Business Takaful

Source: The Star, 20th November 2007

KUALA LUMPUR: Syarikat Takaful Malaysia Bhd (Takaful Malaysia) is upbeat on turning in higher earnings and revenue for the fiscal year ending June 30 (FY08), thanks to its new operating system.

Group managing director Datuk Hassan Kamil said the company anticipated net profit and revenue to surge by 20% and 25% respectively for FY08.

He added that the new system would help boost revenue and enable it to manage the group’s capital structure more efficiently. It will also hasten the development and the launching of new products.

For FY07, Takaful Malaysia’s group net profit stood at RM24.8mil on RM1.1bil in revenue against net profit of RM36.5mil and revenue of RM969.1mil in FY06.

Hassan said at company level, Takaful Malaysia posted a lower net profit of RM15.8mil for FY07 compared with RM28mil previously.

The lower profit was mainly due to the less profitable general takaful fund and higher management and operating expenses, he said.

According to Hassan, general takaful is less profitable due to an increase in claims, in particular, for motor and fire classes.

Takaful Malaysia, he said was currently reviewing these classes of Islamic insurance in a bid to improve its claims ratio.

Another reason for the lower general takaful profits was the increase in additional operating expenses relating to bad and doubtful debts.

The increase in management and operations expenses was because of the accelerated depreciation on its main operating system, which was due for replacement.

On the family (life) takaful business, Hassan said it had performed quite well compared with the previous year, posting a higher surplus transfer to the shareholders’ funds of RM121mil from RM71mil previously.