Zeti Akhtar Aziz: Recent initiatives to promote financial inclusion
Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the 2006 Graduation
Ceremony of the Malaysian Insurance Institute, Kuala Lumpur, 19 August 2006.
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Members of the Board of the Malaysian Insurance Institute,
Faculty Members,
Distinguished Guests,
Graduating Students,
Ladies and Gentlemen.
Assalamualaikum dan salam sejahtera,
Saya berasa amat berbangga dan berbesar hati kerana dapat turut serta meraikan kejayaan yang
dicapai oleh para graduan MII pada hari ini. Majlis ini menandakan usaha berterusan industri insurans,
khususnya MII, untuk meningkatkan tahap profesionalisme kakitangan industri insurans melalui
pendidikan berterusan, serta kesungguhan industri insurans untuk sentiasa mempertingkatkan tahap
perkhidmatan bagi menjana perkembangan industri. Tahniah dan syabas saya ucapkan kepada
saudara dan saudari.
Ladies and Gentlemen,
Today, we recognise the achievement of yet another group of graduands of the MII. Let me again
congratulate all the 642 individuals who have successfully completed their programmes, among whom
are 276 who will receive the Masters in Business Administration, Associateship and Post-Graduate
Diploma qualifications while 26 will receive the certification as Chartered Financial Consultants. There
are also 340 individuals who will receive their undergraduate diplomas and certificates in various
insurance-related fields. I am particularly pleased to welcome the graduands from Bangladesh, India,
Indonesia, the Maldives, Thailand and Vietnam. The increasing participation of candidates from
abroad is a welcome development as it adds an international dimension to the MII's programmes by
promoting an exchange of cross-border experiences and expertise shared in the programmes. It also
strengthens the network among the workforce of the industry in the region.
On this day, all of you have indeed achieved an important step forward in your professional career.
The skills and knowledge acquired in achieving your qualifications will enhance your ability to
contribute to the performance and development of the insurance industry. In this increasingly
competitive and challenging economic and financial environment, knowledge has emerged as a critical
factor in defining competitive advantage and success.
Ladies and Gentlemen,
Significant market developments continue to exert their influence in shaping both the global and the
domestic economy. These developments include the increased pace of globalisation, the emergence
of new technologies and the increasing importance assigned to the value of knowledge as a
determining factor in a country's performance. As competition intensifies, and rapid and dynamic
changes take place in the financial environment, the areas of comparative advantage will change. In
recognition of these trends, Malaysia has allocated significant resources and attention to human
capital development to strengthen the intellectual capacity of our nation. Indeed, human intellectual
capital plays a pivotal role in driving future performance and competitiveness.
In the financial services sector, the financial landscape will continue to evolve with the proliferation of
financial products and services in line with the rapidly changing requirements of the economy and
expectations of businesses and consumers.
These trends are particularly evident in the insurance industry.
Indeed, over recent decade, the insurance industry has seen significant progress and expansion.
Assets of the insurance industry have now reached over RM100 billion and annual premiums
generated by the industry are in excess of RM23 billion a year. The market penetration, that is, the
number of policies in force as a ratio of the total population, has more than tripled to 38.7% from over
a decade ago. At the same time, this growth has been underpinned by a transformation of the industry
in terms of the distribution systems, product diversity, sophistication of business models and practices,
and the state of the art technological advances. With this track record and the structural changes in
the environment that are occurring, the prospects for continued growth will remain strong going
forward.
Importantly, the insurance industry continues to play an important socio-economic role within the
economy. It is a signifant institutional investor in the capital market, with over RM49 billion invested in
corporate and debt securities. In addition to providing basic insurance protection to individuals and
corporations, insurance products have also contributed significantly towards expanding the breadth of
financial planning options for individuals. This includes solutions that provide for individuals to finance
their retirement needs, medical expenses and children's education, as well as solutions that enhance
their investment income. All of you are therefore part of a key industry that forms an integral
component of our social and economic fabric.
Professionals in the insurance industry can therefore expect to play an important role in this
environment of increasing complexity in financial services that is accompanied by the increasingly
sophisticated demands by businesses and consumers. In this environment, insurance professionals
are expected to not only raise the service standards, but also to align themselves to be a part of a
workforce that is productive, innovative and strategically more focused in advancing the insurance
industry to the fore front of the financial services sector.
While the regulatory authorities have given considerable attention to efforts to empower, educate and
safeguard consumer interests, sound market conduct practices and a commitment to raise the
standards in consumer protection remains largely in the hands of insurance professionals. Apart from
the need to constantly acquire new knowledge and skills, the observance of ethical practices and a
professional code of conduct must be complete and comprehensive. Indeed, an unrelenting adoption
of the highest standards of professionalism and integrity is essential in generating public confidence in
the insurance industry.
Ladies and Gentlemen,
It is therefore, recognised that we need to continuously invest in human capital to create a pool of
high-caliber professionals with the necessary competencies that can deliver high value-added
insurance products and services, adopt advanced business practices, build public trust and
confidence, and thus advance the industry to greater heights.
MII, being the premier insurance education and training institute in Malaysia , shoulders an important
responsibility in developing the human capital for the insurance industry. It has steadily established a
reputation as the leader in executing the industryâ€ ̃s capacity-building initiatives through the
development of skills, and expertise. MII has continued to broaden and enhance its training directory
to meet the increasingly complex and diversified needs of the insurance industry. T he Registered
Financial Planner (RFP) programme which was launched in 2002 has now produced its first batch of
964 graduates in January 2005. In keeping pace with the evolving changes in education, in July 2006,
MII launched its MII e-Academy, an on-line learning avenue to make learning more accessible to the
insurance professionals, unconstrained by location, distance or time.
I am pleased that MII has taken the necessary steps in upholding the responsibility to deliver quality
training, not only for the local insurance industry, but also across the region. The increasing number of
participants from abroad signifies the growing recognition of the programmes organized by MII. At the
regional front, MII's out-reach has been further enhanced with the conclusion of the Memorandum of
Understanding between MII and FORTE Insurance ( Cambodia ) Plc. in June 2005, whereby MII will
conduct professional insurance examinations in Cambodia . At the same time, MII continues to
assume its role as the secretariat of the ASEAN Insurance Training and Research Institute, or AITRI,
in Malaysia , serving as a regional network centre for insurance education and research. For this
purpose, AITRI conducts an annual series of insurance programmes and courses for the ASEAN
regulators and practitioners.
Complementing the MII's efforts for the insurance industry, the International Centre for Education on
Islamic Finance, or INCEIF which was launched in March this year seeks to produce high-caliber
practitioners, professionals, specialists and researchers in Islamic finance. It offers the world's first
certification on Islamic finance, the Certified Islamic Finance Professional (CIFP) programme as well
as post-graduate programmes in Islamic finance. This initiative is aimed at supporting the global
development of the Islamic financial services industry.
Ladies and Gentlemen,
The further development and growth of the insurance industry brings with it new potential and
opportunities for professionals like yourselves. The challenge is to embrace the opportunities as they
present themselves and to continuously develop new skills and competencies that will be needed in
this changing environment. In relation to this, I would like to urge you to rise to the challenge by
building on your achievements today to continually improve your skills and knowledge. The inculcation
of a culture of lifelong learning is essential to enable you to adapt to the constantly changing
environment and to contribute to the growth and development of the insurance industry, and to the
overall financial services industry.
In closing, let me congratulate once again all the graduands of MII. I wish each of you every success
in your career and future endeavours.
Thank you.