In a recent report by the OECD, a lack of awareness of different types of financial products, low level of confidence and poor knowledge of how products work were identified as barriers to financial inclusion. These factors will become more acute in an increasingly more complex and technology-driven financial system. Effective financial education will however, require more innovative approaches, broader partnerships involving the Government, educators, and non-Governmental organisations collaborating with regulators and the financial industry. The AFI network provides an important platform to examine these and other issues. Conclusion Through the AFI platform, we have a unique opportunity to work together to improve lives through financial inclusion and to have an enduring impact on global issues and developments. In this connection, a specific outcome of this Forum will be the commitment of AFI members to an Accord. This Accord will build on Maya Declaration of 2009 to extend the commitment of AFI members to take the financial inclusion agenda a step further forward towards achieving the vision of a truly inclusive financial system. Let me conclude by expressing on behalf of Bank Negara Malaysia our deep gratitude to Her Majesty Queen Máxima for gracing this event. I would also like to thank the distinguished speakers and resource persons who have travelled from various parts of the world to share with us your valuable insights. To all participants, I hope this will be a memorable event, and one that will generate new knowledge and new ideas to spur your own country’s journey to deeper financial inclusion.

To be clear, though, we are not opposed to use of longevity reinsurance, including to non-UK counterparties, provided risks are properly managed. We set out our expectations in a Director’s letter more than a year ago. It asked insurers to pre-notify the PRA of new longevity risk transfer and hedging arrangements, including the insurer’s proposed approach to risk management. We consulted on the content of the letter and 3  published Supervisory Statement 18/16 on ‘Solvency II: longevity risk transfers’ . This allowed us to track activity and has been a source of useful information to supervisors. Our supervisory approach has not changed since. Through a programme of in-depth supervisory reviews, we are gaining assurance on insurers’ risk management. We will then review our expectation to be notified ahead of transactions. With insurers transferring more longevity risk and the associated returns, the profitability of writing annuities depends increasingly on the mix of assets chosen to back them. Yields on government bonds are low and spreads on corporate bonds narrow. Insurers are therefore searching for yield in less liquid, direct investments. These include equity release mortgages, commercial property and infrastructure financing. Based on supervisory information, around 25% of annuities are backed by such direct investments currently. But insurers have plans for that proportion to increase to 40% by 2020. These assets can be a good match for long-term annuity liabilities. Moreover, increasing investment in real assets may have wider economic benefits. However, they often lack observable market prices and external credit ratings.