Islamic Life Insurance Research Articles

Sharia Life Insurance: Legal Basis and Operational Systems

Islamic life insurance is a non-bank financial institution that is used by the Muslim community as a medium in anticipating risks that might arise in the future. So that people make insurance, especially sharia life insurance as an alternative in dealing with future risks related to one's life. This study aims to determine the legal basis for sharia life insurance and its operating system as a forum for information for Muslim communities in Indonesia. In this study, the author uses the doctrinal research method in which the approach used is the regulatory approach (Islamic law) and the conceptual approach. This research prioritizes secondary data in its management such as primary legal materials, secondary legal materials, and tertiary legal materials. This study shows the origin of Islamic insurance is derived from the traditions of the Arab community at the time of the Prophet Muhammad, called Akilah. If someone dies (killed) by someone, then the family of the murderer is obliged to pay blood money (diyat) to the heirs of the victim. The blood money was collected from murderous families and then handed over to the heirs of the victims. This tradition later developed into Islamic insurance known today. Sharia insurance operational system is to use two contracts, namely Tabarru contract and mudharabah contract. With the existence of these two contracts, the elements of gharar, maysir and riba can be removed.

Source of Funds and Islamic Insurance Growth: Investment Returns as a Mediation

Sustainable growth must be maintained by maintaining an increase in investment returns, with the source of funds as a stimulant. The population of this study was all Islamic life insurance companies in Indonesia. The study used path analysis mediation with regression or two layers OLS (Ordinary Least Squares) and followed by Sobel test. The result showed that investment returns can mediate participant funds in influencing the growth of Islamic life insurance companies. Meanwhile, investment returns did not mediate the influence of company funds in influencing the growth of Islamic life insurance companies.

PENGARUH DANA TABARRU� DAN UJRAH TERHADAP HASIL INVESTASI PADA PERUSAHAAN ASURANSI SYARIAH DI INDONESIA PERIODE 2013-2018

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.

THE RELATIONSHIP BETWEEN SHARIA LIFE INSURANCE DEMAND AND ECONOMIC GROWTH IN INDONESIA

This study aims to examine the relationship between demand for Islamic life insurance and economic growth in Indonesia. Density of insurance is used to measure the demand for Islamic life insurance. While economic growth is measured using gross domestic product. The data used is time series data for 15 years for the period 2002-2017. The analytical method used is linear regression. The findings show that there is a significant positive relationship between demand for Islamic life insurance and economic growth at the level of alpha of 5%.

KINERJA KEUANGAN PADA PERUSAHAAN ASURANSI UMUM SYARIAH DAN ASURANSI JIWA SYARIAH DI INDONESIA PERIODE 2014-2016

This research is to know the difference of financial performance between islamic general insurance companies and islamic life insurance companies in the periods of 2014-2016. This research used quantitative for the research method, purposive sampling for the sampling technique, islamic general insurance companies and islamic life insurance companies for the sample. This research conduct the comparative analyzed with independent sample t-test and mann-whitney test. This research used nine variables to evaluate the financial performance which was SMR, TKD, BK, BM, PI, LK, ABSR, PP, and CT. The cmparative analysis showed that there are no differences on SMR, BK, BM, PI, PP, and CT, whereas there aredifferences on TKD, LK, and ABSR

PELAYANAN ASURANSI JIWA SYARIAH: SUDAHKAH SESUAI HARAPAN?

This study aims to analyze Gap on Islamic Life Insurance Services in DKI Jakarta by CARTER approach (Compliance, Assurance, Responsiveness, Tangibles, Empahty, Reliability), respondents in this study amounted to 150 respondents, using Cluster sampling method, this researcher use Importance Performance Analysis Method. The result of the research shows that the level of satisfaction between perception and expectation toward service to customers of Islamic Life Insurance in DKI Jakarta has a value of 97.22%, it indicates that there are still Gap on services provided by Islamic Life Insurance Company in DKI Jakarta especially on Hospitality employees in serving the customer, Ability to respond to problems arising, Ability to communicate with customers, Capacity quickly responsive to customer complaints, Use of equipment and technology in operational activities, and Application of Information technology.

