costly : insured losses have risen five - fold in the past three decades due to extreme weather. heatwaves and other natural disasters have a drastic impact on human health. life and health insurers face mounting claims. non - life insurers and reinsurers also bear the brunt of claims from property damage caused by storms. the 2018 eiopa stress test showed that reinsurers are hit particularly hard by losses from natural disasters. piling extra pressure on this sector. events in other countries could also lead to higher foreign currency risks. and these effects cascade through the sector. this also brings to mind the issue of the protection gap that eiopa recently studied. only 35 % of losses due to extreme weather and other weather events are insured. that leaves 65 % of economic losses uninsured. this begs the question : will these climate risks still be insurable for the sector or even be affordable for consumers in the future? and what can we do about those potential uninsured losses? are we doing enough to address this issue? and then there is the transition to a sustainable economy. this transition also exposes insurers and pension funds to risks from adapting to new climate policies, rapidly advancing carbon - neutral technology and changing market conditions. but a low carbon economy will ensure sustainable growth and financial stability. a smooth transition is paramount : in 2018 dnb conducted a stress test for a disruptive energy transition. we concluded that it could lead to severe losses for dutch financial institutions. it is likely that this also applies to financial institutions outside the netherlands. steps taken by insurance companies and pension funds insurers and pension funds did take important steps to integrate sustainability in business models and risk management practices. good progress has been made in risk management. many institutions are embedding climate risk into their risk management. and climate change is also discussed and strategized more often in the boardroom. what ’ s more, we see institutions conduct scenario analyses. this helps them better understand their risks on the liability and asset - side. this is a big leap in the right direction. however, forward - looking risk management methods still need to be refined. this includes improved scenario analyses : to better understand the effects of climaterelated risks on the institution. we have seen insurers conducting these. next to this is modeling climate change trends and nat cat. i do agree that this comes with a challenge. we cannot predict the future. however, we cannot and

why do we exist? and who or what do we serve? if we live and work purposefully, we serve the greater good, an ideal, or future generations. it means acting in line with our deepest values and beliefs, our sense of humanity, our personal calling. so if goals are about doing and achieving, purpose is about being and becoming. over the past decade or so, an increasing number of businesses have embraced purpose. philips strives to make the world healthier and more sustainable through innovation, and by improving the lives of 3 billion people by 2025. dsm ’ s purpose is to create brighter lives for people today and generations to come. unilever ’ s purpose is to make sustainable living commonplace and the company believes this is the best long - term way for its business to grow. what about banks? do banks have a purpose and, if so, what place should it have in their culture and strategy? and should banking transformation have a purpose? or is it sufficient for a bank to focus on changes that will help them increase profit, mitigate risk and comply with regulations? these questions warrant passionate debate and clear answers. answers that banks need for themselves, but also that society expects. in recent years, consumers have felt that banks served only themselves at the expense of society at large. perhaps purpose can help to restore trust, by bridging the needs of a bank with the needs of society. de nederlandsche bank believes in the value of having a purpose and we cherish ours. we are in this world to contribute to the sustainable welfare of the netherlands by promoting financial stability. through this, we also contribute to the realisation of the sustainable development goals. this inspires us and guides us in relating to our stakeholders. and it seems we are not alone in this. last december, the dutch banking association published a report in which it explored how banks can contribute to the sustainable development goals. i wholeheartedly encourage such explorations. ladies and gentlemen, genuine transformation is hard. it means letting go of what we know, what is comfortable, what we are used to. it means submitting to a long, and often perilous journey. and it means committing to a path whose outcome is far from certain. whether banks change or transform, and whether they embrace purpose or not, their functions and functioning are crucial. as banks adapt to a changing world around us, their decisions will impact all of us for a very long time. i wish