The overall market expanded in H1 whilst the insurer’s performance weakened against competitors.
AIA Group could see its market share in China’s bancassurance market rise as new sales and commission reforms remove practices that may have put the insurer at a competitive disadvantage, according to Jefferies.
Jefferies said AIA had a weak second quarter and is likely to report a weak third quarter, with the reforms creating a near-term headwind for sales.
However, it expects the changes to support AIA’s market share from 2027 onwards.
New reforms covering expenses and commissions took effect in China in July 2026.
The rules expand existing requirements for insurers to disclose commission payments to banks, with insurers now also required to report compensation details for bancassurance sales staff in product filings.
Jefferies said the changes appear designed to ensure commission payments remain within regulatory limits and prevent additional payments from being made outside disclosed arrangements.
The reforms may also have prompted insurers to bring forward sales before the new rules took effect.
Jefferies said sales surged in some parts of the market in the second quarter but have since fallen materially, suggesting some third-quarter demand was pulled forward.
AIA’s bancassurance sales in China fell 6% in the first half of 2026 even as the overall market grew, resulting in a substantial loss of market share, according to Jefferies.
The broker expects the smaller market to weigh on AIA in the third quarter, as some demand was satisfied earlier in the year.
It estimates that Chinese bancassurance accounts for 15% of AIA China’s value of new business (VONB).
If industry sales fell 50% after the July reforms, Jefferies estimates this would reduce AIA China’s sales by about 7%.
As AIA China contributed 29% of group VONB in the first half, the impact could translate into a roughly 2.1% hit to group growth.
Over the longer term, Jefferies expects AIA’s market share to increase as competitors adjust their sales practices to comply with the new rules.
AIA could also benefit from an easier comparison in the second quarter of 2027, as some peers had already brought forward sales earlier this year.