The structured development of the insurance industry over the years in particular, spurred on by various capacity building initiatives, had yielded positive outcomes contributing to continued growth. The performance of the insurance industry is expected to improve in 2010 on the back of the economic recovery and increasing awareness on the role of insurance as a protection and financial planning tool. Improvements in the employment market, rising disposable income and revival in economic activities will generate spins-off to the insurance sector and create greater demand for insurance products. Nevertheless, the operating environment for the insurance industry in 2010 is expected to remain challenging. Despite the optimism on the economic and financial conditions as the financial markets continue to stabilize in early 2010, the low-yield investment environment will continue to pose near-term challenges for insurers. In the past, investment earnings had predominantly been relied upon to offset any setback in insurers’ underwriting performance but such expectations may be altered in the near-term. The financial crisis is a clear reminder for insurers to return to basics and focus on its core function of sound business underwriting. The increasing intensity of climate change has heightened the vulnerability of the world at large to natural disasters and extreme weather conditions. Tsunamis, volcanic ash and earthquakes, not previously known to strike in generally thought “safe” zones have actually occurred. Similarly, earthquakes and hurricanes have become more intense causing multibillion dollar losses to the affected economies.
Muhammad bin Ibrahim: Today’s risks, tomorrow’s claims Keynote address by Mr Muhammad bin Ibrahim, Assistant Governor of the Central Bank of Malaysia, at the International Claims Convention 2010 “Today’s risks, tomorrow’s claims”, Kuala Lumpur, 19 April 2010. *  *  *  First of all, I congratulate the Malaysian Insurance Institute, the Australasian Institute of Chartered Loss Adjusters and the Association of Malaysian Loss Adjusters for their excellent efforts in jointly organizing this convention, themed “Today’s Risks, Tomorrow’s Claims”. I understand that this is the leading insurance claims event with an exciting programme for insurers, loss adjusters, risk managers, claims industry specialists, suppliers and industry associations. The Convention provides a platform for the relevant parties involved in insurance claims to examine and deliberate on the growing challenges in insurance claims with a view to formulate anti-fraud best practices in the insurance industry. The global insurance industry as a whole remained resilient despite the deepening of the global financial crisis in 2009 that is expected to potentially lead to more insurance fraud cases. Whilst the decline in the financial markets has put significant pressure on insurers’ investment portfolios, the aggregate financial position of insurers remained strong to weather the crisis. The financial sector in Malaysia, following a decade of financial reforms that include strengthening the regulatory and supervisory framework, and building the domestic financial infrastructure, is now bolstered by high capitalization levels, sound asset quality and sustained profitability. As a result, it was well-positioned to weather the deterioration of the external environment.