The elaborated SWOT Analysis of Suzuki – one of the largest car manufacturers in the world was presented last time. This time the complete SWOT Analysis of AIA is being presented in this blog.
AIA is one of the largest life insurance companies in the world. It was founded a century ago in 1919 and has been providing the best service to its customers within its field. They are growing their business in 18 countries in Asia.
With the increase in e-commerce around the world, the AIA has the opportunity to extend its business in an online form. If you are interested to learn about digital marketing – check out our Free MasterClass on Digital Marketing 101 by the CEO and Founder of IIDE, Karan Shah.
If you want to learn about AIA, in this blog you will be able to learn about the SWOT Analysis of AIA. But before directly jumping into the SWOT analysis of AIA, let us learn about AIA, its competitors, its products, and its financial status.
About AIA
AIA is the largest life insurance company in the Asia Pacific region whose headquarter is in Hong Kong. They are the provider of insurance services for both individuals and companies. Apart from insurance services, for positive change, they promote a science-based health wellness program. The journey of AIA was started in 1919 in Shanghai by Cornelius Vander Starr to serve the Asia Pacific region with insurance and financial services.
Cornelius started his business in China before he expanded his service throughout the world. He then shifted headquarters to New York City which later became the subsidiary of New York-based AIG. AIA group not only limited their business within insurance, but they also became the shirt sponsor of one of the biggest football clubs of England – Tottenham Hotspur in 2013.
| Founder | Cornelius Vander Starr |
|---|---|
| Year Founded | 1919 |
| Origin | Hong Kong |
| No. of Employees | 23,000+ |
| Company Type | Public |
| Market Cap | $132.58 Billion (2021) |
| Annual Revenue | HKD 427.32 Billion (2022) |
| Net Income/ Profit | HKD 53.22 Billion (2022) |
Products of AIA
AIA provides services for both individuals and business groups. The services for individuals are:
- Life Insurance
- Medical Insurance
- Accident Protection
- Critical Illness Protection
- Disability Protection
- Savings
The services for business groups are:
- Employee Benefits
- AIA Regional Solutions
- Retirement
- Credit Insurance
Competitors of AIA
AIA, being a leading insurance company does not come easy. And, there is lots of competition in the field of insurance. Some of its competitors are:
- Sedgwick
- AIA
- Talanx Insurance
- Zurich Insurance
Now that we have understood the company’s core products and services, let’s dive deep into the SWOT analysis of AIA.
SWOT Analysis of AIA
SWOT analysis is a study which is undertaken by the majority of companies to determine their core strengths, weaknesses, opportunities and threats. It is a framework that is used to evaluate a company’s competitive position which later helps in strategic planning.
SWOT analysis can be conducted by any popular brand or any brand which is still new in the market can make use of this template to evaluate internal and external variables that might influence the brand authority and market development.
Below is a step-by-step detailed guide to help you with the SWOT analysis of AIA.
Strengths of AIA
The strengths are basically what makes the brand different from the other competitors and what the organisation excels at. Following are the strengths:
- Leading in its Segment: The second most powerful transnational corporation in terms of corporate control over global financial stability. Also, in the list of leading insurance companies itself is one of the biggest strengths of AIA.
- Global Presence: AIA has worldwide recognition in more than 18 countries because of its strong work performance and reputed brand name that it has gained over the years.
- Affordable Insurance: AIA insurance company is the market leader and serves the people in France with insurance products that are low in rates but with superior quality.
- Financial Position: AIA has a very strong financial position in the market with consecutive profits over the years along with accumulated profit reserves which can be utilised for future expenditures or marketing activities.
- High Level of Customer Satisfaction: AIA has gained the trust of more than a million clients and has a very strong customer relationship management team through which they keep their current customers very satisfied and also enjoy a good brand equity status among potential customers.
Weaknesses of AIA
The weaknesses are a major drawback that stops the organisation from performing at its optimum level. They are the areas in which businesses can make improvements. The major drawbacks are as follows:
- Research and Development: AIA has a good share of expenditure on the research and development department but it is spending way less than a few of the players within the industry which have benefitted as a result of their innovative products.
- Diversity in the Workforce: The local workers contribute to the majority of the workforce at AIA making it difficult for outsiders to adjust and hence resulting in the loss of talent.
- High Employee Turnover Rates: AIA has a very high employee turnover rate as compared to its competitors which means it spends a lot on training activities as employees keep leaving and joining.
- Low Interest: Low-interest rate structure in Hong Kong decreases the profitability of people buying insurance from AIA.
- Low Investments in Customer-oriented Services: Low investments in AIA Group’s customer-oriented services rivals may acquire an edge in the near future. The AIA Group must enhance its research and development spending, particularly in customer service-oriented apps.
Opportunities for AIA
Opportunities are the favourable external factors that may give the organization a competitive advantage over others. The opportunities of AIA are as follows:
- Possibilities in the Online World: Clients’ increasing acceptance of online services will allow AIA Group to offer innovative services to customers in the Insurance (Life) market.
- Social Media: Over the years the number of active users on social media channels has increased and with this AIA can make use of its social media handles to promote its products, interact with customers and even provide after-sale services.
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- Future of Insurance Company: Global life premium insurance growth is predicted to rebound to 3% with increased risk awareness owing to COVID-19 and global economic recovery set to accelerate the demand for life insurance products.
- Future Trends: The next 10 years will see the insurance industry moving from traditional to more customer-centric products. In the post-pandemic era, due to personalized services, the products are given based on information collected from external sources and devices.
- Transport Industry: The transport industry has been booming and is expected to boom in the next few years as well which has resulted in more auto insurance which is helpful for AIA to scale its business.
Threats to AIA
Threats are those factors that have the potential to provide harm to the organisation in any form. The threats of AIA are as follows:
- Technological Advancements: The technological advancements by a few competitors can pose a threat to AIA as today’s customers are more attracted towards new technological advancements and may be lost to competitors’ offerings thus reducing the market share of AIA.
- Competition: There is always an ongoing competition that puts downward pressure on the prices. This could lead to lower profits if it makes changes in the price or may also result in lower market share if it doesn’t make price changes.
- Fluctuating Interest Rates: The interest rates keep on fluctuating and don’t provide a stable financial and economic environment.
- Exchange Rate: The exchange rate also keeps fluctuating and makes it difficult for a company like AIA because it extends service internationally while its suppliers are local.
- Gig Economy: Most organized companies across the world offer group insurance. Various online-based and reputed companies like Fiverr, Amazon Mechanical Turk, and others have entered the ‘freelancer’ population who work without any formal company allegiance. This has resulted in an enormous loss for the insurance companies.
This ends our complete SWOT analysis of AIA. Let us conclude our learning below.
To Conclude
AIA is a well-known insurance brand with a significant global presence. In the SWOT analysis of AIA, we observed that the company is heavily reliant and enjoys strong brand recognition and trust with its customers. It has a strong distribution network and has reached across all the markets it serves, but suffers from an increasing number of suppliers in the same space and better R&D efforts by its competitors.
Also, one point not to miss out on is that AIA is in line with its marketing effort. It has created a customer base for itself by tapping into the digital era and creating a social media presence on several platforms. If you are interested in learning digital marketing, don’t forget to check out IIDE’s 3 Month Advanced Digital Marketing Course.
We hope this blog on the SWOT Analysis of AIA has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.
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