Worldwide, insurers have been successfully leveraging on bancassurance to gain a foothold in markets with low insurance penetration and a limited variety of distribution channels. Bancassurance can increase market penetration given the relatively higher level of public confidence in dealings with banks. For the banks and insurers, capitalising on synergies derived from tapping into the banks' extensive customer base to offer consumers comprehensive financial solutions while optimising on the branch network have proven to be highly successful strategies towards mutually improving productivity and profitability. In Malaysia, bancassurance constitutes a significant feature of Malaysia's financial landscape, and continues to develop rapidly in terms of market reach and operational sophistication. These developments have contributed towards significantly raising the nation's insurance penetration level and enhancing the competitive structure of the insurance industry. In addition to bancassurance, the Internet is emerging as a promising medium for insurers to advertise products and service policyholders. With the rapid technological advancements and increasing consumer demands for more efficient delivery of products and services, it offers the potential for insurers to target a wider market, improve client service and conduct business seamlessly across borders. While planning for effective distribution channels may become the key differentiating factor in the growing region today, one must not overlook the implications of the changing demands of the general public. The ageing of the population is an issue of increasing importance in the developing world. All across Asia , the number of people aged 65 and above is expected to grow dramatically over the next 50 years.

This issue, as we know, is a complex one, and implementing the new reform or the new standards proposed, whether for crisis prevention or crisis resolution, will pose an important challenge for the region. Turning specifically to the issue of cross-border supervision, I think it is clear from the experience of the current crisis that a number of observations were important. First, Systemically Important Financial Institutions (SIFIs), which include internationally active banks, do have significant implications for global financial stability, not least for the AsiaPacific region. When in distress, their operations and the uncertainties that they propagate can significantly impact confidence, market liquidity, and the real economy through a credit crunch and the drying up of international trade financing as we have seen, while prolonged market anxiety about how the problem is going to be resolved can heighten volatility in global financial markets. Second, over such period, as was seen in the current crisis, host regulators in emerging markets in Asia had limited room and information to respond to the SIFI’s distress. The dominant role in managing the crisis was played by the home regulators. What followed was a lack of balance in addressing relationship and responsibility of home and host supervisors, particularly in information sharing. As a result, host regulator’s response became less timely and was bilateral in nature, limited largely to a mixture of ring fencing and coordinated moves that raised the potential for negative externality.