CONTENTS ABOUT AIA STUDY BACKGROUND EXECUTIVE SUMMARY. KEY FINDINGS Quality of life Financial security Retirement Family and education REPORT MALAYSIA

Transcription

1 Report Malaysia 2014

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3 CONTENTS ABOUT AIA STUDY BACKGROUND EXECUTIVE SUMMARY KEY FINDINGS Quality of life Financial security Retirement Family and education REPORT MALAYSIA 3

4 INTRODUCTION TO AIA ABOUT AIA

5 ABOUT AIA INTRODUCTION TO AIA AIA Group has been meeting the risk protection and savings needs of people across the Asia-Pacific region since The Group comprises the largest independent publicly listed pan-asian life insurance group with operations in 17 markets in the Asia-Pacific region. It is a market leader in the region (ex-japan) based on life insurance premiums. Through an extensive network of agents, partners and employees across the Asia-Pacific region, AIA serves the holders of more than 28 million individual policies and over 16 million participating members of group insurance schemes. For more than 95 years, AIA has been helping our customers realise their hopes and aspirations. AIA uses knowledge of our customers needs and the experience that we have gained over the years to continue to develop a range of products and services including life insurance, accident and health insurance, savings plans, employee benefits, credit life and pension services that support our customers and their families through every stage of their lives, as well as our corporate clients throughout the region. REPORT MALAYSIA 5

6 INTRODUCTION TO AIA STUDY BACKGROUND

7 STUDY BACKGROUND AIA SURVEY ON MIDDLE CLASS HOPES AND ASPIRATIONS INTRODUCTION TO THE STUDY As the leading pan-asian life insurance group, AIA created the AIA Survey on Middle Class Hopes and Aspirations to gain additional insights about the middle class and their priorities to strengthen our understanding of the middle class in the Asia-Pacific region. The inaugural survey conducted in 2013 covered the Greater China markets of mainland China, Hong Kong and Taiwan. In 2014, the survey focused on six Association of Southeast Asian Nations (ASEAN) markets: Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. The study provides an in-depth look at the fast-rising middle class group across four key areas, namely quality of life, financial security, retirement, and family and education. The survey sheds light on how the middle class perceives their life, family and values, financial well-being, career and retirement. It is clear that personal circumstance, culture, and the level of economic development in the market where respondents are living, are key drivers that greatly shape the hopes and aspirations of the middle class across the region. SURVEY METHODOLOGY This report specifically highlights the survey s findings for Malaysia, which were collected through 500 interviews conducted between July, 2014 with Malaysians who identified themselves as middle class (the same methodology was applied across all surveyed ASEAN markets): 400 online interviews were conducted with Malaysians aged These respondents recruited are individuals who have previously indicated willingness to participate in online surveys and who identified themselves as middle class. To improve representativeness, an additional 100 face-to-face interviews were conducted with Malaysians aged 50 and above using random sample selection. The sample was evenly split between men and women Interviews were conducted throughout peninsular Malaysia, excluding Borneo The margin of error for the study is within +/-4.4% The study was conducted by Ipsos, a leading global market research agency REPORT MALAYSIA 7

8 EXECUTIVE SUMMARY

9 EXECUTIVE SUMMARY THE MIDDLE CLASS IN MALAYSIA MALAYSIA S MIDDLE CLASS HAS THE FOLLOWING CHARACTERISTICS: Quality over quantity Malaysians place health ahead of wealth Over two-thirds (68%) consider being healthy as one of their top life goals, followed by a happy marriage (38%) and saving for retirement (35%). The retirement challenge Saving for retirement still remains a challenge for many members of the Malaysian middle class One-third (33%) think that saving enough for a comfortable retirement is one of the life goals that is the most difficult to achieve. This is one of the highest percentages compared to other ASEAN peers, with the exception of Singapore, where 35% hold this view. Income and satisfaction Malaysians are generally satisfied with their life Two-thirds of the respondents (67%) are satisfied with their life. These are lower percentages than those recorded by the middle class in the five other ASEAN markets surveyed, where on average 76% of respondents are satisfied with their lives and 54% consider themselves as successful. Generational caretakers The expectation persists that children should support their parents in their old age Over two-thirds (73%) of the middle class in Malaysia think that children should be responsible for financially supporting their parents in their old age. Currently, 57% are supporting their own and/or their spouses parents. Barriers to entrepreneurship Malaysians are wary of the investments needed to embark on an entrepreneurial journey Thirty-six percent of respondents consider starting their own business as being one of the most difficult goals to achieve in life this was the highest percentage of any of the ASEAN markets surveyed. Among those who want to start their own business, 68% say that lack of capital is the key barrier preventing them from doing so. Other reasons include a reluctance to give up a steady income (36%) and an aversion to the risk of losing money (34%). REPORT MALAYSIA 9

