Determinants of demand for family takaful in Malaysia / Muhammad Radzi Ahmad Muniran

The takaful industry in Malaysia has shown speedy growth in recent years starting from the establishment of Syarikat Takaful Malaysia Berhad in 1985. Family Takaful is one of the service industry that are expected to remain to drive growth in the economy. However, the demand of family takaful market in Malaysia is still remains low if compares to other Islamic countries even though the takaful industry continues to endure resilient performance with the challenges in a competitive situation. Therefore, the study purposely to identify the determinants of demand for family takaful in Malaysia. From a review of the literature available in this specific area of interest, there are few variables that are found related to the economic determinants of family takaful demand. These variables are the income level, interest rate, inflation, and saving. This study uses annual time series data obtained from World Bank, Central Bank of Malaysia and Department of Statistics Malaysia for the period 1998 through 2012. This study found provided that income level is crucial in determining the demand of' family takaful since it is the only element that is significant and positively have relationship with the demand of family takaful.