As for cross-sectional systemic risks, the Financial Stability Board promoted a set of measures to strengthen the capital requirements for systemic banks and to establish stricter supervisory requirements and stronger resolution frameworks for them. The development of microprudential policy also entailed changes of an institutional nature. In Europe, the European Systemic Risk Board was created, with the task of microprudential supervision of the financial system of the European Union (EU). However, at the same time it was necessary to create a framework for action at national level to enable the different sources of systemic risk to be monitored and the adequacy of the new macroprudential policy matters and instruments available to be assessed. Following this roadmap, the Spanish Government has recently announced its intention to create a macroprudential authority comprising representatives of the Ministry of the Economy and Enterprise, the Banco de España and the National Securities Market Commission. This new authority will be responsible for the macroprudential supervision of the Spanish financial system, with the aim of contributing to the prevention and mitigation of systemic risk. The crisis also highlighted certain vulnerabilities in the international accounting standards, resulting in the provisions needed to cover risks being recognised late and being inadequate in amount. In response, an expected loss accounting model was introduced, which, along with the reforms in the prudential area, helped improve recognition of credit risk and increasing the resilience of banks to unexpected deterioration in their credit portfolios.

Already the industry has undergone substantial transformation in recent years. Products, distribution channels, customer sophistication, and risk types, all look vastly different from how they used to a decade ago. I have no doubt that this trend will accelerate moving forward. A key source of change are regulatory initiatives. While these are primarily intended to enable easier and cheaper access to products by a much wider market, it also means a lower degree of reliance on agents. Examples include the liberalisation of fire and motor tariffs, and the requirement under the LIFE Framework for companies to offer pure protection term products through direct and online channels since July 2017, and starting in July 2018, to extend this to pure protection critical illness and pure protection medical and health products. At the same time, the regulatory expectations on the conduct of agents have also intensified. It is the aim of Bank Negara Malaysia to continuously strengthen the professionalism of insurance and takaful agents. This is not to speak of the impact of technology. In the case of agents and intermediaries more generally, the information revolution can be a particular source of anxiety. In an age of apps, aggregators and “Ask me anything” chatbots, suppliers and consumers are closer than ever before, potentially bypassing the agents or intermediaries altogether. With the emergence of fintech and insurtech, insurers in other countries are starting to experiment with chatbots capable of independently maneuvering sales and servicing processes. Product aggregators are also fast growing in prominence.