Zeti upbeat about takaful's viability

Dr. Zeti Akhtar Aziz, governor of Bank Negara Malaysia, is committed to steady growth within the takaful industry. By the end of 2004 takaful operators in Malaysia must increase the minimum paid-up capital to RM100m, a level that remains low compared to the conventional insurance sector. Market share growth of the takaful sector has slowed within recent years, particularly in terms of the percentage year-on-year growth; however, vertical growth has been a bit more promising. The Financial Sector Master Plan (FSMP) of 2001 calls for gradual financial market liberalization, which may increase competition from foreign takaful operators. While increased regulations and product transparency are positive steps, a more aggressive development strategy is needed for higher growth rates. Statistics are provided on growth rates for family and general takaful.