Takaful's high growth potential in Malaysia

In its 'Standpoint Commentary' Malaysian Insurance and Takaful: Stable Fundamentals Amid Evolving Dynamics, RAM Ratings highlights the high growth prospects for Takaful in Malaysia. Under the new Acts, i.e. the Financial Services Act 2013 (FSA) and the Islamic Financial Services Act 2013 (IFSA), composite insurers and Takaful operators (TOs) are required to legally separate their general and life/family businesses by 2018. While RAM Ratings believes this would strengthen regulatory oversight of the sector, the additional capital and resource requirements could be significant for smaller players. RAM Ratings believes that the consensus medium-term forecast of 7-10 per cent growth for general and life insurance and double-digit growth for Takaful is largely achievable.