Ethical Business Practices at AIA Singapore: A Case Study

This report provides a comprehensive analysis of AIA Singapore's ethical business practices. It begins with an introduction to the insurance sector in Singapore, highlighting the importance of ethical conduct and stakeholder satisfaction. The report then introduces AIA Singapore, detailing its services and mission. A key section focuses on identifying AIA's stakeholders, including insured persons, the government, and employees, and analyzing their expectations. The core of the report examines AIA Singapore's ethical business practices, such as providing employee development opportunities, ensuring a diverse workforce, maintaining a safe workplace, and prioritizing customer data privacy. An analysis section assesses how these practices align with stakeholder expectations, emphasizing the company's positive public image and contributions to societal development. The report concludes with recommendations for enhancing business practices, reinforcing AIA's commitment to ethical operations and stakeholder satisfaction. The report underscores the importance of ethical conduct in the insurance industry and how AIA Singapore strives to meet its stakeholders' needs and contribute to society.

ETHICAL DECISION
MAKING
2020
A CASE OF AIA SINGAPORE
STUDENT DETAILS
[Company name] | [Company address]

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Table of Contents
1. Introduction...............................................................................................................2
2. Company Introduction: AIA Singapore.....................................................................2
3. Stakeholders of the Organisation.............................................................................3
4. Ethical Business Practices at AIA Singapore...........................................................5
5. Analysis of the ethical practices and shareholders expectations............................7
6. Recommendations for improving Business practices............................................10
7. Conclusion..............................................................................................................11
8. Reference...............................................................................................................13

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1. Introduction
The insurance sector is focused on providing individuals protection from uncertain
future events. The sector provides risk management to society in the form of
insurance contracts. Life-insurance companies offer the individuals with the risk
cover for their life, in form of medical expenses or a death benefit in terms of lump-
sum amount to the beneficiary mentioned in the contract, and depending upon the
premium amount that the individual has decided while signing the contract.
Singapore has experienced new entrants within the industry and growing
successfully in the past few years1.
Singapore is a limited market for the world insurance industry, as it accompanies for
only 0.34% of the world’s insurance market as in 20182. Due to which the new
entrants within the Singapore insurance sector easily get success by effectively
catering the needs of the Singapore market. The insurance sector deals with
providing the risk management to the individuals, therefore, it is required that the
activities conducted within the industry are ethical and the needs and requirements
of the company’s stakeholders are effectively analysed and fulfilled. So that the
company can expand its business within the industry and can improve business
performance. The report is focused on analysing the ethical business practices at
AIA Singapore and analysing whether the activities meet the expectations of the
stakeholder or not.
1Anastassia Evlanova, ‘Why is Singapore's Insurance Industry So Competitive?’ [2019]
<https://www.valuechampion.sg/why-singapores-insurance-industry-so-competitive> accessed 24
January 2020.
2 Swiss Re Institute, ‘World insurance: the great pivot east continues’ [2019] <
https://www.swissre.com/dam/jcr:b8010432-3697-4a97-ad8b-6cb6c0aece33/sigma3_2019_en.pdf >
accessed 24 January 2020

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2. Company Introduction: AIA Singapore
AIA Singapore Private Ltd. founded in Asia and is providing the insurance products
and services in 18 markets across the Asia Pacific. AIA Singapore established in
1931, is focused on providing its customers within Singapore with the risk protection
of Life and provides, medical protection, accident and health insurance, life
insurance policies and savings plan. AIA focus on providing its customer with
financial support so they can focus on their future planning and lead a healthy and
active life. AIA Singapore aims to provide the population of Singapore with quality
financial advice and with suitable products and operate ethically3.
3. Stakeholders of the Organisation
The stakeholders are an important part of the business, as the stakeholders
including the members of the business organisation who are either directly or
indirectly linked with the business organisation and the business performance are
influenced by their interest. To be a successful business entity it is required that the
organisation pay attention to its stakeholders and ensure their satisfaction4. The key
stakeholder of AIA Singapore includes the insured persons, the government of the
nation and the employees of the organisation.
Employees working within the organisation plays an important role in the
performance of the organisation. The interest of the employees is required to be
effectively analysed, as a satisfied employee will contribute towards the development
of the organisation. The employee working within the organisation expects that the
organisation performs well within the industry so that they can feel proud while
3 AIA, ‘About AIA Singapore’ [2019] <https://www.aia.com.sg/en/about-aia.html> accessed 20 January
2020.
4 Migle Matuleviciene and Jurgita Stravinskiene, ‘The Importance of Stakeholders for Corporate
Reputation’ (2015) 26 (1) IEEE, 75-83.

