The Performance Of Aviva Life Assurance Business Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Aviva is in life assurance sector trading located in the region of central London. The date of incorporation as per ICC report is 09th of February 1990. Their principal activities are transaction of life assurance, long term servings and general/health insurance business and fund services. They operate in nearly 30 countries around the world. Aviva plc is world's fifth largest insurance group and the largest insurance services provider in UK with 54,000 employees serving around 50 million customers worldwide (Aviva corporate profile 2009).

It is one of the leading providers of life and pension products in Europe. The core purpose is to provide prosperity and peace of mind to customers. The strategic priorities are to manage composite portfolio, to build global asset management, to allocate capital rigorously, to increase customer reach and productivity boost up.

1.1 Strategy

One Aviva and twice the value is strategy of Aviva. According to Andrew Moss, Chief executive's presentation the value and organizational meaning of their strategy is to build Aviva a global group, a regional structure, to gather a collective learning and knowledge and other resources to elevate their growth. He also adds respond the challenges in a global market and finally to maximize capability of their asset management. Operational meaning he added the clarity and purpose by understanding the responsible and their ultimate objective. Neglecting the duplication which intricate it. Moss insisted to understand their customers by managing talents and innovating new products to sell across global. Finally to raise the utilization of shared services to realize the benefits of scale and purchasing power.

The target markets are UK, North America, Asia Pacific and Europe. The regionalized growth target to 2010 in new business sales and profits for Europe is minimum 10% and for Asia Pacific is minimum 20% p.a. North America - USA to double volume of new business sales within 3 years of acquisition, whilst maintaining margins. The growth target for UK is to grow at least as fast as the market subject to at least maintaining margins. The settings of targets show capabilities of the organization. With respect to the report projected by the group Chief Executive Andrew Moss, target fix up can be attainable in lieu of their past performance and achievement in all these markets. Aviva competing in almost all the continents and so it publicise and projects their own global vision "One Aviva Twice the Value."

The strategies and the overview of Aviva's progress have been discussed so far. Main purpose of this paper is too explicit its role on corporate social responsibility in the aspects of every particular effect.

It is to consider a business set of facts or circumstances where they do and to whom they do. Corporate social responsibility is about how companies manage the business processes to produce an overall positive impact on society. Aviva publicise themselves that they are committed to act as a responsible member in the international business community. Further to this commitment as their saying, let us discuss what they do accordingly and what they failed to do. Throughout this paper we also discuss the application of key concepts of ethics to their organization.

2. Theories of CSR and Business Ethics

Corporate social responsibility is one of the new developments of business ethics which is precisely directed to the business organizations because of the development of this application (Rogene A Buchholz and Sandra B Rosenthal 1999). The theories of corporate social responsibilities can be classified according to Elisabet Garriga and Domènec Melé in to four groups. They are instrumental theories, political theories, integrative theories and finally ethical theories (2004). In a very brief we discuss the relative approaches of corporate social responsibility theories and business ethics through the categorization.

2.1 Instrumental Theories

The related approach to the corporate social responsibility categorized in these theories is the organization viewed only as a wealth creating machine and the economic output is the only social activity. This approach can be easily examined by Friedman that "the only one responsibility of business towards society is the maximization of profits to the shareholders within the legal framework and the ethical custom of the country (1970)

Maximizing the shareholder value, strategies for achieving competitive advantages, strategies for the bottom of the economic pyramid and cause-related marketing are the different sorts of variants incorporated in these instrumental theories.

2.2 Political Theories

The power of corporations in society and the responsible use of this power in the political arena is related approach to the corporate social responsibility which includes political considerations and political analysis in CSR. This approach directed organizations to hold as true to social rights in social cooperation. The two major theories that can be a distinctive attributes are corporate constitutionalism and corporate citizenship.

2.3 Integrative Theories

Basically these theories are related to satisfy social demands. This implies that the consistency and improvements of a company is based on the society. The lack of unification of the normative and descriptive approaches to interact with society is related to integrative theories of CSR. (Diane L. Swanson 1999) This group of theories is focused on detection and findings of social demands which obtain social acceptance.

Issues management, principle of public responsibility, stakeholder management and corporate social performance are the incorporated views that categorized under these theories. (Elisabet Garriga and Domènec Melé 2004)

2.4 Ethical Theories

The related approaches of CSR are based upon the ethical provinces of organizations to society. According to Elisabet Garriga and Domènec Melé study, these theories can be related to profits, political performance, social demands and ethical values and they found the need to create a new theory on the business and society relationship which indeed desegregate these four factors. These theories realize the connection between business and society is attached to ethical values. Additionally, they guide to follow the principles of business ethics that shows a necessity to achieve the social demands so that a value of society can be obtained.

Moreover they emphasize normative stakeholder theory, universal rights, sustainable development and common good approach.

3. Aviva and its role on CSR

Aviva publicise themselves in related to corporate social responsibility as, "We're committed acting as a responsible member of the international business community as an insurer, investor, employer and customer." In this section it is clearly studied the sayings and reactions of organization. Eventually here we discuss whether the way they act really relevant to what they say or they pretend to gain the social responsiveness.

3.1 Environmental Issues

Environmental issues are the prominent even predominant aspects in corporate responsibility. Aviva make public on environment as, "Engaging with global challenge to combat climate change and protect the environment." The company also says the carbon related emissions caused by travel has been cut half since 2002. As of political, Aviva insist government to reduce the climate change effects on customer through flood-proof roofing. A spokesperson of Aviva said that they believe Pay as you drive package is one of the ways people would have use their car less. The insurance amount of car would depend on the usage rather than a flat fee.

