Good morning, everyone. I'm very excited to be here today to present FWD's first set of full year results post our IPO in July 2025. I will start with providing you with an overview of our business achievements, and then I will hand over to Sid, our Group CFO, who will take you through key financial highlights. 2025 was a standout year for FWD Group. We successfully executed our customer-led strategy underpinned by our digitally enabled business model, achieving record financial result. The successful IPO on the Hong Kong Stock Exchange, where we raised $466 million in July, shows the market's confidence in our business and in our strategy of building a leading Pan-Asian insurer, offering significant growth potential in years to come.
This fulfilled a long-held objective to ensure FWD Group has full capital market access as a solid foundation for our future development and growth. This was followed by a credit rating upgrade to A2 from Moody's in the same month. In August, we completed the build-out of our high net worth hub in Asia, FWD Private, starting with Hong Kong, Bermuda, and Singapore. This supports continued growth momentum in new business sales and value creation for shareholders, which is already evident from the performance of FWD Private. In September, we refinanced $1.15 billion of debt and, using our IPO proceeds, further reduced leverage by $500 million.
This reduced our leverage ratio to 21.3% as at year-end 2025, which is closer to our 15%-20% target range, as well as reduced our debt servicing costs by more than 25%, improving the cash available for shareholders' value creation. Finally, in December, Fitch revised our credit outlook to positive. These achievements are the result of the hard work of the team, and I would like to thank everyone at FWD who are working relentlessly towards building a leading Pan-Asian insurance company and delivering strong shareholder value. Moving to business highlights. FWD has delivered a record set of results for the full year 2025. This continuing growth momentum across the business is a testament to our unwavering customer focus and the agility of our business model. Starting with growth.
Our new business sales in 2025 grew by 25% to approximately $2.4 billion, which is a continuation of the strong growth seen in 2024. Following strong sales momentum, our new business contract service margin grew by 18% to approximately $1.5 billion. Looking at profitability. Years of strong new business sales growth is now translating into growing profitability, which along with our ongoing focus on expense discipline, has delivered a record net profit under IFRS 17 of $166 million. This focus on expense disciplines also led to a significant reduction in expense overrun. In terms of value creation.
Consistent growth in new business metrics is supporting value creation for the shareholders as we grew our comprehensive tangible equity by 18% to approximately $8.7 billion, and group embedded value by 19% to approximately $619 billion. Last but not least, these fantastic results have been achieved while maintaining a strong balance sheet and delivering our robust cash flow. Our latest group prescribed capital ratio was 265%, and the net underlying free surplus generation for the year amounted to $857 million, an increase of 20% year-over-year. We have proven track record of growth since our formation in 2013. We achieved a solid compound annual growth rate of over 20% new business sales.
We have also established a footprint in Asian markets that are some of the fastest growing in the world and are well positioned to continue to grow. Since 2022, we have grown at a CAGR of 20%. Growth has come from most of our business segments with Hong Kong and the emerging markets leading the growth momentum for our group. Now, let's turn to the strategy that underpins this growth. There are three key pillars to our strategy that has positioned us to capture Asia's significant protection gap, which is driven by favorable demographics, rising affluence, and rapid digital adoption. These pillars are winning in our home markets in Asia, multi-channel distribution tailored for each market, and transforming insurance through technology. We will discuss all of these in more detail. Let us start with our mature markets in North Asia.
In Hong Kong and Macau, our largest segment, we deliver an outstanding performance in 2025, achieving 51% growth in new business sales and continued market share gains. Hong Kong remains one of the fastest growing life insurance markets globally, supported by strong demand from both onshore and offshore customers, and its continued development as a global wealth management hub. The recent build out of FWD Private, alongside continued strengthening of our agency channel, where agent numbers grew by 7% and productivity improved by 40%, has further enhanced our ability to capture this growth. All these strengths came together through our diversified multi-channel distribution platform, including over 280 broker and IFA partners, 13 bank insurance partners, and a growing agency force to deliver record new business sales of $1.2 billion.
