November 16, 2006, Hong Kong – This year's AIA "Life Matters" Index has revealed that less than a quarter (24%) of the respondents in Hong Kong are confident that they will have sufficient finances for their lives after retirement.

The findings of the annual survey by American International Assurance Company, Limited (AIA) highlight a lack of retirement planning among Hong Kong people, with a vast majority of 76% of respondents admitting they either would not have (29%), or were not sure they would have (47%) sufficient enough money for retirement. Moreover, only 45% currently maintain retirement plans in addition to their MPF accounts.

According to Mr. Thomas Lee, Vice President and Acting Assistant General Manager of American International Assurance Company (Bermuda) Limited, the findings present a sobering picture of an inadequate level of retirement readiness in the territory. "Hong Kong people are ill-prepared for their retirement years," said Thomas Lee. "There is a serious lack of understanding of the savings required to finance life after retirement, and we have to address this quickly and effectively."

Education and public awareness initiatives are most pressing for the older age groups. While the average age that people in Hong Kong plan to retire is 59, 60% of all respondents over the age of 55 are not sure they have enough savings to see them through their retirement, while 20% believe they do not.

Of the younger generation aged between 25 and 44, around 20% believe that based on their current financial and investment situation, they will have enough funds for retirement. The remaining - approximately 80% - is either unsure or certain that they will not have sufficient savings. The average amount of money respondents believe they require for retirement is HK$2.75 million. Ill-preparedness is extended beyond income security to include medical coverage, with just 34% of respondents owning medical coverage after retirement.

The findings draw attention to a broader picture of financial planning in Hong Kong, across the fields of investment and education planning for children. With 69% saying they engaged in investing activity to accumulate funds for their retirement years, building a nest egg may be seen as a key driver for investments. However, most Hong Kong people started investing only in their late 20s (33% began between the ages of 25 and 29). 53% of respondents said they wished that they had started investing before they were 25 years old whereas only 20% actually did so.

In education, just under a third of respondents (32%) began investing for their children's tertiary education before their children were one year old. On average, most families have not saved enough to finance a tertiary degree program and believe they have saved approximately half so far of what they think would be enough for a tertiary degree.

"The findings have alerted us to a lack of investment knowledge and planning among Hong Kong people," Thomas Lee added. "Investment awareness should be heightened to encourage more in our community to actively seek financial advice and consultancy so that they can better prepare themselves for the future."

"Risk protection, another factor in a secure future, has been shown to be lacking again in this year's survey", said Mr. Stephen Lee, Vice President of Accident & Health Department of American International Assurance Company (Bermuda) Limited. Almost half of the people (49%) in Hong Kong believe they do not have enough funds to meet the needs of their family in the next 10 years if they were diagnosed with a critical illness such as cancer and required extensive treatment. 29% of respondents picked "Don't Know" when asked the question of whether finances were sufficient in case of critical illness. This reveals that Hong Kong people are insufficiently protected against serious health risks.

Respondents in 2006 also shared their concerns for more specific illnesses, with 91% rating protection for specific female illnesses such as cervical cancer and breast cancer as important or very important, while 72% consider coverage for male illnesses such as prostatitis, testicular cancer, as important or very important. In 2005, only 17% considered adding personal insurance to cover all forms of cancer. This year, cancer (87%), including breast cancer for women, tops the list of diseases for which concern is strongest. Those who are concerned about contracting heart disease, stroke and kidney related diseases accounted for 82%, 77% and 75% of respondents respectively.

The survey has also found that 73% of the respondents have life insurance protection. When they consider adding personal insurance, they have a greater interest in hospital/surgical coverage (42%).

The AIA "Life Matters" Index, an accident and health survey, has been conducted annually since 2004 by research firm TNS. Data is collected via telephone interviews from a representative random sample of 1,000 people each in Hong Kong, Malaysia, Singapore and Thailand respectively.

AIA is one of the largest life insurers in Southeast Asia, 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.

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.