The takaful industry, Islamic equivalent for insurance, is set to be on track for quantum leap performance in the next phase of growth and development, delegates at a major conference in Kuala Lumpur were told yesterday.
"The success of the industry lies in its ability to collectively position itself strategically to meet the needs of the economy and the ability to be competitive and innovative," Bank Negara Malaysia deputy director Azleena Idris said in her opening speech at the second annual World Takaful Conference: Family Takaful Summit Malaysia.
"Combined efforts by industry players and market participants are important in charting strategic direction for the industry and maximising its potential," she said.
"For family takaful, being the segment that is envisioned to form the new growth paradigm for takaful business, vast growth potential exists," Idris added.
"It is opportune for operators to seize the opportunities that would lead to expansion of takaful market share and increased penetration," she said.
"The takaful industry is envisaged to have an active role as an enabler for the growth of other components of the Islamic financial market, in particular the growth of the sukuk market," she said.
"New takaful laws in Far and Middle East are expected to be released and in force before the end of next year," said Bahrain delegate and Takaful Re assistant director for family and medical Tamer Saher.
"They will regulate the legal framework of the takaful industry and attract new investors to the industry," Mr Saher said.
"However, the fact that new takaful operators are aggressively competing on high risk like motor third party and medical insurance for quick growth of their portfolios, coupled with intense competition from the existing strong conventional players for reserving their market share, will act as potential threats to new entrants to the industry," Mr Saher added.
"For more than two decades, the takaful industry in Malaysia has witnessed tremendous growth," said conference organiser MEGA Events managing director David McLean.
"This growth momentum is expected to continue with the rising affluence of Malaysians amidst strong economic growth.
"The family takaful segment in particular has huge growth potential as there is a large untapped market that still exists.
"With only 54 per cent of the population having a life insurance or family takaful policy, there are opportunities to penetrate into the remaining underserved areas in family takaful segment," he added.