Takaful ... Apr12

It stands to gain from a new ruling in Indonesia that will see pure takaful players grabbing a bigger share of the insurance market.

The Indonesia’s regulator is in the midst of removing Islamic Windows or the sale of takaful products by insurers that are not licensed as takaful operators. This will effectively benefit standalone takaful companies, of which there are not more than four in Indonesia and one of which is Takaful Malaysia.

Although Takaful Malaysia has been the largest standalone takaful company in Indoensia, this is set to change with the new ruling, which is being implemented.

At the moment, Indonesia contributes less than 5% to Takaful Malaysia’s revenue and the company hopes to grow this to 50% in four years.

Aside from the new ruling, Indonesia’s rapid growth represents a strong upside for its takaful sector. Demand for Islamic products is set to rise along with the country’s standard of living and purchasing power, as large inflows of foreign direct investment will create more employment opportunities.