Market thoughts: Potential implications of COVID-19 on takaful scheme for mental health disorders

Abstract

Malaysia's takaful market is showing steady growth and is overtaking conventional insurance in a very obvious way despite the pernicious COVID-19 pandemic hitting global Islamic finance sectors. As comparison, family and general takaful premiums rose by 29.6 percent and 16.4 percent respectively in the first half of 2019, as compared with 12.2 percent in conventional life and -1.3 percent in general insurance. The COVID-19 pandemic's rapid emergence poses unparalleled challenges the world is dealing with. In addition to the risks to human health and lives, this pandemic has a drastic effect on companies and economies worldwide and is also affecting people's mental health due to depression issues. Hence, this commentary aims to discuss the market thoughts on the potential implications of COVID-19 on takaful scheme for mental disorders. Mental health issues in Malaysia continue to be a major concern, generating debates about causes, responses and, more recently, insurance or takaful plans. Mental illness is costly to treat, especially for the disfavoured group. As a result, people with an ultimate goal will try to have a good plan protection to cover their uncertain health conditions. Thus, to overcome this scenario takaful provider should introduce a takaful scheme for mental health disorders in the country where the growth of market potential is there.