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Malaysian takaful industry to reach 20% share of the insurance industry by 2020

Takaful or Islamic insurance is now a growing industry in Malaysia. Takaful is a type of Islamic insurance, where members contribute money into a pooling system to guarantee each other against loss or damage.

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Malaysian takaful industry to reach 20% share of the insurance industry by 2020

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  1. Malaysian Takaful Industry to Reach 20% Share of the Insurance Industry by 2020 Takaful or Islamic insurance is now a growing industry in Malaysia. Takaful is a type of Islamic insurance, where members contribute money into a pooling system to guarantee each other against loss or damage. This industry has been able to sustain its double-digit growth in 2016 and 2017 with the expansion in its policies. The industry is now aiming to reach 20% share of the insurance industry by 2020. Head of takaful operations in Malaysia, Suparno Ahmad, believes that the takaful industry is giving tough competition to industry players. He also states that the phased liberalisation, as announced by Bank Negara Malaysia, would complement the takaful industry with value-added products. Liberalisation of the Motor and Fire Tariff The first phase of the Liberalisation of the Motor and Fire Tariff topped the headlines of online insurance news portals when it was introduced in Malaysia on 1 July 2016 by Bank Negara Malaysia. Now insurers and takaful operators have the flexibility to offer new motor insurance products at market-based pricing and with regards to the risk profile of drivers. They can decide the premium pricing for insurance products. The liberalisation of motor and fire tariff will lead to greater innovation in the insurance products and takaful industry will also get new opportunities to expand its market share. One-Day Conference on Challenges and Solutions: Takaful Industry A one-day General Takaful Agents Convention 2017 was organised by Malaysian Insurance Institute in Kuala Lumpur to discuss and address the challenges and find solutions in general takaful sector. The members of the takaful sector believe that the phased liberalisation will help the sector to offer new innovative products to the consumers at market rates. However, the three types of car insurance policies - Third Party Insurance, Motor Comprehensive Cover and Motor Third Party Fire and Theft Product will continue to be made available to the customers.

  2. Double Digit Growth Will Continue Islamic Finance sector of Malaysia had seen double-digit growth in the past and the operators believe that the sector would continue to grow aggressively going forward. The takaful sector believes they would reach 20% of market share of the insurance industry by 2020 because they now have all the necessary infrastructure and framework in place to boost the sector. Additionally, the phased liberalization of motor and fire tariff has brought in more opportunities for the takaful sector to grow in the coming years. Insurance fraud has been a growing concern in Malaysia, but with the implementation of the tariff liberalization, the number of frauds would be reduced by 20-30%.The motor insurance industry and the takaful sector both will benefit from the liberalisation rule and would grow in the years to come. Want the latest insurance industry news first? Visit www.piam.org.myand get latest updates in Malaysian insurance and takaful sector at one place.

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