While there are attempts to publicise takaful offerings, these efforts remain fragmented and lack of focus on advocating greater appreciation and understanding about the value of protection. Households and businesses remain unaware and uninformed in making decisions relating to financial protection. Recognising this persistent challenge, the Bank and the Securities Commission recently spearheaded the establishment of the Financial Education Network and the launch of the National Strategy for Financial Literacy to increase the impact of financial education initiatives and to elevate financial literacy among Malaysians. Efforts to improve financial literacy will also require industry associations to drive the development of best practices for industry-wide adoption. In this regard, the Malaysian Takaful Association should be consistently proactive and agile in responding to emerging opportunities and resolving impeding industry issues. Takaful industry as a game-changer in empowering financial resilience As Malaysia advances towards the shared prosperity vision, it is crucial to ensure balanced and inclusive growth. The takaful industry has a critical role in enhancing the socio-economic wellbeing of Malaysians. This vision cannot be achieved without addressing the specific needs of the lower income group. According to a study by Khazanah Research Institute, people in the lower income category now have lesser residual income. The cost of living burden is the heaviest for lower income households, who spend 94.8% of their income on basic expenditure. Not much is left for savings or for financial protection in the event of misfortune. Overcoming the issue of affordability requires long-term and broader measures to grow people’s income.

The Muslim economy, in particular, is one of the fastest growing economies worldwide, driven by the exponential growth of Muslim population demanding Shariah-compliant products and services. Globally, the Muslim population itself is expected to grow twice as fast as the nonMuslim population. The global halal market is expected to reach USD9.71 trillion by 2025 – more than 20 times the size of Malaysia’s economy. The global Islamic finance assets on the other hand have already surpassed USD2 trillion last year. All these present significant opportunities for the takaful industry to provide protection and risk management solutions – be it for trade or goods in transit, for protection of physical or financial assets, and for the protection of human livelihoods. Yet, the global takaful growth ranges at only around 4% last year. While the number of takaful operators has increased to 306, the global takaful industry still accounts for less than 1% of the global insurance market. This calls for serious attention and more concerted efforts by the takaful industry worldwide to ideate and introduce solutions that can support the progress of the Muslim community. Indeed, we should also recognise that this lack of protection and coverage is holding back the economic development of the Muslim community, and it is incumbent upon us to do more to improve this. Takaful as a solution of choice for Malaysians Here in Malaysia, the dual financial system which also includes conventional insurance and takaful market, is well-entrenched. The operating environment presents both opportunities and challenges for the takaful industry.