The determinants of performance of takaful and conventional insurance companies in Malaysia / Farrah Hidayah Zuhaimi

The purpose of this research paper is to investigate the factors that affect the performance of Takaful and conventional insurance companies in Malaysia. 5 companies from Takaful and 5 conventional insurance companies have been selected over the period of year 2005 until 2015. This study was conducted using secondary data which are retrieved from annual report for each of the companies and calculated manually for the given formulas. Furthermore, in Malaysia, Takaful and conventional insurance companies are very competitive to each other. Based on the BNM annual report on year 2014, the profitability of conventional insurance is slightly higher compare to Takaful. Thus, there are various factors to be looking at such as solvency, capital adequacy, liquidity and operating efficiency. From this study, it is to investigate the significant relationship between the independent variables and performances of Takaful and conventional insurance companies (ROA) in Malaysia. Moreover, from other previous findings research papers, mostly indicate that some of the factors play a significant role for the performance. The result analysis shows the different factors that influence the performance. Hence, this result would provide important information for policy makers for decisions and strategies to financial and economic stability.