Takaful must shed its image as being an imitator, a follower or impersonator of conventional insurance. Takaful operators, including the financial groups to which they belong, must see beyond takaful as yet another line of insurance products. In this, we need the right leadership, shareholders included, to set the right tone from the senior leadership that takaful must offer distinctive benefits highly valued by all. Its impact must be lasting and profound. This is especially so in our system, where takaful is competing side by side with the insurance industry. 1/6  BIS central bankers' speeches  All this considered, allow me to suggest three priorities for the industry to embark on to realise the full potential of takaful: First, fulfill the promise of takaful in helping protect people and businesses. Takaful is derived from the Arabic word “kafal”, which means ‘to help’. To my mind, this calls for the industry to reach out beyond its comfort zone of focusing on mandatory products, such as motor and fire, or those that are easy to sell, namely mortgage related products. It must make serious inroads in other areas where protection gaps exist, such as in agricultural risk, annuity and trade credit. Something that is consistent with the needs of our economy. Ultimately, the industry must be ahead of the curve to innovate and deliver solutions that are truly needed and highly valued by customers, both individuals and businesses. In family takaful, the industry must position itself as a trusted and valued solution provider for all Malaysians.
When I was finalising my speech, I was told by my staff that the average turnaround time to process damage motor claims has increased by 10, from an already miserable record of 83 days. In the 19th century, Jules Verne wrote that anyone can travel around the world in 80 days. We can’t settle an insurance claim any earlier in the 21st century. Go figure. My own experience suggests that the turnaround time is the most important aspect of takaful operations that shapes the industry’s image in the eyes of the customer. The industry has to seriously look at this. It should relentlessly pursue changes in processes, rules and parameters that are necessary to improve the experience for customers. This requires creativity and persistence. The situation is not much better in the family takaful business, although we are putting in place the infrastructure to tackle this problem. The Bank, the insurance and takaful industry, and the National Registration Department will roll out a new, automated mechanism this year to expedite the process for claiming death benefits. With this, the industry will be better able to help those in their hour of need. The Bank, through the LIFE Framework and other initiatives, is determined to ensure that customers receive a fair deal. The recent implementation of the balanced scorecard will increase the professionalism of takaful intermediaries. It is now incumbent upon the industry to establish and maintain trust and goodwill with its customers.