Captive insurance rapidly growing in Asia – Swiss Re and Labuan IBFC

Recent captives conference discussed how risk management and captives are evolving

Captive insurance rapidly growing in Asia – Swiss Re and Labuan IBFC

Insurance News

By Gabriel Olano

In the first half of 2019, four new captive insurers were registered in the Labuan International Business and Financial Centre (IBFC) in Malaysia, making it the fastest growing captive domicile in Asia and bringing the total number of captives to 51.

That was one of the main developments discussed in the “Adding Confidence to Captives: Managing Volatility via Self Insurance” conference, held on August 07 in Kuala Lumpur. The conference was organised by Labuan IBFC and Swiss Re Corporate Solutions, and was attended by over 160 delegates consisting of risk management professionals, business owners, corporate leaders, and advisers.

“Risk management in the form of self-insurance or captives is on the rise, due to it being an overall cost-efficient and customisable risk mitigating tool,” said Danial Mah, director general of the Labuan Financial Services Association at the conference’s launch. “Asia in particular has shown tremendous potential for growth in captives over the coming years. The July 2019 AM Best’s Captive Market Report stated that the rating agency expects to see significant growth in the Asia-Pacific domiciles for captives, including Labuan IBFC.”

Mah added that having four new captives join in the first half of 2019 is significant, as it is already two-thirds of the way to matching 2018, when six new captives registered in Labuan IBFC.

“In terms of gross written premiums, Labuan’s captive insurance business increased by 12.8% to US$288 million in June 2019, compared with US$255 million for the same period in 2018,” Mah said, adding that most of the premiums come from Asian markets, particularly from Indonesia and Japan.

“Today we see a rise in demand for captive insurance across the region including Malaysia and expect this to increase as the risk management function advances and the corporate landscape evolves,” said Andre Martin, APAC head of innovative risk solutions at Swiss Re Corporate Solutions. “We look forward to continue working with customers to provide solutions in the captive space and are encouraged by the interest in alternative risk transfer solutions from this event.”

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