10 KEY FINDINGS

11 WHO ARE THE MALAYSIA MIDDLE CLASS? The middle class in Malaysia earn a high average household income compared to their counterparts in other ASEAN markets, apart from the middle class in Singapore. Percentage of the population that consider themselves middle class according to monthly household income The self-identified middle class in Malaysia has an average household income of RM6,339 per month. Eighty-four percent of those who consider themselves to be middle class are aged between 25 and 34 and have a university or post-graduate degree. The middle class respondents also, on average, have RM160,000 in assets. This is considerably higher than most ASEAN markets surveyed including Thailand, Vietnam, Indonesia and the Philippines. Below RM3,000 RM3,000 to 4,999 RM5,000 to 6,999 RM7,000 to 9,999 RM10,000 or more 59% 78% 91% 91% 92% REPORT MALAYSIA 11

12 QUALITY OF LIFE AIA MIDDLE CLASS INDEX (MCI) They generally expect their life situation to improve over the next 12 months AIA Middle Class Index Scores above 50 indicate an expectation of improvement for each aspect of life Malaysia s middle class are more likely to think their life situations will improve rather than worsen over the next 12 months, as shown by the AIA Middle Class Index* score of 60.5 (where 50 represents an equal balance of expectations for improvement and for worsening). Over half (56%) of the respondents think the middle class in Malaysia will grow over the next 10 years. OVERALL The value of your property Your family life Your career or business Your romantic life Your home and the quality of where you live Your health and wellbeing The value of your savings The environment where you live The amount of money you have available to spend The amount of time you have for leisure *The AIA Middle Class Index (MCI) is a summary score for whether respondents think aspects of their lives will improve or worsen over the next 12 months. An index above 50 indicates they expect lives will improve and an index below 50 indicate they expect their lives to worsen. The index is calculated by the formula (P1*1) + (P2*0.5) + (P3*0), where P1 is the percentage who say that their situation will improve, P2 is the percentage who say it would stay the same and P3 is the percentage who say it will worsen. 12 AIA GROUP LIMITED

13 QUALITY OF LIFE EXPECTATIONS RELATED TO LIFE EVENTS New employment and positive financial changes have strongest links with expectations of the middle class in Malaysia Over one in five (22%) of Malaysia s middle class started a new job in the past 12 months. Among the surveyed respondents, these are some of the people with most positive expectations, with an MCI score of Life events that are linked to positive expectations over the next 12 months include those who had recently experienced winning a big prize (MCI of 70.3), started a new job (MCI of 67.4), moved to a new city (MCI of 66.4), and getting an inheritance (MCI of 66.3). HOPES AND ASPIRATIONS Health is a top priority for the Malaysian middle class When asked to select their top five goals in life, over two-thirds (68%) mention being healthy as one of their top goals in life. Financial goals for the future are also important for Malaysia s middle class. Over one-third (35%) cite saving for a comfortable retirement as one of their main goals and 29% have a goal of saving enough finances for emergencies. Top five goals in life Overall AIA Middle Class Index among those experiencing different life events All respondents Won a big prize Started a new job Moved to a new city Came into money/inheritance Started a new relationship Job promotion/ pay increase Purchased a new home End or lack of a relationship Purchased a new car Got married Birth of a child Death of a loved one Loss of job Increased debts % had experienced this change in the past 12 months 4% 22% 6% 5% 7% 27% 15% 9% 20% 9% 12% 14% 8% 32% Being healthy A happy marriage/relationship Saving for retirement Having enough for emergencies Travelling the world Having a successful career Having a peace of mind Being happy with who I am Having a financial safety net Owning a home Paying off debts Helping my children be successful Taking a vacation Starting my own business Having children Paying for my children s education Having close friendships Owning a car Getting more education 38% 35% 29% 28% 26% 26% 26% 25% 25% 23% 23% 20% 18% 15% 12% 7% 6% 68% 5% REPORT MALAYSIA 13

