PETALING JAYA (Oct 16, 2013): Syarikat Takaful Malaysia Bhd, the country's pioneer Islamic insurer, is targeting double digit-growth in new business this year driven by its family and group segments.
Group managing director Datuk Mohamed Hassan Kamil said the company aims to maintain its lead in the group family takaful business, capturing 40% of the market sector, and 20% of the combined family and general takaful business.
"The company's earnings outlook continues to be strong and we are on track to meet our key performance indicators. The family takaful business will continue to be the major contributor as we continue to be the market leader in group business," Hassan told SunBiz recently.
For the fiscal year ending December 31 2013 (FY13), Takaful Malaysia is looking to rake in RM1.4 billion in new business compared with RM1.1 billion it secured last year. The bulk of the new sales will come from its family business and the rest from the general takaful segment.
"Since the start of our transformation program back in 2007, we have established a five-year track record for consecutive profitable business growth and we hope to maintain our excellent performance with strong underwriting and investment activities," Hassan said.
He noted that Takaful Malaysia will carry on being cautious in accepting only profitable underwriting contracts while avoiding those prone to greater risks.
"This is to ensure that we are able to derive healthier underwriting profits and mitigate increase in the loss ratio of both family takaful and general takaful businesses," he said.
Hassan mentioned that developing new product offerings is definitely an area the company is looking into as it strongly believes this would likely be the key driver of sales.
"Our focus would be in enhancing product packaging of our existing comprehensive investment-linked products in order to offer our customers extra benefits and flexibility when addressing their various protection, investment and savings needs. This will put our products on a higher platform to compete with our competitors as we hope to package them to suit the growing needs of our consumers," he said.
Additionally, Hassan hopes to continue to increase Takaful Malaysia's market share via its growing agency force to market its products.
"Our aim is to grow our agency force to 2,500 people by the end of this financial year," he said.
"Most importantly, our unique selling proposition as the first and sole takaful operator to consistently offer our valued customers a 15% No Claim Rebate (NCR) should there be no claims made during the coverage period across all general products gives us a competitive advantage in the market," he said.
Takaful Malaysia is hoping to open more Takaful My Care Centres (TMCCs), especially in non-bumiputra or non-Muslim populated areas in tandem with its efforts to promote takaful products to this market segment.
"At present, we have 18 TMCCs and we are targeting to have 25 TMCCs by the end of this year," Hassan said.
Takaful Malaysia's gross contributions are substantially derived from its single contribution products.
"Our key strategy to increase the percentage of regular contributions will be to focus on expanding our retail agency and concentrating on promoting our very comprehensive investment-linked products," Hassan said.
On new growth areas, Hassan mentioned that the development of Islamic loan products is an area he would like to explore further as with the growth of syariah-compliant loans in the market, takaful as a valid risk transfer mechanism would grow concurrently.
"We recognise that these segments usually are sophisticated risks and therefore provide takaful advisory services as to how banks can best protect their interests as they are applicable to consumer banking products and others within the business/commercial/corporate banking space," he said.
"Providing investment-linked products to bank partners with emphasis on education and retirement needs will be an area we intend to look into. Our goal is to keep the product simple with an effective selling process," he added.
Hassan said growth for general products, especially the non-motor business portfolio, will be supported by the strong underwriting margin over the next two years.
"The general business as a whole would be maintaining a 12% underwriting margin due to better cost control. Motor business is still the largest for the industry's general business with an average of 47% for the past 5 years (2008-2012)," he said.
In FY12, the motor segment made up about 48% of the company's total general takaful gross contributions.
The motor claim ratio for the takaful industry as a whole is slightly below 70% for 2012 whereras Takaful Malaysia's motor claim ratio is below the industry average.
Takaful Malaysia's growth areas, Hassan said, are still within the fire and engineering segments.
In FY12, its family takaful generated gross earned contributions jumped 42.2% to RM987.7 million, while the general takaful gross earned contributions reached RM457.1 million. The family takaful business continues to grow with about 67% share in 2012, from about 55% in 2011.
For the last two financial years, Takaful Malaysia's operating revenue registered a growth of about 20%, while its net profit was even more impressive, with a cumulative annual compounded growth rate of 35% for the last five financial years.