Consumers’ perception of distribution channel for the Malaysian microtakaful scheme: an exploratory study

Abstract

Purpose This paper aims to investigate consumers’ preferences regarding the distribution channels for subscription, contribution payment and compensation claims of microtakaful scheme in Malaysia. Design/methodology/approach Consumers’ preferences were explored through questionnaires and focus group discussions (FGD) conducted among the bottom 40% income classification households (B40) in five zones: northern, central, eastern, southern and Sabah and Sarawak. Findings Empirical findings from cross-tabulation analysis revealed that takaful company is the preferred distribution channel for purchasing protection plans and making compensation claims. However, the online platform is the favoured channel to make contribution payments. Further investigation through FGD suggested that the selection of a channel for subscription, contribution payment and compensation claim is influenced by consumer trust, cost-effectiveness and simplicity of procedure. Research limitations/implications Limitation is pertaining to only cross-tabulation analysis used in explaining the choice of distribution channel for microtakaful among B40 group. Thus, advanced analysis is required to strengthen the findings. Practical implications Findings of this study would help marketers and practitioners to formulate strategies to promote their microtakaful protection to enhance subscription among the low-income population. Originality/value Empirical findings offer academic contributions to the existing body of knowledge on microtakaful area as the primary data collected will eventually allow future researchers to explicate the contribution of the current study to understand the important of distribution channel for microtakaful from the perspective of subscribers and potential subscribers.