MANULIFE Insurance Bhd (MIB) plans to tap into the under-penetrated takaful market in Malaysia by inking a five-year strategic partnership with Takaful Ikhlas Family Bhd and is eyeing over RM30 million in new business premiums over the period.
CEO Sang Hui Lee said the partnership would enable MIB agency members to market and sell four Takaful Ikhlas products by providing options to its existing and new customers to choose life insurance products which are Shariah-compliant.
The products include Ikhlas Preferred Term Takaful, Ikhlas Savings Prime Takaful, Ikhlas Education Plus and Ikhlas Wanita Elegance.
“The RM30 million would be in Takaful Ikhlas’ books, but for us, we’ll have the opportunity to give our customers the choice of a takaful option. That is greater (for us) as it is something we cannot offer ourselves,” he said at the partnership signing ceremony in Kuala Lumpur yesterday.
Moving forward, Sang said MIB’s main focus would continue to be recruitment of agents to increase its manpower and with the addition of the takaful options, the company will have a full set of products that could help boost agents’ confidence.
“We also want to increase our presence here in Malaysia. Looking at the market share, we are still below 3%, therefore, we will do whatever we can to increase growth and good profitability,” he said.
MIB is wholly owned by Bursa Malaysia-listed Manulife Holdings Bhd, which is a member of Canada-based financial services group Manulife Financial Corp.
Meanwhile, Takaful Ikhlas president and CEO Mohd Din Merican said the partnership would enable the company to expand its market share by leveraging on MIB’s high-yielding agents.
He said Takaful Ikhlas has a customer base of about two million people presently, comprising 1.2 million customers under its family line and the balance for general insurance products.
“The partnership is part of our expansion strategy, as our current market, which mostly comprises government servants, is already quite saturated,” he said.
Mohd Din said the partnership is expected to see about 100 MIB agents go through specific procedures of licensing and training to enable them to start their selling activity in a few months.
On the industry outlook this year, Lee said the insurance sector remained positive as there is still a lot of opportunities with the penetration rate being still low and Malaysians still requiring a lot of coverage.
Depending on the economic situation, he said the country could see a lower or higher growth this year but in general, the Malaysian market remained attractive.
Adding to that, Mohd Din said the four products offered through the partnership also cater for the demand seen ahead.
He noted that although the conventional insurance penetration rate was seen as quite flat, the market saw demand for takaful products growing in 2018 to reach a market penetration rate of 15.2%.