Just one year after the company started operating its direct cargo trains linking China and Europe, it made the bold decision to allow other producers on-board, giving up what was seen as a significant competitive advantage at the time. But the results were astonishing. By doing so, it was able to increase the frequency of departures which allowed it to move its products more quickly to Europe. Today, HP’s Europe-bound trains depart daily from China, with the higher frequency working to its own advantage. The notion of co-opetition is not entirely foreign to the world of insurance. Insurance marketplaces such as Lloyd’s of London have long operated arrangements that deliver advantages from pooling risks and information. In Malaysia, market mechanisms exist to move reinsurance documentation more efficiently between market participants, and to share information on fraud. The emergence of new technologies will take this further. Open application programming interfaces, or APIs, enable insurers to provide and obtain access to information that will significantly alter the operational process of insurers. But access to information would require a network of service providers who are willing to share data and information, without giving away one’s competitive edge. Investments in infrastructure, especially in ICT is very expensive. By pooling funds to build shared infrastructure, the burden becomes more manageable. More investments in IT will enable new possibilities to expand insurance reach, improve efficiency and increase effectiveness. Not long ago, the natural instinct would be to resist these forces of change.

The idea here, is not to view the insurance industry’s stability in isolation, but to be seen within the wider context of preserving social and economic value of insurance systems. A new paradigm on ethics Technological advances and scientific breakthroughs have opened new possibilities to operate and deliver products to customers. Technological innovations will make customers better off but insurers on the hand, may be confronted with some fundamental ethical issues. For insurance companies, this requires a rethinking of professional and ethical standards. Thus, a need for a new paradigm on ethics. For example, with greater ability to aggregate and analyse more data from multiple sources, questions arise on the extent insurers should consider using genetic and social preferences in underwriting. Or whether it is acceptable to commit someone to a long-term financial undertaking when they may not fully comprehend the implications of their choices even though insurers might truly believe it is ‘good’ for them. And then, there is always the dilemma and trade-offs in directing more resources toward social impact investments, in cases where it lowers risk-adjusted returns for policyholders. As advancements in technology brings about various unknowns and a blurring of business lines, professional and ethical standards need to be embedded into our DNA to ensure the integrity of 3/5  BIS central bankers' speeches  our industry. When it comes to ethical values and conduct, we must move beyond conceptual discussions to practical applications. Time and effort must be undertaken to raise the standards of competence and developing well-defined codes of behaviour.