Factors Affecting Financial Performance Of Takaful Operators In Malaysia

Abstract

This study identifies the factors that affecting the financial performance of Takaful operators in Malaysia. Data were gathered using secondary data collection method from annual report for each of Takaful operators and Bank Negara Malaysia from year 2007 until 2016. The data consist of profitability, leverage, liquidity and firm size for 5 registered Takaful operators in Malaysia namely; Syarikat Takaful Malaysia Berhad, Takaful Ikhlas Sdn Bhd, Prudential BSN Malaysia Berhad, Sun Life Malaysia Takaful Berhad (CIMB Aviva Takaful Berhad) and Hong Leong MSIG Takaful Berhad. Data were analysed using multiple regression analysis. From the analysis, firm size was found significantly positive effect towards financial performance. In contrast, leverage and liquidity were found significantly negative effect related to the financial performance. Thus, this study is very important and beneficial to regulators, investors and customers. As recommendation, Takaful operators should improve their sales in order to enhance the consistency of profit growth. Besides that, Takaful operators need to disclose the financial report from the beginning because it could make an easier for researcher in collecting data. Moreover, as the Islamic insurance that applies Shariah compliance, Takaful operators should sustain the customer trust in order to achieve well in financial performance