The Malaysian Takaful Association (MTA) expects a cautious outlook for the Islamic insurance industry in 2026, due to global uncertainties that weigh on business confidence and consumer sentiment.
MTA interim Chairman Borhanudin Samsudin said that businesses are facing higher costs, supply chain disruptions and raw material shortages, which could lead to higher consumer prices and reduce demand for their products.
Addressing these issues, MTA has identified three strategic priorities for 2026: maintaining a sustainable medical and health insurance and takaful (MHIT) coverage, strengthening the adoption of hibah (gift) as a wealth protection solution, as well as advancing the phased liberalisation of the general takaful segment.
"To support these priorities, the MTA will focus on strengthening industry frameworks and regulatory alignment, enhancing regional and international collaboration, and elevating professional standards across the agency force," Mr Borhanudin said. He added that these initiatives are aimed at improving the industry's resilience and competitiveness while ensuring takaful operators remain capable of meeting the evolving needs of participants in an increasingly complex operating environment.
The MTA also said it will continue efforts to raise awareness of takaful as a Shariah-compliant insurance option.
2025 resilient financial performance
Turning to 2025, Mr Borhanudin said that the takaful market remained resilient last year, with total gross contributions rising by 4.73% to MYR16.38bn ($4.03bn), thanks to growth in both the family and general takaful segments. This reflects a stabilising post-pandemic trajectory and a significantly expanded base, he added.
The family takaful segment recorded largely stable new business contributions of MYR9.74bn, an increase of MYR10m from the previous year. The market share of new business contributions edged up slightly to 39.44% from 39.16% in 2024. Business in-force contributions expanded to MYR10.15bn in 2025 from MYR9.62bn, largely sustained by endowment products within the individual ordinary family business segment.
Meanwhile, gross written contributions for the general takaful segment climbed 12.38% y-o-y to MYR6.64bn from MYR5.91bn previously.
Overall, the entire net contributions reached another record MYR20bn, compared with MYR19bn in the preceding year.
Motor takaful remained the largest contributor, accounting for close to 69% of gross written contribution, marking a 12.57% expansion, reflecting continued demand for motor vehicle coverage. Additionally, the non-motor takaful business also expanded last year, rising by 11.95%.
On the other hand, takaful operators paid out a total of MYR10.61bn in benefits and claims during 2025. Of the total amount, MYR7.91bn or 74.6% was disbursed by family takaful operators, while MYR2.70bn was paid under general takaful coverage.