Gross Contributions Showed a Significant Increase for Family Takaful and General Takaful at 18.3% and 21.2% Respectively.
Kuala Lumpur, 12 April 2023 – The Malaysian Takaful Association (MTA) today announced the Takaful industry’s strong performance for 2022 on the back of the country’s post-pandemic recovery phase. The industry’s positive growth can be attributed to several factors, including the growing popularity of takaful products among consumers, the introduction of new innovative products, and the adoption of digital technologies to enhance service delivery. The Family Takaful achieved a Penetration Rate of 20.1% in 2022 as compared to 18.6% in the previous year based on the number of certificates inforce against the total Malaysian population. The industry’s growth is driven by increasing demand for Islamic finance products and the acceptance of takaful products as preferred protection schemes. The industry has also made significant strides in digital transformation, with many players offering online platforms for consumers to participate and Takaful operators to manage Takaful products.
MTA Chairman, Elmie Aman Najas said: “We are witnessing a strong demand for Takaful products, as more and more Malaysians recognise the importance of protecting themselves and their families against financial risks. The number of certificates inforce for 2022 has increased to 6.63 million certificates, compared to 6.07 million in 2021.”
The Family Takaful market has shown strong resilience with annual Takaful contributions of new businesses maintained above the RM2 billion mark, recording RM2.19 billion (a slight decrease of 1.9%) compared to RM2.23 billion in 2021. Overall, the Untuk Keluarga new business industry registered RM10.06 billion in gross contributions, an increase of 18.3% compared to RM8.5 billion in 2021. In parallel, a total of 1.31 million new business certificates were issued in 2022, a 15.6% increase from the 1.14 million certificates in 2021. Meanwhile, gross contribution of total business inforce was RM 8.34 billion in 2022 in contrast to RM7.42 billion in 2021.
Agency and Bancatakaful were the main channels for new business total contribution at 22% and 44% respectively. For new businesses, Agency recorded 72% as the main distribution channel for Annual Contribution Takaful plans. Meanwhile, Bancatakaful was the main contributor for Single Contribution Takaful plans with 49%.
“In relation to agency business, the pandemic has had a significant impact on the growth rate of new agent recruitment. In 2022 MTA has registered 39,027 new agents. The indication of the continued strong recruitment trend in 2021, which recorded a higher number than those seen in the pre-pandemic before 2019, served as important indicator of the industry continued strength as we transitioned from post-pandemic to endemic phase in our economy.” he added.
Other industry sectors similarly showed encouraging growth. In 2022, the General Takaful business registered Gross Direct Contributions of RM4.64 billion, with Motor Takaful business contributing RM3.07 billion, and the Fire Takaful business with RM0.84 billion. These are increases of 21.1%, 20.7% and 23.5% respectively from their performances in 2021. Motor Takaful remained at the top position in terms of portfolio mix of General Takaful at 66.2% [2021: 66.4%], followed by Fire Takaful at 18.2%.
For 2022, the Takaful industry paid out a total of RM 7.55 billion in claims, an increase of 29% from the previous year, RM 5.86 billion. Out of this, Family Takaful recorded total claims payout RM 5.5 billion which has a spike in growth of 23.09% from the year 2021, RM 4.5 billion. Meanwhile, General Takaful recorded a total claim payout amounting RM 2.05 billion, an increase of 51% from the previous year, RM 1.36 billion. This demonstrates the industry’s commitment to providing financial protection to its customers and the community as well as emphasises its contribution in supporting the economy.
MTA expects the Takaful industry to maintain its growth momentum in 2023, albeit at a moderate rate, despite the country still being in the pandemic recovery phase. The industry remains committed to providing accessible and affordable takaful protection to all Malaysians, as part of its efforts to support the country’s economic growth and development.
MTA will continue to play its role towards amplifying the level of public as well as private awareness to Takaful products and services and positioned itself as being the catalyst for Takaful industry transformation and growth for the future.