Insurance

Malta’s insurance sector is traditionally the third pillar of its financial services industry, following asset management and banking.

The country’s strong regulatory framework, competitive costs and innovative structures, such as Protected and Incorporated Cell Companies, have attracted numerous insurance undertakings, reinsurance firms, intermediaries, and cells.

With a Maltese licence, companies can operate across the EU, making insurance a dynamic growth industry within the wider financial services sector, with most firms selling insurance to clients outside Malta.

Malta’s insurance companies offer a wide range of coverage, including personal, health, property, motor, travel, liability, and employee protection. The market also includes insurance management firms serving large corporations and providing reinsurance solutions, from global players to boutique firms offering operational and managerial support.

The industry supports over 1,200 jobs and benefits from a network of specialised audit, legal and advisory services.

Additionally, the Government is investing in the development of a dynamic insurtech cluster, leveraging Malta’s cell company framework to test and implement technologies such as blockchain, AI and smart contracts.

The country’s insurance framework provides for three types of insurance companies: standalone insurance or reinsurance (captive) companies, cells within Protected Cell Companies and cells within Incorporated Cell Companies.

Cell Company Legislation

Malta is the only EU country providing for the set-up of cell companies, which allow firms, insurance managers and brokers to underwrite risks through cells within a core company. This structure offers a cost-effective, ring-fenced alternative to establishing a standalone insurance company.

Initially introduced through Protected Cell Company (PCC) legislation, Malta has since expanded the offering to include Incorporated Cell Companies (ICC), giving businesses more flexibility to choose the most suitable framework.

Cell companies are popular due to their cost-efficiency, quick set-up and flexibility. Insurance entities using these structures can operate with a single corporate vehicle containing multiple cells, each with segregated assets and liabilities.

In a PCC, core assets may be exposed to the liabilities of the cells, while in an ICC, core assets are shielded. In both cases, only one licence is required for the core entity, which manages compliance and administration, thus lowering costs. This structure also allows for the sharing of resources, such as staff, across the core and cells, generating potential savings.

Cell structures are ideal for a variety of undertakings, including startups without the capital to set up their own insurance business, non-insurance corporations seeking insurance expertise and large insurance groups looking to consolidate operations while maintaining strict segregation within their portfolios.

While both PCCs and ICCs provide cost-effective alternatives to captive insurance companies, the key distinction is that PCCs are structured as a single legal entity, whereas each ICC cell is an independent company with its own legal status and regulatory requirements.

As financial stakeholders increasingly recognise the benefits of cell structures, the sector is expected to continue expanding, with Malta at the forefront of this growth.