Japan remains a strategically important market for FWD, anchored by a resilient protection business. Our recent entry into the savings market further broadens our product mix and creates new avenues for growth and diversification. In 2025, the business delivered 11% growth in new business sales to $132 million. Japan also continues to be a key cash contributor to the group, reflecting its relatively mature profile, with around $300 million of cash remitted to the group since 2023, while the combination of our established protection business and expanding presence in savings supports both continued cash generation and incremental growth over time. Moving to Southeast Asia. The Southeast Asian life insurance markets offer a compelling long-term growth opportunity, and we are very well-positioned to capture this growth across the region.
Based on industry data, our Southeast Asia markets are expected to grow almost twice as fast as the G7 and other Asian developed markets over the next decade. Today, around 45% of our total new business APE comes from our Southeast Asia segment, which together form a core engine of growth for the group. Thailand and Cambodia is our second-largest segment, and we are the second-largest life insurer in Thailand by new business sales. 2025 has been a more challenging year from a new business growth perspective. This was due to the lower interest rate environment and the impact of our focus on quality new business through actions such as the exit from underwriting new business in the corporate care segment in 2024. As a result of these actions, claims and persistencies have improved, contributing to an increase in OPAT of 18%.
Record dividends was also remitted to the group during 2025. We are the leader in the bank insurance channel in this market through our partnership with Siam Commercial Bank, or SCB. In December 2025, we further deepen our partnership through the integration of our customer-facing platform, Omne, as the default insurance platform within SCB EASY, the banking app that serve over 15 million SCB customers. We continue to develop a high quality, digitally enabled agency channels in Thailand. In 2025, we retained the number two MDRT ranking and launched the FutureMe program to boost recruitment and long-term productivity. We've just announced a leadership change for the segment. As our current CEO, David Korunič , prepared to retire later this year, we have appointed Khun Knattapisit Krutkrongchai, or KK, as our new CEO.
KK brings deep industry experience and strong leadership, and we are very confident that he's well-placed to continue executing our strategy and supporting the long-term performance of our Thailand business. I also would like to take this opportunity to say thank you to David for his significant contribution to FWD Group, particularly for his leadership through the pandemic years. Turning to emerging markets, this segment remains a key pillar of FWD's long-term growth ambition. In 2025, we delivered record new business sales of $529 million, with APE up 27% across the segment, reflecting strong momentum. Bancassurance continued to anchor our distribution model. In Indonesia, BRI Life is the number one bancassurance. This is complemented by our four other exclusive partnerships in the EM segment. Alongside this, our agency channel remains focused on quality growth.
In both the Philippines and Vietnam, FWD agents and advisors rank number two in the latest MDRT ranking. As a result of this disciplined approach, agent productivities across emerging markets improved by over 40%. Furthermore, our continued focus on digital enablement position us well to unlock the next phase of growth across this segment. Let's now look into our diversified distribution strategy, which continues to drive our growth. As part of our enhanced extend and empower distribution strategy, we build a strong multi-channel distribution model. Bancassurance remains the cornerstone of our approach, and we have continued to strengthen our other channels, giving us the agility to capture new opportunities as they emerge. A great example is the Broker and IFA channel, which delivered more than 50% growth in 2025, an exceptional performance that reflects the momentum we built across the business.
In 2025, bancassurance contributed 37% of new business sales. Broker IFA channel delivered a similar strong contribution. Agency accounts for 18% of new business sales, and digital and other channels contributed 8%. This diversified model ensures we are both resilient and nimble, enabling us to seize opportunities and create sustainable value for shareholders across multiple fronts. The bancassurance channels is the cornerstone of our distribution strategy. We are the leading bancassurance in Southeast Asia, where we currently have seven exclusive partnerships and 33 partnerships in total. We are penetrating and deepening our partnerships with banks and their customers via our digital and generative AI tools, such as our recent integration of the FWD Omne platform into the SCB EASY app. Our bancassurance channel continued to grow robustly due to the significant growth in Hong Kong, Singapore, Malaysia, and our JV with BRI Indonesia.
