Question

Find out what is the Malaysia Takaful's market performance and Malaysia's takauful operator required rate of return. pls provide references

Answer 1

Let's make this question very simple and understandable by breaking the question into different parts.

First of all, we can make an idea of what is Takaful.

Islamic insurance is a relevant topic to discuss. Many research works have been carried on this topic. Here we'll come across takaful insurance which is based on Islamic law or sharia. Takaful is a type of Islamic insurance wherein members contribute money into a pool system to guarantee each other against loss or damage. Takaful branded insurance is based on Islamic religious law that explains how individuals are responsible to cooperate and protect one another. Like commercial insurance policies, this too covers life, health, and general insurance need.

takaful insurance was introduced as an alternative to those in the commercial insurance industry which are against the general Islamic restrictions on factors like interest, gambling and uncertainty principles all of which are outlawed in sharia.

Next, we come across Malaysia Takaful.

When we go through Malaysian Takaful insurance it is important to know about what is MTA.

MTA is nothing but Malaysia Takaful Association which is a general body to undertake all Takaful related matters in Malaysia. This is also regulated through the Islamic Financial Services Act 2013.

Next, we'll discuss Malaysia Takaful market performance.

Soon after the enactment of the Takaful Act 1984 Malaysia's first Takaful operator Syarikat Takaful Berhad was formed and it commenced operation in August 1985.

MTA was formed in 2002 in order to enhance self-regulation and to promote the interest of operators, All operators are required to be a member of MTA before the commencement of its operation.

According to Risk Assessment Model (RAM ratings 2019) it was stated that Malaysian Takaful Industry operations are stable. According to report given by them.

"RAM Ratings said with the progressive impact of tariff liberalisation and moderating economic growth, general takaful contributions were expected to expand at a slower 6.0-7.0 per cent pace. "

https://www.nst.com.my/business/2019/03/470479/malaysian-takaful-industry-outlook-stable-2019-ram-ratings#:~:text=RAM%20Ratings%20said%20with%20the,6.0-7.0%20per

https://www.researchgate.net/publication/274569773_The_relative_efficiency_of_investment_management_of_life_insurers_and_takaful_operators