5 Interactive Distance Learning Programs on Islamic Banking and Finance

Tuesday, May 19, 2009

PruBSN: Take-up Rate For Takaful Products Still Low

The take-up rate for takaful products is still low in the country due to misperception, according to Prudential-BSN Takaful Bhd (PruBSN) chief executive officer Mohamad Salihuddin Ahmad.

To date, the take-up rate was only 7.7 percent compared to 40 percent for conventional life insurance products, he said.

This, Salihuddin said, could be due to the misperception that takaful products were only for Muslims only.

"Takaful is not a product for Muslims only and since we started business more than two years ago, we have adopted takaful for all concepts," he told reporters after launching the PruBSN Johor Baharu business centre here today.

However, PruBSN, a joint venture between Prudential Plc and Bank Simpanan Nasional, did not see the misperception as a setback but an opportunity to explore, he said.

With more than half of its 10,000 agents being non-Muslims, Salihuddin was optimistic that PruBSN could grow further and capture a bigger share of the non-Muslim market.

At present, 35 percent of its more than 216,000 policyholders are non-Muslims, he said.

"Unlike conventional insurance, takaful products are Syariah-compliant and the best way to go as they propagate transparency," he added.

PruBSN, which has received about RM300 million in regular contributions from policyholders, planned to open five more business centres nationwide this year.

Salihuddin said that between RM500,000 and RM1 million will be invested in each business centre, depending on the size and renovations to be made.

He said the company decided to open the Johor Baharu business centre as it expects an upswing in development with the Iskandar Malaysia project, and it currently has 239 agents servicing customers in the state.

Its other business centre was opened recently in Shah Alam, Selangor, while its marketing and administrative centre is located in Wangsa Maju, Kuala Lumpur.


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