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Family takaful up 14% in first 9 months

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PETALING JAYA: Family takaful new protection value increased 14% to RM364.2 billion in the nine months ended Sept 30, 2020, arising from RM4.84 billion new business contribution, which went up 3.2% from the corresponding period last year.

The Malaysian takaful industry continued its upward trend in promoting and enabling more Malaysians to obtain new family takaful protection despite challenges during the year.

“This encouraging decent growth is evidence of the positive effects from re-opening of the economy from Covid-19 especially during the third quarter of 2020. The industry will also continue to promote takaful digitally and continue to play its role in providing protection to Malaysians” said Malaysian Takaful Association (MTA) chairman Muhammad Fikri Mohamad Rawi in a statement today.

He added that the positive growth of the takaful industry also reflected the increasing awareness of the importance of protection among Malaysians, particularly during this pandemic period. Takaful operators have; more than ever, actively used the digital platform to promote takaful awareness.

“This is the second year the association is promoting takaful awareness through social media. The targeted segment of the campaign is youth aged between 25 to 45 years old. We aim to educate the public on the essence of takaful, the importance of protection and to share some affordable plans available in the market,” said Fikri.

As a whole, the takaful industry added 573,718 new certificates, a marked single digit increase of 7.2% from 535,426 new certificates issued during the same period in 2019. Furthermore, the annual contribution new business figures grew moderately by 6.7% to RM990 million for the nine months period compared to figures of the corresponding period last year, while the single contribution new business has increased slightly by 2.4.% to RM3.86 billion.

The total family takaful business’ in-force sum covered grew by 12.3% or RM1.06 trillion for the nine months period of 2020 compared to corresponding period last year. There was a moderate growth of 5.2% or 5.36 million certificates of in-force business. This resulted in improvements to the penetration rate, a ratio of the number of family takaful in-force certificates to the total Malaysian population, which increased to 16.4% as compared to 15.7% for the same period in 2019.

The general takaful industry has also registered a decent growth of 3.6% with total gross contributions of RM2.57 billion as compared to RM2.48 billion in the same period 2019. Motor takaful remained the largest class of business with a proportion of 65.3%.

Fire takaful maintained its position as the second largest class of business with a gross contribution of RM450 million, denoting a slight increase of 3.2%. Other classes of business also recorded a slight increase of 1.5% to RM447 million as compared to RM0.437 billion in 2019. In terms of market segment, tariff products still dominated the general takaful business.

In terms of claims paid, the net claims incurred ratio (NCIR) increased to 57% from 55.6% in same period 2019. For motor, the industry’s NCIR increased to 71.4% from 68.9% over the same period in 2019.

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