Impact of COVID-19 on takaful operators in Malaysia

This study aims to analysis the impact of COVID-19 on all 16 takaful operators that available in Malaysia. There are two types oftakaful operator in Malaysia, which is Family Takaful and General Takaful. Both of these takaful have the own target in the market. All the data for this research are acquired from the official website of the company Since COVID-19 arrive on Malaysia on March 2020, there are a lot of death due to the virus breakout. The family members who died during the pandemic will claim the insurance, but too many claims made can significantly affect the takaful company. Therefore, this study will rank all the takaful operators before the pandemic occurs and during the pandemic. This study uses Data Envelopment Analysis by testing two different models which is Chames, Cooper and Rhodes (CCR) model and Banker, Chames, and Cooper (BCC) model. Two of these models are use in this study to ensure that results of the ranking analysis are more accurate and precise. Moreover, these models employ the input-oriented model function to maximise the efficiency. The input variables for this research are commission and management expenses while the output variables are income and contribution. The decision-making unit (DMU) is the name of the takaful operator. Based on the research, BCC-I model is better than CCR-I model due to significant improvement in ranking, occupying a position that is more convincing and reliable. The result show that only four takaful operator that maintain efficiency level from 2019 until 2022 based on CCR-I model while there are six takaful operators that maintain efficiency level from 2019 until 2022.