AIA survey reveals people are saving more but could be saving smarter

| 25 Jun 2021

AIA group Limited (AIA) announced the results of a survey on the impact of COVID 19 on household savings, revealing that as many as 71% of consumers plan to save more, driven by fear and insecurity arising from the pandemic. The survey also showed that 73% 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.

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% of the respondents said they reduced their savings in 2020, 55% said they plan to increase their savings in 2021 and 10% of those plan to increase their savings by more than 50%.


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%), guaranteeing financial security (60%) and coverage for medical expenses (54%) 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%) or retirement (52%).


How to meet such diverse goals through increased household savings is a major challenge. Almost a third of the respondents (31%) simply save what money they have after expenses without a proactive saving plan. 21% 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.

The importance of insurance for protection and savings
A further impact of the pandemic is a stronger interest in insurance with 73% agreeing that insurance has become more important than ever to provide better protection in case of unexpected incidents and 18% say they plan to increase their allocation of funds to insurance. Of those planning to raise their spending on insurance, 57% say they plan to spend more on medical and health insurance, which is already the most popular category with 56% currently owning a medical/health policy.


The emotional and financial impact of COVID-19
The fear and uncertainty that is driving increased interest in protection also appear to be impacting wellbeing, with 70% of those surveyed saying COVID-19 has negatively impacted their social life, 38% believing it has adversely affected their health, and 39% feeling that their mental health1 has suffered. The financial impact has also been significant with an average income reduction of 27% across the eight markets surveyed in Asia, with a reduction of as much as 33% in Thailand. And these impacts may not end any time soon, with 88% believing COVID-19 will persist beyond June 2021 and 57% believing it will last until 2022 or beyond.

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Dealing with mental health and critical illness, the AIA way

Majority of Singaporeans still struggling with their mental health

AIA Singapore: 8-year-old learns why being a Financial Services Consultant is #NotJustAnotherJob

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