According to Angela Balakrishnan, Aviva will be the first insurance group to try to make its operations carbon neutral throughout the world. She added that they (AVIVA group) strongly believe that climate change to be the most important environmental issue facing the world as Mr. Richard Harvey, group chief executive said (2006).

The group is also focus on possible ways of producing environmentally friendly products. The strategy for climate change has three spheres to focus. They are sphere of control, sphere of influence and sphere of concern.

Since 2008 Aviva and Honk Kong University have been working together to create Hong Kong's first "green" junk. According to the sources it was launched in the year 2009 which is the first sea vessel to run on B5 biodiesel blend which is refined from wasted cooking oil collected from the restaurants i.e. 5% biodiesel and 95% ultra low sulphur diesel. Sources added that in Aviva Singapore, they have been raising awareness by collecting recyclable wastes to encourage people not to throw things that can be recycled.

As a part of environment and getting deeper on to it, the research was conducted by Aviva Asia. They publicise their mission statement as to build holistic environment through protection of trees using management techniques and advanced technology. They found environmental pollution was the major problem as of now since the ozone layer being broken. As a result of their research the ultimate solution for avoiding this problem is to plant trees and to protect trees. Aviva Asia has been come out with solution for several issues which deals with environment. Such as air pollution, unhealthy ecological regime, pest control, plant diseases control, lichens, protaxics, element deficiency, maintenance, watering, planting methods and so on.

3.21 Progress

In the previous tear they said that they would reduce their carbon emission by 5% and they achieved in reduction of carbon emission by 15% where in the year 2008 the reduction was 3.3%. The company is keen in reducing the increase of carbon emission by 5% in the coming year. Zelda Bentham a senior environmental manager said "Carbon reduction is increasingly becoming a mainstream business challenge and we look to our new long-term reduction target (to 2020) to assist us in developing appropriate solutions. " The longer term goal for the first time they have set themselves is to reduce their carbon emission by 30%. They achieved what they have said and increased long term achievement as six times from their yearly target of reducing carbon emission. From this prospect as for as environment concern they do what they say.

3.2 Community

"Delivering positive impacts in the communities where we operate" is how they publicize themselves for the community investment. Community investment is another prominent prospect of corporate responsibility. The key programmes of Aviva's community investments are street to school, Oxfam 365 and Paying for it. The new five year programme for street children to improve access of education is street to school. Supplying funds and responses to the natural as well as manmade disasters is Oxfam365 and finally Paying for it programme is to promote financial literacy and economic citizenship for young people.

These are the international community investment programmes that Aviva say. Are they really executed what publicise by themselves? Street to school study report indeed provide answer for this (Aviva community report 2009).

3.21 Street to School and so on

In the UK one child in nine i.e. 100 000 children per year will run away from their home before they turn 16. One in twelve is harmed and 80% do not receive help as per the sources. With partnership of Railway Children Aviva UK will help this young and vulnerable children. The charity's 'off the radar' research (2009) explored the tormenting experiences and sorrowful realities for these children.

The company invested £8m in 2009 (2008: £9.6m) for charitable and community investment. Apart from this, 18% of which have also been invested through employee volunteering hours. Street to school has been started in UK, India, and Turkey and will gradually adopt by every country they operate, eventually accounting for 50% of their charitable donations. In India Aviva has partnered with Child Rights and You (CRY) to help over 50, 000 street children to get access for their education and training by 2012. In partnership with the Hindustan Times, Aviva India also held a five-day book donation drive which resulted in 125,000 books donated by employees, schools and members of the public. Save the Children will use the books to help give 38,000 under- privileged children access to education (As per the corporate responsibility summary report 2009)

The summary report also added that they support further more charities and mobilized their investments. In addition to street to school, economic citizenship education for teenagers, Aviva's Canada's community fund, Taiwan typhoon and Podari Zhizn are the community investments they undergo.

3.22 The Progress

In the last year the company said that they would create their group-wide community strategy develop how they measure outcomes and continue to allocate their employees in community activities. Though they had a busy and successful year of employee engagement, Aviva maintained the progress of engaging their employees in volunteering hours than ever before (+18%). The flagship community investments of street to school in 3 countries have been launched successfully. Further step of this community investment would be implementation of that street to school in to all the other countries they operate.

4. Discussion

With the help of categorization of theories of CSR and business ethics the strategy and investments for very few aspects has been discussed in this paper. There are many other policies and basic philosophies of ethical issues and social responsibility prospects have also been successfully treated by Aviva. Right from the employee relations to the customer relations and sustainability issues have been includes in this issues.

As for as an insurance group company concerns, the maximum possible investments and social demands have been attempted to fulfill by this organization. For a manufacturing process plant there could be many issues that raised and threatened by the socio-economic issues. Though the company might organize yet more CSR plans and community investments, Aviva has secured by satisfying a sufficient social demands and ethical issues. It has the capabilities of doing and deserves the social responsibility to the society. The stakeholder theories, contract theories, and profit maximization theories are part of corporate responsibility and business ethics. In a wide a group or individual who can affect or is affected by the organization is defined as a stakeholder. And so the insurance group that too world's fifth largest insurance group has follows the theories of business ethics and its development.

5. Conclusion

From the progress of their investments which we have discussed it is clearly explicated that the analyses of ­­their adverts and their reaction. Aviva keep up their achievements and targets and in fact elevating the longer terms and takes serious keen on achieving it rather by simply publicise and leave. From my point of view the interventions made in this paper with the guidance of theories, have an effective impact towards the society in terms of corporate responsibility.

Ultimately it is understand that the key ethical concepts that Aviva has effectively utilized to its practical approaches. The relationship between their business strategy and the theories can be precisely handled. Henceforth, the evaluation of Aviva's CSR practices which is discussed throughout this paper have been created a positive impact.