Malaysia's takaful segment recorded double-digit penetration rate of 15.5% in the first half of this year compared to 9.3% a decade earlier in 2009, reported state-run news agency Bernama.
The penetration rate of family takaful had been steadily increasing with a double-digit growth of 15.5% as of the first half of this year from about 9.3% in 2009. The same scenario could also be seen in the general takaful segment which performed better than the conventional segment, according to MIDF Amanah Investment Bank insurance analyst Khoo Zhen Ye.
The takaful segment in Malaysia has registered higher growth than conventional insurance because of factors such as a lower base, stable domestic consumption, and increasing consumer awareness.
The market has also driven partially by the central bank’s target to increase the share of the Islamic financing mix to 40% by 2020.
“Overall in 2019, the life insurance segment performed better compared with general insurance segment as the latter is in the phased liberalisation of the motor and fire tariffs. The tariff liberalisation has started since last year but for fire insurance which was supposed to take effect this year had been postponed to next year to give some space to industry players,” said Mr Khoo.
Read: Great Eastern partners Axiata Digital Capital to offer affordable insurance and takaful
He also noted that the overall insurance penetration rate in Malaysia continued to remain stagnant at around 54% to 55 %for the past five years.
However, he still held a positive outlook for the industry amidst a strong domestic demand. The main driver of growth will come from the life and family takaful segment, he said as he foresees non-policy holders taking advantage of the new life and takaful tax relief of MYR3,000 ($725.45).
Read: NAMLIFA marks the graduation of its latest batch of professional advisers
P.S: Motivation on the go with AAN podcast