Monday, February 26, 2024

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62% of Labuan captive premium generated from international business

More than 62% of captive premium in Labuan in 2022 was generated from international insurance business.

The Labuan captive sector has continued to gain momentum with five new captive formed in 2022 bringing the total number of captives to 67 and total gross premiums to US$571m.

“This underscores Labuan IBFC’s prominence as the captive market of choice regionally and globally,” a spokesperson for the Labuan IBFC, told Captive Intelligence.

“The captive market in Labuan has traditionally attracted interest from corporates and GLCs within the Asian region, with recent captive premiums mainly derived from Indonesian and Japanese businesses.”

The five new captives formed in Labuan last year were approved to underwrite agricultural and fire-related risks.

In a long read published in June, Captive Intelligence reported Labuan is set to allow some captives to write third-party risk, in addition to the risks of its owner or members, in the case of association captives.

This will likely make the domicile a more attractive proposition for new formations or re-domestications.

Abie Pua, principal officer of Labuan-domiciled Howden PCC (L) Bhd and head of risk consulting at Howden Broking, said that talent recruitment, especially for personnel with experience in captive consulting and management, was one of the key challenges that Labuan is facing as it tries to grow as a domicile.

“This remains a key challenge as there is not any training or development programme offered by a professional body or institution in the Asia region,” she added.

Pua highlighted that Howden Malaysia is the only team among the Howden Asia offices that can provide full range captive consulting services ranging from captive feasibility studies, captive formation, captive management services, and captive reinsurance placement.

On 1 January 2023, Howden Broking Group (HBG) launched a new captive consultancy and captive management service, in conjunction with Strategic Risk Solutions (SRS).

Pua said the move responds to Howden’s strategic move into the large retail client segment, where captives are an accepted and common means of self-financing risk.

She added it was a natural and obvious extension of Howden’s existing analytics, specialty, large client and reinsurance capabilities in order to benefit the broker’s clients and prospective clients.