* New business value rises to record $578 million
* Shares trade up 1.7 pct after earnings (Adds share reaction, analyst comment)
April 22 (Reuters) - AIA Group Ltd, the world's second-largest life insurer by market value, said new business jumped 44 percent on a constant exchange rate basis as demand surged in Hong Kong and China, despite slowing economic growth in the mainland.
New business indicates expected profit from new premiums - a key yardstick for growth at AIA, which listed in Hong Kong in 2010 after a spin-off from bailed-out U.S. insurer AIG.
AIA said in a statement on Friday that the value of new business rose to a record $578 million in the quarter from $425 million a year earlier. Growth was 36 percent once changes in currency rates were factored in.
China and Hong Kong together account for about half of new business growth globally at AIA, originally founded in Shanghai nearly 100 years ago and the first foreign insurer to be granted a license in China.
AIA shares in Hong Kong were trading up 1.7 percent by 0304 GMT, outperforming the broad Hang Seng Index, which was down 0.8 percent.
Mark Tucker, AIA's Group Chief Executive, said the company was confident of its future prospects, and that it was focusing on increasing the reach of agency and distribution channels and expanding and improving its range of products.
In a research note, Morgan Stanley said AIA's better-than-expected new business growth in tough market conditions would help pave the way for the company to achieve "another successful" year of results.
AIA also recorded double-digit growth in new business by value in Malaysia. Singapore growth was more muted, with increased regular premium protection business partially offset by lower single premium volumes, it said in its statement.
The insurer did not provide detailed guidance on its business outlook.
But it sounded an upbeat note. "The Asia-Pacific region remains the most attractive and exciting market in the world for life insurance," AIA said, "with the protection gap between the need for life and health insurance and the levels of cover in place continuing to widen." (Reporting by Kshitiz Goliya in BENGALURU and Sumeet Chatterjee in HONG KONG; Editing by Richard Pullin and Kenneth Maxwell)