PKF promotes Captives in New York (post Brexit)
PKF Malta, in collaboration with FinanceMalta, participated in an event called New York Captive Owners Summit, which took place on 31st October in New York.
George M. Mangion of PKF Malta talks about recent developments in the insurance market and next events in line for promoting Malta as a domicile of choice for European Captives in New York, focusing on success of the industry’s latest events and discussing essential points across the financial landscape
This was a sequel event that took place in an innovative, more intimate setting and was specially formulated to attract America’s leading captive owners, ably hosted by a British firm Captive Review. It is evident that opportunities to attract investment to Malta from the lucrative US market are rich but these need to be properly nurtured. The harvest is ripe for those who venture forth so it follows that FinanceMalta, which is always on the alert to stimulate inward investment, believed this initiative would help Malta in its quest to remain a compelling proposition for prospective investors seeking to establish or extend their footprint in Europe.
The New York Captive Owners Summit was a highly exclusive learning and networking event that centred on a series of in-depth roundtable sessions. This event provided investors with all the information needed to set up and run a successful captive through one day of indepth presentations, panel debates, case studies and round-table discussions. As a closed gathering of prospective captive owners, there was also plenty of time, space and privacy for networking with other professionals who share business goals and vision, via a series of formal and informal receptions and activities. One augurs that such initiatives by the private sector serve as a catalyst to place Malta on the radar screen whenever Risk Managers are concerned.
Post Brexit questions about US subsidiaries pondering on where to move to in Europe are becoming more frequent, so the event would attract the attention of large captive managers the likes of AON, JLT Marsh and R&Q. Furthermore, there were industry service providers versed in technology solutions the likes of Verisk Insurance Solutions, Intralinks and Rante. Another event was organised this year on 29th March, with the support of FinanceMalta, Bee Insurance Management and a line of keynote speakers, in New York. Again this proved to be an innovative event focused on Malta as a domicile seeking to attract US Companies to host their European Captives. Topics included: how to survive FATCA and CRS, what tax regulations one should look out for when relocating and finally the advantages Malta offers as a domicile which continues to strengthen its position in Europe as a strong player in the Captive market. Developed over a
decade of continued building of the country’s financial services infrastructure and legal framework, this legislation makes the island more attractive for the operation of Captives.
The jewel in the crown is the Protected Cell Companies (PCCs). Malta is the only full EU member state that can offer PCCs. It is also the only EU member state that offers the securitisation cell company structure used for asset-backed financing or insurance linked securities platforms. Undoubtedly, the insurance market in Europe is experiencing a dramatic change in culture, mainly due to the aftermath of Solvency II and recently challenges on passporting rights which may be forfeited by U.K based Captives as a consequence of the Brexit negotiations.
Any introduction of protective policies that might be introduced in the US following the election of Donald Trump could also open new opportunities for insurance companies to relocate to a European jurisdiction such as Malta. Without any doubt, some of the key advantages of Malta as a democracy include our professional institutions, EU membership, political stability and English speaking. Malta has managed to prosper albeit being small, and can thus give captive owners the flexibility of full passporting rights and accessibility with a stronger customer focus.
At PKF Malta we pride ourselves on being the right size to provide the right solutions for the right people. This is evidenced in the assistance our team of insurance, tax, finance and legal experts provide to assist in compiling a company’s
feasibility, pre-licensing and licensing process, as well as throughout an entity’s ongoing operation. We provide value adding recommendations and have assisted clients in embedding risk management processes in their day-today operations. It goes without saying that 2016 being the first year of reporting this will be a challenging time for the insurers as they get to grips with the Solvency II requirements, and at this juncture PKF is able to provide advice to help insurers and/or start-ups deal with these financial reporting challenges. As service providers, we place value on the relationship we build with our clients. We believe that, by basing a relationship on trust, we can provide clients the best tailor-made service possible. We endeavour to provide our clients with the right combination of skills, experience, statistical methodologies and programmes to deliver the assurance and support they need. PKF is committed to train its staff to enable them to provide client service of the highest standards.
Professional staff allocated to respective projects are closely involved throughout the assignment and provide main source of continuity. A number of key experts facilitate delivery of all the objectives in a timely manner. Licensed by the MFSA to act as an approved auditor in carrying out external audits of insurance companies and insurance intermediary companies, PKF works closely with specialised service providers within the local industry to cater for client’s needs including set-up arrangements. Being
a member firm of PKF International, it also teams up with 400 overseas offices to deliver specialised technical solutions (including actuarial services) to the local insurance industry. It is worth noting that in the UK one observes a plateauing effect experienced by the Captive market, which is partly attributed to a soft market. Another challenge is the onset of Solvency 11 for smaller insurance units as they pass through a slow learning curve however the benefits of this regulatory reform are starting to be felt within the market and undoubtedly there is a window of opportunity to refocus again on market development.
Recent articles in the insurance media deal with topics on uncertainties linked to Brexit talks and unforeseen ramifications arising from the protectionist trade policies that Donald Trump as the President Elect had been promising in his election campaign. In conclusion, PKF Malta believes in the attraction of US captive owners, in particular those which target European risks. For example, the opinions reached at the US Summit prove beyond doubt that there is a need for multinationals with operations in Europe to insure their risks through Captives. Certainly in the past this was not so popular but due to the reasons mentioned in this article, this is becoming more plausible than ever, with companies wanting to manage their international risks and reap the full benefits of a Captive in Europe enjoying full passporting rights anywhere in EU.
This time try Malta – it provides a perfect fit.