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working for the organisation, also they require that the organisation works ethically
and provide respectful and fair treatment to all its employees5. The employees
expect that the organisation provides them with satisfactory wages or the
compensation and job security along with the opportunities to develop skills and
capabilities while at work. To ensure the employee development within the
organisation, the insurance companies within the Singapore Insurance Employee
Union has signed an agreement on training initiatives for their employees6.
The insurance company depends upon the premium money paid by the insured
customers; therefore, they are also among the key stakeholder of the organisation.
An organisation operating within the industry is required that it caters the
expectations of its customer base so that it can effectively work within the industry
and can expand its business. The customer expects that the company provides it
with comprehensive product offerings and advice that would meet his needs and
expectations7. As the customers within the insurance sector want responsive and
immediate service, as they want that the organisation provides them with all the
necessary information and are responsive when required8. The customer is trusting
the organisation with the life risk management, so the customer expects that the
organisation provides him with satisfactory and trustworthy services, so that they can
be approached when required. The insurance companies within the Singapore
Insurance Industry are focused on adopting digitalisation to meet the requirements of
its customers, as through websites and online information systems the customers
5 R. Edward Freeman, ‘Stakeholder Theory’ (2015) 2 BE 1-6.
6 Joanna Seow, ‘Insurance industry working with union to train employees for digital economy’ [2019]
<https://www.straitstimes.com/business/insurance-industry-working-with-union-to-train-employees-for-
digital-economy> accessed 24 January 2020.
7 Max Goettsche, Tobias Steindl and Simon Gietl, ‘Do Customers Affect the Value Relevance of
Sustainability Reporting? Empirical Evidence on Stakeholder Interdependence’ (2014) 25(3) BSE
149-164.
8 Antonio Coviello and Giovanni Di Trapani, ‘The Customer Satisfaction in the Insurance Industry’
(2012) SSRNEJ.

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will be effectively able to analyse the available information and can focus upon the
policies that they require9.
Government plays an important role in the working of the insurance sector; therefore,
they are considered as the key stakeholder who is influenced through the
performance of the organisation within the industry. The government set up policies
and regulations to regulate the insurance sector within the industry, to ensure that
the organisations are working ethically and to protect the interest of the customers
within the industry10. Therefore, it is required that the insurance companies focus on
such government policies and regulations and ensure the working of the organisation
as per the government rules and regulations. The Life Insurance companies within
Singapore are governed under the Consumer Protection Act, and any company
promoting unfair trade practices is entitled to legal actions as per the law11. The
Singapore Government expects an organisation to focus upon spreading awareness
about insurance, conducting business ethically, and ensuring trust and transparency
within the operations.
4. Ethical Business Practices at AIA Singapore
AIA Singapore is focused on providing quality product and services and ethically
operate its business. The organisation is focused on developing a corporate culture
that is focused on conduct ethical business activities which are focused on doing the
right things, in the right way and including the right people. AIA Singapore focuses
on working ethically both internally as well as externally so that it can meet the needs
9 The Digital insurer, ‘How Insurers Can Perfect The Customer Journey In The Digital Age’[2019]
<https://www.the-digital-insurer.com/wp-content/uploads/2019/05/OC-1-How-insuers-can-perfect-
customer-journey-in-the-digital-age-1.pdf> accessed 27 January 2020.
10 Alain Verbeke and Vincent Tung, ‘The Future of Stakeholder Management Theory: A Temporal
Perspective’ (2012) 112(3) JBE 529-543.
11 Consumer Protection Act, ‘Ministry of Trade and Industry Singapore’ [2019]
<https://www.mti.gov.sg/Legislation/Legislation/Consumer-Protection> accessed 20 January 2020.

