Diversification of Islamic Financial Insturments
163
contributions, the main channels are bancassurance (54.1%), followed by agents (14.8%),
brokers (7.2%) and other channels (24.0%).
Malaysian General Takaful Market Performance in 2016
The General Takaful Market in 2016 shows a good performance in overall. According to the
MTA Takaful Annual Report 2016, gross contributions of motor Takaful amounted to RM 1.46
Billions, and gross contributions for non-motor Takaful of RM 0.95 Billion, representing a
growth of 2.3% and 8.6% respectively.
Banca versus non-Banca Takaful Products
The statistics on the Banca products and non-Banca products, between 2015 and 2016 showed
that there is a various in the figures, where family Takaful non-banca perform well in 2016
with rati0 of 80% versus 2015 where the ratio of 78%, on the other hand General Takaful 2015
was performing better in banca and non-banca products with ratio of 22% and 53%
respectively.
A Glance of Malaysia in the International Takaful Market
Malaysia is regarded among the countries that dominate the Takaful industry globally, where
according to the world Takaful report 2016, by year-end 2014, the Takaful assets were
estimated to be around USD 33 billion. Gross Takaful contributions were estimated to be
around USD 14 billion by the end of 2014. However Takaful market still highly concentrated in
the GCC and South East Asia with Saudi Arabia and Malaysia predominating these markets.122
As for the Premium growth, operating ratio and combined ratio, Malaysia has combined ratio
of 91%, and operational ratio of 92%, it comes after the following countries, Bahrain; Jordan ;
Qatar; Saudi Arabia; and United Arab Emirates.123
Malaysia leads the Takaful industry in the South-east Asian region. It has 12 registered Takaful
operators. The statistics showed that Malaysia’s Takaful industry grew faster than
conventional insurance, with general and family Takaful recording 8.3% and 9.7% growth,
respectively, at end- June 2015, compared with conventional general and life insurance growth
of 6.6% and -0.4%, respectively.124
The portfolio of Takaful operator is very diversified as it combined cash, equity, Sukuk, fixed
deposit and others, that provides a balance portfolio in term of risk and return. The
diversification of the products in the market provides a proper management portfolio of the
Takaful operator to manage their investment and their assets and liabilities. Hence the
breakdown of the investment portfolio of the Malaysia Takaful operator showed a healthy
position in term of the distribution and the allocation of cash, fixed income and equity
exposure which is always has a small allocation due the uncertainty of the stock market. The
market portfolio allocation still shows the Sukuk represent a large portfolio for investment for
the Malaysian Takaful operator, however some of the Takaful operator make significant
placement in the fixed deposit, as it is also representing free risk compare to other investment
assets.
122 World Takaful report 2016. P6.
123 World Takaful report 2016. P9.
124 Ibid