AIA Group SWOT and PESTLE Analysis

 

Strength

This section is available only in the 'Complete Report' on purchase.

Weakness

This section is available only in the 'Complete Report' on purchase.

Opportunity

1. Change in customer preferences with growing market: Increase in healthcare awareness among people has provided the opportunity for AIA to expand and diversify its protection-oriented portfolio and develop new revenue streams. Ageing population, increasing need for retirement savings, awareness of life style related diseases, rapid urbanization and significant wealth creation are the factors contributing in change in customer preferences. Like in India, there is a significant gap of protection insurances of which AIA can avail this opportunity through partnerships and joint ventures. With reference to the Annual Report 2022, middle-class population in Asia (excluding Japan) is expected to get doubled by year 2025, crossing Europe and North America and middle-class expansion by more than seven times in the continent by 2020 which provides large customer base in future for the company. In addition to this, there is increase in prevalence of lifestyle related disease as 49% of all the non-communicable diseases deaths globally are covered by Asia (excluding Japan). Also, the income of the population is going to increase and this will lead to a demand for better health products. So, there is a large scope to capture the growing market.

2. Low market penetration presents great potential: Low awareness of protection insurances, untouched markets and targeting new customers are the causes of low penetration. Life insurance premiums penetration in Asia ex-Japan markets stands at an abysmal 2.4% of GDP. This is remarkably lower than the developed countries such as US (3.5%), Italy (6%), UK (8%) and Japan (8%). As per theory, the penetration rate should justly figure above the ratio of the developed economies, given the relatively low amount of social spending and high savings rate. AIA partnership with its 7 largest partner banks having access to more than 60 million existing customers provide only 2% of penetration of AIA products and provide significant potential new customers for future profitable growth. This can be developed through deepening engagement with strategic partners, through non-traditional partners expand distribution reach, engage customers in healthy living, increase customer engagements and develop the market capabilities using data analytics according to each country market.

The remaining section under "Opportunity" is available only in the 'Complete Report' on purchase.

Threat

This section is available only in the 'Complete Report' on purchase.

 

Political

1. Hong Kong has introduced insurance amendment bill 2023 in the legislative council: The Insurance (Amendment) Bill 2023 was introduced by the Hong Kong government into the Legislative Council on April 6, 2023 in order to alter the Insurance Ordinance to put in place a risk-based capital regime for insurers in Hong Kong. A rule-based capital adequacy regime applies to long-term and general business insurers in Hong Kong, which means that an insurer's capital adequacy is determined by its solvency margin. A single insurer's business and risk management practises, such as the products they sell or the investments they make, are not considered by the current regime. There are also some inconsistencies in the established guidelines for valuing assets and liabilities.
In order to bring Hong Kong's insurance system into compliance with the requirements outlined in the Insurance Core Principles published by the International Association of Insurance Supervisors, the IO has been amended. The Hong Kong Insurance Authority has already held numerous rounds of industry consultation to comprehend and evaluate the effects of the revisions. These revisions will make the insurers more liable to adapt to the changing risk management rules. Insurers will have to maintain adequate capital and should meet the international standards. Following the implementation of this rule, insurers like AIA will face scrutiny and will be subject to tough guidelines.

The remaining section under "Political" is available only in the 'Complete Report' on purchase.

Economic

This section is available only in the 'Complete Report' on purchase.

Social

This section is available only in the 'Complete Report' on purchase.

Technological

This section is available only in the 'Complete Report' on purchase.

Legal

This section is available only in the 'Complete Report' on purchase.

Environmental

This section is available only in the 'Complete Report' on purchase.