KUALA LUMPUR (Dec 14): Malaysian Life Reinsurance Group Bhd (MLRe), a joint venture between the Life Insurance Association of Malaysia (LIAM) and Reinsurance Group of America Inc, is expecting its newly launched retakaful window to contribute up to 10% of its premium within the next three years.

While MLRe chief executive officer Patrick Cheah Gim Guan acknowledged that the target may be considered a "tall order", he is confident that with the company's 26 years of experience as Malaysia's largest life reinsurance provider on top of regulatory support from Bank Negara Malaysia (BNM), the target is achievable.

"At the moment, we are just in the early days. So our expectation is within three years to hopefully reach 10% of our total premiums. It's a tall order, I wouldn't deny that. But I think with our strength...we are definitely able to provide the local support wherever necessary. And we can grow quite fast," he told reporters on Thursday after the launch of the retakaful window.

The retakaful window, with licence to operate granted from the Ministry of Finance, allows the group to offer family retakaful services.

Cheah highlighted that MLRe sees a significant growth potential in the retakaful space in Malaysia as takaful operators are currently showing a very high growth rate. As such, the goal of the retakaful window is to introduce tailored retakaful solutions to meet the evolving needs of takaful operators.

“I think for MLRe, we have reached a saturation point. We are the market leaders in the conventional life [reinsurance] space and if we do not participate in the retakaful market we are just going to lose out. So we want to ensure that we are there to support not only the industry but the national agenda as well,” he said.

Besides that, Cheah pointed out that the establishment of its retakaful window will also support BNM’s vision of national insurance and takaful penetration rate of 75% of the population.

“We are definitely here to provide that message of support to ensure that the agenda comes true. A lot of the reinsurance players are effectively multinationals. We are the first local life reinsurer.

“With the movement towards Islamisation [of the financial industry], we are well supported to grow on the retakaful side as well. So by creating the retakaful window, we give another avenue of capacity to the clients,” he added.

During the launch, MLRe chairman Datuk Kamaruddin Taib in his speech said that the retakaful window is aimed at tapping into the growing demand for shariah-compliant financial services, allowing the group to cater to a broader market, particularly those seeking reinsurance products that adhere to Islamic principles.

"The decision to enter the retakaful market is a well-considered strategic move to reflect our role as a key player in this growing sector. This step is also in line with Malaysia's vision to be a major hub of Islamic finance," he said.