Malaysian takaful is splitting into two very different stories. General takaful gross written contributions rose 12.38% in 2025 to RM6.65 billion, from RM5.91 billion in 2024, while family takaful new business contributions were essentially flat at RM9.74 billion, barely above RM9.73 billion in 2024. That divergence, disclosed in the Malaysian Takaful Association’s newly published Annual Report 2025, is reshaping how underwriters and distributors think about growth in Southeast Asia’s most mature Islamic insurance market.
The figures, drawn from the Malaysian Takaful Association’s newly published Annual Report 2025, show a market that is no longer moving as one. General takaful, the smaller of the two lines, is sprinting; family takaful, by far the larger book, is essentially treading water on new business. The underlying detail points to a market entering a more selective phase of growth just as a leading rating agency flags a slowdown ahead.
General takaful contributions jump while claims surge
General takaful is the smaller of Malaysia’s two takaful lines, but it is growing the fastest. General takaful gross written contributions climbed 12.38% year-on-year to RM6.65 billion in 2025, from RM5.91 billion in 2024, a pace of expansion that outstrips the family side by a wide margin.
That growth is not coming cheap. General takaful claims and benefits rose 17.07% to RM2.70 billion in 2025, from RM2.31 billion in 2024, a claims trajectory that is climbing faster than contributions themselves. The combination echoes dynamics seen elsewhere in the region’s Islamic risk pools, including the retakaful capacity constraints described in InsuraBeat’s earlier coverage of how the takaful market’s growth targets are exposing a retakaful capacity gap as GCC growth accelerates. In Malaysia’s case, MTA leadership has pointed to phased liberalisation of general takaful pricing and product design as the structural lever that could let operators absorb faster claims growth without sacrificing underwriting discipline — a process the association’s Interim Chairman Borhanudin Samsudin has tied to the industry’s continued transformation agenda running into 2026 and 2027.
Family takaful new business stalls
Family takaful remains by far the larger line by volume of business written, but growth in fresh sales has essentially stopped. Family takaful new business total contributions were RM9.74 billion in 2025, essentially flat versus RM9.73 billion in 2024 — a near-zero change that stands in sharp contrast to the double-digit acceleration on the general side.
Claims tell a different, more encouraging story for insurers’ loss ratios: family takaful claims and benefits fell 16.77% to RM7.91 billion in 2025, from RM9.50 billion in 2024, part of RM10.61 billion in total claims and benefits paid out across the industry in 2025. Lower payouts on the family side, combined with flat new business, suggest an industry consolidating existing policyholders rather than winning meaningfully more of them. Penetration data reinforces that picture of gradual, incremental progress rather than a breakout year: family takaful penetration reached 19.63% of total population in 2025, while the number of family takaful certificates in force reached 6.74 million in 2025. Despite the flat new-business trend, family takaful still commands the lion’s share of Islamic life-style protection sold in the country: family takaful held a 39.44% market share of new business total contributions versus conventional life insurance in 2025, based on Bank Negara Malaysia data cited in the MTA report.
RAM Ratings flags a sharper slowdown than the segment split suggests
The general takaful acceleration arrives alongside a more cautious rating-agency read on where the cycle is heading. In its sector outlook published via RAM Ratings’ 29 September 2025 press release, the agency said it expected life and family takaful segment growth to slow to 3%-5% in 2025, compared to 8.3% growth in 2024. That forecast range sits well below the double-digit pace general takaful posted for 2025, underscoring that family takaful specifically — rather than the market overall — is the segment losing momentum.
RAM’s caution is not about capital adequacy: the agency maintained a stable outlook on Malaysia’s insurance and takaful sector, citing robust capital buffers against market volatility, while flagging persistent medical cost inflation and price competition in detariffed non-life products as key risks. Medical cost inflation squeezing family takaful margins, paired with price competition in deregulated general lines, is precisely the tension MTA’s leadership is trying to manage through phased liberalisation — opening up general takaful pricing flexibility while keeping family takaful’s protection role intact. The theme parallels how governance floors are being set elsewhere in the sector, such as the reforms detailed in Egypt’s FRA Decision 70, which sets a new governance floor for takaful across North Africa.
Zakat and surplus distributions underline takaful’s mutual model
Beyond the segment-level growth and claims figures, the MTA report also highlights the cooperative dimension that differentiates takaful from conventional insurance. The takaful industry contributed approximately RM52.25 million in zakat during financial year 2025, sourced across family, general and retakaful operators, while the industry distributed approximately RM1.30 billion in surplus sharing to eligible participants in 2025. Those figures matter for the liberalisation debate: any move to loosen pricing controls on general takaful will need to preserve the surplus-sharing mechanics that give participants a direct stake in underwriting performance, a structural feature that also underpins investor confidence in Islamic finance more broadly — a dynamic explored in InsuraBeat’s report on how Munich Re named a CEO of Retakaful as global Islamic finance assets scaled a new milestone.
Taken together, the 2025 results describe an industry at an inflection point. The segment-level split — general takaful sprinting on volume while absorbing faster claims growth, family takaful holding its book steady but barely adding new business — points to a 2026 in which MTA’s phased liberalisation agenda and RAM’s more conservative growth forecasts will do more to shape outcomes than either line’s 2025 numbers alone.
