Now that the dust has settled on the Budget last week, we wanted to take a closer look at the measures it contains that could help insurtech businesses recruit, retain talent and access finance. We would like to thank the Deloitte team for their advice to members on the post-Budget implications for insurtech.

Whilst some new proposed measures are to be welcomed, the proposed eligibility rules for Founders’ Relief risk leaving insurance entrepreneurs outside a major new incentive, while changes to Business Asset Disposal Relief could reduce the support available to them. For Insurtech UK, the priority is ensuring that policies intended to help innovative businesses start, scale and stay in the UK recognise the contribution of insurance technology in protecting customers and growing the economy.

Employee share options: a welcome improvement

From April 2027, the individual option limit under the Company Share Option Plan (CSOP) will double from £60,000 to £120,000, with the scheme renamed Enterprise Management Incentives 2 (EMI2). The exercise period will also extend from 10 to 15 years. This could be particularly useful for insurtechs whose activities make them ineligible for the existing EMI scheme. Share options can help growing businesses compete for skilled people when they cannot match the salaries offered by larger employers.

Founders’ Relief: insurance must not be overlooked

The Government has proposed a new Founders’ Relief, offering a 10% Capital Gains Tax rate on qualifying share disposals, subject to a £10 million lifetime limit. It is intended to apply from 6th April 2027, with detailed conditions still subject to consultation and legislation.

However, the proposal uses exclusions based on the Enterprise Investment Scheme, including insurance and other financial activities, which could leave insurtech founders outside the relief. Innovative insurance businesses should be assessed on their contribution to growth, employment and innovation. Insurtech UK will be making that case in the Founders’ Relief consultation, which closes on 30th November 2026. Members whose businesses could be affected are encouraged to share examples with Jim Clark.

A less generous BADR allowance

The Budget also reduces the lifetime limit for Business Asset Disposal Relief (BADR) from £1 million to £500,000 from April 2027. For founders who do not qualify for the proposed new relief, this could mean a less favourable position when disposing of their business.

Finance and talent: opportunities depend on delivery

The additional £5 billion of financial capacity for the British Business Bank, including support for equity investment and a new venture debt product, is encouraging. The practical test will be whether suitable funding reaches innovative firms at the stages when they need it.

The Budget also includes measures intended to improve access to talent, including an expanded High Potential Individual visa and proposed legislation addressing non-compete clauses affecting recruitment by start-ups and scaling firms. For insurtechs, the value of these announcements will depend on eligibility, implementation and how easily businesses can use the support.