Malaysian takaful industry’s total assets reach RM52.3 billion as of June

SEPANG: The takaful industry in Malaysia has achieved a major milestone, with total assets reaching RM52.3 billion as of June, said Malaysian Takaful Association chairman Elmie Aman Najas.

He said the RM52.3 billion milestone not only marks a significant achievement but also sets the stage for greater contributions to Malaysia’s financial and social fabric.

He noted that over the past decade, the sector has paid out RM37 billion in claims, reflecting its vital role in providing financial protection and addressing the welfare needs of participants.

“Takaful operators now account for 32% of the insurance and takaful market in Malaysia, contributing approximately 4.5% to the nation’s GDP (gross domestic product) in 2023,” he said at the Takaful Leaders and Agents Summit 2024 (TLAS 2024) today.

He noted that takaful family products emerged as a key driver, making up 42% of new business premiums in 2023.

“The growing demand for family-oriented financial solutions demonstrates the sector’s ability to address evolving consumer needs, especially amid economic uncertainties and rising living costs.”

Despite these accomplishments, Elmie said, challenges remain as the penetration rate for takaful in Malaysia stands at just 20%, with only two out of ten Malaysians covered by takaful plans. “Achieving our target of 75% penetration will require significant efforts, collaboration, and innovation across all stakeholders.”

He said one of the strategic pillars to address this gap is Hijrah27, an initiative aimed at expanding takaful’s international footprint and increasing accessibility for Malaysians. “This long-term roadmap aligns with Malaysia’s broader aspirations for economic resilience and financial inclusivity.”

Elmie highlighted the importance of agents in driving awareness and trust. “With 117,000 registered agents nationwide, their role is pivotal in educating the public about the benefits of takaful and bridging the gap between providers and participants,”

Furthermore, he stressed that while the takaful industry has made remarkable progress, it must remain agile in responding to external pressures such as economic fluctuations and shifting customer expectations. “We must embrace the challenge to lead with courage and innovation to secure the industry’s future,” he said.

MTA chairman Mohd Radzuan Mohamed emphasised the alignment of the takaful sector with Bank Negara Malaysia’s strategic priorities, which focus on financial inclusion, resilience, and innovation.

“Hijrah27 embodies our vision of driving sustainable and inclusive growth by making takaful products accessible across all socioeconomic segments while enhancing operational efficiency and customer-centric service,” he said.

He added that the initiative underscores the takaful industry’s ambition to not only expand its market share but also improve service quality and product offerings to meet evolving consumer needs.

“This involves upholding high ethical standards, fostering professionalism and investing in workforce development to maintain customer trust,” Radzuan said, adding that through initiatives such as Hijrah27, the takaful sector aims to strengthen its position within Malaysia’s financial landscape, contributing to national goals for sustainable economic growth.

Additionally, he noted that the Malaysia Leadership Council has identified takaful as a key focus area and pledged its support for the Hijrah27 mission.

He said Hijrah27’s strategic focus also aims to position the takaful industry as a cornerstone of Malaysia’s Islamic finance ecosystem, promoting inclusivity, resilience and sustainability.

“As the sector continues to grow, its role in protecting individuals and businesses while advancing Malaysia’s broader financial landscape remains central to its mission. Through our collective efforts, we are confident in shaping a robust and inclusive takaful sector that aligns with national aspirations and global trends,” said Radzuan.

TLAS 2024 gathered about 500 participants, including agency leaders, takaful agents and representatives from member companies of MTA. The industry is celebrating its 40th anniversary and the summit is part of a series of events to commemorate the milestone.

The event also served as a strategic platform to strengthen collaborations within the takaful ecosystem through the signing of two memorandums of understanding. The one with Universiti Sultan Azlan Shah aims to enhance education and knowledge-sharing initiatives within the industry and the other with Perfect 10 focuses on the development of e-educational modules and tools for agents to utilise and provide a higher level of service to their respective participants and increasing the customer experience.