Islamic Insurance Research Articles

The Future of Sharia-Based Employment Insurance for Indonesia’s Employment Insurance Agency (BPJS Ketenagakerjaan): Learning from Malaysia

The growing Islamic economy worldwide has inspired the launch of “Indonesia’s Islamic Economic Masterplan 2019-2024” in May 2019. The blueprint aims to establish a sustainable domestic Islamic market and make Indonesia the key player in the global Islamic economy and finance hub by developing several sectors such as Islamic banking, Islamic capital market, social security, and Islamic social sectors. Data from Indonesia’s Financial Authority shows a huge gap between conventional and Islamic insurance regarding their contribution to Indonesia’s GDP in the third quarter of 2018. The former contributed 31,7%, while the latter only had 1,13%. It seems that Indonesia, home to the world’s largest Muslim population, is left behind among other Muslim majority countries to create an Islamic economic market. In contrast, Malaysia with fewer Muslim inhabitants has succeeded in building a feasible sharia economic market and Islamic insurance in its social security institution called the Employees’ Provident Fund (EPF). This study uses a comparative study to observe phenomena and analyze differences and similarities to be interpreted or evaluated, and comparisons will be made between Indonesia and Malaysia as units of analysis. Our findings indicate that the probability of developing Islamic insurance in social security institutions not only depends on the precise scheme that BPJS Ketenagakerjaan will introduce as the provider but also on the willingness of the national government to build a new regulatory framework.

Takaful (Islamic Insurance) Adoption in Pakistan: A Moderating effect of Religiosity

The purpose of this research study is to explore the moderating effect of religiosity against the intention to adopt Takaful insurance products and services in Pakistan. Earlier studies in the field of Takaful insurance have highlighted the degree of interaction between these two factors. The study includes four independent factors in addition to the dependent variable. The dependent variable is the intention to use Takaful Insurance products and services and independent variable are relative advantage, compatibility, social influence, and customer awareness of Takaful Insurance. Data from various regions of Pakistan were collected using a convenient sampling technique and a series of questionnaires as the survey instrument. The moderate effect of the factors has been predicted using moderated multiple regression analysis. The results show that religiosity significantly moderates the interplay of relative advantage, compatibility, social influence, awareness of Takaful, and intention to use Takaful Islamic insurance products. The result suggests that religious considerations influence Pakistani Takaful Insurance seekers' decisions to use Takaful Islamic Insurance goods and services in a significant way and it support hypothesis. The results of this study should help financial institutions develop marketing strategies that take these variables into account.

Analisis Tingkat Literasi Keuangan Syariah Petani Padi Di Desa Sei Penggantungan Kabupaten Labuhanbatu

Sei Penggantung Village, Labuhanbatu Regency, is an underdeveloped village starting to develop. Having the majority of the population working as rice farmers makes farmers during the farming period always need capital, but often in farming activities, farmers are always constrained by money. Farmers always borrow from conventional financial services in the village when there is a shortage of capital. This does not solve the problem but creates a new trial, namely interest-bearing debt, so a new financing system is needed that avoids interest. Islamic financial institutions can be an option for farmers as a source of capital. The aim is to assess knowledge of Islamic finance among farmers. The study was conducted from October 2022 to January 2023. It used four indicators to measure Islamic financial literacy: Islamic savings and loans, basic knowledge of Islamic finance, Islamic investment, and Islamic insurance. A survey method was used to collect data, and a sample of 30 individuals was selected through purposive sampling. Data collection was carried out by interviewing using a questionnaire, and previously the questionnaire items were validated and tested for reliability. Descriptive statistics were used for analysis. The results showed that the level of Islamic financial literacy among rice farmers in Sei Penggantungan Village was low, with an index value of 59.66%. According to the classification of Chen and Volpe (1998), it is included in the low category (<60%). The main factor causing low Islamic financial literacy among farmers is the limited access of rural communities to financial education related to Islamic financial services. This includes understanding the features, benefits, risks, rights, and obligations associated with the service. This drives the lack of public interest in using Islamic financial services causing farmers to continue to rely on moneylenders to find sources of capital.

The Effect of Claim Service Quality on the Decision to Buy Sharia Insurance Products (Case study on Sharia Insurance in Indonesia)

The aim of this research is to determine the significant effect of quality of claim service on the decision to buy sharia insurance products, to determine the influence of claim service quality on the decision to buy sharia insurance products. The method used in this research is a quantitative method with a descriptive approach. The population in this study were customers of Islamic insurance throughout Indonesia and the sample used in this study totaled 95 people with predetermined conditions, namely customers who had filed a claim. The collection technique used in sampling is Purposive Sampling, namely a sampling method where each population does not have the same opportunity. The technique used to collect data is an indirect communication technique with a tool in the form of a questionnaire. Meanwhile, to analyze the data, researchers used the SPSS For Windows program. Based on the results of the analysis carried out, it can be concluded that the quality of claim service has a significant effect on the decision to buy sharia insurance products in Indonesia with an effect of 60% and the remaining 40% is the influence of other variables that are not in this study (Extranius Variable).

