The Labuan International Business and Financial Centre ( Labuan IBFC) has revealed that it continued to serve the growing regional insurance sector in 2017, with gross written premiums (GWP) increasing by 2.2% to US$1.4 billion.
Throughout the year, 14 insurance and insurance-related new set-ups launched in the region, although the overall number did decline from 204 in 2016 to 203 in 2017.
Of the $1.4 billion of business underwritten, 63.2% was retained in Labuan, which was mostly a result of general reinsurance and captive premiums totalling $943 million and $361 million, respectively.
Foreign business remains an important part of the region’s insurance industry, increasing its contribution to 60.9% in 2017. Fire risks again dominated with nearly 37% of the total premiums.
Despite the growth in premiums, the underwriting margin declined to $91.9 million as a result of increased catastrophe-related claims, which resulted in the overall claims experience increasing from 35.2% to 63.5%.
As a result, the overall industry profitability totalled $170 million in 2017, compared with $387.3 million a year earlier.
“Despite this, the Labuan insurance sector’s financial footing remained sound and stable with strong buffer of solvency margin 5 times above the regulatory requirements,” says the Labuan IBFC.