Measuring the efficiency between conventional general insurance and general Takaful in Malaysia

Measuring the efficiency between conventional general insurance and general Takaful in Malaysia

One of recommendations to achieve the vision of The Financial Sector Blueprint launched by Bank Negara Malaysia (BNM) in year 2011 is to intensify the internationalization of Islamic finance through regional and global takaful/ retakaful outreach in Malaysia. While these discussions continue, the pe...

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Main Author: Cheah, Chee Keong
Format: Thesis
Language:eng
eng
Published: 2014
Subjects:
HG Finance
Online Access:https://etd.uum.edu.my/4715/1/s814635.pdf
https://etd.uum.edu.my/4715/2/s814635_abstract.pdf
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institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Hanafi, Norshafizah
topic HG Finance
spellingShingle HG Finance
Cheah, Chee Keong
Measuring the efficiency between conventional general insurance and general Takaful in Malaysia
description One of recommendations to achieve the vision of The Financial Sector Blueprint launched by Bank Negara Malaysia (BNM) in year 2011 is to intensify the internationalization of Islamic finance through regional and global takaful/ retakaful outreach in Malaysia. While these discussions continue, the performance, particularly in the general or non-life sector whether has consistently achieve a productivity level that outpaced the conventional general insurance in Malaysia. This thesis examines the efficiency of general insurance and takaful industry in Malaysia during the period 2009 to 2013. A total of 31 of general insurance and 8 general takaful operators are selected in this study which cover all the firms in the general insurance industry. The inputs of claim expenses and management expenses, outputs of premium/ contribution earn and investment income are selected based on approach consistent with several literature to measure the efficiency scores. This study employed a non parametric approach which is Data Envelopment Analysis (DEA) base on input orientation measurement to estimate the technical efficiency, pure technical efficiency and scale efficiency to compare the difference between both industries sector. The model results based on constant return to scale (CRS) and variable return to scale (VRS) to assess the efficiency scores between both industries sector. The findings indicate that there is a significant difference in efficiency between takafui industry and insurance industry where that takaful has higher efficiency than conventional insurance throughout the year 2009 to 2013. The finding shows that the general takaful industry improves of their efficiency compare with previous literature where takaful have lower efficiency compare to conventional insurance. The Malmquist productivity index shows a significant improvement in overall productivity of both industry sectors. The study suggests diversified and more selective of risk business while underwrites the risk portfolio in general insurance and takaful industry in Malaysia reduce the claim ratio
format Thesis
qualification_name masters
qualification_level Master's degree
author Cheah, Chee Keong
author_facet Cheah, Chee Keong
author_sort Cheah, Chee Keong
title Measuring the efficiency between conventional general insurance and general Takaful in Malaysia
title_short Measuring the efficiency between conventional general insurance and general Takaful in Malaysia
title_full Measuring the efficiency between conventional general insurance and general Takaful in Malaysia
title_fullStr Measuring the efficiency between conventional general insurance and general Takaful in Malaysia
title_full_unstemmed Measuring the efficiency between conventional general insurance and general Takaful in Malaysia
title_sort measuring the efficiency between conventional general insurance and general takaful in malaysia
granting_institution Universiti Utara Malaysia
granting_department Othman Yeop Abdullah Graduate School of Business
publishDate 2014
url https://etd.uum.edu.my/4715/1/s814635.pdf
https://etd.uum.edu.my/4715/2/s814635_abstract.pdf
_version_ 1747827786506043392
spelling my-uum-etd.47152022-05-18T01:55:03Z Measuring the efficiency between conventional general insurance and general Takaful in Malaysia 2014 Cheah, Chee Keong Hanafi, Norshafizah Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HG Finance One of recommendations to achieve the vision of The Financial Sector Blueprint launched by Bank Negara Malaysia (BNM) in year 2011 is to intensify the internationalization of Islamic finance through regional and global takaful/ retakaful outreach in Malaysia. While these discussions continue, the performance, particularly in the general or non-life sector whether has consistently achieve a productivity level that outpaced the conventional general insurance in Malaysia. This thesis examines the efficiency of general insurance and takaful industry in Malaysia during the period 2009 to 2013. A total of 31 of general insurance and 8 general takaful operators are selected in this study which cover all the firms in the general insurance industry. The inputs of claim expenses and management expenses, outputs of premium/ contribution earn and investment income are selected based on approach consistent with several literature to measure the efficiency scores. This study employed a non parametric approach which is Data Envelopment Analysis (DEA) base on input orientation measurement to estimate the technical efficiency, pure technical efficiency and scale efficiency to compare the difference between both industries sector. The model results based on constant return to scale (CRS) and variable return to scale (VRS) to assess the efficiency scores between both industries sector. The findings indicate that there is a significant difference in efficiency between takafui industry and insurance industry where that takaful has higher efficiency than conventional insurance throughout the year 2009 to 2013. The finding shows that the general takaful industry improves of their efficiency compare with previous literature where takaful have lower efficiency compare to conventional insurance. The Malmquist productivity index shows a significant improvement in overall productivity of both industry sectors. The study suggests diversified and more selective of risk business while underwrites the risk portfolio in general insurance and takaful industry in Malaysia reduce the claim ratio 2014 Thesis https://etd.uum.edu.my/4715/ https://etd.uum.edu.my/4715/1/s814635.pdf text eng public https://etd.uum.edu.my/4715/2/s814635_abstract.pdf text eng public masters masters Universiti Utara Malaysia Abdul Kader, Adams & Hardwick (2010). 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