AmMetLife Takaful sees 38 per cent growth in takaful business

BERNAMA (6.10.2019)

Oct 6 -- Ammetlife Takaful Bhd (AmMetLife Takaful) expects its takaful business to record a 38 per cent growth by the end of its financial year ending March 31, 2020, supported by continuous campaigns and cross-selling through its bancatakaful partner, Ambank (M) Bhd. 

AmMetLife Takaful chief executive officer Noor Azam Mohd Yusof said to-date, the company has recorded about 13 per cent year-on-year growth compared with the same period in 2018.

“This was mainly supported by regular contribution products distributed through AmBank branches and the agencies," he told Bernama when contacted.

Apart from distributing credit-related takaful product, Ambank is also distributing AmMetLife Takaful products such as Protect Secure-i Murni and FlexiSecure-i, and has launched a new medical rider, HealthCare Choice-i Rider, which comes without any lifetime limit.

Meanwhile, commenting on the upcoming 2020 Budget, Noor Azam said the budget should include a higher tax deduction allowance on insurance or takaful product purchases to boost insurance product take-up rates in line with the government’s aspirations to promote a financially inclusive society.

"The current tax relief of RM3,000 per year life for insurance premiums for individuals can be reviewed to increase the adoption rate.

“Over time, these incentives will boost the public’s awareness on life insurance and takaful, and improve the adoption rate," he added.

In January this year, Prime Minister Tun Dr Mahathir Mohamad had launched mySalam, the national Bottom 40 (B40) protection scheme to boost the take-up rate for insurance and takaful products among the B40 group.

The scheme, which was set up with a substantial seed fund of RM2 billion, is expected to benefit 3.69 million people aged between 18 and 55 in the group.

"AmMetLife Takaful started exploring the possibility of providing micro takaful schemes to the general public with the B40 segment in mind since the end of 2017.

“We even introduced iMeriah, a pilot insurance scheme for Mydin’s loyal customers, and we are now looking for feasible ways to scale up this concept targeting the B40 segment, together with a financial literacy agenda," added Noor Azam.   

-- BERNAMA

Malaysia: Brunei’s Takaful growth pushes ahead its Islamic finance ambitions

KUALA LUMPUR, Jan 15 — Assets held by the Islamic insurance (takaful) sector in Brunei recently have grown significantly while those of conventional types of insurance have been declining, a report from the country's central bank showed.

The monthly report from Brunei's monetary authority, known as AMBD, said that in the year ended Sept. 30, takaful assets rose 21 per cent to 425 million Brunei dollars (RM1.102 million). Conventional insurers saw a drop of 1.3 per cent in assets during the same 12-month period.

The fast-growing takaful sector indicates Brunei is progressing toward its goal of having Islamic financial products account for up to 60 per cent of total banking assets in five years, compared with 40 per cent at present.

At end-September, Brunei's takaful market accounted for 33 per cent of total insurance assets, up from 29 per cent a year earlier, according to the AMBD report.

Brunei, which has Southeast Asia's highest per-capita income after Singapore, aims to compete in Islamic finance with regional powerhouses Malaysia and Indonesia. That is part of a strategy to wean itself off dependence on oil reserves, which are expected to run out in about two decades, and diversify Brunei's economy.

Brunei, Malaysia and Indonesia have the largest potential for retail Islamic banking in Southeast Asia. The combined population of the three Muslim-majority countries is nearly 280 million.

Although insurance assets have seen rapid growth in Brunei in the past decade, industry players say there is still poor awareness about insurance among its population. Brunei has four takaful operators.

Assets of Indonesian takaful firms grew 43 per cent to 13.1 trillion rupiah (RM3.61 billion) during 2012, from 9.15 trillion rupiah a year earlier, data from that country's regulator showed. Takaful firms accounted for 2.3 per cent of Indonesia's total industry assets.

A proposed law in Indonesia that requires takaful firms to be spun off into standalone entities could, when enacted, spur mergers in that market. 

In July, Malaysia declared new rules for takaful firms to separate life and general business lines, a move observers said could spur buy-outs of smaller operations.

(The Malay Mail Online.Com / 15 Jan 2014)

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Growth of Malaysia's insurance, takaful sectors seen stable

KUALA LUMPUR: The growth of the insurance and takaful sectors for 2014 will remain stable amid domestic demand, said industry experts.

Takaful Malaysia group managing director Datuk Mohamed Hassan Kamil said strong growth prospects and improved risk management would lead to increased demand for insurance and takaful amongst the public at large.

He said the industry is anticipated to remain encouraging for both conventional and takaful operators through the introduction of new or enhanced and innovative products by insurance takaful companies.

“There is plenty of room for organic growth, given the fact that Malaysia still has low insurance penetration in both the conventional and takaful sectors.       

“In addition, we project a muted earnings growth outlook in certain areas of the local insurance and takaful industry arena that is likely to be impacted by investment de-risking and financial market volatility,” he told Bernama.

