In view of the high success penetration rate of bancassurance service providers and the fact that bank backed insurance companies have ready pool of the banking customers within the group to tap, they should seriously explore the bancassurance route to exploit the effectiveness of bancassurance to gain new market share. Ladies and Gentlemen, I am confident that the commitment of Axa Affin's foreign partner to introduce its best practices in Malaysia and its strategy to "Think Global Act Local" in terms of product innovation, operational and distribution strategy will go a long way towards ensuring the success of this new business venture, founded on the sound relationship they have nurtured via the general insurance entity, i.e. Axa Affin Assurance Berhad. This would also contribute to the development of the industry through the transfer of expertise, providing leadership in innovation and expanding the range of quality products and services available to Malaysian consumers. Having such strategic partnerships which allows equity participation from international players of up to 49% under BNM new liberalized operating environment would enable insurers to leverage on the experience and financial capabilities of the foreign partner and this would allow them to grow in size. They would also have the capacity to improve their competitiveness and enter into foreign markets, taking more complex risks and expand their product portfolio more significantly.
BIS Review 11/2007  1  Ladies and Gentlemen, On the regulatory front, allow me to share with you what the future holds for the regulatory developments that would predominantly shape the future direction of the life insurance industry. The Bank's future regulatory orientation will be characterized by a heightened focus on, and alignment, with risk; anticipatory, rather than reactionary interventions; a clear goal to promote efficiency, innovation and competition by ensuring that regulation is proportionate in relation to its costs and benefits; greater use of incentive approaches to achieve desired institutional behaviours and outcomes; an expanded regulatory toolkit that leverages more extensively on the inherent checks and balances built into the system; and an increased focus on market conduct and harnessing active consumerism to reinforce prudential regulation and supervision. In this regard, I wish to emphasise that in the course of designing any regulatory framework, the Bank will continue to involve all stakeholders particularly the industry for better appreciation of new policies introduced. The insurance industry is expected to continue its positive growth momentum in the near term. Growth in the life sector should continue to receive support from the encouraging demand for savings and investment-driven products such as endowment and investment-linked insurance. The increasing awareness among the consumers of the importance of risk protection, relatively low penetration level and large mortality protection gap also underpin strong future growth opportunities for life insurers in the more traditional risk product lines such as term (including credit-related term) insurance.