Pengukuran Efisiensi Asuransi Syariah Dengan Data Envelopment Analysis (DEA)

This research is aimed to measure the efficiency of Islamic Insurance Companies in Indonesia by using Data Envelopment Analysis (DEA). The sample used in this research are the Islamic Insurance Companies that publishes their full financial statements from the years 2012-2014. The variables in this study consists of two kinds of variables, namely input variables and output variables. The variable input is the total assets and the cost of commissions. While the variable output is the gross contribution and investment income. This study uses the intermediation approach with input orientation and use three types of measurements are the measurement of the efficiency of technical efficiency, pure technical and scale. The results of this study are in the groups of Islamic General Insurance Companies and Islamic Life Insurance Companies there are no company that achieve optimal efficiency levels in the three types of measurements.Whereas in the group Syariah General Insurance Unit are 2 companies optimally efficient in 3 measurements or by 28.57% of the total companies sampled in this group. And the group Syariah Life Insurance Unit are 4 companies optimally efficient in 3 measurements or 25% of total companies sampled in this group.

Analisis Determinan Tingkat Proporsi Dana Tabarru’ Pada Asuransi Jiwa Syariah

This research aims to determine influence of the claim risk, retakaful contribution, operating expenses, exchange rate, inflation rate and BI rate toward proportion of tabarru’ funds on Islamic life insurance companies. Sampling is done by purposive sampling technique to get 138 data from different starting ranges data and periods, with the final sample of 23 Islamic life insurance companies during 2010-2017. The method of analysis used in this research is multiple linear regression using unbalanced panel data that processed by using Eviews 9. The result showed that the best estimation model for this research is Random Effect Model (REM). Simultaneously all of the independent variables have significant influence towards proportion of tabarru’ funds. While partially, claim risk has positive significant, retakaful contribution and operating expenses has negative significant influence towards proportion of tabarru’ funds. As for the macroeconomic variables, namely exchange rate, inflation rate and BI rate have no significant influence towards proportion of tabarru’ funds

A narrative on Islamic insurance in Bangladesh: problems and prospects

PurposeThis study aims to find out the problems of family Takaful (Islamic Life Insurance) operations in Bangladesh and proposes strategies to overcome the problems.Design/methodology/approachQualitative data were collected through interviews with 32 respondents from two family Takaful operators in Dhaka, Bangladesh.FindingsThe study finds a number of problems of family Takaful which relate to the government, Takaful company and the Shariah board. Lack of governing guidelines for Takaful companies in Bangladesh is causing numerous operational problems of family Takaful. To overcome these obstacles, the government should propose separate Act for Takaful. This requires support from the stakeholders along with Islamic scholars in the country.Practical implicationsIt is anticipated that the findings and suggestions of the study will assist the policymakers in improving the situation of family Takaful companies particularly in Bangladesh.Social implicationsIf the proposed suggestions are implemented in Takaful companies, the problems facing Takaful will likely be solved and more people will take part in Takaful. This would contribute to developing the country economically, raise Islamic values and foster peace and harmony in the society.Originality/valueMainly, this study is based on the primary research that has been conducted in family Takaful companies in Bangladesh.

Efisiensi Asuransi Syariah di Indonesia dengan pendekatan Data Envelopment Analysis

The purpose of this study is to estimate the efficiency level of Islamic insurance companies in Indonesia. The data used are taken from each financial report of 14 Islamic life insurance companies and 12 Islamic general insurance in the period 2013-2015. Efficiency score estimation is done by using Data Envelopment Analysis (DEA) method. There are three input variables, namely asset, load, claim payment and two output variables, namely income and tabarru’ funds obtained. The results show that islamic life insurance and islamic general insurance companies in Indonesia have not been operating efficiently.

Perbedaan Efisiensi Perusahaan Asuransi Jiwa Syariah dan Konvensional di Indonesia Dengan Metode Data Envelopment Analysis (DEA)

This study aims to determine and comparing the level of operational efficiency of Islamic Life Insurance and Conventional Life Insurance in Indonesia. This study uses a quantitative non-parametric approach With Data Envelopment Analysis (DEA) CRS and VRS assumption, and a statistical tool Mann-Whitney U-Test. The samples are 13 Islamic Insurance and 5 Conventional Insurance that comply with the specified sample criteria. During 2010 to 2014, the relative average value of Islamic Life Insurance and Conventional Life Insurance with VRS assumption more efficient than CRS assumption. This indicates that in relative terms, the source of operational inefficiency is not effective on the efficiency scale. While the hypothesis test results showed no significant differences in levels of operational efficiency in both groups the data by CRS assumptions and VRS.

