AXA Life Insurance Singapore today revealed that Singaporeans hold the least optimistic outlook towards life, compared to their counterparts in 8 Asian markets. The AXA Life Outlook Index, a regional study developed to identify Asian consumers’ current and projected level of confidence, registered an index of 58.1 for Singapore, down from 59.2 in 2007 and below this year’s regional average index of 69.0. Respondents from the Philippines held the most optimistic view towards life, with an index of 84, marginally lower than 85 in 2007.
Angela Lau, Head of Branding and Communications, said “Given the existing economic environment, the decline in the AXA Life Outlook Index for Singapore is hardly surprising and consistent with the findings from China, Hong Kong, India, Indonesia, Malaysia, the Philippines and Thailand. While Singaporeans are once again the least optimistic in Asia, the dip in optimism is less severe compared to China (66.9) and Thailand (66.1), where indices dropped by 8.2.”
Singaporeans are least impacted by the current crisis
Interestingly, when asked to rate the impact of the current economic turmoil on priorities in life on a scale of 1-10 (1 being “have not been impacted at all”; and 10 being “have been impacted considerably), the mean score of 6 made Singaporeans the least affected across the markets surveyed. Similar to participants from China, Hong Kong, Indonesia and Malaysia, Singaporeans”; key response to the economic crisis is to reduce all kinds of expenses and save more in view of future uncertainties.
Career, family and health are top 3 factors driving life outlook
The AXA Life Outlook Index survey also revealed that career, family and health were the top 3 factors influencing Singaporeans’ level of confidence. In the immediate term (next 12 months), 38% cited career as the most important part of their life outlook, followed by family (22%) and health (17%). These 3 aspects remain significant in the medium term (next 5 years), with a slight shift in importance towards family (24%) and health (18%).
Commenting on the value of the AXA Life Outlook Index, Angela Lau said “Like the global AXA Retirement Scope survey, the AXA Life Outlook Index is an important consumer research tool which enables us to gain insights to Singaporeans’ perceptions and extent of financial preparation in key aspects of their lives. Understanding what’s important to Singaporeans in the pursuit of their life goals allows us to provide quality financial advice and solutions to meet their needs”
Key career concern lies in job security
On the career front, job security was the key concern among 1 in 2 Singaporeans, consistent with findings across Asia, except for China and Thailand where job progression and prospects were more significant. On a scale of 1-10 (1 being “not confident at all”; and 10 being “very confident”), Singaporeans’; career outlook was 6.1 in the next 12 months and 5.9 in the next 5 years, the lowest across all 8 markets.
Gilbert Pak, Chief Executive Officer, said “At AXA, we understand that clients are worried about their livelihood and may defer their long term protection needs till the economy recovers. That is why we launched a ground-breaking Unemployment Benefit Programme in mid March, which offers clients two options for their regular premium insurance plans, should they be made redundant. It clearly demonstrates AXA’s confidence in the future and commitment to our clients, in good and bad times”
Under the Unemployment Benefit Programme, eligible clients who are involuntarily unemployed can either choose the first in the market 100% Premium Refund Guarantee or enjoy an extended grace period up to 365 days, compared to the industry norm of 30 days.
Singaporeans hold positive outlook for their families and more plan to have children
Like respondents from China, Hong Kong, India, Malaysia and the Philippines, Singapore participants expressed confidence that their families would be in a better position over time. More than half (52%) of Singaporeans surveyed planned to have children, up from 33% in 2007. 1 in 5 Singaporeans plan to have 1 child, while about 3 in 10 intend to have 2 or more children.
Similar to Hong Kong, the top 3 reasons Singaporeans gave for not having children were:
- Too expensive to raise a child (sentiment echoed in China, the Philippines and Thailand)
- Age related issues (similar to the Philippines and Thailand)
- Too many uncertainties in life
Singaporeans are least confident about maintaining health status
Across all 8 markets, respondents were less confident of maintaining their bill of health over the next 12 months, next 5 years and upon retirement. For Singaporeans, the confidence level declines from the current 6.4 to 5.8 at retirement, the lowest when compared to other Asians. 3 in 4 Singaporeans recognise that medical expenses will be the major expense upon retirement, and have a medical insurance policy in place.
“It is worrying that 1 in 4 Singaporeans are not covered with a hospitalisation and surgical policy, as it is one of the basic protection plans. The survey also showed that of those who had medical policies, 62% purchased their plans while 52% relied on their company for medical coverage. The latter finding could be a cause for concern, as Singaporeans could potentially lose part of their cover if they were unemployed” added Angela Lau.
Singaporeans are least confident with their preparation for retirement but emerge top in Asia for seeking expertise of financial advisers.
When asked to rate their confidence towards retirement preparation, Singaporeans gave a rating of 5.3 on a scale of 1 to 10 (1 being “not confident at all” and 10 being “very confident”), down from 5.5 in 2007. Compared to their peers in Asia, particularly India (7.8) and the Philippines (7.2), Singaporeans were the least confident when it came to preparing for their retirement.
On a brighter note, the AXA Life Outlook Index revealed that 4 in 10 Singaporeans have planned seriously and taken action to secure their retirement, the highest among all 8 markets surveyed. 1 in 4 Singaporeans have thought seriously about retirement planning but do not know how to prepare for it.
In addition, at least 4 in 10 Singaporeans seek help from a financial adviser when planning for their retirement, again the highest across Asia. Among those who have a financial adviser, 1 in 5 Singaporeans review their financial plan once every 6 months and about 2 in 3 Singaporeans review their financial plans at least once every 2 years.
Plan ahead to build greater confidence in life
Angela Lau concluded, “The key to gaining greater confidence in life lies in planning ahead. If you fail to plan, you are inevitably planning to fail. Speak to a qualified financial adviser about your concerns and work with him/her to develop a plan that addresses your needs."