Performance of family takaful operators and life Insurance companies: A comparative analysis in Malaysia

• Main Author: Zainordin, Zinon Abidin
• Format: Thesis
• Language: English; English; English
• Published: 2019
• Subjects: HG Finance
• Online Access: https://etd.uum.edu.my/9905/1/s824226_01.pdf; https://etd.uum.edu.my/9905/2/s824226_02.pdf; https://etd.uum.edu.my/9905/3/s824226_references.docx; https://etd.uum.edu.my/9905/

An important element in the financial services sector such as takaful and insurance industry is performance. It is important indicator to evaluate the effectiveness of the industry, how does the industry counter to the challenges and which companies are going to survive their businesses. The purpose of this study is to analyse the performance of 11 family takaful operators and 13 life insurance companies in Malaysia from 2013 to 2018. There are five operational specific factors (OSF) tested in this study which are size, capital, premium growth, underwriting risk and expense ratio. This study use panel data analysis to analyze the data obtained from family takaful and insurance companies’ financial statements. The findings show the performance of insurance companies is better than family takaful in generating profitability (ROA).The findings also concluded that the profitability was affected by four OSFs which are size, capital, underwriting risk and expense ratio while premium growth was found have no impact to the profitability for both takaful operators and insurance companies. From these results, it is recommended that the both takaful operators and insurance companies should control and manage properly their OSFs in order to increase companies’ profitability and stabilize their financial system.