The Preferences of the Muslim Consumers Between Takaful and Conventional Policy: A Study on Motor Insurance Consumers

Abstract

Malaysia is regarded as among the countries having the fastest growth of takaful at the international level, but it is a disappointed fact that there are those who are unaware of the existence of Takaful, mostly Muslim consumers. Hence, the objective of this study is to measure the preferences and understanding of the Muslim Consumers between Takaful and Insurance Policy for their motor insurance. There are 173 respondents who returned the questionnaires including online questionnaires. The respondents were the Muslim consumers among public and private servants from different departments and companies in area Mukah, Sarawak, Malaysia. From the result, 58 respondents currently subscribed Takaful insurance for motor, 100 respondents currently subscribed conventional insurance for motor, and 14 respondents were not insured by any insurance product for motor. The analysis of Pearson’s chi-square showed a value of 118.67 with a significance of 0.00, which concluded that respondents subscribed Takaful insurance for motor also preferred Takaful insurance while respondents subscribed conventional insurance for motor also tended to prefer conventional insurance. Their preference significantly influenced their choices to buy the type of their motor insurance. In addition, Pearson’s chi-square has a value of 80.36 with a significance of 0.00, which concluded that respondents subscribed Takaful insurance for motor preferred to buy insurance from Takaful company while respondents subscribed conventional insurance for motor preferred to buy insurance from both Takaful and other insurance companies.