus on protection. Other than the agency's slowdown, especially in the first quarter, we see the partnership distribution continue to grow very strongly, supported by our ability to serve the affluent and high net worth customer segments of Public Bank.
Overall, we are pleased. Although there's a temporary slowdown, we are pleased and confident with the strong underlying fundamentals of our business in Malaysia. Thank you.
Thanks, Hak Leh. I think that's pretty comprehensive answers, Michelle. Next question, please.
The next question comes from Michael Chang of CGSI Securities. Michael, please press the unmute button shown on your screen and ask your question.
Thanks. I've got some questions for management. Firstly, in relation to the PAR mix, I noticed that it was very high in mainland China. Can I just get a sense, is this mix a new normal, or should we actually expect the PAR mix to increase going forward? Secondly, the Thailand margin is up 116% in the first half. That's a record high of any region, I think, since the IPO. What in particular is driving that? I'm surprised that there's been a marked increase in the mix of medical insurance products. How optimistic are you about further shifts in the product mix towards health and protection going forward? Lastly, could I get Garth just to elaborate a bit on the BEPS 2 impact, how it impacted the numbers this period? Can I just confirm that it only impacted the OpEx and not so much CSM, EV, and VONB? Thanks.
Okay. On the participating products mix in China.
Sure.
Yeah. Okay. I'll send some other questions. I think in China, in the first half, we basically shipped all the long-term saving in agency to the participating products. I think the participating products mix will be further improved because nowadays the critical illness products are still non-participating. It's stipulated by the regulation. Going forward, it may have some relaxation on that. Very probably, we could introduce the participating critical illness product in the future. That will further increase the participating products mix. Thank you.
Hak Leh, on the Thai margin, yes.
Thank you, Michael. We are very pleased with the excellent VONB growth of our Thailand business in the first half of 36%. Yes, we benefited from the one-off sales of individual health insurance business in the first quarter ahead of new regulatory requirements that were introduced towards the end of March. In addition to that, we also saw a very positive shift in the product mix throughout the first half towards protection, especially critical illness riders. That substantially increased the overall portfolio margins of our business in Thailand. As I always mention, our focus is always on growing, achieving strong VONB growth rather than focusing solely on volume or margin alone. As you can see, we are a clear market leader in Thailand. We have the strongest agency force. We've been consistently number one in MDRT every year since IPO. Our agency force continues to grow in productivity, in manpower.
Our agency force has 44% of the overall market share and more than 50% of the new protection business in the market. In addition to that, we are encouraged by the strong growth of partnership with the Bangkok Bank, supported by the increase in the case size as well as the activity of the sales force. We are very strongly positioned with our market leadership across all key segments in Thailand. We are actually in a strong position to support the growth of life and health business in Thailand.
Yeah. The global minimum tax, Michael, it's the first time that we've got the global minimum tax as it came into effect from the 1st of January of this year. We have included in the appendix, it is page 69, details of the numbers that have flowed through the various measures, which I think should be helpful to you. Just to give some color and a high overview, the global minimum tax is something that has come in, as I say, this year. It's the first time. It's already included in our numbers for the first half. It's already included in the OpEx growth, in the UFSD growth, and in those numbers, in the actual numbers. It's also something that we have in the net profit, and the number in the net profit is $51 million. You'll see the details in slide 69, as I say.
When we look at the global minimum tax, we see that it's very difficult to estimate what it will be in the future. It depends on a number of different things. It's based broadly on net profit in each jurisdiction, and that net profit may vary from year to year. It also depends on new business volumes and exactly which jurisdiction the profits arise in. For that reason, we don't think it's appropriate to calculate it in the EV, and we don't have it in the CSM either. That's in line with IAS 12. There was actually a specific guidance from the IFRS, the ISB, that under IAS 12, that it wasn't to be accounted for as a deferred tax item. That gives you some idea of the difficulty of projecting it.
What we can say is what we've said before, that it will mean that the effective tax rate goes to between 15% and 18%, and you'll see that the effective tax rate is at 18%, which is in line with the guidance we've given. The only guidance I can really give you is that it will be, we expect 15% to 18% to be there for the near term, but very difficult to estimate beyond that. As you can see, our numbers are still very strong, and it's a relatively small amount compared with our overall numbers. I'm.
