be published next week. longer term trends it is natural that immediate issues are at the forefront of our minds. however, it ’ s important that sufficient time and attention is devoted to considering the longer term shifts in our economy and society. what might the impacts, direct and indirect, be on the insurance sector of technological innovation and the digitalisation of financial services? recent research suggests more than 90 % of european insurers have already implemented measures to enhance digital capabilities, including data analytics and artificial intelligence, or have plans to do so within next twelve months. 12 other key shifts include our ageing society, the greater integration of europe ’ s single market, the growing role of asia in the global economy, and the impact of mankind on the world ’ s biodiversity, never mind climate change. how should we respond? the central bank ’ s aim is to meet these challenges by being future - focused, by working with stakeholders and by accepting that success can best be delivered if we are open to diversity of thought. this brings me back to where i began. a well - functioning insurance market provides important benefits and supports for society as a whole. and the central bank ’ s constant and predominant aim is for “ the welfare of the people as a whole ”. conclusion in closing, i ’ d like to acknowledge the important role played by insurance ireland in advocating for its members, and in promoting the irish insurance sector, both here and abroad. we have a shared interest in a strong, stable sector. i look forward to productive, open engagement in the future. thank you. 1with thanks to brian balmforth, mark rowe, pamela farrell, joseph collins, chris joyce, olivia rouse and deirdre nic ginnea for their support in preparing this speech 2see esrb report on systemic risks in the eu insurance sector december 2015 3eiopa insurance overview report 2021 here insurance ireland. see https : / / www. insuranceireland. eu / about - us / about - us 5see european commission proposals for amendments to the solvency ii directive and a new insurance recovery and resolution directive see my remarks at irish funds conference : " funds - facing the future " 31 may 2022 7see central bank of ireland financial stability review 2022 i see central bank of ireland financial stability review 2022 i 9see ecb governing council monetary policy statement amsterdam, 9 june 2022 10see central bank of ireland financial stability review 2022 i see for example commission impact assessment 12deloitte 2022 insurance

ambitious targets for capital spending as part of the national development plan. public investment, both by itself and as a means of crowding in private investment, is necessary to build our economic resilience. appropriate levels of investment in priority areas such as housing will reduce the impact of future adverse shocks by addressing the structural challenges we face in infrastructure and climate change. balancing the effective delivery of needed public investment in the current high - inflation environment will require careful management and prioritisation in other areas, in particular when it comes to choices regarding current expenditure and taxation. recent analysis by central bank staff shows that further stimulating economic activity with additional permanent current spending would risk creating excess demand and in the process would add to already high inflation. as the ecb ’ s governing council said last week, “ fiscal support measures to cushion the impact of higher energy prices should be temporary and targeted at the most vulnerable households and firms to limit the risk of fuelling inflationary pressures, to enhance the efficiency of public spending and to preserve debt sustainability. ” increases in permanent core expenditure should be funded by permanent revenue - raising measures to avoid introducing a vulnerability in the public finances as well as reducing the risk of creating imbalances in the economy as a result of excess demand. the economy in general, and the public finances in particular, have benefited from the exceptionally low interest rate environment that has prevailed over recent years. as policy rates increase – and over the next several meetings the governing council expects to raise interest rates further – sovereign financing costs will increase. the reduction of public debt, supported by a sustainable funding base for public expenditure, should remain a key priority in the years ahead. as interest rates rise, financial markets are more likely to increase the focus on fundamentals such as relative debt levels when pricing sovereign bonds. credit worthiness will continue to matter. the longer term : building resilience from a policy perspective it is important to also take a step back and consider the longer - term. in fact, i think this should be a more central part of our policy deliberations. our experience of the past few years suggests a greater tendency for medium - to - longer term issues and economic shocks to coincide more frequently with day - to - day conditions. the current experience of energy prices is a case in point, where the challenges and opportunities presented by the necessary transition to a less carbon - intensive economy are becoming obvious in a shorter time period than previously expected. consequently, anchoring public policy in achieving a more resilient