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and requirements of its stakeholders and can achieve business goals and objectives
effectively12.
The ethical business practice at AIA Singapore includes:
Providing opportunities to employees within the organisation to develop their skills
and to foster innovation within the organisation. Focusing on hiring a diverse
workforce irrespective of the culture, religion or the background of the candidate. The
organisation focuses on providing the opportunity to the people who have the
required talent and can contribute towards the achievement of organisational goals
and objectives.
Employing a diverse workforce within the organisation also promotes the
development of a business culture that is focused on respecting the employees
working within the organisation irrespective of their position within the organisation,
age, nationality, marital status or the caste or religion of the employee. And
promoting fair means within the organisation for hiring and promoting the
employees13.
Being an ethical organisation AIA Singapore focus on the development of a safe and
secure workplace for the employees working within the organisation. The
management of the organisation has set up rules and regulations that ensure that
the activities within the organisation take place safely and securely and if any
situation arises that may impose threat for the employee then it must be reported
immediately.
12 AIA Singapore, ‘Our Commitment’ [2019]
<https://www.aia.com.sg/en/about-aia/our-commitments/our-commitment.html> accessed 20 January
2020.
13 AIA Singapore, ‘Company Factsheet’ [2019] <https://www.aia.com.sg/content/dam/sg/en/docs/aia-
corporate-factsheet/aia-corporate-factsheet.pdf> accessed 20 January 2020.

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AIA along with focusing on the development of an internal ethical culture also
ensures that the organisation ethically deals with its customers. It focuses on its
marketing and advertisements of its products and ensures that the information
provided to the customers are accurate and truthful so that the customers can rely
on the data and facts shared. Also, the organisation marketing team focuses on
treating the customer fairly and provides them with personalised solutions according
to their requirements and ensures that the customers are kept away from any
misleading information and unsuitable products.
To be an ethical organisation and to ensure customer trust and respect for the
organisation, AIA focuses on maintaining customer data privacy and data security.
The organisation ensures that the legal rules and regulations are being followed
while transferring the customer's private data and business information across
borders. AIA Singapore ensures that the employees working within the organisation
does not unethical use of their business position within the organisation or in the
industry, and ensures that the employees working within the organisation are being
provided with the opportunities for their development and growth irrespective of their
position or any of diversity reasons.
The organisation focusses on a fair and ethical competition within the industry, to
compete within the industry and to achieve business goals and objectives AIA focus
on the introduction of innovative and competitive products and services and focus on
meetings the expectations and demands of the customers within the industry. Also,
the organisation has developed policies that prohibit the use of unethical measures
to extract information related to its competitors or any industry-related facts or
figures. AIA is an organisation focused on conducting ethical business practices
within the industry ensures that either the subordinate or any superior level

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employee of the organisation is not involved in any unethical business practices such
as bribery, corruption or any other improper personal benefits. Anti-corruption laws
formed within the organisation focus on managing such activities within the
organisation.
The activities conducted at AIA Singapore follows the code of conduct established by
the government and ensures that the interest of the customer is protected within the
industry. As the government focus on the social activities conducted by the
organisation and they expect that the organisations operating within the nation
contributes towards the development of society along with focusing on the
development of the business nation. therefore, to meet the interest of the
government and to achieve the goal of being an ethical organisation, AIA also
focuses on its social responsibilities. The organisation focusses on taking initiatives
that would influence the lifestyle of the people within the society by providing them
with education opportunities, also contributes towards the development of the
nation’s economic status and improving social harmony within the nation14.
5. Analysis of the ethical practices and shareholders expectations
AIA Singapore is serving the customers within the nation since 1931 and has created
a public image of being an ethical organisation due to the ethical business practices
conducted within the organisation that contributes towards the achievement of
business goals along with meeting the needs and requirements of the business
stakeholders. The organisation is providing risk management to more than 1 million
customers who trust the organisation because of this ethical business practices.
14 AIA Singapore, ‘Corporate Social Responsibility Program’ [2019] <https://www.aia.com.sg/en/about-
aia/our-commitments/corporate-social-responsibility.html> 2019, accessed 20 January 2020.

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The AIA Singapore has established a base of 5,000 professional AIA representatives
who effectively work to boost the business of the organisation, and has achieved a
rank of largest life insurer in Singapore in terms of the amount insured by the
organisation. to meet the expectations of the customer and to provide them with
required services, AIA has created an innovative AIA Platinum Wealth Plan, that
focuses on meeting the need for wealth protection along with wealth accumulation15.
AIA being a socially responsible organisation and an organisation that is focused
towards societal development has raised a fund of around S$ 542,968.00 till 31st
December 2019 and has contributed the sum towards providing the financial aids to
the required sections of the society and has established AIA Centennial Fund to
support the education of the children within the society. The aim of AIA to meet the
customer's needs and demand and to provide them with the products and services
has been effectively met by the organisation16. As the customers within the
Singapore industry requires a retirement plan that would have flexible pay-out
options, AIA introduced a plan that meets the expectations of the customers and
allows the customer to delay their retirement until 70, and such product introduction
led to 9% increase in business revenue of the organisation17.
AIA Leadership Centre provides a development opportunity to its employees within
the organisation and has hosted more than 240 events in 2018 that has contributed
towards the development of its employees. The government expectation of
promoting the benefits of insurance among the societies have been met by AIA
15 AIA Singapore, ‘Company Factsheet’ [2019] <https://www.aia.com.sg/content/dam/sg/en/docs/aia-
corporate-factsheet/aia-corporate-factsheet.pdf> accessed 20 January 2020.
16 Ho Lee Yen, ‘Growing an insurance business with customer-led product innovation and marketing
strategy’ [2001] AIA <https://www.visioncritical.com/hubfs/Customer%20Stories/AIA/AIA-customer-
story.pdf> accessed 20 January 2020.
17 Gabriel Olano, ‘AIA Singapore recognised for customer centricity’ [2019]
<https://www.insurancebusinessmag.com/asia/news/breaking-news/aia-singapore-recognised-for-
customer-centricity-173439.aspx> accessed 20 January 2020.

