The sanctions imposed on Russia are having a “profound” impact on London’s insurance sector, a leading insurance expert has told MPs.
London insurers are struggling to keep on top of complex sanctions legislation and have resorted to taking an extremely cautious approach, the insurance chief said.
“The volume of the legislation that’s been coming out has been very difficult for people to manage,” Neil Roberts, head of marine and aviation at Lloyd’s Market Association told the Commons Treasury Committee.
Insurers’ troubles in dealing with sanctions have in turn seen them err on the side of “extreme caution,” due to fear of breaching complex sanctions rules, the insurance veteran continued.
“Even very well-resourced compliance teams have been finding it troublesome, and insurers are not as well-resourced as banks, and they’re also finding it difficult,” Roberts said.
“You are left with extreme caution because people do not wish to infringe the sanctions because the penalties are extreme.”
This extreme caution has seen insurers seek to avoid all risky trades, in a bid to prevent themselves from being hit with the “extreme penalties” slapped on those who break western sanctions rules.
The situation has meant western sanctions imposed on Russia have had a “profound” impact on London’s insurance markets, Roberts said, as he claimed the impacts on Russia have been less clear cut.
“Impact on Russia – difficult to say. Impact on the UK insurance market – profound,” Roberts said.