The Malaysian takaful industry made significant strides in 2024, making a record payout of MYR10.20bn ($2.31bn) in benefits to certificate holders.
This was a 16.73% increase from 2023, said the Malaysian Takaful Association (MTA) in a statement released yesterday.
Family takaful
Family takaful accounted for over three quarters (77.37%) of the benefits paid in 2024 at MYR7.89bn, while general takaful paid out MYR2.31bn.
The increased payout came on the back of a greater number of in-force family takaful certificates. A total of 993,393 new certificates was issued throughout the year, bringing the total number of in-force certificates modestly higher to 6.69m from 6.60m in 2023, after accounting for certificate replacements, expiries, or terminations over the same period.
The new certificates translated to a 1.48% growth in new business gross contribution at MYR9.73bn from MYR9.59bn. Business in-force contributions also rose in tandem, to MYR9.62bn in 2024 from MYR8.97bn in 2023, a growth of 7.20%.
The upward trend was most apparent when looking at a 3-year bloc period trend. The average increase in takaful benefit payout per year in 2022–2024 was MYR1.54bn per year, a significant quantum of almost 400% when viewed against the MYR393.3m average increment in 2019–2021.
The average number of in-force family takaful certificates per year also rose to 6.64m in 2022–2024 from the 5.58m certificates in 2019–2021. This growth also translated to family takaful new business contribution, which averaged MYR9.79bn per year in the 2022–2024 period, up from MYR7.08bn per year in 2019–2021.
The steady performance indicates the increasing awareness of having financial protection and growing appreciation for takaful among the people. This encouraging development is in part attributable to the concerted industry effort to highlight the role of takaful as a social safety net.
Takaful operators’ outreach initiatives have resulted in more Malaysians pursuing a career in the industry. There are now 92,866 active family takaful agents, with 26,714 new agents registered in 2024 alone.
Correspondingly, agents’ market share of new business increased to 25.56% in 2024 against 23.17% in 2023. Bancatakaful continued to extend its lead at 52.05% of new business contribution, up from 48.68%.
The bolstered number of active agents and the industry’s collective efforts to engage Malaysians helped the family takaful penetration rate hold steady at 19.57% in 2024 (2023: 19.57%).
General takaful
The general takaful segment maintained its momentum in 2024. Gross written contribution rose to MYR5.91bn from MYR5.45bn, translating to an 8.46% growth. Gross direct contribution saw a corresponding uptick, at 8.41%, to MYR5.90bn from MYR5.44bn the year prior.
General takaful performance remained driven by motor takaful, the largest contributor to the segment at 68.77% of gross written contribution. This paralleled Malaysia’s record-high 816,747 new vehicle sales units in 2024, surpassing the 800,000 unit mark for the first time.
With motor takaful accounting for the largest share of the segment, motor claims proportionately accounted for the majority of General Takaful claims paid at MYR2.04bn, or 88.30%.
In the non-motor classes, fire takaful experienced greater uptake in 2024 with MYR1.00bn gross written contribution, rising 7.27% from the previous period, while personal accident moderated to 6.56% at MYR388.00m gross written contribution.
Channel-wise, agency remained the dominant distribution channel in 2024, growing from 61.29% to 62.67%. Bancatakaful experienced consistent growth, increasing to 13.63% from 13.33% in 2023.
MTA interim chairman Wan Saifulrizal Wan Ismail said, “MTA’s mandate is clear – to make takaful more relevant, accessible, and impactful through value-based intermediation. Our vision is for takaful to be attuned to the evolving needs of Malaysia’s diverse population, driving sustained industry growth. Strengthening collaboration, deepening public awareness, and advancing product and service innovation will remain our focus, all with the aim of extending protection to the underserved and ensuring every Malaysian has access to a reliable social safety net.”
Health insurance price cap to result in foregone contributions of MYR800m
The takaful industry, though, is anticipated to forego MYR800m due to a cap imposed by Bank Negara Malaysia on medical insurance premium hikes. The cap is set at below 10% for at least 80% of policyholders over the next three years, to ease the financial burden on policyholders. The measure was imposed despite rising medical costs.