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Article
Publication date: 1 August 2021

Roy Poan, Valencya Engla Merizka and Farida Komalasari

The purpose of this study is to examine the role of attitude, religiosity, awareness and subjective norm toward trust which influences purchase intention regarding Islamic

Abstract

Purpose

The purpose of this study is to examine the role of attitude, religiosity, awareness and subjective norm toward trust which influences purchase intention regarding Islamic insurance in Indonesia.

Design/methodology/approach

This research uses quantitative methods. Online questionnaires are distributed and collected for people who already have an insurance policy, have the knowledge and are interested in buying Islamic insurance in Indonesia. A total of 322 valid responses were collected using non probability purposive sampling and snowball sampling method. To achieve the purpose of this study, an analysis using SEM or structural equation model for hypothesis testing was performed.

Findings

The results show that trust significantly affected purchase intention regarding Islamic insurance. Other than that, trust is significantly influenced by awareness, religiosity and subjective norm. Moreover, the attitude toward trust found that not significantly related.

Originality/value

The originality of this study is the first research integrating attitude, religiosity, awareness and subjective norm, mediating by trust toward a purchase intention of Islamic insurance in Indonesia.

Details

Journal of Islamic Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0833

Keywords

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Article
Publication date: 1 June 2015

Nizar Souiden and Yosr Jabeur

The purpose of this paper is to investigate the role of Islamic beliefs in moderating consumers’ attitudes and purchase intentions of conventional and Islamic life…

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4563

Abstract

Purpose

The purpose of this paper is to investigate the role of Islamic beliefs in moderating consumers’ attitudes and purchase intentions of conventional and Islamic life insurance. Second, it investigates the role of Islamic beliefs in moderating the relationship between the attitude toward conventional/Islamic life insurance and purchase intentions of these types of services.

Design/methodology/approach

A questionnaire was administered online in a Muslim liberal country where both types of insurance are offered. Based on a total sample of 207 responses, ANOVA tests and a structural Equation Modeling were used to test the research hypotheses.

Findings

Results show that: the higher (lower) the Islamic beliefs of individuals, the less (more) favorable their attitude will be toward conventional life insurance and the more (less) favorable their attitude will be toward Islamic life insurance; the higher (lower) the Islamic beliefs of individuals, the weaker (stronger) their purchase intentions for conventional life insurance will be and the stronger (weaker) their purchase intentions for Islamic life insurance will be; and Islamic beliefs moderate the relationships between attitudes and purchase intentions of life insurance.

Practical implications

Because they play a significant role in moderating consumers’ attitudes and purchase intentions of conventional and Islamic life insurance, Islamic beliefs can be used as a meaningful criterion to segment the life insurance markets in (less conservative) Muslim countries. This would help insurance companies to better target their services. In a case where two segments coexist (i.e. individuals scoring low on Islamic beliefs vs individuals scoring high on Islamic beliefs), insurers should weigh different strategic options by targeting one of the two segments or both of them. Perhaps the main issue occurs when an insurer attempts to target both segments. In this case, managers should be aware of the confusion that they might create in the mind of their clients (or potential clients). Concurrently offering two types of life insurance (conventional and Islamic) may put the insurers’ credibility at stake.

Originality/value

Earlier studies report that in Muslim countries, the demand for life insurance is weak or negatively correlated with religion. The majority of these studies consider religion as a macro indicator (i.e. at the country level) when explaining the demand for such services. The present study further clarifies the nature of the relationship between religion and the demand for life insurance by: examining the role of Islamic beliefs (as one of the main dimensions of Muslims’ religiosity) at the micro level (i.e. at the consumer level); and investigating the moderating role of Islamic beliefs in explaining attitudes and purchase intentions of conventional and Islamic life insurance in a less conservative Muslim country.

Details

International Journal of Bank Marketing, vol. 33 no. 4
Type: Research Article
ISSN: 0265-2323

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Article
Publication date: 2 December 2019

Hafiz Ali Hassan

The concept of Takaful has a long history. It is linked with the era of Prophet Muhammad 1,400 years ago. The globalization and development of socio-economic systems have…

Abstract

Purpose

The concept of Takaful has a long history. It is linked with the era of Prophet Muhammad 1,400 years ago. The globalization and development of socio-economic systems have made business activities more complex in response to emerging human needs and requirements. Similarly, Takaful insurance has fully commercialized and become an important indicator of the international financial market. The purpose of this study is to understand the Takaful mechanism and progression of its procedures to date since its inception.

