Page 65 - Full Book_24.4.2021

In Retrospect

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The Will to Suceed

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The growing acceptance of Islamic financial products and services Malaysia’s Takaful Sector Maintained a Positive Outlook
among the population will likely be sustainable, due to the strong
regulatory framework in place and an expanding Islamic finance Malaysia’s Takaful industry grew 0.97% YoY during the first half Achieving a Leading Repute
ecosystem that includes Sukuk, takaful and Shariah-compliant of 2020, to reach RM286.2 billion in new Takaful protection
funds. Another reason for the faster-growth in Islamic finance value and RM3.19 billion in total new business contributions,
over the years is that more banks have adopted an Islamic-first for all certificates combined. These achievements were credited to
strategy to always offer the Islamic product first – for certain proactive agents who embraced digital platforms and technology |
products. to creatively promote Takaful products and services in Malaysia as
well as various initiatives taken by the country’s Takaful sector to
Malaysia’s Insurance Sector was Responsive maintain a positive penetration momentum.
Due to the impact of the pandemic and the MCO, insurance In-force protection value was RM1.02 trillion during January to Paving the Way for a Sustainable Future
premiums were RM310 million lower than in 2019 with motor June 2020, in comparison to RM0.96 trillion reported over the
insurance, representing 47% of the market, recording its worst same period in 2019. The performance of the Family Takaful
decline, dropping 7.4% year-on-year (“YoY”). sector demonstrated its resilience, thereby allowing it to serve
as a catalyst for growth. This growth was supported by greater
However, despite the effect on top line and investment results, acceptance of Takaful coverage amongst Malaysians, reflecting
Malaysia’s insurers expect to emerge stronger from the COVID-19 increased awareness with regards to Takaful as a choice for
crisis. Risk awareness and management improved in light of the protection. 61
pandemic, policy wording and exposures tightened. Insurers
were able to stress test their capital models and their business Meanwhile, total gross contribution in the General Takaful sector
continuity planning as work from home norms were seamlessly increased 0.6% YoY to reach RM1.64 billion in the first half of
implemented while operations and the service to agents and 2020.
clients had to be maintained. Insurers thus hastened their
investments into technology and digitilisation – a benefit which 4 www.themalaysianreserve.com/2020/09/08/malaysian-banks-record-
strengthens the industry’s long-term resilience. subdued-performance-but-remain-resilient/ Adhering to the Best Governance Practices
5 Bank Negara Malaysia in the statement issued following the conclusion
BNM focused its attention on protecting and cushioning the of its Monetary Policy Committee’s (“MPC”) final meeting for 2020
impact of the pandemic on policyholders and assuring a smooth 6 BNM’s Financial Stability Review (“FSR”) for the first half of 2020
functioning of the industry, despite pressure on revenues
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and capital. While insurers had to stress test their models and
assumptions, BNM adjusted its standard operating procedures to
guide the industry on how to organise its operations during the
Movement Control Order (“MCO”). As one of its key measures,
BNM delayed the implementation of the third phase of the Motor Laying the Foundation for Financial Growth
and Fire De-tariffication. With regard to insurers’ policyholders,
it encouraged insurers to set-up a COVID-19 test fund to support
the testing of policyholders.

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Additional Information & Disclosure Summary

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24 th AGM Information