Monday, June 16, 2014

Etiqa bullish on family takaful

Posted on 13 June 2014 - 05:36am
KUALA LUMPUR: Etiqa Takaful Bhd expects its family takaful business to account for 65% of the group's total contribution in two to three years pushed by its growing agency force, from 60% currently.
"The target is to increase both (family takaful and general takaful) but the relative strength where the takaful market is now is skewed towards family takaful," its CEO Ahmad Rizlan Azman told a press conference at the 5th Annual World Takaful Conference: Family Takaful Summit Malaysia 2014 here yesterday.
Etiqa Insurance and Takaful chief commercial officer Shahril Azuar Jimin said the group's current family takaful to general takaful ratio of 60:40 is a good mix and can ideally be 64:36 or 65:35 as family takaful will be a sustainable business to support the growth of the group.
"In the market among composite insurers, we have the best mix as the general businesses do not necessarily carry the same kind of profitability as family takaful and it is open to more risks."
Shahril said Etiqa expects to have 12,000 family takaful agents in two years, from 8,000 agents now. The group is recruiting 300 agents every month and it plans to maintain this at least for a year.
"It's not just about the numbers. It's about professionalism and how productive they (agents) are. While the agency force may have been seen as a slightly more expensive distribution channel, we don't have to invest in infrastructure in term of branches and thereby the agency force has been playing the role of reaching out to rural areas. That is why it is still relevant to have a thriving agency force," said Shahril.
The agency force contributes 20.6% of the total gross contribution to Etiqa's family takaful business and it continues to become a priority for the group to develop the agency force. This year, Etiqa's focus is on enhancing and strengthening servicing skills and technical know-how of its agents.
The Etiqa Academy has provided over 5,000 family takaful agents the opportunity to experience and create a more professional and dynamic sales force.
Etiqa continued to be top takaful operator in Malaysia commanding a market share of 46.3% in general takaful and 28.6% in family takaful in terms of gross distribution and new business contribution respectively in 2013.
A range of new takaful products to boost business growth, emphasising on investment-linked, retirement and endowment, are also in place.
Experts are projecting that the Malaysian takaful industry is expected to grow by 20% per year for the next two years as consumer acceptance grows and regulatory changes provide a stronger and more stable infrastructure for the syariah-compliant insurance industry.
With a comparatively small 13% penetration rate for family takaful compared with the 55% penetration rate for conventional life insurance, there is tremendous potential for further growth in the family takaful segment in Malaysia.


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