Besides leading Nat Cat DAX, ICRM has been involved in 16 core research projects – such as conducting seismic analysis for Sumatra and flood risk assessment for Jakarta. A number of other local and global initiatives aimed at building disaster risk resilience is being undertaken in Singapore: Recently, the industry, led by Lloyds, signed a Natural Catastrophe Statement of Intent with MAS and UK Trade and Investment to promote the development of natural catastrophe insurance in regional markets. As part of the SOI, eight Lloyds Syndicates have committed $ million in natural catastrophe capacity in emerging markets, including Asia. An integrated ASEAN market Fourth, improving market access. ASEAN countries are working together to open up insurance market access within ASEAN, enabling greater risk diversification beyond national boundaries. Diversification is critical to building resilience. Last year, ASEAN member states made a commitment to liberalise by 2025 the crossborder supply of international Maritime, Aviation and Goods-in-Transit or MAT insurance, catastrophe reinsurance and remaining classes of reinsurance. The majority of ASEAN member states have already committed to liberalise MAT insurance; and are aiming to substantially liberalise catastrophe reinsurance by 2019. Conclusion Insuring Asia against natural catastrophe is a most worthwhile endeavour. The growth and prosperity that Asia has achieved over the last three to four decades can potentially be set back by the economic and social disruptions that natural disasters unleash on a periodic basis. We must put in place mechanisms for the effective assessment, management, and transfer of 3/4  BIS central bankers' speeches  disaster risks.

Whilst sustaining the current pace of development, growth prospect remains strong for the takaful sector, in view of the large untapped potential, where out of the 53.5 percent market penetration rate for both takaful and insurance, the market penetration rate for takaful was merely 10.9 percent in September 2010. The takaful industry indeed represents an important component in the overall Islamic financial system. Given its role in providing risk protection, the takaful industry offers a suite of financial products and services that complement the existing range available for consumers. In recognising its importance, focus has been given in developing a dynamic and vibrant takaful industry within our Islamic financial system. Where the industry is today has been an outcome of an accumulation of efforts in instituting a comprehensive Islamic financial landscape in Malaysia’s financial system. A strong institutional infrastructure and effective legal, regulatory and Shariah framework are the underpinnings of our Islamic  BIS central bankers’ speeches  1  financial industry. In our pursuit to develop Islamic finance, the recent enhancement to the Central Banking Act has accorded formal recognition to the existence of Islamic finance as an arm of the dual financial system, thereby giving significance and due prominence to Islamic finance. Moving forward, a number of initiatives are planned to further enhance the competitiveness and growth momentum of the takaful industry, emphasising on enhancement of the regulatory and supervisory framework and the Shariah governance framework.