This article first appeared in The Edge Financial Daily on July 31, 2019 - August 6, 2019

KUALA LUMPUR: FWD Takaful Bhd, backed by Hong Kong tycoon Richard Li, aims for a 15% market share of the local family takaful industry within five years, according to chief executive officer (CEO) Salim Majid Zain.

At a press conference after the FWD Takaful brand’s launch on Monday, Salim said the company currently has less than 2% share of the family takaful market, worth RM2.5 billion in 2018.

“There are now 12 companies in the family takaful industry; we are No 11. We hope to be the fifth-largest over the next five years,” he said.

Salim said FWD Takaful has up to 30,000 policyholders, with most of them already a policyholder under HSBC Amanah Takaful (M) Bhd. “So, we are launching the brand today (Monday), [but] not the company itself, because the company has existed for 13 years.”

In March this year, Pacific Century Group, through its insurance arm FWD Group, acquired a 49% stake in HSBC Amanah Takaful from HSBC Insurance (Asia Pacific) Holdings Ltd, and rebranded it to FWD Takaful.

Pacific Century is founded and headed by Richard, who is also the younger son of Li Ka Shing, one of the world’s richest men.

The acquisition signifies Richard’s collaboration with Malaysia’s richest man Robert Kuok through JAB Capital Bhd (or formerly known as Jerneh Asia Bhd) and the Employees Provident Fund (EPF) to participate in the local takaful market.

JAB Capital, a wholly-owned unit of Kuok Brothers Sdn Bhd, holds a 31% stake in FWD Takaful, and the EPF owns the remaining 20%, according to Companies Commission Malaysia data.

FWD Group, meanwhile, is a five-year-old brand, offering life and medical insurance, general insurance and employee benefits across eight markets before it entered Malaysia. FWD Takaful is therefore the first takaful business under FWD Group.

Salim said FWD Takaful has 120 agents, and another 250 are being registered. The management is expecting 600 registered agents by end-2019.

FWD Group emerging markets managing director and group chief distribution officer Binayak DuttaAlso, also present at the press conference, said FWD Takaful’s shareholders intend to collectively invest RM1 billion over five years to expand the business.

“We hope to establish a digital IT (information technology) services and data centre in Malaysia, known as the FWD Kuala Lumpur Data Centre, Takaful and Innovation Hub for a long-term sustainable development of the industry. We are committed to doing all that, while growing the business,” he said.

Finance Minister Lim Guan Eng, Pacific Century director Peter Allen and FWD Group executive vice-president Arthur Lee were seen at the launch as well.

At the launching ceremony, Guan Eng said FWD Takaful's entry into the Malaysian market bodes well for the local insurance and takaful industry, as it will provide Malaysians with more competitive takaful plans. It reflects Malaysia’s takaful industry's growth potential as well.

“This is also in line with the government's commitment to assist Malaysian households to become more financially resilient through insurance and takaful protection.”

Guan Eng also said FWD Takaful’s digital strategy adoption in the distribution channel and takaful product offerings is a step in the right direction for consumers’ convenience and seamless operations.

“FWD Takaful’s aim to foster digitally enabled relationships with customers is a great way for Malaysia to be at the forefront of this movement. By encouraging and introducing digital products, it adds to a collective effort that will help the transformation towards the digitalisation of the Malaysian economy.”