Tuesday June 12, 2012
Malaysia's family takaful market to hit RM7.2bil in 2-3 years
KUALA LUMPUR: Malaysia's family takaful market is poised to grow to some RM7.2bil in two to three years from RM4.2bil currently, given the low insurance penetration rates among the general populace, including the Muslim community, according to Etiqa Insurance & Takaful.
Chief commercial officer Shahril Azuar Jimin said only 54% of the population had life insurance or family takaful policy, with takaful having a penetration rate of about 11%.
Etiqa is the insurance and takaful arm of Malayan Banking Bhd, the country's largest bank by assets.
“Malaysia has got most of the prerequisites for family takaful good infrastructure, a strong and knowledgeable market, and distribution. In the early days, the distribution force was lacking,” he said on the sidelines of the World Takaful Conference.
“Ten years ago, there were less than 100,000 agents for takaful, whereas conventional insurance had about 250,000,” Shahril said, adding that Etiqa's own agency force numbered some 100,000 now.
He said family takaful, with net contribution in terms of five-year compound annual growth rate of 20% outpacing both general takaful and conventional life insurance, had much room to expand.
“The immediate market (for family takaful), which is the Muslim community, is very much under-insured. We're also seeing more acceptance from the non-Muslim market because of the equitable aspect that takaful offers,” he said.
Shahril added that the take-up by non-Muslim customers was close to 40% for its general takaful products and 25% of new business in family takaful.
“There are now 12 companies offering family takaful. Four new licenses were awarded within last 1 years. Once they scale, up we will see the impact (of the new operators).”