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through a campaign #WhatsYourWhy, that was supported by its brand ambassador,
David Beckham, and created awareness within the society about taking steps
towards a healthy and secured lifestyle18.
AIA Singapore ethical nature of conducting business and meeting the needs and
requirements of its customer has resulted in attracting many graduate talents within
the nation and has achieved GTI Media’s “Most Popular Graduate Employer 2017” in
the Insurance sector. AIA’s ethical business policies and work environment have
implemented the whistle-blower policy within the organisation to protect the interest
of the customers as well as the employees working within the organisation and it has
resulted in creating a culture in which the employees focus on using ethical ways to
conduct business activities19.
To provide the customers with satisfactory and innovative services, AIA has
launched a health and wellness program, named as AIA Vitality that encourages the
customers to understand their health requirements and suggest options that they can
implement to improve their physical well-being. AIA Singapore focuses on providing
its customer with innovative and attractive services has led the organisation towards
achieving the Innovator of the Year for life insurance at Singapore Management
Excellence Awards 201820.
The expectations of the stakeholders within the organisation are important to ensure
the success of the business organisation. Therefore, to maintain the position of
leading service provider within the industry AIA also focuses on implementing
18 AIA Singapore, ‘Leading a Healthier Century, Annual Report 2018’ [2018] AIA
<https://www.aia.com/content/dam/group/en/docs/annual-report/annual_report_2018_e.pdf>
accessed 20 January 2020.
19 AIA Singapore, ‘Leading a Healthier Century, Annual Report 2018’, [2018] AIA
<https://www.aia.com/content/dam/group/en/docs/annual-report/annual_report_2018_e.pdf>
accessed 20 January 2020.
20 AIA.com, ‘Environmental, Social and Governance’ [2018]
<https://www.aia.com/content/dam/group/en/esg/AIA%20Group%20ESG%20Report
%202018_E.PDF> accessed 20 January 2020.

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various rules and policies that contribute towards meeting the expectations of the
key stakeholders of the organisations including the customers, employees and the
government. The ethical business activities conducted at AIA Singapore effectively
meet the needs and expectations of the stakeholders within the industry also helps
the organisation in achieving its goals and objectives. AIA has experienced an
increase in Operating profit after tax by 13% to US$5,298 million in 201821.
6. Recommendations for improving Business practices
AIA Singapore being among the leaders within the Singapore insurance industry
focuses on conducting ethical and fair business practices within its organisation and
ensures that the needs and expectations of its stakeholders are achieved. As it is
focused on providing the customers with innovative products that meet their needs
and demands, AIA can focus upon improving its new product policy by ensuring
effective customer engagement while deciding upon the product by evaluating the
customer needs and expectation through market analysis or the customer reviews
about existing product within the industry or analysis of feedback received from
customers22.
AIA Singapore can effectively improve its business performance and the ethical
practice to meet the stakeholder’s expectations by improving effective
communication with the business stakeholders. As implementing an effective mode
of communication within the business organisation communicate internally as well as
externally ensures that the stakeholders are effectively connected with the
organisation and the organisation is working according to their needs and
21 AIA Singapore, ‘AIA delivers an excellent performance in 2018’ [2019]
<https://www.aia.com.sg/content/dam/sg/en/docs/press-releases/2019/aia-delivers-an-excellent-
performance-in-2018-media-release-15-March-2019.pdf> accessed 20 January 2020.
22 Stakeholder Analysis [2019]
<https://shodhganga.inflibnet.ac.in/bitstream/10603/9222/14/14_chapter%205.pdf> accessed 20
January 2020.