Economic and market predictors of solvency of family takaful in Malaysia

  • Muhamad Abduh, Syaza Nawwarah Zein Isma
  • Journal of Islamic Accounting and Business Research, June 2017, Emerald
  • DOI: 10.1108/jiabr-06-2015-0030

This is a study on factors affecting solvency of family takaful companies in Malaysia

What is it about?

Data are extracted from the annual reports of six family takaful companies and Bloomberg for the period from 2008 to 2012. Equity-to-asset and equity-to-technical reserve ratio are used to measure solvency and thus become the dependent variables. Meanwhile, profit rate, Islamic index, company size, risk retention, contribution growth, investment income, takaful leverage, liquidity and expenses are the independent variables.

Why is it important?

Following the discovery of solvency determinants of family takaful companies in Malaysia in the post-RBC requirement and post-2008 global financial crisis, the findings would provide a basis for the insurance and takaful industry players and regulator in Malaysia on the improvements that can be made to the risk-based capital guideline for the insurance industry.

Perspectives

Dr Muhamad Abduh
Universiti Brunei Darussalam

This study explores factors affecting the solvency of family takaful, which to the best of the authors’ knowledge is still lacking empirical research which may improve the understanding of this issue.

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http://dx.doi.org/10.1108/jiabr-06-2015-0030

The following have contributed to this page: Dr Muhamad Abduh

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