There is an estimation of 324 Takaful operators around the world. In terms of direct takaful, Saudi Arabia has the largest General Takaful market while Malaysia has the most extensive Family Takaful market. Malaysia is considered one of the main retakaful markets in Southeast Asia, along with Indonesia and Brunei.
Growth of the Global Takaful Market
The global takaful sector is one of the segments of the insurance market that is expanding the fastest, with an average annual growth rate of between 15-20%. Following the remarkable expansion of the Islamic financial system, particularly in the Islamic banking industry and Islamic capital market, there is an increasing demand for takaful products on a global scale.
The expansion of both sectors helped the takaful and retakaful industries to grow healthily. For instance, there is a logical demand for mortgage protection takaful covers given the significant expansion of Islamic financing and mortgages.
Growth Of Malaysia’s Takaful Market
The Malaysia Takaful Association reports that the family takaful business in Malaysia has experienced double-digit growth. In the nine months that ended on September 30, 2020, the value of family takaful protection climbed 14% to RM364.2 billion thanks to RM4.84 billion in new business contributions, an increase of 3.2% from the same time in 2019.
Over the years, the demand for Family Takaful has grown significantly. When compared to the same period in 2019, the general takaful business had a respectable gain of 3.6%, with total gross contributions of RM2.57 billion as opposed to RM2.48 billion. With a share of 65.3%, motor takaful outlasted the largest business category. With a gross contribution of RM450 million, or a little rise of 3.2%, fire takaful maintained its place as the second-largest business class.
Limitations faced by the Retakaful and Retrotakaful Market
However, there is only a small amount of retrotakaful capability accessible at this point in development. Due to a lack of supply in the market, takaful operators on the Shariah Advisory Board are expected to permit retakaful/retrotakaful capacity to be supplied from conventional players on the basis of dharura (utmost necessity).
Malaysian Re, through its Malaysian Re Retakaful Division (MRRD), is licensed by the Ministry of Finance to carry on both life and general retakaful activity. By extending the Shariah-compliant supply chain to domestic and overseas takaful operators, it was established to supplement Malaysian Re's traditional reinsurance operations. It makes use of Malaysian Re's best underwriting procedures, which include appropriate pricing models and tools, sound rating disciplines, and actuarial evaluations. For more information, visit https://www.malaysian-re.com.my/our-solutions/retakaful.