Regarding market players, he said the local insurance and takaful players are expected to utilise multiple distribution options available and develop alternative channels whilst strengthening their agency force to establish a solid foothold in the industry.

He said this will be supported by the implementation of strategic marketing and operating systems on top of competitive and cutting-edge products and services offered by respective industry players.

Hassan Kamil said despite the positive outlook, the industry will face diverse changes that were expected from the enforcement of the Risk-Based Capital (RBC) framework in 2014.       

“The RBC implementation might change the landscape of the takaful industry and the expected contribution growth is deemed to accelerate modestly, with fairly robust growth amongst takaful operators outpacing the conventional players,” he said.

Apart from that, both industries have been experiencing an influx of mergers and acquisitions (M&As) resulting in more foreign insurers tapping into the Malaysian insurance market, he said.

Amongst M&As this year were Khazanah Nasional Bhd’s partnership with Canadian-based Sun Life Financial Inc to acquire 98% of CIMB Aviva Assurance Bhd for RM1.8bil, and American International Assurance Bhd’s acquisition of ING’s insurance and takaful business in June 2013.

The industry has seen new players from Canada and the US coming into the Malaysian market, taking over the smaller local players.

“We have witnessed the emergence of financial solid players in the local insurance industry arena as a result of the M&A exercises.       

“The insurance and takaful industry in Malaysia remains encouraging for both life and general insurance and takaful despite moderating economic growth following the slowdown in major advanced countries,” Hassan Kamil said.

The persistent talent shortage, of professionals well versed in both principles, would be one of the main areas that need to be looked at critically in order to remain competitive in the industry, he said.

In addition, he said the rapid development of insurance and takaful industry has made it all the more difficult to recruit the right human capital needed for the various job functions. 

(The Star Online / 23 Dec 2013)

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Takaful Malaysia sets 15pc no claim rebate

SHAH ALAM: Syarikat Takaful Malaysia Bhd will maintain its 15 per cent 'no claim rebate' and increase its value added service delivery amidst tougher competition. 

Takaful Malaysia is the first and sole Takaful company in the country to offer an additional 15 per cent no claim rebate to all its participants in the general and selected family takaful products. 

"Demand for Takaful products is good, the growth rate is 20 per cent and their value proposition is the 15 per cent no claim rebate," Group managing director Datuk Mohamed Hassan Kamil told Bernama. 

It was reported that Takaful Malaysia is confident of disbursing about RM35 million in no claim rebate this year to its customers given the positive growth in its General Takaful portfolio. 

Mohamed Hassan said Takaful Malaysia has sufficient surplus to sustain its 15 per cent no claim rebate in the future. 

"The projection is made due to the company's prudent underwriting policy, efficient claim management and the investments which the company undertakes," he said. 

Mohamed Hassan said last year, Takaful Malaysia paid out a record RM31 million in no claim rebate to its customers, adding it is optimistic on capturing a more than 50 per cent market share from the current 40 per cent.

(Business Times / 24 May 2013)

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Takaful Malaysia eyes bigger revenue contributions

KUALA LUMPUR: Syarikat Takaful Malaysia Bhd expects revenue contributions from its Indonesian operations to easily increase to 20% once the ruling on sales of takaful products by stand-alone takaful companies comes into force in 2015.

Group managing director, Hassan Kamil, said currently the Indonesian operations contributed about 10%.

“Our takaful company in Indonesia is a stand-alone company. So by then we hope the competition will be more equal and fair.

“Currently, the playing field is not level. A lot of conventional companies operate as a window, so they have a significant advantage compared with us as they use the conventional arm to support the takaful window, without the need of a separate capital,” he told a media briefing after the group’s annual general meeting today.

On the group’s plan to acquire a property in London, Hassan said, the plan was put on hold as the Islamic Financial Services Act (IFSA) would be in place this June.

“The IFSA will allow us to have a structure where there is a financial holding company, so we will wait for specific guidelines from Bank Negara Malaysia before we proceed with our next steps in acquiring the property in London.

“With the existence of the financial holding company, this will probably allow us to benefit more from the tax structure if we were to establish the financial holding company in Labuan,” he said, adding that the group expected to restart negotiation on the acquisition in London next year.

The new Act would require conventional and takaful insurers to relinquish their composite licences and conduct their life and general insurance businesses under separate units.

On other possible overseas venture, he said, Takaful Malaysia has looked at the China and Middle East markets, which had large Muslim population.

However, he said, China lacked Syariah-compliant instruments for the group to invest its premiums while Middle East was unstable in terms of security.

Moving forward, Hassan said, the industry’s prospects remained positive and it was anticipated to grow between 20% and 25% this year.

“We hope to ride on that momentum and to grow at least at that percentage to ensure that our market share is sustained,” he said.

Takaful Malaysia, which will present its internal target capital level to BNM by September, is set to have a dividend policy next year.

