Zamani Abdul Ghani: Significant trends surrounding the takaful industry Opening address by Mr Zamani Abdul Ghani, Deputy Governor of the Central Bank of Malaysia, at The 3rd International Convention on Takaful and Retakaful, Kuala Lumpur, 29 August 2007. *  *  *  Bismillahirrahmanirrahim, Distinguished Speakers, Ladies and Gentlemen. Assalamualaikum w.r.t. and Good Morning. I am indeed very pleased to be here this morning to welcome you to Kuala Lumpur . Alhamdulillah, we have among us today distinguished market players, regulators, scholars as well as participants from many parts of the world, including Brunei, Thailand, Indonesia, Singapore, Bangladesh, Sudan, Nigeria, Pakistan, Kuwait, Egypt, UAE, Bahrain, Jordan, Turkey and many others. On behalf of Bank Negara Malaysia, I wish to congratulate the Islamic Banking and Finance Institute Malaysia (IBFIM) and the Malaysian Takaful Association (MTA) for their efforts in organizing, for the third consecutive year, this International Convention on Takaful and Retakaful. Let me at the outset reiterate the importance of this Convention as a source of collaboration for ideas, sharing of knowledge and exchange of experiences for the continuous development and improvement of the takaful and retakaful industry. In few days time, on 31st of August, Malaysia is celebrating the 50th National Day and therefore, the organization of this 3rd Convention on Takaful and Retakaful is indeed very special. The convention and independence celebration have similarities in their core values. Both cherish the spirit of alliance, tolerance and togetherness.
Both also share strong call for “muhasabah” or reflection – to strategize for the future by reflecting on past experiences. My address today will touch on these two aspects. I will share my observations on the significant trends surrounding takaful industry in recent years as well as key focus areas for the industry moving forward. Finally, I will highlight a couple of major initiatives undertaken by Malaysia to further strengthen as well as expand the breadth and depth of the takaful and retakaful industry. High growth potential of global takaful market As a starting point, allow me to share with you five major trends in global takaful industry over the past few years. These trends have significant bearing on the development of this industry moving forward. First, the takaful and retakaful industry continued to show rapid growth momentum, and is increasingly being recognized as one of the major components of the overall Islamic financial system . Global takaful contributions amounted more than USD2 billion in 2005 and are expected to reach USD7 billion by 2015. The past few years have seen growth rates of around 20%, indicating high growth potential in years to come due especially to the present very low rate of takaful market penetration. As for Malaysia, a commendable track record of the takaful industry has been recorded since its inception more than two decades ago. For the first half of this year, the total assets of the takaful funds stood at RM7.6 billion (as equivalent to USD2.2 billion).