donald l kohn : expertise and macroeconomic policy comments by mr donald l kohn, vice chairman of the board of governors of the us federal reserve system, on " insiders versus outsiders in monetary policy - making, " by timothy besley, neil meads, and paolo surico, at the american economic association session, allied social science associations annual meeting, new orleans, louisiana, 4 january 2008. * * * this panel is dealing with an important topic – in effect, the design and functioning of monetary policy committees. monetary policy decisions are judgment calls, informed by forecasts and discussions about how the economy is likely to evolve, alternative possibilities, and potential responses to policy actions. the question is how to bring the best possible judgments to bear on these questions. besley, meads and surico's contribution is to ask whether certain characteristics of the policymakers matter for the how they vote on the monetary policy committee. for the monetary policy committee ( mpc ) at the bank of england, they find heterogeneous views among voters, but no systematic differences based on whether the mpc member is an insider – that is part of the hierarchy at the bank – or an outsider appointed for a short term just to the mpc ; whether the person comes from an academic background ; or whether that person has worked at the treasury. i found the piece well done and interesting, and i have only a few comments before moving on to some questions and observations about the federal open market committee ( fomc ) sparked by reading this research. 1 my first comment is that i'm not surprised by the results. the mpc has a well - defined objective given by the government. to be sure, members may differ about the precise time frame in which to meet that objective, but these distinctions should be small relative to the importance of the overall objective. in addition, at every policy meeting, each member of the mpc is operating with the same information from the staff, and before the quarterly meetings that precede an inflation report, the members have sat through a number of discussions covering all aspects of the forecast. everyone should be equally familiar with the key issues and analysis. finally, dissent is accepted, indeed encouraged in some respects, by insiders as well as outsiders, reducing any differences in incentives facing the two groups. nonetheless, some aspects of the paper raised questions in my mind about the robustness of the results. for one, the authors, in testing for differences in policy

reliance on agents. examples include the liberalisation of fire and motor tariffs, and the requirement under the life framework for companies to offer pure protection term products through direct and online channels since july 2017, and starting in july 2018, to extend this to pure protection critical illness and pure protection medical and health products. at the same time, the regulatory expectations on the conduct of agents have also intensified. it is the aim of bank negara malaysia to continuously strengthen the professionalism of insurance and takaful agents. this is not to speak of the impact of technology. in the case of agents and intermediaries more generally, the information revolution can be a particular source of anxiety. in an age of apps, aggregators and “ ask me anything ” chatbots, suppliers and consumers are closer than ever before, potentially bypassing the agents or intermediaries altogether. with the emergence of fintech and insurtech, insurers in other countries are starting to experiment with chatbots capable of independently maneuvering sales and servicing processes. product aggregators are also fast growing in prominence. an accenture survey revealed that aggregators account for 70 % of new business premiums in the uk private automobile insurance market. indeed, two product aggregators platforms are already operating within bank negara malaysia ’ s regulatory sandbox. the bank is reviewing the regulatory framework to enable the aggregators to operate by the end of this year. 1 / 5 bis central bankers'speeches these are headwinds that the industry has to tackle head - on, and like it or not, they will further intensify. while we cannot stop these changes, we can certainly choose how we respond to it. with challenges are opportunities. these can only be reaped through a combination of traits – greater proactiveness, a willingness to adapt and clear strategic thinking. i do not doubt that this is much harder than it sounds, but i believe a good place to start would be focusing on three priorities. allow me to elaborate on each in turn. technology that matters the vision for the life insurance and family takaful industry is to achieve a penetration rate of 75 % of the malaysian population. within this, the takaful industry has set a 25 % target to be achieved by 2020. for this to happen, it is crucial that the industry gets to grips with the shift in market demographics, especially where interactions with technological platforms are concerned. it is imperative that agents embrace technology. a 2017 study 1 by bain & company