UK considering launching captive insurance framework
Bermuda may face a new competitor in the captive insurance market - the United Kingdom.
In his Autumn Statement speech to the House of Commons, outlining the Government’s financial policies, Jeremy Hunt, the Chancellor of the Exchequer, announced that there will be a: “Consultation on introducing a UK regime for captive insurance companies – the government will consult on the design of a new framework for encouraging the establishment and growth of captive insurance companies in the UK.”
The consultation will launch in Spring 2024, Bermuda:Re+ILS's sister publication Captives International reported.
News of the consultation comes after a number of approaches to the UK Government by the captive insurance industry. In September of this year the potential benefits of introducing a UK captive insurance regime were stated at a roundtable involving experts from across the global risk transfer value chain, who were joined by Andrew Griffith, Economic Secretary to the Treasury and City Minister.
News of the consultation was welcomed by Caroline Wagstaff, chief executive of the London Market Group.
“The London Market Group is delighted by the announcement today by the Treasury that it will consult on the creation of a UK captive regime by spring next year, taking on board the recommendations within our Plan for the Future,” Wagstaff said. “As the global centre for risk transfer, London needs to be able to offer all the tools in the toolkit, so this is a great step forward. We look forward to working closely with the government and regulators to ensure the UK remains a highly competitive insurance centre.”
After the September meeting, Wagstaff said:
“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 $161 billion by 2030, and other jurisdictions – including France and more recently Italy – are opening their doors.
“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."
