muhammad bin ibrahim : brief overview of malaysia ’ s insurance industry welcoming speech by mr muhammad bin ibrahim, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the life insurance association of malaysia ’ s 40th anniversary dinner, kuala lumpur, 21 november 2014. * * * i am pleased to be here to celebrate the life insurance association of malaysia ’ s 40th anniversary dinner. i notice the presence of a number of senior and veterans who have previously served in the industry, as well as the next generation of leaders who shall bring the malaysia ’ s insurance industry to the next level of excellence. over the course of 40 years, the insurance industry has seen significant development and progress. many of you present here join me in bearing witness to the important strides that have been made to bring the industry to where it is today. these achievements go well beyond the individual successes of any one company, any one individual. the most significant milestones were accomplished through the collective vision of the industry coming together to lay the strong foundations for future growth. the association has been instrumental in this process, working closely with the bank since we assumed the regulatory function of the insurance industry from the ministry of finance back in 1988. industry ’ s achievements today, the life insurance industry contributes 2. 8 % of malaysia ’ s gross national income ( gni ), with premiums totalling rm26 billion in 2013. more than 18, 000 are employed in the industry. the life agency force has grown to about 80, 000, with more of them earning higher average incomes as they pursue professional careers as full time insurance agents. the industry is on a strong financial footing with excess capital of rm23. 5 billion, above the regulatory minimum capital requirement. expense rates have declined from 41 %, prior to the introduction of the guidelines to control operating cost of life insurance business, to 26. 3 % in 2013, representing significant efficiency gains that have created a more competitive industry and improved value for policyholders. most importantly, the life insurance industry has continued to innovate through new products and distribution channels, providing individuals protection against financial risks and help them meet their financial goals, whether for education, retirement, or to pay for medical expenses. in 2013, the industry paid out over rm16 billion in benefit claims to policyholders under various life insurance policies. the life insurance has contributed to the betterment of the health and malaysian in general. the life insurance industry has also had a key role in the development of malaysia ’ s

that momentum in the market, and an associated increase in indebtedness, can be hard to check, particularly if expectations of a rapidly rising market become deeply entrenched. a number of countries have had to take a series of actions over time to slow fast growth in housing market activity to more sustainable rates. see the box on page 22 of the may 2013 inflation report. bis central bankers ’ speeches to return to where i started. the financial policy committee of the bank of england is charged with looking ahead to identify and to counter risks to financial stability. there will always be a number of blinking warning lights – risks generated at home and risks coming from abroad – on our dashboard. the growing momentum in the market is now in my view the brightest light on that dashboard. it has not yet been accompanied by a substantial increase in aggregate mortgage debt, though gross mortgage lending is growing and there are signs that debts are becoming more concentrated. this could fade as affordability and lender constraints act increasingly as a brake on momentum. but other outcomes are very possible and the financial policy committee will need be both vigilant and ready to act. bis central bankers ’ speeches