. • lloyd ’ s has estimated that even a modest an increase in penetration rates for catastrophe will allow for a large reduction in the economic costs that are being borne by governments and local communities in asia. 37. so far the take - up of catastrophe insurance in asia has been woefully low. part of the reason has to do with a lack of insurance awareness among businesses around the region. but it also has to do with data gaps – the industry needs good data on the frequency, location and economic impact of natural disasters, so that insurers and reinsurers can price risks adequately. so we have had a limited supply of insurance coverage, that has itself led to higher cost of protection, which in turn discourages demand for insurance against catastrophe risks. 38. but we can solve this problem. we can overcome the fragmentation of data in asia, pool data so as to facilitate more efficient underwriting of catastrophe risks. here too, we have an initiative in singapore called the natural catastrophe data analytics exchange ( nat cat dax ). • nat cat dax is a public - private partnership, involving several leading global insurers, the public sector and our research institutes ; • it is using high resolution data obtained through remote sensing technologies – from satellites, drones and uavs – and combining that with industry data to much richer database on natural disasters ; • we welcome more in the industry to join the founding members in this initiative. cyber insurance 39. the third major, emerging opportunity is in cyber insurance. the good news is that asia is the most rapidly growing digital market globally. but it also means increasing costs of cyber attacks. this is a global problem, and we face it here in asia. the frequency, sophistication bis central bankers ’ speeches and the sheer audacity of cyber - attacks is growing. it will pose huge costs to our economies, and to corporate and personal privacy. 40. the demand for protection will grow, not just the need to insure against losses but also the demand from businesses who wish to strengthen their resilience and to recover more quickly from security breaches. 41. but the market needs development. it ’ s still in its infancy. we have to increase awareness of the importance of insurance in dealing with cyber risk. again, however, the data needed for efficient underwriting of risk is weak. we need to strengthen collaboration between the industry, government and academia to build reliable databases and analytical tools to enable the efficient underwriting of cyber risk

have to live with the fact of low real interest rates for many years to come. 14. it will pose a challenge for retirement security, and especially for pension funds and insurance funds. as you know, it hits you on both your assets and your liabilities. it means a lower return on your assets. and it pushes up the value of liabilities because the discount rates has gone down. 15. it is not a temporary challenge but a long term challenge. as life expectancy goes up, liabilities will be pushed out further, and the gap in maturity between your liabilities and your assets is likely to grow. this mismatch in durations, together with low interest rates, means we have a growing problem. 16. we cannot address this fundamentally through changes in asset allocation strategy among insurance and pension funds, taken as a whole. there have been recent shifts towards alternative assets. there has been a search for yield, and some funds have seen improvement in their return on their assets. but we have to bear in mind that globally, there is a limited supply of quality alternative assets. funds are moving into private equity, real estate and some other alternative assets but more money going into these assets doesn ’ t raise yields. it can only mean a lower return on these assets over time. the search for yield doesn ’ t raise yields overall, it just redistributes yields among different players. so there are limits to this strategy for the pension and insurance fund industry as a whole. 17. i should note that the challenge we are talking about in retirement security is not a problem only for the advanced economies. several emerging economies too are entering a phase where their societies are ageing, and some are quite unprepared for it. 18. brazil is the most pronounced case, where the unsustainability of its social security system is reaching crisis proportions. past promises have not been funded, are soon going to have to be funded, and they are not going to be able to fund it. china has also begun ageing. it has a complex system of retirement security, with multiple pension schemes in different provinces and for different groups. but china is in the process of reforms, integrating its systems and seeking to provide adequate coverage for all workers, and i think they will be getting there. 19. even in asean, thailand is going to begin ageing before long. and the asian countries that grew quickly a few decades ago are also entering the ageing phase – societies