In this new feature, we interview some of the champions from the Shared Value Project’s member organisations about their unique individual experiences with shared value, and how it is changing their role within their organisation.
To kick things off we talk to Damien Mu, CEO of AIA Australia, who talks about his role as a CEO in a company taking on shared value, and how AIA Australia is addressing issues such as obesity and lifestyle related diseases in order to improve the sustainability of their business and the life insurance industry.
What does shared value mean to you?
To me shared value is where an organisation through its actions and business practices improves or addresses social and environmental issues. It is an operating and cultural philosophy of “how” organisations approach business, integrated into the strategy. It is understanding how what you do intersects and impacts society and looking at ways in which you can have positive impact, creating a win/win for all involved. Being a shared value company means addressing more than the financial bottom line when devising solutions to issues that affect the profitability of business and the life insurance industry in general but then the realisation that when you do, you actually create economic value.
For instance, obesity and lifestyle-related diseases are an important issue affecting the sustainability of the life insurance industry in Australia, but they are also key social issues affecting the future of this country on a broader level – three in five Australian adults are now considered overweight or obese, and 280 are diagnosed with diabetes every day.
When formulating policy initiatives to address issues like these, AIA Australia looks at both the economic and social aspects of the problem – so in this case how can we reduce claims instances and premiums for our customers, while at the same time positively encouraging people to take proactive action on their health?
At AIA we have created shared value through AIA Vitality which tackles these health issues by incentivising our clients and partners to improve their health and wellbeing.
What lead you to shared value?
As a business which assists members financially when often they’re at their most vulnerable, we saw trends developing in our insurance claims and wanted to take a proactive approach to improving these situations – not only for us as a business, but for our customers and partners. The aim of the Vitality program is to change the conversation around life insurance, and around Australians’ lifestyle choices in general, from ‘what if something happens’ to ‘how can we prevent it from happening’.
We believe that we can encourage Australians to make positive, permanent changes to their lifestyle that will make an impact on national health over time. Engaged Vitality members enjoy lower insurance premiums and Vitality partner rewards as well as improved health, society benefits through improved productivity and a reduced healthcare burden on governments, and we as a company benefit through the reduced length and number of insurance claims.
What does shared value success look like in AIA Australia and where are you at on the journey?
Further to the Vitality example above and how this is helping address the issue of obesity in society, at AIA we’ve also created a shared value initiative relating to AIA Rehab.
We’ve been active in the worker rehabilitation space for a long time, particularly in regards to mental illness, which is estimated to cost our industry over $150 million dollars a year in claims, and which currently affects around 1 in 5 Australians every year. We’ve developed a set of best practice principles around rehab following comprehensive research with specialist academics in this area, which we strictly adhere to as a business and help the employers we work with to implement on a practical scale within their companies.
These focus around proactively screening employees for mental health issues, supporting claimants with regular contact, assistance and encouragement should they suffer a mental health issue which takes them out of the workplace, and recognising the part that work plays in giving an individual confidence and purpose.
It’s estimated that every dollar spent on identifying, supporting and case-managing employees with mental health issues yields close to a 500% return on productivity for businesses through increased output and reduced leave, so we are having a real impact not only on our own profitability, but on the productivity of our partners’ businesses by implementing these programs.
What is your role within AIA Australia to support the company along its shared value journey?
My role is to ensure every team member at AIA Australia knows the part they play in helping to improve people’s lives through their day to day roles. That I walk the talk on shared value and help embed this in our organisation. That the team has a genuine understanding that manifests in the way they approach ideas and solutions to problems. Through our AIA Rehab program the evidence shows that work is actually good for our health and this applies to the AIA team as well.
For most people, being at work provides a sense of purpose in life and pushes us to greater heights and endeavours. A shared value working environment helps to reinforce this principle by clearly showing how employees of AIA positively impact the lives of so many Australians.
How has practicing shared value helped you in your role or career more generally?
Articulating shared value helps us to confirm and realise our purpose in our working lives – to actively make a difference in people’s lives. This is what helps to drive me, knowing that, as a life insurer we are not only financially supporting people when they’re at their most vulnerable but that we are also actively helping them return to work after an illness or that we are helping them to become healthier so that they can prevent illness in the first place. That this has not only a profound impact on those we touch but society more broadly. We have a long way to go…but are committed to this mission.
What do you think are some pertinent issues in Australia that could be solved through creating shared value?
I believe every business, level of government and individual has a part to play in creating shared value in our society and that a myriad of issues can be addressed in this way.
For us as a business, shared value makes sense across the board as a business strategy and delivers the best outcomes for all channels. By focusing our business initiatives towards both social and economic benefits, we ensure that not only are we profitable as a business from year to year, but also that we are creating tangible and sustainable value in the broader community in which we operate, and maintaining a goodwill towards our business that will encourage future growth.
I believe every organisation should be able to look at their mission and purpose and adapt this to have a positive effect on society through the concept of shared value.
Image credits: AIA Australia