In Focus: How can insurers stay relevant as captives grow in the UK?

WE ASKED: ”As captive arrangements become increasingly important and better utilised in the UK, how can the insurance sector work with corporate clients using these models to both manage emerging risks and remain relevant?”

Esme Gould, head of captives and alternative risk transfer (ART), Zurich UK

At Zurich UK, captives are a core part of our proposition for commercial clients. By supporting captive arrangements alongside a full suite of insurance products, we help complex businesses manage their risks as they grow and evolve.

Our global presence and multinational capabilities mean we can work with businesses using captives across multiple jurisdictions, supporting them to navigate local requirements quickly and expertly, as well as giving them a seamless customer experience alongside their core insurance cover.

Captives are powerful tools for managing emerging risks. Insuring new products and exposures can be a challenge when there is limited history to draw on, so a captive can provide protection for new ventures while generating valuable data and insights to inform future decision-making.

Insurance is at its best when it is more than just a risk transfer option.

By combining captive arrangements with risk transfer propositions and services such as Zurich Resilience Solutions – our risk management arm – insurers can be partners in the long-term success of businesses, underpinning innovation and supporting growth.

A partnership approach can help ensure captives deliver their full value over time.

Leon Walker, head of captives for Europe, Middle East and Africa (Emea), Aon

As captive arrangements become increasingly important in the UK, the challenge for decision-makers is moving beyond market cycles to managing the forces reshaping today’s risk landscape.

Trade disruption, technological acceleration, workforce transformation and climate related shifts are creating more interconnected and less predictable exposures.

In response, we are seeing captives play a broader, more strategic role within organisations.

Conversations with chief financial officers and treasurers are moving beyond renewals and toward earnings volatility, capital allocation and long-term flexibility.

Client focus is shifting from the cost of transferring risk to how risk capital can be retained, optimised and deployed to support wider business objectives.

At the same time, organisations are looking for partners that can bring perspectives across risk, people and capital, supported by analytics that help them understand how emerging challenges – such as artificial intelligence (AI), supply chain disruption and workforce changes – may impact their operations.

As the UK develops its captive framework, maintaining competitiveness with established domiciles will be critical.

The UK starts from a position of strength, with deep technical expertise and a strong market ecosystem. There is an opportunity to create a platform that enhances resilience, optimises capital and supports long-term strategic flexibility.

Caroline Wagstaff, chief executive, London Market Group

In order for London to remain as the primary global centre for risk transfer, we need all the tools in the toolkit and the lack of bespoke regulation for captives has historically been missing for the UK.

In autumn 2025, the Prudential Regulation Authority (PRA) engaged closely with the captives community within insurance and received a lot of very frank and constructive input about what is needed to ensure the UK regime is genuinely competitive.

To be an effective tool for the management of emerging risks, captives must be regulated proportionately. To do so, the PRA needs to understand their risk profile and determine the capital and governance requirements accordingly.

In addition, the PRA must consider the regulatory culture and approach around captives. Successful domiciles have regulators that employ captives experts, are connected with brokers and owners and facilitate open and productive conversations.

Another key proof point of a successful captive domicile is a responsiveness in terms of timing – often these decisions are time sensitive and a recognition of that is something competitive jurisdictions deliver.

Nafisah Hussain, director of public policy, International Underwriting Association

There is a unique opportunity for the UK to become a leading domicile for captive insurance companies. Both our world-class insurance talent pool and extensive financial ecosystem – in the London market and nationwide – provide a strong foundation for this.

A clear and predictable regulatory regime is, however, essential. This would enhance investor trust, encourage inward investment and help create more high paying, specialised jobs.

In order to be successful, captive regimes must also be actively promoted, with responsive, cost effective supervision that minimises market barriers to entry.

Regulators the PRA and FCA have pledged to launch a joint consultation this summer to establish a new, proportionate regulatory regime for UK captive insurers.

The process is focused upon creating a specialised, less stringent regulatory environment for captives, reflecting their lower risk compared to traditional commercial insurance. The intention is now to “proceed at pace” to implement a UK captive insurance framework by mid-2027.

The prospect of a UK captives regime has already generated significant interest and the International Underwriting Association looks forward to working with the government to promote this.