This was partly offset by stable new business sales in our Thailand segment. Overall, our bancassurance channel delivered 15% growth in APE for the full year of 2025. Moving to the Brokerage and IFA channel. With a network of around 2,800 partners, our Broker and IFA channel delivered 51% APE growth, the fastest in our distribution mix. This is supported by the build-out of FWD Private across Hong Kong, Singapore, and Bermuda, which we intend to further expand into new markets in the coming years. In line with strong APE momentum, VNB growth in Broker IFA channel also very strong at 38%. It's important to note that the margin in this channel is comparable to the margins of our other key distribution channels. Turning to our agency channel. With over 40,000 agents, it's a key distribution channel to access our customers.
APE increased 8% year-on-year, and VNB grew 60% year-on-year, supported by more than 50% uplift in productivity. In 2025, we were ranked in the top 10 global multinational insurers in MDRT. We were also ranked number two in Thailand, the Philippines, and Vietnam in the MDRT, reinforced by our quality growth in this channel. Agency remains a core pillar of our long-term sustainable growth strategy. We are executing a disciplined approach to building a strong, profitable, and scalable agency force, underpinned by our best-in-class digital foundation. Digital tools such as FWD Cube and Agent AI Assistant are now embedded in most of our Southeast Asian markets, empowering agents with simpler, smarter, and more efficient and effective ways of working. We see significant headroom to expand the channel by further leveraging these capabilities.
At the core of our progress are the foundations we put in place across our data and technology stack. We now operate an integrated data environment that give us a single source of truth all across our markets. Because of our standardized modular system, we are able to automate processes that can drive operational efficiency at scale. With this foundation, tangible operational gains are now emerging across our businesses. We are processing higher volumes with the same or even fewer resources. Turnaround times are improving and unit costs are coming down. In Japan, for example, the unit costs of claims management have been reduced by more than 20%. Real-time claims monitoring in Thailand and Japan identify anomalies and prevents fraud, often instantly. AI tools also helped to retain customers, resulting in a decrease in surrender submissions in Thailand.
While operational efficiency is the most immediate and visible outcome, these same foundations are also strengthening how we engage with our customers and support our distribution network. On the customer side, generative AI underwriting in Japan reduced case review time by 40%. Generative AI voice bots in Thailand and Singapore are providing 24/7 support, reducing wait time and manual call handling. By the end of 2025, chatbots were handling about 50% of consumer calls in Thailand and reduced call center seats by almost one half. On the distribution side, FWD Cube, AI Agent Assist, and our ACE prospecting tool draw from the same underlying data environment to improve productivity and sales effectiveness, where we have seen early success, including a 10% uplift in APE for users in the Philippines.
We will continue to build on these capabilities thoughtfully and with discipline, ensuring they contribute to sustainable growth and long-term value for our shareholders. Before I pass to Sid, I would like to recognize his significant contribution during some critical years for FWD Group, including leading us through our successful IPO last year. As we announced this morning, Sid will remain with us through a planned transition period, and the group will continue to benefit from his deep experience in his capacity as an advisor. David Junius will join FWD Group as Managing Director and Group Chief Financial Officer from July first, bringing nearly 30 years of global financial leadership experience, including CFO and COO roles at SiriusPoint and senior positions at AIG. Sid, thank you, and over to you to cover the financials. Thanks, Sid.
