TAKA­FUL TO GROW TO 20% MAR­KET SHARE SOON

Insurance - - INDUSTRY UPDATES -

AC­CORD­ING to Malaysian Taka­ful As­so­ci­a­tion (MTA) chair­man Zain­udin Ishak, the Malaysian taka­ful in­dus­try is con­fi­dent of cap­tur­ing 20% of the to­tal in­sur­ance/taka­ful rev­enue pie soon if 2012 per­for­mance is an in­di­ca­tor. Last year, fam­ily taka­ful reg­is­tered new busi­ness gross con­tri­bu­tion of RM3.5 bil­lion, a 30% growth com­pared to the RM2.7 bil­lion reg­is­tered in 2011. He added gen­eral taka­ful reg­is­tered a 9.2% gross con­tri­bu­tion growth to RM1.75 bil­lion com­pared to 2011, with mo­tor taka­ful con­tribut­ing 54.6% of to­tal gross con­tri­bu­tion for this sec­tor. The over­all net claim ra­tio dropped to 57.4% in 2012 com­pared to 66.1% in 2011. The lat­est Fi­nan­cial Sta­bil­ity and Pay­ment Sys­tems Re­port 2012 re­leased by Bank Ne­gara Malaysia (BNM) noted that to­tal as­sets of taka­ful funds grew by 12.4% to RM19 bil­lion, with to­tal taka­ful con­tri­bu­tions ac­count­ing for 13.6% of to­tal pre­mi­ums and con­tri­bu­tion in the in­sur­ance

and taka­ful in­dus­try. The re­port said the fi­nal risk-based cap­i­tal (RBC) frame­work for taka­ful op­er­a­tors was is­sued to sig­nif­i­cantly strengthen the pru­den­tial frame­work for taka­ful op­er­a­tors to be on par with stan­dards ap­pli­ca­ble to the in­sur­ance in­dus­try. The full com­pli­ance with the RBC frame­work for taka­ful op­er­a­tors will take ef­fect from Jan 1, 2014. The re­port added that dur­ing 2012, BNM strength­ened ex­ist­ing re­quire­ments on prod­uct ad­vice in the life in­sur­ance and fam­ily taka­ful sec­tors. Apart from BNM’s ini­tia­tives, MTA has in­tro­duced sev­eral guide­lines in 2012 to en­sure that the taka­ful in­dus­try is at par with the con­ven­tional in­sur­ance ca­pa­bil­ity. MTA was set up to pro­mote the in­ter­ests of its mem­bers and to su­per­vise the ex­er­cise of self-reg­u­la­tion within the taka­ful in­dus­try.

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