Captive momentum builds as Airmic welcomes government’s UK domicile decision

Airmic has welcomed the announcement by Rachel Reeves, Chancellor of the Exchequer, that HM Treasury will proceed with implementing a “genuinely competitive, bespoke captive insurance framework” in the UK.

In her Mansion House speech on 15 July, Chancellor Reeves highlighted the government’s intention to “provide targeted regulatory support for the areas where the UK does already have a comparative advantage for insurance, where Britain is the destination of choice for underwriting complex, specialised and high-value risk.”

Airmic has been lobbying the government to introduce a bespoke regulatory framework for captive insurance companies for over two years, setting out the merits and use cases for captive insurers to the Bank of England and government, and introducing captive-owning members to officials.

While the details of the new regime have yet to be thrashed out by the government, the chancellor did set out high-level proposals. These reflect a broader scope than originally envisaged, enabling more organisations to establish captives and cover a wider profile of risks.

The proposals include:

• Proportionately lower capital requirements for captive insurers;

• Reduced application and administration fees and a faster authorisation process;

• Reduced ongoing reporting requirements, compared to those for insurers and reinsurers;

• Potential recognition of Protected Cell Companies (PCCs) to help smaller firms establish captives without standalone entities.

Airmic’s CEO, Julia Graham, said the move is a boost for UK businesses, giving existing captives and prospective captive owners a greater diversity and depth of choice as what was once an alternative risk transfer strategy becomes an increasingly mainstream solution.

“The UK is home to some of the top risk and risk-financing expertise in the world,” said Graham. “With global demand for captives growing, having an onshore captive domicile alongside the world’s most advanced commercial insurance market will be a huge asset to our members and other captive owners. It will strengthen their options to deploy captives in new areas and to achieve intelligent and resilient risk financing strategies.”

Lobbying continues

Airmic member organisations collectively spend more than £5.1 billion in annual premium through their captives and hold more than £22.6 billion in assets under captive management. Of those who do not use a captive, almost three-quarters are exploring the possibility of forming a captive in the future, according to an Airmic member survey published in March this year.

Airmic welcomed the government’s commitment to proceed at pace, balancing speed with effective implementation. Consultations are planned for summer 2026, with implementation targeted for mid-2027, in close collaboration with the PRA and FCA.

Airmic will continue to work closely with HM Treasury, the FCA and the PRA, as the captive framework is designed, lobbying for an ambitious and competitive framework and is looking forward to contributing through Sector Expert Groups (SEGs).

“It is imperative to develop a compelling offering in what is an increasingly competitive landscape,” Graham added. “This means establishing a proportional, risk-based regulatory regime, that balances quality with agility and facilitates a range of uses.”

Richard Cutcher, Airmic’s captive ambassador, joined Graham and Airmic members in discussions with the Treasury and the Bank of England over the past two years as the Association made the case for a UK captive option.

“The UK has the opportunity to be a genuinely unique option for captive insurance companies,” said Cutcher. “Airmic members and captive owners globally have a wide choice of captive domiciles to choose from already, but if the UK can pitch its regulation right, it will be another stand out option for UK and international businesses.”