Takaful Malaysia to continue growing steadily with resilient earnings prospect
KOTA KINABALU: Syarikat Takaful Malaysia Bhd (Takaful Malaysia) has been projected by analysts to continue growing steadily with resilient earnings prospect, despite potential industry headwinds.
The research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) noted that despite the current market uncertainties as well as deregulation of the industry, Takaful Malaysia’s year to date (YTD) performance has shown strong progression, thus maintaining the group’s foothold in the takaful market.
As per Takaful Malaysia’s filing on Bursa Malaysia, profit after zakat and tax amounted to RM202.5 million for the nine months ended September 30, 2018, an increase of 36 per cent from the corresponding period of the previous year.
MIDF Research thus expected Takaful Malaysia to maintain its performance in financial year 2019 (FY19), albeit at moderating pace, despite potential industry headwinds such as the de regulation of motor and fire insurance, as well as government focus in pushing for affordable insurance products.
The research arm also opined that Takaful Malaysia is optimised to continue to grow steadily as driven by rapid expansion of the group’s digital platform and the increasing up-take of Islamic financials products and services.
“Moving forward, we expect the group’s digital platform to continue providing support for customers’ acquisition,” MIDF Research said.
“We see the growth of online transaction to be strategic, enroute to optimising the group’s operational structure in the long run.”
Meanwhile, the research arm of Kenanga Investment Bank Bhd (Kenanga Research) continued to believe that the growth momentum of Takaful industry premium should outpace the conventional insurance given its low penetration as well as resilient demand for Takaful products.
“To defend its turf as the fourth biggest market player in the combined Life insurance and Family Takaful business, the group’s main focus remains on strengthening its foothold from the perspective of customer reach, operational agility, cost competitiveness as well as maximising value to shareholders.
“Note that the group has also been amplifying its presence through various marketing activities (including online initiatives) as well as promoting its unique proposition with 15 per cent noclaim rebate; with the latter to attract the right customers with good claim experience,” Kenanga Research noted.
On a side note, MIDF Research believed that with the current weakness in Takaful Malaysia’s share price, it is a good opportunity for investors to have exposure in the growing takaful market.