Bank of England (BoE) Deputy Governor Sam Woods has said that sanctions against Russia following its invasion of Ukraine are considered “manageable” for the UK insurance and reinsurance industry so far, as well as for the wider financial sector.
Woods’ comments, first reported by Reuters, follow the UK Government’s decision to implement further restrictions on the ability of Russian businesses to access insurance from the Lloyd’s and London Market.
In the most recent move, Russian companies in the aviation and space industries will be prevented from accessing UK insurance sector, in a move that leaders say will “severely limit” Russia’s access to the global insurance and reinsurance market.
Other sanctions have seen Russian banks severed from the global payments messaging system SWIFT, while the London Stock Exchange has also suspended trading for many Russian firms.
Speaking to the House of Lords regarding the package of sanctions, Reuters quoted Woods as saying: “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.”
Sheldon Mills, executive director for consumers and competition at the Financial Conduct Authority, also confirmed that sanctions would prevent Russian businesses from extending or renewal insurance and reinsurance policies already in place.
“Whilst that is a significant exercise, it is one we are confident the industry can do,” Mills said. “It’s not something which is completely unusual for the market, although the size and scale and urgency of this is slightly different.”
The specialist Lloyd’s market has already expressed its support for sanctions, and has said it will proactively engage with the British government and international regulators as the situation develops.