New Takaful Licences

PETALING JAYA: Several international organisations were among four joint venture companies that were issued new family takaful licences following the approval from the Finance Ministry, Bank Negara said yesterday.

Those getting the licences are the joint ventures between

American International Assurance Bhd (70%) and Alliance Bank Malaysia Bhd (30%);

AMMB Holdings Bhd (70%) and Friends Provident Group plc, UK (30%);

ING Management Holdings (M) Sdn Bhd (60%), Public Bank Bhd (20%) and Public Islamic Bank Bhd (20%);

The Great Eastern Life Assurance Company Ltd (70%) and Koperasi Angkatan Tentera Malaysia Bhd (30%).

The four new licences, issued under the Takaful Act 1984, were given based on the applicants’ financial soundness and resilience, track record, expertise, business plan and contribution towards local financial sector development, Bank Negara said.

“The new family takaful operators have strong value propositions that will further enhance the development of the family takaful industry in Malaysia.

“This will help in penetrating untapped areas of business within the family takaful industry including microtakaful, medical and retirement products,” the central bank said.

It also said the new family takaful operators would also contribute strongly towards reinforcing Malaysia’s position as an international Islamic financial hub.

Bank Negara said that following the announcement in April last year on the issuance of two family takaful licences under the liberalisation of the financial services sector, it had received several strong applications for the family takaful licences.

“There are tremendous growth opportunities for the insurance and takaful industry in supporting the requirements of the economy,” it said.

An industry observer lauded the central bank’s move.

“The penetration rate for takaful in Malaysia is around 10% compared with conventional insurance which stands at around 40%.

“With more players coming in, competition will be steeper but customers can enjoy better pricing for the (takaful) products.”

An analyst said the joint-venture companies issued with the licences had the expertise to boost the local takaful industry.

“These are established players that can add value and depth to the takaful market.”

Another analyst said the move by Bank Negara was in line with the Government’s aim of making Malaysia an international Islamic financial hub.

“With the issuance of the licences, Malaysia is a step closer towards achieving that goal.”

Previously, there were eight existing takaful operators in Malaysia, namely

CIMB Aviva Takaful Bhd,

Etiqa Takaful Bhd,

Hong Leong Tokio Marine Takaful Bhd,

HSBC Amanah Takaful (M) Sdn Bhd,

MAA Takaful Bhd,

Prudential BSN Takaful Bhd,

Syarikat Takaful Malaysia Bhd and

Takaful Ikhlas Sdn Bhd.