Just one final thing to add on the EV. The EV operating profit, and therefore the ROEV, is net of the GMT, the BEPS as well. Does that answer all the questions, Michael?
That's good. Thanks a lot.
Thank you. Next question, please.
The next question comes from Michael Lee of Bank of America Global Research. Michael, please press the unmute button shown on your screen and ask your question.
Thank you. Thank you for giving me this chance to ask questions. My questions are for Garth. It's about capital management and the buyback. I know you have two parts of the buyback. One part is from the net free surplus generation every year, and also a major part is from your annual review of your capital status. I want to make it clear whether you have a certain level of capital ratio you want to maintain, or you have a certain level of free surplus balance you want to maintain, because free surplus balance in the first half of this year dropped quite a lot to below $10 billion. It impacts your buyback decision. Another question about buyback is whether stock price in the market will impact your buyback decision.
Of course, I hope that the stock price of AIA Group Limited could remain strong, but this will impact the effect of your buyback. Do you have some consideration about buyback size and timing when it links to stock prices? Also about buyback period, this year your buyback was between April and July. Any consideration about this kind of buyback period? Thank you.
Yeah. Thanks, Michael. A few questions there. In terms of the amounts of buybacks, we said that we'll look at those at least annually. As we get the year-end position and our business plans in place, with that, you'll see that we said also that we want to remain our current level is comfortably above 200% in the shareholder capital ratio, although we will review that as the business changes over time. When we look at the level, we do look at the stresses and so on that we have in the business and the stress capital that we need. We tend to think of it more in terms of the absolute numbers. The ratio is helpful as guidance, but we tend to think of it as absolute numbers overall and so on.
At $9.9 billion of free surplus, we're very strong, very comfortable, and the shareholder capital ratio has reduced in line with our expectations, but it remains at 219%, which is comfortably above 200%. In terms of the buyback considerations, clearly, we look at the way in which we'll use the capital. The obvious is to use buybacks, and we've done that to date. If you look at the value of the stock, I think not just in terms of the IFRS book value, but look at it more generally, thinking about future growth and so on. We look at the overall levels of share price in deciding what's the best action for shareholders. To date, we've bought shares. We thought the shares were good value, and I think that that's been the case. In terms of timing, we would tend to declare every year.
That would be at the end of March, and then the natural timing is April to July. Clearly, it depends also on the size of the buyback. You have a certain proportion of the market that you can have as buybacks each day. That also impacts the period. You would expect that it would normally start in April and then run from there, depending on the market volume and so on.
Thanks, Michael. We've got time for one final question, please.
Sure. The last question comes from Leon Qi of CLSA. Leon, please press the unmute button shown on your screen and ask your question.
Good morning. Thanks for taking my questions. This is Leon Qi from CLSA. My first question is on how we should understand the China growth strategy and our capital management policy. A very ambitious 40% VONB growth target. Appreciate that. On the other hand, we do understand market focus on the capital management. If management could share any color on how we should understand the relationship between such a very ambitious growth target and also capital management policy, I understand it's probably more on the new business investment side, impact on free surplus and shareholder capital resources. Second question is on the product repricing and also China growth. We all know that from the 1st of September, the regulatory pricing interest rate cap on all the different products in mainland China is being cut once again. The 1st of September is just a few days ahead of us now.
Earlier, also Fisher Zhang mentioned our repricing efforts and market demand. Some other analysts also have touched this, but I'm just trying to see if we could be more specific on the repricing on our products and how our client demand looks like on that front. Thirdly, on the interest rate impact on our capital management, I remember that in the second half of last year, actually, the interest rate declines in particular in mainland China and also Thailand have caused some quite significant negative impact on our free surplus and also shareholder capital, in particular the required capital. Garth Jones has also given a few numbers a few months ago on the second half of last year. This time around, in the first six months of this year, actually, treasury yield in China has been going sideways.
Specifically on these two metrics, is it safe for us to say that in the first half of this year, interest rate has already become a non-material factor in the movement of our required capital and also free surplus? If we could try to quantify this interest rate impact. Three questions from me: the China growth versus capital management, secondly, China product repricing and China growth, and thirdly, the interest rate impact. Is it behind us now for capital management? Thank you very much.
