Malaysia takaful industry achieves record growth in 2024

[MALAYSIA] Malaysia's takaful industry has achieved a significant milestone by distributing RM10.20 billion in benefits to its certificate holders in 2024. This represents a 16.73% increase from the RM8.74 billion paid out in 2023, underscoring the sector's robust growth and its pivotal role in providing financial protection to Malaysians.​

Growth in Contributions and Coverage

The Malaysian Takaful Association (MTA) reported that the industry experienced a 9.8% rise in net contributions, reaching RM19 billion in 2024, up from RM17.3 billion in the previous year. This growth was driven by both family and general takaful segments. Family takaful saw the issuance of 993,393 new certificates, bringing the total number of certificates in force to 6.69 million by the end of the year. Additionally, gross written contributions from general takaful increased by 8.46%, with motor takaful accounting for nearly 69% of the total contributions.​

The increase in both claims and contributions reflects a heightened awareness and trust in takaful products among Malaysians. Industry experts point to successful public education campaigns, digital transformation, and greater product accessibility as key enablers of this growth. The shift toward mobile platforms and online enrollment has particularly resonated with younger demographics, expanding the reach of takaful beyond traditional distribution channels.

In response to the growing demand, several takaful operators have introduced innovative products tailored to specific life stages and needs, such as micro-takaful plans and shariah-compliant critical illness coverage. These offerings aim to bridge the protection gap among underserved communities, especially in rural and semi-urban areas where conventional insurance uptake remains low.

Financial Performance of Key Players

Takaful Malaysia Keluarga Berhad reported a 22% increase in revenue, totaling RM3.58 billion in 2024, up from RM2.94 billion in the previous year. The company's profit after zakat and tax rose by 9% to RM378.1 million, reflecting improved performance across both family and general takaful businesses.

Other major players, including Etiqa Takaful and FWD Takaful, have also posted strong performance indicators, contributing to the sector’s overall momentum. Consolidation and strategic partnerships with fintech startups have allowed these companies to streamline claims processes and offer more personalized customer experiences. Analysts believe that this trend will continue as technology becomes a core driver of operational efficiency and customer retention.

Strategic Outlook

Looking ahead, the MTA aims to expand the industry's penetration rate to 40% by 2028. This target is part of a broader strategy to enhance financial protection for underinsured groups, particularly within the B40 and M40 income segments. Currently, approximately 46% of Malaysians lack personal financial protection, highlighting a significant opportunity for growth and outreach.

In support of the national agenda for financial inclusion, Bank Negara Malaysia has reiterated its commitment to fostering a more inclusive takaful ecosystem. The central bank's regulatory framework emphasizes transparency, consumer protection, and sustainable growth, ensuring that the industry remains resilient amid evolving economic conditions. Collaborative efforts with governmental and non-governmental organizations are also underway to promote financial literacy and encourage long-term savings behavior.

The takaful industry's continued growth and its commitment to expanding coverage are poised to play a crucial role in strengthening Malaysia's financial resilience and supporting its socio-economic development.