A captives roundtable held in London in September, attended by captive owners, brokers and insurers, was bought together by the UK government’s city minister and the London Market Group (LMG).
The roundtable’s content and composition represented new ground for the sector, emphasised the LMG, London’s trade body for commercial insurers and reinsurers.
Firstly, the UK does currently not have a specific legal and regulatory framework for hosting captives; and secondly, it marks the first time the UK government has convened market participants to listen to the benefits that a captive regime could bring to the country.
The LMG described the creation of a UK captive framework is a key pillar of its roadmap to improve the business environment for risk transfer in the UK, and a part of its latest “Plan for the Future”, launched to coincide with the roundtable.
“It was great to get round the table today with key industry leaders and financial services regulators to explore the case for designing a competitive UK captive insurance regime,” said Andrew Griffith, economic secretary to the Treasury.
Caroline Wagstaff, CEO of the London Market Group, said: “The London Market is very grateful to the City Minister for his energy and focus on helping the market to thrive through the possible introduction of new products.
“Despite being the global hub for risk transfer, the UK’s regulatory regime is not conducive to businesses setting up captive insurers here. This is a rapidly growing global industry; with captive premium estimated to reach US$161 billion by 2030, and other jurisdictions – including France and more recently Italy, are opening their doors,” she said.
Griffith continued: “I am thankful to the LMG for bringing us all together and I look forward to continuing to work with industry to support growth and international competitiveness across the UK’s insurance sector, helping ensure the UK remains a world leading destination for risk management solutions and insurance innovation.”
Wagstaff concluded: “If we are to remain the place where business comes for risk transfer advice and solutions, then not having this string to our bow means we are not keeping pace with new and innovative methods of risk management.
“A UK captive domicile would offer participants an extensive financial services ecosystem; London-based global brokers with extensive captive consulting experience, an unrivalled range of local banking and asset management options and the world’s largest and most sophisticated reinsurance market.”