Analysis of demand for Takaful insurance: a case study in Iran

Purpose The Islamic financial system consists of three functional areas of Islamic banking, Islamic insurance and the Islamic capital market, which, with its development and progress, has become an important part of the global financial market and as an alternative, efficient financial model in front of the financial system. Takaful insurance is a relatively new but growing sector of the Islamic financial industry. Today, this insurance has attracted the attention of many researchers and executives. To further improve, it is important to identify the key factors according to the demand and also to evaluate their importance. In Iran’s insurance industry, Takaful product has not yet been released, and insurers have recently entered this field. Therefore, the purpose of this paper, an attempt has been made to identify the factors affecting the demand for Takaful insurance in Iran. The results of this research can be useful for policymakers and Takaful providers in formulating appropriate strategies to increase the demand for Takaful insurance. Design/methodology/approach In this regard, in this research, using library studies, indicators affecting demand were identified. After that, using a field study and distributing a questionnaire among experts in the field of research, the importance of the indicators was analyzed relative to each other and the indicators were ranked based on their importance. Findings Based on the results, the indicators are divided into five categories of economic, social, demographic, marketing and sales and features of Takaful insurance products. Originality/value To the best of the authors’ knowledge, this is the first study regarding the identification and ranking of factors affecting the demand for Takaful insurance in Iran’s insurance industry.

The case study of the sharia insurance industry: how far is the spin-off policy being effectively implemented in Indonesia?

PurposeThis study aims to analyze the effectiveness of the spin-off policy which includes clarity of objectives and criteria, implementation and monitoring and evaluation functions.Design/methodology/approachThe method used is a qualitative method with a theme approach and the analytical hierarchy process (AHP). Data were obtained from the results of focus group discussions and AHP questionnaires with informants from Indonesian Sharia Insurance Association (AASI), the sharia life and general insurance industry, the Sharia Supervisory Board, the government and regulators.FindingsThe results of the research are the effectiveness of the clarity of goals and criteria has not been realized optimally, the effectiveness of increasing profitability has not been realized, and the effectiveness of the monitoring and evaluation functions by the government and regulators has been realized. The supporting factor that has the highest level of importance is the role of the government and regulator.Research limitations/implicationsThe limitation of this research is that it has not used a wider range of profitability test tools and projections. The theoretical implication of this research is as a reference for robust research in identifying spin-off success factors because this study uses a mixed method where qualitative methods are used in the study using data from theory and expert informants from three parties: regulatory parties, associations (AASI) and the insurance company (life insurance and general insurance). These results form the basis for compiling a questionnaire with a quantitative method so that the data is become relevant based on theory (design) and practical side.Practical implicationsPractical implication of the study is that the Islamic insurance industry has to prepare to achieve condition of Tabarru funds and the investment reaches 50% of the main insurance fund. AASI, as the sharia insurance industry organization, continues innovating the most suitable form of spin-off that can be achieved by the Sharia business unit and also continues to coordinate with regulators to discuss existing problems. The government and regulators also support the implementation of the spin-off by providing convenience in various aspects such as spin-off period relaxation and government incentive and relaxation to enhance sharia insurance industry.Originality/valueThe contribution of the results of this research for the government and regulatory agencies is as input in setting policies and regulations related to spin-offs, for the industry is expected to be more prepared in terms of resources, commitment and strategy.

History and Development of Takaful Research: A Bibliometric Review

This paper explored a trend analysis related to takaful research from 1989 until March 2022. This research aims to determine: (1) the current growth and trends of publications in takaful; (2) the most productive contributors in takaful studies; (3) the highly-cited documents in takaful research; and (4) the essential keywords and themes involved in the takaful studies. The data was obtained through the Scopus database with the keywords “takaful,”“Islamic insurance,” or “sharia insurance.” The search resulted in 423 documents and became 356 documents after screening. The data has been exported and analyzed using tools such as Biblioshiny, VOSviewer, Publish or Perish (PoP) and Microsoft Excel. The results showed that most publications were in 2017 and 2020. The most significant contributor that published the most research documents were Syed Ahmad Salman by the author (21 publications), International Islamic University Malaysia by Institution (24,4%), English by language (97,5%), Malaysia by country (64,04%), Journal of Islamic Accounting and Business Research by title (22 publications). This study found the article “the cost efficiency of takaful insurance companies” written by Kader as the most cited publication. Moreover, based on the results of network visualization mapping, takaful research was divided into four main themes: risk management in the takaful industry and its relation with Islamic banks, efficiency in the takaful industry, and behavior of takaful customers, and development of takaful. This study recommended a systematic literature review on popular topics such as efficiency and family takaful for further studies.

