The investment performance of insurers and takaful operators (ITOs) will remain sensitive to financial market conditions amid global economic and policy uncertainties, including those arising from the conflict in the Middle East, Bank Negara Malaysia (BNM) said.
“The conflict could also trigger supply chain disruptions, which may weaken ITOs’ underwriting performance by elevating claims costs, added BNM.
The central bank made these comments in its “Financial Stability Review Second Half 2025” report released yesterday.
“Looking ahead, Malaysia’s financial markets will continue to operate in a highly uncertain global environment, shaped by ongoing developments and uncertainties surrounding geopolitical tensions and trade tariffs. In particular, the recent conflict in the Middle East could lead to greater volatility in energy markets and commodity prices. These risks, together with developments in US trade policies, could weigh on supply chains and add to global inflationary pressures, while also posing headwinds to global growth,” BNM also said.
“Notwithstanding these risks, domestic market sentiment is expected to be supported by Malaysia’s strong economic fundamentals, policy credibility and continued structural reforms.”
The Financial Stability Review provides BNM’s assessment of current and potential risks to financial stability and of the resilience of the Malaysian financial system. It also reports on any actions taken to manage risks to financial stability.
BNM also provides some key financial indicators related to the takaful sector:
|
Takaful Sector (MYR m)
|
2H2023
|
1H2024
|
2H2023
|
1H2024
|
2H2025
|
|
Takaful Fund Assets
|
55,631.9
|
59,749.8
|
59,654.0
|
62,536.3
|
65,239.6
|
|
Family
|
48,476.1
|
52,274.9
|
51,620.1
|
54,237.9
|
56,490.1
|
|
General
|
7,155.8
|
7,474.9
|
8,033.9
|
8,298.4
|
8,749.5
|
|
% of insurance and takaful industry
|
14.0
|
14.2
|
13.9
|
14.3
|
14.4
|
|
Net Contribution Income
|
8,310.7
|
9,756.8
|
9,239.9
|
10,289.1
|
9,768.1
|
|
Family
|
6,217.6
|
7,527.1
|
6,969.8
|
7,873.9
|
7,195.8
|
|
General
|
2,093.1
|
2,229.6
|
2,270.1
|
2,415.3
|
2,572.2
|
|
% of insurance and takaful industry
|
22.1
|
24.7
|
23.1
|
25.3
|
23.6
|
|
Family Takaful
|
|
|
|
|
|
|
New Business Contribution
|
4,363.4
|
5,228.6
|
4,503.4
|
5,306.8
|
4,433.3
|
|
General Takaful
|
|
|
|
|
|
|
Gross Direct Contribution
|
2,764.4
|
2,960.4
|
2,940.9
|
3,247.4
|
3,387.0
|
|
Claims Ratio (%)
|
62.2
|
63.6
|
64.3
|
63.5
|
61.5
|
|
Source: Bank Negara Malaysia
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