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PruBSN to fortify local takaful business



KUALA LUMPUR: Prudential BSN Takaful Bhd (PruBSN), the sixth takaful company in Malaysia, will in the next couple of years embark on initiatives to strengthen its presence in the local market before going regional.

Chief executive officer Mohamad Salihuddin Ahmad said the next two years would be the foundation-building phase where the company would focus and fortify its position in the Malaysian takaful business.

“For our regional expansion, we will leverage on Prudential's network and expertise in 11 other countries in Asia and adopt the best practices available in these countries.

“But to do that, PruBSN will have to embark on initiatives to strengthen its takaful business in the local market before it leapfrogs overseas,'' he said in an interview.

Mohamad Salihuddin Ahmad: Prudential will leverage on network.
PruBSN is a 49:51 joint venture between Prudential Corp Holding Ltd and Bank Simpanan Nasional (BSN).

One of the company's major initiatives in capturing the local Islamic insurance market would be in trying to educate the public that takaful was not meant only for Muslim policyholders, he noted.

By changing the mindset of the public and incorporating Prudential BSN's corporate values of TRUST, Salihuddin said he was confident it would help the public better understand the importance in having Islamic insurance coverage.

TRUST is the abbreviation for Trustworthy, Respect, Understanding, Smile and Teamwork. He added to date the company had more than 5,000 agents, which about 60% were non-Muslims.

PruBSN which began operations in August, currently had more than 13,000 policyholders – of which again close to 60% were non-Muslims, Salihuddin said.

By having a mixed composition of agents, he said the company wanted to project the message that syariah-compliant insurance was for all races and not a religious investment instrument.

He added that the market for takaful in Malaysia had great growth potential as its penetration rate currently was only close to 5.6% compared with about 40% for life insurance.

On the company's projected growth rate, Salihuddin said in the next three to five years, it was expecting a double-digit compounded annual growth rate.

Another initiative which the company was looking at to strengthen its foothold in the local market was bancatakaful.

He said Prudential's global network and expertise, coupled with BSN's 382 branches and eight million customers, would help the company's takaful business grow moving forward.