Aon plc is preparing to establish a UK-based captive management company as the government moves forward with plans to allow captive insurance vehicles to be domiciled in the country.
The announcement from Aon came ahead of Chancellor of the Exchequer Rachel Reeves outlining details of the new regulatory framework during her Mansion House speech. The changes are aimed at positioning the UK as a competitive location for captive insurers, alongside established jurisdictions such as Bermuda, the Cayman Islands, Vermont, and Guernsey.
Industry bodies welcomed the move, describing it as a step toward expanding domestic risk management options and attracting more insurance activity onshore. However, market participants have also emphasised the need for practical implementation and regulatory clarity.
The London Market Group (LMG), which led the push for a UK captive regime, said the move reinforces London’s position as a centre for risk transfer. Backed by a coalition of brokers, captive owners, advisers and insurers, the LMG has been in discussions with HM Treasury, the Prudential Regulation Authority and the Financial Conduct Authority to help shape the new framework.
LMG chair Sean McGovern said the UK must be able to offer a full range of risk transfer tools if it is to remain globally competitive. He added that the pace of implementation will be critical, particularly as other onshore jurisdictions, including France and Italy, introduce their own captive regimes.
The global captive insurance market is projected to grow from around US$159 billion in 2024 to more than US$250 billion by 2032. Supporters of the UK framework argue that aligning domestic rules with international standards could allow the UK to capture a portion of this growth.
Aon said its planned UK captive management operation will provide clients with an additional domicile option once the regulatory changes come into effect. Ciaran Healy (pictured above), the firm’s global captives leader, said captives continue to play a central role in risk financing strategies and that the UK is well placed to host such activity, given its existing insurance infrastructure in London.
Healy added that Aon is in the final stages of preparing for the launch and expects the UK framework to offer more flexibility for clients structuring their risk programmes.
Peter Hogg, of Aon, said the regime could generate interest from UK-based organisations that have not previously considered captives, and may also lead some firms to consider moving existing captives from overseas back to the UK.
