In addition, it will not be able to offer innovative products like investment linked products, which can further diversify their investment portfolio as these products are gaining popularity among conventional insurance companies. In the absence of an Islamic banking system, takaful operators would not be able to synergise and utilise the network of the banking system through bancassurance which can not only be an effective distribution channel but also serve to drive down operating costs. The development of a comprehensive Islamic financial infrastructure in Malaysia that includes Islamic banking, the money and capital markets has reinforced the development of the takaful business. 2  BIS Review 43/2003  Today, the takaful industry in Malaysia has emerged as a fast growing industry within the insurance sector since its introduction in 1985, 18 years ago. From total assets amounting to only USD0.5 million in 1986, it has reached more than USD900 million in 2002, constituting 5.2 per cent of the total assets of the insurance sector. In the same period, the takaful operators have offerred a wide range of family and general takaful products. The Malaysian Financial Sector Master Plan represents the blueprint for the development of the financial sector over a 10-year period. The plan, which was launched in 2001, places importance on the development of Islamic banking and takaful sector as an important component in the financial system.
Average life expectancy continued to rise sharply over the period, however. When it then became increasingly obvious during the 1990s that the ATP system was also going to be under-financed, a number of years of political debate passed before a majority of the Swedish parliament could agree on a new pension system that would be sustainable in the long term. With the implementation of the premium-reserve pension reform of 1998, a system was created that indeed is not guaranteed to result in high pensions for pension savers, but that at least will enable the public finances to bear the costs as an increasing number of people retire. However, Sweden is not the only country to be facing a difficult demographic challenge, quite the reverse. In the euro area, some countries will have a considerably larger frequency of retirement in the coming decades, which means that in 30 years there will be twice the number of pensioners per worker compared with today. Nevertheless, until recently pension reforms in most euro area countries have been conspicuous by their absence. In addition, the majority of these countries have only used a system whereby current pensioners are paid directly by current workers, and no funds have been reserved. The fact that this is unsustainable in the long run has been obvious for a long period. Yet, it has been politically impossible to bring about the kind of reforms that we in Sweden succeeded in introducing through political accord.