Ms Blanc, who is the former chief executive of Axa UK and Ireland, will take up her new role at ABI in October.
She succeeds Andy Briggs, chief executive of Aviva UK, who will remain on the board as the senior independent director.
Phil Loney, Royal London’s chief executive, will become deputy chairman succeeding Paul Geddes, from Direct Line Group, who will also remain on the board, ABI said.
Ms Blanc said she was "delighted and honoured" to become the next chairwoman of the ABI and the first woman in this role.
She added: "I am proud to say I built my career in this industry. In that time I have seen it change dramatically. It is now a more inclusive sector than I can ever remember, but the journey is not over.
"As chair, I want to continue to drive the excellent work the ABI has already done in this area. With so much focus on the role of women in society today, I hope my appointment sends a signal to young women considering a career in insurance that there are no closed shops in this sector.”
Ms Blanc said insurance plays a vital role in the UK economy and provides peace of mind and practical help to millions of people every year.
She added: "Rapid changes in the market, the use of technology and data and unprecedented geopolitical changes make it more important than ever that the industry can speak with a clear, single voice through the ABI."
Mr Briggs, said there was more to be done by the association in the sector, said the ABI’s work on auto enrolment and digital innovation has led to strong growth in pension provision, and the work in general insurance "is now leading to fairer premiums for customers".
He added: "In my successor, Amanda Blanc, the ABI has appointed someone of the highest ability, experience and drive.
"I am very proud that the ABI has taken a leading role in promoting gender diversity over the last two years, and in appointing the first ever woman to become chair, this is an important moment for the industry."