KUALA LUMPUR, Sept 3 — Malaysia is ready and has the potential to become a mega takaful operator in the region given its strong track record, right capitalisation, capable expertise and broad knowledge of the industry, said Ernst & Young.

Its global Islamic finance leader, Ashar Nazim, said with the advantages, Malaysian entities should go out and help develop other regional markets. He said the local takaful operators had the right ‘ingredients’ to build upon and grow beyond Malaysian borders into Asean region as well as into various parts of the world.

“Malaysia has the most successful template for the family takaful, while most other markets are still struggling to find the right sustainable model.

“There are a lot of start-up operators in the Gulf Cooperation Council, larger Asia and North Africa who want to get that knowledge, successful learning and experience,” he told a media briefing after the launch of Ernst & Young’s latest report here today.

He said takaful operators in Malaysia should take advantage of the country’s backdrop as one of the few core Islamic finance markets that has strong industrial base.

Country managing partner and Islamic finance leader of Ernst & Young Malaysia, Datuk Rauf Rashid, said there was huge untapped market in the region that would translate into tremendous demand for takaful businesses.

The penetration rate in Malaysia currently stood at about five per cent, while the largest Muslim population in the world, Indonesia, was at only 1.8 per cent, he said. He said in Asean, Malaysia and Indonesia held one-third share of the global takaful market.

The report, Global Takaful Insights 2014: Market Updates, was launched by Bank Negara Malaysia director of Islamic Banking and Takaful Department, Wan Mohd Nazri Wan Osman.

According to the report, Malaysia’s takaful industry is expected to grow to US$3 billion (RM9.54 billion) this year from the estimate US$2.4 billion for 2013. — Bernama