A comparative analysis between Islamic insurance (takaful) and conventional insurance: case of entrepreneur in Kelantan, Malaysia / Fairuz Irdina Patul Muin

This study investigates the differences between the principles and practices of takaful and conventional insurance and examines how industrial companies in MIEL Lundang perceive these options. It also explores the level of awareness and understanding of takaful among businesses, focusing on the factors influencing their decision-making in risk management. This research is critical in understanding how takaful, as a Shariah-compliant risk management model, can benefit the industrial sector. A qualitative method was adopted by conducting semi-structured interviews with 10 business owners and managers in the MIEL Lundang area. Additional data were gathered through library research to support the thematic analysis. The findings revealed that awareness and understanding of takaful are limited, particularly among non-Muslim business owners. Challenges such as slower claim processing times and insufficient promotion of takaful contribute to its lower adoption. Muslim-owned companies are more likely to choose takaful due to its ethical principles and alignment with Shariah values, while non-Muslim companies prefer conventional insurance for its straightforward terms and faster claim processes. This study underscores the importance of increasing awareness and understanding of takaful through more inclusive marketing and educational efforts. Takaful has significant potential as a primary risk management solution, offering both ethical and practical benefits to the industrial sector.