The Bank of England (BoE), the central bank of the UK, has started assessing the risk country’s insurers face from the sanctions on Russia, Reuters reported. 

Alongside, BoE has also asked them to ramp up their defences against cyber threats amid the Ukraine crisis. 

BoE executive director for insurance Charlotte Gerken was quoted by the news agency as saying in an event: “What we are doing is going through with firms what the nature of their exposures maybe, both direct and indirect, and working very closely with the Treasury.”

The UK along with the US and the European Union have imposed severe sanctions on Russia’s financial institutions including the Central Bank of Russia after it invaded Ukraine last week.

As a result, the risk of potential cyber-attack on financial entities in the West is also said to have mounted. 

Aviva has revealed that its fund unit had small Russian exposure and the insurer plans to divest it. 

Separately, Gerken set out the supervisory priorities for insurance firms in 2022 that included operational resilience along with climate change, the operation of non-EU insurers in the UK and diversity and inclusion.

“Cyber risk continues to haunt all businesses and having a cyber-insurance policy does not substitute the need for a robust framework to manage cyber risk,” Gerken noted. 

“We expect firms to be able to demonstrate their operational ability to withstand and recover from severe but plausible scenarios such as ransomware attacks,” she added.