As of the second quarter of this year, there were 43 captives established in Labuan International Business and Financial Centre (Labuan IBFC), compared to 39 at the end of last year, according to official data from Labuan IBFC.
Labuan IBFC Chairman Mohammed Azlan Hashim said: “We envisage this positive trend to continue as Labuan IBFC is focused on strengthening its presence in the captive market of Asia. We’ve indeed been cultivating this niche in self-insurance, particularly in captive insurance and will continue to do so.”
In Labuan IBFC’s recent survey “Attitudes towards Captive Insurance in Asia”, conducted by the captive trade publication Captive Review, close to 70% of 112 respondents in Asia said that they are “very comfortable” using Labuan IBFC as their domicile choice for their captives.
In addition, 61% of respondents agreed that access to regulators and strong legal as well as regulatory provisions are the main considerations when choosing a captive domicile. The availability of local captive infrastructure is also an essential requirement for most respondents (57%).
On the back of these requirements, more than half of those surveyed also agreed that Labuan IBFC retains a favourable reputation as a domicile, with more than 30% agreeing that the midshore jurisdiction is a “strong” captive domicile.
Mr Azlan said Labuan IBFC is one of the fastest growing risk management centres in Asia, adding that it is the only jurisdiction in Asia that offers protected cell companies and Shariah-compliant captives.
Labuan IBFC recorded aggregated written premiums of US$348.6 million in its captive insurance sector last year, a 7% decline from 2015 due to a decrease in gross premiums generated from the engineering sector. Despite the fall in total gross premiums, the total earned premium for captive insurance business increased by 18.8% to $252 million (2015: $212.1 million), due to higher retention in all sectors.
