Ownership type, business model, market structure, and the performance of Takaful and conventional insurance companies in Malaysia

Abstract

The paper evaluates the performance of the Takaful and insurance companies in Malaysia. It examines the impact of ownership, business model, and market structure on conventional and Takaful companies' performance. The interfirm comparisons provide information about the performance and competitiveness of firms operating under different modes of business. The study adopts the unbalanced panel data approach with Panel Corrected Standard Error (PCSE) regression to analyse the data of 44 Malaysian Takaful and insurance companies with 255 firm observations over the period from 2011 to 2016. The study's findings show that Takaful and insurance companies perform at par in terms of their premiums. However, Takaful has better investment income. Foreign-owned firms perform better than local firms. The efficient market hypothesis is more powerful than the structural conduct hypothesis in explaining the firms' performance. The study's implications are expected to help improve and develop the Takaful and insurance sector as an efficient industry in-line with regulation changes. To the ABOUT THE AUTHOR Shaikh Hamzah Abdul Razak is a retired professor of Takaful. Previously, he served as associate professor at the International Centre for Education in Islamic finance (INCEIF) Prior to joining INCEIF, Dr Shaikh was with Malayan Banking Berhad since 1974 and held several posts in various departments. His research interest includes among other Islamic finance in general, Takaful and wealth management in particular. Fekri Ali Shawtari is an assistant professor at Community College of Qatar. Dr Fekri earned his PhD in Islamic finance from the International Centre for education in Islamic Finance (INCEIF), Malaysia. His reseasrch interests include Islamic banking and finance, risk management, efficiency, earnings management. Teaching Assistant of Accounting at Qatar University. He is undertaking PhD at The University of Sheffield in the UK. He has extensive teaching experience in accounting modules. His research interests focus on IFRS, accounting quality and earnings management, ce, whistleblowing.

Leverage, Product Diversification, and Performance of Life Insurance Companies in Indonesia

“…The greater the leverage, the stronger the power monopoly of the market, but the level of competition also increases. Levered firms have the opportunity to earn profitable investments and assets, enabling them to meet customers' expectations efficiently (Razak et al, 2021). The characteristics of the life insurance market in Taiwan, several insurance companies, look diverse but have slight differences in their products, imperfect information, and ease of entry into the market, indicating that the life insurance market is a competitive monopolistic market Chen et al (2021).…”