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Takaful Malaysia Case
Takaful Malaysia Case
TAKAFUL :
THE MALAYSIA CASE
Development of Takaful
– Worldwide Prospective
Takaful or Islamic Insurance is a new
industry.
2
Worldwide Muslim Population
(Based on 1998 Islamic Web.Com)
3
Potential of Takaful Business in Muslim Countries
Worldwide Muslim Population (Based on 1998 ISLAMIC Web.Com)
Area Population Muslim Population Percentage
(Million) (Million)
Worldwide 5,070 1,500 30%
South East Asia 363 226 62%
Malaysia 20 10.4 53%
Total Insurance Premium (Based on 2003 Sigma Report)
Area Total Premium Life Insurance Non-Life Insurance
(USD ‘Billion) (USD ‘Billion) (USD ‘Billion)
Worldwide 2,940 1,670 1,270
South East Asia 194 137 57
Malaysia 5.6 3.4 2.2
Area Total Takaful Family Takaful General Takaful
Contribution Contribution Contribution
(USD ‘Million) (USD ‘Million) (USD ‘Million)
Malaysia 267 201 66
(Takaful)
4
Potential of Takaful Business in Muslim Countries
5
Development of Takaful – Malaysia Case Study
Takaful industry is relatively new
compared to conventional insurance
companies in Malaysia.
7
Organisation Chart: Islamic Banking & Takaful
Department & Insurance Supervision Department
GOVERNOR
DEPUTY
GOVERNOR
ASSISTANT ASSISTANT
GOVERNOR GOVERNOR
9
Performance of Takaful Business in Malaysia
300
Net Contribution in USD Million
250
66
200 58
47
150
39
100 201
176
137
50 98
0
2000 2001 2002 2003
Year
Family General
10
Overview of the Takaful Performance
The favourite economic conditions in 2003
was positive for takaful industry in
Malaysia.
12
Performance of Family Takaful in Malaysia
160
Contribution in USD Million
140 134
119
120
97
100
78
80
60
40
20
0
2000 2001 2002 2003
Year
13
Performance of Family Takaful Business
14
Performance of Family Takaful Business
15
Distribution Channel for Family Takaful
Business
Direct Marketing and Agents: 86.3%
Bancassurance: 13.0%
Brokers: 0.7%
Types of Family Takaful Business in Malaysia for Year 2003
Annuity Investment-
1% Linked
Ordinary 1%
Family Group
10%
Ordinary
Family
Individual
88% 16
Assets of Family Takaful Fund in Malaysia
(2003)
Other Assets, Islamic Private
10.8% Debt Securities
and Equities,
34.6%
Investments,
45.3%
Investment
Accounts and
Islamic Money
Market, 35.6%
Government
Islamic Papers,
10.5%
Other
Financing, 2.4%
Investment Investments, 0.2%
Properties, 5.9%
17
Performance of General Takaful in Malaysia
for Year 2003
120
106.05
Contribution in USD 'Million
100
87.55
80 70.21
60 53.34
40
20
0
2000 2001 2002 2003
Year 18
Distributions Channel for Family Takaful
Business
Direct Marketing And Agents: 70.1%
Bancassurance: 10.0%
Brokers: 19.6%
Types of General Takaful Business in Malaysia (2003)
Marine,
Misc Aviation and
20.0% Transit
8.7%
Fire
Motor
41.5%
29.9%
19
Assets of General Takaful Funds in Malaysia
(2003)
Islamic Private
Other Assets, Debt Securities
10.8% and Equities,
Investment
34.6%
Accounts and
Islamic Money
Market, 35.6% Investments,
45.3%
Government
Islamic Papers,
10.5%
Other
Financing,
Investments,
2.4% Investment
Properties, 0.2%
5.9%
20
Basic Concepts of Takaful
1. Al-Mudharabah – means ‘profit sharing’.
2. Al-Takaful – means ‘joint guarantee’.
3. Tabarru – refers to elements of ‘donation’.
COMPANY'S
COMPANY ADMINISTRATRTION
& MANAGEMENT
EXPENSES
TAKAFUL
INVESTMENT PROFITS 30% (Example only)
CONTRACT BASED
BY FROM
ON PRINCIPLE OF COMPANY INVESTMENT 70% (Example only)
AL-MUDHARABAH
COMPANY'S
ADMINISTRATRTION
COMPANY & MANAGEMENT
EXPENSES
TAKAFUL
INVESTMENT PROFITS
CONTRACT BASED
BY FROM
ON PRINCIPLE OF COMPANY INVESTMENT
AL-MUDHARABAH
OPERATIONAL
COST OF SHARE OF
TAKAFUL SURPLUS FOR
THE COMPANY
PARTICIPANT TAKAFUL GENERAL GENERAL OPERATIONAL
CONTRIBUTION FAMILY FAMILY COST OF SURPLUS 40% (Example only)
PAID BY ACCOUNT ACCOUNT FAMILY (PROFIT)
60% (Example only)
OPERATIONAL SHARE OF
COST OF SURPLYS FOR
THE PARTICIPANT
TAKAFUL
27