and gibraltar accounted for c. 60 % ( €1. 8bn ) of non - life business written in ireland through branches or freedom of services ( equating to c. 11 % of the total non - life market ) and c. 96 % ( €2. 5bn ) of life insurance business written in ireland through branches or freedom of services. these interactions between the insurance industry in ireland and the uk include the sale of insurance products, financial arrangements such as cross border reinsurance, and the use of outsourced service providers. this cross - border business has been an important channel in improving the provision of insurance to irish businesses and consumers, some of it quite specialist in nature. the crossborder model works well, in both directions, when provided by firms that are financially resilient, well managed, with a solid business strategy and are knowledgeable about the irish insurance market. the potential loss of eu authorisation will affect the ability of uk and gibraltar - based insurance undertakings to continue performing certain obligations for eu policyholders ( and vice versa ) and will impact the service continuity of contracts concluded before the uk leaves the eu. without action, there are risks that uk and gibraltar - based insurers passporting into ireland will lose their ability to continue to provide insurance cover, including collecting premiums, making mid - term alterations and negotiating and settling claims on any outstanding insurance contracts – ranging from long - term life insurance policies to annual motor insurance contracts – taken out prior to the uk ’ s departure from the eu. the larger firms typically have activated plans to obtain licences in the eu27. however, there are some providers, often offering relatively niche products or serving niche markets, where the cost of setting up and running a new eu subsidiary may be prohibitive. in addition to the contract continuity risk, there are clear risks of reduced competition and a reduction in customer choice. the central bank continues to take a proactive, risk - based approach to ensuring affected firms have credible plans to address these brexit risks. we are also engaging directly with the firms, with eiopa, and with the uk authorities. we have sight of credible plans to ensure continuity of service for more than 90 % of the life and non - life markets. nonetheless, there remain tail risks of some smaller providers not being sufficiently proactive or organised, which may affect the provision of services post brexit. markets in fund management, uk fund managers could lose the right to manage irish authorised

expansion is due partly to the moderate level of interest rates and solid economic growth. short - term monetary and credit developments can be affected, inter alia, by the shape of the yield curve and external factors, and be subject to some degree of volatility. looking through such transitory aspects, there are, however, several indications that higher short - term interest rates are influencing monetary dynamics, although they have not, as yet, significantly dampened the overall strength of these dynamics. for example, increases in short - term rates have served to moderate the expansion of the narrow aggregate, m1, in recent quarters, but its annual growth is still robust. equally, the annual growth rate of loans to the private sector has shown some signs of stabilising since mid - 2006, albeit at double - digit levels. all in all, taking into account both short - term factors and the underlying trend of the continued vigorous expansion of money and credit, there are clear indications of upside risks to price stability at medium to longer - term horizons. in fact, following several years of robust monetary growth, the liquidity situation in the euro area is ample by all plausible measures. in this environment, monetary developments continue to require very careful monitoring, particularly against the background of a solid expansion in economic activity and still strong property market developments. to sum up, in assessing price trends it is important to look beyond any short - term volatility in inflation rates. the relevant horizon for monetary policy is the medium term. risks to the medium - term outlook for price stability remain on the upside, relating in particular to stronger than currently expected wage developments in a context of ongoing robust growth in employment and economic activity. given the vigorous monetary and credit growth in an environment of already ample liquidity, a cross - check of the outcome of the economic analysis with that of the monetary analysis supports the assessment that upside risks to price stability prevail over the medium to longer term. accordingly, the governing council will continue to be strongly vigilant in order to ensure that risks to price stability over the medium term do not materialise. this will support the solid anchoring of medium to longer - term inflation expectations in the euro area at levels consistent with price stability. therefore, looking ahead, acting in a firm and timely manner to ensure price stability in the medium term remains warranted. in relation to fiscal policies, the governing council welcomes the recent commitment by the euro area finance ministers – at the eurogroup meeting in berlin on