Airmic welcomes yesterday’s 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.
Airmic welcomes the government’s commitment to proceed at pace, balancing speed with effective implementation. The final proposals reflect a broader scope than originally envisaged, enabling more organisations to establish captives and cover a wider profile of risks.
Consultations are planned for summer 2026, with implementation targeted for mid-2027, in close collaboration with the PRA and FCA. Airmic members welcome this long-awaited development, which responds directly to clear market demand for a competitive UK captive regime.
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 this 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.”
Airmic member organisations collectively spend more than £5.1 billion in annual premium through their captives and hold more than £22.6 billion 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.
The Association welcomes the government’s consultation response which highlights the need for "proportionately lower capital and reporting requirements and facilitating faster authorisations for captive insurers", as well as a “broader scope than originally proposed" for the captive regime.
Airmic will continue to work closely with HM Treasury, the FCA and the PRA, as the captive framework is designed, continuing to lobby 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 on behalf of its members and captive owners.
“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.”
Scott Feltham, Group Head of Insurance at Compass Group PLC, who has actively been involved to date as an Airmic Member and Airmic Board Member also welcomed the announcement: “The UK has long been the epicentre of insurance. An ambitious UK captive insurance regime will further reinforce this position, making the UK the foremost domicile for transacting insurance business. This will also serve as a key contributor and add greater diversity to the UK’s wider financial services ecosystem and the broader economy.”
These are exciting times for captives. Captives are now a mainstream part of an agile, intelligent and resilient risk financing strategy regardless of insurance market conditions. The use of captives for the incubation of emerging risks, blended catastrophe covers and sustainability projects is directly aligning the use of captives to the strategies of organisations in an increasingly connected, complex and fast-moving world.
There are more quality domicile options available to Airmic members than ever before and each captive will have a different risk profile, business or plan or ownership structure, which in turn will influence which domicile is appropriate. It is no surprise that Guernsey is a common domicile choice among Airmic members, due to its long-standing position as a go-to jurisdiction and proximity to the London insurance market.
Airmic is the UK and Ireland’s largest and most vibrant risk management and insurance association. Airmic has over 450 corporate members, more than 2,000 individual members, and is supported by a network of leading risk and insurance partners and affiliated institutes, associations, and universities.
Leigh Anne Slade
Head of Media, Communications and Interest Groups, Airmic
leigh-anne.slade@airmic.com
+44 7956 417877