First of its kind

BY CAMILIA REZALI

Back then, the market share, market penetration, and takaful development in Islamic Banking were not as significant as it is today.

The international rating agency, Fitch Ratings, stated there were signs that takaful was finally making inroads in a market that ought to be its natural financial habitat. While the market share of Islamic banking of the entire banking sector is just under 40 per cent, the percentage of takaful is still way behind at 16 per cent of the whole insurance sector in Malaysia.

Chief Executive Officer of Zurich Takaful Malaysia Berhad, Mukesh Dhawan, said: “The allocation rates were lower in the early years and as per the guidelines provided by Bank Negara on Oct1, 2020, all Investment-Linked Plans (ILPs) must allocate more units to the customers.”

“Despite the guidelines, we see there is a big chunk of the Malaysian population who are not covered. So, to reach them, we need a wider product, which is what we have now – Proinvest,” he said.

Zurich Takaful officially introduced Takaful ProInvest on Nov 3, 2020. The investment-linked plan is designed to optimise savings and investments. It is also intended to help Malaysians plan for a better future and a comfortable retirement.

At its core is a wide choice of professionally-managed Shariah-approved local and foreign investment funds to diversify and optimise investment returns. This includes the recently-launched Shariah Global Edge Fund that tracks the MSCI World Islamic Index where the underlying fund is managed by Blackrock.

Its other funds, which are focused on Malaysia’s domestic markets, are either managed internally or are feeder funds that invest in products managed by RHB Bank and Principal Asset Management (formerly CIMB-Principal Asset Management).

Since Oct 1, 2020, Takaful allocations have improved as high as 60 per cent. The improvement was believed to be driven by the Minimum Allocation Rate (MAR) guidelines – a new market strategy structured by Bank Negara.

With the new guidelines coming into force, ProInvest is made more customer-centric. It is a more transparent and dynamic product.

“For financial planning enthusiasts, Proinvest will act as a base solution, and customers can tailor-make it. We enable our customers to increase their contribution by increasing top-ups as time goes by. And the best part is that you can extend the plan up to 100 years of age.

“Customers can sell units and even withdraw units for any preferred use, like children’s education, children’s marriage, family vacation and others. It can be for anything that you need. That is why I call it a very dynamic, flexible and customer-friendly product,” added Mukesh.

Its Family Care Privilege under Takaful Proinvest enables up to four spouses and/or children to obtain coverage up to RM300,000 or 25 per cent Basic Sum Covered (BSC) each without medical examination should the unfortunate happen. This helps secure the family’s financial well-being even after the client’s death.

Takaful ProInvest simplifies customer enrolment with a high non-medical limit of up to RM4,000,000. Auto-extension on coverage term until age 100 is possible without the need for any medical examination.

“Adding a complementary essence to the plan is wealth protection, which offers a high death benefit and Accidental Indemnity benefits. This emphasises the plan as a lifetime solution, in gearing customers for their retirement needs.

“This three-pronged approach of helping customers to save and invest while having coverage allows customers to focus on achieving their life goals without worry, be it a comfortable retirement, or a secure future for their family,” said Mukesh.

So, the diversification of Proinvest extends to providing Shariah fund managers’ choice, or options provided by Blackrock, RHB Bank or CIMB Bank. Mukesh described the product as a “plan that provides the next level of diversification”.

To increase awareness of takaful, Zurich Takaful desires to serve the under-served population in Malaysia by expanding the number of Takaful agents.

Mukesh said: “We need more people to serve them. Therefore, our plan is to drive growth with a multi-distribution approach or a multi-channel approach.

“We have a dominant agency force called Zurich Takaful Wealth Planners that contributes to 95 per cent of our business, comprising 7,000 professionally trained agents across Malaysia. In short, we are going to grow that channel by recruiting more people.”