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: 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 2018, middle-class population in Asia (excluding Japan) is expected to get doubled in 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).

2. Low market penetration: 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.

3. Efficiency Increment through Digitalization: Technology, Innovation and Digitization – three pillars for a company to adapt to environmental changes. Technology and innovation are those pillars which AIA has built upon and catering to people need but digitization is where its opportunity lies. Digitization of operational process, systems and supporting distribution helps in simplifying customer experience, reducing costs and increase customer base. They can increase digitization through building Insurance Chatbots that provide instant service to customers using Natural Language Processing or by Private Cloud and Big Data in smaller countries market by consolidating multiple data centers into it and reducing carbon footprint. They can increase customer interaction by developing a mobile application where customer can resolve their queries, get latest updates of products and its related terms and conditions and get timely notification for its payment of premium, thus overall helping in improving customer experience.

4. Growth Opportunities in Existing Countries: With the aim of expansion and after opening its first office in the country, AIA expects future growth opportunity despite low penetration in the Cambodia as compared to its neighbors. Having market reached maturity; positive signs of growth resemble future growth driven by dynamic and young labor force. Cambodian life insurance market has shown potential growth as premiums of life insurance grew 30% from US$ 151.6 million in 2017 to US$ 196.4 million in 2018 and general insurance sector grew by 50.6% to US$ 75.4 million in 2017.
Australia also has potential growth opportunity for expanding its distribution channel through a $3.8 billion purchase of Commonwealth Bank of Australia (CBA). CBA’s Sovereign Assurance and CommInsure Life would keep selling AIA’s product which would result in AIA capturing a leading market position in Australia and increasing its revenue. This partnership could bridge the gap of insurance industry and align it with what exactly the customer needs.

Threat

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

Political

1. Changing Consumer Demographics: Ageing population, increasing preferences for healthy and secured lifestyle, urbanization, mushrooming smart cities, awareness of lifestyle related diseases, rapid urbanization, growing need for retirement savings and significant wealth creation are encouraging people to take insurance and get secured by the loss in case of any contingency. Four main risk factors affecting life style related diseases are physical inactivity, unhealthy diet, smoking and excessive alcohol intake. These habits cause four main non-communicable diseases- diabetes, respiratory problems, cancer and cardiovascular responsible for 60% of all deaths worldwide. AIA Vitality helps people to control these habits and focus on healthy diet and exercises. In addition to this, it provides wide customer base in the future with new and existing customers both as these factors will drive demand for protection and long term savings products in various country markets. Presently, Hong-Kong has the lowest birth rate, so with government aiming to boost birth rate, AIA has wide future growth opportunity to increase its customer base.

Economic

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

Social

1. Decline in population of Japan translates to lower revenue in Japan: Panasonic and other homegrown Japanese companies such as Sony, Sharp, Toshiba and other have seen a decline in their business on their own home turf, a reason that contributes to this decline in business is that Japan is suffering a cultural malaise where in the major population of Japan has aversion to human contact in a society dominated by technology, this leads to an extremely low birth rates in Japan because of which Japan is experiencing an irreversible decline in its population, Japan’s population peaked in 2010 at 128 million and since then it has been on a steady decline, Japan is also one of the very few countries to have a negative population growth (-0.1%). Because of this declining population the growth of Panasonic has stagnated severely in their own home country which contributes a significant portion of their international revenues.

2. High average age of Japanese population and high labor cost: Besides the issue of declining population, the average age of Japanese citizen is around 48 years one of the highest in the world whereas average age of India’s population is expected to reach around 29 years by the year 2020. Because of such high average age of population, Japan is seeing a decline in overall expenditure, Last year Japan’s GDP growth rate was around 1% and to make matters worse the labor costs in the country are extremely high which makes it worrisome for companies like Panasonic to increase their revenues within the country and also the high operational cost that the company has to bear due to high labor cost to operate in Japan. Over the years Panasonic has seen decrease in the percentage of the revenues that their Japan’s operations contribute compared to their global revenues.

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.