Tuesday, September 13, 2011

Takaful IKHLAS Sets RM1 billion target

3 May 2011


Takaful IKHLAS has set its sights on hitting the RM1 billion contribution mark in two years, some 10 years after it started operations, said its top executive. To accommodate the surge in business volume, the company recently received a RM100 million capital injection via its parent MNRB Holdings Bhd.

"Our growth has remained steady over the years but we need enough capital to support the volume," its president and chief executive officer Datuk Syed Moheeb Syed Kamarulzaman told Business Times recently. With the capital injection, Takaful Ikhlas, with an authorised capital of RM500 million, will now have a paid-up capital of RM295 million.

Takaful IKHLAS can now set its eyes on more opportunities in the market, namely in product development and investment strategies. The domestic takaful market is also anticipating the implementation of the proposed risk-based capital (RBC) framework in the near future that would lead to some takaful operators injecting new capital to maintain their licence to operate takaful business.

Akin to the conventional insurance RBC regime that came into force in January 1 2009, the takaful RBC is used to set capital requirements considering the size and degree of risk taken by the insurers. As a rule of thumb, Moheeb suggests that an insurer's capital should be three times the business volume.

According to Moheeb, Takaful Ikhlas is looking to rake in RM900 million in contributions by the financial year ending March 31, 2012. "We are on track to meet our RM760 million contribution target for the fiscal year ended March 31 2011," he said.

To face the increase in competition with the additional four new family operators, Takaful Ikhlas is working hard to beef up its agency business and product offerings. It is learnt that the company derives 70 per cent of its business from the family or life insurance business, whereby up to 25 per cent is contributed by its agency force. Malaysia now has 12 takaful operators after Bank Negara Malaysia awarded four new family takaful licences to consortiums last year. The four are American International Assurance Bhd and Alliance Bank Malaysia Bhd; AMMB Holdings Bhd and Friends Provident Group (UK); ING Management Holdings (Malaysia) Sdn Bhd, Public Bank Bhd and Public Islamic Bank Bhd; and Great Eastern Life Assurance Co Ltd and Koperasi Angkatan Tentera Malaysia Bhd.

NST

No comments:

Post a Comment