Labuan International Business and Financial Centre (Labuan IBFC) approved 11 new reinsurance company licenses in the first half of 2020, of which seven were captive insurance entities.
Captive insurance now represents 31.4 percent of total gross premiums underwritten in Labuan IBFC, amounting to $267.9 million, with 72.8 percent of the total captive premiums from international markets, according to Datuk Danial Mah Abdullah, director-general of Labuan Financial Services Authority.
Speaking in his welcome speech at the third Asian Captive Conference (ACC), Mah added: “This is in line with the status of Labuan IBFC as a regional wholesale risk intermediating centre. In fact, for the first half of 2020, Mah said 64.5 percent of total gross written premiums from Labuan’s reinsurance industry originated from international markets.
“We expect this percentage to increase as we develop Labuan even further as a centre of risk management and reinsurance through innovation,” he added. “Labuan IBFC is the only jurisdiction in Asia that offers protected cell companies (PCC).”
Overall Labuan IBFC saw an increase of more than 50 percent in licensing application approvals for the first half of 2020, taking the total number of licensed entities currently operating in Labuan IBFC to more than 800. The insurance market represents nearly 30 percent of that figure – or 220 entities.
Mah said he remained cautious on the outcome in the second half of the year, but predicted Labuan “will pull through this COVID-19 rollercoaster year on a positive note.”
He added: “We in Labuan FSA are cognisant of the COVID-19 situation. Other than the safety precautionary measures, we have provided regulatory reliefs aimed at alleviating the operational difficulties of the market. We will continue to support the market players during this difficult and challenging time.”
The ACC 2020 is a special virtual edition due to the pandemic and is a collaboration by Labuan IBFC and Pan-Asia Risk & Insurance Management Association (PARIMA). This year, the ACC is hosted as part of the PARIMA Resilience Week of events.
Labuan International Business and Financial Centre, Labuan IBFC, Datuk Danial Mah Abdullah, Labuan Financial Services Authority.