In New York, putting Malta on the radar for the post-Brexit scenario

It is evident that opportunities to attract investment in Malta from the bullish US market are rich but need to be properly nurtured. The harvest is ripe for those who venture forth.  

It is pertinent, to note how with the support of Finance Malta, Bee Insurance Management and a line of international speakers, PKF participated in a promotional event to promote captives in New York on 29 March 2016.  

This was one in a series of events to promote Malta as a domicile of choice. The New York event was well attended and attracted a gathering of insurance consultants, risk managers and legal advisers in the field.  

It put Malta on the radar as a place where to domicile in Europe post Brexit. We are pleased that the event created interest from large captive managers the likes of AON, JLT Marsh and R&Q.  

In attendance were industry service providers providing technology solutions the likes of Verisk Insurance Solutions, Intralinks and Rante, apart from legal firms, investment managers, banking executives from Wells Fargo and Barclays, rating agencies and heads of state regulation in Delaware. 

Tax experts from PKF office in New York explained in simple terms what it entails, how to survive Fatca and CRS - essentially what risk managers should look out for.  The momentum generated by the first event, encouraged us to step up our efforts in promoting Malta as a domicile of choice for European Captives. 

Logically, it is important to maintain momentum and to do so PKF decided to participate in a sequel.  This is the Captive Owners Summit organised by Captive Review in Essex Place - a prestigious conference Centre in New York.  

The aim is to continue spreading the word about Malta’s unique benefits.  This is planned to take place on 31 October 2016.  

This is a highly exclusive, educational and networking event for prospective captive owners from leading US based companies. This event will provide investors with all the information needed for successfully setting up and running a captive, through one day of in-depth presentations, panel debates, case studies and round-table discussions.  As a closed gathering of prospective captive owners, there will also be plenty of time, space and privacy for networking with other professionals who share business goals and vision, via a series of formal and informal receptions and activities.  

Finance Malta being at the forefront to stimulate investment concurs that this initiative helps Malta remain a compelling proposition for prospective investors seeking to establish or extend their footprint in Europe. 

Talking of networking, it is opportune to recall how last year saw the final touches by EU insurers to convert their systems to comply with complex Solvency II rules.  

To help assess the level of preparedness for such novel regulation, a compliance survey was conducted by PKF last year. This was circulated amongst all local Maltese registered firms.  The target population included all firms licensed by the MFSA in 5 categories: Insurance Principals (Insurers and Reinsurers), Affiliated Insurance Companies (Insurers and Reinsurers) and Protected Cell Companies (PCC), thus a total of 58 firms.  

Essentially, the general feel amongst the insurance companies was that the Solvency II regulation was deemed to be a significant improvement (91.67%) over Solvency I in maintaining the solvency and financial integrity of insurers or reinsurers. Most of the firms also consider this regulation as “helpful” as it assists them to maintain discipline and monitor risks. Another follow up measure to last year’s survey, is to assess the ease of reporting by designing a QRT readiness questionnaire. 

One augurs that the risk-based approach of Solvency II will serve as a catalyst for risk managers overseeing that capital and the value allocation thereof is properly aligned to underwriting criteria.  

The internal model to assess solvency limits will eventually become part and parcel of the decision making process, even going into specifics relating to classes of business written and feasibility thereof in terms of the group’s risk appetite.  

In another initiative to attract US business in an exciting sector of Innovation and Research, a delegation from PKF advisory division has booked a second visit to the Massachusetts Institute of Technology (MIT) in Boston.  This is timed a few days after the conclusion of the Captive event in Essex Place.  The Massachusetts Institute of Technology (MIT) does not need any introduction.  It is common knowledge that it is a private research university in Cambridge, Massachusetts founded in 1861 in response to the increasing industrialization of the United States.  In its innovative streak one finds that it adopted a European polytechnic university model and stressed the merits of laboratory instruction in applied science and engineering.  

The uniqueness of MIT is its appetite for problems - especially those intractable, technical problems whose solutions make a permanent difference.  Needless to say that with its supportive campus environment it houses an incredible range of student groups and as part of its diversity and its intensely creative atmosphere, the arts flourish in all their forms. MIT attracts some of the most talented students in the world.  Students are frequently encouraged to bridge MIT’s excellence with public service.  

This initiative follows a previous meeting held this year in conjunction with Malta Enterprise visiting MIT and a sister institution CIC to attract start-ups and innovators interested to join the growing list of resident tenants at the cutting-edge Life Science Park located in San Gwann.  

The government has endorsed this initiative taken by PKF as it wishes the island will become a centre of excellence in scientific breakthroughs and attract more bio technology and oncology clinical research and development.  

Readers who are familiar with MIT may conclude that if successful, this initiative will create a link to another educational milestone in Malta - The Sadeen American University at the Zonqor campus supported by the University of Chicago.  

Certainly, multiplicity of tertiary educational facilities is a step in the right direction to diversify our intellectual property and in the short term, we hope to attract medical students to partake in Bart’s medical school.  

Back in the US, MIT is no stranger to accolades - it is rated as the world’s best university in chemistry; economics; linguistics; materials sciences; and physics and astronomy.  

Needless to say this impressive learning institution is the pride of the American intelligentsia and many countries are trying to emulate its success.  

The mind boggles how MIT exceed in other diverse disciplines such as accounting and finance, art and design, biological sciences, earth and marine sciences and mathematics.  

The lobby of inventors, researchers and venture capitalists closely follow announcements and papers presented by scholars at MIT and some of these end up being turned into economic success when taken on board by entrepreneurs to monetize such concepts.  

One of the disciplines at MIT that mirrors the Malta government policy is that of research and development in the oncology studies and bio technology sphere which is being actively promoted in Life Sciences park at San Gwann.  

With the help of both Malta Enterprise and FinanceMalta one augurs that the Captive Insurance event and the CIC initiative will gain traction and attract fruitful investment from New York.

George Mangion is a senior partner of an audit and consultancy firm, and has over twenty-five experience in accounting, taxation, financial and consultancy services. His efforts have seen that PKF has been instrumental in establishing many companies in Malta and placed PKF in the forefront as professional financial service providers on the Island.

George can be contacted at [email protected] or on +356 2148 4373