PETALING JAYA: Malaysia’s family takaful penetration rate fell marginally to 19.58% in 2023, as compared to 2022’s rate of 20.06%.
This was despite the increasing population, which grew by 678,500 people last year, outpacing 2022’s population growth of 401,600 people.
On a brighter note, the Malaysian Takaful Association (MTA) said the numbers indicated a normalisation in the industry in 2023 after a strong post-pandemic growth in 2022.
The association said a total of RM8.74bil in benefits and claims were distributed to the members “in need”, with 77.69% or RM6.79bil accounted for by Family Takaful, and General Takaful contributing the remainder RM1.95bil.
MTA chairman Elmie Aman Najas said total disbursement amount represented an uptick of 24.4%, demonstrating the industry’s responsiveness and dedication to assist certificate holders.
“The increase also represents the importance of having adequate financial protection and greater awareness of having a safety net for self or loved ones against unforeseen circumstances,” he said during the Takaful Industry Performance 2023 presentation. Meanwhile, 1.13 million new family takaful certificates were reported to have been added in 2023, representing a gross contribution of RM9.59bil.
“This awareness is translated into takaful products continuing to be a preferred option and new certificates being registered. Albeit, we could not reach the high 1.31 million new certificates and RM10.06bil gross contribution registered during the strong 2022,” he said.Elmie Aman added that the contribution was driven by the number of in-force certificates that remained stable, indicating that its members continue to fulfil their contribution obligations and that industry-wide awareness campaigns are producing noticeable results.
In light of this, MTA is cautiously optimistic on the takaful industry and expects it to maintain a steady momentum for 2024, on the back of positive projections of the nation’s economic growth at 4% to 5%.
Elmie Aman said the group would continue amplifying the level of the general public and private sector’s knowledge of takaful goods and services, in addition to positioning MTA as a driving force behind the future expansion and metamorphosis of the takaful sector.
“We understand the importance of having reliable and comprehensive protection to support the growth and development of the nation,” he said.
In line with the upbeat forecasts, Elmie Aman said via its transformation plan, Hijrah27, the group aims to unite and guide the industry as well as the entire Islamic ecosystem to work together towards promoting takaful to its rightful place as a leader in Malaysia.
Additionally, the four-year strategy also intends to inspire a new generation of players and elevate and reinvent the takaful business to become a household name.
“Good industry performance, increased awareness on financial literacy and takaful, and a conducive Islamic financial and non-financial ecosystem has triggered the need for the industry to formulate a comprehensive strategic transformation plan to align the industry with these changes and tap into the opportunities.
“We believe that this strategic plan will help provide impetus to and subsequently maintain the growth momentum of takaful,” he said.
He added that while the Hijrah27 is still being developed, MTA will continue focusing on partnerships, all-encompassing awareness, innovative products and services, and expanding the role of takaful in the ecosystem – all while fostering an atmosphere that is comfortable for Malaysians to engage in.
The Hijrah27 is the continuation of the group’s MTA Reform Plan 2022-2023 known as ISLAH 23.