Design/methodology/approach

This study seeks to examine the origin, evolution and historical developments of Takaful mechanism, operations, models and governing framework with extant literature review from previous studies and current practices.

Findings

The modern Takaful insurance first began in Sudan back in 1979. The Takaful operations must abide by the Sharia laws and work under the supervision of the Sharia Supervisory Board. Since its evolution, Sharia scholars have introduced various Takaful models that are going to be explained in this study. Moreover, several Islamic organizations, including the “Islamic Financial Services Board” and the “Accounting and Auditing Organization for Islamic Financial Institutions,” have provided guidelines and supervision to develop and strengthen the Takaful industry further. The study acknowledges Takaful as a growing insurance industry with huge potential and promising future in both Pakistan and the international market.

Practical implications

During the analysis, various deficiencies and loopholes were identified, which are responsible for the unmatched growth of conventional insurance. They can be eliminated with the joint efforts of industrial players, Sharia scholars and Takaful insurance companies. Hence, Islamic scholars and academic researchers are encouraged to develop and modify the current practices of Takaful mechanism according to current market demands and consumer approach. The research efforts will help Takaful operators to develop more innovative Takaful products adhering Sharia compliance. Consequently, it will help to access more consumer market and further enhances the Takaful growth.

Originality/value

This study is an effort to provide a basic understanding of the mechanism of Takaful models. The study helps to comprehend how Takaful models have evolved and been modified over the course of time. Moreover, it provides a base for further development and improvement in current practices of Takaful models, which will result in increased progress for the Takaful industry.

Details

Journal of Islamic Marketing, vol. 11 no. 6
Type: Research Article
ISSN: 1759-0833

Keywords

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Article
Publication date: 20 January 2020

Usama Adnan Fendi

This paper aims to provide an essential framework for establishing Shariah-compliant deposit insurance scheme, by reviewing the Shariah provisions concerning the available…

Abstract

Purpose

This paper aims to provide an essential framework for establishing Shariah-compliant deposit insurance scheme, by reviewing the Shariah provisions concerning the available approaches for deposit guarantee, types of deposits in Islamic financial institutions and the permissible party to incur the cost of this guarantee.

Design/methodology/approach

This paper reviews the Fiqh rules and principles approved by the well-known Islamic Fiqh references, as well as the resolutions of International Islamic Fiqh Academy (IIFA) and Shariah standards issued by Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), and presents these resolutions and judgments in a modern applicable way.

Findings

This paper recommends that the Islamic scheme for deposit insurance should be established based on Takaful insurance principle, and this scheme must adopt fund segregation principle to comply with Shariah provisions for guarantee permissibility.

Research limitations/implications

The paper bridges the gap between theory and practice by highlighting how the proposed model can be initiated in practice, thus, it can influence public policy in countries with Islamic banking system.

Originality/value

This paper represents a significant contribution toward the establishment of a consensual Shariah-compliant Islamic deposit insurance model.

Details

Journal of Islamic Accounting and Business Research, vol. 11 no. 1
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 8 October 2019

Syed Ali Raza, Rehan Ahmed, Muhammad Ali and Muhammad Asif Qureshi

The role of insurance is a backbone for consumers to secure their future. It is important to know where to invest and what are the benefits. Therefore, for the Muslim…

Abstract

Purpose

The role of insurance is a backbone for consumers to secure their future. It is important to know where to invest and what are the benefits. Therefore, for the Muslim segment, Islamic insurance system provides Riba (interest)-free environment where consumers invest their money and recover their losses according to sharia. This paper aims to examine the determinants that influence purchase intention of consumers toward Islamic insurance (Takaful) adoption in Pakistan with the help of the modified theory of planned behavior (TPB).

Design/methodology/approach

The authors added four specific variables related to Islamic sharia compliance in the conventional form of the TPB. The relationship among the variables is assessed by using partial least squares structural equation modeling, while the data are collected from 305 respondents.

