Accordingly, an easing of the pressure on domestic productive resources was also expected, together with a reduction in the trend current-account deficit. Later on, beginning last June, we drew attention to the international financial conditions which were beginning to normalize, after announcements by the Federal Reserve Board of the United States. We noted then that this process could create increased short-term volatility in the global economy and the international financial markets, as portfolios were adjusted and spending plans were reviewed, but that, at the medium term it was a healthy development because it would create an environment that would help prevent the incubation of financial vulnerabilities. At the same time, we noted that the Chilean economy was on a good stand to address this transition in international liquidity. Our inflation-targeting and floating exchange rate regimes, our sound fiscal accounts and strong financial system, together with our healthy external financial structure allowed us to confront with relative calm this process and help cushion its impact on our economy. Throughout the past year, we have seen both a moderation in the investment impulse in Chile as the gradual normalization of global financial conditions. Investment has adjusted more sharply than anticipated, such that our economy grew less than we projected in late 2013, which also reflects in a downward revision of Chile’s growth forecast for 2014. Still, I would like to say that other mineral exporting economies have given a surprise in the same direction, hand in hand with the worsening of China’s economic outlook.

While life insurance premiums and family takaful contributions have grown by 48% since 2010, the penetration rate has only increased by 5 percentage points. This indicates that the industry is increasingly concentrated on a narrow insurance segment. If we eliminate double-counting, only 35% of adults have some form of cover. For the rest, products are too complex and remain unaffordable. Existing distribution channels also fail to provide adequate access, especially outside urban centres. Technological advancements are not being used to the fullest. Even for the population segments that are being served, making a purchase or a claim is a process fraught with anxiety and headache. Increasing medical insurance premiums have also placed insurers under heightened public scrutiny, with questions raised on the suitability of product designs that offer little protection against escalating costs of healthcare. Insurers’ contracting arrangements with healthcare service providers have also been called into question. While insurers might not be the guilty party here, the response to the criticism has been slow and wanting. As a group, the insurance community is meek in safeguarding the sector’s image and reputation. Underinvestment in domestic talent and capacity is another key concern. Among a large number of foreign insurers, significant reliance on group level support has limited the investments in core functions needed to develop strong domestic capabilities. In addition, large amounts of payments are being made for management fees and outsourcing arrangements. Between 2014 and 2016, it is estimated that insurers in Malaysia made no less than RM1.3 billion of such payments to foreign affiliates.