Abstract

The Malaysian Takāful industry has experienced encouraging growth since its commencement in 1985. Annual growth rate of the industry has been estimated at 20%. Despitethis rapid rate of growth the rate of penetration is still not impressive. This paper seeks to find the reasons for this relatively low penetration rate of the Takāful industry among Malaysians from the perspective of Malaysians who do not participate in the Takāful industry.

The method employed to achieve the objective of this paper was the survey method; Data analysed using Logistic Regression Model (LR).This research finds that marketing, is a robust predictor of Takāful demand, as 50% of the respondents have not been approached by any Takāful agents, while religion has a significant relationship with Takāful consumption as majority of the respondents do not plan to have Takāful policies as they opine that Takāful is not permissible being similar to conventional insurance (Haram). Also age was a significant factor among the young respondents not planning to participate in Takāful policies.