The Takaful industry is currently suffering from a lack of experienced and well-trained personnel, which industry leaders are heralding as one of the biggest potential hindrances to growth.
These industry leaders have stated that there simply are not enough senior staff available to fill the positions on offer. What happens to an industry where a lack of qualified personnel could significantly impede the stellar growth rates currently present in the Takaful space?
Azim Mithani, CEO of PruBSN Takaful, says that: “Human capital remains the largest constraint on the Takaful business,” and that this has been further compounded due to the historic growth rates present in the industry and the number of new licenses being offered.
Mithani goes on to explain that: “In order to staff these operations, you need a lot of people, this staffing needs to take place from top to bottom and finding these people is a real challenge. You have to be very focused on who you want to bring in and how you go about bringing those people in.”
This lack of experienced personnel has also resulted in a bidding war for top talent and, going forward, salary escalation is something that operators are becoming increasingly aware of. “There is tremendous demand for certain people in the market and there is a danger that this could get out of control,” says Mithani.
The overall outlook for the Takaful industry is however not as bleak as it seems, as total staff numbers have more than doubled at many of the Malaysian Takaful providers, in line with growth expectations. What Mithani has seen is that Takaful operators have been increasingly leaning on their sister organizations, particularly in terms of back office staffing.
This has meant that they are able to leverage off of their parent firms for their basic infrastructure capabilities and focus on hiring specific talent necessary under a Shariah compliant operation. However, people are going to remain the key issue, particularly those with specific technical knowledge such as Shariah and product knowledge.
Shahril Azuar Jimin, the chief sales officer at Etiqa Takaful, has already stated that: “The Malaysian Takaful industry needs more skilled human capital and professionals to increase penetration rates in the country.” He goes on to add that: “Malaysia is currently facing a lack of professionals in technical areas such as product development, actuary and investment and this is having a negative effect on the Takaful industry.”
All Takaful operators require all of its people to understand the Shariah principles of their business and those that are involved in distribution, product governance and particularly customer service are those who must have an adequate level of understanding of the Shariah in order to help address some of the business problems that they have to face.
Malaysia’s emphasis on developing numerous world class Islamic financial education institutions has placed the country into a league of its own. Its experience in training and managing human capital for the Islamic finance and Takaful industries has been tantamount to its success in offering Islamic finance as a viable alternative system. As such, developing human capital is central for Malaysia’s future growth potential.
According to Mithani however, while these educational institutions are helping to increase the talent pool, these are generally only producing junior level staff. Senior people are in short supply and are essential to further business prospects. “It’s all about a top to bottom approach: creating a good talent pipeline is essential and we can easily absorb a number of graduates into this pipeline. It is fully trained experienced workers that are the greatest problem.”
Mithani sums up by saying that: “It will be a few years before we are seeing the trained talent breaking through the organization. However that is going to be a key point that will drive the industry forward for the next 10 years. – SW