. for example, the supply of niche insurance products may reduce or end altogether, given the increased costs and frictions of serving eu customers from the uk. finally, brexit is not the only uncertainty that we face. to touch on three others : 1. firstly, the effects of climate change, in the form of more frequent and severe storms, floods and droughts, have already affected insurers. further increases in the number and severity of disruptive climatic events look certain. furthermore, as the governor of the central bank recently remarked10, the financial system ( including the insurance industry ) has a crucial role to play in the transition to a lower carbon economy. 2. secondly, insurance is also at the forefront of the opportunities and challenges that arise from disruptive technology change both in how services are provided and the services that are needed. 3. and thirdly, demographic changes across europe are profound, with an increasingly aged population needing to be served for a longer period of time. to conclude on resilience, as risks evolve, so should the insurance industry. i expect insurance firms to be anticipating future significant risks and opportunities to ensure that they remain resilient over the long term. through this, i expect that you will not only be rising to the challenges that are in front of us today, but are also resilient enough and sufficiently future - focused to successfully support the needs of the economy and your customers long into the future. regulatory regime i have touched on our work and expectations on the necessary enhancements to recovery and resolution planning for insurance firms. i would also note that we are undertaking work in 2019 on prism, to ensure that it continues to evolve and remains fit for purpose as our approach and the risks in the financial system change. it is over three years now since solvency ii came into effect. i am very pleased to welcome karel van hulle here today who was instrumental in the introduction of the solvency ii regime. the introduction of solvency ii represented a significant milestone for the insurance industry. we can, and must continue to develop the solvency ii regime, to ensure it remains relevant and appropriately protects policyholders and beneficiaries. solvency ii will be reviewed in 2020. this review will provide the opportunity to examine the practical implementation of solvency ii, ensure it remains fit for purpose, adapts to changes in market conditions and evolving business models, while continuing to meet its fundamental objectives. input to the 2020 review of solvency ii will

is complex. while it must be evidence - based and outcomes focused, it does require finely - balanced judgement to operate in the grey areas 1 / 5 bis central bankers'speeches between the two ends of this spectrum of risk. insurers must operate in line with the domestic and international regulatory regime. our riskbased supervision of insurance firms is delivered in line with this regime, anchored by our prism3 methodology. it strives to deliver effectively in ensuring that the system as a whole is, and individual firms operating within it are, appropriately resilient. it seeks to ensure that regulated firms : have sufficient financial resources ( capital and liquidity ), including under a plausible but severe stress ; have sustainable business models to allow them to prosper through the economic cycle ; are well run, appropriately governed, have effective risk management and control functions and appropriate cultures ; and can recover if they get into difficulty, and we can resolve them without significant externalities or taxpayer support if they cannot. a more resilient system is better able to withstand shocks and continue to support the economy and its customers in good times and bad. it becomes less of a transmission mechanism for shocks and, potentially, plays more of a smoothing role in reducing volatility. in recent years, volatility in the cost of insurance in ireland has undoubtedly caused challenges for insurance customers. i expect the boards and management of regulated firms to ensure that their firms are sufficiently resilient. i also recognise and support system wide efforts to address some of the factors causing volatility and higher insurance costs than in other comparable countries. these efforts include the work of the cost of insurance working group. an associated recommendation of the personal injuries commission4, chaired by nicholas kearns, is for the establishment of judicial guidelines for appropriate general damages for various types of personal injury. such guidelines should lead to greater levels of consistency in the assessment of general damages in ireland, which should help in better enabling the domestic non - life insurance sector to support its customers. recovery & resolution planning recovery and resolution planning for insurance firms also requires further work. the regulatory regime for insurance is not sufficiently robust or consistent across europe. this issue is accentuated by the inconsistency in insurance compensation schemes across europe – an issue for both home and host supervisors. as well as pushing for further developments at a european level, the central bank is driving firms to improve how they execute recovery planning as well as advancing our own approach to resolving insurance firms. culture culture is also