What does shared value mean to you?
Shared value is created when companies explore opportunities for innovation and growth by addressing social problems as business objectives. For IAG, our purpose is to make your world a safer place. We recognise that the competitiveness of IAG and the health of the communities we work in are mutually dependent.
What led you individually to the shared value concept? How did you come across it?
Back in 2013 I was asked to take a lead in consolidating how IAG managed its sustainability and philanthropic work. I was looking for a more commercial approach to leading these initiatives and was attracted to the shared value concept which had recently been articulated by Michael Porter and Mark Kramer in the January 2011 HBR article “Creating Shared Value: Redefining Capitalism and the Role of the Corporation in Society”. So I created the IAG Shared Value team to help bring these pieces of work together and to link the activity to IAG’s purpose and its corporate strategy. The team was initially established within IAG’s corporate strategy team – indicating IAG’s commitment to linking IAG’s purpose and strategy and embracing the shared value approach.
What does shared value success look like at IAG and where is your company on the journey?
IAG’s Shared Value team, which is now called the IAG Safer Communities team, are focused on ways to help our customers and the community to be safer, stronger and more confident. At its heart, IAG’s insurance business helps the community to recover from unexpected loss arising from accidents and natural disasters. This stabilises the community and makes it possible for people to build their lives free from the interruption caused by unexpected events.
Increasingly our role as an insurer is to help communities to understand risk, to prevent accidents, and lead safer lives. We are investing in innovation to provide assurance to our customers about ways to avoid risk in their lives. To give some examples of our extensive portfolio of shared value innovation – our Research Centre tests motor vehicle safety and recommends safety improvements to motor vehicles. Our NRMA Insurance Safer Journeys application rewards drivers for avoiding driver distraction using mobile phones while driving cars. Our Get Prepared app, which we co-created with our partner Australian Red Cross, helps Australians to prepare for storms and natural disasters by developing a Get Prepared Plan that you can access in an emergency. Our DipStik innovation alerts local councils and the SES about dangerous causeways and river floodings at road crossings. Our Good ‘Hoods initiative in Blacktown NSW is innovating ways to improve social resilience alongside local government and community organisations. Our research has shown the important linkage between social resilience and the capacity of the community to recover quickly from large peril events so we are invested in helping communities to be socially resilient where neighbours know each other, community organisations are strong, and people are encouraged to show leadership in building strong communities.
As you can see, IAG has a rich portfolio of social innovation activity focused on making the community safer, stronger and more confident. Shared value has been instrumental in driving this social innovation and delivering on our purpose to make your world a safer place. We expect IAG to benefit commercially by reducing the cost of claims and making insurance coverage more affordable.
What is your role as a leader in supporting shared value within your organisation?
As the Group Executive for Strategy I am accountable for shaping IAG’s Corporate Strategy to deliver on our social purpose – making your world a safer place. The choices we make to ensure communities are resilient are an important focus for our strategy.
How has practicing shared value helped you individually in your role or career more generally?
I care about making a difference for my community and shared value has helped provide the roadmap between my values and my role leading corporate strategy. Shared value has reinforced my view that there is no trade off between doing right by the community and doing right by shareholders.
What do you think are some pertinent issues in Australia that could be solved through creating shared value?
For many years IAG has focused on how to improve safety of Australians and New Zealanders on the road by testing the safety of new cars and advocating for safety improvements and better regulation. We are currently supporting the automotive industry in enabling driverless cars and evaluating the regulatory and other changes needed to commercialise this important technology. IAG is playing a regional leadership role in advocating for stronger prevention and adaption to climate change. We recently announced IAG’s climate action plan including our science-based climate targets. We are on the global board of United Nations Environment Programme Finance Initiative (UNEP FI) and are a signatory to UNEP FI Principles for Sustainable Insurance. We believe that accessibility and affordability of insurance is a social issue linked to climate change. The driving cause of insurance claims inflation in the past ten years has been an increase in the frequency and intensity of climate events. IAG’s leadership on shared value and sustainability will make our community more resilient to climate events, benefit our customers by making insurance more affordable ensuring more people are able to recover from unexpected loss. We believe this creates a more confident, resilient and safer community.