Going forward, insurers are expected to leverage more extensively on direct channels to distribute their products and communicate with customers. With digitisation and other new technologies, not just in insurance but across all other financial and non-financial services, the costs of distribution and managing customer relationships can be greatly reduced with expanded reach. Digitisation is also expected to give rise to new entrants into the insurance value-chain such as product aggregators, which will allow consumers to easily compare product features, providers, coverage and price. These developments will drive the increasing adoption of multi-channel distribution strategies. The implications for agents will be a greater need to specialise and to be able to do so while seamlessly integrating with different and more diverse contact points with consumers. This will require innovative business models as parts of the distribution chain become commoditised. For example, agents may specialise in more complex product offerings, provide more tailored advice, improve the customer experience by deploying new technologies and reaching out to untapped consumer segments. As greater efficiencies drive 2  BIS central bankers’ speeches  down costs, fees and commissions will increasingly be tied to the breadth and depth of services provided by agents. This in turn will contribute towards lifting productivity and the value of jobs in the industry, including that of the agency force. Third, insurance agents will need to embrace a broader role in the education of consumers.
From the Bank of  BIS Review 50/2009  1  Zambia’s point of view, the objective of financial stability remains key in all our activities. Financial stability depends to a large extent on the existence of robust risk management systems of financial institutions. It is therefore, important that risk management systems should keep pace with financial innovation. I have no doubt that the banking sector will rise to this challenge. Once again, thank you for the opportunity to witness this important event. 2  BIS Review 50/2009