Zainudin said: “If the situation in the eurozone worsens and causes the reinsurers to hike their pricing, then the takaful and insurance companies including those in Malaysia would likely see higher prices for takaful and insurance products.”
Growth wise, he said the new Financial Sector Blueprint (2011-2020) would provide the impetus for the takaful industry to grow further by promoting access to other financial services sectors by introducing a range of directives, guidelines and best practices that would indirectly facilitate and drive its growth.
Among the recommendations in the blueprint were to develop a vibrant private pension industry for retirement and old age and the provision of wealth management products and services to cater to the demand of the growing affluent segment.
The industry experienced a compounded average growth rate of 27% in terms of net contributions between 2005 and 2010, with family takaful driving the growth at 28% for the same period.
Family takaful growth dominated over 80% of the total takaful market in 2010, and MTA was upbeat on the continued strong growth momentum, underpinned by rising affluence amid strong economic fundamentals.
Given the large untapped market that still exists with only 54% of the population having a life insurance or family takaful policy, the takaful industry was poised to benefit in years ahead, Zainudin added.
He said some of the major issues in the industry were inadequate investment instruments to meet the needs and demands of businesses as well as the shortage of talent.
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