KUALA LUMPUR, Oct 15 (Bernama) -- The takaful scene in Malaysia and Indonesia is on a steady rise, with analysts projecting the market to soar to US$5.4 billion (US$1=RM4.22) by 2033 -- a sign that demand for Shariah-compliant protection is no longer niche, but mainstream.

To put that into perspective, both markets stood at just US$1.4 billion in 2024, so the road ahead looks promising.

According to market research firm IMARC Group, the encouraging outlook is supported by the rising demand for Islamic insurance products, as well as proactive government initiatives that continue to attract both local and international participation in the takaful space.

In Indonesia, PT Prudential Sharia Life Assurance (Prudential Syariah) is among the key players driving the momentum.

The company, a market leader in the private joint venture takaful life segment, recorded contributions of 3.4 trillion Indonesian rupiah, extending protection to nearly half a million participants in 2024.

 Regulatory maturity and talent exchange

Prudential Syariah chief executive officer Iskandar Ezzahuddin said the company is taking a fresh look at how insurance works, especially in the Shariah space.

From a regulatory perspective, Iskandar said Shariah has always been seen as complementary to conventional finance. However, it is no longer the case.

He noted that the Indonesian government is putting greater effort into developing a more mature regulatory framework, ensuring that the industry can expand sustainably while attracting international expertise.

“There is actually a lot of demand from the Malaysian talent to actually broaden their horizons to include Indonesia, and I think a lot of the concern is quite similar in the sense of familiarity,” he said.

To address this, he said Prudential Syariah is opening its doors to collaboration, facilitating cross-border partnerships in areas such as distribution, operations, takaful expertise and governance.

“We want to put it out there that we are open to collaboration -- whether it is sharing talent, expertise, or developing new Shariah-based solutions. There is a lot of opportunity ahead,” he added.

Looking ahead, Prudential Syariah also sees strong potential for collaboration with business partners from Malaysia, particularly in knowledge transfer, partnerships, and talent mobility to further strengthen the regional shariah insurance ecosystem.

 A mandate to grow Shariah insurance

Iskandar said his team’s mission is to grow the business by advancing inclusion and strengthening cross-border synergies between Malaysia and Indonesia.

“If we look at Indonesia and Malaysia today, Malaysia has done an incredible job in building its takaful ecosystem, from governance to product innovation. There is a lot we can learn and adapt to,” he said.

He said that as both countries continue to nurture their Islamic finance sectors, one thing is clear that the takaful market is not just about numbers and policies; it is about trust, innovation, and creating a system that speaks to the values of its people.

Iskandar said that through partnerships with Bank Syariah Indonesia and key Islamic organisations such as Nahdlatul Ulama and Muhammadiyah, and a network of more than 80,000 Shariah-trained agents, Prudential Syariah is committed to enhancing inclusion and deepening financial literacy.

He added that being a spin-off entity has given Prudential Syariah the flexibility to shape its own culture and adapt quickly to evolving customer needs.

 Rising financial literacy signals market readiness, product innovation

Iskandar shared that in 2023, Indonesia’s Shariah Financial Literacy Index was only nine per cent, and this year, it stands at 45 per cent. 

“In just two years, the financial literacy for Shariah finance has grown significantly,” he said.

In a strategic move to enhance its reach and provide inclusive financial solutions, Prudential Syariah has formed a significant partnership with Bank Syariah Indonesia.

This collaboration aims to leverage the extensive network and customer base of both entities to drive growth and accessibility in the Indonesian market.

“The Bancassurance partnership with Bank Syariah Indonesia would unlock access to more than 21 million customers through more than 1,000 branches nationwide,” he said, adding that this network enables deeper engagement and accessibility for customers.

To further enhance the inclusive offerings, Iskandar said Prudential Syariah has developed a diverse range of protection-oriented and affordable products tailored to different life stages and income levels.

Prudential Syariah continues to innovate through key offerings, such as PRUCritical Amanah, PRUHeritage Syariah, PRUSehat Syariah, and PRUWell Medical Syariah. 

PRUCritical Amanah provides comprehensive critical illness and whole life protection, covering the early stages, with options tailored to customer needs and affordability, while PRUWell Medical Syariah offers a solution to high medical inflation, where contributions are based on individual health risk profiles and incentivise customers who maintain healthy lifestyles.

PRUSehat Syariah is an affordable health insurance solution designed to support younger generations in Indonesia in facing both health and financial challenges, and PRUHeritage Syariah offers life protection for legacy planning.