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Apr 2021

Malaysia: Labuan collects more captive insurance premiums

Source: Asia Insurance Review | Jun 2017


Labuan’s total earned premium for captive insurance business increased by 18.8% to US$252 million in 2016, despite an overall decrease in total gross premium, according to the Labuan Financial Services Authority (Labuan FSA) Annual Report. The increase in total earned premium for captive business was due to higher retention for all sectors, the report suggested.
   Furthermore, the report also found that most of the total gross premiums for the captive insurance business were derived from outside Malaysia, “reflecting the centre’s efforts to promote international business in support of insuring group risks”.
Asian risk owners account for 75% of Labuan’s captive market
Since Labuan’s first captive was established by a property developer company in 1998, the sector has been “growing rapidly”, reaching approximately 40 captives in 2016 and contributing to an aggregated written premium value of $348.6 million.
   Within Labuan’s captive market, risk owners in Asia have been the main contributors, accounting for almost 75% of the market, while the remainder is made up of EU and US parented captives.
   This positive trend is expected to continue as the Labuan International Business and Financial Centre (IBFC) concentrates on “strengthening its grip on Asian captive markets”.
   Labuan currently offers business owners various options, including the pure captive and protected cell company structures. The Labuan FSA added in the report: “The variety of captive structures to select from, coupled with other business enablers designed to provide legal stability with minimal setup and operating costs, make Labuan IBFC the region’s choice for captive market.” A 
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