With greater affluence, households will also become more empowered in expressing preferences and more discerning in making  1  IMF- World Economic Outlook 2014 Update. 2  Emerging Asia definition: South and East Asia excluding advanced countries (Hong Kong. Singapore, South Korea, Taiwan). 3  Swiss Re- Sigma World Insurance in 2004 – 2012. 4  Swiss Re- Global Insurance Review 2013 and Outlook 2014/15. 5  Why Does Population Aging Matter So Much for Asia (Lee et al 2011), Aging, Economic Growth, and Old-Age Security in Asia (ADB 2012). BIS central bankers’ speeches  1  financial decisions. Insurers will need a more tailored approach in ensuring their distribution capabilities are able to effectively deal with different customer segments. Thirdly, advancements in information and communication technology (ICT) have given rise to an era of instantaneous connectivity. According to certain estimations, Internet and smartphone penetration rates in Asia have reached 32% 6 and 43% respectively in 2013 7 Beyond offering new channels for delivery of products and services, ICT has opened up new ways of doing business. The Internet has evolved from being merely a tool for insurers to provide information on products into a competitive marketplace and platform for exchange. In more advanced economies, for example, aggregators have intensified price competition in personal lines insurance business. The advent of “big data”, encompassing technologies ranging from social media to telematics, will significantly augment insurers’ analytical capabilities to enable a more responsive and personalised customer experience, foster process innovation and provide strategic agility through quicker time-to-market.

New policies and procedures must be communicated in a timely manner to all relevant parts and levels of the organisation and periodically reviewed in the light of changing circumstances. In addition, more complex IT infrastructures that are central to many of the new channels will require commensurate attention to IT-related risks, which include strategic, compliance and business continuity risks. Conclusion The Austrian economist Joseph Schumpeter described “creative destruction” as “process … that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one” 19. As Asia transforms and replaces old social and economic structures with new ones, so must the insurance industry revolutionise its business models and paradigms. The challenges for insurers are significant, yet great rewards await those who seize the opportunities presented by the new environment. In so doing, not only will the industry benefit from growth but the public, who are the ultimate stakeholders, will continue to enjoy rising standards of living and protection from adversity. With many in Asia still not adequately insured, the imperative is clear – insurers must rise to the challenge and chart new pathways towards success. With that, I congratulate Asia Insurance Review for organising this most timely and relevant Asia Conference on Bancassurance & Alternative Distribution Channels. To all the speakers and participants, I wish you all a productive conference and thank you for your kind attention. 19  Capitalism, Socialism, and Democracy (1942) by Joseph Schumpeter. BIS central bankers’ speeches  5