Malaysia Takaful Aimed For 16% Penetration - 2019

Takaful penetration rate among Malaysia's 32 million population is expected to surpass 16 per cent in 2019 from last year's 15.2 per cent, said Malaysian Takaful Association (MTA).

MTA chairman Muhammad Fikri Mohamad Rawi sees the low insurance penetration rate and young demographics as significant market growth opportunities that has yet to be tapped by the takaful sector.

He acknowledged the takaful sector will not, by 2020, be able to achieve the 25 per cent target under Bank Negara Malaysia’s Financial Sector Blueprint 2011-2020.

Takaful is a co-operative system of reimbursement or repayment in case of loss, structured to be Sharia-compliant and as an alternative to conventional insurance.

Nevertheless, MTA, which represent 15 operating member companies, vows to carry on with a host of outreach programmes “to raise awareness among Malaysians the importance of being insured.”

"Last year, the takaful penetration rate among Malaysia's population is 15.2 per cent," he said in a briefing here today. Also present were Takaful Ikhlas General Bhd chief executive officer Eddy Azli Abidin and Syarikat Takaful Malaysia Am Bhd chief executive officer Mohd Sabri Ramli.

"This year, with our outreach programmes among university students and continuous marketing of ‘Perlindungan Tenang’ among low income earners, we hope to reach 16 per cent penetration rate,” said Fikri, who is also Sun Life Takaful chief executive.

Sun Life Takaful is part of Sun Life Malaysia, a joint venture between Canadian insurer Sun Life Financial Inc and Malaysia’s sovereign wealth fund Khazanah Nasional Bhd.

Fikri said 'MTA is ready to give feedback on the ground' when Bank Negara consults players to set the next Financial Sector Blueprint beyond 2020.

Latest statistics from MTA revealed last year’s new takaful protection grew 14.5 per cent to RM324.2 billion in sum assured for all policies combined, compared with RM283.1 billion in 2017.

This year, he forecast the total sum insured to expand by double digits to reach RM300 billion.

“Last year, we saw RM4.91 billion in new business contribution for all certificates combined. This year, we hope to bump up the number to more than RM5 billion,” added Fikri.