Modeling the Premium and Contract Properties of Family Tak?ful (Islamic Life Insurance)

Modeling the Premium and Contract Properties of Family Tak?ful (Islamic Life Insurance)

PROSEDUR UNDERWRITING BANCASSURANCE DAN ASURANSI JIWA SYARIAH PADA PT. ASURANSI TAKÂFUL KELUARGA

This study explains the comparative risk selection (of underwriting) in bancassurance products and Islamic life insurance products at PT. Family Takaful Insurance. The result revealed that the underwriting procedures of each product are different based on their characteristics. Full protection is designed as a simple of underwriting product only with age provisions and administrative requirements. Financing takâful products cover all financing from the bank. Thus, bank which does the insurance process will make these data as basic information about insurance customers. Since the bank is insured, and apply risk selection process as risky selection process at most insurance companies. DOI: 10.15408/aiq.v4i1.2543

The impact of Islamic beliefs on consumers’ attitudes and purchase intentions of life insurance

Purpose – The purpose of this paper is to investigate the role of Islamic beliefs in moderating consumers’ attitudes and purchase intentions of conventional and Islamic life insurance. Second, it investigates the role of Islamic beliefs in moderating the relationship between the attitude toward conventional/Islamic life insurance and purchase intentions of these types of services. Design/methodology/approach – A questionnaire was administered online in a Muslim liberal country where both types of insurance are offered. Based on a total sample of 207 responses, ANOVA tests and a structural Equation Modeling were used to test the research hypotheses. Findings – Results show that: the higher (lower) the Islamic beliefs of individuals, the less (more) favorable their attitude will be toward conventional life insurance and the more (less) favorable their attitude will be toward Islamic life insurance; the higher (lower) the Islamic beliefs of individuals, the weaker (stronger) their purchase intentions for conventional life insurance will be and the stronger (weaker) their purchase intentions for Islamic life insurance will be; and Islamic beliefs moderate the relationships between attitudes and purchase intentions of life insurance. Practical implications – Because they play a significant role in moderating consumers’ attitudes and purchase intentions of conventional and Islamic life insurance, Islamic beliefs can be used as a meaningful criterion to segment the life insurance markets in (less conservative) Muslim countries. This would help insurance companies to better target their services. In a case where two segments coexist (i.e. individuals scoring low on Islamic beliefs vs individuals scoring high on Islamic beliefs), insurers should weigh different strategic options by targeting one of the two segments or both of them. Perhaps the main issue occurs when an insurer attempts to target both segments. In this case, managers should be aware of the confusion that they might create in the mind of their clients (or potential clients). Concurrently offering two types of life insurance (conventional and Islamic) may put the insurers’ credibility at stake. Originality/value – Earlier studies report that in Muslim countries, the demand for life insurance is weak or negatively correlated with religion. The majority of these studies consider religion as a macro indicator (i.e. at the country level) when explaining the demand for such services. The present study further clarifies the nature of the relationship between religion and the demand for life insurance by: examining the role of Islamic beliefs (as one of the main dimensions of Muslims’ religiosity) at the micro level (i.e. at the consumer level); and investigating the moderating role of Islamic beliefs in explaining attitudes and purchase intentions of conventional and Islamic life insurance in a less conservative Muslim country.

Comparative Study on the Efficiency of Bangladeshi Conventional and Islamic Life Insurance Industry: A Non-Parametric Approach

Comparative Study on the Efficiency of Bangladeshi Conventional and Islamic Life Insurance Industry: A Non-Parametric Approach

The Factors that Affect the Demands of Family Takaful Schemes in Malaysia

There are many factors that may influence the demand of Takaful products in Malaysia. This study will focus on the Family Takaful schemes which are also known as Islamic Life Insurance. The main purpose of this study is to determine the economic variables that significantly affect the demand of family Takaful schemes in Malaysia. It is seems that conventional Insurance are more preferable by customers so, Takaful operators had developed several Takaful products to suit the needs of the policyholders. Diversification of Takaful product can meet a different needs and wants of customers on insurance which based on sharia compliant. As to conduct the study, the data is collected from the year 2002 to year 2012 and using yearly basis. In order to examine which is the major factors affecting the demand of Takaful Scheme, regression is used as a method to analyze the data collected. The dependent variables will be the demand of Family Takaful schemes in Malaysia while the independent variables level of income of customers, the premium payment and the rate of interest. The expected result of this research is to have significant relationship.

