As a mobiliser of long term private savings, life insurance has a critical role in providing long term funding for the massive investment required to achieve the growth and income objectives of Vision 2020, that is, in becoming a fully developed economy. In line with the rapid changes taking place in the business landscape of the insurance industry, the authorities have moved away from prescriptive regulation to one that allows for a more flexible operating environment. Specifically, insurers are now operating in an environment where regulations have become more principle-based. The principle-based regime places greater expectation and demands on the leadership and senior management of insurers in driving fundamental changes required within the organization in response to the changing regulatory landscape. In particular, senior management of insurers must raise the bar for the organization to achieve best-in-class practices that are aligned with the organization's strategic orientations, rather than merely complying with a minimum set of prescribed requirements. A pre-requisite for this transformation is that senior management acquires a thorough understanding of the relationship and inter-linkages between the various components of the insurance business, and to manage these dynamics in a manner that optimizes performance. 2  BIS Review 123/2007  The regulatory shift also places greater prominence on creating a strong risk management culture that is fundamental to sound insurance operations. In Malaysia, the transition to a Risk Based Capital Framework and the implementation of the risk-based supervisory regime constitute important capacity building elements of this change.

With a gathering of more than 300 industry leaders from 25 countries, I am confident that the deliberations will generate new solutions/strategies in an industry that is undergoing rapid transformation, underpinned by globalization, broad-based financial deregulation and increasing opportunities as well as uncertainties amidst an environment of heightened volatility. Rapid developments in technology and financial liberalization have played a catalytic role in transforming the financial services industry worldwide. Consequently, traditional business boundaries have become increasingly blurred, as demand for financial products and services become more diverse and sophisticated, transcending the traditional offering of stand-alone banking, insurance or investment products. As changes in the global financial industry continue to occur and indeed accelerate, insurance companies in the region will face mounting pressures to adapt effectively into the evolving environment by embracing innovation and becoming strategically more focused. A key ingredient in supporting such transformation is to nurture strategic leaders who have the foresight to anticipate, influence and reshape the strategies in tune with these developments. Charting the journey forward, insurance leaders need to consider the following salient trends: •  Firstly, the global trend seen in several industries, including insurance, to reduce costs and increase efficiency and productivity in an increasingly competitive environment. The traditional paradigm of pricing goods and services purely on costplus basis should therefore be re-evaluated. Indeed the focus needs to be shifted towards providing products and services that provide superior value proposition to consumers, made possible through re-engineering of business processes and operating models that promote greater productivity and competitiveness.