Factors Influencing the Choice of Takaful over Conventional Insurance : The Case of Malaysia

Kamil, Naail Mohammed; Nor, Norsham Binti Mat

doi:10.12816/0025101

Cited by 21 publications

(8 citation statements)

References 16 publications

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“…Following Islamic principles, Takaful’s underlying financial structure is Sharia compliance and it is different from conventional insurance products offered in most western countries. Previous studies have established the positive relationship between Muslim religiosity and Takaful purchase intentions (Sharma et al , 2016) and the factors attributable to the preference of Takaful over conventional insurance products for Muslim consumers (Matsawali et al , 2012; Nor and Kamil, 2014). In addition, Takaful’s growth and use in the UK has been researched (Coleen-Maturi, 2013), focusing exclusively on British Muslim consumers.…”

Section: Introductionmentioning

confidence: 99%

The impact of cognitive style, consumer demographics and cultural values on the acceptance of Islamic insurance products among American consumers

Schmidt

2019

IJBM

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Purpose The purpose of this paper is to explore the extent by which consumer acceptance of an Islamic insurance product (Takaful) in a non-Muslim majority country would be affected by consumer knowledge about its Islamic origins. Furthermore, this study identifies the degree to which various psychological traits and demographics of the consumers influence purchase intentions. Design/methodology/approach A questionnaire was distributed to a national sample of 390 respondents, half of whom were told that this insurance product is Islamic and the other half were not. The questionnaire was identical between the two groups and the only difference was the disclosure of the product’s Islamic origins. Additional measures related to consumer demographics, cognitive style and prior experience with insurance products were obtained from the respondents. Regression analysis was used to determine the drivers of consumers’ purchase intentions. Findings Purchase intentions for Takaful were found to be lower when the product was presented to subjects as Islamic. In addition, it was established that a consumer’s cognitive style, political orientation, yearly insurance expenditure and views of Islam influence purchase intentions for Takaful. Originality/value This paper is the first to explore the degree of acceptance of an Islamic insurance product in a non-Muslim majority country (USA) and to investigate the effects of a product’s religion of origin on the purchase intentions of American consumers.

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Section: Introductionmentioning

confidence: 99%

The impact of cognitive style, consumer demographics and cultural values on the acceptance of Islamic insurance products among American consumers

Schmidt

2019

IJBM

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“…The study showed that size of company, retakaful dependence and solvency margin are statistically significant determinants of the investment performance of the general Islamic insurance companies in Malaysia. Kamil and Mat Nor (2014) studied factors influencing the choice of health takaful over conventional insurance in Malaysia. The study revealed that Takaful customers have a clear concept of Takaful and the requirement of Shariah compliance and that takaful is necessary for Muslims as a replacement of conventional insurance.…”

