undertakings, can be an effective way to tailor supervisory responses to risks at the institutional level. third, we need to recognise that regulation is as much an art as it is a science. experience suggest that authorities should prioritise rules that are appropriate for their jurisdictions, and at the same time, allow room for regulatory and supervisory discretion to respond to emerging and specific risks. this is important if we are to reconcile and balance the trade offs between the practical limitations that regulators face, the desire to avoid excessive regulation, and the need for authorities to act to mitigate risks. the exercise of regulatory discretion should be subjected to appropriate rigour and accountability. and it should be supported by a stronger focus to develop regulatory experts, rather than just more regulations. this requires deep knowledge of the industry, but also wisdom and discernment. in the current state of constant change, building the capacity of supervisors is one of the most critical priorities to guard against threats to stability without impeding growth and innovation. finally, we need to create room for experimentation. while rules are not meant to restrict innovation, they often have the effect of doing so. this might end up leaving customers worse off, 4 / 5 bis central bankers'speeches and insurers exposed to higher business risks than necessary or appropriate. when faced with the stark choice of doing nothing and risking harm to public interests, or writing rules to control something that we do not yet fully understand, it is only sensible to experiment and learn from it. this point is also crucial, when technology offers so much potential to increase financial inclusion. platform - based solutions and insure - tech companies are opening up insurance access to large segments of the population at a fraction of previous costs. to fully benefit from such possibilities, some regulators have adopted “ regulatory sandboxes ” to test solutions and design regulations that are appropriate. there will no doubt be other approaches taken to experiment and innovate. and when things do not work, we must be prepared to change tactics and strategy. conclusion over the last few decades, the global regulatory community has come together to build stronger supervisory systems and more resilient markets. insurers have built extensive networks in their pursuit of growth. now is the time to build on these foundations and further strengthen them, with a renewed commitment and focus on increasing the utility and impact of insurance. in a journey of many twists and turns, the iais has been incredibly fortunate to have secretary general yoshihiro kawai at its helm,

excessive and complicated regulations. this could lead to unintended consequences that can make the financial system less, rather than more stable. in a dynamic world, regulation and supervision should be agile, pragmatic and dynamic and able to respond to changing conditions in a timely manner. a bit of uncertainty ought to be tolerated. but at the same time, we should not hesitate to reverse course should a particular rule prove to be ineffective. rules are never meant to remain relevant in perpetuity. it never does. it always run its course. it is from this perspective that regulators must have the courage to change course. in addition, from another perspective, the importance of proportionate regulation and supervision cannot be overstated. this is an area where i think we must continue to work in developing and refining the approaches to proportionality and support more inclusive insurance markets. in the larger scheme of things, as regulators we cannot ignore the broader objectives of supporting economic growth and improving the overall welfare of society. equally important, with environmental, social and governance considerations, becoming an important criterion and increasingly adopted by investors, the ethics and sustainability of insurers ’ activities will be important factors in creating shareholder value. consumer welfare and wider social impacts alongside profits will constitute key metrics by which performance is measured. this is only appropriate, as maintaining public ’ s trust and confidence is a good business strategy. the idea here, is not to view the insurance industry ’ s stability in isolation, but to be seen within the wider context of preserving social and economic value of insurance systems. a new paradigm on ethics technological advances and scientific breakthroughs have opened new possibilities to operate and deliver products to customers. technological innovations will make customers better off but insurers on the hand, may be confronted with some fundamental ethical issues. for insurance companies, this requires a rethinking of professional and ethical standards. thus, a need for a new paradigm on ethics. for example, with greater ability to aggregate and analyse more data from multiple sources, questions arise on the extent insurers should consider using genetic and social preferences in underwriting. or whether it is acceptable to commit someone to a long - term financial undertaking when they may not fully comprehend the implications of their choices even though insurers might truly believe it is ‘ good ’ for them. and then, there is always the dilemma and trade - offs in directing more resources toward social impact investments, in cases where it lowers risk - adjusted returns for policyholders. as advancement