The Labuan International Business and Financial Centre (Labuan IBFC) has highlighted its resilience and solid performance across sectors despite the unique challenges that 2020 brought.
The Labuan Financial Services Authority was able to remain agile and respond to market needs via a set of pre-emptive temporary measures to alleviate the industry’s burden in weathering the business strains.
The measures are seen as having ensured businesses’ operations remained viable and uninterrupted in serving their clients during the pandemic.
Some of these measures were extended until December 2021 to meet the market needs in its recovery phase.
The insurance sector is seen as having remained resilient and largely driven by captive and reinsurance business.
Overall, the insurance sector demonstrated better performance and profitability, with total premiums underwritten increased by 6.7% to $1.6 billion.
Labuan captive remained a popular risk management tool with total gross premiums recorded 8.7% growth in 2020.
The organisation attributes this growth to the heightened understanding on the business merits of self-insurance solutions in Asia.
Due to a combination of factors on COVID-19 pandemic and the introduction of economic substance regulation, the number of non-licensed companies moderated by about 30% in 2020.
Coupled with higher deregistration, the total active Labuan companies stood at 5,802.
Furthermore, the triggering domino effect of economic slowdown and imposition of travel restrictions drove some knock-on effects on the Labuan aviation leasing business.
While the total industry leased assets declined by 9.9% to $40.7 billion, stabilisation in global oil prices coupled with increasing oil and gas activities, saw this sector of the leasing market growing 196.5% to $1.5 billion in 2020.