Labuan IBFC: The fastest growing captive centre in Asia

16-12-2020

Labuan IBFC: The fastest growing captive centre in Asia

Labuan saw more captives set up in the first six months of 2020 than in the whole of 2019. Here, Labuan IBFC outlines why it has been so successful.

Labuan IBFC has had seven new captives registered between January to June 2020, thereby reinforcing its regional prominence in the captive market. This essentially means more captives have been set up in the centre in the first half of 2020 compared with the entire 2019.

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The seven new captives brings a total of 56 captives registered in the jurisdiction as of June 2020. This represents a growth of 9.8 percent year-on-year and is significant when contrasted with 2019 as a whole. Of the seven new captives formed, four are foreign owned and three are Malaysian entities, thereby reinforcing Labuan IBFC’s role as a regional risk intermediation hub.

And of the seven, five are protected cell companies (PCC).

Labuan IBFC, without a doubt remains the fastest growing captive centre in Asia.

In terms of gross written premiums, Labuan’s captive insurance business accounts for 31.4 percent of the total gross premiums underwritten in Labuan IBFC amounting to $267.9 million, with 72.8 percent of the total premiums originating from international markets.

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In contrast for the whole of 2019, Labuan IBFC recorded a 14.2 percent growth in total gross premiums for its captive insurance business amounting to $457.5 million.

“This steady growth could be attributed to the heightened understanding of the benefits of self-insurance in Asia and the hardening reinsurance market. Other factors could include changes in the international tax landscape, prompting companies to seek midshore jurisdictions like ours in order to ensure tax compliance,” said Labuan IBFC chief executive officer, Farah Jaafar-Crossby.

“Labuan IBFC is the only jurisdiction in Asia with the protected cell structure and with the ongoing pandemic, there has been a heightened interest in PCCs as a cost-effective self-insurance vehicle,” added Jaafar-Crossby.

Labuan IBFC has also seen a growth in the number of insurance and risk management licensees – the largest cohort in the Centre with currently more than 220; with 11 licensees registering in the first half of 2020.

The jurisdiction offers Asia’s widest range of self-insurance structures aside from pure single captives, with structure offerings that include mutual and association captives, rent-a-captives as well as Asia’s only protected cell company and Shariah-compliant takaful captives.

This article was written by Labuan International Business and Financial Centre (Labuan IBFC) which can be contacted at: comms@libfc.com

 

Captive International