KUALA LUMPUR: Takaful players are engaging with the government to develop a more affordable Rahmah Takaful programme for the B40 and M40 income groups, gig workers and the service sector workers, said the Malaysian Takaful Association (MTA).
MTA CEO Mohd Radzuan Mohamed said that the country’s takaful players are ready to assist the government’s plan to introduce the Rahmah Insurance initiative.
“We had a series of engagements with the ministry to share our expertise and offerings, with the aim of helping them establish a sustainable Rahmah Takaful programme for these target markets,” he told reporters during a press conference after Takaful industry 2022 performance briefing and Iftar Jamaie on Wednesday.
The Minister of Domestic Trade and Cost of Living is planning to introduce the Rahmah Insurance initiative to provide a more affordable insurance protection for the public.
“This is where the ministry is actually looking at, how takaful players can support these segments if they are involved in unfortunate events like an accident,” said Mohd Radzuan.
Last year, MTA said that Malaysia’s takaful industry recorded 18% growth in 2022 and secured 23% market share of net contributions on the back of the country’s post-pandemic recovery phase.
Its chairman Elmie Aman Najas said the growth was driven by increasing demand for Islamic finance products and the acceptance of takaful products as preferred protection schemes.
“The industry’s growth can be attributed to several factors including the growing popularity of takaful products among consumers, the introduction of new innovative products, and the adoption of digital technologies to enhance service delivery,” he commented.
The Family Takaful achieved a penetration rate of 20.1% in 2022 as compared to 18.6% in the previous year based on the number of certificates inforce against the total Malaysian population.
The industry has also made significant strides in digital transformation, with many players offering online platforms for consumers to participate and takaful operators to manage takaful products.
Elmie said: “We are witnessing a strong demand for takaful products, as more and more Malaysians recognise the importance of protecting themselves and their families against financial risks. The number of certificates inforce for 2022 has increased to 6.63 million certificates, compared to 6.07 million in 2021.”
The Family Takaful market’s annual Takaful contributions of new businesses recorded a 1.9% decrease to RM2.19 billion compared to RM2.23 billion in 2021.
Agency and Bancatakaful were the main channels for new business total contribution at 22% and 44% respectively.
“In relation to agency business, the pandemic has had a significant impact on the growth rate of new agent recruitment. In 2022, MTA registered 39,027 new agents. The indication of the continued strong recruitment trend in 2021, which recorded a higher number than those seen in the pre-pandemic before 2019, served as an important indicator of the industry’s continued strength as we transitioned from post-pandemic to endemic phase in our economy,” said Elmie.
Other industry sectors similarly showed growth. The general takaful business registered gross direct contributions of RM4.64 billion, with the motor takaful business contributing RM3.07 billion, and the fire takaful business with RM0.84 billion.
For 2022, the takaful industry paid out a total of RM7.02 billion in net claims, an increase of 25.9% from the previous year RM5.58 billion.
