The UK government’s decision to introduce a domestic regulatory framework for captive insurance has drawn a broad response from across the insurance sector, with industry leaders welcoming the move while emphasising the importance of effective implementation.
Announced by Chancellor Rachel Reeves during her Mansion House speech, the new regime will, for the first time, allow organisations to domicile captive insurers in the UK. The measure is part of a wider effort to boost the UK’s financial services competitiveness and bring more risk financing activity onshore.
Industry participants have largely endorsed the policy shift, describing it as a long-awaited development that could expand the UK’s role in global risk transfer. However, many have also highlighted the need for regulatory clarity, alignment with international standards, and timely execution to ensure the framework delivers on its promise.
Martina Neary (pictured above, left), UK Insurance Leader at EY, said the proposed “lighter-touch” regime has the potential to benefit both multinational and UK-focused organisations. She noted that the planned framework could unlock efficiencies and make the UK a more accessible captive domicile. Still, she cautioned that while the proposals may ease operational complexity, navigating the new regime would likely present challenges.
Marsh also welcomed the reforms, calling on government and regulators to ensure the UK becomes a globally competitive and inclusive captive hub. The firm said the regime should support a broad spectrum of captive users, including small and mid-sized enterprises. Chris Lay, CEO of Marsh McLennan UK, said the ability to establish captives easily and cost-effectively in the UK will be key if the country is to compete with established domiciles such as Bermuda, Guernsey and Vermont.
Meanwhile, The London Market Group (LMG), which has campaigned for the introduction of a UK captive regime, described the announcement as a significant milestone. Chair Sean McGovern (pictured above, centre) said the UK needs to offer the full range of risk transfer tools to maintain its position as a global insurance centre, and urged regulators to move quickly. He noted that other European countries, including France and Italy, are moving in the same direction.
Broadstone’s head of non-life, Kathryn Moore, said the government's consultation outcome signals a clear intent to position the UK as a captive insurance hub. She pointed to proposed features such as lower capital thresholds and streamlined authorisation as steps that could support market entry and growth.
RSA Insurance chief risk officer Dave Howell also welcomed the broader direction of travel but said the success of the initiative would depend on a regulatory environment that is stable, proportionate and easy to navigate. He said frequent regulatory changes have placed pressure on insurers’ resources and called for reforms that prioritise simplicity and predictability.
Howell also noted that solvency reform and a more pragmatic approach to product regulation could help free up capital and foster innovation.
KPMG’s global and UK head of financial services, Karim Haji (pictured above, right), described the reforms as part of an “evolutionary” shift in the government’s approach to modernising the financial services sector. He said industry will be watching closely to see how quickly proposals are translated into policy and whether regulatory institutions can deliver the promised outcomes.
Haji added that, alongside other reforms, such as the consultation on insurance-linked securities, the captive regime could support more sophisticated risk management practices across the UK economy. However, he stressed that the impact will ultimately depend on how well the regime is executed.
The global captive insurance market is projected to grow to more than US$250 billion by 2032. Industry stakeholders have argued that if the UK can deliver a competitive and well-regulated framework, it may be able to secure a meaningful share of this growth.
