Factors Affecting Adoption of Takaful (Islamic Insurance) in the Maldives

Shabiq, Ahmed; Hassan, Zubair

doi:10.24924/ijabm/2016.04/v4.iss1/86.97

Cited by 7 publications

(14 citation statements)

References 25 publications

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“…It further depicts relative advantage and Takaful usage has (þ0.244) association, which means if a change occurs among any of them it will experience the 0.244 change in another factor in a positive direction. Therefore, it shows a strong association and results are consistent with previous studies such as Rahim andAmin (2011), Aziz, et al (2015) and Shabiq and Hassan (2016).…”

Section: Correlation Analysissupporting

confidence: 92%

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Factors influencing the investors’ intention to adopt Takaful (Islamic insurance) products

Hassan

Abbas

2019

JIMA

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Purpose The research paper is an effort to find out the behavior of Pakistani individuals toward usage of Takaful insurance. This paper aims to identify the factors, which influence investors’ intention toward the adoption of Takaful. Islamic finance is growing rapidly in the international market, especially in Islamic countries. Pakistan is an Islamic country, where the majority of the population is Muslim. Therefore, there is a great potential for Takaful exists in the country. Design/methodology/approach Both explanatory and descriptive research designs used for the research framework. The theory of planned behavior is the base theory and the model incorporates several factors such as relative advantage, compatibility, social influence, awareness and religiosity that may influence the adoption of Takaful. The primary data collected through the distribution of self-administered survey-based questionnaire, containing 23 items scaled at a five-point Likert scale. The non-probability snowball sampling and judgmental sampling techniques are used due to the scarce of Takaful users. The sample consists of 345 individuals (127 Takaful users and 218 non-users) living in the three main cities, namely, Karachi, Lahore and Islamabad. The data are further analyzed and interpreted with IBM SPSS 21. The results are evaluated using descriptive statistics, reliability, confirmatory factor analysis, correlation and binary logistic regression models. Findings The research findings reveal that factors such as relative advantage, compatibility, social influence, awareness and religiosity have a significant impact on the behavioral intention of Takaful amongst a depicted sample of Pakistani people. Similarly, Takaful has great potential in the Pakistani market, but due to lack of awareness, Takaful share is far behind than conventional insurance. It is further suggested that Takaful operators must devise some policies and plan to spread awareness about Takaful and come up with more innovative products. Practical implications The Takaful operators must devise plans to aware people about Islamic insurance. The study provides implication to Takaful management; Takaful users; and more importantly, the regularity authorities to operate and successfully conduct Takaful applications. Further, they should advance Takaful operations and produce more innovative products. The study focuses on some factors while there are plenty of others, which should be studied accordingly. For future researchers and students, there is a great potential of other techniques and measures, which can be further used for analysis of Takaful business. Originality/value This research is a first attempt to trace out the behavior of Pakistani people about Takaful, using the above discussed factors. The behavioral intention is studied using users and non-users combination, which is never done before in the current setting.

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Section: Correlation Analysissupporting

confidence: 92%

“…The overall model was also significant. This was consistent with Obeid and Kaabachi (2016), Husin and Rahman (2016), Shabiq and Hassan (2016). The Table VII shows the significance values of the variables after binary logistic regression.…”

Section: Regression Analysissupporting

confidence: 84%

Factors influencing the investors’ intention to adopt Takaful (Islamic insurance) products

Hassan

Abbas

2019

JIMA

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“…This research is based on a modified model of the TPB by adding the four variables such as awareness, perceived risk, perceived compatibility and relative advantage. Several studies (Husin and Rahman, 2014; Shabiq and Hassan, 2016; Amin, 2012) have been done on TPB by adding some new variables to find their results.…”

Section: Literature Reviewmentioning

confidence: 99%

Influential factors of Islamic insurance adoption: an extension of theory of planned behavior

