The Labuan International Business and Financial Centre (Labuan IBFC) has charted a 28% increase in premiums for its captive business so far in 2021, an expansion that has included the approval of 18 new captives.
Labuan Financial Services Authority Director General, Nik Mohamed Din Nik Musa, praised the utilisation of protected cell companies (PCCs) as a cost-effective and robust means of gaining traction and operating.
“This could be attributed to a greater appreciation for self-insurance as a component of a dynamic risk management strategy as well as the recognition of its cost advantages in light of the hardening re(insurance) market,” he said.
Farah Jaafar, Labuan IBFC CEO, underlined how this growth of 18 new captives is a marked increase from the 7 incorporated over the same period last year.
“Clearly the harder insurance market already prevailing pre-pandemic and made even harder by the pandemic, has allowed risk management professionals to truly bring the benefits of self- insurance to the fore,” Jaafar remarked.
She added that with cell captives effectively lowering the barrier entry, smaller businesses are able to partake in self-insurance vehicles.
In an effort to ensure diversification and expansion consistent with international standards and best practices, Nik Mohamed Din said the Labuan FSA say they will continue to review the legislation in consultation with relevant stakeholders including industry players
Labuan IBFC is now home to 232 insurance and insurance-related entities including 64 captives, with Asia contributing nearly 92% of total captives and the remaining 8% being based in the US and Europe.
