The takaful industry is pushing for more affordable products targeting the B40 (low income) group such as Perlindungan Tenang, which is in line with the Bank Negara Malaysia’s (BNM) aspiration to close up the protection gap.
Malaysia Takaful Association (MTA) chairman, Muhammad Fikri Mohamad Rawi said MTA, together with its members, had also been working hard to achieve the target set by BNM of 25 per cent takaful penetration rate in the country by 2020.
“The amount of sign-ups for Perlindungan Tenang is very positive, but it is still a challenge for us to reach out to those in the outskirts as they might not understand the necessity for such protection. But we will continue to reach out and educate the masses on the matter,” he said after the Takaful StarNite award ceremony on Saturday.
Perlindungan Tenang, an affordable insurance and takaful scheme launched in 2017, is a combined initiative of the MTA, Life Insurance Association of Malaysia and General Insurance Association of Malaysia under the purview of BNM. The takaful starting price is as low as RM39 yearly.
As for the takaful industry’s performance, it recorded an uptrend last year with new takaful protection value of RM324.2 billion. New business contribution for all certificates combined in 2018 totalled RM4.91 billion.
“The protection value grew by 14.5 per cent from 2017 with a double-digit growth of 13.1 per cent in the family takaful business contribution over the RM4.35 billion recorded in 2017.
“As a whole, the takaful industry added 699,534 new certificate holders, which was an increase of 4.6 per cent from the previous year,” he said.
Takaful is a co-operative system of reimbursement or repayment in care of loss, structured to be Shariah compliant as an alternative to conventional insurance.
Meanwhile, Economic Affairs Minister Datuk Seri Azmin Ali said the buoyant performance of the takaful industry reflected the increasing familiarity with the takaful concept among Malaysians, evidenced by greater acceptance of takaful coverage as the protection of choice.
“While the Malaysian economy is expected to grow between 4.3 per cent and 4.8 per cent in 2019, the finance and insurance sub-sector is expected to record a positive growth in 2019, supported by stronger financing activity in both household and business segments,” he said in his speech.
However, he said, the Malaysian population remained under-served with only 15.2 per cent of Malaysians having takaful coverage despite a Muslim population of over 60 per cent.
“In other words, this industry is primed for robust growth and there is a need to aggressively bring about awareness to promote the value proposition and distinct features of takaful to the Malaysian population,” he said.
During the Takaful StarNite ceremony, 24 awards were given out to excellent agents and organisations as well as a special award, Tokoh Kembara Takaful, which went to Datuk Dr Daud Bakar for his achievements and contributions in promoting and developing the takaful industry within the country and globally.