November 15th 2024
LONDON November 14, 2024 – The London Market Group (LMG) welcomes this evening’s announcement by Rachel Reeves, Chancellor of the Exchequer that HM Treasury will consult on a UK regime for captive insurance companies. If introduced, a UK regime could 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 advocating for a dedicated and proportionate regulatory regime for captives. Over recent months, 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.
Caroline Wagstaff, CEO 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; captives are an increasingly important part of that mix. This is a rapidly growing global industry, with captive premium estimated to reach US$161 billion by 2030, and other jurisdictions – including France and more recently Italy – are opening their doors.
“It is vital that the Government hears directly from UK plc, captive owners, managers, brokers and insurers – as well as businesses who may not have considered a captive before, about what they need to help make a UK market thrive. We will be working to ensure that this consultation delivers what the government needs in terms of depth and breadth of response”.
Julia Graham, CEO of AIRMIC commented: “Captives are taking centre stage as part of the established and long-term risk financing strategies of many important commercial organisations. In a context of complex challenges, the London insurance market retains a leading global position with an envious world class reputation. As part of this position, captives should play a mainstream role and in support of this, the UK should have a proportionate regulatory regime for captives.”
The London Market is pleased HM Treasury has recognised the exciting opportunities presented by this rapidly growing market and is grateful for the support of the Chancellor and Tulip Siddiq, the Economic Secretary to the Treasury and City Minister.
A UK captive domicile would offer UK plc the ability to build resilience and risk management here at home, while benefitting from an extensive financial 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.
ENDS
Notes to Editors
The London Market Group (LMG) is the trade body for the specialist commercial (re)insurance industry in London
- The London market employs 60,000 people and contributes nearly £50bn to the UK economy.
- It is the world’s largest specialty insurance market – nearly twice as large as its nearest competitor and earns $160 bn in income every year.
- Almost three quarters of that is from overseas, making it a key driver of foreign earnings to the UK economy.
For more information please contact:
Will White, Omnia Partners
07771 555247
