HONG KONG, 24 June 2021 – AIA Group Limited (“AIA”; or the “Company”; stock code: 1299) announced today the results of a survey on the impact of COVID 19 on household savings, revealing that as many as 71 per cent of consumers plan to save more, driven by fear and insecurity arising from the pandemic. The survey also showed that 73 per cent of consumers agree that insurance has become more important than ever to secure better financial protection in case of emergencies.
The AIA Save Smarter Study 2021 surveyed 7,400 insurance consumers aged 25+ across eight Asian markets, including Mainland China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
Stuart A. Spencer, Group Chief Marketing Officer of AIA Group, said: “AIA’s purpose is to help people live Healthier, Longer, Better Lives. One of the key findings from this survey is that under duress, consumers are willing to forgo saving for planned life events and instead shift their focus toward protecting themselves against the unexpected. This approach is completely understandable, but it has led people to retain cash in the bank. A better solution lies in insurance products and savings plans that deliver greater peace of mind through higher returns and access to liquidity.”
Intention to save more for emergencies but without more planning
Uncertainties caused by COVID-19 are driving a major shift in consumer household savings. While 41 per cent of the respondents said they reduced their savings in 2020, 55 per cent said they plan to increase their savings in 2021 and 10 per cent of those plan to increase their savings by more than 50 per cent.
The study also showed that household savings trends and objectives are changing. Managing uncertainty has become the emerging saving goal with a greater focus on having access to emergency funds. Preparation for emergency spending (64 per cent), guaranteeing financial security (60 per cent) and coverage for medical expenses (54 per cent) top the list of savings objectives. A lower but nonetheless important priority remains saving for typical life goals such as education, getting married, buying a house (42 per cent) or retirement (52 per cent).
How to meet such diverse goals through increased household savings is a major challenge. Almost a third of the respondents (31 per cent) simply save what money they have after expenses without a proactive saving plan. 21 per cent set aside a fixed amount for various goals. By far the most popular place to save is the bank, with more than nine out of 10 preferring the liquidity of bank savings, and a quarter of the savers with no other form of savings at all.