Four new captive insurers approved in Labuan IBFC

PETALING JAYA: A total of four new captive insurers have been approved in the Labuan International Business and Financial Centre (Labuan IBFC) in the first six months of 2018.

According to Labuan IBFC Inc chairman Datuk Mohammed Azlan Hashim, the four new approvals in the first half were equivalent to the number of captives licensed in the full year of 2017.

He remains optimistic that the midshore financial centre will retain its captive approval momentum through the rest of the year.

“Labuan IBFC is one of the fastest growing risk management centres in Asia.

“This is evidenced by the fact that it is one of the financial centres in the region that approved the most captive entities in 2017, with more than 60% of the premiums are non-Malaysian.

“Risks are dynamic, and risk profiles new technology are even more so.

“The ability to keep pace in this new digital landscape is no mean feat and perhaps, self-insurance coverage such as captive insurance is an ideal option to manage and mitigate these risks,” said Azlan in a press in release issued yesterday.

A Labuan captive insurer may underwrite direct insurance or reinsurance business risks of their own group or third party risks subject to the regulator’s approval.

To date, there are a total of 47 captives approved by Labuan Financial Services Authority, the regulator of Labuan IBFC. In 2017 alone, a total gross premium of US$360.9mil has been underwritten.

Meanwhile, Labuan IBFC Inc chief executive officer Farah Jaafar-Crossby pointed out that only Labuan IBFC is offering the Protected Cell Companies (PCC) structure in the Asian region, currently.

The PCC has the ability to form “cells”, which may comprise a core for holding noncell assets, or any number of cells with the intention of segregating and protecting the assets of each respective cell.

“The appreciation towards the PCC structure is relatively low and there is much to be done to increase the awareness on the benefits of this structure to the Asian businesses.

“We are working towards this – be it educating or providing market feedback to the regulators to better our structure and we are certainly working closely with the regulator for the benefits of our clients and the jurisdiction,” stated Farah.