The London Market Group (LMG) has urged creating a regulatory environment that facilitates UK domiciled captives, “demonstrating both at home and abroad that the [London] market can respond swiftly and effectively.”
In its latest report, the LMG, a trade body for the specialist commercial (re)insurance industry, notes that the market for captive insurance worldwide is expected to reach US$161 billion by 2030, but the UK currently sees none of this business.
Sean McGovern, chair of the LMG, comments: “Although the London market remains the largest hub of direct (re)insurance when compared to other centres, its rate of growth has been slower than some of its key competitors, and over the last decade, its market share has remained broadly stagnant.”
Between 2020 and 2022, the London insurance market grew by 32 per cent, whilst in the same period, Bermuda saw growth of 39 per cent, according to the LMG.
The trade body remarks that to maintain its status, London needs to continue to drive new product innovation and ensure it can offer the full range of risk transfer tools.
In a research published earlier this year, the LMG found that lighter-touch regulations could see almost 700 captive insurers either moved onshore, from jurisdictions such as Guernsey and Bermuda, or set up in the UK.
Previously, the UK Chancellor Jeremy Hunt announced in his Autumn Statement speech in November 2023, that there will be “consultation on introducing a UK regime for captive insurance companies; the government will consult on the design of a new framework for encouraging the establishment and growth of captive insurance companies in the UK.”
