Efficiency and improvement potential of Sharia insurance: Implications of the financial sector strengthening law

The future of sharia insurance in Indonesia is very bright. Rapid economic growth, rising savings rates and the development of the middle class economy bodes well for the Islamic life insurance industry. Sharia life insurance in Indonesia registered in the Financial Services Authority Institute totaling 52 companies. Of the many companies in this study only took 6 (six) companies in the 2013-2018 period. Researchers took in the company PT. Panin Daichi Life, PT. Central Asia Raya Life Insurance, and PT. Life Insurance Manulife Indonesia, PT. AIA Financial, PT. Prudential Life Assurance. In 4 (four) companies have fluctuating report results that are not directly proportional to investment. But the company PT. Sun Life Financial Syariah between funds of Ujrah participants and investment returns always increases.
 Based on the above background, the formulation of the issue is taken as follows: 1. How is the influence of Tabarru funds' on investment returns in Islamic insurance companies in Indonesia for the period 2013-2018 ?. 2. How is the effect of ujrah on investment returns in sharia insurance companies in Indonesia for the period 2013-2018 ?. 3. How big is the influence of tabarru funds' and ujrah on investment returns in sharia insurance companies in Indonesia for the period 2013-2018?
 The research objectives are: 1) To determine the effect of Tabarru funds' on investment returns in sharia insurance companies in Indonesia for the period 2013-2018. 2) To find out the effect of ujrah on investment returns in sharia insurance companies in Indonesia for the period 2013-2018. 3) To determine the effect of Tabarru funds' and ujrah on investment returns in sharia insurance companies in Indonesia for the period 2013-2018.
 The method used in this study is a quantitative method. From the results of the calculation of the simultaneous regression coefficient test (F test) it was concluded that the tabarru funds variable (X1) and the Ujrah variable (X2) simultaneously affect the investment return on Islamic insurance in Indonesia. This can be seen from the simultaneous test (F test), namely the value of Fcount <Ftable (69.945> 3.28) with a significance value of 0.000> 0.05. As the coefficient of determination test (R2) obtained a value of 0.798 which means it can be concluded that the influence of Tabarru funds and Ujrah on investment returns is 79.8% while the remaining 20.2% is influenced by other variables not included in this study.

This study aimed to analyze the value of efficiency and the comparison of efficiency ratio in conventional insurance companies and Islamic Sharia Business Unit (ISBU) of Sharia insurance, both life and general insurance, in Indonesia from 2011-2018. The input variables used are total capital and total expenses. While the output variables in this study were total income. The method used to obtain efficiency value for each insurance industry was Stochastic Frontier Analysis (SFA). The result of efficiency value from the conventional insurance companies and ISBU Sharia insurance would be compared by using independent sample t-test statistic tests. The population in this research was all conventional insurance companies, both life and general, and all life and general insurance of ISBU Sharia insurance that registered in the web of Financial Services Authority (FSA). The sample used was 28 conventional insurance companies consisting of 21 life insurance companies and seven general insurance companies, and 12 ISBU Sharia insurance consisting of nine Sharia life insurance and three Sharia general insurance. This research resulted that there was no difference in efficiency value between conventional insurance companies and ISBU Sharia insurance. JEL Classification: C73, G22, L15 How to Cite: Ulansari, D. R., & Septiarini, D. F. (2020). A comparative study of the efficiency of conventional and Sharia insurance in Indonesia. Jurnal Keuangan dan Perbankan, 24 (2), 202-213. DOI : https://doi.org/10.26905/jkdp.v24i2.3165

Sharia insurance companies and conventional insurance require efficiency measurements to determine the ability to survive and compete in strong competition between companies. The purpose of the study was to compare the efficiency of Sharia general insurance companies and conventional general insurance in Indonesia in 2018-2020 and find differences in the efficiency of Sharia and conventional general insurance companies. This research is quantitative descriptive research with data sourced from the company's official website or related websites. The research was conducted by the Development Envelopment Analysis (DEA) method with the CCR model. Input variables include assets, capital, operating expenses, administrative and general operating expenses, claims expenses, and commission expenses, while for premium output variables, tabarru' funds, investment income. It was found that the efficiency value of Sharia general insurance during encroachment was higher compared to conventional general insurance with a significant difference in efficiency value.

