New UK captives framework gets green light

The government has announced that it intends to proceed with the introduction of a new UK captive insurance framework.

A captive is a wholly-owned subsidiary insurer formed to provide risk mitigation services for its parent company or related entities.

A consultation for a new framework around captives was unveiled by chancellor Rachel Reeves in her speech at Mansion House on 14 November 2024.

And the government confirmed today (15 July 2025) that “following careful consideration of the consultation responses, the government, working closely with the financial regulators, intends to proceed with the introduction of a new UK captive insurance framework”.

It added: “The government’s view is that a new captive insurance framework will help cement the UK’s position as a leading international jurisdiction for insurance and risk management business.

“Improving the UK’s captive insurance offering can also support the government’s wider aim to promote growth in the economy, both via expanding the range of insurance services that can be offered in the UK and also by giving businesses in the UK a greater range of risk management options.”

Response

The move was welcomed by industry leaders. The London Market Group (LMG) said a “UK regime will 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”.

Sean McGovern, chair of the LMG, added: “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. This announcement is clear evidence of the government recognising the London market’s role as a contributor to growth and delivering on commitments to support the industry as we continue to enhance the market’s world-leading position.

“British companies and public sector institutions now need to join us in encouraging the regulators to move at pace to establish an attractive and dynamic UK captive regime so they grasp the opportunities offered by the announcement today with both hands.”

Chris Jones, chief executive at the International Underwriting Assocation, said: “There is a tremendous 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 initiative.

“A clear and predictable regulatory regime will enhance investor trust, encourage inward investment and help create more high-paying specialised jobs. In order to be successful, it must also be actively promoted, with responsive, cost-effective supervision that minimises market barriers to entry.

“The prospect of a UK captives regime has already generated significant interest and the IUA looks forward to working with the government in its promotion.”