Low Market Penetration Of Takāful Among Malaysian : Non-Takāful Customers’ Perspective

by Assoc. Prof. Dr. Omaima Eltahir Babikir Mohamed and Prof. Datuk Dr. Syed Othman Alhabshi

International Journal of Ethics in Social Sciences, (2015) Vol.3, No. 1


The Malaysian Takãful 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 Takãful industry among Malaysians from the perspective of Malaysians who do not participate in the Takãful 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 Takãful demand, as 50% of the respondents have not been approached by any Takãful agents, while religion has a significant relationship with Takãful consumption as majority of the respondents do not plan to have Takãful policies as they opine that Takãful is not permissible being similar to conventional insurance (Haram). Also age was a significant factor among the young respondents not planning to participate in Takãful policies.

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