Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict
The impact of sanctions on Russia after the Ukraine invasion is “manageable” for Britain’s re/insurers along with the wider financial services sector, Reuters reported citing Bank of England (BoE) deputy governor Sam Woods.
Last week, the UK government decided to block Russian firms’ access to Lloyd’s and the London market for aviation/space insurance.
Speaking to a House of Lords committee meeting on insurance regulation, Woods said: “We looked very carefully at whether we think these are manageable in terms of any collateral damage or impact on the UK financial services sector, and so far we are comfortable that they are.”
Other than the insurance market, the sanctions would also block several key Russian lenders from SWIFT, the global payments messaging system.
Additionally, the London Stock Exchange has halted trading in over 30 Russian firms.
Financial Conduct Authority executive director for consumers and competition Sheldon Mills told the committee that with the sanctions in place, Russian firms will not be able to renew or extend their existing re/insurance policies.
Key insurance players such as The Lloyds of London along with others will have to take steps to identify Russian entities and block their access to re/insurance cover, Mills added.
Additionally, the Russian firms will not be able to receive payouts on their existing and new re/insurance policies.
Speaking to the committee Mills said: “Whilst that is a significant exercise, it is one we are confident the industry can do.
“It is not something which is completely unusual for the market, although the size and scale and urgency of this is slightly different.”