14 QUALITY OF LIFE SATISFACTION AND SUCCESS They are less satisfied than the middle class in other ASEAN markets Over two-thirds (67%) of Malaysia s middle class are satisfied with their lives. This is lower than any other ASEAN markets surveyed. The level of satisfaction increases only marginally with income, with 71% of the respondents earning RM8,000 or more per month saying they are satisfied with their lives. Nearly half (48%) of Malaysia's middle-class respondents consider themselves successful. This is lower than for any other ASEAN markets surveyed, where regionally an average 54% of respondents consider themselves successful. Percentage of middle class Malaysians that are satisfied with their lives by monthly household income DREAMS They are generally optimistic about achieving their dreams Almost two-thirds (64%) of Malaysia s middle class think that they will achieve their biggest dreams in their lifetime. A further 6% say they have already achieved their biggest dreams. However, almost one quarter of the respondents (24%) think they will not achieve their biggest dreams in their lifetime. Among ASEAN markets surveyed, the percentage of Malaysian respondents who do not believe they will achieve their dreams are second only to the group in Singapore (39%) who hold this view. Some Malaysians dream of becoming millionaires, in the hope that they can be generous with their fortune. For some, staying healthy or travelling the world is their biggest dream, whereas for others, having a secure retirement is key. Dreams and Achievements Below RM5,000 RM5,000-7,999 RM8, % 67% 71% 24% 6% 6% Percentage of middle class Malaysians who consider themselves successful by age years years years years 40% 45% 59% 66% 64% I am yet to fulfil my biggest dream yet I think I ll be able to achieve it I am yet to fulfil my biggest dream yet I don t think I ll be able to achieve it Yes I have already fulfilled my biggest dream I have never thought about what my biggest dream is Having stable finances which means I do not need to worry about my retirement To be a generous millionaire To stay healthy and to travel around the world Quotes from Malaysia s middle class 14 AIA GROUP LIMITED

15 QUALITY OF LIFE STARTING A BUSINESS Concerns about financing are preventing the middle class from becoming entrepreneurs Fifteen percent of Malaysia s middle class are currently self-employed, including 2% who are business owners. Just under one in five (18%) state having their own business as one of their main life goals. The idea of independence ( being my own boss ) (24%) and the potential of achieving higher income (26%) are chief motivators for starting a business for Malaysia s middle class. LIVING ENVIRONMENT Many want to move to quieter pastures Over three quarters (77%) of the middle class respondents live in cities and a further 17% live in suburbs. If they had US$2 million to spend, 28% would choose to live in a modern city, compared to 23% in the countryside and 21% in suburbs. Where they would buy a house if they had US$2million to spend However, 36% of respondents consider starting their own business as being one of the most difficult goals to achieve in life. More respondents in Malaysia hold this view compared to their counterparts in the ASEAN markets surveyed. In a modern city In the countryside In the suburbs By a beach 28% 23% 21% 18% Among those who want to start their own business, 68% say that lack of capital is the key barrier preventing them from doing so. Other reasons include a reluctance to give up a steady income (36%) and an aversion to the risk of losing money (34%). In the mountains By a forest In a historical city 1% 3% 6% Why they want to start their own business 7% 5% 4% Higher income 26% Be my own boss Enjoying my work more 7% 10% Having more free time Bequeathing the business to my children Contributing to the community Becoming an expert at what I do 17% 24% Earlier retirement REPORT MALAYSIA 15

