An Exhilarating Time for UK Captives
HDI Global UK & Ireland’s Dan Sammons talks to Captive International about reform, readiness and resilience.
The UK’s long-anticipated move towards a more captive-friendly regulatory regime has injected fresh momentum into an already sophisticated market. For Dan Sammons, captives manager at HDI UK & Ireland , the reforms represent not a starting point but an evolution.
“I think speaking from the captive perspective, the UK is already a highly evolved market servicing captives from fronting to reinsurance and associated services since pretty much the start,” he told Captive International the day before the AIRMIC captives Forum in London. While captives originated in the United States in the 1950s, with fronting arrangements becoming mainstream in the 1970s, London has long played a central role in supporting these structures. The addition of onshore captive-friendly legislation, Sammons argues, “just further enhances that reputation the UK has as the insurance centre of the world. It’s an exhilarating time.”
Despite the enthusiasm, Sammons is clear that the market is still in a preparatory phase. “As far as the UK captive regime is concerned, the market’s in a planning, structuring and positioning phase,” he explained. The UK Government has signalled a commitment to a “proportionate and low burden regime”, designed to make the country an attractive option not only for first-time captive owners but also for organisations considering re-domiciling or expanding an existing captive strategy.
That promise of proportionality is key. For many risk managers and corporate treasurers, the appeal of established domiciles has rested on regulatory clarity, pragmatic oversight and manageable capital requirements. If the UK can align itself with those characteristics while retaining the depth of its insurance ecosystem, it may well become a compelling alternative.
The industry is mobilising accordingly. “Brokers, captive managers, insurers, advisers – we’re all preparing and enhancing our offerings,” Sammons noted. For HDI Global and its UK & Ireland arm, that has meant sharpening both service and structure.
“It’s hard to comment on other insurers,” he says, “but speaking for ourselves, we’ve seen our offering and proposition enhanced to better position ourselves in key global markets.” He points to a reputation for “top-tier servicing, agility and flexibility and underwriting excellence”, coupled with a partnership ethos reflected in client longevity. “Our average tenure for our captive clients is more than 10 years. That goes some way to demonstrate our position on the servicing side and the type of partnership that we offer.”
Beyond Fronting: Innovation and Collateral
Servicing, however, is only part of the equation. Increasingly, captive owners are seeking more sophisticated and integrated risk financing solutions. Sammons emphasises the advantage of being able to combine fronting with in-house reinsurance capability.
“One of our key advantages is having our HDI enablers as part of the team,” he said. “When we go to market, we can not only talk about the fronting servicing requirements of our captive owners and clients, but we can also talk about the reinsurance, and that brings with it some advantages, particularly around collateral.”
Collateral requirements have long been a friction point in captive-fronting relationships. The ability to structure programmes in a way that optimises capital efficiency while satisfying regulatory and credit considerations is therefore a differentiator. In a market where many fronting arrangements can appear similar at first glance, structural nuance and underwriting flexibility matter.
Indeed, Sammons suggests that flexibility is becoming a defining trait. In an environment of heightened competition and regulatory stimulus, “that standard offering… is not enough anymore for our captive-owning clients”. Instead, they are “looking to work with a forward-thinking, trusted global player intent on creating the next level of excellence through the experience they’ve already got and the flexibility and innovation they can create.”
Why 2026 Matters
If 2025 has been about preparation, 2026 may be about crystallisation. Sammons describes this year as “the final planning stages before implementation – where concept becomes reality”.
Much hinges on formal consultations expected from the UK’s twin regulators, the Financial Conduct Authority and the Prudential Regulation Authority. Authorisation requirements, capital thresholds, governance standards and reporting obligations will all be under scrutiny. Market participants are also watching closely for clarity on the potential use of protected cell companies (PCCs), which could broaden structural options for prospective captive owners.
For first movers, 2026 will be critical. Feasibility studies are already under way, often based on working assumptions about what the legislation might look like. “It’s the time that first movers have got to plan captive formation,” Sammons said, adding that re-domiciling may require even longer lead times.
Industry bodies such as the London Market Group have been encouraging early engagement. Insurers, brokers and advisers are investing now, seeking to differentiate themselves ahead of formal implementation. “Agility and flexibility to offer more client-focused and bespoke solutions is key,” Sammons observed. In a stimulated market, standing still is not an option.
Europe’s Embrace of Captives
The UK’s renewed interest in captives is part of a broader European trend. Over recent years, several jurisdictions have refined their frameworks to attract or retain captive business. Sammons attributes this shift to a confluence of risk and regulatory factors.
“There’s increased volatility coming from, amongst others, climate losses, geopolitical risk, cyber, social inflation and liability severity,” he said. While not exhaustive, that list captures the complex risk environment facing corporates today. Emerging loss trends, often highly sector-specific, can be difficult for traditional insurers to price within diversified portfolios.
“Insurers rely on portfolios of risks and data to be able to equitably price and assume risk,” Sammons explained. “By that nature, they can’t be as live or targeted as a captive can be when addressing these risks.” Captives, by contrast, possess an intimate understanding of their parent company’s operations and risk appetite. “They are highly motivated to take those risks and support and protect the business.”
He offers a telling example from the ESG arena. A manufacturer identified a supply-chain risk: if a Tier 1 supplier suffered material damage and had to be replaced, the alternative supplier might have a higher carbon output. That shift could “materially impact the ESG rating” of the manufacturer.
Traditional supplier extensions in property programmes might respond to business interruption, but they rarely contemplate the cost of purchasing carbon credits to offset increased emissions. “What the client and the captive wanted to do was to have protection against this,” Sammons said, including cover for the cost of buying carbon credits. For conventional insurers, fluctuating carbon credit prices and market uncertainties make such coverage challenging. For a captive, however, it may represent an acceptable and strategically aligned risk.
This kind of tailored, forward-looking solution illustrates why captives are gaining traction. They can “pluck risks from the risk register that may have a severe effect and concern to that individual business but may not be applicable as a broad-brush insurer-led product”.
Regulatory reform has reinforced the trend. Jurisdictions including France, Ireland, Malta, Luxembourg and Switzerland have refined their regimes to facilitate easier access and ongoing management. The UK’s initiative has arguably added competitive impetus. “There is a concerted movement towards supporting a proactive captive strategy,” Sammons pointed out, one that helps businesses “create resilience and innovation”.
For Sammons, the future lies not in competition between insurers and captives, but in collaboration. “Working together in partnership, combining this motivation and understanding of the business that only a captive can have with the capabilities of a willing, agile and forward-thinking insurer – it’s a powerful proposition.”
As the UK edges closer to implementing its new regime, that partnership model may prove decisive. If proportional regulation is matched by market agility and structural innovation, London’s long-standing captive expertise could be complemented by a vibrant onshore domicile. In Sammons’ words, it is not merely reform – it is the moment “where concept becomes reality.”
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