Family Takaful and General Takaful paid out RM6.79 billion and RM1.95 billion respectively
Kuala Lumpur, 26 March 2024 – The Malaysian Takaful Association (MTA) today announced that takaful operators paid out a total of RM8.74 billion in 2023 to support the rakyat in their time of need. Notably, Family Takaful honoured RM6.79 billion in benefits, underlining its commitment to safeguarding families across the nation. The General Takaful disbursed a total of RM1.95 billion. This uptick of 24.40% in payouts demonstrates the takaful industry’s responsiveness to emerging needs and its dedication to promptly assist certificate holders.
This payout comes on the back of Family Takaful gross contribution of business inforce which grew 7.55% to RM8.97 billion, compared to RM8.34 billion in 2022. The number of certificates inforce in 2023 was stable at 6.60 million, shy of the 6.63 million certificates inforce recorded in 2022.
Throughout the year, the Family Takaful business added 1.13 million new certificates with a corresponding gross contribution of RM9.59 billion but could not reach the high 1.31 million new certificates and RM10.06 billion gross contribution registered in 2022. Although this figure was slightly lower than the previous year, it underscores the sustained interest and trust in takaful protection among the rakyat.
MTA Chairman Elmie Aman Najas commented, “The importance and benefits of takaful are gaining greater traction, as evidenced by the consistent inforce certificates following a strong year in new certificates in the previous year. This signifies that participants continue to fulfil their contribution obligations, indicating a sustained awareness of financial planning and retention among participants. The industry-wide awareness initiatives are translating to tangible outcomes, with takaful products continuing to be a preferred option.”
“Performance-wise, the three-years numbers indicate a normalisation in the industry in 2023 after a year of strong post-pandemic growth in 2022. The Family Takaful Penetration Rate in 2023 held relatively steady at 19.58%, even as the population grew by 678,500 people, outpacing that of 2022 and was a record 10-year high growth,” he continued. In 2022, the Penetration Rate was 20.06% and population growth was 401,600 persons.
The General Takaful business continued its upward trajectory in 2023 with a 17.44% increase in gross written contributions to RM5.45 billion from RM4.64 billion. Gross direct contribution also registered an increase, of 17.40% to RM5.44 billion from RM4.64 billion a year prior.
These contributions are primarily attributable to the robust performance of motor takaful, which expanded 18.70% to RM3.64 billion, and remained a key driver of General Takaful. This performance aligns with an all-time high 799,731 new motor vehicles sold in the year due to promotional campaigns and new model launches. Increased awareness and appreciation for takaful products coupled with ease of participation via digitalised solutions have resulted in motor takaful accounting for 66.94% of the General Takaful business.
General takaful operators are agile and have adapted to the uptake in electric vehicles (EVs) by introducing innovative motor takaful for EVs. The tailor-made products help the operators gain grounds, and support the overall National Energy Transition Roadmap of having 20% of all vehicle sales being xEVs by 2030, and 50% by 2040.
Other lines of business also recorded strong growth as post-pandemic recovery continued, in particular those linked to logistics, as trade picked up pace. Aviation performance grew 146.04%, recording RM13.81 million gross direct contribution (2022: RM5.61 million), while cargo rose by 79.09% to RM30.85 million (2022: RM17.24 million) and marine hull improved by 45.89% to RM15.07 million. The recovery of the construction sector in 2023 helped Contractor’s All Risks & Engineering achieve a 44.00% or RM71.32 million improvement, coming in at RM233.42 million for the year.
In terms of channels, Agency and Bancatakaful remained the key contact points, with new business with total contribution standing at 34.03% and 29.99%.
MTA expects the takaful industry to maintain a steady momentum in 2024, reflecting the forecast for Malaysia’s overall economic expansion. The industry is united in its commitment to accessible and affordable takaful protection for the rakyat as part of its efforts to support the country’s economic development.
In line with this, MTA announced its four-year strategic transformation plan to elevate, and innovate takaful to be a household name in Malaysia and inspire a new generation of participants. The mandate is to make takaful more relevant, accessible, and impactful.
Named Hijrah27, the strategic transformation plan embraces change with purpose and aligns MTA’s mission with the visionary goals of the Financial Sector Blueprint 2026 and the industry’s Value-Based Intermediation framework. Hijrah27 is the continuation of the successfully concluded MTA Reform Plan 2022-2023, known as ISLAH 23, and will guide the industry and overall Islamic ecosystem as a whole to work together to advance takaful.
While Hijrah27 is still undergoing finaliastion, MTA envisions that it will provide impetus to and subsequently maintain the growth momentum of takaful, towards making it a leader in Malaysia. There will be continued emphasis on collaborations, comprehensive awareness, products and services innovations and expansion of takaful’s role in the whole ecosystem to widen protection and meet the undserved and underserved rakyat at their level of need to ensure every Malaysian has a safety net.