Its president and CEO Ab Latiff Abu Bakar said Takaful Ikhlas' family takaful business should grow by another 10% to contribute 70% of its gross contributions in the next three to four years. For the financial year ended March 31, 2012 (FY12), family takaful made up just over 60% of the operators contributions at RM501 million.
Takaful Ikhlas still lags behind the industry average growth where family takaful is the dominant business line in Malaysia, accounting for 77% of the total takaful market in 2010. Between 2007 and 2011, the country's net contribution for family takaful increased at a compound annual growth rate of 20%, outpacing both general takaful and conventional life insurance market.
At a global level, the growth in family takaful continues to outpace that in both general takaful and conventional life insurance. Malaysia makes up more than 70% of the global takaful contributions worth US$1.7 billion.
"With stiff competition among takaful players placing pressure on profitability, the family takaful segment can be seen as a long term sustainable proposition with strong bottom-line returns," Ab Latiff told SunBiz in an exclusive interview recently.
According to him, the attraction of this sector is stability in the form of consistent cash-flow from the participants' contribution compared to the general takaful. Ab Latiff noted the many opportunities that remain unexplored by direct takaful providers like Takaful Ikhlas to scale up the family takaful segment.
One of it is the expansion into corporate or group business which remains under-penetrated but a better way to reach the masses at a faster and cheaper rate, he said.
"This would be the low hanging fruits. Family takaful is for the long haul and would take time to escalate but the group businesses would compliment the family segment in the short term," he said.
Takaful Ikhlas will also look to introduce new products packaged with Islamic services to further grow its family takaful segment.
"We will sign a memorandum of understanding in June where we have the Islamic services bundled with our products," Ab Latiff said.
Takaful Ikhlas is also looking at strengthening its distribution channels with focus given to family agency. The strategies will include looking at new areas of penetration such as Generation Y and non-Muslim market, equipping the distribution channels with the right tools through technology and developing the right products to suit the target market segments.
Takaful Ikhlas has about 3,500 agencies from its family takaful division and will also be introducing different channels to increase its sales. The company will also be recruiting non-Muslim agents to attract the non-Muslim businesses, he said.
Established in 2003, Takaful Ikhlas is a wholly-owned subsidiary of MNRB Holdings Bhd and has attracted 1.8 million participants comprising individuals and companies.
For FY12, Takaful Ikhlas' net profit fell to RM8.5 million from RM8.9 million the previous year, while gross contribution also dropped 8.5% to RM695.4 million from RM760.1 million.
No comments:
Post a Comment