16 May 2017Analysis

Growth potential for Asian captive markets is huge: Labuan IBFC CEO

The Asian market for captive insurers is relatively unexplored and the potential for growth is immense, according to Danial Mah Abdullah, CEO of the Labuan International Business and Financial Centre (Labuan IBFC).

The penetration level is low at the moment, with only 2.3 percent of the total 6,939 captive established worldwide, Abdullah claims.

“The Asian corporations are viewing captives as a viable alternative of risk management tool and the number who appreciates this concept is growing,” he said.

“Labuan IBFC, for example, is a substance-enabling jurisdiction that offers captive as a business solution that is complemented by a competitive tax structure. In fact, there are currently about 39 captives in the centre and it is home to the world’s only takaful captive, introduced in 2015,” explained Danial.

Labuan IBFC, along with Labuan International Insurance Association (LIIA), will be jointly organising the Asian Captive Conference (ACC 2017) in Sasana, Kijang, Kuala Lumpur on August 16-17, 2017.

Here they will be raising awareness of the viability of captives as a risk transfer tool as a complement to the traditional insurance.

Abdullah continued: “While many companies will continue to depend on traditional insurance, those with the know-how will explore greater business opportunities and risk management options through captives, especially when commercial premium rates make standard insurance untenable.”

The theme of the conference is ‘De-Risking Asia: The Growing Role of Self-Insurance’, and the Governor of Bank Negara Malaysia, Datuk Seri Muhammad Ibrahim is expected to deliver a keynote address during the event.

Key areas in risk management including insurtech and block-chain, along with the effects of the Base Erosion Profit Shifting and tax transparency in business, will be discussed at the conference.

The conference will feature speakers such as Steve Tunstall, general secretary of the Pan-Asia Risk and Insurance Management Association (PARIMA); George McGhie, managing director of Captive Practice, Willis Towers Watson; Kelvin Wu, group risk and insurance manager of International SOS, Datuk Majid Mohamad, technical advisor of LIIA; Michael Velten, Asia-Pacific financial services and insurance tax leader, Deloitte and Stuart Herbert, senior vice president of Marsh Captive Solutions.