Hong-Kong based insurer on Friday posted an 18 percent rise in annual value of new business (VONB) but missed estimates, while announcing a $1.6 billion share buyback that analysts said fell short of market expectations.

The company's shares fell as much as 4.2 percent by 0615 GMT, hitting their lowest level since March 5. The stock was also the top loser on the Hang Seng Finance Index, which was up 1.6 percent.

AIA approved a new $1.6 billion buyback plan, citing its strong financial position. Analysts at Jefferies, however, said the buyback fell short of expectations.

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The company had last approved a share buyback program in April 2024, extending it by about $2 billion.

It also declared a final dividend of 130.98 Hong Kong cents per share, up from 119.07 Hong Kong cents declared last year.

"In aggregate, AIA's dividends and buybacks thus offer investors a total yield that is surprisingly competitive with lower growth global insurance peers," Jefferies said.

AIA's VONB, which gauges expected profit from new premiums and is a key measure of future growth, rose to $4.71 billion on a constant currency basis for the year ended Dec 31, from $4.03 billion a year earlier.

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It, however, missed a Visible Alpha consensus estimate of $4.78 billion, according to Jefferies.

Its key onshore China business logged a 20 percent rise in VONB for the year, while the Hong Kong division jumped 23 percent.

The firm's VONB margin grew by 1.9 percentage points, owing to a favourable product mix shift and repricing efforts in Hong Kong and China, its main markets.