Four new captives in first half for Labuan IBFC

KUALA LUMPUR: Labuan International Business and Financial Centre (Labuan IBFC) envisages a positive trend in the take-up of captive insurance following four approvals in the first half of the year.
The midshore centre is also one of the financial centres in the Asian region to approve the most captive entities last year.
To date, there are a total of 47 captives approved by Labuan Financial Services Authority (Labuan FSA).
Labuan IBFC Inc chairman Datuk Mohammed Azlan Hashim said Labuan IBFC is one of the fastest growing risk management centres in Asia. This is evidenced by the fact that it is one of the financial centres in the region that approved the most captive entities in 2017, with more than 60% of the premiums are non-Malaysian.
“A total of six captives were approved by Labuan FSA and a total of gross premium of US$360.9 million (RM1.5 billion) was underwritten last year,” he said in a statement.
Reflecting on the growth of captives in Labuan IBFC, Azlan noted that in the first half of 2018, Labuan FSA had already licensed the same number of captives it did for the entirety of 2017, adding that he hoped this positive trend will see us through the rest of the year.
Azlan said self-insurance tools such as captive insurance could be an ideal option to manage and mitigate new and emerging risks from digital threats.
“Risks are dynamic, and risk profiles in new technology are even more so. Needless to say the risks arising from digital threats are multifaceted. The ability to keep pace in this new digital landscape is no mean feat and perhaps, self-insurance coverage such as captive insurance is an ideal option to manage and mitigate these risks.
“Indeed, captives provides a more flexible and innovative solution and offers the ideal vehicle to ‘incubate’ these risks. It is a unique concept and can be structured according to the needs of the business or according to the characteristic demands of the risk being mitigated,” said Azlan.
Meanwhile, Labuan IBFC Inc CEO Farah Jaafar-Crossby said Labuan IBFC also offers Protected Cell Companies (PCC) and it is only available in this jurisdiction in the Asian region.
“There are also other financial centres in Asia that are currently exploring the use of this structure but the fact that we are the pioneer in the region – having the legislation set in 2010, gives us an edge among our peers in the region,” Farah said.