UK Law and Practice Contributed by: Clare Swirski, E. Drew Dutton, Hugo Laing and Rosamund Wood, Debevoise & Plimpton LLP
of insurance is an FCA-regulated activity and would require authorisation. Third-Country Branches Non-UK insurers may apply for authorisation to estab- lish a UK branch if they meet the relevant regulatory requirements to do so. There are certain distinctions under Solvency UK; for example, a single branch can- not carry out both life and non-life insurance activities (subject to certain “grandfathering” provisions), and Solvency UK sets no particular standards for pure reinsurers to establish a branch. Effect of Brexit Post-Brexit, the PRA and FCA implemented a “tem- porary permissions regime” (TPR) that, under certain conditions, permitted non-UK European Economic Area (EEA) firms to continue to passport into the UK for a limited period. Provisions have also been imple- mented to preserve the validity of contracts written cross-border into the UK pre-Brexit where the EEA insurer does not intend to apply for UK authorisation. Whilst other EEA member states have implemented broadly similar transitional provisions that allow UK- authorised firms to continue to service policyhold- ers resident in those member states under existing contracts, the time periods have been set by each individual member state and vary considerably. The TPR ended on 30 December 2023. Since this date, to carry on (re)insurance business in the UK, all firms domiciled outside the UK, Gibraltar and Switzerland needed to apply to the PRA for authorisation to estab- lish a UK subsidiary or to open a UK branch through the normal process. The PRA’s policy statement (PS8/24) sets out its approach to the authorisation and supervision of branches of overseas (re)insurers. Of note is the PRA’s increased focus on the reinsurance arrange- ments of non-UK firms that seek to open a branch in the UK. The statement also gives guidance on when the establishment and authorisation of a UK subsidi - ary may be more appropriate than opening a branch. 3.2 Fronting There is no specific prohibition on fronting in the UK. However, in practice, the regulators would now expect retention of at least 10% of the risk on underwritten
lines (as a general rule of thumb). This figure has also been raised more recently as “a good referential” by the European Insurance and Occupational Pensions Authority (EIOPA) in its Brexit guidance. Recently, the PRA specifically raised that where aggregate reinsur- ance cessions to the “home” third-country undertak- ing by the branch exceeds the amount retained (ie, the reinsurance is of more than 50% of the risk), issues of supervisability may arise. 4. Transaction Activity 4.1 M&A Activities Relating to Insurance Companies UK insurance distribution M&A was subdued in the first half of 2025, the slowest H1 since 2019, but activity picked up modestly in September, with ten announced deals. Indeed, September was the busi- est month since April 2025. Specialty intermediaries (MGAs and wholesalers, including Lloyd’s brokers) accounted for just under a quarter of UK deals in H1 2025, indicating continued investor interest in niche capability despite lower overall volumes. By late 2025, conditions had improved modestly (including better base rates and lender appetite, and faster regulatory timelines). Considerable activity in the life insurance market followed Solvency II’s implementation, with several insurers exiting lines of business with higher capital requirements, such as annuities. The run-off market was also impacted as firms look to be as capital- efficient as possible and offload non-core business through share sales, reinsurance or business trans- fers, or often a mixture of the two latter approaches. In the annuity market, recent years have seen con- siderable activity. The bulk pension annuity (BPA) market saw further growth in 2025 with around 350 transactions, an increase from 293 deals in 2024. In 2025, several North American asset managers sought a direct presence in the UK BPA market through M&A transactions. Deals highlighting this included Brook- field Wealth Solutions announcing the acquisition of Just, Athora’s announcement of an agreed acquisition of PIC, with Apollo set to be a key shareholder, and L&G entering a strategic partnership with Blackstone.
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