Analisis Pengaruh Rasio Early Warning System dan Good Corporate Governance terhadap Risk Based Capital pada Perusahaan Asuransi Syariah di Indonesia Periode 2017-2021


 
 
 
 The goal of this study is to determine how big of an impact Good Corporate Governance (GCG) and Early Warning System (EWS) ratios have on the Risk Based Capital (RBC) of Sharia insurance businesses. The study technique employs a total sample of 13 Islamic insurance firms and a quantitative approach using panel data regression models utilizing EViews12. Liquidity, claims expenditure, and changes in surplus are the factors from the EWS ratio that were chosen. The size of the board of directors, board of commissioners, sharia supervisory board, and audit committee are the following factors that were chosen from GCG. The outcome of the hypothesis test was that none of the independent factors concurrently affected the RBC variable. The liquidity ratio is the single factor that, in part, significantly affects RBC.
 Keywords: EWS; GCG; RBC; Sharia Insurance
 
 
 

SYSTEMATIC LITERATURE REVIEW: THE EFFECT OF PREMIUMS AND INVESTMENTS ON SHARIA INSURANCE COMPANY PROFITS

This study aims to map the effect of premiums and investments on the profits of Islamic insurance companies. In research using the Systematic Literature Review method, eight articles out of 200 matched the criteria, with search strings from 2018 to 2022. The results showed that (RQ1) the problems contained in research journals varied, namely differences in results from previous studies on Premiums, Investment Returns, and Profits, as well as the decline in profits of Islamic insurance companies. In the research conducted by Alifia Nur Afifah and Anniza Citra Prajasari (2022), there are problems of inconsistency with the results of the previous study on premiums and profitability. In a study conducted by Ridwan Tabe et al. (2018), there are problems with the decline in net profit of the Panin Dai-ichi Life Sharia insurance company. And research conducted by Nur Indah et al. (2021) showed there needs to be more consistency in previous research between premiums for profits and investment for gains. (RQ2) The research method that is often used is the quantitative method; this method is very relevant because quantitative research looks at the "Facts/Truth" that are in the research object out there, and the researcher must be neutral about whatever is found in the field and be impartial. Furthermore, the results of the research question (RQ3) Every year and even in 2022, some journals discuss the effect of premiums and investments on the profits of Islamic companies.

Dynamics of the Insurance Paradigm Analysis in Pakistan: An Evidence of Leading Islamic, Public and Private Insurers

This paper explores the dynamics of the general insurance paradigm throughout six different companies, NICL (National Insurance Company), EFU (Easter Federal Union), Adamjee, Jubilee General Insurance, Salaam Takaful Limited, and Pak-Qatar Takaful, in the developing economy of Pakistan from 2012 to 2021. To examine collective long-run outcomes, Pedroni and Kao tests were taken to measure the impact of public and private corporate entities as well as the cause-and-effect relation of each regressor on the dependent variable of solvency ratio, Granger causality and the Pooled Mean Group-Autoregressive Distributed Lag (PMG-ARDL) model have been used. According to the estimated outcomes, it has been deliberately observed that except for the claim ratio, all other explanatory variables positively influence the solvency ratio. In future, this paper will be help out researcher, practitioners, and public sector corporate consumer demand and service quality issues under the general insurance paradigm conventional and Islamic insurance as well.

Asuransi Dan Koperasi Syariah Di Indonesia

This paper aims to optimize Islamic insurance and cooperatives in Indonesia, reviewed from philosophical, historical, juridical and sociological studies. The method used is library research which examines literature analyzed qualitatively using a sociological, historical, juridical, and philosophical approach. The study results show that insurance and cooperatives carry the spirit of togetherness and help each other. The spirit of insurance and cooperatives is deeply rooted in Indonesian society; it's just that they are not institutionalized regularly. The Indonesian government is trying to accommodate insurance and cooperatives in various laws and regulations legally. However, there is still a need for firmness and clarity regarding the Sharia insurance and cooperatives law, especially if there is a dispute. In addition, insurance and cooperatives must improve their practice and understanding so that the community feels their benefits.