The purpose of this research is to know the influence of Uncertainty Macroeconomic and demographic factors such as Population, Gross Domestic Product, Government Sukuk and Sharia Mutual Funds to The Investment Yield Sharia Insurance in Indonesia. The method of research using a causal research design in Indonesia Sharia Insurance. The data used are secondary data sourced from Financial Services Authority, Indonesia. The method of analysis used in this research is the SEM method using SmartPLS software. The results show that Population, Gross Domestic Product, Government Sukuk and Sharia Mutual Funds do not influence Investment Yield Sharia Insurance in Indonesia. The implications of this research are the Indonesian Financial Services Authority policy which considers Population, Gross Domestic Product, Government Sukuk and Sharia Mutual Funds for Investment Yield Sharia Insurance in Indonesia. The limitation of this research is to use monthly samples and only observe for 2 (two) years. Originality of this research is using the latest observation variable that is 2018-2019 and observation at a sharia insurance company in Indonesia.

This study aims to determine the level of efficiency of Sharia life insurance in Indonesia and Malaysia during the 2015-2018 period. The sample used was 12 Sharia life insurance companies in Indonesia and 5 Sharia life insurance companies in Malaysia. The method used in this research is Data Envelopment Analysis (DEA) with the assumption of Variable Return to Scale (VRS) with input-orientation. The selection of variables uses a value-added approach with its input variables, namely capital, total expenses, and total investment as well as its output variables, namely total profit and total investment income. The results of this study indicate that the average overall value of sharia life insurance efficiency in Indonesia is relatively lower than the average efficiency of sharia life insurance in Malaysia. The development trend of the efficiency of Sharia life insurance in Indonesia and Malaysia tends to decrease during 2015-2018. Meanwhile, the cause of inefficiency in Sharia life insurance in Indonesia and Malaysia is the total expenses variable. Keywords: Efficiency, Sharia Life Insurance, DEA

The performance of sharia life insurance in Indonesia and Malaysia has increased and decreased, the declining performance of sharia life insurance causes low income, indicating inefficiency. Inefficiency has adverse effects that will hinder the firm's growth. The purpose of this study is to measure the technical efficiency value of 24 sharia life insurance companies and analyze the effect of profitability level and firm size on the level of sharia life insurance efficiency in Indonesia and Malaysia. The methods used in this study are descriptive and quantitative with causality design. In this study using purposive sampling technique with a total sample of 14 sharia life insurance in Indonesia and 10 sharia life insurance in Malaysia with a total of 144 observations. The data were analyzed by Data Envelopment Analysis (DEA) and tobit regression analysis methods. The results showed that the level of efficiency of sharia life insurance with the average Malaysian firm is more efficient than Indonesian companies. The level of profitability with the average is in the healthy category. The average firm size is in the category of large companies. The level of profitability and the size of the enterprise partially have a positive and significant effect on the level of efficiency. The practical implications of this study are that companies must pay attention to factors that can increase their level of efficiency by reducing operational costs and maintaining and increasing productive assets carefully.

This study examines the efficiency level of Sharia Insurance in Indonesia from 2014 to 2017. In addition, to the factors that influence the efficiency of Sharia Insurance companies. Identifies of measurements using the DEA (Data Envelopment Analysis) method, the efficiency mean (x) of Sharia General Insurance results is higher than Sharia Life Insurance. The efficiency of Sharia General Insurance is at 82% categorized as high efficiency, whereas Sharia Life Insurance is at 75% and categorized as a medium efficiency. After obtaining the Sharia General Insurance and Sharia Life Insurance efficiency the variable was analyzed using the Tobit regression method with solvency ratios variable and company size. After partial processing, the results show that the solvency ratio has a negative and not significant effect while the size of the company’s variables has a positive and not significant effect on Sharia General Insurance. In Sharia Life Insurance the solvency ratio variable influences negatively and is not significant. Whereas the size of the company is also positive and insignificant. After that, in the third stage to study non-financial factors that improve efficiency, the questionnaire was distributed to 50 respondents and processed using multiple linear regression models with variable Y, the efficiency and variable X, Technology, and Innovation. The results find that technology variables did not affect efficiency while innovation significantly increases efficiency. The higher the level of innovation, the higher the level of company efficiency.

