The takaful industry, which expects new business growth of at least 20% this year, faces some hiccups with the implementation of new legislation in the form of the Islamic Financial Services Act (IFSA) 2013. However, experts believe this will not hinder the industry from achieving sustainable growth in the long term. Malaysian Takaful Association chairman Zainudin Ishak pointed out that talent recruitment might face some challenges in the short term.
- Despite these issues, the industry will maintain a growth for new business of at least 20% per annum this year, after family takaful registered a 39.4% yoy jump in gross contributions to RM1.01bn in 1Q13 while general takaful registered an 18.8% increase in gross contributions to RM504.6m.
- He said that due to the separation of the family and general takaful licences into independent entities under the Act, the recruitment of talent among composite insurers or those having dual licences would intensify. This includes the demand for separate chief executive officers for both the family and general takaful companies, he said.
- Zainudin added that the separation of licences would not only pose challenges to the industry in retaining existing talent, but could also lead to staff pinching and unnatural hikes in wages. He, nevertheless, reiterated that this would only be a short-term effect of the Act. (Starbiz)