Friday, April 19, 2024

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Lactalis the latest French captive licence, momentum continues

Multinational dairy company Lactalis has received a captive licence from the French Prudential Supervision and Resolution Authority (ACPR).

The formation of Sorelac continues the momentum in France’s captive sector after the 2023 Budget (PLF) made progress, including provisions for introducing a new regulatory regime for captives.

Captive Intelligence understands Sorelac will begin by writing property damage and business interruption insurance. It is also Lactalis’ first captive.

It is understood to have been a 15-year project within the group, and has been completed by risk and insurance director Nicolas Incarnato, who joined in 2019.

Lactalis was keen to pursue the formation in France, despite the uncertainty surrounding the future regulatory regime.

“The demand will be high from new mid-sized players to set up their first captive,” one consultant working with several French captive prospects told Captive Intelligence.

“I’m quite optimistic to say that there will be a demand, especially if we now hear more about the world of captives in France.”

Captive Intelligence understands Strategic Risk Solutions will manage Sorelac, its first formation in France since opening an office in the country in November.

Maxime Schons, head of the Luxembourg office and licensed manager for the Luxembourg regulated entities under management, said: “SRS has recently opened its French office with a dedicated local service team specifically skilled to serve the current and future French regulated entities. It will be overseen by a new director to be appointed very shortly.”

Despite captive specific legislation only progressing last week, ACPR has not been hostile to captives, and since 2020 four new reinsurance captives had been formed in the domicile.

Multinational payment and transactional services company Worldline established a captive in 2020, while food processing business Bonduelle and consortium Groupe SEB set up captives last year.

In October 2022 multinational advertising and public relations company Publicis Groupe got its captive licence. Sorelac is the fifth establishment in that time.

French-owned captives have typically pulled towards Luxembourg and Ireland, while there are also French captives in Malta, Switzerland and Guernsey.

It remains to be seen whether captives already domiciled in a jurisdiction with a strong track record on captives will be tempted to re-domesticate now that the option is available, but experts expect the French market to be dominated by new captives initially.