The use of Islamic insurance continues to increase significantly from day to day. Research on sharia insurance continues to grow and is still ongoing. The purpose of this study is to collect the latest data on topics related to Islamic insurance and the latest related research. The method used in this study is the bibliometric method which is an analysis of previous studies on the topic of Islamic insurance by utilizing indexed academic data and based on CrossCef and Google Scholar. Data obtained from publish or perish is then selected which is most appropriate to the topic, then saved. Then this data is processed in the VOSViewer software which visualizes the data in the form of different colored connected lines. It is from this VOSViewer that the results regarding the relevance of the topic of Islamic insurance and previous researchers are obtained. The results show that research topics such as company, indonesia, sharia, sharia’s body, claims, sharia in indonesia indicate keywords that have been widely researched. while topics covered in green such as sharia insurance, sharia insurance company, assets growth, sharia life insurance, study, sampling, research, insurance, premium, investment, and operational cost are topics that have not been widely researched

This study aims to determine investment, premium income, and tabarru funds on profits of sharia life insurance companies in Indonesia. This study tested the hypothesis which stated that there was an effect of investment, premium income, and tabarru funds on profits. This data collection technique uses a purposive sampling technique with certain criteria. The population in this study were 24 sharia life insurance companies registered with the Financial Services Authority and the sample in this study were 6 sharia life insurance companies. Data analysis technique using multiple linear regression analysis. The research results showbased on the results of the regression test and t test investment has a positive and significant effect on insurance company profits. The tcount value is positive, meaning that the higher the investment, the higher the profit earned by the sharia life insurance company.Based on the results of the regression test and the t test, premium income has a positive and significant effect on insurance company profits. The tcount value is positive, meaning that the higher the premium income, the higher the profit earned by the sharia life insurance company.Based on the results of the regression test and t test, tabarru funds have a negative and significant effect on insurance company profits. The tcount value is negative, meaning that the higher the Tabarru fund, the lower the profit earned by the sharia life insurance company.

Sharia insurance presents an alternative system in insurance operation with risk sharing in ta'awun (cooperative). Knowledge and insight into reality and trends are used to assess and decide sharia insurance operationalization policies. This study analyzed the growth of Islamic insurance company assets in Indonesia in 2016-2020. The data is sourced from the Sharia Financial Statement Statistics published by OJK and Bank Indonesia Statistics from 2016 - 2020 with multiple linear regression analysis methods. This research aims to find out the influence of internal variables and external variables on the assets growth of sharia insurance in Indonesia. In this study, there are two variables, namely dependent variables and independent variables. Dependent variables are the assets growth of sharia insurance in Indonesia (PERASSET), and independent variables, namely GDP (GDP), inflation (INF), contribution (KONB), investment (INVEST), and operating costs (BOPERATE). The results of this study GDP, Inflation, Contributes, and Investment affects Sharia insurance's assets growth. While operating costs do not affect the assets growth of sharia insurance companies. Keywords: Sharia Insurance, Asset Growth, GDP, Inflation, Contribution, Investment, Operating Costs

Profitability is an indicator in measuring the performance of a financial institution, one of which is sharia life insurance. Sharia life insurance profitability can be measured by Return on Assets (ROA). This study aims to analyze the influence of internal and external factors on the profitability of Islamic life insurance in Indonesia. The objects of this study were three full fledge and 15 sharia life insurance business units for the period 2014 to 2018. The research method used was panel data regression analysis dynamic generalized method of moments (GMM). The results showed that leverage and contribution (premium) had a positive and significant effect on the profitability of sharia life insurance.

