Labuan IBFC records 43 captive insurers in 2 Q of 2017

KUALA LUMPUR: The Labuan International Business and Financial Centre (Labuan IBFC) has recorded 43 captive insurers, with an aggregated written premium of up to US$500 million (US$1= RM4.30) in the second quarter of 2017.

Chief executive officer, Danial Mah Abdullah said the number had increased from 39 captives with an aggregated written premium of US$348.6 million recorded in 2016.

A captive insurer is an insurance or reinsurance entity, whollyowned directly or indirectly by an industrial, commercial or financial entity.

It provides insurance or reinsurance coverage for the risks, assets and liabilities of its parent company.

Danial said currently, the captives registered in Labuan IBFC involved different sectors, including aviation, as well as oil and gas.

“About 75 per cent of the total captive market contributions were from risk owners in Asia,” he told a press conference in conjunction with the inaugural Asian Captive Conference 2017 yesterday.

Danial said Labuan IBFC had secured three new captives licenced last year.

“According to the ‘Attitudes Towards Captive Insurance in Asia’ survey conducted by Captive Review in partnership with Labuan IBFC, there were only eight new captives licensed in the Asia Pacific last year.

“When three new captives out of eight were recorded last year, I think we are doing quite good,” he added.

The survey, which involved 112 risk and insurance professionals in Asia, sought to determine the reason why captive insurance is still nascent in Asia, despite high take-up rates in Europe and the United States.

It showed that only eight, or one per cent of the global captives were formed in the region last year, compared with 478 new licences in North America, 108 in Bermuda and the Caribbean, and 22 in Europe.

Meanwhile, the survey revealed that nearly 70 per cent of the respondents were “very comfortable” using Labuan IBFC as the domicile choice for their captives.

It said that 61 per cent of the respondents agreed that access to regulators, strong legal and regulatory provisions, were the main considerations in choosing a captive domicile.

It also said that 57 per cent of the respondents agreed that the availability of local captive infrastructure was an essential requirement to set up a captive.

The survey added that more than half of the respondents agreed that Labuan IBFC retained a favourable reputation as a domicile, with more than 30 per cent saying that the mid-shore jurisdiction was a “strong” captive domicile. — Bernama