Kuala Lumpur, 13th October 2014: Takaful is known as a Islamic Insurance, a co-operative system of reimbursement which is grounded in Islamic muamalat( Islamic Banking), observing the rules and regulations of Islamic law. In recent months there has been double-digit growth of Islamic banking assets which has accompanied a boost in gross takaful contributions across key Muslim developing markets, including Saudi Arabia, UAE and Malaysia. Despite takaful’s strong double-digit growth, the insurance penetration rates in these key markets are generally low (on average just 2%), indicating the possibility of strong underlying growth potential.
Malaysia’s ascent to become a leader in the global takaful market is attributed to various factors. A steady economic growth, a growing young Muslim population and a well-established regulatory structure. According to the Global Takaful Insights 2014, Malaysia’s Takaful Industry is estimated to grow to US$3 billion (RM9.54 billion) this year. Malaysia’s general and family takaful segment has experienced a growth rate of 16 percent and 11 percent respectively, over a period of five years as stated in the Borneo Post.
Achieving growth in the Takaful insurance sector and breaking through into the mainstream might be easier said than done. The main purpose of Takaful, is to bring equity to all involved, and the main objective of the contract is to assist policy holders through bad times. According to a recent report by Ernst & Young " Malaysia is ready to become a mega regional takaful operator given its strong track record, right capitalisation and broad knowledge of the industry. Ernst & Young global islamic finance leader, Azhar Nazim said" Local takaful operators had the right ingredients to build upon and grow beyond Malaysian borders into the Asean region. Malaysia has the most successful template for family takaful , while other markets are struggling to find the right sustainable model ".
As quoted by RAM Ratings Services Bhd ( RAM Ratings) in a recent article, “Optimistically, if the industry continues on its high-growth trajectory of about 15 to 20 per cent per annum, it could reach half the size of the conventional industry by 2018, making the sector potentially much more lucrative to investors. The growth of takaful is also well supported by the country’s developed Islamic finance industry and is evolving at a faster pace "
Despite the growth potential, there are also many challenges faced by the Takaful industry today. Firstly, competition within the industry which involves the takaful market and conventional insurance market.
Secondly is the operational issues affecting profitability. According to the World Takaful Report 2012, new existing companies are using aggressive pricing strategies to compete against established players. Although the takaful sector's growth has remained strong, underwriting losses remains a source of worry for many operators. In a recent article by Global Islamic Finance Magazine,Sameer Abdi Head of Middle East Islamic Financial Services Group, Ernst & Young said " It's worth noting that most takaful operators are yet to achieve critical business volume despite incurring substantial establishment costs over the year,"
Thirdly, takaful operators face stiff competition on pricing and the growth with profitability given the underwriting capacity which causes heavy investment losses. As for the current market , Takaful players ought to manage challenges in the increasing competitive Takaful market to drive operational excellence ,in order to spur financial boost to the takaful business.
Thoughtful discussions on how to achieve growth opportunities as well as constructive ways in overcoming challenges on a wide scale will be shared and discussed in the upcoming conference organized by Fleming Gulf entitled 2nd Annual Future Of Global Takaful to be held on 28-29th January 2015 in Hotel Royale Chulan, Kuala Lumpur. Delegates of this event will gain insights from the best in the industry, while engaging in thought provoking sessions on the overall perspective towards building a leading profitable Takaful market.
Fleming Gulf will be hosting this highly prestigious event, which serves as a platform to exchange unique ideas, trends and successful Takaful strategies. Join the movers and shakers from Bank Negara Malaysia, Prudential BSN Takaful, AIA Public Takaful, PT Asuransi Jasindo Takaful, Hong Leong MSIG Takaful, Noor Takaful, Munich Re, National Takaful Company Watania, Amana Takaful Life and many more to harness the opportunity to meet other industry experts. Equip yourself with progressive strategies to boost the growth and profitability of the international Takaful market. Fleming Gulf delivers the most comprehensive business events by leveraging our network of industry influencers with specialist knowledge to provide organisations the winning edge that makes a difference in their decision making in today's competitive business landscape.
More information about Fleming Gulf Asia is available at http//:www.fleminggulf.com
For Registration Details, kindly visit http://bit.ly/Takaful14 or email emerson.dinesh@fleminggulf.com or contact us at 603-2027 4767
Press release posted on: Oct 26 2014
Press Release
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