Awareness of the Differences Between Islamic Insurance and Conventional Insurance amongst Students of Islamic Studies in Sri Lanka

The purpose of this study is to assess the level of awareness and understanding of Takaful, an Islamic insurance scheme, as compared to traditional insurance among students of Islamic Studies in Sri Lanka. Despite the growing popularity of Takaful in the country, there is a notable lack of awareness and understanding of this concept among Sri Lankans. By conducting a survey among Sri Lankan students, this research seeks to determine the level of awareness and acceptance of Takaful, while identifying the factors that influence this perception. The research methodology employed was to collect data through questionnaires distributed to customers in Sri Lanka. The findings indicate that although there is a growing demand for Takaful in the country, a significant portion of the population is either unaware of its existence or hesitant to adopt it due to prevailing misconceptions. The study highlights the importance of increasing awareness and understanding of Takaful to encourage greater participation in this form of insurance. In addition, future research could examine the reasons for limited engagement with Takaful and explore strategies to promote insurance literacy and active participation in the industry.

Pengaruh Inflasi, Saham Syariah, Sukuk, Reksadana Syariah Dan Asuransi Syariah Terhadap Pertumbuhan Ekonomi Di Indonesia Tahun 2015-2022

As a developing country, Indonesia needs qualified economic instruments to increase national economic growth by at least 7%. On the other hand, Indonesia is one of the nations with the most advanced Islamic economy. It an excellent opportunity for Indonesia to enhance national economic growth through Islamic Stocks, Sukuk, Islamic Mutual Funds, and Islamic Insurance. However, Indonesia has not taken full advantage of these conditions, as the GDP has stagnated at 5% for the past eight years. In addition, several other factors, such as inflation, might affect national economic growth. This research aimed to determine the effect of inflation, Islamic stocks, Sukuk, Islamic mutual funds, and Islamic insurance on Indonesia’s economic growth in 2015-2022. This research employed quantitative methods. The data was collected using the Time Series technique in 2015-2022, which comprised 95 data. The data were analyzed by descriptive statistics, classical assumption test and multiple linear regression with the SPSS version 26. Partially, the result indicates that inflation did not significantly affect Indonesia’s economic growth. Islamic stocks significantly affected Indonesia’s economic growth. Sukuk significantly affected Indonesia’s economic growth. Islamic mutual funds did not significantly affect Indonesia’s economic growth. Islamic insurance significantly affected Indonesia’s economic growth. Simultaneously, inflation, Islamic stocks, sukuk, Islamic mutual funds and Islamic insurance significantly affected Indonesia’s economic growth.

Implementasi Akad Tabaru Pada Asuransi Syariah Guna Meningkatkan Perekonomian

ABSTRACT, The development of Islamic financial institutions in Indonesia has experienced quite rapid development. Islamic financial institutions have many kinds, one of which is Islamic insurance. As insurance labeled sharia, it is obligatory in its operations to comply with Islamic principles and values. This research was conducted to analyze how the implementation of the tabarru contract on Islamic insurance in order to improve the economy. This research method uses a qualitative approach with the method of analysis of literature studies or library research. The data used in this research comes from books, journals, scientific papers, to legal online searches. The results of this study indicate that the implementation of the tabarru contract in Islamic financial institutions with a research focus on Islamic insurance institutions has implemented the tabarru contract in its activities. As well as having an indirect positive impact on improving the economy.

Takaful funeral; an innovation for Islamic insurance product

Purpose This study aims to determine the prospect of takaful funerals as an Islamic insurance product and its marketing strategy. The multicase study analyzed is the Takaful Funeral Amsterdam of Indonesia, launched in 2015, Millî Görüs of Turkey in 1970 and Arrahma of Morocco in 2006. Design/methodology/approach This study delivers an analytic hierarchy process to qualitatively and quantitatively describe Muslim customers’ priority choice and interest criteria for takaful funerals as a forerunner of Islamic insurance products. Findings Based on the priority choice and interest criteria, the highest priority element of takaful funeral products is market need (49.21%). The group subcriteria were dominant compared to the individual subcriteria. Product design is the second choice (20.9%), with function as the priority in subcriteria. Practical implications This indicates that the Muslim community urgently needs funeral service products that are consistent with Islamic law, which emphasizes its function. The market needs as the highest priority element implies that bundling products, affordable prices and simple design are the most suitable methods for developing takaful funeral products in Indonesia. Originality/value To the best of the authors’ knowledge, this is the first study to discuss Islamic funerals in Indonesia, with the potential to be further developed with the increasing need of the Islamic insurance industry for new products. Previous research did not examine the PPME Al-Ikhlas Takaful Amsterdam, Millî Görüs of Turkey and Arrahma of Morocco as case studies for developing Islamic funeral insurance in Indonesia. Therefore, this gives the present study high originality.

