. whist this may reflect what many insurers tell us – that they only want to grow in segments that they believe are adequately priced ; another interpretation is that some insurers are being overly optimistic on risks for which they have no or limited historical claims data and which previous risk carriers have declined as they no longer believe them to be adequately priced. despite falling premium rates, general insurer profits in the past few years have been sustained by both benign catastrophe experience and levels of prior year reserve releases that are now the highest for thirty years ( chart 2 ). natural catastrophes are a major component of many gi firms ’ risk profiles. catastrophe losses returned to more normal levels by historical standards in the first half of this year. but the low incidence of catastrophic events in recent years may have given support to the idea that this component has in some way diminished, whether due to trends in nature or more effective management of risks by policyholders and insurers. i have also heard speculation that some man - made risks may have decreased : for example, if planes and ships are built better than previously, or if companies are better at managing their risks. mindful of both the impact and the uncertainty involved in considering this, we would expect firms to seek the bis central bankers ’ speeches best available evidence and to take a prudent and comprehensive view to the assessment of risks. put simply, we would not expect a handful of recent data points to lead to a marked reduction in a firm ’ s assessment of its best estimate of liabilities nor its “ 1 in 200 ” risk. turning to reserve releases, our obvious concern is that these should reflect genuine reserve redundancy with the decisions taken by risk managers and actuaries using their best professional judgement and not in any way influenced by a desire to sustain reported profits. for long tail lines, such as casualty, a key assumption in setting reserves is the expectation of future claims inflation. in most cases this assumption is derived implicitly using the recent actual data and trending this forward. given that the recent past has seen falling inflation in many sectors the obvious question is – is it reasonable to assume that these trends will continue? it does seem plausible that claims inflation has often been lower than expected against the background of the current low inflation environment. but our calculations suggest reserve releases have in some cases got to a point where implied future claims inflation looks very low. in an extreme case, we estimated past claims inflation for the class of business to be 5 %

like in clearing, contingency measures are in place to contain key risks. one thing needs to be very clear, however. contingency measures are – quite rightly – 1 / 5 bis central bankers'speeches temporary ; they do not relieve institutions for aligning with the new legal environment. yet, the uncertainty of how brexit will take place and what future partnership will follow, has weighed on the banks ’ preparations. it has also led to a withholding of the transfer of portfolios until the last moment, until the final decision concerning brexit is taken. this creates an additional operational risk of course, when enormous sums ( trillions ) are to be shifted overnight. the risk of the uncertainty remains though. there is no playbook and no experience for a thing like brexit. but as of today i do not expect a risk for financial stability even in the case of a hard brexit. thankfully, i can provide another reassurance here. we are unlikely to see a bottleneck in the supply of financial services or even a credit crunch. the vast majority of financial services and products should still be available on the continent even after brexit. incoming financial institutions ladies and gentlemen, some simple numbers on business coming into the german financial market reveal the extraordinary impact. in a first wave, we expect roughly 2, 000 employees to be transferred from britain to or newly recruited in germany in the wake of brexit. there have been 22 brexit - related licensing procedures for credit institutions in the ssm as a whole, of which eight were for germany. of these, seven have since been finalised, and the remaining licence probably won ’ t be pursued. a further ten credit institution procedures concerned an expansion of business activities in the ssm under existing licences ; three of these were in germany. 41 licencing procedures concerned investment firms. germany accounted for nine of them, all of which have been finalised. in addition, we have seen the brexit - related establishment or expansion of seven branches of third country firms, five branches of banks domiciled in the european economic area and two financial holding companies in germany. at present, the target operating models ( toms ) available to us envisage an increase in asset positions in the total amount ( i. e. across credit institutions and investment firms ) of around €637 billion, or about 300 %. in the ssm, the 11 largest banks are set to