Insurance companies are opaque at best, confusing at worst. Selective disclosure, in the words of Johnny Mercer’s 1944 song, tends to accentuate the positive and eliminate the negative. Asian insurer AIA has plenty of positives to share. On Thursday, the company announced 2014 earnings that beat estimates by 13 per cent.

China (one-tenth of total earnings) led growth, with new business rising by more than a half and operating profit after tax up nearly two-fifths. And unlike many peers — which sell savings products under the guise of insurance — the company is pursuing pure insurance, which delivers much higher margins.

There is still room to grow. AIA has a nationwide market share in China of less than 1 per cent, according to Credit Suisse research. That is partly because it only operates in five major regions, but even in those areas its share is still less than 5 per cent. And life insurance cover in China is woefully inadequate, with only 5 per cent of recommended sums insured, according to a Swiss Re study (although a reinsurer may not be the most impartial judge). There is also opportunity beyond China: of the six Asian markets in which AIA operates, five offer potential for growth with coverage levels of less than one quarter.

The market already loves AIA. Its shares are up 130 per cent since its late 2010 listing (although it has underperformed rival Prudential in that period). AIA trades at 20 times next year’s forecast earnings for growth which, thanks to 2014’s good numbers, is expected to be a mere 3 per cent.

To snare upgrades, AIA will need to stay ahead of the competition. So last year it paid $800m to Citibank for exclusive product distribution in China. The company gave plenty of detail on operational rollout but, so far, no figures for financial performance. Without such detail, it is hard to know whether the tie-up will be a positive or a negative.

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