Raza

Ahmed

Ali

et al. 2019

JIMA

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Purpose The role of insurance is a backbone for consumers to secure their future. It is important to know where to invest and what are the benefits. Therefore, for the Muslim segment, Islamic insurance system provides Riba (interest)-free environment where consumers invest their money and recover their losses according to sharia. This paper aims to examine the determinants that influence purchase intention of consumers toward Islamic insurance (Takaful) adoption in Pakistan with the help of the modified theory of planned behavior (TPB). Design/methodology/approach The authors added four specific variables related to Islamic sharia compliance in the conventional form of the TPB. The relationship among the variables is assessed by using partial least squares structural equation modeling, while the data are collected from 305 respondents. Findings The results suggest that attitude, subjective norm and perceived behavioral control are strong predictors of an Islamic insurance adoption in Pakistan. Moreover, factors such as compatibility, relative advantage and awareness have positive and significant impacts on takaful participation. A negative but insignificant relation is found between perceived risk and intention. Practical implications This paper provides insight for understanding the factors that lead to consumers' purchase intention of Islamic insurance. Originality/value This paper makes a unique contribution to the literature with reference to Pakistan, being a pioneering attempt to investigate the factors of Islamic insurance adoption by modifying the TPB and applying more rigorous statistical techniques like confirmatory factor analysis (CFA) and partial least square structural equation modeling.

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“…Resultantly, various Takaful models have progressed over time. One Takaful model is practiced in one region and does not practice in another region because of the nonuniformity of prevailing "Sharia Laws," and these models have become base for Takaful agreements (Shabiq and Hassan, 2016).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Therefore, multiple Takaful operating models have evolved over the course of time (Rahim and Amin, 2011). Shabiq and Hassan (2016) noted that these models are permitted and practiced under the supervision of Sharia board members, and they have become pillars of Takaful agreements. Sharia board members consist of Islamic Scholars and Muftis who are qualified and specialized in the procedures of Islamic jurisprudence (Sadeghi, 2010).…”

Section: Takaful Mechanismmentioning

confidence: 99%

Takaful models: origin, progression and future

Hassan

2019

JIMA

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Purpose The concept of Takaful has a long history. It is linked with the era of Prophet Muhammad 1,400 years ago. The globalization and development of socio-economic systems have made business activities more complex in response to emerging human needs and requirements. Similarly, Takaful insurance has fully commercialized and become an important indicator of the international financial market. The purpose of this study is to understand the Takaful mechanism and progression of its procedures to date since its inception. Design/methodology/approach This study seeks to examine the origin, evolution and historical developments of Takaful mechanism, operations, models and governing framework with extant literature review from previous studies and current practices. Findings The modern Takaful insurance first began in Sudan back in 1979. The Takaful operations must abide by the Sharia laws and work under the supervision of the Sharia Supervisory Board. Since its evolution, Sharia scholars have introduced various Takaful models that are going to be explained in this study. Moreover, several Islamic organizations, including the “Islamic Financial Services Board” and the “Accounting and Auditing Organization for Islamic Financial Institutions,” have provided guidelines and supervision to develop and strengthen the Takaful industry further. The study acknowledges Takaful as a growing insurance industry with huge potential and promising future in both Pakistan and the international market. Practical implications During the analysis, various deficiencies and loopholes were identified, which are responsible for the unmatched growth of conventional insurance. They can be eliminated with the joint efforts of industrial players, Sharia scholars and Takaful insurance companies. Hence, Islamic scholars and academic researchers are encouraged to develop and modify the current practices of Takaful mechanism according to current market demands and consumer approach. The research efforts will help Takaful operators to develop more innovative Takaful products adhering Sharia compliance. Consequently, it will help to access more consumer market and further enhances the Takaful growth. Originality/value This study is an effort to provide a basic understanding of the mechanism of Takaful models. The study helps to comprehend how Takaful models have evolved and been modified over the course of time. Moreover, it provides a base for further development and improvement in current practices of Takaful models, which will result in increased progress for the Takaful industry.

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Factors Affecting Adoption of Takaful (Islamic Insurance) in the Maldives

Abstract: The aim of this research is to examine the factors affecting adoption of Takaful (Islamic Insurance)

Cited by 7 publications

References 25 publications

Factors influencing the investors’ intention to adopt Takaful (Islamic insurance) products

Factors influencing the investors’ intention to adopt Takaful (Islamic insurance) products

Influential factors of Islamic insurance adoption: an extension of theory of planned behavior

Takaful models: origin, progression and future

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