PETALING JAYA: The Malaysian takaful industry continued to demonstrate resilience in 2025, delivering a steady performance and reinforcing its integral role in safeguarding financial stability for the rakyat.
Reflecting a stabilising post-Covid-19 pandemic trajectory and a significantly expanded base, the industry grew by 4.73% in 2025, bringing total gross contributions to RM16.38 billion, according to the Malaysian Takaful Association (MTA).
On the back of this steady performance, takaful operators collectively distributed RM10.61 billion in benefits to certificate holders in 2025, underlining the core spirit of takaful as a dependable cushion when Malaysians most require it.
Payout quantum continued to be led by family takaful at RM7.91 billion, with medical claims representing the largest class of payouts. This was marginally higher than RM7.89 billion disbursed in the prior year, underscoring its continued importance as a social safety measure.
General takaful meanwhile honoured RM2.7 billion in claims, a 16.88% increase from RM2.31 billion in 2024 as motor claims continued to constitute the largest share of payout.
Beyond financial protection, the takaful industry continued to create shared value through RM52.25 million in zakat contributions for community development initiatives and RM1.3 billion in surplus to eligible participants in 2025. These efforts reflect the core takaful principles of mutual cooperation, fairness and shared responsibility.
As part of its efforts to help more Malaysians understand and benefit from takaful’s unique value propositions, the MTA continued its nationwide outreach initiatives under the Takaful4All and Hijrah27 strategic agendas.
More than 120,000 Malaysians across urban, rural and underserved communities were reached through community engagements, financial literacy programmes, campus activations and strategic collaborations, promoting greater financial resilience and expanding access to takaful protection.
During the year, 861,956 new family takaful certificates were issued, bringing the total to 6.74 million in-force certificates after accounting for natural maturities, expiries, replacements and terminations.
In terms of contributions, family takaful new business contributions recorded a flat but stable performance at RM9.74 billion in 2025, up by RM10 million from the prior year. Meanwhile, business in-force contributions expanded to RM10.15 billion from 2024’s RM9.62 billion, largely sustained by endowment products within the Individual Ordinary Family Business segment.
Overall, the family takaful segment maintained its solid position in the broader protection landscape, with its new business contributions edging up slightly to 39.44% from 39.16% in 2024.
The segment’s resilient performance points to strengthening contribution quality and consumer confidence in syariah-compliant protection solutions. The 15.34% increase in average case size to RM11,300 from RM9,797 attests to this, indicating that past industry outreach is are translating into higher-quality, long-term protection commitments rather just volume growth.
These gains are partly attributable to collective industry efforts to engage Malaysians, allowing the family takaful penetration rate to hold steady at 19.63% in 2025 (2024: 19.57%), even as Malaysia’s population expanded to 34.33 million (2024: 34.1 million).
The general takaful segment continued its positive trajectory in 2025, with gross written contributions increasing 12.38% to RM6.64 billion from RM5.91 billion in 2024.
The segment’s performance continued to be driven by motor takaful, which remained the largest component at about 69% of gross written contributions (RM4.59 billion). This marked a 12.57% expansion, closely mirroring the tail-end of Malaysia’s record new vehicle sales, which peaked at 820,752 units.
Accordingly, motor claims proportionately made up the vast majority of general takaful claims paid. A total of RM2.4 billion was disbursed by takaful operators for motor claims, accounting for 88.97% of total net claims.
The non-motor takaful businesses also expanded in 2025, rising 11.95%. Fire takaful recorded RM1.11 billion in gross written contributions, an increase of 10.43% over 2024, while personal accident takaful rose to RM422.67 million, translating into an 8.93% increase.
In terms of distribution channels, agency remained dominant in 2025, accounting for 61.5% of written contributions (2024: 62.67%). Bancatakaful remained the second largest contributor at 13.37% (2024: 13.63%) while direct business channels and online platforms continued their gradual adoption at 8.45% and 6.73% respectively (2024: 7.64% and 6.58%).
MTA interim chairman Borhanudin Samsudin said, “Our mandate is to ensure takaful remains available, accessible and resilient through value-based intermediation. As our industry base grows larger, maintaining growth naturally becomes more complex. Therefore, our focus is shifting towards sustaining and creating a takaful ecosystem that evolves alongside the changing, more challenging economic realities of Malaysia’s communities.
“Our goal is to extend protection to underserved communities and ensure every Malaysian has access to a reliable and inclusive social safety net. On this note, I am pleased to report that our industry-wide initiatives to strengthen the takaful industry are progressing steadily, with more than 60% of Hijrah27 targets achieved as of 2025.
Moving forward, the expansion of programmes such as the iTekad Protection Programme will be crucial in supporting vulnerable segments, including microentrepreneurs and participants of Inisiatif Pendapatan Rakyat.”
“This year, we aim to achieving the 80% milestone for Hijrah27. Key focus areas are takaful awareness and talent development, heavily supported by our new collaborations with the Financial Industry Collective Outreach, the Asian Institute of Insurance and the Chartered Institute of Islamic Finance Professionals,” he continued.
Looking ahead, the MTA has outlined three priorities for 2026 – ensuring sustainable medical and health Insurance and takaful coverage, strengthening the adoption of hibah as a wealth protection solution, and advancing the phased liberalisation of the general takaful segment while preserving industry stability.