In 2018, Labuan added 5 new captives, achieving 2 consecutive years of growth since 2016 and becoming the fastest-growing captive market in the Asia-Pacific region.

In 2014-2015, there were 40 captives in Labuan. Labuan reversed the decline that began in 2016 (when it lost 1 captive) and added 4 more captives in 2017. By the end of 2018, there were 48 captives in Labuan, ranking No. 2 in the Asia-Pacific region and closing the gap with the No.1 Singapore captive market.

The captive insurance business continued to grow in 2018 for the 5th consecutive year, with total gross premiums up 11% to USD400.5 million, 67.4% of which came from foreign business. Six new captives were established in 2018, all of them Asia-based.

An analysis of captive premiums shows that captives mainly underwrite special risk insurance products, and the share of special risk has risen year on year. In 2018, excluding the conventional fire, marine, engineering and motor insurance lines, special risk accounted for over 61%, far more than the 34% recorded by conventional commercial insurers in Labuan.

The rapid growth of Malaysia's Labuan captive market has benefited from its flexible captive supervision policy and proactive market promotion strategy.

The captive forms permitted by Labuan FSA include the mainstream captive structures used worldwide, including pure or single-parent captives, group or association captives, protected cell captives (PCCs) and multi-owner captives. It provides access to the region and to Malaysia’s strong direct insurance market. Captives in Labuan IBFC may obtain reinsurance cover from any reinsurance company, and captive insurance entities may also write third-party risks and life insurance within the parent group, subject to approval by the regulator, the Labuan Financial Services Authority (Labuan FSA).

Malaysia's position as the largest Takaful (re)insurance market worldwide gives Labuan another unique advantage. By the end of 2018, Labuan's insurance sector remained strong, with total gross written premiums posting a significant increase to USD1.7 billion, up 19.1% from the previous year. Foreign insurance business accounted for 64.7% of the total premiums underwritten.  22 insurance and insurance-related entities were approved, comprising six captives, 13 brokers, two (re)insurers and one underwriting manager, bringing the total number of approved Labuan insurance and insurance-related entities to 216.

During 2017-2018, Labuan IBFC actively promoted captive business and held several marketing seminars in mainland China, Hong Kong and Singapore. On March 19, 2019, Labuan FSA signed an MOU with the CBIRC in Beijing.

In 2018, among other Asia-Pacific captive markets, mainland China and Hong Kong had 8 captives after Hong Kong added 1 more. Although no new captives were established, Singapore retained its position as the No.1 captive domicile in the Asia-Pacific region, with 71 captives in total.