In recent times, Asia has been tipped as the next growth area for the captive insurance world. While growth has been steady, there is yet to be the 'boom' spoken about by various commentators.
Of the 6,315 captives placed in various jurisdictions globally, only 168 are domiciled in Asia, according to statistics compiled by this publication. This is 20 more than the 148 recorded in 2016. Singapore and Labuan IBFC lead the way in the region with 73 and 48 respectively, with Labuan IBFC leading incorporations in 2018.
Of the 345 new formations in 2018, Asia is home to 10, significantly less than the 77 in Bermuda and the Caribbean and the 242 in North America.
Despite being home to a relatively small share of the global market, a number of Asian multinationals own captives that are domiciled in international jurisdictions. The potential for captive insurance growth in a region that is experiencing rapid economic expansion still remains.
This white paper will reveal some of the factors that are holding the Asian captive insurance industry back, some of the successes the market has experienced and what the future holds for the region.
In 2018, Captive Review carried out a survey in partnership with Labuan IBFC.
Some of the key findings include:
- A "lack of awareness" was cited by respondents to the survey as the biggest obstacle to new captive formations in the region. Just under half (46%) claimed this was the case, while a soft insurance market and an increasing regulatory burden also fared high up the list.
- When talking about self-insurance, only 15% referred directly to the utilisation of a captive, with most believing it referred to "setting up a fund to pay for losses".
- Regulation was the most important factor for respondents when considering where to set up shop. An overwhelming majority (81%) chose this. Cost followed with 9%.
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