francois villeroy de galhau : insurance in a world of disruption speech by mr francois villeroy de galhau, governor of the bank of france, at the 9th international insurance conference, paris, 27 october 2017. * * * ladies and gentlemen, i am very happy to be here today as supervisor in my capacity as president of the acpr, and also as guarantor of the smooth financing of our economy in my capacity as governor. in these two respects, the insurance sector is both close to me and important to me. thank you for inviting me to speak on this theme of disruption. to put it more clearly, and as you have pointed out, mr. president [ bernard spitz ], the world is in turmoil in many ways. this undeniably represents a challenge for insurers, but also a motivation : the raison d'etre of insurance has always been to be a vector of protection and stability in the midst of uncertainty. this morning, i would like to stress the essential role that insurance must play in our economy, by emphasising two areas : its financing and its digitalisation. but before that, i would like to mention the very recent developments in monetary policy. i. our monetary policy is in itself a source of stability yesterday, at the governing council presided by mario draghi, we took the important decision to reduce our net monthly asset purchases by half – to eur 30 billion – until september 2018. this is an essential step towards their possible end later ; a step that is justified by our confidence in the gradual convergence of inflation towards our target of 2 % over the medium term : we consider the economic recovery in europe to be “ increasingly robust and broad - based ". in parallel, we said that we will continue to ensure “ ample ” monetary support, rather than “ very substantial ” support as mentioned in our previous statements – thanks to the whole range of our instruments, including the sizeable stock of assets that we will continue to hold in line with our policy of reinvestment, and our forward guidance on interest rates. in this new paragraph, the governing council stresses an essential point that i have often referred to over these past few weeks : our non - standard monetary policy is not a solo – it is not simply about net monthly purchases, and we shouldn ’ t focus too much on them – ; it is a group of instruments that we can play, by following a predictable sequence, as part of our gradual normalisation strategy

##due. the diversification, properly understood, of the investments of french savers towards more equity - based, long - term savings is in everyone ’ s interest. and today there are additional incentives for life insurers to offer new products that break away from the dual cash - liquidity guarantee, due to the lesser solvency ii capital requirements. and this brings me to the issue of regulation. here too, insurers have an essential role to play, i n preparing the review of the solvency ii directive ’ s new regulatory framework. the directive came into force almost two years ago now and you have implemented it with a great deal of professionalism. in many respects, solvency ii represents a very significant step forward for the insurance sector. but this does not mean that it ’ s perfect : we must analyse its impacts closely, particularly its effects on investment behaviour and the financing of the economy, in order to propose the adjustments that prove necessary. progress has already been made on the financing of infrastructure projects and businesses, thanks to two amendments that came into effect in april 2016 and september 2017, respectively, which adapted the calibration of capital requirements. more generally though, the reviews of the standard formula and long - term guarantee package measures planned for 2018 and 2020, respectively, are important opportunities to make essential improvements. the work is already underway, and the more you 2 / 3 bis central bankers'speeches actively participate, alongside your european colleagues, the more our chances of success will be enhanced. iii. the role of insurers in the digitalisation of our economy it is essential for our economy to adapt to the digital revolution : it creates incredible opportunities, but with them, new risks against which the insurance sector, once again, can bring stability and protection. i would like to discuss two subjects in particular : firstly, cyber - insurance. the cyber - insurance market is still underdeveloped. insurers can and should take inspiration from their own experiences in tackling cyber - risk, and use it to develop a more mature french and european cyber - insurance offering. the coverage against cyber - risk is a very real concern that affects all companies – both small and large – as cyber - attacks are becoming increasingly frequent and costly : according to figures from euler - hermes, 57 % of french companies were victims of these attacks in 2016, compared with 32 % in 2015. we at the banque de france, alongside the eurosystem and our g7 colleagues,