Section: Empirical Reviewmentioning

confidence: 99%

Effect of Islamic Insurance on the Growth of the Insurance Industry in Kenya

Nkirote

2017

strategicjournals.com

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The Kenyan insurance market wrote KES.100 billion of Gross Direct Premiums in the year 2011. It has grown at an average rate of 16% p.a. over the last 5 years. The market comprises of 47 insurance companies, transacting long-term and short-term insurance business. In addition, there are over 140 insurance brokers operating in the Kenyan insurance market. This study aimed to establish the effect of Islamic Insurance (Takaful) on the growth of the insurance industry in Kenya. The study aimed to fulfill following objectives; to find out the effect of General Takaful on the growth of insurance in Kenya and to establish the effect of Family Takaful on the growth of insurance in Kenya. This study adopted a descriptive design. The population of this study was all insurance companies in Kenya. Purposive sampling was used to select the insurance companies that offer Islamic insurance (Takaful) products. There was only one Insurance company Islamic insurance products and that was Takaful Insurance of Africa which began its operations in Kenya in 2011. Takaful Insurance of Africa sold its policies directly or through agents, brokers and commercial banks. The study used secondary data from insurance companies from 2011 when the first insurance company (Takaful East Africa) begun offering Takaful products, to 2015. Data was analysed using Statistical Package for Social Sciences (SPSS). Results showed that there was a significant positive relationship between Islamic insurance and the growth of Kenya's insurance industry. Specifically, it was found that general re-takaful had the greatest impact on insurance growth with family takaful having the least effect. This study recommended that industry players invest more in marketing as well as innovation to come up with a wider range of general takaful products and to increase awareness in the market to increase its uptake. Family Takaful had been found to be the least consumed Islamic insurance product. There were still a lot of opportunities in Kenya for this kind of product. Industry players should increase the awareness campaigns to increase its uptake. The majority of Kenyans did not have medical insurance. This study recommended that Islamic insurance companies ought to take this advantage and invest more on the campaigns to sell health insurance to Muslims and non-Muslims alike. The study therefore recommended for the formation of a fully-fledged reinsurance company for takaful products.

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“…Numerous studies have highlighted the significance of customer satisfaction and service quality (Mohd Shaladdin et al , 2018), the role of agents (Kamil and Nor, 2014), perceived cost (Edward and Sahadev, 2011) and corporate image (Bhatti, 2018), all of which have a positive impact on customer satisfaction. The findings of the previous studies noted that the strength or weakness of the relationships between the customers and the financial insurance service provider depends greatly on the corporate image of the company in the market, along with the favorable amount of service quality, perception of the cost of financial services and the agent’s trustworthiness.…”

Section: Introductionmentioning

confidence: 99%

Forging customer satisfaction through commitment-trust factors in financial insurance services: moderating role of corporate image

Saoula

Abid

Ahmad

et al. 2023

JIMA

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Purpose It is widely evident that trust and commitment are important pillars for strengthening the relationship between financial service firms and their customers. However, it has not been explored how the service quality, perceived cost and role of agents are important for financial service firms. To overcome this gap, this study aims to investigate the role of service quality, perceived cost and the role of agents as the commitment–trust factors in the financial insurance service (Takaful) in Malaysia, enhancing customer satisfaction. Design/methodology/approach The study follows a quantitative design in which primary data was collected using a survey instrument. The measurement instrument was adapted from the previous research, and data were collected from 264 customers of the Takaful financial service organizations in Malaysia. The data were analyzed using variance-based structural equational modeling in Smart-PLS software. Findings This research has revealed several useful insights that demonstrate a significant impact on service quality, perceived cost and the agents’ role in forging close relationships with their customers. Corporate image has a moderating role in relationships and has significantly impacted takaful insurance companies. The results imply that regardless of the corporate image of the financial service organizations, customers are concerned about the prices and the quality of the agents’ services. Research limitations/implications In this study, only the predictors such as service quality, perceived costs and agents’ roles as trust–commitment factors were examined to determine customer satisfaction. Other investigations are highly recommended, such as value co-creation in takaful, takaful customer experience and takaful trust. This study offers insights to takaful insurance companies on how to keep up a positive corporate image, which will boost their trust–commitment factors and ultimately increase customer satisfaction. Originality/value By presenting commitment–trust factors and company image in an identifiable framework, the current study has expanded the discussion on takaful financial insurance services. The methodology is developed and rigorously tested to gauge customer satisfaction in takaful financial service organizations’ context.

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Factors Influencing the Choice of Takaful over Conventional Insurance : The Case of Malaysia

Cited by 21 publications

References 16 publications

The impact of cognitive style, consumer demographics and cultural values on the acceptance of Islamic insurance products among American consumers

The impact of cognitive style, consumer demographics and cultural values on the acceptance of Islamic insurance products among American consumers

Effect of Islamic Insurance on the Growth of the Insurance Industry in Kenya

Forging customer satisfaction through commitment-trust factors in financial insurance services: moderating role of corporate image

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