7 million, despite the transfer of the ctp insurance class to the accf, underpinned by renewals and new policies issued for the motor vehicle class, and the continued uptake of the micro insurance bundled product. the life insurance sector recorded a turnaround with a 6. 2 percent increase in gross premiums to $ 142. 2 million from a decline in 2017 and is attributed to the continued uptake of investment - linked endowment products. honourable chair, the risk transfer role that the insurance industry provides is vital to the sustainability of our economy. insurance provides the necessary safeguard for the financial health of individuals, families, communities, businesses, financial institutions and the economy as a whole. a key safeguard therefore is in the form of claim payments, and total net claims and policy payments increased by 6. 0 percent to $ 223. 3 million in 2018. the general insurance sector ’ s net claims paid increased by 7. 8 percent to $ 104. 5 million, due to the settlement of major fire claims. similarly, the life insurance sector recorded an increase of 4. 5 percent to $ 118. 8 million in 2018, as matured policies accounted for majority of the payout to policyholders. honourable members, insurance companies can only honour their claim obligations if they are adequately capitalised through a buffered level of solvency capital, and i am pleased to report that the insurance industry was assessed as sound over 2018 with both the life and general insurance sectors reporting strong solvency positions. these sound solvency positions were supported by the positive profitability position of both sectors, though profitability reduced from the level reported in 2017 by 30. 1 percent to $ 23. 7 million, as a result of the higher loss ratios for the fire and motor ctp classes. the sustained safety and soundness of each individual insurance company is also supported by effective reinsurance arrangements. reinsurance premiums paid by general insurers in 2018 totalled $ 56. 6 million with total reinsurance recoveries reported at $ 23. 8 million. the insurance industry also plays a significant role by supporting economic growth as it recycles premiums back into the economy as investment capital. in 2018, the life insurance sector ’ s investment portfolio grew by $ 121 million to $ 1. 2 billion, investing mostly in government securities ( $ 719. 3m ), listed and unlisted equities ( $ 295. 6m ), and properties ( $ 103. 9m ). the insurance industry

market. these products add to the services that are available to the customers. i must say that the fiji has seen many of these products coming on stream in the last ten years. very quickly we have seen the introduction of atms, phone banking, internet banking and other services. i must acknowledge that westpac has been at the forefront of bringing these new technology and products to fiji which have helped modernise our financial system. later on this year we will launch a new real time gross settlement system which will make the clearance of cheques between commercial banks more efficient. new currency notes let me briefly mention our new currency notes. we put into circulation the new currency notes last tuesday. they have been well received by the people. the visually impaired welcomed the different lengths of notes so they can easily identify the denomination. there were comments on the difficulty of getting to change the $ 100 note. these were the same comments that we got when we introduced the $ 50 bill some 13 years ago. let me say, that even prior to the issue of the new $ 100 bill, taxi drivers and market vendors have difficulty breaking even a $ 20 bill and that is not in fiji only. the solution is simple. we do what we have been doing all along – make sure that we have smaller change before getting into a cab or going to the market. the $ 100 and the $ 50 bills are obviously not meant for small transactions. they make large transactions much easier. i thank the commercial banks for their support and cooperation in the smooth distribution of fiji ’ s new design currency notes. monetary policy let me say something on the economy and monetary policy. we all know that the economy is going through a very difficult time. it is extremely important that everyone understand two things. first, we need to clearly understand the real state of our economy. only then can we appreciate the urgent need to execute adequate and lasting solutions to these problems. tinkering at the margin will not work for us any longer. second, we should also appreciate that the solutions that will last are not without costs. there will always be a cost to correcting economic imbalances particularly of the magnitude that fiji is facing. to me the key economic challenge that we face is to correct our widening trade imbalance. our exports continue to be dismal. sugar is earning $ 100 million less than its peak year. garment has lost even more than that. gold production has now disappeared and that ’ s another $ 60 million. tourism numbers and