KUALA LUMPUR: Retakaful players in Malaysia are well positioned to serve the global and domestic takaful value chains, Bank Negara Malaysia deputy governor Adnan Zaylani Mohamad Zahid said.
He said that with the comprehensive ecosystem and facilitative infrastructure in Malaysia which is reflective of a more mature Islamic finance ecosystem in the country, the retakaful ecosystem could be further strengthened to support the value chain.
"The presence of major global retakaful players in Malaysia, complemented by strong domestic retakaful players, further enriches Malaysia’s proposition as a global gateway for Islamic finance as outlined in the Financial Sector Blueprint 2022-2026.
"In recent years, we have seen more new markets emerging across Asia, Africa and Europe as the Islamic finance business expands to include Shariah-compliant risk protection,” he said at the launching of Malaysian Life Reinsurance Group Bhd’s (MLRe) retakaful product here today.
According to Adnan Zaylani, the latest developments in digital takaful, microtakaful, social and green finance together with Malaysia’s changing demographic landscape towards an ageing population presented new growth areas in which retakaful could play a greater role in spurring further developments.
he said Malaysia’s takaful industry has also expanded nearly three times from where it was a decade ago with greater diversification of business lines by extending takaful coverage to underserved segments and embedding new value-added services such as badal hajj, waqf and charity.
"All these signals towards greater opportunities for the retakaful industry to expand in Malaysia and optimise Malaysia as a base for tapping global opportunities,” he said.
The deputy governor said the takaful and retakaful markets are interdependent in terms of their growth and viability, similar to the symbiosis between insurance and reinsurance.
He said as such, strong growth prospects for takaful meant that retakaful also stands to reap its benefits if seized in a timely manner.
"However, while takaful is making strides in its development, there remain gaps in the retakaful market to serve as a tool of choice by takaful operators for managing their risks.
"Several dimensions which retakaful players can strive to grow in line with the Malaysia International Islamic Financial Centre (MIFC) aspirations include greater diversification of risks with increased cross-border retakaful business within the region and beyond as well as expansion of retakaful offerings in innovative segments which remain relatively untapped such as agriculture as well as climate and social resilience,” he added. - Bernama