16 FINANCIAL SECURITY FINANCIAL SECURITY - A CONSTANT PURSUIT They generally consider themselves financially secure Over half (53%) report feeling financially secure. For those who earn a higher income of over RM8,000, over 56% say they are financially secure. The overall figure of those who feel financially secure in Malaysia is lower in comparison to other surveyed ASEAN markets. Fifty-three percent believe that they would be able to achieve financial security in their lifetime, with 47% believing that financial security is a never-ending pursuit. On average, the Malaysian middle class think they need at least RM3.28 million to be wealthy and at least RM1.52 million to achieve financial security for the rest of their lives. Malaysia middle-class respondents who consider themselves financially secure according to monthly household income Below RM5,000 RM5,000-7,999 RM8, % 54% 56% Malaysia s middle-class respondents who consider themselves financially secure according to assets Below RM50,000 RM50,000 to 299,999 RM300, % FINANCIAL PLANNING They would put money from a sudden windfall into investments 56% 53% When asked what respondents would do if they came into a large sum of money, almost three in ten (29%) say they would invest it. A total of two-thirds (67%) would use the money to save, invest, pay off debts or start a business. Seventy-nine percent think its more important to have financial plans than to live life for the moment. Amongst all ASEAN markets surveyed, this is the highest percentage of respondents who hold this view, next to the Philippines where 94% surveyed hold this view. Malaysia s middle class are strong believers in hard work but 79% think that luck plays some part in financial success. 16 AIA GROUP LIMITED

17 FINANCIAL SECURITY If you were suddenly given a very large amount of money, what would you most look forward to doing with the money? Biggest concern of life costs Invest it Pay off debts Start my own business Put it in the bank Buy a house or car Go on vacation Spend it on children Share with family/friends Give it to charity 15% 12% 11% 8% 7% 6% 5% 2% 29% Cost of healthcare Unexpected emergencies Cost of housing Cost of raising children Saving for retirement Cost of children s education Cost of groceries Credit card debt Cost of insurance 51% 46% 31% 29% 29% 22% 18% 13% 10% Quit my job 2% Cost of transportation 8% Spending it day-to-day 1% Cost of vacations 7% Cost of technology/gadgets 2% HEALTHCARE CONCERNS Healthcare costs are a concern for the middle class in Malaysia Cost of clothing 1% Despite the priority that Malaysians put on being healthy, they are concerned over the cost of healthcare (51%). Forty-six percent are also concerned about the cost of unexpected emergencies. Other life costs concerns include the cost of housing (31%). This is a high percentage compared to the other ASEAN markets surveyed, topped only by a larger group (36%) in Singapore who hold the same view. REPORT MALAYSIA 17

18 RETIREMENT THE RETIREMENT CHALLENGE Malaysia s middle-class respondents are concerned about having sufficient savings for retirement Life goals thought most difficult to achieve One-third (33%) think that saving enough for a comfortable retirement is one of the life goals that is most difficult to achieve. This is a high percentage compared to the other ASEAN markets surveyed, topped only by a larger group (35%) in Singapore who hold the same view. Over two-thirds (73%) of the middle class in Malaysia think that children should be responsible for financially supporting retired parents. Currently, 57% are supporting their own and/or their spouses parents. Travelling the world Starting my own business Saving for a retirement Having enough for emergencies Paying off debts Being Healthy Having a financial safety net Having a successful career Having a peace of mind Owning a home Getting more education Being happy with who I am A happy marraige/relationship Helping children be successful Paying for children s education Taking a vacation Having close friendship Having children Owning a car 45% 36% 33% 24% 23% 23% 19% 18% 18% 17% 17% 13% 13% 12% 12% 10% 8% 7% 3% AIA GROUP LIMITED

