of aggregate national income. despite this, the imf estimates that global pension liabilities could be underestimated by up to 50 percent of 2010 gdp. efforts to close this gap will need to include measures that result in greater risk sharing between governments, pension providers and individuals, the development of capital markets to better support the increasing longevity, and extending the retirement age to be in tandem with the longer life span. while bis central bankers ’ speeches these trends present enormous opportunities for the insurance industry, it also presents the important challenge of building the capacity to support new, larger, more complex and more concentrated risks within a much more compressed timeframe. risk management, product development and underwriting capabilities will be particularly important at the institutional level while at the system - wide level, closer attention will be needed to enhance the financial safety nets for the protection of policyholders and to avoid economic and social dislocations in the event of large - scale insurance failures. in the advanced economies, the insurance industry built such capacity over four centuries. asia will have a much shorter time to achieve the same, in order and to ensure that the growth does not outstrip the industry ’ s capacity to manage the associated risks. this brings me to the second point which relates to the impact that the global financial crisis and the ensuing international regulatory reforms are having on the insurance industry. while insurance companies have generally held up well through the crisis, the industry now finds itself at the intersection of major regulatory developments. the crisis has also delivered a major blow to confidence in financial institutions. this needs to be regained. both these factors will have an important influence on the way in which the industry responds to new insurance and asset accumulation opportunities in asia. we can expect that the characteristics of growth in the industry going forward will therefore differ in some respects from the historical experience. the changes in the capital rules and related accounting standards aim to achieve a more risk - based and market consistent valuations of insurance assets and liabilities. while this should improve understanding and accounting for the risks inherent in insurance business, it will also require insurers to more carefully manage risk and capital, while recognizing the prospect for increased short - term volatility. going forward, innovations in insurance solutions will also need to take into account the higher regulatory expectations for more transparency, stronger financial buffers against unexpected losses and the requirements to do more to ensure that products offered are suitable to the different customer segments. regulators will also be applying a much higher level of scrutiny on complex insurance

bis central bankers ’ speeches before i end my remarks, allow me to say a few words about this magnificent building, sasana kijang. designed to be a nexus for thought leadership and collaboration in central banking, “ sasana ” is a sanskrit word that describes a site, centre, building or arena where communities gather for meetings, while the kijang is a small yet very intelligent animal that is depicted in bank negara malaysia ’ s logo. the architectural concept of sasana kijang is inspired from the shape of the cowrie shell, a popular form of money in the malay peninsula during the 3rd century with its building facade derived from the geometric patterns of traditional malaysian songket motifs, reflecting the hand woven fabric designs. sasana kijang hosts a learning centre with state - of - the - art training facilities for local and foreign participants and provides opportunities for the exchange of views and experience towards promoting capacity building in central banking. in addition to training facilities, offices and conference halls, sasana kijang also houses the bank negara malaysia knowledge management centre and the bank negara malaysia ’ s museum and art gallery which is open to the public. i hope all of you will take the opportunity to explore the bank ’ s collection displayed at the museum and art gallery and to enjoy the activities in the knowledge management centre. as visitors to malaysia, your stay here is not complete unless you have treated yourself to the variety of food, traditional and modern, that the country has to offer. on that note, i wish you all a productive engagement and a pleasant stay in kuala lumpur. bis central bankers ’ speeches