The FSA is to warn insurers and brokers of the need for contingency plans in the event of a bird flu pandemic.

The regulator is to publish, what it describes as a "gentle reminder" for firms to consider the potential risks, in its Financial Risk Outlook document later this month.

An FSA spokesman confirmed that avian flu would be included in its market-wide risk assessments.

He said: "It is about contingency planning more than anything else, because nobody knows how this will develop. Most firms we regulate made fairly good contingency plans against a possible severe acute respiratory syndrome (SARS) outbreak a couple of years ago; so they have a pretty good idea of what they need to do. All we are doing is gently reminding them."

The H5N1 avian flu virus has claimed lives in Turkey and Vietnam. Scientists fear it may mutate into a form that passes from person to person.

Topics