Factors that Affect the Investment Performance of Takaful Industry: Malaysia Evidence

Abstract

Uniqueness of finance industry in Malaysia is where the industry operated parallels between conventional practice and Islamic practice. This also involved the Insurance industry in Malaysia. In Malaysia, insurance companies operates in 2 types, either by conventional or Islamic insurance, which also known as Takaful. Those two types of companies is almost similar, but in terms of operational and investment level, the Islamic insurance must be in tune with the Shariah principles. The policyholders, investors and regulators are interested in the performance of this industry. By focusing for the Islamic insurance industry, this study aims to investigate the investment performance of Islamic insurance industry in Malaysia. Eight independent variables had been selected comprises of company-specific factor and macro factors in this study. The period of this study was between years 2011 until 2020, a ten years study. Panel regression was employed on five selected Islamic insurance (Takaful) operators in Malaysia. The result reveals size (CS), liquidity (LIQ) and equity return (EQUIR) are significant in relation with the investment performance of Islamic insurance company in Malaysia.

Intention to Purchase Family Takaful: An Extension of Decomposed Theory of Planned Behavior

“…These resources can include easily accessible information, user-friendly websites, helpful customer support, and efficient application processes. Financial self-efficacy reflects an individual's confidence in their ability to manage their financial affairs effectively (Yusof et al, 2022). Individuals with higher financial self-efficacy are more likely to budget for insurance premiums as part of their financial planning (Raza et al, 2020;Sharma et al, 2020;Daxini et al, 2018).…”

“…Family takaful is also known as a concept of cooperation 'ta'awun' and donation 'tabarru' where the risk is shared collectively and voluntarily by a group of participants to guarantee the mutual protection of its members (Htay et al, 2015). The concept of family takaful is based on cooperation where the participants involved provide financial security to each other (Yusof et al, 2022). In other words, family takaful is established on the concept of common and mutual support by making regular premiums/money in business and reducing the risk of participants.…”