ASEAN KEY DESTINATIONS
Captive industry grows 23% annually
The captive insurance industry in Singapore has seen good growth over the past years, recording average annual growth rate of near to 23% since year 2000, Teo Swee Lian, deputy managing director of the Monetary Authority of Singapore (MAS), the central bank, said at a conference on alternative risk management solutions.
As a means of self-insurance, the captive insurance concept is well-rooted in Western countries with corporates who choose to self retain some of their insurance risks by setting up their own insurance company.
But it is still very nascent in Asia, except in Japan and Australia. Statistics show that top Asian companies only have a 27% take-up rate of captives compared to 77% in the United States, according to Teo.
"Captive insurers being self-insurance vehicles also place importance on an efficient tax regime to minimize costs. Singapore has a wide network of double tax agreements with over 50 countries around the world, which gives advantage to tax recognition," Teo added.
Another key factor is that Singapore has a critical pool of international reinsurance players, with 16 of the top 25 global players having a presence here, which makes for easy access to international reinsurance, according to the official.
Experts pointed out that as Asian corporates become more sophisticated and embrace enterprise risk management, there is great potential for growth in the captive insurance industry.
Teo said that the Singapore government committed to helping foster greater risk awareness and working with industry to continue to develop a conducive business environment to help facilitate innovative and efficient risk management solutions for all corporations. Xinhua