AIA surplus capital grows to $1.7bn Mark Tucker, chief executive of AIA, said the insurer would leave itself the opportunity to look at takeovers by not rushing to give away the more than $1bn of surplus capital it is generating each year. AIA has been linked with a bid for ING's Asia businesses, which are due to go on the block at the end of March or start of April and are worth up to $6bn, but Mr Tucker declined to say whether he was interested in the assets as the group reported strong sales and growth in profits for 2011. The group also revealed that its working capital - which is money it can invest in growing its business, paying dividends or doing deals - had grown by more than $1.7bn over the past year as regulators had allowed the group to release more cash from its local units to be used by the group. A number of Asian insurance regulators had restricted the amount of capital that could leave their countries following the financial crisis because of fears that AIA's then parent, AIG, could try to use that funding to stave off its own near collapse. Many of those restrictions are being lifted since AIA listed itself as an independent company in October 2010. This was especially noticeable for AIA in Hong Kong, where the company was able to double the dividends paid up to the parent company from $585m in 2010 to $1.1bn last year. Mr Tucker said the group was content to keep hold of the extra cash and capital it was generating in the near term and that it could be used to invest in the existing business, to help guard against volatility in the markets that could affect its balance sheet and to pay continuing dividends. "We are leaving ourselves some opportunity to look at M&A, but to look at it in a very financially disciplined way," he said. But 99 per cent of our time is spent on organic growth and 99 per cent of the AIA story is around organic growth. Analysts said that while the group had plenty of room to look at deals or handing back extra cash to shareholders, it could wait until markets had become more settled and the group had completed the operating improvements it has been making over the past year. Mark Kellock, analyst at Barclays Capital in Hong Kong, said the group would be very careful to ensure it had plenty of room in its capital base over regulatory requirements. "It probably won't leave itself open to regulatory pressure by spending all that spare capital on M&A or capital management [extra dividends] in the near term," he said. Pre-tax operating profits were 13 per cent higher at $2.4bn for the year to November 2011, which was AIA's first full year as an independent listed company. Net profits were down 40 per cent to $1.6bn on the back of unrealised losses in the group's equity portfolio, although the recovery in Asian stock markets since the start of this year meant those losses had already been fully reversed, Mr Tucker said. The shares closed in Hong Kong 3.3 per cent higher at HK$28.30.