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. capitalism, socialism, and democracy ( 1942 ) by joseph schumpeter. bis central bankers ’ speeches

are able to scale up very quickly into geographical areas and customer segments that might not be accessible by existing channels. it is therefore not surprising that bancassurance is the fastest growing global channel for insurance. in china, bancassurance sales increased by 415 % within 5 years from 2004 to 2009 11. in malaysia, bancassurance accounted for 36 % 12 of new life insurance business premium and 39 % 13 of gross contributions for takaful business in 2013. at the current penetration level of 5 % of the banking population, there remains significant room for growth. under the life framework, the bank has envisaged a bancassurance penetration target of 10 % 14 as part of the move towards diversification of insurance distribution channels in malaysia. rationalization of incentive structures proposed under the framework are aimed at improving persistency through more widespread adoption of needs - based selling, product strategy reviews and quality post - sales service. these measures are also expected to shift the mix towards protection and savings products from credit - related insurance that currently dominates this channel in particular for bancatakaful 15. financial advisers on the other hand have the advantage of providing advice to consumers on overall financial planning by growing, managing and protecting personal wealth to meet specific financial goals. with increasing affluence, a growing segment of consumers with more complex financial needs and goals will require the sort of comprehensive service that is delivered by financial advisers. in addition, financial advisers may be perceived to be more independent than tied agents, which will be important as consumers become more discerning. as a relatively new channel in most of asia, the primary focus is to establish public confidence through raising professional and ethical standards of financial advisers. this is a key focus under the life framework for malaysia. in addition, the bank will reduce paid - up capital requirements for financial advisors to encourage new entrants. previously consisting mainly of tele - marketing and direct mailing, direct distribution is today considered an important channel by most insurers, in view of the new possibilities enabled by the high levels of internet penetration and proliferation of mobile devices such as smartphones and tablets. social media has become a vital platform for business to engage with consumers and build their brand as well as being a rich data source in its own right on today ’ s fast moving consumer trends. the availability of instantaneous information has tipped the balance of power in favour of consumers. one such innovation is the aggregator, which has seen an increase in utilisation of