November 26, 2007, Hong Kong ¡V The AIA Life Matters Index 2007 has revealed a lack of adequate medical coverage among Hong Kong people. While more than half of the respondents do not have accident and medical insurance protection, only a quarter of the respondents will be covered by medical insurance upon retirement.

The findings of the annual index by American International Assurance Company, Limited show that 64% of Hong Kong people own life insurance plans. However, less than half of all respondents have insurance coverage against accident (46%), hospital and surgical (41%), and critical illness (35%). The lack of adequate medical coverage is more obvious in the age group of 60 or above. Among this group of respondents, only 36%, 36% and 29% are being covered by accident, hospital and surgical, and critical illness insurance respectively. When asked about their level of concern regarding accidents and disasters, the top 3 issues concerned by the majority of the respondents were illness and disease, traffic accidents, and the impact a longer life would have on their health and finances.

Mr. Thomas Lee, Vice President and Assistant General Manager of American International Assurance Company (Bermuda) Limited, said, "Most people in Hong Kong are ill-prepared for their medical expenses in the event they are diagnosed with a critical illness, which will pose a burden on our public healthcare system. On the other hand, when they consider adding personal insurance, hospital/surgical coverage is top of the list (27%). This is followed by traditional life (22%), accident (22%) and critical illness (20%)."

Due to the insufficient medical protection, Hong Kong people will be exposed to financial risk. Mr. Barry Chung, Vice President and Head of Accident and Health Department of American International Assurance Company (Bermuda) Limited, said, "If they lost their jobs, 23% of the respondents said they would experience financial difficulty in just three months or less, up from 19% of last year. About 58% of the respondents said they could manage for a maximum of 12 months, also slightly higher than 50% a year ago. The findings reveal that Hong Kong people are under-protected for life's risks."

The index also presents a more sobering picture of existing coverage against critical illness. Over half (52%) of Hong Kong respondents believe they do not have enough funds to meet the needs of their family for the next 10 years if they were diagnosed with a critical illness such as cancer and required extensive treatment; up from 49% in last year's index. Moreover, 28% of the respondents answered "don't know" when asked if their finances were sufficient.

In addition to insufficient medical coverage, the index also highlights the lack of retirement readiness in Hong Kong. Despite the fact that 69% of the respondents have regular savings or investments for a rainy day in addition to their pension schemes, 42% of the respondents admitted that based on their current financial and investment situation, they would not have sufficient funds to support their living after retirement. 36% of the respondents are unsure about whether they have enough savings for retirement. The low awareness among Hong Kong people on retirement planning needs to be addressed.

In terms of investment patterns of Hong Kong people, bank savings is most popular among the respondents (72%). This is followed by insurance savings (46%), equities/stocks (44%), fixed deposits (34%) and mutual funds (29%).

In education savings, almost half of the respondents (48%) have begun investing for their children's tertiary education. However, most families are unable to meet the average savings target of HK$430,000 which they believe would be needed for a tertiary degree. The average amount of money they have saved so far is HK$230,000.

"With the growing popularity of financial planning in Hong Kong, this year's index has revealed a growing awareness of investing among people in the territory. People have begun to realize the importance of medical protection, retirement planning and education savings. However, there is a general lack of strategic planning as most people do not understand their specific financial needs, have no proper targets and are therefore unable to plan how to achieve those targets. People are advised to actively seek financial advice and consultancy so that they can better prepare themselves for the future," Mr. Thomas Lee added.

The AIA Life Matters Index survey has been conducted annually since 2004 by research firm TNS. A random sample of 1,000 people each in Hong Kong, Malaysia, Singapore and Thailand respectively, were interviewed via the Internet or telephone.

AIA is one of the largest life insurers in Southeast Asia, with branch offices, subsidiaries and affiliated companies located in countries and jurisdictions including Mainland China, Hong Kong, Macau, Taiwan, Australia, Brunei, Guam, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, 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). AIG, world leaders in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Paris, Switzerland and Tokyo.

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