The UK’s captive insurance market is buoyant and optimistic that the Prudential Regulation Authority (PRA) is prepared to match the Treasury’s ambitious and implement a genuinely competitive regulatory regime in 2027.

Captive Intelligence has reported extensively on the news that Chancellor Rachel Reeves has given the green light to a UK captive framework, carrying an extensive data-driven analysis of the UK’s 300 captive owners today and a long read analysis featuring reaction from across the market.

Attention now turns to the design and implementation of a competitive regime by mid-2027 with the PRA and Financial Conduct Authority (FCA) moving its engagement with industry to the next phase as it establishes working groups of service providers and captive owners to help inform the regulations’ design.

Speaking on the latest episode of the Global Captive Podcast, Airmic CEO Julia Graham, William Thomas-Ferrand, global leader of Marsh Captive Solutions, David Hogg of Aon, and Esme Gould, head of captives & ART in the UK at Zurich Insurance Company, provided their reaction to the language used by Government in its consultation response and announcement.

Thomas-Ferrand was also joined on the pod by Marsh colleagues Rob Geraghty and Nick Gale.

Airmic announced last week that it would be pushing for an “ambitious and competitive framework” in its future discussions with the regulators and speaking on GCP #124, Graham said she had been encouraged by the tone emanating from the PRA and FCA in recent months.

“I saw a turning point earlier this year when the discussions that we had, particularly with the Bank of England, were becoming more embracing, more involving, more upbeat, and there was a definite change in the pace and the nature of the questions that we were receiving,” she said.

“And I do think that the need for something competitive and proportionate didn’t initially get through, but certainly in those later conversations this year, absolutely we saw a distinct change and I do think those messages have got through and you definitely see that in the detail of the consultation response.”

Thomas-Ferrand agreed that the government and regulators had been fully engaged with the consultation and the feedback it had received from industry, which should bode well for the next steps of putting in place the all-important details.

“The government has clearly listened to the responses to the consultations that they’ve had so far, and I think that is really, really positive,” he explained.

“They’ve made some very broad statements about how they want it to be competitive, and certain designs of captives they want to be included. That to me means that we’ve set the baseline that we want it to be competitive and I have full faith that they will deliver on that.

“We at Marsh, I mentioned just now, we’ve been working on it for a good few years. We have a team here in the UK, some of whom are on this podcast. And the competitiveness is absolutely key. There’s lots of good captive domiciles around the world. We really want this to be successful and I think the release sets that framework out.”

Aon was quick to confirm last week that it would be establishing a UK captive management company in anticipation of the regulations being introduced and is confident that the demand from new and existing captives will be there to justify a UK domicile and operation.

David Hogg, regional managing director in EMEA for Aon Captive and Insurance Management, said on the podcast the additional choice of the UK will be another benefit for existing and prospective captive owners.

“We’ve been in early preparation for this new market for quite some time, as we do think there’s going to be be demand for this,” Hogg said.

“Although perhaps more from UK organisations where previously they’ve looked at retaining risk in a formalised way, it made sense for them, but owning a captive outside of the UK was outside of appetite.

“I think coupled with that, as you know, the UK is able to offer a huge pool of specialist insurance talent, and I think this pool of talent, when you combine it with the close proximity to London, which we all know is the world’s leading insurance market, I think this is going to provide a really unique, and compelling selling proposition.”

Zurich Insurance Company, an insurer that has fronted for captives for over 30 years, has been another supporter of the initiative and is expected to be involved in the next stage of consultations.

“Assuming the framework is proportionate and competitive, we would anticipate a steadily growing interest, particularly for new captive formations,” Gould said.

“This would be in line with trends we’ve seen in other jurisdictions who have introduced a new captive approach in recent years, such as France or Alberta in Canada.

“Mid to large companies without existing captives are likely to be a primary audience. And also potentially some re-domiciling or secondary captives being established to cover specific areas or regions or bespoke risks, so we shall see!”

Listen to the full episode of the Global Captive Podcast here, or on any podcast app. Just search for ‘Global Captive Podcast’.