American International Assurance Company (Bermuda) Limited

Hong Kong, October 28, 2005 - This year's AIA "Life Matters" Index revealed that only about half of the respondents in Hong Kong are satisfied with their insurance coverage against accidents, health and medical risks, down from 67% a year ago.

The annual survey by American International Assurance Company, Limited (AIA) found that natural disasters and accidents and diseases abroad are the major concerns of Hong Kong people. 41% of the interviewees said they were more concerned now than 12 months ago about the risk of being affected by a natural disaster. The same number of respondents was also more concerned about being infected with a disease or meeting with an accident overseas. This compares with 30% who were concerned with accidents closer to home.

In view of these concerns, more people were considering to add personal insurance coverage for personal accidents and critical illnesses such as cancer, heart disease, stroke and respiratory illnesses. 21% of the Hong Kong respondents said that they were considering acquiring insurance for hospitalisation and surgical expenses while 17% expressed that they would consider adding personal coverage for cancer. This is in line with the fact that cancer tops the list of critical illnesses about which people across the region are most concerned.

Mr. Arthur Koo, Senior Vice President, Accident and Health Department, American International Assurance Company (Bermuda) Limited, said "The natural disasters that have taken place in the past 12 months, in particular the South Asia tsunami, have vastly increased people's awareness of the impact of extreme events and prompted Hong Kong people to review their insurance coverage. In addition, recent discussions surrounding the reform of Hong Kong's health care system have encouraged many citizens to consider carefully how they will fund their future medical expenses."

Despite the economic recovery in the past year, the survey suggested that people were more worried about their financial situation if they lost their job because of illness or accidents. Findings showed that 25% of the respondents would experience financial difficulty in just three months or less. About 54% said they could manage for a maximum of 12 months while only 24% would have financial support other than insurance for over two years.

In the unfortunate event of hospitalisation, 37% of the Hong Kong respondents expressed a general preference of private medical services. A closer look at the survey findings revealed a growing gap between the views of the younger generation and senior citizens towards private and public medical services. Half of those aged over 50 in Hong Kong expressed a preference towards public services while just 25% of those aged between 20 and 29 preferred the public sector.

Mr Koo said: "Hong Kong people are more likely to go to public hospitals, reflecting the perception of high quality public services in Hong Kong. It may also be related to the finding that Hong Kong people tend to consider the government as being responsible for their healthcare." 26% of people in Hong Kong said that the government should be primarily responsible for healthcare, compared with 21% who felt that individuals have the responsibility. And those who said that their employers should be responsible accounted for a proportion of 19%.

"People in Hong Kong are more sensitive to the cost of medical care than in other countries we studied. They prefer public medical care for major treatments and private clinics for minor ailments. With the government's announced intentions to reform the healthcare system, people are becoming more aware of the fact that they cannot rely on the government alone for healthcare services. They have to begin taking responsibility for their own needs as the burden of medical expenses shifts back to the individual. Medical insurance is a ready-made solution," added Mr Koo.

The AIA "Life Matters" Index is being conducted by research firm TNS. Data is collected via telephone interviews from a representative random sample of 500 people in Hong Kong, Malaysia, Singapore and Thailand respectively.

AIA is Southeast Asia's largest life insurer, with branch offices, subsidiaries and affiliated companies located in countries and jurisdictions including Australia, Brunei, China, Guam, Hong Kong, India, Indonesia, Japan, Macau, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. AIA markets a full line of life insurance products through a multi-channel distribution system, whose core franchise is an extensive agency force. AIA is a wholly-owned subsidiary of American International Group, Inc. (AIG), the world's leading international insurance and financial services organization.