Expats kiss their lofty lifestyles goodbye
A report published by Zurich International Life shows that a majority of respondents in the UAE have stopped spending on luxuries, and are focusing on the basics.
January 21, 2009 3:46 by Dana El Baltaji
A recent report published by Zurich International Life, an offshore insurance and investment firm, entitled Zurich Wealth Monitor III claims that 75 percent of respondents in the UAE are concerned about not saving enough, and 58 percent believe that their lifestyle has been affected by the credit crunch.
Predictably, the number one priority for 44 percent of respondents in the UAE is saving. The survey also showed there has been an increase in retirement saving plans for 31-40 year olds from 35 percent to 45 percent.
Graham Morrall, regional head of distribution, Middle East and Africa, Zurich Financial Services Group explains: “The survey shows that potential expatriate customers are thinking about their finances, the economy and their lifestyles, and from there then use the information to try and assess whether the strategy that we have for addressing what we think is in people’s heads is useful.”
For Zurich, the numbers indicate a shift in priorities: from frenzied spending to a focus on basic needs: “There’s a [big proportion of people who are] going back to the practicalities. For us that means reducing expenditures on discretionary things like holidays, cars and other luxuries.”
Ultimately, the survey suggests expatriates in the UAE are more keen on saving than on relishing the ‘expat lifestyle’. They’d have to be. According to the survey, 58 percent of respondents believe that their lifestyles have been compromised by the financial crisis. Ouch.
This may not bode well for Dubai, which banks on expatriates spending furiously on luxuries they don’t need.
It may be bad news for Dubai, but it could be good news for Zurich. According to Morrall, the survey indicates that investment firms and their personalized saving plans may appeal to more people, especially those who’ve been burned by the financial crisis and who boost their savings.
It’s important to note that the survey excludes Emiratis. Morrall explained that a majority of Zurich’s customers are expatriates, and that the form is working on products that may appeal to nationals.
The question we can’t help asking is: what will get expatriates to invest with firms after what happened to the global market?