The Labuan International Business and Financial Centre (Labuan IBFC) saw gross written premiums increase by 2.2% to $1.4bn last year compared to 2016.

The underwriting margin contracted to $91.9m due to the increase in catastrophe-related claims during the year, resulting in the overall claims increasing from 35.2% to 63.5%.

As a result, the overall industry profits moderated to $170m in 2017 as compared to $387.3m a year earlier, said a statement issued by Labuan IBFC.

Despite this, the Labuan insurance sector’s financial footing remained sound and stable with a strong solvency margin five times above the regulatory requirements, added the statement.

Of the $1.4bn GWP, 63.2% was retained in Labuan, mainly driven by general reinsurance and captive premiums amounting to $943m and $361m respectively.

The contribution from foreign business increased to 60.9% and it remained as a significant portion of the Labuan insurance sector’s business pie.

Fire risk insurance maintained its dominance with 36.7% of the total premiums.

In 2017, there were 14 insurance and insurance-related new set-ups in Labuan IBFC.