Labuan International Business and Financial Centre (Labuan IBFC) charted strong captive growth in 2020, with its total number of captives increasing by 15.4% over 2019, according to trade publication, Captive Review, which recently released its World Domicile Update 2020.
Ms Farah Jaafar-Crossby, CEO of Labuan IBFC Inc, the market development arm of the jurisdiction said, “2020 was a boon year for Labuan captive business. We had eight new captives formed, totalling 55 captives now licensed by the jurisdiction. This was the highest number of captives formed in both Asia and MENA in 2020.”
Captive Review confirmed that Labuan IBFC licensed a quarter of all captives in Asia and MENA, thereby reinforcing its position as the fastest growing captive centre in Asia, according to a statement issued by Labuan IBFC.
Ms Jaafar-Crossby added, “We are also extremely proud to be listed as 16th out of 71 global domiciles with the greatest number of captive formations in 2020, leading the captive industry in Asia and MENA. It is worth noting that the report also indicated that Asia was the fastest growing captive region in the world with a year-on-year growth of 6.3%.”
Looking ahead, bolstered by renewed growth of Asian economies, a hardening reinsurance market, the need to cover more esoteric risk like cyber, greater awareness of self-insurance vehicles and recognition of Labuan IBFC as a key jurisdiction for these vehicles, she added that she is expecting 2021’s growth momentum will exceed that enjoyed in 2020.
“In terms of gross written premiums, Labuan’s captive insurance business already accounts for 31.2% of the total gross premiums underwritten in Labuan IBFC amounting to $497.5m, with 65.4% of the total premiums originating from international markets. These numbers clearly indicate a coming of age and maturity of the market, making Labuan IBFC a truly global domicile of choice,” she said.
Mr Roy Sharma, chairman of Labuan International Insurance Association (LIIA), the industry body representing all insurance-related licensed entities, said, “The growth of captives has been in tandem with the increase in our association members as well as ancillary service providers in Labuan. We now have more than 220 insurance and risk management licensees and LIIA plays a pivotal role in Labuan IBFC”. He adds that LIIA will be setting up a captives sub-committee within the association to further develop the captives’ space and for it to have an even stronger voice in the jurisdiction.
Labuan IBFC celebrated its 30th year of establishment in 2020, with more than 800 licensed financial intermediating entities including banks, insurance and insurance-related entities, corporate service providers, wealth management vehicles, digital financial service providers and many other business sectors.