Labuan International Business and Financial Centre (Labuan IBFC) has continued to grow its captive insurance industry, with four approvals in the first half of this year.
At the Asian Captive Conference, held in Kuala Lumpur, Dato Mohammed Azlan Hashim, chairman of Labuan IBFC, revealed that in the first half of this year, Labuan Financial Services Authority (FSA) had already licensed the same number of captives it did for the entirety of last year, adding that he hoped this positive trend will see us through the rest of the year.
He also noted that as of 1 August, there are a total of 47 captives approved by the FSA.
Hashim said: “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 percent of the premiums are non-Malaysian.”
He added: “A total of six captives were approved by Labuan FSA and a total gross premium of $360.9 million was underwritten last year.”
The chairman went on to suggest that self-insurance tools such as captive insurance could be an ideal option to manage and mitigate new and emerging risks from digital threats.
“Risks are dynamic, and risk profiles in new technology are even more so. Needless to say, the risks arising from digital threats are multifaceted. 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.”
“Indeed, captives provides a more flexible and innovative solution and offers the ideal vehicle to ‘incubate’ these risks. It is a unique concept and can be structured according to the needs of the business or according to the characteristic demands of the risk being mitigated.”
Farah Jaafar-Crossby, Labuan IBFC CEO, also weighed in, talking about Labuan’s offering of protected cell companies (PCCs).
Jaafar-Crossby said: “There are also other financial centres in Asia that are currently exploring the use of this structure but the fact that we are the pioneer in the region—having the legislation set in 2010, gives us an edge among our peers in the region.”
“Having said that, 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. So, do watch this space for more updates.”
Farah added that Labuan IBFC’s commitment to generating awareness of the benefits of self-insurance in Asia will continue in the years to come.
He commented: “We hope to be able to champion the benefits of self-insurance in Asia, especially as the risk management environment across the globe becomes more and more challenging.”