In closing, as we enter 2026, our first full year as a public company, we are well-positioned to deliver sustainable value for our shareholders. Our strategy is clear and focused, winning in our home markets, leveraging a balanced and scalable multi-distribution model, and differentiate ourselves through industry-leading digital capabilities that enhance customer, distributor, and underwriting outcomes. We operate in Asia's most attractive growth markets with a proven track record of delivering strong growth. This is now translating into earnings and growth in value-creating metrics like CSM, EV, and CTE. Together, our strategy and strong financial disciplines give us confidence in our ability to sustainably grow our key value metrics at mid-teens levels while maintaining a strong and resilient balance sheet. Thank you once again for your time and attention today.
Let me start by going through our financials. We've delivered fantastic results across all metrics. Exceptional growth, record profitability, strong value creation in excess of our long-term guidance for shareholders, while further improving balance sheet strength are the key financial highlights for the full year 2025. Starting with growth, we delivered record new business metrics for the full year 2025, with new business sales growing by 25% year-on-year to approximately $2.4 billion. New business CSM growing by 18% to approximately $1.5 billion, and value of new business, VNB, growing 11% to $945 million. The comparability of new business CSM and VNB margins was impacted by certain notable items, such as the decline in interest rates in Thailand, operating assumption changes in 2024, and statutory tax changes.
Adjusting for these factors, new business margins were broadly similar to that of the prior year. Moving to profitability, strong new business sales growth is now translating into growing profitability. Our operating profit after tax, OPAT, was up 5% year-on-year to $499 million. All four segments delivered positive OPAT. We've also achieved record net profit after tax, NPAT, under IFRS 17 of $166 million, which is a result of our strong new business growth and ongoing focus on expense discipline. Value creation. Ultimately, FWD is relentlessly working towards creating value for shareholders, and we've delivered on this for the full year of 2025, with results exceeding the mid-teens guidance we gave at the half year. Return on tangible equity was 15.7%.
The contractual service margin, CSM, balance grew by 24% to $6.6 billion, while comprehensive tangible equity, CTE, and embedded value, EV, grew by 18% and 19% respectively. The growth in CSM, CTE, and EV are the leading indicators of future growth and profitability in cash flows. This full year performance gives me tremendous confidence in the group's ability to deliver future earnings and cash flow growth. Finally, cash and capital. Supported by earnings growth and new business sales momentum, net underlying free surplus generation, net UFSG, grew by 20% for the full year 2025.
Our group prescribed capital requirements, GPCR, base solvency ratio was 265% as of December 2025, and was 210% after adjusting for the impact of the new economic value-based solvency regulation, also known as ESR in Japan, which I will address later in the presentation. Cash remittances for the full year 2025 were broadly unchanged from the half year, and the group achieved operating cash flow break even for the second consecutive year. I would now like to walk you through some of our business financial highlights, starting with our largest market, Hong Kong and Macau. Hong Kong and Macau achieved outstanding results for the full year of 2025, with new business sales increasing by 51% to approximately $1.2 billion. Growth was equally strong for onshore and offshore businesses at 58% and 44% respectively.
FWD Private, our high-net-worth value proposition, contributed approximately 25% of the increase in new business sales in Hong Kong and Macau. Our diversified distribution strategy was a key driver of new business sales growth, enabling us to capitalize on par product opportunities in the broker channel at broadly similar margins. This has resulted in increased market share and improved profitability through better operating leverage. New business CSM growth outpaced the growth of APE for the full year of 2025, as it grew by 64% to $684 million, while VNB grew by 44% to $478 million. New business CSM benefited from expense underruns that supported margin improvement by 4.4 percentage points, whereas VNB margins declined by 1.9 percentage points, mainly due to a higher risk discount rate.
Looking ahead, new business sales growth is expected to moderate as market conditions normalize in 2026 following exceptionally strong performance in 2024 and 2025. The outlook reflects a high base effect from 2025, and in particular, we expect marginal growth in the first quarter given Q1 2025 record high sales. Finally, OPAT for the segment grew 24% year-on-year to $270 million as a result of higher CSM release from new business growth. Turning to Japan, in the second half of 2025, we entered the individual savings market with the Japanese yen single premium product. Sales from this new product and ongoing growth in our individual protection business supported new business sales growth of 11% for the full year of 2025 to $132 million.
