Marsh urges that the regime, when implemented, ensures that the UK becomes a dynamic, innovative, and globally competitive hub for a wide range of captive insurance services offering enhanced risk management capabilities and choices for organisations of all sizes. Captive insurance is a long-established risk management tool, offering organisations greater choice in how they build their risk management strategy. It can help address traditional and emerging risk management pain points, enabling a greater control of risk and reduced costs.
Notably, the announcement supports the utilisation of captives for a broad range of risks, enabling captives to tailor their risk transfer strategies more effectively and for captive business owners to offer enhanced services to clients. The announcement also opens the potential for the formation of more flexible, cost-effective vehicles, such as protected cell companies (PCCs), that would benefit smaller and mid-size companies.
Chris Lay, CEO of Marsh McLennan, UK, and a long-time proponent of a UK-based captives regime, said: "We welcome the government’s decision, which will make the UK a full-service insurance centre through the addition of a captive insurance regime. Having previously run Marsh’s global captive business, I know that this has the potential to enable organisations of all sizes in the UK and around the world to have access to greater choice in how they manage risk and build the offering of our already world-leading insurance sector. We need to ensure that the new captive framework will not only allow the UK insurance market to further demonstrate its reputation for innovation but also that captives can be formed as seamlessly as they are in other jurisdictions."
Today’s announcement, along with the other reforms announced, will help position the competitiveness of the UK in the global insurance market.
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