Takaful Malaysia to leverage on digitalisation after high returns

The insurer’s ‘Click for Cover’ portal offers the 1st tranche of online products to customers

By MARK RAO / TMR File Pic

SYARIKAT Takaful Malaysia Bhd aims to expand its market share in the general takaful business after recording higher turnover and earnings for its 2017 fiscal year, while ramping up its digital capabilities.

The company increased its revenue by 6.5% to RM2.14 billion year-on-year (YoY) due to the higher sales in the family and general takaful businesses.

Its net profit rose by 17.3% to RM206.7 million on higher net wakalah fee income for the financial year ended Dec 31, 2017 (FY17), Takaful Malaysia group CEO Datuk Seri Mohamed Hassan Md Kamil (picture) said the company’s general takaful business is still growing, and while it has maintained its lead position in the family takaful segment, the company is still finding it hard to establish a strong foothold in the Islamic insurance industry.

“We sustained our position as the market leader in the takaful business, and our general takaful, derived primarily from the fire and motor classes’ gross contribution, shot 20% up from FY16 to close at RM591 million,” noted Mohamed Hassan in a statement last Friday.

He added that Takaful Malaysia is also in the middle of enhancing its digital capabilities to increase products, as well as provide service accessibility to the consumers.

“We made significant investments in tools, applications and new technologies to improve operational efficiencies and enhance the customer experience via our digital strategy,” Mohamed Hassan said.

He added that Takaful Malaysia’s online sales portal, “Click for Cover”, also offers the first tranche of online products to their customers.

To build on its bancassurance business together with its banking partners, as well as to improve the group’s growth rate, the insurer will be introducing new products.

The family takaful business’ gross earned contributions improved by 3% YoY to RM1.26 billion for FY17, largely attributable to higher sales of mortgage-related products, coupled with lower net benefits along with claims — owing to the decrease in medical claims.

The segment’s year-to-date investment income amplified by 7% YoY to RM242 million due to the higher profit secured from Islamic debts securities, which was partially offset by lower dividend income from equity securities.

The main contribution to the general takaful business’ growth in gross contribution was derived from the fire and motor classes. The marked up in claims from these insurance classes snowballed in higher net benefits by 33% to RM146 million for the segment.

The group’s investment income, however, fell marginally from RM29.6 million in FY16 to RM29.3 million in FY17.

The takaful operator surpassed the RM200 million mark for the first time since its inception in 1984, raking in a net profit of RM206.7 million in FY17, and since 2009 — growing at a compounded annual growth rate of 27%.

Net return on equity was also higher for the period at 26.7% compared to the 24.9% managed in FY16.

The Lembaga Tabung Haji unit, BIMB Holdings Bhd, has a 59.72% stake in the company, which makes them the primary shareholders.