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.

This should take into account an insurer’s legal and professional obligations, the wider impact on society, issues of equity and fairness, and preservation of virtues such as honesty and compassion. These issues I raised are delicate issues that can involve complex ethical choices. It will test the values of corporations, its people, its leadership. Specific issues for regulation and supervision Let me mention a few words on specific challenges for regulation and supervision in the future that is before us. First, the lifespan of regulations is getting shorter and shorter, with new areas of risk emerging faster than regulators can write new rules. Second, and adding to the complication, potential threats are also creeping in from beyond the traditional regulatory perimeter. This can be both from non-traditional players, or unfamiliar business models or technologies. Third, we may have to simply accept that we may never fully grasp or understand emerging risks facing the industry, in a timely manner. Allow me to offer some reflections on these issues. First, we need a better and effective approach to collate intelligence, including from non-traditional sources. Technological advancement offers additional opportunities. There is clearly vast potential on the use of big data and machine learning to improve risk identification and assessments. Last year, the US SEC successfully charged a bank for failing to adequately train its representatives in the sale of certain complex debt instruments, using custom analytics. Tools were developed to sift through millions of trading records, a task that would have been impractical with traditional investigative techniques.