PETALING JAYA: Syarikat Takaful Malaysia Keluarga Bhd
(STMB) remains well-positioned to fund its growth initiatives and sustain dividend payouts throughout Bank Negara Malaysia’s regulatory risk-based capital framework 2 transitions, according to Hong Leong Investment Bank (HLIB) Research.
This will be supported by a robust capital adequacy ratio exceeding 200%, predictable 15% blended annual contractual service margin (CSM) releases and strict cost discipline.
In a note to clients, HLIB Research said that STMB is focused on diversifying away from its historically credit-heavy Family Takaful franchise, with regular contribution business emerging as the next growth pillar.
The annualised premium equivalent (APE) market share stood at 14.1% in 2025, driven by stronger bancatakaful penetration, while regular contribution APE reached RM142mil last year.
HLIB Research noted that the group’s management targets over 30% annual growth for this segment, supported by deeper penetration of existing bank partners and a progressively broader product shelf.
“Credit also remains highly profitable, with over 70% of underwriting stemming from personal financing,” the research house added.
Given personal financing’s shorter duration of five to seven years compared to mortgages, the group’s CSM is released relatively faster.
Overall, the management of STMB expects an average blended 15% annual CSM release.
“The growing regular contribution book should progressively lengthen the group’s earnings and improve business diversification,” said HLIB Research.
Meanwhile, STMB plans to broaden its digital takaful platform and brand Kaotim beyond its existing four products into travel, personal accident, savings and retirement, ultimately positioning it as a comprehensive direct-to-consumer takaful platform.
“The management is prioritising product breadth and digital infrastructure before stepping up marketing, while continued digitalisation should structurally lower distribution costs and improve operating leverage,” the research house further pointed out.
On the proposed RM1.6bil acquisition of Takaful Ikhlas Family and Takaful Ikhlas General by Bank Rakyat, HLIB Research said it introduces a potential medium-term risk to STMB’s bancatakaful franchise.
Although the existing partnership remains intact for now, the research house added: “We do not discount the possibility of Bank Rakyat eventually internalising more takaful distribution through Takaful Ikhlas, potentially reducing new business contribution and CSM generation for STMB.”
The eventual earnings dent remains difficult to quantify, particularly given the uncertainty over contractual arrangements, transition timing and product allocation.
“Nevertheless, we view this as more of a channel concentration risk than a structural growth impairment,” HLIB Research said.
“STMB continues to deepen other Tier-2 banking relationships, while accelerating Kaotim could progressively create an owned distribution channel, reducing reliance on bancassurance partners and retaining more economics through the absence of agency commissions,” the research house noted.
HLIB Research has maintained a “buy” call on the stock with an unchanged target price of RM4.13 per share.
