The Maltese financial services jurisdiction, particularly the insurance sector, was extensively reviewed in the first of a new series of domicile reports published by Commercial Risk Europe. The point of these reports is to provide readers with the latest news, views and analysis in the world of captives, alternative risk transfer and finance and the rise of the insurance and reinsurance securitisation market.
The start-point of this publication on Malta was the Malta International Risk Congress (MIRC) that was hosted in partnership with the Malta Financial Services in Malta earlier this year.
In an extensive report, Malta is described as having followed a consistent and successful growth path in financial services for the last 20 years, not least in insurance. This has been based on a combination of high quality but open door regulation, membership of the European Union and a willingness by the regulator to innovate with the introduction of vehicles such as PCCs, ICCs and most recently RSPVs. The World Economic Forum's Global Competitiveness Index 2014-2015 ranked Malta 15th out of 144 countries for its financial market development.
Malta's insurance industry continues to grow despite the ongoing financial problems in Europe and worldwide, soft European and international underwriting conditions, and a brake put on new captive formations because of uncertainty surrounding the introduction of Solvency II—Europe's new capital adequacy and reporting regime—next year.
The report notes that a combination of local and international market growth led to record levels of premium posted during 2014, in which companies wrote some €2.82bn in gross premiums—up from €2.58bn in 2013 and €2.31bn in 2012.
The decision by the Maltese government and MFSA to use Malta's membership of the European Union and introduce user-friendly rules for PCCs, ICCs and now RSPVs to attract cross-border insurance business appears to have paid off.
Premiums for risks based outside Malta rose from €1.2bn in 2010 to close to €2.5bn by the end of 2014. International insurance business now accounts for some 85% of the total gross written premium. Local premiums also increased.
Commercial Risk Europe's Report also features an extensive interview with the MFSA Chairman, Prof Joe Bannister. It tackles various issues revolving around the industry, including the challenges faced in a difficult and competitive, global financial environment, innovation in the market place, development in the insurance and captive sector, growth in the hedge fund industry and the establishment of the EU capital Markets Union.
The full report is available on: https://goo.gl/ns4lK2.
MFSA Newsletter – October 2015
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