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Low Awareness Impedes Takaful Industry’s Growth

The way takaful operators manage their promotion is ineffective, hampered by lack of coherent, nation-wide efforts to disseminate information in order to create demand. A study commissioned by the Malaysian Takaful Association provides a comprehensive appraisal of the low penetration rates in the sector. In particular, it examines the extent of the general public’s awareness of the Takaful industry as well as its product features and attributes.

The research conducted by a team comprising Hayati Mohd Dahan,  Yon Bahiah Wan Aris, Ainon Basar and headed by Zuriah Abdul Rahman of the Faculty of Business Management, analyzed data from a representative nationwide survey of 1,169 adults aged 18 and above, including the 13 states as well as the federal territories of Kuala Lumpur, Putrajaya and Labuan.

A key issue uncovered by the study is that current takaful consumers are clear about takaful features and its benefits and the Muslims, represented by the Malays, have no doubts about the products being permissible and Syariah-compliant. Although the survey reported that the general public is aware of takaful, a fraction of the non-consumers and non-Muslims demonstrated limited knowledge about its attributes and products.