A Preliminary Study on the Factors Influencing Malaysian Youths' Adoption and Rejection of Takaful

Abstract

Takaful company was initially established in Malaysia in the 1990s. The Malaysian Takaful (Islamic insurance) sector has grown significantly in recent decades, with fifteen Takaful companies operating in the country, including general and family Takaful. According to the Malaysian Takaful Association, 2020, the Malaysian Takaful industry witnessed exponential growth with general Takaful business has registered Gross Written Contributions of RM 3.46 billion, an increase of 4.4% over the same period in 2019; and the Family Takaful business has registered RM6.59 billion new business gross contributions in 2020, an increase of 7.0% compared to RM 6.16 billion in 2019. On the other hand, Islamic insurance has a lower penetration rate than conventional insurance, still lacking. There have been studies conducted to determine the reasons, however to the best of academics' knowledge; there is still a gap in understanding why Malaysian youth are not embracing the Takaful policy . As a result, this study aims to determine the causes for this and promote Takaful among Malaysian youngsters. The sample for this study comprises 53 Malaysian youth who were recruited from various sources. The data for this study is gathered through a random sample. This study employed descriptive statistics and correlation coefficients for statistical analysis. Religion, social status, product features, marketing, agent characteristics, and service quality, availability, and transparency determine the success of Takaful's adoption. However, the vast majority of respondents are unfamiliar with the Takaful concept, as well as its awareness and coverage. It is anticipated that this research will be eye-opening for regulatory organizations, Takaful companies, academics, and students to come out with strategies to attract youths to subscribe to takaful policy.