A Conceptual Model of Literature Review for Family Takaful (Islamic Life Insurance) Demand in Malaysia

The growing significance of takaful industry (Islamic insurance) in Malaysia is expected to foster sustainable economic growth in Malaysia. Further to this, Malaysia is recorded to be the major player and one of the fastest takaful growth in Southeast Asia. As such, family takaful (Islamic life insurance) segment must be competitive and innovative to increase market penetration and compete with their conventional counterparts. This paper aims to propose a simple yet comprehensive conceptual model by identifying the main determinants that drive family takaful demand in Malaysia. An extensive review of literature available has been carried out to achieve the purpose. Several critical factors namely, agency system (al-wakalah), reputation of takaful operators, products and services, marketing and advertising of takaful products, are found to be the main determinants for family takaful demand.

Comparative Study on the Efficiency of Bangladeshi Conventional and Islamic Life Insurance Industry: A Non-Parametric Approach

This study endeavor is to examine the efficiency in the both life insurance and life Takaful industry of Bangladesh. The study used Data Envelopment Analysis (DEA) to explore the contributions of technical and efficiency changes to the growth of productivity in the life insurance industries of Bangladesh by using descriptive statistics such as mean, median, standard deviation, minimum & maximum and efficiency concerning the generalized output-oriented Malmquist index for the years 2009-2011. The output-input data consists of a panel of 13 Life Insurance and Takaful Life companies (10 life insurance and 03 Takaful life) in Bangladesh. This study utilizes two inputs and two outputs, namely, commission and management as well as premium and net investment income, respectively. In the DEA technique, efficiency is measured by the Malmquist index. The Malmquist efficiency measures have two components: the efficiency change and technical change index. Efficiency change is again combined by pure efficiency and scale efficiency. It is found that, on geometric mean, the TFP of the Conventional life industry is better than Takaful life mainly due to both efficiency and technical changes where the main source of the efficiency change is scale efficiency rather than pure efficiency. Finding of this study indicates that Conventional and Takaful life industry of Bangladesh, the smaller the size of the companies, the higher the probability for the companies to be more efficient in utilizing their inputs to generate more outputs. This work will beneficial for researchers as well as practitioners to better understand the Bangladeshi life insurance industry. JEL Classification Codes: C14, C67, D57, G22

Determinants of Family Takaful (Islamic Life Insurance) Demand: A Conceptual Framework for a Malaysian Study

Family Takaful is one of the service sectors that are expected to continue to drive growth in the economy. Thus,the family Takaful market continues to play an important role in supporting economic and social development.However, in Malaysia, family Takaful market is still at a lower penetration level if we were to compare to otherdeveloped countries even though the Takaful industry continues to sustain strong performance amidst challengesin a competitive environment. Evidence has shown that the percentage of society covered by family Takafulcontracts in Malaysia is still very low compared to conventional insurance. Therefore, the study aims to proposea conceptual framework for the determinants of family Takaful demand in Malaysia. From a review of theliterature available in this particular area of interest, there are two categories of factors that are found to be themain determinants of family Takaful. These factors are the socio-demography and economic factors.

The role of goods, money and securities markets in promoting family takaful in Malaysia

In line with the government's policy to promote Malaysia as an international hub for Islamic banking and finance, the dynamic effects of goods, money and securities markets on the development of family takaful (Islamic life insurance) in the country during the period from 1999 : Q1 to 2006 : Q4 are empirically examined. Specifically, it seeks to explore the short- and long-run dynamics and the causalities between takaful performance and the goods market, money market, and securities market. The findings indicate that, the goods market is the most significant market in promoting family takaful in Malaysia. This implies that, the government's effort has been successful, thus far.