MFSA participates in global captive insurance summit amid renewed growth in the sector

MFSA participated in a global captive insurance summit amid at renewed growth in the sector

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The MFSA was invited to participate in the European Captive Summit, an international conference which brings together top names from the captive insurance industry.

The Summit, which was held virtually, was organised by Captive Review, which is considered to be an authority in the field of captive insurance, in partnership with the European Captive Insurance and Reinsurance Owners Association (ECIROA).

Captive insurers are insurance companies purposely set up to insure the risks of its parent Group as a part of a wider risk management strategy.  Malta is well recognised as a jurisdiction for onshore captive insurance solutions. The captive insurance industry is re-entering a cycle of popularity, amid hardening in the insurance sector, which was accelerated by the coronavirus pandemic and a reduction in the market capacity.

Ray Schembri, the MFSA's Head of Insurance and Pensions Supervision, participated in the closing session of the conference, held on Wednesday, which included virtual panel discussions, roundtables and interactive workshops.

The summit aimed to tackle the most pressing topics now facing the industry, with participants including representatives from various multinational corporations, such as Airbus, Nestle and Adidas.

During the conference, Ray Schembri answered questions sent to the panel by the conference participants – made up mainly of insurance captive owners and their representatives, but also included insurance brokers and consultants. His contribution focused on the increasing interest in Malta’s insurance sector and the rise in activity being experienced.  He also addressed the mitigation measures put in place by the MFSA to deal with the effects of COVID-19 on the regulator and on the industry, whereby technological tools put in place by the MFSA allowed the regulator to ensure business continuity through the crisis while allowing the industry more flexibility.

“The MFSA’s contingency plans enabled us to continue working uninterrupted during the coronavirus period. We were also able to remain close to the insurance sector and to provide a degree of flexibility when it came to reporting deadlines, electronic sign-offs and virtual board meetings.”

In comments to BusinessToday, Ray Schembri highlighted that, in the current climate, captive insurance was becoming a sought-after option for large corporations to insure their own risk.

“The captive insurance concept tends to go through certain cycles. In recent years, the insurance industry experienced relatively soft market conditions which somehow limited the appeal of alternative risk management strategies such as captive insurance solutions. However, now, the rapidly hardening market conditions are making it more attractive for corporations to invest in their own captive insurance company,” he said.

Joining the MFSA's Head of Insurance and Pensions Supervision in the closing session were Jeremy Quick, Banking and Insurance Division director at Guernsey Financial Services Commission – the financial services supervisory authority in Guernsey, and Malcolm Cutts-Watson, founder and managing director of Cutts-Watson Consulting, which specialises in captive insurance consultancy.

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