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

Khairil Faizal Khairi,Aimi Fadzirul Kamarubahrin,Nur Hidayah Laili

doi:10.33102/jmifr.v17i3.283

Khairil Faizal Khairi, Aimi Fadzirul Kamarubahrin + Show 1 more

Open Access

https://doi.org/10.33102/jmifr.v17i3.283

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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.

Highlights

Corona Virus Disease (COVID-19) has imperatively shaken the world with the numbers of confirmed cases keep increasing as August 28, 2020, there have been 24,605,876 confirmed cases including 834,791 deaths globally
The COVID-19 originated in China and become a major public health crisis affecting majority of the country around the world at varying speeds and strength levels (Meyer et al, 2020), and it was characterized as a pandemic in March 2020
The rapid transmission of the virus through humans justified the shutdown of markets and the suspension of free mobility (Fitzgerald et al, 2020) and such outbreaks are associated with adverse mental health consequences

Summary

Introduction

Corona Virus Disease (COVID-19) has imperatively shaken the world with the numbers of confirmed cases keep increasing as August 28, 2020, there have been 24,605,876 confirmed cases including 834,791 deaths globally. The increasing necessity of mental illness coverage has spurred takaful and insurance companies to introduce and promote an attractive scheme for mental health disorders patients. Mental health disorders issues represent important public health challenges by responsible bodies including takaful operators, corporate sectors and government in handling this pandemic.

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Conclusion