The London Market Group (LMG) welcomes today’s announcement by Rachel Reeves, Chancellor of the Exchequer that HM Treasury will move ahead with the introduction of a UK regime for captive insurance companies. The LMG is confident that a UK regime will deliver an important risk management tool for UK and international plcs, as well as reinforcing London’s position as the global centre for risk transfer and insurance.
The announcement follows a campaign, led by the LMG but supported by brokers, captive owners and advisers and insurers, advocating for a dedicated and proportionate regulatory regime for captives. Over several years, the LMG has been in discussions with HM Treasury, the Prudential Regulation Authority and Financial Conduct Authority over how the proposed regime might be shaped.
Sean McGovern, Chair of the LMG said: “If London is to retain its position as a global centre for risk transfer, it needs to be able to offer all the tools in the toolkit. This announcement is clear evidence of the government recognising the London Market’s role as a contributor to growth and delivering on commitments to support the industry as we continue to enhance the market’s world-leading position. British companies and public sector institutions now need to join us in encouraging the regulators to move at pace to establish an attractive and dynamic UK captive regime so they grasp the opportunities offered by the announcement today with both hands.
“Captives are taking centre stage as part of the established and long-term risk financing strategies of many important commercial organisations. It is a rapidly growing global industry, with captive premium estimated to reach US$161 billion by 2030, and other onshore jurisdictions – including France and more recently Italy, are opening their doors. It is fitting that the UK is part of this growing sector, and critical for the London Insurance market so it can retain a leading global position with an enviable world class reputation.”
Caroline Wagstaff, CEO of the LMG commented “The announcement of the consultation on protected cell companies is very welcome as this offers real choice for UK companies of all sizes in the use of captives and genuine differentiation. A clear timetable to delivery is also a real plus, it will help everyone to track progress and work at pace to deliver a world-beating regime”.
The London Market is grateful for the support of the Chancellor and the City Minister Emma Reynolds, as well as to the many firms and individuals who have supported the campaign over the last two years.
A UK captive domicile will offer UK plc the ability to build resilience and risk management here at home, while benefitting from an extensive financial and professional 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.
