we may use independent reviews to obtain an opinion on insurers ’ internal ratings of those assets. second, we will review whether insurers have the appropriate governance and risk management to make and hold illiquid, direct investments. this includes expertise across all three lines of defence. for example, where internal ratings reflect in part what actions the insurer would take to recover value if the asset became distressed, that insurer should have appropriate credit work - out capabilities. third, we will consider whether insurers ’ capital requirements properly reflect the risks to which they are exposed when holding illiquid direct investments in a matching adjustment portfolio. in particular, solvency ii internal models should capture effectively all the risks in a 1 - in - 200 stress. we are currently doing thematic work on ‘ the matching adjustment in stress ’ that will influence our future thinking in this area. risk concentrations a broader concern is that the search for yield on solvency ii capital could lead insurers to take excessively concentrated risks. in general insurance, we are currently running a stress test designed to identify concentrations of exposure to a number of possible natural and man - made catastrophes. perhaps more worrying is the potential for hidden concentrations. more than 25 years after asbestos - related claims contributed to the near collapse of the lloyd ’ s of london market, insurers continue to face related losses. http : / / www. bankofengland. co. uk / pra / documents / solvency2 / matchingadjustmentletteroct2014. pdf http : / / www. bankofengland. co. uk / pra / pages / publications / ss / 2017 / ss317. aspx all speeches are available online at www. bankofengland. co. uk / speeches a peril with potential for hidden exposures is cyber. sizing cyber exposures across the industry is therefore difficult. but it is clear that the risk is growing. to give one estimate, the lloyd ’ s business blackout scenario – analysing the implications of a cyber attack on the us power grid – puts global insurance losses to $ us40bn. yesterday we published a supervisory statement setting out our expectations for the prudent management of cyber underwriting risks. it distinguishes affirmative from non - affirmative or ‘ silent ’ exposures, where the insurer has not explicitly included ( or excluded ) cover. we expect insurers to take steps to bring non - affirmative exposures within risk

alternative paths ( again with transferable votes to resolve ties ) ; or an arrangement like the current one where, after discussion, the governor proposes a motion which is likely to command a majority. how all this would be communicated to the public i leave as an exercise for the interested reader. how successful are the mpc ’ s communications to financial markets and business more generally, and should the committee be considering other changes? the survey of sbe members i have already described is interesting in this respect. the first, and most striking, result is that, although the survey was conducted in the weeks immediately following our “ surprise ” increase in bank rate in january, the response overall is very positive. almost 90 % of respondents found communications by the mpc to be either helpful or very helpful. but the interest in the survey lies in the more detailed responses. there are some important differences in the types of mpc communications that are thought to be useful in forming a view of interest rate prospects at different time horizons. they are summarised in chart 11. at shorter horizons, such as three months, the voting pattern on the mpc, together with the minutes of meetings and the statement published when interest rates change, are thought to be more informative than when forming a view of interest rate prospects over a time horizon of 12 to 18 months. at those longer horizons, it is the judgements contained in the inflation report that are thought to be more useful. it seems to be that differences of view among committee members are more relevant to assessing near - term interest rate prospects than the mpc ’ s collective assessment which carries more weight at longer time horizons. mpc communications were thought to be helpful in understanding how the mpc interpreted the latest data and also in forming a view as to the prospects for interest rates. over 60 % of respondents thought that the balance of mpc communication was “ about right ”, although around 20 % felt that too much commentary was devoted to the central view of prospects rather than to the balance of risks. given the emphasis which the mpc places on the fan chart as a means of conveying information about forecasts, it is striking that there is a demand for even more information about the risks surrounding the central projection rather than the central projection itself. there is, perhaps, a lesson here in the need to redress the balance of discussion in the inflation report towards the risks and away from the central projection. the view of respondents – largely city economists – in this respect seems