Tax cuts on the Isle of Man will provide "long term certainty" for new and existing captives and other insurance related businesses, insurance experts said.

Earlier this month it was announced the Isle of Man would reduce the corporate tax rate from 10% to zero.

David Vick, chief executive of the Isle of Man's Insurance and Pensions Authority said: "We expect to see the captives sector grow.

"This is a positive move and adds certainty for companies. There is a strong pool of labour here and we have a diverse financial sector, including insurance and investment."

But, Andrew Green, partner with accountant Mazars, commented: "It is worth noting that there is still VAT payable on the Isle of Man and a number of clients will still prefer Guernsey. It could be argued this has a stronger insurance sector. But, the Isle of Man may start to attract more virtual insurers."

Meanwhile, Mike Henthorn managing director of Aon's Isle of Man captives division said: "We are expecting to see increased interest, including from the smaller protected cell companies.

"VAT is less of an issue, as it does not affect captive management fees.

"One of the island's main attractions is its proximity to London, Manchester and Belfast."