Factors influencing selection of contractors’ all risk Takaful product among Bumiputera contractors in Malaysia

• Main Author: Mohd Azizi, Ibrahim
• Format: Thesis
• Language: English; English
• Published: 2022
• Subjects: HD61 Risk Management; HG Finance
• Online Access: https://etd.uum.edu.my/10562/1/permission%20to%20deposit-grant%20the%20permission-s903157.pdf; https://etd.uum.edu.my/10562/2/s903157_01.pdf; https://etd.uum.edu.my/10562/

Contractors' All Risks (CAR) is a complete insurance policy in the construction project to insure building construction works and other civil engineering works. However, CAR Takaful selection among Bumiputera contractors is still low as project data records from Pasukan Projek Khas 1, JKR Malaysia, show that only ten percent of the Bumiputera contractors choose CAR Takaful over CAR insurance. Also, statistics show that CAR Takaful's share of gross contributions is still much lower than CAR insurance's share of gross premiums. Therefore, this study examines the relationship between internal factors (attitude, awareness, understanding, and religiosity) and external factors (subjective norm, service quality, and role of agents) with CAR Takaful product selection. This study also analyses the mediating effect of intention in the relationship between internal and external factors with CAR Takaful product selection. The study uses the Theory of Planned Behaviour (TPB) as the underpinning theory. Through the quantitative survey method, 311 questionnaires were collected from targeted Bumiputera contractors in Malaysia (Grade G1 to Grade G7), except in Sabah and Sarawak, that are registered with the Construction Industry Development Board (CIDB) and are also members of Persatuan Kontraktor Melayu Malaysia (PKMM). The data was analysed using the Partial Least Squares Structural Equation Modeling (PLS-SEM) technique. The findings showed that understanding, religiosity, subjective norm, and intention positively affect CAR Takaful selection. However, attitude, awareness, service quality, and role of agents did not affect CAR Takaful selection. In addition, attitude, religiosity, and subjective norm positively affect intention. The findings also found that the relationship between attitude, awareness, religiosity, subjective norm, and role of agents with CAR Takaful selection is positively mediated by intention. These findings can guide Takaful operators and agents to formulate the right strategy, policies, and services to attract Bumiputera contractors to select CAR Takaful products in the construction project.