The UK is set to launch a dedicated regime for captive insurance companies, a move that has received broad backing from insurance brokers and industry bodies across the London market.

Chancellor of the Exchequer Rachel Reeves announced the initiative as part of the newly released Financial Services Growth & Competitiveness Strategy, which outlines a suite of reforms aimed at strengthening the UK’s financial services landscape. The goal is to make captive insurance – a form of self-insurance used by corporations to manage risk – more accessible and appealing within the UK, including through the introduction of protected cell companies (PCCs).

Risk and reinsurance specialist Aon responded swiftly, revealing plans to establish a captive management business headquartered in the UK to support the new framework.

According to Aon, the UK is positioning itself to become “a compelling alternative” to current leading captive domiciles such as Vermont, Bermuda, the Cayman Islands, Guernsey, and others.

However, regulatory structures still need to be developed. HM Treasury’s document outlines a public consultation on proposed rules for captives scheduled for summer 2026, with full implementation of the new regulatory framework targeted for mid-2027.

Ciaran Healy, Aon’s global captives leader, stated that well-crafted regulation could drive interest from UK firms that have not yet explored the captive route, and may even encourage existing offshore captives to consider relocating to the UK.

Healy welcomed the Chancellor’s commitment, calling it “a major step in putting the UK on the global captive map.” He emphasized that captives have become an integral part of corporate risk financing strategies since their inception in the 1960s, and that London’s reputation as a global insurance hub makes the UK a natural choice for such a regime.

Marsh Applauds Development

Marsh, part of Marsh McLennan, also expressed support for the government’s plan. The firm noted that captive insurance provides organizations with more control and flexibility over their risk strategy while helping reduce overall costs.

Marsh highlighted the potential of new captive structures, such as PCCs, which can lower barriers to entry for smaller and medium-sized enterprises. Chris Lay, CEO of Marsh McLennan UK and a longstanding advocate for a UK captives regime, praised the decision, calling it a significant enhancement to the UK’s full-service insurance offering.

Lay added that ensuring the UK captive framework is both innovative and as seamless as those in competing jurisdictions will be critical to its success.

McGill and Partners Perspective

Stephen Cross, CEO of McGill and Partners Europe, welcomed the move as a much-needed opportunity for large UK corporations to explore domestic captive options, cutting down on overseas travel for busy executives.

While the framework is still under development, Cross believes it will not only enable UK-based formations but also support the re-domestication of existing captives. He noted that Lloyd’s of London could become a major beneficiary by pairing its fronting services with the new regime—a synergy he described as highly advantageous.

EY: Benefits for UK-Headquartered Groups

EY’s UK Insurance Leader, Martina Neary, said that the new captive regime would help align regulatory and tax domiciles for UK-based multinationals, reducing complexity and improving access to the market. She acknowledged the potential hurdles involved in navigating the new environment, but emphasized the significant long-term opportunities for businesses.

Widespread Industry Endorsement

The announcement also received enthusiastic support from key industry associations, including the International Underwriting Association (IUA), the London Market Group (LMG), and the London & International Insurance Brokers’ Association (LIIBA).

IUA Sees Strategic Opportunity

Chris Jones, CEO of the IUA, called the move a chance for the UK to emerge as a leading jurisdiction for captive insurance. He underscored the importance of a clear and stable regulatory regime, which would foster investor confidence, drive inward investment, and support the creation of high-value jobs.

Jones said the proposal has already attracted notable interest and confirmed the IUA’s intent to collaborate with the government on promoting the initiative.

LMG: Captives a Growing Global Force

Sean McGovern, Chair of the LMG, framed the move as critical to maintaining London’s role as a global center for risk management. With captive premiums projected to reach US$161 billion by 2030 and other European countries like France and Italy introducing their own regimes, McGovern said the UK’s entry into this growing market is both timely and essential.

LMG CEO Caroline Wagstaff added that the consultation on PCCs offers significant promise for UK firms of all sizes. She commended the clear timetable for implementation, which she said will help stakeholders prepare for success.

LIIBA: A Welcome Addition

Christopher Croft, Chief Executive of LIIBA, said the UK captive regime will provide an important new option for brokers and their clients. He cautioned that the success of the initiative will depend on a supportive regulatory culture that prioritizes implementation as much as policy design.

“This development helps solidify London’s place as the global hub for risk management,” he concluded.