. innovations in micro - insurance have helped protect our most vulnerable communities from devastation. today, drones are being used to inspect property damage claims, and machine learning to detect fraud. indeed, the industry has enabled trade to flourish, serving as the bedrock of modern economies. despite these remarkable developments, the world continues to face immense economic, environmental and social challenges. the effects of climate change are real, leaving horrific damage and destruction. economic losses in the aftermath of this year ’ s hurricane season in the gulf of mexico is estimated to reach up to $ 265 billion. events that we once thought to be implausible or highly unlikely, have become the “ new normal ”. 1 / 5 bis central bankers'speeches in many parts of the world, health care costs continue to rise, and many face uncertain futures as public sector safety nets and government finances come under increasing strain. against this backdrop, financial inclusion for the underserved segments remains an elusive goal. for the insurance industry, this raises important issues. two issues come to my mind. first is on the industry ’ s role in addressing a few of the challenges facing our economies and society. and second, the manner in which regulation and supervision can adapt to support broader economic and social development. in addressing these issues, i shall attempt to advocate the idea that a rethinking in approach is an imperative. new paradigms are needed to anchor business and public policy to the realities of the future. i will touch on three of them : competitive, stability and ethical paradigms. a new competitive paradigm in an increasingly interconnected world, traditional models of competition deserve a re - think. network effects will become more important, both in increasing the value of insurance products and services, and to better manage risks. rather than see the competitive landscape through a zero - sum lens, co - operative competition or “ co - opetition ” can result in synergistic benefits. the example of hewlett - packard ( hp ) clearly illustrates this idea. just one year after the company started operating its direct cargo trains linking china and europe, it made the bold decision to allow other producers on - board, giving up what was seen as a significant competitive advantage at the time. but the results were astonishing. by doing so, it was able to increase the frequency of departures which allowed it to move its products more quickly to europe. today, hp ’ s europe - bound trains depart daily from china, with the higher frequency working to its own

##d in being a part of this. we would think that the strong trends we have seen should be accompanied by greater trade facilitation by the financial sector as we know that about 47 percent of global trade is estimated to be supported by bank - intermediated trade finance2. but we also know that in the past, islamic trade finance share in malaysia has been relatively low, and we measured this at 11. 3 % of trade financed in 2016. this has improved with the various initiatives that we have undertaken in creating awareness and working with the industry, government and agencies to expand the offerings and the use of islamic trade finance facilitation with the share growing to 31. 4 % in 2020. however, we have to acknowledge that we may still have much to do and we look forward to the report which i have been informed also shares a host of ideas and recommendations for us to take forward. before that, please allow me to share some thoughts on some of the important thrusts that we see for us to take into consideration as we continue our work in this. firstly, we critically need trade - based solutions to ease liquidity constraints. the pandemic, which led to subdued domestic demand and stringent covid - 19 containment measures, has resulted in a liquidity squeeze among malaysian businesses, particularly the smes. to stay afloat, some companies have had to resort to increased debt to meet their payment obligations. 1 / 4 bis central bankers'speeches while measures have been introduced to lessen the burden of smes in the form of wage assistance programmes, support grants and deferment of financing instalments, these are merely a temporary backstop akin to a band - aid. prolonged assistance of this form may not be sustainable. the over dependence on debt - based instruments also reduces the financial flexibility of businesses in supporting their recovery. trade - based solutions can offer a viable option where funding is tailored to the lifecycle of production. companies can obtain short - term liquidity via the sale of current assets such as receivables and inventories to financial institutions without increasing their indebtedness. the structuring of such solutions however, entails new sets of risks to financial institutions. in contrast to debt financing, the financier is exposed to risks beyond credit, such as inventory and market risk, which calls for additional safeguards for risk mitigation, different approaches to risk management, infrastructure and practices. given the nature of the exposures, this warrant