Takaful Penetration To Grow To 12 Pct By 2012

To further strengthen the resilience and competitiveness of the insurance and takaful industry, Prime Minister Datuk Seri Najib Tun Razak Monday announced that the foreign equity participation in insurance companies and takaful operators will be increased to a limit of up to 70 percent.

Najib said that a higher foreign equity limit beyond 70 percent for insurance companies will be considered on a case-by-case basis for players who can facilitate consolidation and rationalisation of the insurance industry.

"The rate of takaful penetration is still low, only seven percent and players currently are still unable to penetrate the market fully.

"Therefore with the presence of new players, as long as they are not after the same market, it will not become a problem for local operators. Infact it will help to increase the level of awareness (of takaful) among the people," he told Bernama in an interview.

As the industry competition is expected to grow, Syed Moheeb said local players should also increase their competitiveness.

"Only four out of our eight operators are large and able to compete. The remaining four are relatively small.

"Hence they would need to upgrade their performance. If not, Bank Negara Malaysia will ensure that they bring in new partners who will be able to help them in their growth," he added.

-- BERNAMA