From: Captive International
The future looks bright for the Asian captive insurance market in 2021, with at least three domiciles offering attractive captive regimes despite the possibility that 2020 will be lost to the COVID-19 pandemic. Adrian Halter, Bernard Yap, Ji Yao, Ming Lam and Shen Mei Soh of EY examine the outlook for the Asian market.
Asia is a huge growth market for captive insurance. The number of captives in Asia and premium volumes are expected to grow rapidly, because of the hard insurance market and because the world’s economic growth is pivoting toward Asia.
Which of the existing top captive insurance domiciles in the region—Singapore, Labuan or newcomer Hong Kong—will be the winner? Will the answer depend on tax rates, regulatory regimes, geographical location or other factors? And how will this all fit into a wider corporate group’s regional ambitions in Asia-Pacific?
This article discusses the current status and features of these three captive domiciles and how each of them positions itself to capture the expected growth, each in their own unique way.
Captive insurance in Asia
Asia currently accounts for only 3 percent of captives globally, with 168 of the total 6,315 domiciled in Asian jurisdictions, according to the Monetary Authority of Singapore (MAS). Asia, however, has seen a significant growth in recent years, increasing by 30 percent from 129 in 2015 to 168 in 2018.
Singapore’s overall value proposition as a captive insurance domicile remains sound and will be strengthened in the long run.”
Singapore and Labuan lead the number of captives in the Asian region. At the time of writing, Singapore is home to 78 captives while Labuan has 56. Hong Kong, a relatively recent market entrant, has only four captives.