France is emerging as an important market as Malta's insurance management industry continues to attract new customers, both pure captives servicing their parent and associated companies, and direct writers with a broader client base. At least eight French insurers are registered on the island, including Peugeot, Renault and Axeria, and more are showing interest, industry sources say.
The number of French insurers may actually be one or two more. Some are constituted as cells in one of the three protected cell companies (PCCs) operating in Malta: Atlas Insurance PCC, AON's White Rock Insurance (Europe) PCC, and French-owned Axeria Life International PCC. One cell is French, according to information obtained. But the origin of six of the remaining nine cells was not available; one or more may be French.
Protected cell companies hold assets in one or more separate cells. Organisations which are not large enough to set up a captive may use a "captive-type" structure.
The first French insurer was registered in Malta in 2007, more than two years after the first captives were established here in 2005. The other seven all set up on the island last year. Mark Salmon, general manager of AON Insurance Managers (Malta), says he understands why.
"What is happening with the French is the same thing we saw with the Germans," he explains. "Once the first one or two large companies located their insurance operations in Malta, other businesses started looking as well. And the French companies which have come here include some very big, well-known names."
These include Peugeot, Renault and insurer Axeria. There is now a critical mass of French businesses represented here, and this in itself is marketing the benefits Malta offers. This is a good thing. Sources in the industry have said that the French do not like to be actively marketed to; "strong sales pitches do not go down well in France," they say.
The Malta Financial Services Authority is doing very little to market the Malta domicile to French firms, but its chairman, Joe Bannister, said it has participated in technical breakfast meetings where it has used the opportunity to present Malta to French risk managers - the people who are likely to drive any insurance-related decision.
"Like the British, Germans and others, the French are coming to Malta to benefit from the advantages of a well-regulated sector, an approachable yet respected regulator, the availability of all the skills financial firms require and the EU-approved tax structure," Prof. Bannister says.
Other factors also come into play. Sources close to the French industry claim that this influx is partly due to increased confidence in Malta as a financial services jurisdiction. "French companies moved cautiously, waiting for Malta to clear its tax system with the EU before beginning to make a move and deciding to use Malta for financial services after seeing a number of high-profile companies like BMW move in."
The Mission Économique de La Vallette - the business arm of the French Embassy - also published a study of and guide to financial services in Malta. This has gone a long way to establishing Malta as a serious and trustworthy jurisdiction for French businesses, the sources added.
"Malta is a mature market for much of French industry," they say. "French wines, foodstuffs and cars are well established here. It is good that French financial services firms are also turning to Malta."
Overall trends show an accelerating development in the Maltese insurance arena. Last year, registered insurers almost doubled, from 22 in December 2007 to 43 in December 2008. Many establish themselves as direct writers, catering to a broader market than captives do, and increasingly a number of the insurers are choosing self-management over the services of insurance managers.
Prof. Bannister points out that while we may now be enjoying the attention of some of the most respected French companies, businesses from around the world, including many from outside the EU, are also showing interest in Malta. That interest goes beyond insurance: an unknown number of firms are locating other unregulated services, including treasury operations, on the island.
The number of French insurers may actually be one or two more. Some are constituted as cells in one of the three protected cell companies (PCCs) operating in Malta: Atlas Insurance PCC, AON's White Rock Insurance (Europe) PCC, and French-owned Axeria Life International PCC. One cell is French, according to information obtained. But the origin of six of the remaining nine cells was not available; one or more may be French.
Protected cell companies hold assets in one or more separate cells. Organisations which are not large enough to set up a captive may use a "captive-type" structure.
The first French insurer was registered in Malta in 2007, more than two years after the first captives were established here in 2005. The other seven all set up on the island last year. Mark Salmon, general manager of AON Insurance Managers (Malta), says he understands why.
"What is happening with the French is the same thing we saw with the Germans," he explains. "Once the first one or two large companies located their insurance operations in Malta, other businesses started looking as well. And the French companies which have come here include some very big, well-known names."
These include Peugeot, Renault and insurer Axeria. There is now a critical mass of French businesses represented here, and this in itself is marketing the benefits Malta offers. This is a good thing. Sources in the industry have said that the French do not like to be actively marketed to; "strong sales pitches do not go down well in France," they say.
The Malta Financial Services Authority is doing very little to market the Malta domicile to French firms, but its chairman, Joe Bannister, said it has participated in technical breakfast meetings where it has used the opportunity to present Malta to French risk managers - the people who are likely to drive any insurance-related decision.
"Like the British, Germans and others, the French are coming to Malta to benefit from the advantages of a well-regulated sector, an approachable yet respected regulator, the availability of all the skills financial firms require and the EU-approved tax structure," Prof. Bannister says.
Other factors also come into play. Sources close to the French industry claim that this influx is partly due to increased confidence in Malta as a financial services jurisdiction. "French companies moved cautiously, waiting for Malta to clear its tax system with the EU before beginning to make a move and deciding to use Malta for financial services after seeing a number of high-profile companies like BMW move in."
The Mission Économique de La Vallette - the business arm of the French Embassy - also published a study of and guide to financial services in Malta. This has gone a long way to establishing Malta as a serious and trustworthy jurisdiction for French businesses, the sources added.
"Malta is a mature market for much of French industry," they say. "French wines, foodstuffs and cars are well established here. It is good that French financial services firms are also turning to Malta."
Overall trends show an accelerating development in the Maltese insurance arena. Last year, registered insurers almost doubled, from 22 in December 2007 to 43 in December 2008. Many establish themselves as direct writers, catering to a broader market than captives do, and increasingly a number of the insurers are choosing self-management over the services of insurance managers.
Prof. Bannister points out that while we may now be enjoying the attention of some of the most respected French companies, businesses from around the world, including many from outside the EU, are also showing interest in Malta. That interest goes beyond insurance: an unknown number of firms are locating other unregulated services, including treasury operations, on the island.