In an environment that is highly competitive and constantly subject to rapid changes, t he industry is quickly ascending to prominence as evidenced by total assets amounting to RM6 billion, representing an average annual growth rate of over 27% for the past five years. Moreover, takaful contributions recorded an average annual growth of 18.8% during the period, and generating RM1.3 billion of contributions last year. This profound growth performance was achieved against the backdrop of relatively low overall takaful penetration rate of 5.6%, and the overall insurance penetration rate of 38.7%. This, coupled with growing awareness of the importance of takaful or insurance protection among the public, is a perfect recipe or combination for continuing success and further improvement of growth prospect of the industry in the coming years. Future success, however, will have to be earned as the competitive element within the industry is immense. These competitive elements could be in the form of groups of experienced players that are determined to sustain their market share, on the one hand, and new players with strong financial support and abundance of existing resources and international network on the other. Secondly, the takaful business, like other financial services products, is closely aligned with the expectations of the consumers. Hence, the sustainability of a takaful operator is dependent on its ability to effectively respond to their needs and demands. The long-term success of a takaful operator depends on the capacity to retain customers and the degree of customer allegiance.

This strong performance is anchored by the strong legal, regulatory and Shariah framework governing the industry, with full commitment of the government to position Malaysia as a thriving International Islamic financial centre. Major initiatives, such as the recent establishment of a well financed INCEIF, or the International Centre for Education in Islamic Finance, are clear indication of the efforts to enhance talent and human capital development, an essential element to drive innovation and sustain market competitiveness of the industry. T he  2  BIS Review 31/2006  dynamism and viability of the takaful industry in Malaysia that is supported by sound enabling environment have already drawn significant attention of m any strong international players seeking the opportunity to be part of the Malaysian takaful industry. The advancement and progress that have been achieved thus far have provided competitive advantage to our Malaysian takaful operators and opened up significant opportunity for our players to venture further abroad and become stronger global players, InsyaAllah. Against this backdrop of growing opportunities and challenges, it is imperative for the takaful operators to enhance their institutional capabilities and operational efficiency in order to strengthen their competitive position in responding to the ever changing environment. It is our aspiration to see Commerce Takaful Berhad emerges as an effective and progressive takaful operator with strong presence in the domestic financial landscape and acts as among the anchor players to expand takaful business at the global front.