Impact of the Risk Based Capital implementation: A case study on an insurance company in Malaysia

Lazam, Norazliani Md; Tafri, Fauziah Hanim; Shahruddin, Sharifah Nazatul Shima Syed Mohamed

doi:10.1109/icssbe.2012.6396516

Cited by 3 publications

(1 citation statement)

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“…Dohmen et al (2011) studied risk attitudes using a large representative survey and a complementary experiment conducted with a representative subject pool in subjects' homes. Lazam et al (2012) discussed the impacts of the risk-based capital implementation in insurance companies of Malaysia. Caporale, et al (2017) analyzed the determinants of insolvency risk for general insurance firms in the UK.…”

Section: Introductionmentioning

confidence: 99%

Internal and External Determinants of Risk Based Capital

Sinaga¹,

Manurung²,

Machdar³

et al. 2023

Journal of Applied Finance &Amp; Banking

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This research aims to investigate the determinants of Risk Based Capital (RBC) of Indonesia’s general insurance public listed companies. Panel data regression model was used to analyze the internal and external variables influencing the RBC. This research finds that ratios of sales to total asset, gross profit to total asset, premium claim to total asset, investment to total asset, and interest have a significant impact on the RBC of Indonesia's publicly traded general insurance companies. JEL classification numbers: C650, G22, G32. Keywords: Sales to total asset, Policy rate, investment performance, Gross profit to total asset, Premium claim, Panel data regression model, Risk based capital (RBC).

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Section: Introductionmentioning

confidence: 99%

Internal and External Determinants of Risk Based Capital

Sinaga¹,

Manurung²,

Machdar³

et al. 2023

Journal of Applied Finance &Amp; Banking

View full text Add to dashboard Cite

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Performance Effect of Risk-based Capital Policy on Insurers: Longitudinal Microdata Evidence

Akpan

Mahat

Bany-Ariffin

et al. 2019

Journal of African Business

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Risk-Based Capital Framework: Conventional vs. Takaful Operators

Yusof

Lau²,

Osman³

2015

jmr

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Malaysia introduced an RBC framework for its conventional insurance industry in 2009. In 2011, enhancements to the RBC framework were completed. In an effort to improve the overall Takaful regulatory framework, BNM issued new operational and valuation guidelines on 23 September 2010. BNM further issued the draft of risk-based capital (RBC) guidelines for Takaful operators in April 2011 and gathered the industry's feedback (Dhesi, 2012). The proposed Takaful RBC framework appears to be similar to that imposed for a conventional business. Parallel to its counterpart, Takaful operators are obliged to have at least 130% of ISSN 1941-899X 2015 www.macrothink.org/jmr 2 supervisory capital-adequacy ratio (CAR). The minimum CAR imposed is formulated so that Takaful operators have sufficient capital in the shareholders' fund to meet any shortage in Takaful fund. Capital adequacy is a theoretical amount of capital that is required by each insurance company in order to meet payment obligations and support everyday operation without becoming insolvent. The same methodology and assumptions as outlined in the RBC requirements for conventional business have been used to determine each of these capital charges (Dhesi, 2012). However, Conventional insurer and Takaful operators are having different types of risk for their operations (Obaidullah, 1998). Takaful operators also adopt different types of operating models (mudharabah, wakalah and hybrid). The RBC-framework for conventional insurers provides detailed guidelines on the estimation of assets by considering the different types of risks related. Still, the RBC framework for Takaful operators insufficiently addresses the risk that relevant to Takaful operator's activities. The main point that distinguishes Takaful operators and its counterparts is in terms of the sharing of risk with customers. Journal of Management Research

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Impact of the Risk Based Capital implementation: A case study on an insurance company in Malaysia

Cited by 3 publications

References 1 publication

Internal and External Determinants of Risk Based Capital

Internal and External Determinants of Risk Based Capital

Performance Effect of Risk-based Capital Policy on Insurers: Longitudinal Microdata Evidence

Risk-Based Capital Framework: Conventional vs. Takaful Operators

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