Islamic Finance

Takaful Malaysia third-quarter profit rises 33.8%, Indonesia business still faltering


Syarikat Takaful Malaysia on Thursday posted a 33.8% increase in third-quarter net profit, helped by higher sales generated by its family takaful business.

Malaysia’s oldest takaful firm reported 112.34 million ringgit ($26.8 million) in net profit for the three months ending September 30 compared to 83.96 million ringgit for the same quarter last year.

Operating revenue for the period jumped 16% to 753.5 million ringgit, the company reported in a bourse filing.

Contributions for the family takaful business rose by 24.5%, from 436.7 million ringgit in the third-quarter last year to 543.7 million ringgit this year.

The takaful company attributes this rise mainly to higher sales from credit-related products.

Its general takaful business did not perform as well, recording a drop of 3% in gross earned contributions, from 177.1 milion ringgit to 171.9 million ringgit.

The company said this is mainly attributable to the fire and motor classes.

LOSS-MAKING IN INDONESIA

The Malaysian company’s Indonesia operations saw revenue increase for the third-quarter, posting a 6% rise to 108.3 million ringgit, and gross earned contributions went up by 6% to 92.8 million ringgit.

However, these could not pull up the unit overall, although it did claw back some losses. The unit posted a pre-tax loss of 3 million ringgit, from being 5.2 million ringgit in the red for the same period in 2018.

The company said this is mainly due to higher expense reserves and lower surplus transferred from the family takaful fund.

“The Indonesian operations continued to be impeded by the window concept of promoting Islamic products practised by the conventional domestic players,” said the company.

“The takaful industry in Indonesia is anticipated to continue experiencing challenges due to the financial market volatility in addition to the economic conditions,” it added.

ASSETS

Takaful Malaysia, whose parent company is Bank Islam, saw its assets grow to 10.26 billion ringgit compared to 8.93 billion ringgit at the end of December, a rise of around 14.9%.

The insurer said this is mainly because of an increase in other investments, retakaful assets and loan and receivables excluding takaful receivables.  

($1 = 4.1873 Malaysian ringgit)

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Takaful
Earnings