The UK Chancellor of the Exchequer Rachel Reeves announced today that the UK will introduce a captive insurance company regime – a decision that was welcomed by brokers and trade associations across the London market.
The government aims to deliver a new, tailored regime for captive insurance, “making this method of self-insurance and risk management easier and more attractive to do in the UK, including through protected cell companies,” according to the document issued by the government, titled Financial Services Growth & Competitiveness Strategy, which details various proposed financial services reforms, including the captive announcement.
Aon promptly responded with its own announcement that it was forming a UK-based Captive Management Company in preparation for the new regime.
The UK will become “a strong alternative domicile to other jurisdictions where captives are available (including Vermont and other US States, the Cayman Islands, Bermuda and Guernsey),” Aon said.
However, before the new regime can be rolled out, regulations must be developed. Regulators will consult on creating new rules for captive insurers in the summer of 2026, with a target date for implementation of the captive insurance framework in mid-2027, according to the HM Treasury document.
The right regulations would enable new formations for UK organizations that hadn’t previously considered forming a captive, while they also could attract “existing captives from other jurisdictions outside of the UK to consider re-domiciling to here,” according to Ciaran Healy, global captives leader at Aon, in a statement.
Aon is fully supportive of the government’s announcement which will position the UK firmly on the global captive map, Healy added. “For a long time, captives have played a central role for organizations looking to optimize their overall risk financing strategy and the numbers of captives globally has continued to grow since the concept was developed in the 1960s.”
As the UK is already home to the world’s leading insurance marketplace in London, Healy said, “it’s only natural that it should also be a competing jurisdiction for captives.”