faces the greatest need? many of asia ’ s risks, ranging from marine, to property catastrophe insurance, to directors and officers liability, are actually insurable and traditional risks. yet, asia continues to remain severely underinsured. many of these insurable risks are often not well understood or well developed in this region, due to a lack of risk awareness, insufficient data and nascent insurance markets. the insurance protection gap is widening inexorably : • close to half of the world ’ s most underinsured countries are in asia, and of these, half are in southeast asia. bis central bankers ’ speeches • in the past two decades, asia has borne 50 % of the estimated global economic cost of natural catastrophes. yet, less than 5 % of all disaster losses in asia are insured, compared to 40 % in developed nations. • the 2008 sichuan earthquake is a case in point. less than 1 % of the total economic costs of us $ 125 billion were insured. the disaster further left governments and taxpayers with a hefty reconstruction bill of almost us $ 150 billion after the event. going forward, it will also no longer be sufficient to just focus on traditional risks. as asia continues to grow and become more digitally - connected, new and emerging risks will arise and we should be proactive in adapting to these needs. i would therefore like to challenge the industry to : • raise insurance penetration of traditional risks and find innovative ways to cast the net wider to cover more insureds, and • develop innovative and meaningful risk transfer products for new and emerging risks. specifically, i would like to highlight 3 key growth drivers for insurers and reinsurers today : • new and emerging risks • new capital • new technology and innovation. new and emerging risks the rapidly changing global landscape has given rise to new and emerging risks which are mostly intangible, such as cyber, liability, supply chain and reputation. cyber risk is the new catastrophe, estimated to cost the global economy between us $ 300bn – us $ 1 trillion annually. this is much higher compared to the average annual cost of natural disasters at us $ 200bn. more than just the burden of cost, cyber risks often bring about much embarrassment and reputational damage to the company and its clients. however, cyber risks are not adequately prepared for and their associated costs and impact under - estimated : • a large majority of businesses believe that cyber risks are still not fully understood, and that risk readiness for cyber

in construction was falling, with knock - on effects throughout the economy. the fiscal position was suddenly deteriorating. while there had been on average a general government surplus for the previous decade, with gross government debt shrinking to below 25 per cent of gdp by 2007, reliance on the boom - time revenue sources that were now evaporating had been so large that a sizable deficit was now emerging, augmented by the increased cost of social protection spending. the deficit was growing both in absolute terms and especially as a percentage of gdp, which was already shrinking alarmingly. total government spending jumped from 39 per cent of gdp in 2007 to 58 per cent two years later as measured at the time. 4 tax revenue fell by 30 per cent in the same period. while the tax and spending movements had the merit of being a strong automatic stabiliser – the general government position moved from balance to a deficit of about 14 per cent of gdp in the same indeed these measured growth rates greatly exaggerated the degree to which sustainable income was being generated, given the future loan losses that were being embedded. in addition to the banks active in lending to domestic borrowers ( and this included half a dozen foreign - controlled entities as well as the six main locally - controlled banks ), almost half of the total assets of the irish banking system on the eve of the crisis related to export - oriented banks located in what had been known as the dublin international financial services centre. these included sizable operations by banks such as depfa / hypo, merrill lynch, state street, and citi. thus, to say that the irish banking system amounted to about 8 times gdp in 2008 is correct, but exaggerates the size relevant to the irish crisis by up to about half. ( depfa did fail in the crisis, as did a small number of other german - owned bank or nearbank entities, but the assets, liabilities and overall business of these entities were essentially all offshore, and their losses were not assumed by the irish government ). furthermore, there was only a modest involvement of irish banks in explicit equity - type risk - sharing with their borrowers, in contrast to the case of iceland, whose banking system imploded within days of the dramatic irish guarantee of september 2008. another contrast in pre - crisis banker behaviour with the situation in iceland is reflected in the fact that, in post crisis ireland, criminal proceedings have to date been taken only in respect of persons in one bank. several other banks, including the two