Malaysian Takaful Industry On Upward Trend Despite Covid-19 Challenges This Year

The Malaysian takaful industry has continued its upward trend in promoting and enabling more Malaysians to obtain new family takaful protection, despite the challenges of 2020.

For the first nine months of the year, the family takaful new protection value has increased 14% compared to the corresponding period in 2019, with new business contributions increasing by 3.2%. The family takaful new protection value stands at RM364.2 billion, arising from RM4.84 billion new business contributions registered.

“This encouraging decent growth is evidence of the positive effects from re-opening of the economy from Covid-19 especially during the third quarter of 2020,” said Malaysian Takaful Association (MTA) chairman Muhammad Fikri Mohamad Rawi. “The industry will also continue to promote takaful digitally and continue to play its role in providing protection to Malaysians.”

More than ever, takaful operators have actively used digital platforms such as social media and webinars to promote takaful awareness. “We aim to educate the public on the essence of takaful, the importance of protection, and to share some affordable plans available in the market,” shared Fikri. He added that the industry’s growth also reflected the increasing awareness on the importance of takaful protection – especially during the pandemic period.

As a whole, the family takaful industry added 573,718 new certificates, a marked single digit increase of 7.2% from 535,426 new certificates issued during the same period in 2019. The annual contribution new business figures grew moderately by 6.7% to RM0.99 billion, while the single contribution new business increased slightly by 2.4% to RM3.86 billion.

As for the total family takaful business’ in force sum covered, the number grew by 12.3% to RM1.06 trillion while the number of in-force certificates grew by 5.2% to 5.36 million certificates. This resulted in an improved penetration rate of 16.4% compared to 15.7% last year.

The general takaful industry also registered a decent growth of 3.6% with the net claims incurred ratio increasing from 55.6% to 57%. At a proportion of 65.3% in gross contribution, motor takaful maintained the largest class of business with a proportion of 65.3% and its NCIR also increased from 68.9% to 71.4%. Fire takaful remained the second largest class with a slight increase of 3.2% in gross contribution.

Looking ahead to 2021, MTA’s projection is that the takaful sector will remain moderate but positive, given the forecast of resilient private consumption coupled with the still-low takaful penetration rate of 16.4%.

(Source: MTA)

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