Sharia insurance efficiency in Indonesia and Malaysia using the stochastic frontier approach analysis

Zubaidah Nasution ()

Asian Journal of Islamic Management (AJIM), 2021, vol. 3, issue 2, 123-136

Abstract: Purpose: This study aims to analyze the efficiency level of Indonesian sharia insurance and Malaysian takaful with a parametric stochastic frontier approach where the input is total assets and expenses, and the output of this research is claims and premiums.Methodology: This study uses quantitative methods with secondary data in the form of shariah insurance Malaysia and Indonesia annual reports 2016-2020. The data analysis uses a regression test with the help of stochastic frontier approach (SFA)Findings: Based on the results of processing using stochastic frontier analysis (SFA), Indonesian Sharia insurance's overall production efficiency level is known to be 0.6306 or 63.06%, Malaysian takaful on average is known to be 0.6160 or 61.60 %. Partially, Indonesian sharia insurance total assets, insurance expenses, and claims positively and significantly affect the number of premiums. Takaful Malaysia's total assets of Malaysian takaful partially have an insignificant negative effect on the premium amount. Malaysia's takaful expenses and claims partially have an insignificant positive effect on the premium amount.Originality: This study analyzes the efficiency and looks at the effect of the variables of Indonesian sharia insurance and Malaysian takaful with a parametric stochastic frontier approach.Practical implications: This research shows that the management of Indonesian sharia insurance and Malaysia's takaful is still inefficient, so each government needs to regulate the operations in this industry.

Keywords: efficiency; SFA; Sharia Insurance Indonesia; Takaful Malaysia; total assets; claims; insurance expenses; premiums. (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journal.uii.ac.id/AJIM/article/view/22267/12124 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:uii:jrajim:v:3:y:2021:i:2:p:123-136:id:22267

Access Statistics for this article

More articles in Asian Journal of Islamic Management (AJIM) from Center for Islamic Economics and Development Studies [P3EI]
Bibliographic data for series maintained by Deni Eko Saputro ().