A Market Driven By Stability And Innovation

Insurance was never the most glamorous of financial sectors. In fact, it is broadly seen as an industry quietly ticking away in the background, a necessity, but hardly an exciting topic of conversation, says Matthew Bianchi

"However, Malta's captive insurance market over the past two decades has been anything but dull."

As the partner leading the insurance pillar within the Malta Financial Services Advisory Council strategy, Dr Bianchi has enjoyed a panoramic view of this transformation.

"The growth of this market happened because at one specific point in time, everything was in Malta's favour," he says. "It was as though the stars aligned for this sector."

Today, Malta's insurance industry reflects a mature, forward-looking market grounded in robust regulation while offering a competitive edge in innovation and operating costs. The sector will soon be strengthened further with the introduction of pension reform, which will, for the first time, bring auto-enrolment schemes.

Innovative structures such as Protected Cell Companies (PCCs) and Incorporated Cell Companies (ICCs) have given Malta a distinct advantage within the broader EU captive market. The industry is further complemented by the Insurance Managers, offering captives management solutions.

From a niche segment of financial services, the captive insurance sector has evolved into one of Malta's most dynamic and internationally respected industries, home to innovative structures, Fortune 100 captive firms and a legislative framework that stands out within Europe's more traditional insurance landscape.

Dr Bianchi emphasises that "captive insurance companies are generally not attracted to Malta for fiscal reasons, but because we have managed to build a robust ecosystem of service providers and a regulatory regime that is sophisticated and, at the same time, very stable."

When asked about competition, Dr Bianchi notes that today's international corporate groups seek only the most credible captive domiciles. "Malta is well placed in the EU among jurisdictions like Ireland and Luxembourg," he says.

"Dublin is an established captive domicile, thanks to the English language and its North American connections, though the sector there faces high wages and more traditional captive structures. Luxembourg offers a continental base, but with most legislation in French or German, often a drawback for international players."

"Malta, on the other hand, can be considered as an all-rounder, with English being one of our first languages, offering robust regulations and, at the same time, innovative solutions. Malta also offers captives the opportunity to be managed by insurance managers, boasting some of the most respected names in the insurance industry."

"Added to this, the regulator is also committed to applying a more proportionate level of regulation and supervision when it comes to captives. Finally, wages are also an attractive feature of the Maltese jurisdiction, offering a more competitive edge compared to other jurisdictions."

"Another advantage is that the regulator works closely with regulated entities and promotes an open-door policy whilst balancing its role as the authority regulating and supervising the insurance industry. This approach ensures accessibility and open communication with the regulator, which makes it an important aspect for financial services in general and without exception the captive insurance sector."

Malta's success, he says, is rooted in its innovative spirit.

"Whenever there was openness and commitment to innovation, Malta always flourished." He recalls 2007 as a pivotal year, when Malta introduced cell regulation, allowing multiple captive participants to operate within a single company structure.

"At the time, it was a bold step and we knew it. We saw an opportunity to position Malta uniquely within the EU and it eventually made Malta the only EU jurisdiction offering such flexibility."

Today, the island hosts around 150 cell companies supporting captive operations, an achievement Dr Bianchi describes as"remarkable."

Brexit also created new opportunities, as Malta was shortlisted, and in some cases chosen, as an insurance domicile for entities seeking EU continuity post-Brexit.

However, the sector's success has brought new challenges, particularly in attracting young talent.

"Malta has one of the lowest unemployment rates in the EU, and this makes it harder to attract younger generations to consider finance, and especially insurance, as a career," he explains.

"It's a persistent challenge across sectors, but particularly true for captive insurance, which operates quietly and without much fanfare."

He believes the education system must adapt by introducing financial and insurance-related subjects at a younger age.

"There's ample opportunity in this sector. We need to capture young people's imagination early and nurture their interest. The insurance industry is now pooling resources to sponsor educational programmes and promote the sector as a prestigious career choice."

Despite being a small island, Malta remains well-connected, with its own national airline and several international carriers linking it to Europe and beyond.

"The recent direct connection between Malta and New York will further enhance our appeal," he adds.

In the wake of Malta's past grey listing, Dr Bianchi acknowledges that Malta has shown resilience and the island's strengths remain undeniable.

"The challenges are real, but they are part of a larger story," he says. "Malta has built a regulatory framework, innovative structures, and an accessible environment that continue to attract forward-looking companies. The fundamentals are strong, and the potential is immense."

Ultimately, he believes Malta's captive insurance market remains in the right place at the right time.

"If the stars aligned to create this dynamic sector in the first place," he concludes, "there is every reason to believe they can align again for its next chapter of growth."

Disclaimer: This article was first published in "The Sunday Times" on 16/11/2025.

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