Shariahgovernance and takaful financial performance: the case of listed takaful insurances

Yosra Ridha BenSaid

Journal of Islamic Accounting and Business Research, 2023, vol. 16, issue 1, 170-187

Abstract: Purpose - The purpose of this paper is to examine theShariahgovernance mechanisms of takaful insurance and their impact on its financial performance. Design/methodology/approach - The effect of Shariah governance mechanisms on financial performance is analyzed over 2012–2018 on a sample of 11 takaful listed insurances in the Middle East region. Using multiple regression models, four hypotheses addressingShariahgovernance mechanisms are tested. Findings - The findings generally reveal thatShariahgovernance has an impact on the financial performance of takaful insurance. The Shariah Supervisory Board (SSB) size, the members’ reputation and their qualifications are the main determinants of financial performance for listed takaful insurance. Research limitations/implications - This paper includes two main limitations that may affect the accuracy of the finding. First, the results are restricted to the Middle East region and may not be generalized to other regions. Second, the sample is dominated by UAE, i.e. 4 takaful insurances out of 11. Practical implications - BothShariahgovernance and regular governance have an impact on the financial performance of takaful insurance. Yet, the effect ofShariahgovernance is more robust. To improve its financial performance, takaful insurance should expand the size of the SSB, hiring reputable scholars and recruit doctors in Islamic economics. Originality/value - This research studies takaful insurance, unlike the majority of other works that have focused on Islamic banks.

Keywords: Takaful; Shariah governance; Financial performance; Islamic finance (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jiabrp:jiabr-09-2022-0236

DOI: 10.1108/JIABR-09-2022-0236

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