Takaful players told to merge in order to survive
Malaysia’s 11 takaful companies should consider merging soon, especially in the general takaful business due to potential limited growth prospects in addition to insurmountable competition especially with the upcoming detariffication of motor and fire insurance in 2016. Apart from new regulatory requirements like the Islamic Financial Services Act 2013 which many companies have difficulties to comply with, takaful products have failed to differentiate itself from conventional insurance products. In addition, limited product offerings by takaful makes conventional insurance more attractive. Nonetheless, other than the regulatory aspects, the synergy offered by a merger would make the company more competitive in addition to having more products to offer.
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