Takaful grabs 5.5% share of insurance business

  • Business
  • Tuesday, 29 Apr 2003

THE growth potential for the takaful industry will remain positive with the entry of new industry players, said Bank Negara. 

In its Takaful Annual Report 2002, the central bank said the industry’s market share expanded further to 5.5% of insurance sector contributions (total takaful and insurance industry) last year from 4.8% a year earlier, led by growth in combined contributions of both the family and general takaful business of 27% from RM787.6mil to RM1bil last year. 

The family takaful business, which accounted for 66.7% of total contributions, remained the major income generator for the takaful industry. 

In terms of new business, Bank Negara said that except for the annuity takaful plans, all plans under the family takaful business recorded an overall growth of 22.6% from RM368.8mil to RM452.2mil in total new business contributions last year. Similarly, sums participated arising from this new block of business increased by 10.6% to RM14.17bil.  

Mortgage takaful plans continued to dominate the family takaful business, accounting for 70.4% share of total new business contributions. 

The growth of 26.7% to RM318.2mil in new business contributions was predominantly attributable to the Islamic house financing facility offered to civil servants. New business contributions of individual takaful plans registered a growth rate of 19.1% to RM94.1mil. 

While direct marketing and agents remained the main marketing channels for the family takaful business, takaful operators have entered into strategic alliances with banking institutions to sell takaful products through the branch network of these institutions. With the entrants in the market being bank-owned, products marketed through this channel are expected to increase. Bank Negara said the family takaful business registered total income of RM809.1mil last year. Favourable business indicators excluding the annuity scheme led contribution receipts to record 28.9% growth last year.  

Mortage takaful plans accounted for 52.7% of total contribution receipts followed by individual and group takaful plans with 32.4% and 14.9% share respectively. 

As at end of last year, assets of the family takaful fund registered a growth of 19.6% from RM2.65bil to RM3.16bil with a major portion of the assets being in corporate securities and investment deposits, which accounted for 83.4% of total assets. 

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