The efficiency of life insurance and family Takaful in Malaysia: Relative efficiency using the stochastic cost frontier analysis

Baharin, Roziana; Isa, Zaidi

doi:10.1063/1.4801253

Cited by 12 publications

(9 citation statements)

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“…Relatively few studies have been conducted on the cost efficiency of Takaful insurers. Roziana and Isa (2013) applied a flexible cost functional form to measure the relationship between efficiency and organizational structure for Takaful and insurance operators in Malaysia's dual financial system., while Bezat (2011) estimated the SFA method based on the Cobb-Douglas function.…”

Section: Efficiency Scoresmentioning

confidence: 99%

Measuring the relative efficiency of insurance companies in Saudi Arabia: The case study of Takaful vs cooperative industries

Benyoussef

Hemrit

2019

Cogent Economics & Finance

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The aim of this paper is to measure the efficiency of insurance companies in Saudi Arabia using data envelopment analysis (DEA), to analyse the effectiveness of underwriting processes primarily inputs and outputs are determined. Moreover, this study aims at comparing the efficiency of Takaful and cooperative in the year 2014. Taking into account two main approaches of this technique and considering a sample of 23 insurance companies, we show that the results revealed that insurance companies do not operate efficiently. Also, a classification of companies allows to discover that on average, Takaful insurance are relatively more efficient than cooperative insurance companies. The main finding of this paper is the need for better resource allocation in the cooperative insurance companies' systems, because some Takaful insurance companies have resource surplus and in other cooperative ones it is observed a lack of resources.

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Section: Efficiency Scoresmentioning

confidence: 99%

Measuring the relative efficiency of insurance companies in Saudi Arabia: The case study of Takaful vs cooperative industries

Benyoussef

Hemrit

2019

Cogent Economics & Finance

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“…Higher demand would lead to higher levels of efficiency. Studies by Saad (2012), Baharin & Isa (2013), Kader et al (2010), andFaruk &Rahaman (2015) also found inefficient results.…”

Section: Figure 1 Graph Of Indonesian Sharia Insurance Efficiency Levelmentioning

confidence: 93%

“…Al-Amri (2015) The UAE and Qatar takaful insurance efficiency has a high level of technical efficiency, while Saudi Arabia and the UAE have a high level of cost-efficiency. Abbas et al (2018) the efficiency of Pakistani takaful and conventional insurance with DEA shows that takaful and insurance operating have the same level of efficiency Baharin & Isa (2013) cost efficiency takaful and Malaysian conventional insurance with the SFA approach there are significant differences. Takaful cost efficiency is lower than conventional insurance.…”

Section: Literature Reviewmentioning

confidence: 99%

Sharia insurance efficiency in Indonesia and Malaysia using the stochastic frontier approach analysis

Nasution¹

2022

Asian. J. Islam. Manag.

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Purpose: This study aims to analyze the efficiency level of Indonesian sharia insurance and Malaysian takaful with a parametric stochastic frontier approach where the input is total assets and expenses, and the output of this research is claims and premiums.Methodology: This study uses quantitative methods with secondary data in the form of shariah insurance Malaysia and Indonesia annual reports 2016-2020. The data analysis uses a regression test with the help of stochastic frontier approach (SFA)Findings: Based on the results of processing using stochastic frontier analysis (SFA), Indonesian Sharia insurance's overall production efficiency level is known to be 0.6306 or 63.06%, Malaysian takaful on average is known to be 0.6160 or 61.60 %. Partially, Indonesian sharia insurance total assets, insurance expenses, and claims positively and significantly affect the number of premiums. Takaful Malaysia's total assets of Malaysian takaful partially have an insignificant negative effect on the premium amount. Malaysia's takaful expenses and claims partially have an insignificant positive effect on the premium amount.Originality: This study analyzes the efficiency and looks at the effect of the variables of Indonesian sharia insurance and Malaysian takaful with a parametric stochastic frontier approach.Practical implications: This research shows that the management of Indonesian sharia insurance and Malaysia's takaful is still inefficient, so each government needs to regulate the operations in this industry.

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“…Research focusing on performance and efficiency in takaful companies has been conducted by several previous researchers (Norma et al , 2006; Ardianto and Sukmaningrum, 2020; Naushad, Faridi and Faisal, 2020; Karbhari et al , 2018; Saad, 2012; Islam et al , 2013; Baharin and Isa, 2013; Yakob et al , 2014; Al-Amri, 2015). However, to the best of our knowledge, some research has been done so far to investigate productivity changes in takaful companies (Yusof, 2020; Akhtar, 2018; Taib, Ashraf and Razimi, 2018; Lim et al , 2021; Suryoaji and Cahyono, 2019; Iskandar et al , 2020).…”

Section: Introductionmentioning

confidence: 99%

Productivity analysis of family takaful in Indonesia and Malaysia: Malmquist productivity index approach

Sukmaningrum

Hendratmi

Rusmita

et al. 2022

JIABR

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Purpose This study aims to investigate the productivity level of family takaful in Malaysia and Indonesia from 2014 to 2019. Productivity can support corporate sustainability, which is one of the company’s goals. Design/methodology/approach The measurement of the productivity level in this study involved applying the Malmquist Productivity Index (MPI) method. The input variables used consisted of equity, total expenses and total investment. The output variables consisted of total profit and investment income. In addition, this research used the orientation of the output and intermediation. Findings Throughout the study period, the Indonesian family takaful had an average total factor productivity change (TFPCH) of about 0.945. In other words, it did not reach optimal productivity. It is more due to the low value of technological change (TECHCH). On the contrary, family takaful companies in Malaysia had called productivity, showing a TFPCH of about 1.041. Again, this is mainly due to an increase in TECHCH and efficiency change, but it is still low in pure technical efficiency change. Research limitations/implications This study focuses on factors that exist in internal takaful companies. Neither micro- nor macroeconomic variables that can affect productivity levels have been measured. In addition, this study only analyzed two countries out of the 11 countries in the Southeast Asian region. Practical implications Family takaful companies can use the productivity index as one of the bases of evaluation in managing their resources to enhance optimal output. Furthermore, the management of family takaful companies in Indonesia needs to focus more on technological innovation and delivery of services to increase productivity. Meanwhile, family takaful companies in Malaysia can maintain their technology usage and efficiency to operate productively. The government in both countries is expected to actively accelerate the growth of family takaful companies by producing regulatory products that strengthen the industry. Specifically, the government in Indonesia needs to make regulations that support technology improvement. Originality/value There is still not much research that examines family takaful’s productivity level using the MPI. The MPI is an appropriate tool to evaluate the productivity of family takaful companies. Thus, family takaful companies can improve their quality by assessing the productivity index value.

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The efficiency of life insurance and family Takaful in Malaysia: Relative efficiency using the stochastic cost frontier analysis

Cited by 12 publications

References 0 publications

Measuring the relative efficiency of insurance companies in Saudi Arabia: The case study of Takaful vs cooperative industries

Measuring the relative efficiency of insurance companies in Saudi Arabia: The case study of Takaful vs cooperative industries

Sharia insurance efficiency in Indonesia and Malaysia using the stochastic frontier approach analysis

Productivity analysis of family takaful in Indonesia and Malaysia: Malmquist productivity index approach

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