Malaysia: Takaful to grow steadily by 4-5% this year
Source: Middle East Insurance Review | May 2017
Takaful contributions in Malaysia would grow by between 4% and 5% this year, following moderate growth in the insurance and takaful sectors in 2016, according to RAM Rating Services.
Last year, general takaful gross contributions expanded at 4.7% to MYR2.4 billion (US$545.2 million). Family takaful contributions grew faster at 11.8% to MYR7.8 billion.
The rating house expects Malaysia’s takaful sector growth trajectory to remain higher than the conventional counterpart this year, underpinned by growth in family takaful. It said life insurance gross premiums are expected to expand by 5% for the year, while general insurance would record an increase of 2-3%.
The rating agency projects that financial market uncertainties are expected to persist throughout this year.
Still, RAM said: “Despite the likelihood of slower momentum in the near term, the industry’s mid- to long-term outlook remains favourable given the low insurance penetration rate, rising consumer awareness and greater efforts in product innovation and distribution.
“Insurers and takaful operators’ capitalisation levels and reserves remain robust and the industry is supported by a sound and prudent regulatory framework.” M
MYR1 = US$0.23