Findings

The results suggest that attitude, subjective norm and perceived behavioral control are strong predictors of an Islamic insurance adoption in Pakistan. Moreover, factors such as compatibility, relative advantage and awareness have positive and significant impacts on takaful participation. A negative but insignificant relation is found between perceived risk and intention.

Practical implications

This paper provides insight for understanding the factors that lead to consumers' purchase intention of Islamic insurance.

Originality/value

This paper makes a unique contribution to the literature with reference to Pakistan, being a pioneering attempt to investigate the factors of Islamic insurance adoption by modifying the TPB and applying more rigorous statistical techniques like confirmatory factor analysis (CFA) and partial least square structural equation modeling.

Details

Journal of Islamic Marketing, vol. 11 no. 6
Type: Research Article
ISSN: 1759-0833

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Article
Publication date: 8 April 2014

Abdelghani Echchabi, Lukman Ayinde Olorogun and Dhekra Azouzi

The purpose of the study is to examine the willingness (or otherwise) of the Tunisian customers to adopt Islamic insurance services (takaful) and to determine the factors…

Abstract

Purpose

The purpose of the study is to examine the willingness (or otherwise) of the Tunisian customers to adopt Islamic insurance services (takaful) and to determine the factors that influence their decisions.

Design/methodology/approach

Hundred questionnaires are randomly distributed to Tunisian customers, and the data are subsequently analysed using SEM as well as one sample t-test.

Findings

Overall, the results indicate that the Tunisian customers are willing to adopt Islamic insurance services. Furthermore, compatibility of these services is a determinant factor of their decision.

Originality/value

This is one of the few studies of customers' behaviour towards Islamic insurance services, and the first to be conducted in the context of Tunisia. Furthermore, the study extends theory of innovations diffusions to a different area of study and a different context, i.e. Islamic insurance and Tunisia, respectively.

Details

Journal of Islamic Accounting and Business Research, vol. 5 no. 1
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 14 June 2013

Tahani Coolen‐Maturi

This paper aims to examine empirically whether there is a real demand for takaful products among Muslims in the UK, and to assess the awareness about takaful insurance and…

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4813

Abstract

Purpose

This paper aims to examine empirically whether there is a real demand for takaful products among Muslims in the UK, and to assess the awareness about takaful insurance and its main principles among UK Muslim communities.

Design/methodology/approach

The paper uses empirical data collected via an online questionnaire.

Findings

The study shows that the survey respondents are likely to buy car, health, home and home contents insurance if the same cover is offered as conventional insurance and if prices are competitive. The paper also shows that there is quite a lack of awareness about takaful insurance and its main principles among UK Muslim communities, and that most respondents are only aware of the riba and maysir concepts. It also showed that about half the respondents are not sure whether takaful insurance is in accordance with Islam. The majority of the respondents prefer to get takaful products via banking channels rather than from independent takaful institutions. Not surprisingly, the majority of respondents agreed to the use of Arabic terms for the Islamic insurance to show that these are Islamic products and to differentiate them from conventional alternatives in order to attract more Muslim participants.

Practical implications

This findings presented in this paper would encourage more banks in the UK to develop takaful products to target the rapid increase in Muslim populations in the UK and increase the demand for Islamic insurance products. Some promotion strategies may be needed to increase the customers' awareness of the existing takaful products and, more importantly, to their compliance to the Shariah law. Despite the fact that there is an obvious preference among the survey participants towards using Arabic terms in takaful products, one could argue for the financial benefits of introducing these Islamic insurance products to non‐Muslim customers where Arabic terms are avoided but with the explanations of the main concept of takaful products.

Originality/value

The paper examines empirically (via an online questionnaire) whether there is a real demand for takaful products among Muslims in the UK.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 6 no. 2
Type: Research Article
ISSN: 1753-8394

Keywords

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Article
Publication date: 28 February 2019

Alex Paton Schmidt

The purpose of this paper is to explore the extent by which consumer acceptance of an Islamic insurance product (Takaful) in a non-Muslim majority country would be…

Abstract

Purpose

The purpose of this paper is to explore the extent by which consumer acceptance of an Islamic insurance product (Takaful) in a non-Muslim majority country would be affected by consumer knowledge about its Islamic origins. Furthermore, this study identifies the degree to which various psychological traits and demographics of the consumers influence purchase intentions.