Sharia insurance is one of the sharia financial products chosen by the public, especially the millennial generation who are Muslim. This is because there is awareness regarding insurance that does not contain usury, gharar and maisir, so sharia insurance is chosen because it is guided by sharia principles. Basically, the millennial generation in Bengkalis is interested in using sharia insurance products. However, there are many reasons why this desire is not realized, one of which is because the number of sharia insurance agents or companies in Bengkalis is very small. This research was conducted using descriptive qualitative methods with data collection tools in the form of interviews and literature studies. The research results show that the millennial generation, especially those who adhere to the Islamic religion, are interested in using sharia insurance products. However, in Bengkalis it is still very rare to find sharia insurance companies or agents so that the desire of the millennial generation to use sharia insurance cannot be realized optimally. There are several factors that can influence the millennial generation's interest in using sharia insurance, including religiosity (religion), promotional factors, social factors, personal factors, financial literacy factors, and income factors. The author also provides advice to the parties concerned, especially on Bengkalis Island, to provide outreach to the millennial generation regarding sharia insurance products and expand the target market by increasing the number of sharia insurance companies or agents to accommodate the interests of the millennial generation in Bengkalis towards sharia insurance products.

Purpose of the study: This research aims to know the influence of the Industrial Revolution 4.0 era on the insurance industry on the side of assets and Investment insurance companies to Investment Yield Sharia Insurance in Indonesia.
 Methodology: This type of research is explanatory research. This type of research data is secondary data sourced from the Financial Services Authority (OJK) Republic of Indonesia period in 2016-2107. The tool of analysis in this research is the Partial Least Square method using Smart PLS statistics.
 Main Findings: The results are an influence of Assets and Investment on Investment Yield on insurance companies in the Industrial Revolution 4.0 era. In the era of the industrial revolution, 4.0 potential insurance improve economic growth through several aspects, namely promote financial stability. Facilitate trade and commercial activities. mobilize domestic savings. Offering a variety of risk management on capital. Increase more efficient allocation of capital and reduce the risk of loss and can increase Investment Yield for shareholders and stakeholders.
 Applications of this study: This research is the observation only on Sharia Insurance Company sample while other issuers are not observed in this study and this research implies that sharia insurance issuers are growing and contributing to their shareholders and shareholder.
 Novelty/Originality of this study: The first time observing the Sharia Insurance industry industrial Revolution 4.0 era and previous research to observe in Sharia banking.

Industry in Indonesia plays an important role in ensuring transparency, accountability and compliance with sharia principles. This research aims to analyze the application of sharia accounting in sharia insurance companies in Indonesia, with a focus on financial reporting, revenue recognition, distribution of underwriting surpluses, and management of participant funds. The research method used is a qualitative descriptive approach through literature studies and interviews with related parties in several sharia insurance companies. The research results show that the implementation of sharia accounting in sharia insurance companies in Indonesia is in accordance with the Sharia Accounting Standards Guidelines issued by the Sharia Accounting Standards Board (DSAK) and the MUI National Sharia Council (DSN) Fatwa. Apart from that, the challenges faced include the need to increase human resources' understanding of sharia accounting and adapt to industrial developments. With the existence of a sharia accounting system that is transparent and compliant with sharia, it is hoped that it can increase public trust in sharia insurance in Indonesia.

This paper aims to analyze the efficiency value and compare the efficiency ratio between sharia insurance and conventional insurance companies, both life insurance and general insurance in Indonesia, for 2018-2020. The research applies the Stochastic Frontier Analysis (SFA) method, which uses total capital and expenses as input variables, and total income as output variables. The efficiency values of Islamic and conventional insurance companies' results were compared using an independent sample t-test statistical test. The population of this research is all Islamic and conventional insurance companies listed on the website of the Financial Services Authority (OJK). The sample used is 19 sharia insurance companies (15 life insurance companies and four general insurance companies). The sample of conventional insurance is 23 companies (22 life insurance companies and one general insurance company). The results showed that the efficiency value of Islamic insurance companies (0.6549) was 0.0697 lower than conventional insurance (0.7246). It can be concluded that the efficiency of conventional insurance is better than Islamic insurance. Islamic insurance management capabilities are lower than conventional insurance companies’ management capabilities.