Malaysia Takaful Operators growth plans

Malaysia’s takaful operators are planning for sustainable growth as they take advantage of the five-year time frame given to fully comply with the new Islamic Financial Services Act (IFSA), which came into effect earlier this month.
Among other things, IFSA requires composite takaful operators to split their life and general insurance businesses under separate licences within the next five years.In a recent interview with local newspaper Star Biz, Takaful Ikhlas CEO Abdul Latiff Abu Bakar said the company was looking to comply with the other requirements first, of which the deadline for compliance is one year.Takaful Malaysia Managing Director Mohamed Hassan Kamil said that given the five-year time frame, the company will be devising and evaluating potential options to achieve more efficient solutions from the capital management and shareholder return perspectives.“It is unlikely for the changes to materialise in the current financial year. The takaful industry players have yet to digest the full breadth of the IFSA to decide what would work best for them, going forward, especially towards sustainable growth of the takaful markets. This would definitely take time, as financial institutions need to better understand the application of the IFSA,” he said.Mr Hassan said although there will initially be higher outlay in splitting up its life and non-life operations due to start-up costs, in the long run, it will benefit the company and consumers as a whole, as the company will be more focused in terms of strategic planning, management, cost control and enhanced customer service. The capital position, too, will be further strengthened, he added.
Source: eWeekly Takaful