Embargo: Not for Publication or Broadcast Before 1800 Hours on Monday, 11 March 2002.
The 2001 Takaful Annual Report by Bank Negara
Bank Negara Malaysia (BNM) released the Takaful Annual Report 2001 today. Further information about BNM and its publications is available at http://www.bnm.gov.my.
The Annual Report of the Director General of Takaful 2001 provides a review of the performance and developments of the Malaysian takaful industry, which comprised two takaful operators, namely, Syarikat Takaful Malaysia Berhad (STMB) and Takaful Nasional Sendirian Berhad (TNSB), during 2000/2001, and the administration of the Takaful Act 1984 by BNM.
The growth of the takaful industry gained momentum in 2001 with the main business indicators recording higher growth rates. The combined contribution of the family and general takaful sectors increased by 229.5% (2000: 30.5%) to RM1,465.5 million, of which 89.1% of the contribution being generated by the family takaful sector. Total assets of takaful funds grew by 106% (2000: 40.1%) to reach RM2,407 million.
The family takaful sector recorded strong growth in 2001 with new takaful contributions increasing by 367.4% (2000: 80.8%) to RM1,306.4 million. A total of 221,868 new family takaful certificates were issued in 2001, an increase of 35.7% (2000: 163,492 certificates). The overwhelming demand for the newly introduced annuity scheme (SATK) for Employees Provident Fund (EPF) contributors was a major positive development in family takaful business in which the annuity scheme captured 67.4% share of total new contributions and 10.1% share of total sums participated. Mortgage takaful plans continued to register strong growth with 21.3% increase in the number of new certificates but its share of total new takaful contributions declined to 22.3% in 2001 (2000: 58.6%). On the other hand, term individual family takaful plans recorded negative growth in terms of new sums participated and contributions.
Business in force of the family takaful sector continued to expand in 2001. The number of takaful certificates in force increased by 47.5% (2000: 57.4%) to 648,654 certificates while total sums participated and takaful contributions in force grew by 46.6% and 184.6% to reach RM37,492 million and RM1,698.5 million respectively. In terms of distribution of sums participated in force, mortgage takaful plans and group family takaful plans continued to dominate, with shares of 38.3% (2000: 42.6%) and 36.7% (2000: 44.2%) respectively.
Total income of the family takaful funds grew substantially by 286.8% (2000: 32.7%) to RM1,359.1 million in 2001. Correspondingly, total expenditure grew by 55.7% (2000: 45.8%) to RM136.4 million resulting in an excess of income over outgo of RM1,222.7 million in 2001, representing 90.0% of total income of the family takaful funds in 2001. Total assets of family takaful funds increased by 132.5% to RM2,039.6 million in 2001.
General takaful business continued its growth momentum in year 2001 with total gross contributions increasing moderately by 28.6% (2000: 23.9%) to RM227.7 million. The increase in business was from the miscellaneous sub-sectors, namely personal accident, workmen compensation, liability and miscellaneous accident. Marine, aviation and transit (MAT) recorded growth of only 11.2% in 2001, a sharp drop as against a growth rate of 353.3% in the previous year. In terms of portfolio distribution, fire maintained its dominance for the third consecutive year since 1999, constituting 41.9% share of total general takaful gross contributions.
The net retention ratio of the general takaful industry declined slightly from 71.7% in 2000 to 69.9% in 2001. Overall claims experience of the general takaful fund had worsened as reflected by the escalation in claims ratio from 38.6% in 2000 to 41.5% in 2001. However, the general takaful industry managed to maintain its good underwriting performance with an underwriting surplus of RM70.7 million, an increase of 18.6% (2000: 10%) from RM59.6 million in 2000. In terms of assets, the general takaful funds registered a growth rate of 26.2% to reach RM367.4 million in 2001.
While having registered a commendable performance for the year 2001, takaful operators should continuously develop and enhance their capabilities, particularly in the area of product innovation in order to increase the market penetration level further.
Bank Negara Malaysia
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