Airmic to form member working groups amid “very encouraging signs” on UK captive regime

By Rebecca Delaney

June 11 - (The Insurer) - Airmic is in consultation with its members to form working groups in July as part of the association’s next steps in supporting the formation of a UK captive insurance regime, with a handful of large offshore captives considering redomiciliation, CEO Julia Graham said on Wednesday.

• "Small number" of large captives considering onshoring

• Airmic not encouraging "avalanche" of redomiciliations

• Marsh McLennan UK CEO Lay: "Very encouraging signs" from government engagement

The UK government launched a consultation to establish a captive insurance framework in the UK in November 2024. The post-consultation 12-week window closed in early May, although a response has not yet been issued.

“We have interesting times ahead. For Airmic members who are in the room, be very afraid because we will be looking at you to join various working groups that we're going to start establishing in July,” said Graham at the closing panel of the Airmic annual conference in Liverpool.

“I'd like to make it very clear that this is a UK initiative, not a London initiative. It is a UK strength that we're looking for, not just the City, and I think that just needs to be emphasised because it's the quality of our regulation, the quality of our business, but also the quality of the UK.”

Graham said that while numbers under the regime will be predominantly driven by new captive formations, this does not mean that there will be a total absence of redomiciliation of existing captives owned by UK-headquartered companies.

“I do think a small number of large captives may well relocate to London. They've told us that they will, so I suspect they might, but it is a small number,” said Graham.

“We do not encourage an avalanche of transfers. We're very loyal supporters and partners of Guernsey, for example, and we will remain so. So the majority will come from new sources.”

Chris Lay, CEO of Marsh McLennan UK, added during the panel that there are “very encouraging signs” from the UK government following the consultation’s close.

“There are very encouraging signs – and you can read into that what you want – and we're in close contact with the Treasury so we should be ready to think about how to bring that to life,” he said.

“If there are very encouraging signs – we're probably caught in a political timetable here in terms of announcements – we should be on the front foot thinking about what that means. For me, in discussions with government, encouraging signs means they want to do a proper job, not a quick fix. A proper job probably gets to thinking about first-party and third-party risks.”

Lay added: “It's thinking about standing up an industry that is here for the long term, rather than solving for a short-term gain. We're going to get asked questions about how to bring that to life. I'm sure that's where the regulators are at the moment, and that's an opportunity for us to lean in.”

The Insurer has canvassed multiple market sources on what they would like the UK captive framework to look like, its implementation and the types of companies it may be targeted towards. Look out for a more detailed article to follow on the industry’s calls for UK captives…