Captives move into the mainstream as UK eyes regulatory launch
At the Global Risk Summit panel, “Own the Risk: Captive Insurance as a Strategic Tool in Turbulent Markets,” leading figures from across the UK insurance landscape set out a compelling case for the development of a domestic captive insurance regime, highlighting both the opportunities and the challenges that lie ahead.
Speaking on the panel, Caroline Wagstaff, chief executive, London Market Group Cleo Curl, group insurance director, Landsec and Richard Cutcher, captives ambassador at Airmic, outlined how captives are gaining increasing prominence within UK boardrooms.
Cutcher noted a visible shift in awareness, observing that captives are now appearing more frequently in mainstream financial media, including the Financial Times. He suggested that this growing visibility is beginning to influence corporate decision-making at the highest level, with more boards becoming familiar with captives as a viable risk management tool.
Wagstaff traced the origins of the UK’s current push for a captive regime back to discussions with government during the post-Brexit period in 2021. At the time, ministers were exploring policy options to enhance the UK economy, and the concept of a domestic captive framework emerged as a potential “Brexit bonus”. Since then, progress has been gradual, shaped by political turnover and regulatory consultation, but momentum has steadily built.
“I am pretty confident that we will have a UK captive regime,” Wagstaff said, adding that the first UK-based captive could be established as early as next summer.
A key theme of the discussion was the evolving relationship between captives and the commercial insurance market. Historically, some insurers viewed captives as competition, potentially reducing premium flows. However, Wagstaff described a “sea change” in perspective. She argued that the London market must offer clients a full suite of risk management tools—including captives—if it is to maintain its position as a global leader.
“It has always struck me that captives are an incredibly well-established risk management tool,” she said. “If you cannot do it in your home domicile, and you cannot do it in the global centre of risk transfer, then we are not doing our job.”
Cutcher reinforced this point, noting that many captives already conduct business through London, even if they are domiciled offshore in locations such as Guernsey, Bermuda or Singapore. These entities frequently purchase reinsurance or use London-based fronting arrangements, making the UK a natural hub for captive activity.
The panel also examined the regulatory journey to date. Wagstaff highlighted the importance of ensuring that any UK regime is globally competitive, given the wide range of established domiciles already available. She praised the Prudential Regulation Authority (PRA) for its willingness to engage with industry stakeholders and adapt its approach, particularly in light of its new secondary objective to support growth and competitiveness.
“The UK has to do something genuinely competitive,” she said. “Otherwise, why would anyone choose it?”
Curl offered a practical perspective from a corporate captive owner. Landsec’s captive is currently based in Guernsey, which she described as transparent, accessible and well-governed. While she welcomed the prospect of a UK regime, she emphasised that any decision to relocate would depend on clear value.
“If something is working, what is the benefit of moving it?” she asked, noting that governance, regulatory clarity and operational efficiency are critical considerations.
Nevertheless, Curl acknowledged that a UK-based option could make captives more accessible, particularly for companies that may have been deterred by the complexity of offshore arrangements. This aligns with international experience: in France, for example, a domestic captive regime introduced three years ago has led to the creation of more than 20 captives, primarily among mid-sized and privately owned firms.
The discussion also highlighted the strategic role captives can play in fostering innovation. Cutcher cited the example of ride-hailing company Uber, which relied on a captive structure in its early days when traditional insurers were unwilling to underwrite its novel business model. Over time, such risks can be better understood and transferred back into the commercial market.
Looking ahead, the timeline for implementation remains a focal point. Wagstaff indicated that draft regulations from the PRA are expected this summer, followed by further consultation. Final rules could be in place by early next year, with the regime becoming operational shortly thereafter.
The panellists stressed that industry engagement will be crucial in shaping the final framework. Details around regulatory flexibility, permissible lines of business, and supervisory approach will ultimately determine whether the UK can compete with established domiciles.
For Cutcher, the broader goal extends beyond attracting existing captives to relocate. Instead, he sees the UK regime as a catalyst for expanding the overall market. “If it elevates the conversation into more boardrooms and leads to more captives being formed—wherever they are domiciled—that is a success,” he said.
As the UK edges closer to launching its captive regime, the message from industry leaders is clear: success will depend not only on regulation, but on creating an environment that matches the innovation, accessibility and global appeal that have long defined London’s insurance market.
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