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Takaful Malaysia eyes greater market share in 2012, says Hassan

Posted on May 4, 2012, Friday

KUALA LUMPUR: Syarikat Takaful Malaysia Bhd (Takaful Malaysia) has delivered a strong set of results in 2011 with profit after tax and zakat (PATZ) of RM76.4 million, representing a 98.4 per cent improvement compared with annualised 12 months period ended Dec 31, 2010.

The significant improvement in profit was largely attributable to the improved investment and underwriting results along with strong business growth.

At the 27th Annual General Meeting (AGM) held yesterday, Takaful Malaysia’s shareholders approved the final dividend of 10 per cent single tier in respect of the financial year ended Dec 31, 2011 amounting to approximately RM16.3 million.

“For the past 12 months, Takaful Malaysia’s share price has increased tremendously from RM1.39 in March 2011 to RM3.96 on April 30, 2012,” added Datuk Mohamed Hassan Kamil, group managing director of Takaful Malaysia.

Takaful Malaysia was recently listed amongst the top 5 companies in the 2012 edition of the OSK Top Malaysian Small Cap Companies – 30 Jewels.

OSK Research in its report gave Takaful Malaysia a fair value of RM4.42 per share pegged at 10 times estimated financial year 2013 price earnings multiple.

Takaful Malaysia has improved its market share of total takaful contribution to 20 per cent from 15 per cent in 2010.

The total contribution consist of 60 per cent of family takaful and 40 per cent for general takaful.

Based on Insurance Services of Malaysia (ISM) 4Q2011 report, Takaful Malaysia is the only operator among the top three players, which recorded a growth of 43 per cent and increase in market share by five per cent.

With the impending implementation of the Risk Based Capital Framework, it is possible that the industry may witness a round of consolidation between smaller takaful players.

If this development takes place in 2012, there will be bigger but fewer players to contend with.

This may augur well for Takaful Malaysia to further grow its market share moving forward.

“Takaful Malaysia’s existing products portfolio are well positioned to tap the many opportunities going forward.

Our growing image and acceptance for our products and services as well as improving customer service levels will hold us in good stead to compete effectively in the market place.

“We are looking into various strategic initiatives to grow our market share amongst others are marketing and branding, IT strategy and ‘customer centric’ value propositions,” expressed Hassan.

As for marketing and branding, Takaful Malaysia had recently launched the ‘We Should Talk’ campaign which marks an aggressive effort to engage and connect with its potential clients and investors.

The ‘We Should Talk’ campaign is targeted towards creating awareness of takaful or Islamic insurance and the value added benefits of takaful with the profit sharing concept compared to conventional insurance especially on the 15 per cent No Claim Rebate offering for all Takaful Malaysia’s general takaful products.

Takaful Malaysia is the first and only takaful operator in the country that offers this benefit, and had been consistently refunded 15 per cent of the premiums paid if no claims are incurred during the coverage period.

With the launch of this campaign, Takaful Malaysia hope to secure more new premiums in the medium term, thus adding to the future earnings visibility.

“We believe this exceptional yet unique benefit offered by Takaful Malaysia will provide us with competitive advantage over other takaful operators and thus enable us to grow our market share,” added Hassanl.

Takaful Malaysia has also embarked on an IT strategy to enhance its operational efficiency and customer service.

The company has invested RM3 million on a cutting edge technology, Document Management System (DMS) which is specifically designed to streamline operating procedures, increase productivity and help the Company expand its business through improved efficiency.

“On the ‘customer centric’ value proposition, we would continue to focus on delivering quality service and value to customers by offering an excellent customer experience via Takaful myCare Centres,” he added.

“In the pipeline for 2012, Takaful Malaysia will be opening up six additional new Takaful myCare Centre (TMCC) outlets nationwide to the current listing of 14 TMCC outlets with an estimated budget of up to RM500,000 per outlet.

We will also look to enhance our distribution channels to boost sales.

The ability to reach customers nationwide is crucial and we will continue to improve our capability and capacity in this area.” The Economic Transformation Programme (ETP) is also likely to have a potential positive impact to the insurance and takaful industry at the end of 2012.

The various Entry Point Projects (EPPs) under the ETP will boost the economy by providing jobs and generating business activity.

The multiplier or cascading effect of this is income creation, sale and purchase of properties, hiring of employees, loans and other activities; most of which will require insurance coverage.

The government has also expressed its intention of increasing the Gross Domestic Product (GDP) for life insurance from the existing 2.8 per cent to 4 per cent (75 per cent of population) by 2020 via the various ETP based initiatives.

“Ultimately, our goal is to outpace the market and firmly establish ourselves as the preferred choice not just amongst Takaful companies but among insurance providers as well.

We wish to be known as a dynamic, customer oriented Company that offers the best service levels and competitive products with a strong brand and image,” concluded Hassan. — Bernama

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