With a gathering of more than 300 industry leaders from 25 countries, I am confident that the deliberations will generate new solutions/strategies in an industry that is undergoing rapid transformation, underpinned by globalization, broad-based financial deregulation and increasing opportunities as well as uncertainties amidst an environment of heightened volatility. Rapid developments in technology and financial liberalization have played a catalytic role in transforming the financial services industry worldwide. Consequently, traditional business boundaries have become increasingly blurred, as demand for financial products and services become more diverse and sophisticated, transcending the traditional offering of stand-alone banking, insurance or investment products. As changes in the global financial industry continue to occur and indeed accelerate, insurance companies in the region will face mounting pressures to adapt effectively into the evolving environment by embracing innovation and becoming strategically more focused. A key ingredient in supporting such transformation is to nurture strategic leaders who have the foresight to anticipate, influence and reshape the strategies in tune with these developments. Charting the journey forward, insurance leaders need to consider the following salient trends: •  Firstly, the global trend seen in several industries, including insurance, to reduce costs and increase efficiency and productivity in an increasingly competitive environment. The traditional paradigm of pricing goods and services purely on costplus basis should therefore be re-evaluated. Indeed the focus needs to be shifted towards providing products and services that provide superior value proposition to consumers, made possible through re-engineering of business processes and operating models that promote greater productivity and competitiveness.
While the property and casualty insurers have been the hardest hit, life insurers are not necessarily spared as climate change has also taken its toll on human lives via natural disasters, epidemics and the like. While the global insurance industry has displayed remarkable resilience to withstand such record losses, the future remains fraught with uncertainties and the challenge is to ensure that risk management strategies remain adequate to counter the impact of unpredictable changes in global climate patterns. Allow me now to briefly share with you, some of the measures undertaken by Malaysia in responding to the evolving changes and challenges seen in the insurance marketplace. Firstly, in the area of structural reform, industry consolidation remains an area of priority for Bank Negara Malaysia in its efforts to foster a more competitive and resilient industry to harness economies of scale, expand distribution capacity, enhance business volume and exploit opportunities for cost rationalization. Secondly, the shift towards principle-based regulations and the implementation of a riskbased capital and supervisory framework in Malaysia provides a greater degree of flexibility for insurers to exploit business opportunities arising from the changing financial environment, whilst not losing sight of the inherent risks. Moving forward, Bank Negara Malaysia will adopt an increasingly differentiated regulatory approach where insurers that exhibit strong corporate governance and risk management practices will be given greater regulatory flexibility. Thirdly, the advent of bancassurance and bancatakaful has seen more players packaging life insurance and family takaful with innovative investment options that incorporate banking and investment product features.