Design/methodology/approach

A questionnaire was distributed to a national sample of 390 respondents, half of whom were told that this insurance product is Islamic and the other half were not. The questionnaire was identical between the two groups and the only difference was the disclosure of the product’s Islamic origins. Additional measures related to consumer demographics, cognitive style and prior experience with insurance products were obtained from the respondents. Regression analysis was used to determine the drivers of consumers’ purchase intentions.

Findings

Purchase intentions for Takaful were found to be lower when the product was presented to subjects as Islamic. In addition, it was established that a consumer’s cognitive style, political orientation, yearly insurance expenditure and views of Islam influence purchase intentions for Takaful.

Originality/value

This paper is the first to explore the degree of acceptance of an Islamic insurance product in a non-Muslim majority country (USA) and to investigate the effects of a product’s religion of origin on the purchase intentions of American consumers.

Details

International Journal of Bank Marketing, vol. 37 no. 2
Type: Research Article
ISSN: 0265-2323

Keywords

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Article
Publication date: 20 April 2015

Lukman Ayinde Olorogun

This paper aims to consider a contribution model of a general Islamic insurance industry which allowed the return of underwriting profit to the Islamic insurance

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1270

Abstract

Purpose

This paper aims to consider a contribution model of a general Islamic insurance industry which allowed the return of underwriting profit to the Islamic insurance participants. The objective is to create a justified and equitable means of computing contribution which maximises the expected ownership right of the Islamic insurance fund.

Design/methodology/approach

The accumulation of funds and claims paid were characterised in form of accumulation and decay function over a period of time. It provides necessary and sufficient conditions for their existence and uniqueness. Mathematical derivative procedures were adopted to derive the underwriting returns to be returned to the Islamic insurance participants. Lastly, this paper recommends the incorporation of underwriting returns’ variable into the traditional actuarial model and provides theoretical justification for the process.

Findings

Then, the derivation of underwriting returns through convolution of accumulated funds and claims paid views in the form of Laplace Transform led to a conjecture and proved. Thereafter, the proposed and adjusted model was arrived at.

Originality/value

This study, to the best knowledge of the researcher, is the first attempt in the quantification of Islamic insurance industry. Thus, the model is the first attempt of creating a justified way of calculating the Islamic insurance participants’ contributions.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 8 no. 1
Type: Research Article
ISSN: 1753-8394

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Article
Publication date: 14 May 2018

Issa Khan, Noor Naemah Binti Abdul Rahman, Mohd Yakub @ Zulkifli Bin Mohd Yusoff, Mohd Roslan Mohd Nor and Kamaruzaman Bin Noordin

This study aims to find out the problems of family Takaful (Islamic Life Insurance) operations in Bangladesh and proposes strategies to overcome the problems.

Abstract

Purpose

This study aims to find out the problems of family Takaful (Islamic Life Insurance) operations in Bangladesh and proposes strategies to overcome the problems.

Design/methodology/approach

Qualitative data were collected through interviews with 32 respondents from two family Takaful operators in Dhaka, Bangladesh.

Findings

The study finds a number of problems of family Takaful which relate to the government, Takaful company and the Shariah board. Lack of governing guidelines for Takaful companies in Bangladesh is causing numerous operational problems of family Takaful. To overcome these obstacles, the government should propose separate Act for Takaful. This requires support from the stakeholders along with Islamic scholars in the country.

Practical implications

It is anticipated that the findings and suggestions of the study will assist the policymakers in improving the situation of family Takaful companies particularly in Bangladesh.

Social implications

If the proposed suggestions are implemented in Takaful companies, the problems facing Takaful will likely be solved and more people will take part in Takaful. This would contribute to developing the country economically, raise Islamic values and foster peace and harmony in the society.

Originality/value

Mainly, this study is based on the primary research that has been conducted in family Takaful companies in Bangladesh.

Details

International Journal of Ethics and Systems, vol. 34 no. 2
Type: Research Article
ISSN: 0828-8666

Keywords

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