KUALA LUMPUR, May 17 (Bernama) -- AM Best in its new report expects to see significant growth of captive formations in Asia-Pacific (APAC) domiciles as economies grow and businesses seek new and more sophisticated ways of risk management and control.
In the Best’s Market Segment Report, ‘Asia-Pacific Captive Domiciles Poised for Growth’, AM Best looked at the state of APAC captive domiciles and reported that captive insurer growth to date had remained relatively slow, mainly due to the persistently competitive insurance market.
With abundant capacity available at cheaper costs, the benefits of establishing a captive may not seem particularly attractive. A lack of knowledge and understanding of captive insurance also pervades the APAC region.
However, businesses have expanded their use of captive insurance past providing cover for traditional property and liability risks into non-traditional classes of risk, such as cyber and trade credit.
The report stated that as Asia’s economies rose in prominence, fuelled by the growth of small and medium-sized enterprises, captive domiciles in APAC would thrive.
Singapore, Labuan and the Federated States of Micronesia stand out as established captive domiciles while China and Hong Kong, emerging as regulators have been keen to develop captive insurance in their jurisdictions.
AM Best is a global rating agency and information provider with a unique focus on the insurance industry. For more information, contact www.ambest.com.
-- BERNAMA
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