and remain resilient against calamities, not just for their own survival, but in the interest of employees and the community that depend on them. role and prospects of the insurance industry in advancing risk management the cost associated with negative tail - risk events will only escalate as business networks grow in complexity. the use of insurance continues to be an important way in which companies can reduce this cost by transferring risks to insurance providers. insurers are well - placed to assume such risks given their long standing history in risk analytics which enables them to effectively exploit the law of large numbers and benefit from risk pooling. among emerging economies, however, there is still a sizeable protection gap in spite of the increased frequency and severity of weather related disasters and other natural catastrophes. in 2014, insured losses in asia only covered about 10 percent of total losses incurred as a result of natural and man - made disasters. combined insurance premiums written from emerging markets accounted for only 18 percent of global premiums in 2014, against 82 percent recorded from the advanced economies. given the concentration of growth and development in emerging economies, going forward, the extent of underinsurance is a concern. in many of these economies, efforts are being aggressively pursued to increase awareness of the importance of insurance protection in helping one manage risks, and to develop an effective insurance market to meet these needs. the insurance industry in malaysia currently stands at crossroads of implementing important reforms being introduced by bank negara malaysia both in the general and life insurance sectors. the objective of the reforms is to further enhance the competitiveness of the industry, ensure its continued resilience, and encourage greater innovation in solutions offered for households and businesses to better manage risks. to this end, two aspects of the reforms are significant. the first is the progressive strengthening of prudential standards that aim to improve underwriting and risk assessment capabilities within insurance companies, while substantially strengthening incentives for insurers to differentiate themselves in the market. the second is the structural changes that are being introduced to reduce market distortions and drive efficiency improvements. beyond domestic borders, the bank also continues to pursue further liberalisation in the cross border provision of insurance in certain sectors, such as the marine, aviation and goods in international transit ( mat ) sector, both to enhance capacity and reduce costs for businesses. this is primarily being advanced under regional integration plans, focusing in particular on asean. taken together, the reforms are expected to result in wider product offerings and delivery channels, service quality

view it as appropriate “ to act within their existing mandate to mitigate climate - related financial risks ” that “ could potentially impact the safety and soundness of individual financial institutions and could pose potential financial stability concerns for the financial system. ” see basel committee on banking supervision, bank for international settlements ( 2020 ), climate - related financial risks : a survey on current initiatives ( basel : bcbs, april ), https : / / www. bis. org / bcbs / publ / d502. pdf ; see also nick robins, simon dikau, and ulrich volz ( 2021 ), netzero central banking : a new phase in greening the financial system, ( london : grantham research institute on climate change and the environment at the london school of economics and political science, march ), https : / / www. lse. ac. uk / granthaminstitute / wp - content / uploads / 2021 / 03 / net - zero - centralbanking - 1. pdf. for overviews of climate change and economic damage, see, for example, maximilian auffhammer ( 2018 ), “ quantifying economic damages from climate change, ” journal of economic perspectives, vol. 32 ( fall ), pp. 33 – 52 ; solomon hsiang and robert e. kopp ( 2018 ), “ an economist ’ s guide to climate change science, ” journal of economic perspectives, vol. 32 ( fall ), pp. 3 – 32, https : / / pubs. aeaweb. org / doi / pdfplus / 10. 1257 / jep. 32. 4. 3 ; and solomon hsiang, robert kopp, amir jina, james rising, michael delgado, shashank mohan, d. j. rasmussen, robert muir - wood, paul wilson, michael oppenheimer, kate larsen, and trevor houser ( 2017 ), “ estimating economic damage from climate change in the united states, ” science, vol. 356 ( june ), pp. 1362 – 69. see federal reserve bank of new york ( 2021 ), “ kevin stiroh to step down as head of new york fed supervision to assume new system leadership role at board of governors on climate, ” press release, january 25, https : / / www. newyorkfed. org / newsevents / news / aboutthefed / 2021 / 20210125. see lael