Takaful and Insurance Efficiency Determinants: Pre and Post Covid-19 Pandemic

Abstract

This study aims to compare the efficiency of the performance of sharia insurance companies (full fledge) and conventional insurance operating in Indonesia using two stages of data envelopment analysis (DEA) for the period before and during Covid-19 (2018 - 2021). The first stage is to measure efficiency using the non-parametric DEA approach and the second stage uses the Tobit Regression model to see the factors that affect the efficiency level of insurance companies during the period of Covid-19. This result indicates the average efficiency score of Sharia and conventional insurance fluctuated, especially in 2020 there was a decline in efficiency scores, and it is evidence that Covid-19 has had little effect on the insurance business, both conventional and sharia insurance. However, this study reveals that the average conventional insurance can adjust to these conditions faster than the average sharia insurance. The effect on the efficiency level of the insurance companies can be seen from internal and external factors. The findings in this study indicate that insurance efficiency is more influenced by internal variables such as SIZE, ROA and NPM than external variables. There was no significant change in insurance efficiency during the Covid-19 pandemic.