Abstract
Service recovery performance (SRP) is very important for the takaful insurance industry for maintaining and attracting new clients, which in turn serves as a competitive advantage for the survival and continued future of the businesses. If the insurance sector could not maintain SRP, then the competitive advantage of the organizations could be decayed. Therefore, under the theoretical foundation of equity theory and resource-based theory, this research has investigated the link between human resources management practices (HRMP) (such as human capital, training, job description, teamwork, empowerment, and rewards) and SRP directly and indirectly through the employee commitment. By using a convenient sampling technique data was collected from the employees working in the Takaful industry in Pakistan to empirically test the proposed hypotheses and validate the findings. Using cross research design and quantitative research approach. The Structural Equation Modeling (SEM) had presented the positive relationship between HRM practices and SRP. On the other hand, employee commitment had also mediated this relationship. As employee commitment is significantly mediated among most of the HRMP, this aspect is therefore considered to be a big contribution of the study in the context of Pakistan. Based on these findings, the current study has several important implications the practitioners and readers.
Highlights
In recent years, the insurance business in Islamic nations has evolved as Islamic Insurance (Takaful), notably the sale of takaful, has risen dramatically in Southeast Asian countries such as Malaysia and Indonesia
For the 2019–2020 fiscal year, the total premiums written by conventional insurance are 349 billion, whereas the total premiums written by Takaful companies are 30 billion (2019– 2020 Insurance Association of Pakistan Yearbook)
The purpose of this research is to test the mediating effect of employee commitment on the relationship among human resource management practices and Service recovery performance (SRP) pertaining to the takaful industry in Pakistan during the COVID-19 pandemic
Summary
The insurance business in Islamic nations has evolved as Islamic Insurance (Takaful), notably the sale of takaful, has risen dramatically in Southeast Asian countries such as Malaysia and Indonesia. Takaful is known as a rapidly growing industry in Islamic emerging economies that provides Shariah-compliant services and is highly endorsed by Muslim academics worldwide. Compared to the traditional insurance sector, the Takaful industry in Indonesia and Malaysia, which have a majority Muslim population in the Southeast Asian area, has a limited market share and growth rate (Djafri and Noordin, 2017). 10 Takaful companies (including 2 family, 3 general, and 5 window family Takaful firms) are functioning in the market with a portfolio of Shariah-compliant products. In Pakistan, there are 5 life insurance firms and 27 general insurance companies functioning under the private Conventional Insurance market. Takaful is rapidly expanding as a Shariah-compliant alternative to traditional insurance, and its market share is predicted to increase to up to 50% of the whole sector share over the 5 years. In Pakistan, the contribution of takaful insurance has increased during the last decade
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