Parametric insurance using geospatial support and big data to validate legitimate claims by farmers have been rolled-out in many parts of the world. These are all examples of technology reinvigorating the “business-asusual” means of providing protection. From our own engagements with SMEs in particular, businesses often cited that complicated and lengthy procedures remain among the top reason for not purchasing takaful. This is not a new challenge and the solutions are available for takaful operators to deploy. More targeted investment into enhancing operational capabilities is paramount for takaful operators to stay competitive. Efforts should continue to be undertaken by the industry to provide seamless customer experience by digitising operational processes, expanding distribution outreach and also upskilling the intermediaries. We also continue to be open to new proposals and would encourage players to test innovative business models and solutions in Malaysia. To date, 80 applications have been submitted under the Financial Technology Regulatory Sandbox – of which, 12 relate to insurance and takaful services. As we facilitate viability testing of these propositions, we have been gathering data and experience that will allow us to make evidence-backed regulatory adjustments, for new and incumbent market players to operate under a regulatory framework that is more riskproportionate. This will cater for new designs of offerings and business modality, while remaining effective in promoting financial soundness and stability. Nonetheless, what we have seen thus far can only be characterised as digitisation of existing delivery channels and services. Going beyond this, we have yet to see true disruptions.

On the basis of current information and prevailing futures prices for oil, annual HICP inflation is expected to remain very low or negative in the months ahead. Supported by the favourable impact of our recent monetary policy measures on aggregate demand, the impact of the lower euro exchange rate and the assumption of somewhat higher oil prices in the years ahead, inflation rates are expected to start increasing gradually later in 2015. This assessment is also broadly reflected in the March 2015 ECB staff macroeconomic projections for the euro area, which foresee annual HICP inflation at 0.0% in 2015, 1.5% in 2016 and 1.8% in 2017. In comparison with the December 2014 Eurosystem staff macroeconomic projections, the inflation projection for 2015 has been revised downwards, mainly reflecting the fall in oil prices. In contrast, the inflation projection for 2016 has been revised slightly upwards, also reflecting the expected impact of our recent monetary policy measures. The Governing Council will continue to closely monitor the risks to the outlook for price developments over the medium term. In this context, we will focus in particular on the passthrough of our monetary policy measures, geopolitical developments, and exchange rate and energy price developments. When discussing the economic outlook and the new projections, the Governing Council acknowledged that the staff projections are conditional on the full implementation of all our policy measures. Moreover, the March staff projections extend the horizon to 2017.