TAKAFUL TO GROW TO 20% MARKET SHARE SOON
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.