Hassan said even without a dividend policy, the group has been distributing a good amount of returns to shareholders.

Last year, a total of RM57 million was paid out against net profit of RM100.1 million, he said.

(F.M.T news / 29 April 2013)

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Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Malaysia: New legal framework for Islamic banking, takaful being enacted

JOHOR BAHARU: The new legal framework for Islamic banking and takaful is currently undergoing the legislative process towards its enactment, Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said.

She said the new legal framework would not only streamline the legal requirements across sectors but would also ensure that the law was reflective of the nature and features of Shariah contracts.

It would also ensure that the degree of regulation would commensurate with level of risks that Islamic financial institutions, markets and products pose to the overall financial sytem, Zeti said.

"The greater clarity on the legal and prudential requirements underpinned by Shariah principles will enable participants of the Islamic financial system to align to their practices and expectations accordingly when undertaking Islamic financial business and transactions," she said.

She was delivering her keynote address at the last day of the Eighth World Islamic Economic Forum (WIEF) here.

Zeti said while Islamic finance practitioners and scholars continued to draw from the source of fiqh muamalat to create new and innovative instruments, the legal framework needed to be further strengthened to ensure alignment with new market developments.

This is to ensure that it continued to lend certainty and predictability to innovative products and financial transactions, she said.

(The Star Online / 06 Dec 2012)

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Malaysia's Value Proposition - International Takaful

Malaysia's in-depth experience and solid fundamentals in Islamic finance developed over more than 30 years, offer strong value propositions to foreign financial institutions to establish takaful operations in Malaysia to conduct foreign currency business. 

Well-Developed Market

Malaysia has placed an equal emphasis on the four core sectors in Islamic finance – Islamic banking, takaful, Islamic capital market as well as Islamic money market. Malaysia is one of the leading takaful market and has been experiencing rapid growth. As at 2008, total assets of Malaysia's takaful industry amounted to USD3 billion, with market penetration of 7.5%. Takaful assets and net contributions experienced strong growth with an average annual growth rate of 21% and 29% respectively from 2004 to 2008¹.

The rapid liberalisation of Malaysia's Islamic finance industry has encouraged foreign institutions' participation in Malaysia, thus creating a diverse and growing community of domestic and international takaful operators that have acknowledged experience in the takaful industry. Currently, there are eight takaful operators and four retakaful operators, with five foreign participations from the UK, Bahrain, Germany and Japan. These takaful operators conduct both domestic and foreign currency business.

Adopt Global Legal and Regulatory Best Practices

Malaysia's legal framework caters for Islamic finance matters. There is a dedicated judge at the High Court level for Islamic finance matters. The Kuala Lumpur Regional Centre for Arbitration has specific capabilities to deal with Islamic contract matters. This legal framework enables the enforceability of Islamic finance contracts while providing strong governance and legal redress for Islamic financial institutions. 

The Malaysian takaful industry is governed by the Takaful Act 1984, which provides the legislative framework for the licensing and regulation of takaful businesses to ensure the businesses are in accordance with the Shariah principles.

The development of various regulatory guidelines has been instrumental in providing consistency and clarity for the operations of Islamic finance in Malaysia. In addition, Malaysia's Islamic regulatory guidelines have also set the benchmarks for other countries in developing their own Islamic industry.

Well-Developed Shariah Governance Framework 

The Central Bank of Malaysia (Bank Negara Malaysia) has established a centralised Shariah Advisory Council (SAC) to advise on issues related to Shariah compliance matters pertaining to the Islamic banking and takaful industry. The approach was taken, by recognising the importance of Shariah compliance in the Islamic financial system which possesses distinctive characteristics when compared to the conventional system.

The SAC is responsible for analysing issues on Islamic banking and takaful matter, to ensure the aspects of the operations of Islamic financial institutions are in accordance with Shariah principles. 

Comprehensive Human Capital Development 

Malaysia has placed a strong emphasis on human capital development alongside with the development of Islamic finance industry to ensure the availability of Islamic finance talent. As a result, Malaysia has a large and diverse pool of Islamic finance talent comprises product innovators, regulators, intermediaries and risk managers who have both financial and Shariah knowledge and expertise. 

Malaysia adopts a structured and comprehensive approach to human capital development in Islamic finance to meet the growing needs of Islamic finance talent by domestic and foreign financial institutions. Several learning institutions offer wide range of Islamic finance training programmes to develop Islamic finance professionals and cultivate Islamic finance thought leadership. 

Liberal Foreign Exchange Administration (FEA) Rules

Malaysia's liberalised foreign exchange administration rules enhance Malaysia's competitiveness and business efficiency, while promoting financial and economic stability. 

The relaxation in rulings was made in tandem with the readiness of the Malaysian economy to support the country's growth and competitiveness, whilst creating conducive business environment for foreign financial institutions. (MIFC)

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