The Effect of Good Corporate Governance and Company Size on The Profitability of Islamic Insurance Companies in Malaysia

The Effect of Good Corporate Governance and Company Size on The Profitability of Islamic Insurance Companies in Malaysia

Strategi Pengembangan Produk Asuransi Syariah Indonesia Masa Pandemi Covid 19

Economic developments in 2020 experienced an economic crisisto the COVID- 19 virus pandemic. Virus is very dangerous for health and also has an impact on various fields, especially economy in the developmen of Islamic insurance. Asuransi Syariah Indonesia was officially formed on August 25, 1994. This study aims to determine the development of Indonesian Islamic insurance during the COVID-19 pandemic. This study uses a literature review or library research with a descriptive approach which is part of the qualitative. The data used comes from journals, books, websites, and other official documents. This research shows that during COVID-19 pandemic, economic developments had a distinct impact on Indonesian Islamic insurance. From decrease in asset to an increase in gross contributions. Not all obstacles to the development of sharia insurance are caused by the COVID-19 pandemic, there are other factors such as the existence of conventional insurance that has existed for a long time, governance structures, and so on.
 Keywords: History Of Sharia Insurance; The Difference Between Conventional Insurance and Sharia; Development Of Sharia Insurance

Financial performance of sharia and non-sharia life insurance: A comparative analysis

The emergence of Islamic insurance as a financial solution for Muslim communities, especially in Muslim-majority countries, is an intriguing topic. This study aims to evaluate the financial performance of Sharia-compliant life insurance in Indonesia and its market presence. Specifically, it compares the financial performance of non-Sharia and Sharia life insurance companies using the Early Warning System (EWS) and Risk-Based Capital (RBC). The EWS evaluation measures capital adequacy ratio, claim expense ratio, liquidity ratio, and own retention ratio, while RBC measures solvency ratio. The results of hypothesis testing, using the Mann-Whitney U test, reveal a significant difference between the financial performance of non-Sharia and Sharia life insurance companies based on EWS. However, there is no significant difference between their financial performance based on RBC's solvency ratio. The findings of this study imply that, as a whole, sharia-compliant insurance outperforms its non-sharia counterparts. Despite the relatively small sample size, these results offer a ray of hope for Islamic financial institutions to pursue further growth and development.

Social Cost-Benefit Analysis (SCBA) of Islamic Insurance (takaful) Drone-Assisted Disaster Victim Identification: Emotional Management

Islamic insurance (takaful) companies have continuously used the latest technology to serve their customers better. One of the potential technologies that takaful operators can consider is drones. Nonetheless, the adoption of drones has shown an imbalanced pattern between regions, with some countries displaying more commendable experiences than others. In the context of Malaysia, such adoption can be regarded as negligible, if not minimal. While drones have numerous positive effects, this study focuses on emotional management through the lens of social cost-benefit analysis (SCBA) based on disaster victim identification (DVI). DVI is the process of identifying corpses (often in large numbers) following a disaster, either natural or man-made disaster. This study provides preliminary findings that support the need for drones to be integrated into takaful operations, based on the SCBA method focusing on emotional management. The findings indicate that emotional management affects not only the family of the victim but also the first responders involved in the search and rescue (SAR) operation and their families. Hence, proper consideration must be given to using drones in takaful operations with the government disaster agency.

Peran Agen Dalam Menentukan Perencanaan Pemasaran Dan Meningkatkan Minat Nasabah Terhadap Produk Asuransi Syariah

Insurance is one of the references to meet the needs and feelings of security in the face of uncertainties that may arise in people's lives and the risks that will be experienced by the company. Insurance is one of the financial facilities (financial) of domestic life, both in the face of the risk of death and in the face of property risk. In this case, the position of the insurance agent of an insurance company is very strategic, because through this agent the company can market or sell its products to prospective consumers. Agents are also very valuable business assets. An insurance agent is a person who works alone or works in a commercial organization, represents and acts on behalf of an insurance company or sharia insurance company, who is qualified to represent the company. One of the successes of Sharia insurance companies is in the field of marketing. In addition, the agent also plays a role in carrying out activities for the community by introducing financial plans and risk management in insurance and agents also play a role in selecting risk to the customer. customer, assess and measure the extent to which risks that may arise, and determine the best approach to deal with specified risk. Marketing in Islamic insurance requires the ability to recruit, encourage, develop and sell privately (direct communication between sellers and prospective customers and arousing customer interest in the product until the customer is interested in buying the product).
 Keywords: Insurance, Agent, Marketing Capabilitie, Insurance Customer.