Okay. Thank you for your question, President Leon. First, I want to clarify that the 40% VONB compound annual CAGR ambition relates to the new provinces and new geographies in China, which makes up currently 8% of the VONB of AIA China. It's the 40% on the 8%, right? It's not the 40% CAGR on the whole of China. Second, I'd like to point out also the fact that, as Garth explained, you know, some of the metrics that we look at, in addition to VONB margin, is the capital, the new business investment, as a, you know, the proportion of how much VONB is written per dollar of new business investment, the IRR of the new business investment. Actually, you know, in China, because of the shift to participating products, the capital efficiency has actually improved.
Currently, I think if you will see from, you know, that our the solvency position of our AIA China is very strong. It's very strong. I hope I can address your first question on the growth target versus capital management. On repricing, I think I'll hand over to talk about it.
Thanks for the question. Thanks, Mia. I think for the repricing, the regulatory requirement actually reduced the pricing interest rate of the non-PAR to 2%, and the participating product is to 1.75%. I think actually we have prepared all the repricing. We filed a new product already, and we plan to launch it in September. Everything is ready now. I'm thinking about the product attractiveness. That's a key for the future, you know, because, you know, the PIR has done so much. Whether the product is still attractive, the answer is yes. It's because we shipped more to PAR. I think the PAR is a, that's why we are so keen on the PAR shipped because PAR is kind of a win-win to the company and to the customer because in the low interest rate environment, PAR definitely can reduce the interest rate sensitivity.
To the customer, it can, you know, have the future upside potential. I think that's very important for us. Again, I want to repeat that we have to ship most of our long-term saving to PAR. I think that's okay for the future. Last but not least, you can find that our product is very diversified. Actually, you know, our Premier Agency, they position themselves as a lifetime partner and advisor. We are not just sell product. We are selling the total solution. We are selling the proposition. We provide, you know, high professional advisor service, innovative product, relevant value-added services supported by a solid, you know, ecosystem. Again, I would highly recommend you can watch my presentation. That includes our, you know, what we are doing for the, I cite the two typical examples: what, you know, how we sell the CI product.
We innovate the product from CI 1.0- 2.0- 3.0, you know, supported strongly by the case management, by the prevention, by the, you know, ecosystem, by the hospital network. I think that this combination actually well-positioned us to capture the customer needs. Even in the low interest rate environment, with participating product, with all this combination, we have confidence to further satisfy the customer needs, and we think the market potential is still huge. Thank you.
I just add that in China, because we are focused on serving the needs of middle class and affluent families in the major cities, we see that these customers, in terms of their shift in attitudes, there's a distinct shift towards buying insurance. I think that that's increasing your propensity of middle class and affluent families in mainland China to buy insurance and buy insurance from trusted companies like AIA. The demand for our products, despite the reverse rounds of repricing, the demand for products remains very strong. I think the last question is for Garth on interest rates.
Yeah. Thanks, Leon. As you say, interest rates fell really right at the end of last year, and they've remained fairly stable during the first half. To that extent, it's behind us in the numbers. If you look in pages 84 and 85 of the deck, you'll see in free surplus, the investment return variances were negative $0.5 billion. That's largely Thai equities and not China. If you look underneath on page 85, you'll see the investment variances in others is plus $0.1 billion on the regulatory capital required capital. In China, we hold additional reserves that eliminate the 750-day averaging effect that comes through. Because we've got the mark-to-market on the assets, we think it's right that we take that into account as well. That's already been accounted for, and therefore, you can say that at current rates, it's behind us.
I think just to reinforce what we said at the full year on China in particular, in terms of our EV methodology, it is different from most other companies in that we start at the spot rate and grade over a long period for our long-term assumptions. The same is true for Thailand, clearly. The movement in Thailand interest rates is now baked in at the half-year point. With that, we are out of time. Thank you, everybody, for listening. Thanks for all your questions. If you've got any follow-up questions, please come through to AIA Investor Relations. We're around, obviously. Thank you very much.
Ladies and gentlemen, this concludes AIA Group Limited's 2025 interim result Q&A sessions. Thank you for your participation.