This means that monetary policy bears the primary responsibility for price stability, whereas fiscal policy is to a greater extent oriented towards long-term stability in government finances. In Norway, the Government Petroleum Fund acts as a buffer against fluctuations in petroleum revenues. This makes the Norwegian economy more robust and in the short term less dependent on oil, at least as long as the government budget is running a substantial surplus. The Government Petroleum Fund is Norway’s most important shock absorber against shifts in the terms of trade. This explains why we have had far greater exchange rate stability than New Zealand or Australia. For the past 15 years, cyclical trends in Norway have been desynchronised in relation to other European countries. Because of the stagnation in the 1990s, inflation has been particularly low in Europe in recent years. Norway, on the other hand, experienced a long period of economic expansion in the 1990s. Since 1997, price inflation in Norway has been higher than in the euro area countries. This is reflected in the higher level of interest rates in Norway compared with the euro area. Even if instruments are oriented with a view to stability in the krone exchange rate against the euro, cyclical differences will result in inflation differentials between Norway and euro area countries. This year we have seen a tendency for the krone exchange rate against the euro to be strong at times.
Swiss Re reported that in Asia3: (a) more than half of non-buyers dropped out of insurance purchase after conducting initial research or after making their first enquiry; and (b) another one-third dropped out after receiving specific pricing and product details. (4) There is also the view that insurance processes and services, say medical underwriting and claims processing, are non-transparent, onerous and time-consuming. FinTech and InsurTech This brings me to the potential for FinTech, or more specifically InsurTech, to help reduce the protection gap. Technology solutions offer exciting possibilities to alleviate many pain-points associated with the understanding, buying and servicing of life insurance products. To be sure, the insurance sector has always employed technology tools and is a large user of data. This is also part of the problem. A recent McKinsey report stated that 90% of insurers identified complex legacy systems as the key barrier to digitisation. It is only in the more recent one to two years that InsurTech has been recognised as a change driver. Let me cite a few examples of transformations. The move to automation can potentially replace a number of repetitive human processes in the insurance sector. Robotic process automation (or RPA) will enable quick, automatic and 24/7 gathering and processing of data. There will be other technologies that both collude and collide with how things are currently done. Consider the pricing of life insurance premiums.