Rising interest rates and our focused distribution through the IFA channel gives us confidence that we are well-positioned to grow in our chosen segments of individual savings and protection in the Japanese market. The growth in new business sales in 2025 showcases this potential, despite only a small contribution from individual savings volumes for the calendar year. New business CSM grew by 10%, which is similar to the APE growth, while VNB declined by 4%, reflecting a decline in VNB margin largely due to medical product repricing. We've started the year well in 2026 with respect to new business sales and expect a continued incremental contribution coming from our savings market entry. Margins would reflect the growth in the savings business.
OPAT in Japan declined by 5% year-on-year to $186 million, which is mainly attributable to persistency variance in a runoff portfolio. Moving to Thailand and Cambodia. Thailand and Cambodia is our second-largest segment and has historically been a key driver of growth for the group. For the full year 2025, APE in Thailand declined by 6% year-on-year to $577 million due to our focus on quality new business through portfolio actions we had taken, such as the exit from the corporate care sector in 2024, as well as declining interest rates. VNB and new business CSM in Thailand and Cambodia declined 18% and 16% respectively due to the impact of lower interest rates on margins. When adjusting for this, margins were broadly in line with that of last year.
We expect that the effect of lower interest rates will continue to impact margins in 2026. In terms of new business sales, we currently expect moderate growth for the year 2026 as the impact of lower interest rates continues to weigh on the new business volumes for the early part of this year. As our disciplined actions to enhance the quality of new business start to gain traction, we expect to return to growth towards the later part of the year. In the medium to longer term, we remain confident in returning to higher growth given our market positioning, distribution network, and product suite. OPAT in the segment grew by 18% year-on-year to $187 million, supported by growing CSM release and an improvement in claims and persistency as a result of our continued focus on quality new business.
Moving to emerging markets, the strong growth momentum from the first half of 2025 continued into the second half of the year as the emerging market segment delivered 27% growth in new business sales to $529 million for the full year of 2025. Singapore and Malaysia delivered the highest growth in the segment, which was somewhat offset by headwinds in Vietnam. New business CSM grew 4% and VNB by 7% as margins were impacted by operating assumption changes at year-end 2024 and statutory tax changes. Excluding these items, new business CSM margin and VNB margin were broadly in line with 2024. With the trend seen in 2025 and early part of 2026, we remain confident around continued momentum in new business sales growth for the full year in this segment.
As mentioned in the past, emerging markets will be a core growth engine of Southeast Asia for us in the future. OPAT grew by 2% to $34 million for the full year of 2025. The underlying growth is from higher CSM release and persistency improvement, which was offset by a methodology refinement. For the full company, OPAT for 2025 was $499 million, up 5% year-on-year, with all four operating segments being operating profit positive. The largest contributor to OPAT is the net insurance service result that grew by approximately 35% year-on-year to $795 million, driven by higher CSM from new business and in-force growth. Our operating expenses grew by 8% year-on-year as a result of disciplined expense management.
Looking ahead, as our CSM balance grew by 24% for the year-end 2025, we remain confident in our expectation of delivering sustainable mid-teens growth rate and operating profit in future years. Moving to net profit after tax, NPAT grew over 400% from $24 million to a record $166 million under IFRS 17 for the full year. This improvement was driven by OPAT growth and ongoing expense discipline as non-market related expenses declined materially in the full year to $292 million versus $418 million in the full year of 2024.
Turning to CSM, the CSM balance is one of the key indicators of value creation for shareholders at FWD, and we're pleased to report very strong growth of 24% in the CSM balance to approximately $6.6 billion for the full year of 2025. The operating contribution to CSM was approximately $1 billion, a significant increase from approximately $400 million reported in the year 2024. This increase is due to higher new business contribution and improved operating variances and assumption changes in 2025. Non-operating factors contributed to the rest of the growth at approximately $400 million. Part of this was FX related, with benefits coming from the weaker U.S. dollar against the Thai baht, and part was economic variances due to favorable interest rate and credit spread movements in 2025.
