Shortage of talents.

The

Takaful

industry in Malaysia is experiencing a severe scarcity of

qualified and skilled staffs who are versed in technical insurance principles and have enough

knowledge of Islamic law and finance (PwC, 2008). Furthermore, PwC report stated that it

is very challenging to find staff with the right talents and skills, especially those with

expertise in financial reporting, analytical and business skills.

6.1.7. Lessons learned, Recommendations and Transferring Knowledge

Lessons

Two key lessons and five are derived and five appropriate recommendations are proposed from

the Malaysia case study. These lessons and recommendations can serve as important areas of

knowledge transfer to OIC and non-OIC jurisdictions seeking to improve their

Takaful

sectors.

Introduction and Development of Regulatory Framework.

In the SEA region, several

new regulations have been introduced such as those related to the Family

Takaful

(LIFE)

and Life Insurance. This is in addition to the framework introduced to separate the

composite companies in Malaysia in 2018. The regulatory development is expected to

strengthen the overall industry and enhance its sustainability in the long term (Milliman,

2017).

Sustainability of Pension Schemes and Retirement Planning.

In the SEA region, although

there are funded retirement schemes (i.e., predominantly defined contribution schemes),

these are currently being provided lump sum at retirement. This gives rise to the lack of

financial protection at older age in view of longevity risk. Therefore, there is a need to have

retirement planning based on Family

Takaful

products.

There is a need to enhance the existing retirement products being offered in the market,

particularly with dissimulation products, to mitigate the longevity risk. Given the lack of market

penetration in most countries for Family

Takaful

, the need for retirement planning combined

with an ageing society would create an opportunity for the growth of the Family

Takaful

market

in most jurisdictions.

Recommendations

and Transfer of Knowledge

Supportive Regulatory and Governance Framework:

The regulatory and governance

framework is key for the development of the

Takaful

industry in Malaysia. Supportive

regulatory framework including corporate and

Shari'ah

governance is crucial for

upholding

Shari'ah

values and increasing the impact of

Takaful

to the country’s

economy and society. BNM, as a supervisory authority of Islamic finance in the country,

has been unswervingly supportive of the industry’s development. BNM has issued

guidelines and policy documents on various aspects of

Takaful

with the aim of

promoting product innovation to preserve the sustainability of the industry. This

includes the regulation on

Shari'ah

governance and compliance. The duty of

Takaful