Defined by Harvard Business School professors Michael E. Porter and Mark R. Kramer in an article in Harvard Business Review in 2011, shared value refers to business models that create economic value while addressing societal needs. Shared value emerged from the notion that businesses operate in an outdated approach that narrowly views value creation as optimizing short-term financial performance. It rests on the premise that companies must generate societal benefit at profit.
Since 2011, the idea of shared value has infiltrated corporate boardrooms and classrooms worldwide. To convene leaders in shared value and facilitate accelerated impact, the Shared Value Initiative hosted its seventh annual Shared Value Leadership Summit on May 9 and 10 in New York City. The Summit convened approximately 400 individuals with interests in building a shared value ecosystem and identifying tangible opportunities for collaboration.
The event commenced with an opening conversation between Michael Porter and Paul Bulcke, the CEO of Nestlé, and rapidly moved into how shared value can be applied in other sectors beyond nutrition. Discovery, Vitality Group, and a selection of Vitality’s insurance partners, including AIA, John Hancock, and Manulife are working to consider how to create shared value in insurance.
With governments and insurers being among the only stakeholders that can monetize improvements in health, it is clear that there are opportunities where Discovery, Vitality Group and Vitality’s insurance partners can lead the way. Taken together, there were three ways in which insurers can create shared value: (1) Focus on prevention; (2) Close the protection gap; and (3) Invest in prevention/protection. This requires new ways of working, such as mastering behavioral economics, using data and new technology for good, and engaging governments and communities. With insurers actively working to promote shared value, consumers would be richer, healthier, more independent and healthy with age.
The Shared Value Leadership Summit was the beginning of a conversation on how insurers can deliver shared value. Stay tuned for a major announcement from Discovery/Vitality early next month on our work in this area!
Interested in learning more about Shared Value Insurance? Check out the Shared Value Insurance website, or follow Discovery_SA and VitalityUSA for updates!