Driven by our confidence in new business CSM growth and expense discipline, we're well-positioned to grow CSM balance by mid-teens in the coming years. Embedded value grew by 19% for the full year of 2025 to approximately $6.9 billion. EV operating profit grew by 33% year on year to approximately $1.5 billion and was the largest contributor to EV growth for the full year. Similar to CSM, operating variance and assumption changes have reduced materially for the full year 2025 compared to the previous year. We remain fully committed to ongoing expense discipline, which has led to an expense overrun reduction in the calendar year and expect operating leverage to continue to improve further in future periods.
Similar to our CSM trajectory, new business value growth and expense discipline positions us well to grow EV by mid-teens in the future years. With respect to our debt profile, our leverage ratio reduced by 4.2% from the year-end 2024 to 21.3% at year-end, mainly as a result of an increase in shareholders' equity following our IPO and de-leveraging using the IPO proceeds. While there are no immediate refinancing needs with the next hard maturity being in 2028, prudent capital management actions will always be considered that could further accelerate the attainment of our long-term leverage ratio of 15%-20%.
Ultimately, higher new business growth metrics, a strong earnings profile, and value creating metrics feed into free surplus generation and cash remittances that fund debt cost, holding company expenses, and create long-term capacity for future potential financial flexibility. Net UFSG for the full year of 2025 was $857 million, an increase of 20% from the full year of 2024. Net UFSG for the full year benefited from improvement in operating variances and free surplus uplift from reinsurance transactions as we continue to optimize capital and free surplus generation. In the short term, we expect $50-$100 million approximate impact on free surplus generation from ESR implementation and some additional impact from lower interest rates in Thailand, but do not expect any impact to our financial flexibility in operating cash flows.
We are confident that underlying business trends are robust and that we'll deliver growing free surplus generation on an underlying basis. The group was operating cash flow positive for the second consecutive year and expect this trend to continue into the future. There was no change to cash remittances as remittances are usually completed in the first half of every year. We've worked hard over the last few years to balance our strong growth by taking actions to improve capital efficiency, which resulted in our strong group solvency ratios on a PCR basis of 265% as at year-end 2025. This is mainly driven by free surplus generated from business growth, favorable foreign exchange movements from the Thai baht, and capital optimization initiatives. Looking ahead, our group solvency ratios will be impacted following adoption of the Japan ESR.
We're supportive of the change to ESR as the economic principles underpinning it align well with our risk management approach in running the business. The change is coming into effect from March 31, 2026, and with the implementation of this change, our group LCSM cover ratio is expected to decrease to 210% on a pro forma basis. However, this change has not altered the underlying economics of our business. We do not anticipate any additional constraints on the group's financial flexibility or any material changes to holding company financial resources as a result of the change. To conclude, the group maintains a robust capital position with a reduced leverage ratio. Growth is now translating into earnings and in turn into capital re-generation, as reflected in our net UFSG, which will continue to enhance our financial flexibility and support future growth in the coming years.
Before I hand it over to Fong for the wrap-up, I want to briefly acknowledge my own upcoming transition. I'll be handing over the group CFO role later this year at a time when the group has delivered record results, strengthened its balance sheet, and improved the quality and sustainability of earnings, translating into robust cash flows and net UFSG. I'd like to sincerely thank the team at FWD for their hard work and commitment over the years, particularly in delivering these outcomes. With David joining as CFO, someone I've worked closely with for many, many years, the group is well-positioned to build on the progress we've already made as a newly listed company. I remain very confident in the direction and fundamentals of the business. With that, let me hand over to Fong to wrap up before we go to Q&A.