19 RETIREMENT RETIREMENT SAVINGS They use a wide variety of methods to save for retirement Seventy-nine percent of those working hope to retire some day. Nine percent do not have plans to retire because they think that they will never be able to save enough. This group is the highest among all ASEAN markets surveyed, where only 4% have this view on the average. The Malaysian middle class uses a wide variety of investment instruments to save for retirement. Seven in ten (70%) of those saving for retirement are contributing to a regular retirement plan, 70% are investing in the stock market, 61% are investing in real estate and 50% are contributing to a regular savings account. Retirement Plans 3% 9% 9% The most popular activity to do following retirement is to sail around the world (43%). The middle class in Malaysia against the other ASEAN markets surveyed, are the most likely to want to be active in retirement. One in five (20%) would want to either climb mountains, run marathons or excel at golf. This compares to a regional average of only 13% of the ASEAN middle class who wish to excel at these sports in their retirement years. Things they look forward to in retirement Spending time with family Travelling Relaxing Starting my own business Volunteering in my community Spending time with children Starting a second career Taking care of grandchildren 15% 12% 8% 6% 4% 1% 27% 26% I hope to retire someday 79% Which one of these would the Malaysia middle class most want to do following retirement I enjoy work so I don't plan to retire I don't expect ever to save enough for retirement I haven't thought about it Sail around the world Learn a new language Learn a musical instrument 12% 11% 43% Explore North or South Poles 10% RETIREMENT PLANS They plan to be active following retirement Climb a mountain Run a marathon 9% 8% When retiring from their primary career, just over one quarter (27%) of the Malaysian middle class look forward to spending more time with their family. A similar percentage (26%) want to travel. Hit a hole in one in golf Paint a masterpiece painting Act in a television play 3% 2% 2% REPORT MALAYSIA 19

20 FAMILY AND EDUCATION FAMILY AND CHILDREN ARE KEY MOTIVATORS Children and family are the most important aspects of their life Plans for family Almost all (95%) of Malaysia s middle class either have children or are likely to have children some day. When asked what the one thing was that motivates them the most in life, 28% of the Malaysian middle class say it is to make a better life for their children. 5% 5% 49% Have children still at school Have children who have left school Will have children some day Twenty-two percent of the Malaysian respondents who currently work full-time would like the chance to become a "stay-at-home parent" for their children - a number higher than any of the ASEAN markets surveyed (17%). 25% 17% May have children some day Don t want children What motivates them most in life A better life for my children Becoming financially secure Making a better life for myself Becoming wealthy A better life for my parents Being respected by my peers Advancing my career/business Receiving a good education 10% 6% 5% 5% 1% 28% 24% 20% HIGH EXPECTATIONS FOR CHILDREN S EDUCATION They have very high expectations for their children s education A large majority (91%) want their children to attain a university degree, including 37% who want their children to achieve a post-graduate degree. Almost all (96%) parents surveyed are involved in their children s education, with 44% being very involved. Parents tend to set aside RM558 each month (or 8% of their average income) for the education costs of each child. 20 AIA GROUP LIMITED

21 FAMILY AND EDUCATION Men are more likely than women to be the main decision-maker in the household responsible for their children s education (36% of men compared with 28% of women). Malaysia s middle-class parents own educational achievements 24% 5% 18% 53% Post Graduate University A level/polytech Other HOPES FOR THEIR CHILDREN They want their children to enjoy good health Many of the Malaysian middle class are worried about their children s future. Over two-thirds (68%) think that their children s lives will be harder than their own. This is the highest figure for all of the ASEAN markets surveyed apart from Singapore (76%). Eighty-one percent of Malaysia s middle-class parents cite good health as the most important goal they have for their children. Over half (56%) also want their children to have a good career. Equally important to parents are happiness (53%) and having good virtues (52%). Sixty-four percent expect their children to be independent and find their own opportunities to succeed, as opposed to the 36% who think that parents should give as many opportunities to their children as possible. By contrast, 55% of those surveyed in the ASEAN region as a whole think that children should be independent. Goals thought most important for their children Education goals Malaysian middle-class parents have for their children Good health 81% 6% 3% 37% Post Graduate University A good career General happiness Good virtues Academic achievement Financial success 56% 53% 52% 49% 47% A level/polytech Having their own family 30% Other Good friends Social status 23% 12% 54% Extracurricular activities Nice possessions Romantic love Marrying someone wealthy 10% 7% 5% 4% REPORT MALAYSIA 21

22 AIA GROUP LIMITED REPORT MALAYSIA AIA.COM