A set of clear underpinning thrusts is developed to guide the adoption of VBIT by all TOs in Malaysia to create positive value and sustainable impacts for the respective stakeholders. This integrated set of thrusts serves as a compass for TOs in the journey of implementing VBIT.
The underpinning thrusts include:
Ability to bounce back from the financial shock
Process of enabling people to gain control over the factors and decisions that shape their lives
Ability to effectively exercise all necessary functions of regulation
Practice that is deemed to be most superior because it leads to the best results
The implementation of VBIT begins with Corporate Value Intent (CVI) in delivering Shariah propositions through Takaful business activities – operations, practices, conduct and offerings.
Articulates the TO’s institutional
intent or commitment
Integrates the key underpinning
thrusts of VBIT
Basis for formulation of
Reflected in the
Align with Maqasid
Shariah and ESGs
Acts as a voice for the aspirations of the TO’s leadership
CVI is beyond the company’s slogan. It expresses the specific desirable future that the TO is committed to achieving – a goal which balances the creation of value for all stakeholders.
Key Implementation Strategies
The execution of VBIT by TOs may be conducted by focusing on identified key implementation strategies. The way the institution delivers its CVI and implements its value-based strategies shall be based on four (4) interlinked areas of focus.
Inclusive Stakeholder Engagement
Effective communication to achieve the objective of CVI
Offerings, business practices and infrastructure that provide meaningful and valuable experiences
Analysis of potential impacts from all perspectives
Strategic alliances in delivering value-driven solutions
A comprehensive measurement that assesses the progress and effectiveness of the VBIT initiatives implemented by TOs. It will address both financial and non-financial indicators under the four underpinning thrusts of VBIT.
It is important because:
For quantifiable measurement - indicate the progress of VBIT implementation.
To guide TOs - identify whether they are progressing in line with their respective CVI.
Create atmosphere of learning and innovation for the TOs.
Act as an effective tool - promote workforce motivation and job satisfaction.
Shape positive and proactive behaviour among industry players.
The enhanced disclosures will demonstrate TOs’ accountability towards VBIT commitment and in delivering sustainability values. It reflects the progress and effectiveness of the VBIT initiatives in deliberating relevant impact-focused information. The disclosure shall include consistency, reliability, comparability and meaningfulness of each VBIT initiatives.
It is important because:
Enhance the understanding of stakeholders of the role of the Takaful industry.
More Informed decision making by stakeholders.
Better understanding on TO's strategic intent and VBIT initiatives.
Benefits for Society
- Receive better quality of Takaful offerings
- Fair and better transparency to build strong confidence in TOs
- Better awareness and preventing negative outputs
Benefits for Regulators & Government Authorities
- Better alignment of business focus with the national agenda
- Greater integration and effective collaboration
- Strengthen financial stability
Benefits for Takaful Operators (TOs)
- Enhance operational efficiency
- Unlock business opportunities in the underserved & unserved markets
- Increase penetration in new target segments
- Increase competitiveness among TOs
- Effective Takaful ecosystem
- Enhance corporate image in the local and global markets
Future Landscape of Takaful
Driven by shared prosperity & value - "Takaful for all"
Performance measurement & disclosure of financial returns and value
Innovation of products & services to cater for distinct needs, lifestyles & social classes of consumers
Qualitative measurement of company’s involvement that creates a positive impact on stakeholders
Meaningful involvement and contribution from all key stakeholders in different focus areas
What is VBIT?VBIT Framework serves as a guideline in implementing VBI within the sustainability ideals through its value-based agenda. The framework is comprehensive and relevant to Family Takaful, General Takaful, and Retakaful Operators.
What are the goals of VBIT?VBIT reflects the industry’s aspiration to elevate Takaful to the next level by transforming the industry towards achieving meaningful sustainable growth whilst delivering impactful and measurable values to the customer and stakeholders. The objective is to deliver positive socio-economic impact whilst upholding the objectives of Shariah and sustaining positive financial returns for the relevant stakeholders.
How does VBIT affect the stakeholders?It is good to note that during the development of the VBIT Framework, it is foreseen that the implementation of the VBIT initiatives will take place in stages. As the industry progresses through the adoption of the VBIT principles, it is hopeful that the discussion of VBIT ideals can encourage the stakeholders to embrace value-driven agenda and change their mind set to consider more meaningful propositions in delivering the intended outcome.
The VBIT conversations are expected to spur the TOs’ creativity and encourage them to innovate in delivering positive and meaningful impacts to their stakeholders. This will ideally lead to a better quality in TOs’ offerings for distinct market segments nationwide, with greater integration and effective collaboration between different stakeholders in transitioning towards a sustainable financial future for all.
Bank Negara Malaysia has introduced Value-based Intermediation (VBI) in 2017, will the introduction of Value-based Intermediation Takaful (VBIT) be deemed as reinventing the wheel?VBIT is the extension of VBI, where VBI is focused more on adoption of the VBI principles by Islamic Banking in Malaysia. VBIT Framework provides a specific guide for Takaful practitioners on the awareness of and the process to transform the Takaful industry into an intentional and meaningful journey towards achieving the ultimate objectives of Shariah. It is also the first of such framework in the global Takaful landscape, where it explicitly mentions Maqasid Shariah and sustainability agenda in together.
With the implementation of VBIT, what are the impacts on the Takaful offerings that the consumers can enjoy?Consumers can expect Takaful Operators to gradually offer a more customised and inclusive products and services that brings greater meaning and more valuable to them. It will be more thought through and the distinct feature would be more unique to specific communities and segments.
What constitutes the success of the VBIT implementation by Takaful Industry?As the implementation of VBIT ideals provides the opportunity for the industry to focus on its unique value proposition – Shariah compliant, mutual benefit sharing and transparency; the key success factor is highly dependent on the continuous and concerted efforts and commitments from all respective stakeholders – the society, the industry and the regulators in the journey to unlock the full potential of Takaful industry.
Implementing VBIT involves: