Indians have the lowest risk appetite, says Swiss Re survey

When it comes to finance and career, Indians are the most risk averse in the Asia Pacific region, a survey released by reinsurance giant Swiss Re today showed. In addition to two business risk issues – growth and operations – the survey covered four aspects dealing with consumer behaviour – finance, career, health and lifestyle.

The Swiss Re Survey of Risk Appetite: Asia Pacific 2009 was conducted in the first quarter of 2009 to understand the risk attitude of those between 20 and 40 years in India, China, Japan, South Korea, Malaysia, Singapore, Hong Kong and Australia.

In the case of business risk, which was measured by the risk attitude of those managing small and medium enterprises, India was at the bottom of the table (see table). Within this, Indians, along with the Japanese, were found to be the least willing to take growth risks.

China was at the top of the list. Similarly, when it came to operational risks such as those related to environmental policies Indians were at the bottom of the pyramid, with Australians at the top with almost double risk bearing aptitude.

The story was much the same on consumer risk too. But Indians can blame it on the level of income as there appeared to be a correlation between per capita GDP and the risk appetite, Swiss Re’s Head of Economic Research and Consulting for Asia Clarence Wong told Business Standard.

Within consumer risk, while Indians were least willing to take financial risks, they were found to be somewhere in the middle when it came to planning for post-retirement years or hiring financial planners.

But they are simply unwilling to take any chances with their career and most of them are willing to settle for a low-paying job at a well-established large company instead of earning more at a small company that offered rapid growth prospects.

The only aspect where Indians were found to be more amenable to taking risks was on related to lifestyle.

And, when it came to adventure sports, even if it was dangerous, Indians were most willing to take that risk, compared with those from the other seven countries that were covered by the survey.