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Labuan IBFC secures 50 pct of captive formations in Asia in 2018

Last update: 05/11/2019
KUALA LUMPUR, Nov 5 -- The Labuan International Business and Financial Centre (Labuan IBFC) reinforced its position as a market leader in captive insurance, securing 50 per cent in captive formations in Asia last year.

This was revealed via the findings of a white paper by Captive Review titled “Driving Captive Transformation in Asia”.

According to the white paper, the total number of captives in Asia grew by 10 with half of these incorporations domiciled in its jurisdiction, while Singapore came in second with three formations, Labuan IBFC said in a statement today.

It said the paper also revealed 81 per cent of respondents cited regulatory environment as the most important factor in choosing a domicile, which puts the midshore jurisdiction of Labuan IBFC in good stead.

Labuan IBFC noted that it is also home to close to 200 insurance and insurance-related licensed entities, providing an ideal ecosystem for captive formation, as well as management, while the strong banking and corporate services industry provides for a seamless one-stop jurisdiction for captive insurance entities.

Labuan IBFC Inc chief executive officer Farah Jaafar-Crossby said as a midshore wholesale financial intermediation centre, focused on delivering solutions to the Asian marketplace, Labuan IBFC is in good stead to continue being the captive leader in Asia, especially as the requirements of economic substance demand Asian captive owners seek a well-regulated, cost-efficient and facilitative jurisdiction.

“As at mid-2019, Labuan IBFC already registered six captive formations, compared to the five registered for the whole of 2018, reinforcing the study’s findings, which not only indicated an overall growth in understanding the role of captives but the jurisdiction’s ability to continue to attract these risk management vehicles,” she said.

Meanwhile, Captive Review editor Fraser Irving said Asia, often tipped as the next area of opportunity for captive insurance, has shown steady long-term growth over a number of years.

He said while there is yet to be the ‘boom’, the industry is becoming increasingly sophisticated in the region and is definitely here to stay.

The steady overall year-on-year upward trend in Asian captive adoption depicts enhanced maturity and sophistication.

This was demonstrated in the findings with 52 per cent of respondents having heard of protected cell companies (PCCs), while 76 per cent of respondents felt that cell captives are suitable for Asian risk management requirements, he added.


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