From: Captive International
The captive insurance market in Europe is undergoing significant transformation, with regulatory shifts, increased corporate interest, and the emergence of new domiciles shaping its trajectory, according to a panel titled ‘Changes, Challenges and Opportunities in Europe’, which took place at the annual CICA conference, taking place this week in Tucson, Arizona.
Caroline Wagstaff, chief executive of the London Market Group, observed a notable surge in interest in captives across Europe. “You only need to look at France introducing a captive regime, Italy in their first captive, and Spain discussing potential changes. The UK is also evaluating its regulatory framework,” she explained. “What struck me is that something which was considered niche 20 years ago is now essential for businesses seeking risk transfer solutions.”
Udo Kappes, head of insurance at RWE, agreed with this, acknowledging both the growth and the regulatory hurdles. “It’s impressive to see the development in Europe, although since 2016, regulations have become significantly more complex. Relocating a captive is like creating a new one from scratch, with an immense amount of paperwork and coordination required,” he said. “Despite these challenges, the market continues to expand, which is encouraging.”
Nancy Gray, regional managing director – Americas at Aon, pointed to the stability of the European captive market while highlighting emerging opportunities. “Captive utilisation in the Americas is significantly higher than in EMEA, but Europe remains a stable, mature market with growing potential. France is a hot spot, and the UK is actively reviewing its captive regulations. Italy, however, still faces hurdles due to its stringent legislative framework,” she noted. “Europe’s captive market today reminds me of the expansion seen in the Americas about a decade ago.”
One of the primary challenges facing the European captive market is regulatory complexity. The introduction of the Solvency II framework has had a profound impact, and efforts continue to ensure proportionality in its application.
Kappes, who also serves as chairman of the European Captive Insurance and Reinsurance Owners Association, reflected on this evolution. “When Solvency II was first implemented, there was little recognition of the unique nature of captives compared to commercial insurers. The regulation was designed to protect consumers from insurer insolvencies, but captives exclusively serve their parent corporations. We’ve worked hard to ensure a more proportionate approach, and by 2026, we expect relief for small and non-complex entities, including captives.”
