Building on these existing strong linkages, ASEAN is expected to further progress in deepening and broadening its economic pie within ASEAN and in the region. The ASEAN region as a group accounted for approximately 8.3% of Asia's total GDP in recent years and generated around 22% of Asia's total export, placing the region second behind China, Asia's largest exporter. In 2006, ASEAN foreign direct investment rose by 27% to reach USD52 billion and total exports increased by 16.5% to reach USD758.04 billion. Trade among ASEAN countries has also increased tremendously. In fact for Malaysia , our trade with the ASEAN region comprised about 25% of our total trade. As we move towards AFTA and the removal of tariffs, the economic integration between countries in the region will deepen further. The encouraging economic growth prospects of ASEAN present tremendous growth potential and opportunities for the ASEAN insurance market. This increases the need to accelerate the development of insurance markets in the region to support the explosive growth in trade within ASEAN. Over time, the aim should be to achieve a better balance between reliance on foreign insurance markets and the domestic insurance markets within ASEAN to support economic activity. This will contribute towards achieving greater risk diversification, while at the same time, reaping more benefits for ASEAN economies from increasing economic integration. ASEAN currently has a total population of 568 million, and a large proportion comprising of a young workforce in the middle income group.
In this respect, we should learn from the unsatisfactory outcomes that have emerged in some of the more developed markets where product disclosures can run into 60-page documents, which no one can reasonably expect an average consumer to read, let alone understand. Ultimately, the purpose of disclosures must be to help consumers understand the risks associated with different product options. In this context, more information is not necessarily better. The quality of information and financial capability of consumers must be enhanced in tandem with improved disclosures. Of course, increasing product innovations also need to be matched by strong risk and portfolio management capabilities critical to ensure the long-term sustainability and viability of the products offered in the market as well as the financial soundness of insurance companies. The operating landscape in which we operate has also changed significantly. Convergence in financial services has blurred the boundaries between insurance, banking and capital market activities. In this environment, financial sector regulation and supervision has become significantly more challenging. The increasing linkages between insurance and the banking systems as well as capital markets have increased the importance of achieving a harmonised regulatory approach and standard across sectors to minimise possibilities of regulatory arbitrage between different types of institutions. Under such environment, the approach towards regulatory and supervisory framework also has to evolve in tandem with the change in the environment. Recognising these dynamic changes, Bank Negara Malaysia took efforts to strengthen our regulatory and supervisory capabilities as well as sharpen our focus.