savings rates exceeding 30 % of gross national product for most countries in asia, raises the potential for long - term sustainability of domestic consumption spending. this trend has also supported increased intra - regional trade, investment and tourism that is reinforcing the growth prospects in the region. the evolving trends and encouraging growth prospects in our respective regions present tremendous opportunities for the insurance and reinsurance industry. of significance is that the global insurance industry on the whole has remained resilient throughout the current financial crisis. the overall aggregate financial position of insurers in the crisis affected countries have continued to be strong, and generally not severely affected by liquidity pressures or exposures in the credit derivatives markets. earlier losses by insurers in financial market activities had resulted in a shift to " back - to - basics " models, focusing on core underwriting business instead of heavily relying on investments as the main source of earnings. the industry had also benefited from the subsequent upturn in the pricing cycle which has fortified the capital position of insurers and provided the support to maintaining sound underwriting standards. these conditions have placed the industry on a much stronger position to withstand the challenges emanating from this global financial turmoil. domestic and external conditions are however expected to remain volatile for some time. significant uncertainties will persist in the international financial markets and the broader global economic conditions. these conditions will continue to pose significant challenges to the insurance industry. in this environment, maintaining strong capital buffers and sound risk management is even more imperative to ensuring the continued resilience of the insurance industry. with the adoption of solvency ii in europe and its influence on solvency regimes in other jurisdictions, more countries, including malaysia, have now moved to adopt more riskaligned capital regimes. this needs to be reinforced by substantive improvements in risk management practices, greater alignment between business strategy and risk, and greater appreciation by boards and senior management of insurers on risk issues given the growing complexity and increasing interconnectedness of financial markets and financial sector players. the insurance industry has progressed significantly over the years and is well - positioned to supporting both the recovery process and future growth potential of the economy. as emerging economies rebalance with greater emphasis on private consumption, the social safety net will need to be strengthened, with insurance and pensions now having a greater role. an ageing population will also become an issue in the future. globally, the number of the aged population that is aged 65 and above is expected to grow dramatically by 2050. such

zeti akhtar aziz : insurance and reinsurance in the aftermath of the global crisis keynote address by dr zeti akhtar aziz, governor of the central bank of malaysia, at the 21st federation of afro - asian insurance and reinsurance conference, kuala lumpur, 20 october 2009. * * * it is my great pleasure to be here today at the 21st federation of afro - asian insurance and reinsurance conference in kuala lumpur. this conference reinforces the cooperation between the african and asian region in the development of the insurance industry. the theme of this year's conference, " the insurance and reinsurance environment in the aftermath of the global financial and economic crisis ", is indeed highly relevant as stabilization and signs of recovery are emerging in the world economy. the crisis has tested the robustness and resilience of financial systems around the world. the far reaching implications of the financial crisis have shaken the foundations of the international financial system. the effects of the crisis on the financial systems and the re - thinking by the international community on the issues that have surfaced during the crisis will fundamentally change the future financial landscape. this conference provides an important platform to discuss the key issues faced by the insurance and reinsurance industry, in particular, in the context of our two regions and to discuss the potential to leverage on our respective relative strengths and the opportunities that the new environment presents. while several of the advanced economies will continue to be weighed down by weak growth as the slow process of financial resolution continues and the high unemployment delays the recovery process, emerging economies, in general, and asia in particular, have shown a high degree of resilience. the financial intermediation in most emerging economies have remained undisrupted and have continued to support the domestic economic activity. while the emerging economies are expected to lead the recovery process, there needs to be a reassessment of the strategies for future growth. over reliance on export orientation to the traditional markets would increase the vulnerability to external developments. going forward, emerging economies now need to achieve a greater balance between external - oriented development strategies and the strengthening of our domestic demand. in asia, domestic demand in most emerging economies are well supported by the positive demographic structure, the rising income levels, and the broadening of affluence. this is reinforced by the low levels of unemployment and inflation, and the continued access to financing. this changing spending patterns in asia have already led to the rise of a modern retail sector across our region. in addition, high